GOLAR LNG LTD (Form: 20-F, Received: 05/01/2017 07:49:59)

Fixed assets (in thousands of $)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)



[ ]	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934



[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the fiscal year ended	December 31, 2016



[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For the transition period from		to



[ ]	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



Date of event requiring this shell company report



Commission file number	000-50113

Golar LNG Limited

(Exact name of Registrant as specified in its charter)

(Translation of Registrant's name into English)

Bermuda

(Jurisdiction of incorporation or organization)

2nd Floor, S.E. Pearman Building, 9 Par-la-Ville Road, Hamilton HM 11, Bermuda

(Address of principal executive offices)



	Andrew Whalley, (1) 441 295 4705, (1) 441 295 3494 2nd Floor, S.E. Pearman Building, 9 Par-la-Ville Road, Hamilton HM 11, Bermuda

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to section 12(b) of the Act.



Title of each class	Name of each exchange on which registered
Common Shares, par value, $1.00 per share	Nasdaq Global Select Market

Securities registered or to be registered pursuant to section 12(g) of the Act.

None

(Title of class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

(Title of class)

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

101,080,673 Common Shares, par $1.00, per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.



Yes	X	No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of 15(d) of the Securities Exchange Act 1934.



Yes	No	X

Note- Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



Yes	X	No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



Yes	X	No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. (Check one).



Large accelerated filer	X	Accelerated filer	Non-accelerated filer	Emerging growth company

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Yes	No	X

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:



U.S. GAAP	X	International Financial Reporting Standards as issued by the International Accounting Standards Board	Other

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.



Item 17		Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).



Yes	No	X

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.



Yes		No

INDEX TO REPORT ON FORM 20-F



PART I		PAGE

ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1

ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1

ITEM 3.	KEY INFORMATION	1

ITEM 4.	INFORMATION ON THE COMPANY	28

ITEM 4A.	UNRESOLVED STAFF COMMENTS	57

ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	57

ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	85

ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	89

ITEM 8.	FINANCIAL INFORMATION	89

ITEM 9.	THE OFFER AND LISTING	91

ITEM 10.	ADDITIONAL INFORMATION	92

ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	101

ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	102

PART II

ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	102

ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	102

ITEM 15.	CONTROLS AND PROCEDURES	103

ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT	104

ITEM 16B.	CODE OF ETHICS	104

ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	104

ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	105

ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	106

ITEM 16F.	CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT	106

ITEM 16G.	CORPORATE GOVERNANCE	106

ITEM 16H.	MINE SAFETY DISCLOSURE	108

PART III

ITEM 17.	FINANCIAL STATEMENTS	108

ITEM 18.	FINANCIAL STATEMENTS	108

ITEM 19.	EXHIBITS	109

SIGNATURES		112

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

Matters discussed in this report may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

We desire to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are including this cautionary statement in connection with this safe harbor legislation. This report and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance. When used in this report, the words "believe," "anticipate," "intend," "estimate," "forecast," "project," "plan," "potential," "will," "may," "should," "expect" and similar expressions identify forward-looking statements.

The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections. As a result, you are cautioned not to rely on any forward-looking statements.

In addition to these important factors and matters discussed elsewhere herein, important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include among other things:


•	changes in liquefied natural gas, or LNG, carrier, floating storage and regasification unit, or FSRU, or floating liquefaction natural gas vessel, or FLNG, market trends, including charter rates, ship values or technological advancements;


•	changes in our ability to retrofit vessels as FSRUs or FLNGs, our ability to obtain financing for such conversions on acceptable terms or at all,


•	changes in the supply of or demand for LNG carriers, FSRUs or FLNGs;


•	a material decline or prolonged weakness in rates for LNG carriers, FSRUs or FLNGs;


•	changes in the performance of the pool in which our vessels operate;


•	changes in trading patterns that affect the opportunities for the profitable operation of LNG carriers, FSRUs or FLNGs;


•	the failure of West Africa Gas Limited, or WAGL, to commence its time charter for Golar Tundra or any action by our affiliates Golar LNG Partners LP, or Golar Partners or the Partnership, to exercise its related put option;


•	expiration of the letter of credit required under the tolling agreement that we expect will employ the Hilli ;


•	changes in the supply of or demand for LNG or LNG carried by sea;


•	changes in the supply of or demand for natural gas generally or in particular regions;


•	failure of our contract counterparties to comply with their agreements with us;


•	changes in our relationships with our counterparties, including our major chartering parties;


•	changes in the availability of vessels to purchase, the time it takes to construct new vessels, or vessels’ useful lives;


•	failure of shipyards to comply with delivery schedules or performance specifications on a timely basis or at all;


•	our ability to integrate and realize the benefits of acquisitions;


•	changes in our ability to sell vessels to our affiliates Golar Partners or Golar Power Limited, or Golar Power;


•	changes in our relationship with our affiliates Golar Partners, Golar Power and OneLNG SA, or OneLNG;


•	changes to rules and regulations applicable to LNG carriers, FSRUs or FLNGs;


•	actions taken by regulatory authorities that may prohibit the access of LNG carriers, FSRUs or FLNGs to various ports;


•	our inability to achieve successful utilization of our expanded fleet or inability to expand beyond the carriage of LNG and provision of FSRUs, particularly through our innovative FLNG strategy and our joint ventures;


•	changes in our ability to obtain additional financing on acceptable terms or at all;


•	increases in costs, including, among other things, crew wages, insurance, provisions, repairs and maintenance;


•	changes in general domestic and international political conditions, particularly where we operate;


•	a decline or continuing weakness in the global financial markets;


•	challenges by authorities to the tax benefits we previously obtained under certain of our leasing agreements; and


•	other factors listed from time to time in registration statements, reports or other materials that we have filed with or furnished to the Securities and Exchange Commission, or the Commission.

Please see our Risk Factors in Item 3 of this report for a more complete discussion of these and other risks and uncertainties.

We caution readers of this report not to place undue reliance on these forward-looking statements, which speak only as of their dates. These forward looking statements are not guarantees of our future performance, and actual results and future developments may vary materially from those projected in the forward looking statements.

We undertake no obligation to publicly update or revise any forward looking statements, except as required by law. If one or more forward looking statements are updated, no inference should be drawn that additional updates will be made.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

Throughout this report, unless the context indicates otherwise, the "Company," " Golar," "Golar LNG," "we," "us," and "our" all refer to Golar LNG Limited or any one or more of its consolidated subsidiaries, including Golar Management Limited, or Golar Management, or to all such entities. References in this Annual Report to "Golar Wilhelmsen" or "GWM" refer to Golar Wilhelmsen Management AS, a company that until September 2015 was jointly controlled by both Golar and Wilhelmsen Ship Management (Norway) AS. From September 4, 2015, GWM became our wholly owned subsidiary and subsequently changed its name to Golar Management Norway AS, or GMN. References in this Annual Report to "Golar Partners" or the "Partnership" refer, depending on the context, to our affiliate Golar LNG Partners LP (Nasdaq: GMLP) and to any one or more of its subsidiaries. References to “Golar Power” refer to our affiliate Golar Power Limited and to any one or more of its subsidiaries. References to “OneLNG _SM ” refer to our joint venture OneLNG S.A. and to any one or more of its subsidiaries. Unless otherwise indicated, all references to "USD" and "$" in this report are to U.S. dollars.

A. Selected Financial Data

The following selected consolidated financial and other data, which includes our fleet and other operating data, summarizes our historical consolidated financial information. We derived the statement of operations data for each of the years in the three-year period ended December 31, 2016 and the balance sheet data as of December 31, 2016 and 2015 from our audited Consolidated Financial Statements included in Item 18 of this Annual Report on Form 20-F, which were prepared in accordance with accounting principles generally accepted in the United States of America, or U.S. GAAP.

The selected statements of operations data with respect to the years ended December 31, 2013 and 2012 and the selected balance sheet data as of December 31, 2014, 2013 and 2012 have been derived from consolidated financial statements prepared in accordance with U.S. GAAP not included herein.

The following table should also be read in conjunction with the section of this Annual Report entitled "Item 5. Operating and Financial Review and Prospects" and our Consolidated Financial Statements and Notes thereto included herein.



	Years Ended December 31,
	2016		2015		2014		2013		2012
	(in thousands of U.S. $, except number of shares, per common share data, fleet data and other financial data)
Statement of Operations Data: ⁽¹⁾
Total operating revenues	80,257		102,674		106,155		99,828		410,345
Vessel operating expenses	53,163		56,347		49,570		43,750		86,672
Voyage and charter-hire expenses	36,423		69,042		27,340		14,259		9,853
Voyage, charter-hire and commission expenses - collaborative arrangement	11,140		—		—		—		—
Total operating expenses	221,364		234,604		146,488		118,332		207,562
Gain on disposals to Golar Partners	—		102,406		43,287		82,270		—
Operating (loss) income	(141,091	)	(36,380	)	(2,116	)	63,766		202,756
Total other non-operating income	(8,615	)	(27	)	272		(2,482	)	857,929
Net financial expenses (income)	59,541		174,619		87,852		(41,768	)	42,868
(Loss) income before equity in net earnings (losses) of affiliates, income taxes and non-controlling interests	(209,247	)	(211,026	)	(89,696	)	103,052		1,017,817



Net (loss) income	(160,780		)	(151,988		)	(46,362		)	109,555			1,012,162
Net (loss) income attributable to the stockholders of Golar LNG Ltd	(186,531		)	(171,146		)	(48,017		)	109,555			969,022
(Loss) earnings per common share
- basic ⁽²⁾	(1.99		)	(1.83		)	(0.55		)	1.36			12.09
- diluted ⁽²⁾	(1.99		)	(1.83		)	(0.55		)	1.28			11.66
Cash dividends declared and paid per common share	0.60			1.35			1.80			1.35			1.93

Balance Sheet Data (as of end of year):
Cash and cash equivalents	224,190			105,235			191,410			125,347			424,714
Restricted cash and short-term deposits ⁽³⁾	183,525			228,202			74,162			23,432			1,551
Assets held-for-sale	271,307			267,034			280,746			—			—
Long-term restricted cash ⁽³⁾	232,335			180,361			425			3,111			—
Investments in affiliates	648,780			541,565			746,263			766,024			903,322
Newbuildings	—			13,561			344,543			767,525			435,859
Asset under development	731,993			501,022			345,205			—			—
Vessels and equipment, net	1,883,066			2,336,144			1,648,888			811,715			573,615
Total assets	4,256,911			4,269,198			3,899,742			2,591,666			2,401,963
Current portion of long-term debt,	451,454			491,398			112,853			29,305			14,400
Liabilities held-for-sale	209,296			201,213			160,192			—			—
Long-term debt (including related party debt)	1,320,599			1,344,509			1,241,133			663,239			486,442
Total equity	1,909,826			1,916,179			2,237,422			1,771,727			1,755,947
Common shares outstanding ⁽²⁾ (in thousands)	101,081			93,547			93,415			80,580			80,504
Cash Flow Data ⁽¹⁾ :
Net cash (used in) provided by operating activities	(38,551		)	(344,649		)	24,873			67,722			233,810
Net cash used in investing activities	(2,222		)	(255,956		)	(1,429,270		)	(533,067		)	(290,700		)
Net cash provided by financing activities	159,728			514,430			1,470,460			165,978			414,691
Fleet Data (unaudited)
Number of vessels at end of year	15			17			13			7			6
Average number of vessels during year	15.0			14.0			8.8			5.5			12.6
Average age of vessels (years)	11.7			9.7			10.8			18.7			25.4
Total calendar days for fleet	5,864			5,647			2,133			2,012			4,615
Total operating days for fleet ⁽⁴⁾	4,034			4,481			2,059			1,501			3,684
Other Financial Data (unaudited):
Average daily time charter equivalent earnings, or TCE ⁽⁵⁾ (to the closest $100)	$	10,100		$	14,900		$	33,100		$	38,300		$	94,200
Average daily vessel operating costs ⁽⁶⁾	$	10,359		$	11,783		$	23,240		$	21,745		$	18,780

Footnotes

(1) From the initial public offering of our former subsidiary, Golar Partners, in April 2011, or the IPO, until the time of the first annual general meeting of unitholders of Golar Partners, or the AGM, on December 13, 2012, pursuant to the partnership agreement of Golar Partners, we retained the sole power to appoint, remove and replace all of the members of the Partnership's board of directors. Accordingly, Golar Partners was treated as our controlled subsidiary and Golar Partners' results were consolidated with the results of the Company. From the first AGM held by Golar Partners, the majority of the Partnership's board members became electable by the common unitholders, and from such date, we no longer retained the power to control the board of directors and hence the Partnership and accordingly, we deconsolidated Golar Partners and its subsidiaries from our consolidated financial statements. As a result, from December 13, 2012, Golar Partners has been considered our affiliate entity. The deconsolidation of Golar Partners resulted in a gain of $ 854 million recognized in 2012.

A summary of the key significant changes in our financial results, as a consequence of the deconsolidation, include:


•	A decrease in operating income and individual line items therein, in relation to Golar Partner’s fleet; and


•	A decrease in net financial expense in respect of Golar Partner’s debt and capital lease obligations, net of restricted cash deposits.

Offset by recognition of:


•	Gains on disposals to Golar Partners;


•	Management fee income from the provision of services to Golar Partners under each of the management and administrative services and the fleet management agreements; and


•	Equity in net earnings of affiliates, will change to reflect our share of the results of Golar Partners calculated with respect to our various interests in the Partnership, but offset by a charge for the amortization of the basis difference in relation to the $854 million gain on loss of control.

(2) Basic earnings per share are calculated based on the income available to common shareholders and the weighted average number of our common shares outstanding. Treasury shares are not included in this calculation. The calculation of diluted earnings per share assumes the conversion of potentially dilutive instruments.

(3) Restricted cash consists of bank deposits, which may only be used to settle certain pre-arranged loans or lease payments or deposits made in accordance with our contractual obligations under our equity swap line facilities, letter of credit facilities in connection with our tolling agreement, bid or performance bonds for projects we may enter. Short-term deposits represents highly liquid deposits placed with financial institutions, primarily from our consolidated VIEs, which are readily convertible into known amounts of cash with original maturities of less than 12 months.

(4) The total operating days for our fleet is the total number of days in a given period that our vessels were in our possession less the total number of days off-hire. We define days off-hire as days lost to, among other things, operational deficiencies, drydocking for repairs, maintenance or inspection, scheduled lay-up, vessel conversions, equipment breakdowns, special surveys and vessel upgrades, delays due to accidents, crewing strikes, certain vessel detentions or similar problems, or our failure to maintain the vessel in compliance with its specifications and contractual standards or to provide the required crew, or periods of commercial waiting time during which we do not earn charter hire.

(5) Non-U.S. GAAP Financial Measure : Time charter equivalent, or TCE, rate is a measure of the average daily performance of a vessel. For time charters, this is calculated by dividing total operating revenues (excluding vessel and other management fee), less any voyage expenses, by the number of calendar days minus days for scheduled off-hire. Under a time charter, the charterer pays substantially all of the vessel voyage related expenses. However, we may incur voyage related expenses when positioning or repositioning vessels before or after the period of a time charter, during periods of commercial waiting time or while off-hire during drydocking. TCE rate is a standard shipping industry performance measure used primarily to compare period-to-period changes in a company's performance despite changes in the mix of charter types (i.e. spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods. We include average daily TCE rate, a non-U.S. GAAP measure, as we believe it provides additional meaningful information in conjunction with total operating revenues, the most directly comparable U.S. GAAP measure, because it assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rate may not be comparable to that reported by other companies. The following table reconciles our total operating revenues to average daily TCE rate.



	Years Ended December 31,
	2016		2015		2014		2013		2012
	(in thousands of U.S. $, except number of shares, per common share data, fleet and other financial data)
Operating revenues	80,257		102,674		106,155		99,828		410,345
Less: Vessel and other management fee	(14,225	)	(12,547	)	(10,756	)	(9,270	)	(752	)
Time and voyage charter revenues	66,032		90,127		95,399		90,558		409,593
Voyage expenses*	(25,291	)	(23,434	)	(27,340	)	(14,259	)	(9,853	)
	40,741		66,693		68,059		76,299		399,740
Calendar days less scheduled off-hire days**	4,034		4,481		2,059		1,994		4,245
Average daily TCE rate (to the closest $100)	10,100		14,900		33,100		38,300		94,200

* The TCE calculations for 2016 and 2015 exclude charter-hire expenses, which arose from the charter back arrangements with Golar Partners with respect to the Golar Grand and, for 2015, the Golar Eskimo. This amounted to $22.3 million and $45.6 million for the years end 31 December 2016 and 2015, respectively.

** This excludes days when vessels are in lay-up, undergoing dry dock or undergoing conversion.

(6) We calculate average daily vessel operating costs by dividing vessel operating costs by the number of calendar days. Calendar days exclude those from vessels chartered in where the vessel operating costs are borne by the legal owner, and those of vessels undergoing conversion.

B. Capitalization and Indebtedness

Not applicable.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

The following risks relate principally to our business or to the industry in which we operate. Other risks relate principally to the securities market and ownership of our common shares. Any of these risks, or any additional risks not presently known to us or risks that we currently deem immaterial, could significantly and adversely affect our business, our financial condition, our operating results and the trading price of our common shares.

Risks Related to Our Company

We cannot guarantee that our FLNG vessel contract negotiations will progress favorably or our expansion into the FLNG market will be profitable.

We have entered into agreements with Perenco Cameroon, or Perenco, Societe Nationale de Hydrocarbures, or SNH, and the Republic of Cameroon related to a floating liquefied natural gas export project offshore Kribi, Cameroon that is expected to employ the converted Hilli, which has recently been renamed to Hilli Episeyo . Under the terms of the agreements, the converted Hilli is scheduled to provide liquefaction services to the export project during the second half of 2017 for an initial term of eight years. However, given the complex nature of the project, the new and highly technical nature of the FLNG vessel conversion process, and that the agreements are contingent on the satisfaction of significant conditions which, if not satisfied, or waived by the customer, may result in termination prior to or after employment commences, we cannot assure you that the project will commence commissioning in the second half of 2017 as planned and revenues will start accruing once commissioning commences.

In addition, we, in conjunction with our joint venture, OneLNG, are currently marketing FLNG vessels to several prospective customers. Our aim is that OneLNG will find strong strategic partners that have interest in utilizing one or several FLNGs to produce LNG from one or more specific defined gas reserves. While OneLNG has recently entered into a Shareholders’ Agreement with Ophir to establish a joint operating company, or JOC, which is expected to use the Gandria as a converted FLNG, it is uncertain, however, whether any other final strategic partnerships will be agreed for other FLNG vessels. Our and OneLNG’s inability to reach agreements to provide FLNG vessels on favorable terms may have an adverse effect on our financial condition.

Any agreement we or OneLNG enter into with respect to providing FLNGs are or will be subject to significant conditions, which, if not satisfied, or waived by the customer, may result in termination of the agreement, prior to or after employment commences, in which case we may not realize any revenues under such agreements. We can provide no assurance that any of our FLNGs will be able to commence employment or realize any revenues, which could have a material adverse effect on our results of operations and financial condition.

Completion of our FLNG vessel conversion projects will be dependent on our obtaining additional financing.

As of December 31, 2016, we have capitalized costs of $732.0 million, $31.0 million, and $nil in relation to the Hilli, Gimi , and Gandria conversions, respectively. We are committed to make approximately $ 485.1 million aggregate additional payments to complete the Hilli conversion. The Gimi and Gandria are currently in lay-up awaiting delivery to Keppel for conversion. The conversion agreements for the Gimi and Gandria are both subject to certain payments and notices to proceed with the conversions.

In September 2015, in connection with the conversion of the Hilli to a FLNG vessel, we entered into agreements with a subsidiary of CSSC (Hong Kong) Shipping Co. Ltd., or CSSCL, for a pre-delivery credit facility and a post-delivery sale and leaseback financing, or the CSSCL Finance Leasing Arrangement. We expect the CSSCL Finance Leasing Arrangement will cover the remainder of the conversion and commissioning costs for the Hilli , but additional costs may arise.

We expect that the total estimated conversion and fully commissioned cost for the Gimi will be approximately $1.2 billion. We will be required to make approximately $1.2 billion in aggregate additional payments for the completion of such conversion and commissioning, subject to our termination option.

We expect that the total estimated conversion and fully commissioned cost for the Gandria will be approximately $1.5 billion. We expect to contribute the Gandria to OneLNG in connection with the formation of the JOC and that the JOC will arrange financing of the Gandria conversion.

While we believe we will be able to arrange financing as necessary for the remaining payments due for the Gimi and the Gandria conversions and commissioning, to the extent we and they do not timely obtain necessary financing, the completion of the conversions and newbuilding could be delayed or we or they could suffer financial loss, including the loss of all or a portion of the payments made to the shipyards and, in certain circumstances, any deficiencies if the shipyards are not able to recover their costs from the sale of the vessels.

If there is a delay or default by a shipyard or if a shipyard does not meet certain performance requirements, our earnings and financial condition could suffer.

We have entered into agreements with Keppel and Black & Veatch Corporation, or Black & Veatch, for the conversion of two of our oldest LNG carriers, the Hilli and the Gimi into FLNGs . Also, we have agreed contract terms for the conversion of the Gandria into an FLNG in connection with the formation of the JOC. In the event the shipyards do not perform under the contracts and we are unable to enforce certain refund guarantees with third party banks for any reason, we may lose all or part of our investments, which would have a material adverse effect on our results of operations, financial condition and cash flows.

In addition, the conversions and newbuilding are subject to the risk of delay or default by the shipyards caused by, among other things, unforeseen quality or engineering problems, work stoppages or other labor disturbances at the shipyards, bankruptcy of or other financial crisis involving the shipyards, weather interference, unanticipated cost increases, delays in receipt of necessary equipment, political, social or economic disturbances, inability to finance the construction of the vessel and inability to obtain the requisite permits or approvals. In accordance with industry practice, in the event the shipyards are unable or unwilling to deliver the vessel, we may not have substantial remedies. Failure to convert, construct or deliver the vessels by the shipyards or any significant delays could increase our expenses and diminish our net income and cash flows.

Moreover, the Hilli will be the world’s first LNG carrier to have been retrofitted for FLNG service. Due to the new and highly technical process for each our FLNG vessel conversions, each of our FLNG conversion projects is subject to risks that could negatively affect our earnings and financial condition, including risk of delays or cost overruns. For example, the highly technical work is only capable of being performed by a limited number of contractors. Accordingly, a change of contractors for any reason would likely result in higher costs and a significant delay to our delivery schedules. In addition, given the novelty of our FLNG conversion projects, the completion of retrofitting our vessels as FLNG vessels could be subject to risks of significant cost overruns. As well, if the shipyard is unable to deliver any converted FLNG vessel on time, we might be unable to perform

related charters. Any substantial delay in the conversion of any of our vessels into FLNG vessels could mean we will not be able to satisfy potential employment. To date, there are no significant delays on the progress of the Hilli conversion.

Should the Hilli fail to begin its commission at the pre-determined start date in September 2017, the Tolling Agreement provides that the parties have a six month period during which no delay penalty can be incurred. After such six month period, there are certain penalties of up to $400 million, payable over time, due to Perenco and SNH for the Hilli’s under or non performance and covers an eventuality where such under or non performance is prolonged such that Perenco and SNH terminate the Tolling Agreement. Therefore, if the Hilli experiences delays in commissioning, it may have a significant impact on our results of operations and financial condition.

Furthermore, if any of our FLNG vessels, once converted, is not able to meet certain performance requirements or perform as intended, we may have to accept reduced charter rates. Alternatively, it may not be possible to charter the converted FLNG vessel at all, which would have a significant negative impact on our cash flows and earnings.

If the letter of credit is not extended, our earnings and financial condition could suffer.

Under the terms of the tolling agreement for the aforementioned project, the converted Hilli is scheduled to provide liquefaction services to the project by the second half of 2017 for an initial term of eight years. In accordance with the terms of the tolling agreement, we have obtained a letter of credit issued by a financial institution to our Project Partners that guarantees certain payments we are required to make to them under the tolling agreement. The letter of credit is currently set to expire on December 31, 2017, but it will automatically extend for successive one year periods until the tenth anniversary of the acceptance of the Hilli to perform the agreed services for the project, unless the financial institution elects to not extend the letter of credit. The financial institution may elect to not extend the letter of credit by giving notice at least ninety days’ prior to the current December 31, 2017 expiration date or December 31 in any subsequent year as the letter of credit is automatically extended for successive one year periods. If the letter of credit (i) ceases to be in effect or (ii) the financial institution elects to not extend it, unless replacement security for payment is provided within a certain time, then the tolling agreement may be terminated and we may be liable for a termination fee of up to $400 million. Accordingly, if the financial institution elects at some point in the future to not extend the letter of credit, our financial condition could be materially and adversely affected.

We and Schlumberger will have an obligation to make additional payments to OneLNG.

We and Schlumberger have each agreed to make up to an additional $250 million of capital contributions to OneLNG, pursuant to and in accordance with the terms of the Joint Venture and Shareholders’ Agreement. While we believe we will be able to arrange funding for the full amount of our obligations, to the extent we or Schlumberger do not timely make the required capital contributions, such failure to provide the necessary equity funding could have material adverse consequences for OneLNG, and we and Schlumberger will have the right to purchase the other’s interest in OneLNG if the other defaults in such funding obligations.

The success of our investment in OneLNG is subject to the various risks related to OneLNG’s business.

OneLNG’s business is subject to a variety of risks, including, among others, any inability of Schlumberger and us to successfully work together in the shared management of OneLNG, any inability of OneLNG to identify and enter in appropriate projects, any inability of OneLNG to obtain sufficient financing for any project it identifies, any failure of upstream LNG producing projects connected with OneLNG’s activities, and other industry, regulatory, economic and political risks similar in nature to the risks faced by us.

Additionally, OneLNG’s participation in the JOC and the development of the Fortuna Project is subject to a variety of risks, including, among others, the failure to satisfy all the conditions precedent to effectiveness of the JOC Shareholders’ Agreement, including agreement of final project terms and documentation, execution of documentation for approximately $1.2 billion of project debt financing with respect to the conversion of the Gandria , approval by the government of Equatorial Guinea and final investment decision of OneLNG or Ophir, and other risks such as an inability of Ophir and OneLNG to successfully work together in the shared management of the JOC, risks related to the conversion of the Gandria similar in nature to the risks related to the Hilli conversion, and the failure of the Block R License to yield the projected amount of LNG.

The expected total capital expenditure for the Fortuna Project is approximately $2.0 billion to reach first gas. Approximately $1.2 billion is expected to be debt financed. While we believe that we, together with OneLNG, will be able to arrange financing as required for the conversion of the Gandria , to the extent that we do not timely obtain necessary financing and OneLNG or Ophir fail to make any required.

We have a substantial equity investment in Golar Power that is subject to the risks related to Golar Power’s business.

We have a substantial equity investment in Golar Power. In addition to the value of our investment, we expect to receive cash distributions from Golar Power and management fee income from the provision of services to Golar Power under a management and administrative services agreement for the vessels in Golar Power’s fleet. The value of our investment, the income generated from our investment and the management fee income is subject to a variety of risks, including the risks related to Golar Power’s business. In turn, Golar Power’s business is subject to a variety of risks, including, among others, any inability of Stonepeak and us to successfully work together in the shared management of Golar Power, any inability of Golar Power to identify and enter into appropriate projects, any inability of Golar Power to obtain sufficient financing for any project it identifies, any failure of upstream and downstream LNG producing projects connected with Golar Power’s activities, and other industry, regulatory, economic and political risks similar in nature to the risks faced by us.

Although Golar Power has approved making a final investment decision in connection with the Sergipe Project, we cannot assure you that the Sergipe Project will proceed as planned. The capital expenditure for the power station and terminal components of the Sergipe Project, including taxes and financing costs, is estimated at 4.3 billion Brazilian Real equal to approximately $1.4 billion at current exchange rates. Of this amount, the majority is expected to be funded by Centrals Electricas de Sergipe S.A., or CELSE, with debt financing. While we believe that CELSE will be able to arrange financing as necessary for the power station and terminal, to the extent that CELSE does not timely obtain necessary financing, the completion of the project could be delayed and Golar Power and we could suffer financial loss.

In addition, the Sergipe Project is subject to a variety of risks including General Electric’s completion of the Sergipe Project in accordance with the terms of the related EPC contract. Additionally, constructing and operating a power plant is subject to certain risks that include unscheduled plant outages, equipment failure, labor disputes, disruptions in fuel supply, inability to comply with regulatory or permit requirements, natural disasters or terrorist acts, cyber attacks or other similar occurrences, and inherent risks which may occur as a result of inadequate internal processes, technological flaws, human error or actions of third parties or other external events. The control and management of these risks depend upon adequate development and training of personnel and on the existence of operational procedures, preventative maintenance plans and specific programs supported by quality control systems which reduce, but do not eliminate, the possibility of the occurrence and impact of these risks. The hazards described above, along with other safety hazards associated with our operations, can cause significant personal injury or loss of life, severe damage to and destruction of property, plant and equipment, contamination of, or damage to, the environment and suspension of operations. The occurrence of any one of these events may result in Golar Power, through its ownership interest in CELSE, being named as a defendant in lawsuits asserting claims for substantial damages, environmental cleanup costs, personal injury and fines and/or penalties.

Also, exchange rate fluctuations between the US Dollar and the Brazilian Real could have an adverse impact on the results of operations of Golar Power with respect to its investments in Brazil, including its investments in the Sergipe Project through CELSE. The principal currency for operating expenses is the U.S. Dollar; however, a significant portion of expenses for CELSE will be paid in Brazilian Real. This exposure to foreign currency could lead to fluctuations in Golar Power’s net income and net revenue due to changes in the value of the U.S. Dollar relative to the Brazilian Real.

We are obligated to make additional payments to Golar Power in connection with the related Shareholders Agreement.

As a closing condition to the Golar Power joint venture transaction, we and Stonepeak entered into an Investment and Shareholders Agreement with respect to Golar Power that governs, among other things, its management and funding. Under the agreement, we and Stonepeak have agreed to contribute additional equity funding to Golar Power, on a pro rata basis, including (i) up to an aggregate of $150 million due through to mid-2018 and (ii) additional amounts as may be required by Golar Power subject to the approval of its board of directors.

While we believe we will be able to arrange funding for the full amount of our pro rata obligations, to the extent we or Stonepeak do not timely make the required payments, such failure could have material adverse consequences for Golar Power, and failure by us to fulfill our payment obligations could adversely impact our interests in Golar Power.

We may guarantee the indebtedness of our joint ventures.

We may provide guarantees to certain banks with respect to commercial bank indebtedness of our joint ventures. This includes the debt under our $1.125 billion loan facility borrowed by Golar Power’s subsidiaries that own the Golar Celsius and Golar Penguin , which are our former subsidiaries that we contributed to Golar Power. Following our contribution of those subsidiaries, they continue to owe the debt associated with the Golar Celsius and Golar Penguin to the lenders under our $1.125 billion loan facility, which we guarantee. Failure by any of our joint ventures, including Golar Power, to service its debt requirements and comply with any provisions contained in its commercial loan agreements, including paying scheduled installments and complying

with certain covenants, may lead to an event of default under the related loan agreement, including our $1.125 billion loan facility. As a result, if our joint ventures are unable to obtain a waiver or do not have enough cash on hand to repay the outstanding borrowings, the relevant lenders may foreclose their liens on the vessels securing the loans or seek repayment of the loan from us, or both.

We may be required to repurchase the Golar Tundra.

In May 2016, we completed the sale of the Golar Tundra to Golar Partners for the purchase price of $330 million, less the net lease obligations under the lease agreement with China Merchant Bank Financial Leasing and net working capital adjustments. The Golar Tundra is subject to a time charter with WAGL, a company jointly owned by the Nigerian National Petroleum Corporation and Sahara Energy Resource Ltd. Following the completion of minor modifications to the Golar Tundra in May 2016, it arrived in Ghana and is awaiting instructions for commissioning and start-up. Accordingly, Golar Partners tendered the notice of readiness for the Golar Tundra to WAGL in mid-June 2016, with payments beginning to accrue under the contract 30 days thereafter. However, as of the current date WAGL has not formally accepted the notice of readiness. By virtue of a put option in the purchase agreement with Golar Partners related to our sale of the Golar Tundra to Golar Partners, in the event the WAGL charter does not commence within 12 months from the date of closing of the Golar Tundra sale, Golar Partners may require that Golar repurchase the Golar Tundra for the original purchase price.

We previously entered into six UK tax leases, of which one lease remains, being that of the Methane Princess lease. In the event of any adverse tax changes or a successful challenge by the UK Revenue authorities, or HMRC, with regard to the initial tax basis of these transactions or in relation to our 2010 lease restructurings, or in the event of an early termination of the Methane Princess lease, we may be required to make additional payments principally to the UK vessel lessor or Golar Partners, which could adversely affect our earnings and financial position.

We previously entered into six UK tax leases, of which one lease remains, being that of the Methane Princess lease, albeit following the deconsolidation of Golar Partners in 2012 the capital lease obligation is no longer included within our consolidated balance sheet. However, by virtue of certain indemnity provisions under certain agreements with Golar Partners, we have agreed to indemnify Golar Partners in the event of any tax liabilities in excess of scheduled or final scheduled amounts arising from the Methane Princess lease and termination thereof. HMRC has been challenging the use of similar lease structures and has been engaged in litigation of a test case for some years. In August 2015, following an appeal to the Court of Appeal by the HMRC which set aside previous judgments in favor of an unrelated tax payer, the First Tier Tribunal (UK court) ruled in favor of HMRC. In the event of any adverse tax changes or a successful challenge by HMRC with regard to the initial tax basis of the six UK tax leases, or in relation to our 2010 lease restructurings, or in the event of an early termination of the remaining Methane Princess lease, we may be required to make additional payments principally to the UK vessel lessor or Golar Partners, which could adversely affect our earnings and financial position. We could be required to return all, or a portion of, or in certain circumstances significantly more than, the upfront cash benefits that we received in respect of our lease financings, including the 2010 or subsequent termination restructurings. The gross cash benefit we received upfront on these leases amounted to approximately £41 million British Pounds (before deduction of fees). We are currently in conversation with HMRC on this matter, presenting the factual background of our position. Please refer to Note 33. Other Commitments and Contingencies - UK tax lease benefits, of our consolidated financial statements contained herein.

For periods when vessels are in lay-up or being converted, total vessel revenues will be lower.

Three of our vessels are currently in lay-up and one is undergoing conversion to a FLNG. The Hilli and the Gandria were placed into lay-up in April 2013, the Gimi in January 2014 and the Golar Viking in December 2015. However, the Hilli entered the Keppel shipyard in September 2014 and commenced her retrofitting to a FLNG. Both the Gimi and the Gandria are currently in lay-up but have been designated for use in our FLNG conversion projects pending lodgment of their final notices to proceed. We will receive no revenues on account of vessels which are in lay-up or being converted.

A shortage of qualified officers and crew could have an adverse effect on our business and financial condition.

FLNGs require a technically skilled officer staff with specialized training. If we are unable to employ technically skilled staff and crew, we will not be able to adequately staff our vessels particularly as we take delivery of our converted FLNG vessels. A material decrease in the supply of technically skilled officers or an inability to attract and retain such qualified officers could impair our ability to operate, or increase the cost of crewing our vessels, which would materially adversely affect our business, financial condition and results of operations.

We may not be able to obtain financing, to meet our obligations as they fall due, to fund our growth or our future capital expenditures, which could negatively impact our results of operations, financial condition and ability to pay dividends.

In order to fund future FLNG vessel and FSRU retrofitting projects, liquefaction projects, newbuilding programs, vessel acquisitions, increased working capital levels or other capital expenditures, we may be required to use cash from operations, incur additional borrowings, raise capital through the sale of debt or additional equity securities or complete sales of our interests in our vessel owning subsidiaries operating under long-term charters to Golar Partners. Our ability to use cash from operations, obtain bank financing, access the capital markets for any future debt or equity offerings or complete sales to Golar Partners may be limited by our financial condition at the time of such financing or offering, as well as by adverse market conditions resulting from, among other things, general economic conditions and contingencies and uncertainties that are beyond our control. In addition, our use of cash from operations may reduce the amount of cash available for dividend distributions. Our failure to obtain funds for future capital expenditures could impact our results of operations, financial condition and our ability to pay dividends. Furthermore, our ability to access capital, overall economic conditions and our ability to secure charters could limit our ability to fund our growth and capital expenditures. The issuance of additional equity securities would dilute your equity interest in us and reduce any pro rata dividend payments without a commensurate increase in cash allocated to dividends, if any. Even if we are successful in obtaining bank financing, paying debt service would limit cash available for working capital and increasing our indebtedness could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

A decline in the market value of Golar Partners’ common unit price could result in breaches of our margin loan facility.

We entered into a loan agreement, dated March 3, 2017, among one of our wholly-owned subsidiaries, as borrower, Golar LNG Limited, as guarantor, Citibank N.A., as administrative agent, initial collateral agent and calculation agent, and Citibank N.A., as lender. We refer to this as the Margin Loan Facility. If the outstanding balance of the Margin Loan Facility were to exceed the specified loan-to-value ratio threshold (for example, as a result of a decline in the aggregate market value of the pledged securities), we would be required to pledge additional cash or cash equivalents as collateral under the Margin Loan Facility or repay a portion of the Margin Loan Facility. If we were unable to pledge such additional collateral or repay a portion of the Margin Loan Facility Citibank N.A. could accelerate our debt and foreclose on our Golar Partners common units pledged as collateral under the term loan credit facility. Our term loan credit facility could thus increase our vulnerability to adverse economic and industry conditions.

We are exposed to U.S. dollar and foreign currency fluctuations and devaluations that could harm our reported revenue and results of operations.

Our principal currency for our operations and financing is the U.S. dollar. We generate the majority of our revenues in the U.S. dollar. Apart from the U.S. dollar, we incur a portion of capital, operating and administrative expenses in multiple currencies.

Due to a portion of our expenses being incurred in currencies other than the U.S. dollar, our expenses may, from time to time, increase relative to our revenues as a result of fluctuations in exchange rates, particularly between the U.S. dollar and the Euro, the British Pound, and the Norwegian Kroner, which could affect the amount of net income that we report in future periods. We use financial derivatives to hedge some of our currency exposure. Our use of financial derivatives involves certain risks, including the risk that losses on a hedged position could exceed the nominal amount invested in the instrument and the risk that the counterparty to the derivative transaction may be unable or unwilling to satisfy its contractual obligations, which could have an adverse effect on our results.

Our financing agreements are secured by our vessels and contain operating and financial restrictions and other covenants that may restrict our business, financing activities and ability to make cash distributions to our shareholders. In addition, because of the presence of cross-default provisions in certain of our and Golar Partners’ financing agreements that cover both us and Golar Partners, a default by us or Golar Partners could lead to multiple defaults in our agreements.

Our obligations under our financing arrangements are secured by certain of our vessels and guaranteed by our subsidiaries holding the interests in our vessels. Our loan agreements impose, and future financial obligations may impose, operating and financial restrictions on us. These restrictions may require the consent of our lenders, or may prevent or otherwise limit our ability to, among other things:


•	merge into, or consolidate with, any other entity or sell, or otherwise dispose of, all or substantially all of our assets;


•	make or pay equity distributions;


•	incur additional indebtedness;


•	incur or make any capital expenditures;


•	materially amend, or terminate, any of our current charter contracts or management agreements; or


•	charter our vessels.

Our loan agreements and lease financing arrangements also require us to maintain specific financial levels and ratios, including minimum amounts of available cash, minimum ratios of current assets to current liabilities (excluding current portion of long-term debt), minimum levels of stockholders’ equity and maximum loan amounts to value. If we were to fail to maintain these levels and ratios without obtaining a waiver of covenant compliance or modification to our covenants, we would be in default of our loans and lease financing agreements, which, unless waived by our lenders, could provide our lenders with the right to require us to increase the minimum value held by us under our equity and liquidity covenants, increase our interest payments, pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet or reclassify our indebtedness as current liabilities and could allow our lenders to accelerate our indebtedness and foreclose their liens on our vessels, which could result in the loss of our vessels. If our indebtedness is accelerated, we may not be able to refinance our debt or obtain additional financing, which would impair our ability to continue to conduct our business.

Moreover, in connection with any waivers and/or amendments to our loan and lease agreements, our lenders may impose additional operating and financial restrictions on us and/or modify the terms of our existing loan and lease agreements.

Because of the presence of cross-default provisions in certain of our and Golar Partners’ loan and lease agreements that cover both us and Golar Partners, a default by us or Golar Partners under a loan or lease agreement and the refusal of any one lender or lessor to grant or extend a waiver could result in the acceleration of our indebtedness under our other loan and lease agreements even if our or Golar Partners’ other lenders or lessors have waived covenant defaults under the respective agreements. A cross-default provision means that if we or Golar Partners default on one loan or lease, we would then default on our other loans containing a cross-default provision.

Servicing our debt agreements substantially limits our funds available for other purposes and our operational flexibility.

A large portion of our cash flow from operations is used to repay the principal and interest on our debt agreements. As of December 31, 2016, our net indebtedness (including loan debt, net of restricted cash and short-term deposits and net of cash and cash equivalents) was $1.2 billion and our ratio of net indebtedness to total capital (comprising net indebtedness plus shareholders' equity) was 0.38.

Our consolidated debt could increase substantially. We will continue to have the ability to incur additional debt. Our level of debt could have important consequences to us, including:


•	Our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be impaired or such financing may not be available on favorable terms;


•	We will need a substantial portion of our cash flow to make principal and interest payments on our debt, reducing the funds that would otherwise be available for operations, future business opportunities and dividends to stockholders;


•	We may be more vulnerable than our competitors with less debt to competitive pressures or a downturn in our industry or the economy generally; and


•	Our flexibility in obtaining additional financing, pursuing other business opportunities and responding to changing business and economic conditions may be limited.

Our ability to service our indebtedness will depend upon, among other things, our future financial and operating performance, which will be affected by prevailing economic conditions and financial, business, regulatory and other factors, some of which are beyond our control, as well as the interest rates applicable to our outstanding indebtedness. If our operating income is not sufficient to service our indebtedness, we will be forced to take actions, such as reducing or delaying our business activities, acquisitions, investments or capital expenditures, selling assets, restructuring or refinancing our debt or seeking additional equity capital. We may not be able to effect any of these remedies on satisfactory terms, or at all. In addition, a lack of liquidity in the debt and equity markets could hinder our ability to refinance our debt or obtain additional financing on favorable terms in the future.

We are exposed to volatility in the London Interbank Offered Rate, or LIBOR, and the derivative contracts we have entered into to hedge our exposure to fluctuations in interest rates could result in higher than market interest rates and charges against our income.

As of December 31, 2016, we had total outstanding debt of approximately $1.8 billion, of which approximately $0.9 billion was exposed to a floating interest rate based on LIBOR, which has been volatile recently and could affect the amount of interest payable on our debt. In order to manage our exposure to interest rate fluctuations, we use interest rate swaps to effectively fix a part of our floating rate debt obligations. As of December 31, 2016, we have interest rate swaps with a notional amount of approximately $1.3 billion representing approximately 140.2% of our total floating rate debt. While we are economically hedged, we do not apply hedge accounting and therefore interest rate swaps mark-to-market valuations may adversely affect our results. Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant expenses. The derivatives strategies that we employ currently and in the future may not be successful or effective, and we could, as a result, incur substantial additional interest costs or losses.

In the future, our financial condition could be materially adversely affected to the extent we do not hedge our exposure to interest rate fluctuations under loans that have been advanced at a floating rate. Any hedging activities we engage in may not effectively manage our interest rate exposure or have the desired impact on our financial conditions or results of operations.

We will have to make additional contributions to our pension scheme because it is underfunded.

We provide a pension plan for certain of our current and former marine employees. As of December 31, 2016, there were 13 active members and 225 pensioners. Members do not contribute to the plan and it is closed to any new members. The plan is underfunded at the current contribution level, and we will need to increase our contributions significantly in order to avoid the plan’s assets being extinguished. Such contributions could have a material and adverse effect on our cash flows and financial condition.

Our consolidated lessor variable interest entities may enter into different financing arrangements, which could affect our financial results.

By virtue of the sale and leaseback transactions we have entered into with certain entities of Chinese financial institutions that are determined to be variable interest entities, or the lessor VIEs, where we are deemed to be the primary beneficiary, we are required to consolidate these lessor VIEs into our results. Although consolidated into our results, we have no control over the funding arrangements negotiated by these lessor VIEs such as interest rates, maturity and repayment profiles. In consolidating these lessor VIEs, we must make assumptions regarding the debt amortization profile and the interest rate to be applied against the lessor VIEs’ debt principle. Our estimates are therefore dependent upon the timeliness of receipt and accuracy of financial information provided by these lessor VIE entities. For additional detail refer to note 4 "Variable Interest Entities" to our Consolidated Financial Statements included herein. As of December 31, 2016, we consolidated lessor VIEs in connection with the lease financing transactions for six of our vessels. For descriptions of our current financing arrangements including those of our lessor VIEs, please read "Item 5. Operating and Financial Review and Prospects-B. Liquidity and Capital Resources-Borrowing Activities." The funding arrangements negotiated by these lessor VIEs could adversely affect our financial results.

Exposure to equity price risk in our shares could adversely affect our financial results.

As a result of holding an equity swap, which we refer to as our Total Return Swap, in our own securities, as of April 24, 2017 , we are exposed to the movement in our share price in respect of 3.0 million shares under the equity swap. Should the price of our shares fall materially below the level at which the shares were acquired, the equity swap mark-to-market valuations could adversely affect our results. In addition, the equity swap has a credit arrangement, whereby we are required to provide cash collateral equal to 20% of the initial acquisition price and to subsequently post additional cash collateral that corresponds to any further unrealized loss. As of December 31, 2016 , cash collateral of $70.0 million has been provided. In the event the share price declines, the cash collateral requirements could adversely affect our liquidity and financial position.

We have a substantial equity investment in our former subsidiary, Golar Partners, that from December 13, 2012, is no longer consolidated with our financial results, and our investment is subject to the risks related to Golar Partners’ respective business.

As of December 31, 2016, we had an ownership interest of 33.9% (including our 2% general partner interest) in Golar Partners, in addition to 100% of the incentive distribution rights, or IDRs, which we account for under the equity method of accounting. The aggregate carrying value of our investments in Golar Partners as of December 31, 2016 was $ 507.2 million , which represents our total interests in the common and general partner units and the IDRs. The common units of Golar Partners are listed on the NASDAQ Global Market, which as of December 31, 2016 was $24.04. The estimated fair value of our investments in Golar

Partners is calculated with reference to the quoted price of the common units, with adjustments made to reflect the different rights associated with each class of investment. If the price of the common units declines, such that the fair value of our investments in Golar Partners falls below carrying value, and it is determined to be due to other than temporary reasons, we would be required to recognize future impairment charges that may have a material adverse effect on our results of operations in the period that the impairment charges are recognized.

In addition to the value of our investment, we receive cash distributions from Golar Partners, which amounted to $55.3 million for the year ended December 31, 2016. Furthermore, we receive management fee income from the provision of services to Golar Partners under each of the management and administrative services agreement and the fleet management agreements, which amounted to $10.7 million for the year ended December 31, 2016.

The value of our investment, the income generated from our investment and the management fee income is subject to a variety of risks, including the risks related to Golar Partners’ business as disclosed in its respective public filings with the SEC. The occurrence of any such risks may negatively affect our financial condition. As of April 24, 2017 , Golar Partners had a fleet of ten vessels which we manage under the management agreements referred to above, that operate under medium to long-term charters with a concentrated number of charterers that include BG Group, Petrobras, Dubai Supply Authority, PT Nusantara Regas, Eni S.p.A, The Government of Hashemite Kingdom of Jordan and KNPC. Accordingly, a significant risk to Golar Partners is the loss of any of these customers, charters or vessels, or under certain operational circumstances, a decline in payments under any of the charters, which could have a material adverse effect on its business and its ability to make cash distributions to its unitholders if the vessel was not re-chartered to another customer for an extended period of time.

We operate the majority of our vessels, through the Cool Pool, in the spot/short-term charter market, which is subject to volatility. Failure by the Cool Pool to find profitable employment for these vessels could adversely affect our operations.

As of April 24, 2017 , we had eight LNG carriers operating in the spot market within the Cool Pool. Please see "Item 4. Information on the Company - Cool Pool" for further detail. The spot market refers to charters for periods of up to twelve months. Spot/short-term charters expose the Cool Pool to the volatility in spot charter rates, which can be significant. In contrast, medium to long-term time charters generally provide reliable revenues, but they also limit the portion of our fleet available to the spot/short-term market during an upswing in the LNG industry cycle, when spot/short-term market voyages might be more profitable. The charter rates payable in the spot market are uncertain and volatile and will depend upon, among other things, economic conditions in the LNG market.

If the Cool Pool is unable to find profitable employment or re-deploy ours or any of the other Cool Pool participants' vessels, we will not receive any revenues from the Cool Pool, but we may be required to pay expenses necessary to maintain that vessel in proper operating condition. A sustained decline in charter or spot rates or a failure by the Cool Pool to successfully charter its participating vessels could have a material adverse effect on our results of operations and our ability to meet our financing obligations.

Our growth depends on our ability to expand relationships with existing customers and obtain new customers, for which we will face substantial competition.

One of our principal objectives is to enter into additional medium or long-term, fixed-rate time charters for our LNG carriers and FSRUs. The process of obtaining new long-term time charters is highly competitive and generally involves an intensive screening process and competitive bids, and often extends for several months. LNG carrier or FSRU time charters are awarded based upon a variety of factors relating to the vessel operator, including but not limited to:


•	LNG shipping and FSRU experience and quality of ship operations;


•	shipping industry relationships and reputation for customer service and safety;


•	technical ability and reputation for operation of highly specialized vessels, including FSRUs;


•	quality and experience of seafaring crew;


•	the ability to finance FSRUs and LNG carriers at competitive rates, and financial stability generally;


•	construction management experience, including, (i) relationships with shipyards and the ability to get suitable berths and (ii) the ability to obtain on-time delivery of new FSRUs and LNG carriers according to customer specifications;


•	willingness to accept operational risks pursuant to a charter, such as allowing termination of the charter for force majeure events; and


•	competitiveness of the bid in terms of overall price.

We expect substantial competition for providing floating storage and regasification services and marine transportation services for potential LNG projects from a number of experienced companies, including state-sponsored entities and major energy companies. Many of these competitors have significantly greater financial resources and larger and more versatile fleets than we and the Cool Pool do. We anticipate that an increasing number of marine transportation companies, including many with strong reputations and extensive resources and experience, will enter the FSRU market and LNG transportation market. This increased competition may cause greater price competition for time charters. As a result of these factors, we and the Cool Pool may be unable to expand our relationships with existing customers or obtain new customers on a profitable basis, if at all, which could have a material adverse effect on our business, results of operations, financial condition and ability to make cash distributions.

An increase in costs could materially and adversely affect our financial performance.

Our vessel operating expenses and drydock capital expenditures depend on a variety of factors, including crew costs, provisions, deck and engine stores and spares, lubricating oil, insurance, maintenance and repairs and shipyard costs, many of which are beyond our control and affect the entire shipping industry. Also, while we do not bear the cost of fuel (bunkers) under our time charters, fuel is a significant, if not the largest, expense in our operations when our vessels are operating under voyage charters, are idle during periods of commercial waiting time or when positioning or repositioning before or after a time charter. If costs rise, they could materially and adversely affect our results of operations.

We may be unable to attract and retain key management personnel in the LNG industry, which may negatively impact the effectiveness of our management and our results of operation.

Significant demands are placed on our management as a result of our growth. As we expand our operations, we must manage and monitor our operations, control costs and maintain quality and control. In addition, the provision of management services to our affiliates, Golar Partners, Golar Power and OneLNG, and the supervision of the conversion of LNG carriers to FLNG vessels has increased the complexity of our business and placed additional demands on our management. Our success depends, to a significant extent, upon the abilities and the efforts of our senior executives. While we believe that we have an experienced management team, the loss or unavailability of one or more of our senior executives for any extended period of time could have an adverse effect on our business and results of operations.

As our fleet grows in size, we may need to improve our operations and financial systems and recruit additional staff and crew; if we cannot improve these systems or recruit suitable employees, our business and results of operations may be adversely affected.

As our fleet and the fleets of our affiliates grow, we may have to invest in upgrading our operating and financial systems. In addition, we may have to recruit well‑qualified seafarers and shoreside administrative and management personnel. We may not be able to hire suitable employees to the extent we continue to expand our fleet. Our vessels require technically skilled staff with specialized training. If we are unable to find and employ such technically skilled staff, we may not be able to adequately staff our vessels or the vessels of our affiliates. If we are unable to operate our financial and operations systems effectively or we are unable to recruit suitable employees, our results of operation and may be adversely affected.

We are subject to certain risks with respect to our contractual counterparties, and failure of such counterparties to meet their obligations could cause us to suffer losses or otherwise adversely affect our business.

We have entered into, and may enter in the future, contracts, charter contracts, newbuilding contracts, vessel conversion contracts, credit facilities with banks, sale and leaseback contracts, interest rate swaps, foreign currency swaps and equity swaps. Such agreements subject us to counterparty risks. The ability of each of our counterparties to perform its obligations under a contract with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions and the overall financial condition of the counterparty. Should a counterparty fail to honor its obligations under agreements with us, we could sustain significant losses, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The current and future state of the global financial markets and current economic conditions may adversely impact our ability to obtain new financing or to refinance our existing debt portfolio on terms acceptable to us or could cause us to recognize losses, which would negatively impact our business.

Global financial markets and economic conditions have been, and continue to be, volatile. Compared to the middle of the prior decade, operating businesses in the global economy face tighter availability of credit and weaker demand for goods and services. There has been a general decline in the willingness by banks and other financial institutions to extend credit, particularly

in the shipping industry, due to the historically volatile asset values of vessels. As the shipping industry is highly dependent on the availability of credit to finance and expand operations, it has been negatively affected by this decline.

Also, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets has increased as many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing debt at all or on terms similar to current debt and reduced, and in some cases ceased, to provide funding to borrowers. Due to these factors, we cannot be certain that financing will be available if needed and to the extent required, on acceptable terms or at all. If financing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our obligations as they come due or we may be unable to grow our existing business, complete additional vessel acquisitions or otherwise take advantage of business opportunities as they arise.

If the global economic environment does not improve or declines further, we may be negatively affected in the following ways:


•	we may not be able to employ our vessels at charter rates as favorable to us as historical rates or at all or operate our vessels profitably; and


•	the market value of our vessels could decrease, which may cause us to recognize losses if any of our vessels are sold or if their values are impaired.

The occurrence of any of the foregoing could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Due to the lack of diversification in our lines of business, adverse developments in the LNG industry would negatively impact our results of operations, financial condition and ability to pay dividends.

Currently, we rely primarily on the revenues generated from our or our affiliates' LNG carriers and FSRUs, proceeds from sales of FSRUs on long-term time charters to Golar Partners and cash distributions from Golar Partners. Due to the lack of diversification in our lines of business, an adverse development in our LNG carrier and FSRU business, in the LNG industry or in the offshore energy infrastructure industry generally would have a significant impact on our business, financial condition, results of operations and ability to pay dividends to our shareholders.

We may be subject to litigation that, if not resolved in our favor and not sufficiently insured against, could have a material adverse effect on us.

We may be, from time to time, involved in various litigation matters. These matters may include, among other things, contract disputes, personal injury claims, environmental claims or proceedings, asbestos and other toxic tort claims, employment matters, governmental claims for taxes or duties and other litigation that arises in the ordinary course of our business. Although we always intend to defend such matters vigorously, we cannot predict with certainty the outcome or effect of any claim or other litigation matter, and the ultimate outcome of any litigation or the potential costs to resolve them may have a material adverse effect on us. Insurance may not be applicable or sufficient in all cases and/or insurers may not remain solvent, which may have a material adverse effect on our financial condition. Please read "Item 8 Financial Information-Legal Proceedings and Claims."

We may have to pay tax on United States source income, which would reduce our earnings.

Under the United States Internal Revenue Code of 1986, or the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as ourselves and our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States, may be subject to a 4% U.S. federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the applicable Treasury Regulations recently promulgated thereunder.

We expect that we and each of our subsidiaries will qualify for this statutory tax exemption and we will take this position for U.S. federal income tax return reporting purposes. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption and thereby become subject to U.S. federal income tax on our U.S. source income. Therefore, we can give no assurances on our tax-exempt status or that of any of our subsidiaries.

If we or our subsidiaries are not entitled to exemption under Section 883 of the Code for any taxable year, we or our subsidiaries could be subject for those years to an effective 4% U.S. federal income tax on the gross shipping income we or our subsidiaries derive during the year that are attributable to the transport of cargoes to or from the United States. The imposition of

this tax would have a negative effect on our business and would result in decreased earnings available for distribution to our shareholders. Please see “Item 10. Additional Information-E. Taxation" for further information.

United States tax authorities could treat us as a "passive foreign investment company", which could have adverse United States federal income tax consequences to U.S. shareholders.

A foreign corporation will be treated as a "passive foreign investment company," or PFIC, for U.S. federal income tax purposes if either (1) at least 75% of its gross income during the taxable year consists of certain types of "passive income" or (2) at least 50% of the average value of the corporation's assets during such taxable year produce or are held for the production of those types of "passive income." For purposes of these tests, "passive income" includes dividends, interest, and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. For purposes of these tests, income derived from the performance of services does not constitute "passive income." U.S. shareholders of a PFIC are subject to a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

Based on our current and expected future method of operation, we do not believe that we will be a PFIC with respect to any taxable year. In this regard, we intend to treat the gross income we derive or are deemed to derive from our time chartering activities as services income, rather than rental income. Accordingly, we believe that our income from our time chartering activities does not constitute "passive income," and the assets that we own and operate in connection with the production of that income do not constitute passive assets.

There is, however, no direct legal authority under the PFIC rules addressing our method of operation. We believe there is substantial legal authority supporting our position consisting of case law and United States Internal Revenue Service, or IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, we note that there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept our position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if there were to be changes in the nature and extent of our operations.

If the IRS were to find that we are or have been a PFIC for any taxable year, our U.S. shareholders will face adverse U.S. tax consequences and certain information reporting requirements. Under the PFIC rules, unless those shareholders make an election available under the Code (which election could itself have adverse consequences for such shareholders), such shareholders would be liable to pay U.S. federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of our common shares, as if the excess distribution or gain had been recognized ratably over the shareholder's holding period of our common shares. Please see the section of this annual report entitled "Taxation" under "Item 10. Additional Information-E. Taxation" for a more comprehensive discussion of the U.S. federal income tax consequences if we were to be treated as a PFIC.

A change in tax laws in any country in which we operate could adversely affect us

Tax laws and regulations are highly complex and subject to interpretation. Consequently, we and our subsidiaries are subject to changing laws, treaties and regulations in and between countries in which we operate. Our tax expense is based on our interpretation of the tax laws in effect at the time the expense was incurred. A change in tax laws, treaties or regulations, or in the interpretation thereof, could result in a materially higher tax expense or a higher effective tax rate on our earnings. Such changes may include measures enacted in response to the ongoing initiatives in relation to fiscal legislation at an international level such as the Action Plan on Base Erosion and Profit Shifting of the Organization for Economic Co-Operation and Development.

Failure to comply with the U.S. Foreign Corrupt Practices Act, the UK Bribery Act and other anti-bribery legislation in other jurisdictions could result in fines, criminal penalties, contract terminations and an adverse effect on our business.

We may operate in a number of countries throughout the world, including countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977, or the FCPA, and the Bribery Act 2010 of the United Kingdom, or the UK Bribery Act. We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti-corruption laws, including the FCPA and the UK Bribery Act. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our

business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.

In order to effectively compete in some foreign jurisdictions, we utilize local agents and/or establish entities with local operators or strategic partners. All of these activities may involve interaction by our agents with government officials. Even though some of our agents or partners may not themselves be subject to the FCPA, the UK Bribery Act, or other anti-bribery laws to which we may be subject, if our agents or partners make improper payments to government officials or other persons in connection with engagements or partnerships with us, we could be investigated and potentially found liable for violation of such anti-bribery laws and could incur civil and criminal penalties and other sanctions, which could have a material adverse effect on our business and results of operations.

Operating in Cameroon will subject us to an increased risk of loss of revenue or curtailment of production from factors specifically affecting Cameroon.

We have entered into agreements with Perenco, SNH, and the Republic of Cameroon related to a floating liquefied natural gas export project offshore Kribi, Cameroon that is expected to employ the converted Hilli , which has recently been renamed to Hilli Episeyo . Our operations in Cameroon will be subject to higher political and security risks than operations in other areas of the world. Recently, Cameroon has experienced an unstable socio-political framework. Any extreme levels of political instability resulting in changes of governments, internal conflict, unrest and violence, especially from terrorist organizations prevalent in the region, such as Boko Haram, can lead to economic disruptions and shutdowns in industrial activities. Additionally, official corruption and bribery remains a serious concern in the region. Our FLNG operations in Cameroon are subject to these risks, which could materially adversely affect our revenues, our ability to perform our agreements with Perenco, SNH, and the Republic of Cameroon and our financial condition.

In addition, we plan to maintain insurance coverage for only a portion of the risks we face from doing business in Cameroon. There also may be certain risks covered by insurance where the policy does not reimburse us for all of the costs related to a loss. In the event that we incur business interruption losses with respect to one or more incidents, they could have a material adverse effect on our results of operations.

Risks Related to Our Industry

The operation of LNG carriers and FSRUs is inherently risky, and an incident resulting in significant loss or environmental consequences involving any of our vessels could harm our reputation and business.

Our vessels and their cargoes are at risk of being damaged or lost because of events such as:


•	marine disasters;


•	piracy;


•	environmental accidents;


•	bad weather;


•	mechanical failures;


•	grounding, fire, explosions and collisions;


•	human error; and


•	war and terrorism.

An accident involving any of our vessels could result in any of the following:


•	death or injury to persons, loss of property or environmental damage;


•	delays in the delivery of cargo;


•	loss of revenues from or termination of charter contracts;


•	governmental fines, penalties or restrictions on conducting business;


•	higher insurance rates; and


•	damage to our reputation and customer relationships generally.

Any of these circumstances or events could increase our costs or lower our revenues.

If our vessels suffer damage, they may need to be repaired. The costs of vessel repairs are unpredictable and can be substantial. We may have to pay repair costs that our insurance policies do not cover. The loss of earnings while these vessels are

being repaired, as well as the actual cost of these repairs, would decrease our results of operations. If one of our vessels were involved in an accident with the potential risk of environmental contamination, the resulting media coverage could have a material adverse effect on our business, our results of operations and cash flows, weaken our financial condition and negatively affect our ability to pay dividends. Further, any such environmental accident or the total loss of any of our vessels could harm our reputation as a safe and reliable LNG Carrier and FSRU owner and operator. If we are unable to adequately maintain or safeguard our vessels, we may be unable to prevent any such damage, costs or loss which could negatively impact our business, financial condition, results of operations, cash flows and ability to pay dividends.

Our results of operations and financial condition depend on demand for LNG, LNG carriers, FSRUs and FLNGs.

Our business strategy focuses on expansion in the LNG shipping sector, the floating storage and regasification sector and the floating liquefaction sector. While global LNG demand has continued to rise, the rate of its growth has fluctuated for several reasons, including the global economic downturn and continued economic uncertainty, fluctuations in the price of natural gas and other sources of energy, the continued increase in natural gas production from unconventional sources, including hydraulic fracturing, in regions such as North America and the highly complex and capital intensive nature of new and expanded LNG projects, including liquefaction projects. Accordingly, our results of operations and financial condition depend on continued world and regional demand for LNG, LNG carriers, FSRUs and FLNGs, which could be negatively affected by a number of factors, including but not limited to:


•	price and availability of natural gas, crude oil and petroleum products;


•	increases in the cost of natural gas derived from LNG relative to the cost of natural gas;


•	decreases in the cost of, or increases in the demand for, conventional land-based regasification and liquefaction systems, which could occur if providers or users of regasification or liquefaction services seek greater economies of scale than FSRUs or FLNGs can provide, or if the economic, regulatory or political challenges associated with land-based activities improve;


•	further development of, or decreases in the cost of, alternative technologies for vessel-based LNG regasification or liquefaction;


•	increases in the production of natural gas in areas linked by pipelines to consuming areas, the extension of existing, or the development of new, pipeline systems in markets we may serve, or the conversion of existing non-natural gas pipelines to natural gas pipelines in those markets;


•	negative global or regional economic or political conditions, particularly in LNG-consuming regions, which could reduce energy consumption or its growth;


•	decreases in the consumption of natural gas due to increases in its price relative to other energy sources or other factors making consumption of natural gas less attractive;


•	any significant explosion, spill or other incident involving an LNG facility or carrier, conventional land-based regasification or liquefaction system, or FSRU or FLNG;


•	a significant increase in the number of LNG carriers, FSRUs or FLNGs available, whether by a reduction in the scrapping of existing vessels or the increase in construction of vessels;


•	infrastructure constraints such as delays in the construction of export or liquefaction facilities, the inability of project owners or operators to obtain governmental approvals to construct or operate LNG facilities, as well as community or political action group resistance to new LNG infrastructure due to concerns about the environment, safety and terrorism; and


•	availability of new, alternative energy sources, including compressed natural gas.

Reduced demand for LNG or LNG liquefaction, storage, shipping or regasification, or any reduction or limitation in LNG production capacity, could have a material adverse effect on prevailing charter rates or the market value of our vessels, which could materially adversely affect our results of operations and financial condition.

Having dropped to around $27/barrel early in the year, oil prices recovered and stabilised at levels between $45 and $55 for the remainder of 2016. Natural gas prices also recovered although not to the same extent. New LNG supply and the prospect of significant additional volumes over the coming 3-years that will exceed near-term demand has resulted in a “decoupling” of LNG prices from oil. An abundance of available LNG in both the Pacific and Atlantic basins also led to a narrowing of the gap in pricing in different geographic regions. This has continued to adversely affect the length of voyages in the spot LNG shipping market and consequently suppressed spot rates and medium term charter rates for charters. Although the arrival of substantial volumes of new LNG over the next 3 years is expected to positively impact the shipping market and remain supportive of the FSRU business, a prolonged period of low LNG prices could negatively impact new investment decisions for large-scale LNG liquefaction projects. Whilst potentially a positive catalyst for cost competitive liquefaction solutions including floating liquefaction, this has potentially negative long-term demand consequences both for LNG carrier and FSRU demand. Any sustained

decline in the delivery of new LNG volumes, chartering activity and charter rates could also adversely affect the market value of our vessels, on which certain of the ratios and financial covenants we are required to comply with in our credit facilities are based.

Growth of the LNG market may be limited by many factors, including infrastructure constraints and community and political group resistance to new LNG infrastructure over concerns about environmental, safety and terrorism.

A complete LNG project includes production, liquefaction, regasification, storage and distribution facilities and LNG carriers. Existing LNG projects and infrastructure are limited, and new or expanded LNG projects are highly complex and capital intensive, with new projects often costing several billion dollars. Many factors could negatively affect continued development of LNG infrastructure and related alternatives, including floating liquefaction, storage and regasification, or disrupt the supply of LNG, including:


•	increases in interest rates or other events that may affect the availability of sufficient financing for LNG projects on commercially reasonable terms;


•	decreases in the price of LNG, which might decrease the expected returns relating to investments in LNG projects;


•	the inability of project owners or operators to obtain governmental approvals to construct or operate LNG facilities;


•	local community resistance to proposed or existing LNG facilities based on safety, environmental or security concerns;


•	any significant explosion, spill or similar incident involving an LNG production, liquefaction or regasification facility, FSRU or LNG carrier; and


•	labor or political unrest affecting existing or proposed areas of LNG production, liquefaction and regasification.

We expect that, as a result of the factors discussed above, some of the proposals to expand existing or develop new LNG liquefaction and regasification facilities may be abandoned or significantly delayed. If the LNG supply chain is disrupted or does not continue to grow, or if a significant LNG explosion, spill or similar incident occurs, it could have a material adverse effect on our business, results of operations and financial condition and our ability to make cash distributions.

Fluctuations in overall LNG demand growth could adversely affect our ability to secure future time charters.

LNG trade increased by around 6% from 250 million tonnes per annum (mtpa) in 2015 to 265 mtpa in 2016. Although an improvement on the 1.6% growth recorded in 2015, this was less than expected following delays to the start-up and ramping up of certain Australian LNG projects and Yemen being taken offline as a result of geopolitical issues. Future growth in the LNG trade, and therefore requirements for LNG liquefaction, shipping and regasification is highly uncertain and could fall if existing markets for LNG decline, new users and uses for LNG do not materialise as anticipated and no major export projects are sanctioned over the coming years. In the event that we have not secured long-term charters for the vessels in our fleet, a reduction in LNG trade could have an adverse effect on our ability to secure future term charters at acceptable rates.

A reduction in world-wide energy consumption could adversely affect our business.

While the most recent Energy Information Administration, or EIA, International Energy Outlook (2016), has reported that worldwide energy consumption is expected to increase by 48% from 2012 to 2040, with natural gas consumption expected to increase 69%, from 120 trillion cubic feet, or Tcf, in 2012 to 203 Tcf in 2040, there is no guarantee that the worldwide energy markets will experience such increases. Any decrease in energy and natural gas consumption could have an adverse effect on our revenues and profitability as there will likely be decreased demand for our services.

Changes in the supply of and demand for vessel capacity may lead to a reduction in charter hire rates and profitability for FSRUs and LNG carriers.

The supply of vessels generally increases with deliveries of new vessels and decreases with the scrapping of older vessels, conversion of vessels to other uses, and loss of tonnage as a result of casualties. Hire rates for LNG carriers, and to a lesser extent FSRUs, may fluctuate over time as a result of changes in the supply-demand balance relating to current and future capacity of FSRUs and LNG carriers. This supply-demand relationship largely depends on a number of factors outside our control, such as world natural gas prices and energy markets. A substantial or extended decline in natural gas prices could adversely affect our or the Cool Pool’s ability to charter or recharter vessels at acceptable rates or our ability to acquire and profitably operate new FSRUs or LNG carriers. Hire rates for FSRUs and LNG carriers correlate to the price of newbuilding FSRUs and LNG carriers. If rates are lower when we or the Cool Pool are seeking a new charter, our earnings and ability to make distributions to our shareholders will suffer. While we currently believe that there is demand for additional tonnage in the near-term, an over-supply of vessel

capacity combined with a decline in the demand for such vessels, may result in a reduction of charter hire rates. If such a reduction continues in the future, upon the expiration or termination of our vessels’ current charters, we or the Cool Pool may only be able to re-charter vessels at reduced or unprofitable rates or we or the Cool Pool may not be able to charter vessels at all, which would have a material adverse effect on our revenues and profitability.

Vessel values may fluctuate substantially and, if these values are lower at a time when we are attempting to dispose of vessels, we may incur a loss and, if these values are higher when we are attempting to acquire vessels, we may not be able to acquire vessels at attractive prices.

Vessel values can fluctuate substantially over time due to a number of different factors, including:


•	prevailing economic and market conditions in the natural gas and energy markets;


•	a substantial or extended decline in demand for LNG;


•	increases in the supply of vessel capacity;


•	the type, size and age of a vessel; and


•	the cost of newbuildings or retrofitting or modifying existing vessels, as a result of technological advances in vessel design or equipment, changes in applicable environmental or other regulations or standards, customer requirements or otherwise.

As our vessels age, the expenses associated with maintaining and operating them are expected to increase, which could have an adverse effect on our business and operations if we do not maintain sufficient cash reserves for maintenance and replacement capital expenditures. Moreover, the cost of a replacement vessel would be significant.

During the period a vessel is subject to a charter, we will not be permitted to sell it to take advantage of increases in vessel values without the charterers’ agreement. If a charter terminates, we may be unable to re-deploy the affected vessels at attractive rates and, rather than continue to incur costs to maintain and finance them, we may seek to dispose of them. When vessel values are low, we may not be able to dispose of vessels at a reasonable price when we wish to sell vessels, and conversely, when vessel values are elevated, we may not be able to acquire additional vessels at attractive prices when we wish to acquire additional vessels, which could adversely affect our business, results of operations, cash flow, financial condition and ability to make distributions to shareholders. Please refer to “Item 5. Operating and Financial Review and Prospects-B. Liquidity and Capital Resources-Critical Accounting Policies and Estimates-Vessel Market Values" for further information.

The market for LNG transportation and regasification services is competitive and we may not be able to compete successfully, which would adversely affect our earnings.

The market for LNG transportation and regasification services in which we operate is competitive, especially with respect to the negotiation of long-term charters. Competition arises primarily from other vessel owners, some of whom have substantially greater resources than we do. Furthermore, new competitors with greater resources could enter the market for LNG carriers or FSRUs and operate larger fleets through consolidations, acquisitions or the purchase of new vessels, and may be able to offer lower charter rates and more modern fleets. If we are not able to compete successfully, our earnings could be adversely affected. Competition may also prevent us from achieving our goal of profitably expanding into other areas of the LNG industry.

A cyber-attack could materially disrupt our business.

We rely on information technology systems and networks in our operations and administration of our business. Our business operations could be targeted by individuals or groups seeking to sabotage or disrupt our information technology systems and networks, or to steal data. A successful cyber-attack could materially disrupt our operations, including the safety of our operations, or lead to unauthorized release of information or alteration of information in our systems. Any such attack or other breach of our information technology systems could have a material adverse effect on our business and results of operations.

Recent action by the United Nation’s International Maritime Organization, or IMO, Maritime Safety Committee and U.S. agencies indicate that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats. This might cause companies to cultivate additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. However, the impact of such regulations is hard to predict at this time.

Terrorist attacks, increased hostilities or war could lead to further economic instability, increased costs and disruption of our business.

LNG facilities, shipyards, vessels (including FSRUs and conventional LNG carriers), pipelines and gas fields could be targets of future terrorist attacks. Terrorist attacks, war or other events beyond our control that adversely affect the production, liquefaction, storage, transportation or regasification of LNG to be shipped or processed by us could entitle our customers to terminate our charters, which would harm our cash flow and our business. Concern that LNG facilities may be targeted for attack by terrorists has contributed to significant community and environmental resistance to the construction of a number of LNG facilities, primarily in North America. If a terrorist incident involving an LNG facility, FSRU or LNG carrier did occur, the incident could adversely affect construction of additional LNG facilities, FSRUs or FLNGs or the temporary or permanent closing of various LNG facilities or FSRUs currently in operation.

In addition, continuing conflicts and recent developments in Europe, with respect to the Ukraine and Russia, in the Middle East, including Israel, Iraq, Syria and Yemen, and in Africa, including Libya and the areas where Boko Haram operates, such as Nigeria and Cameroon, and the presence of the United States and other armed forces in Afghanistan, Iraq and Syria may lead to additional acts of terrorism and armed conflict around the world, which may contribute to economic instability and uncertainty in global financial markets or could impact our operations. As a result of the above, insurers have increased premiums and reduced or restricted coverage for losses caused by terrorist acts generally. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. In the past, political instability has also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Acts of terrorism have also affected vessels trading in regions throughout the world. Any of these occurrences, or the perception that our vessels are potential terrorist targets, could have a material adverse effect on our business, financial condition, results of operations, cash flows and ability to pay dividends.

Acts of piracy on ocean-going vessels could adversely affect our business.

Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, Strait of Malacca, Arabian Sea, Red Sea, Gulf of Aden off the coast of Somalia, Indian Ocean and Gulf of Guinea. Sea piracy incidents continue to occur, particularly in the Indian Ocean, and increasingly in the Gulf of Guinea and Strait of Malacca, with tanker vessels vulnerable to such attacks. Yet, some sources report there was a drop in the number of piracy incidents in 2016. If piracy attacks result in regions in which our vessels are deployed being characterized as “war risk” zones by insurers or Joint War Committee “war and strikes” listed areas, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew and security equipment costs, including costs which may be incurred to employ onboard security armed guards to comply with Best Management Practices for Protection against Somalia Based Piracy, or BMP4, or any updated version, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, detention or hijacking as a result of an act of piracy against our vessels, increased costs associated with seeking to avoid such events (including increased bunker costs resulting from vessels being rerouted or travelling at increased speeds as recommended by BMP4), or unavailability of insurance for our vessels, could have a material adverse impact on our business, financial condition, results of operations and cash flows, and ability to pay dividends, and may result in loss of revenues, increased costs and decreased cash flows to our customers, which could impair their ability to make payments to us under our charters.

Our insurance coverage may be insufficient to cover losses that may occur to our property or result from our operations or our insurance costs may increase significantly.

The operation of LNG carriers and FSRUs is inherently risky. Although we carry insurance, all risks may not be adequately insured against, and any particular claim may not be paid. Any claims covered by insurance would be subject to deductibles, and since it is possible that a large number of claims may be brought, the aggregate amount of these deductibles could be material. Certain of our insurance coverage is maintained through mutual protection and indemnity associations and, as a member of such associations, we may be required to make additional payments over and above budgeted premiums if member claims exceed association reserves.

We may be unable to procure adequate insurance coverage at commercially reasonable rates in the future. For example, more stringent environmental regulations have led in the past to increased costs for, and in the future may result in the lack of availability of, insurance against risks of environmental damage or pollution. A marine disaster could exceed our insurance coverage, which could harm our business, financial condition and operating results. Any uninsured or underinsured loss could harm our business and financial condition. In addition, our insurance may be voidable by the insurers as a result of certain of our actions, such as our vessels failing to maintain certification with applicable maritime self-regulatory organizations.

Changes in the insurance markets attributable to terrorist attacks may also make certain types of insurance more difficult for us to obtain. In addition, upon renewal or expiration of our current policies, the insurance that may be available to us may be significantly more expensive than our existing coverage.

We may be subject to increased premium payments, or calls, if the value of our claim records or the claim records of other members of the protection and indemnity associations through which we receive insurance coverage for tort liability (including pollution-related liability) significantly exceed projected claims. In addition, our protection and indemnity associations may not have enough resources to cover claims made against them. Our payment of these calls could result in significant expense to us, which could have a material adverse effect on our business, results of operations, cash flows, financial condition and ability to pay dividends.

Our vessels may call on ports located in countries that are subject to restrictions imposed by the U.S. or other governments, which could adversely affect our business.

Although no vessels operated by us have called on ports located in countries subject to sanctions and embargoes imposed by the U.S. government and countries identified by the U.S. government as state sponsors of terrorism, such as Iran, Sudan and Syria, in the future our vessels may call on ports in these countries from time to time on our charterers’ instructions. None of our vessels made any port calls to Iran in 2016. The U.S. sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time.

In 2010, the U.S. enacted the Comprehensive Iran Sanctions Accountability and Divestment Act, or CISADA, which expanded the scope of the Iran Sanctions Act. Among other things, CISADA expanded the application of the prohibitions to companies such as ours and introduced limits on the ability of companies and persons to do business or trade with Iran when such activities relate to the investment, supply or export of refined petroleum or petroleum products. In addition, in 2012, President Obama signed Executive Order 13608 which prohibits foreign persons from violating or attempting to violate, or causing a violation of any sanctions in effect against Iran or facilitating any deceptive transactions for or on behalf of any person subject to U.S. sanctions. Any persons found to be in violation of Executive Order 13608 will be deemed a foreign sanctions evader and will be banned from all contacts with the United States, including conducting business in U.S. dollars. Also in 2012, President Obama signed into law the Iran Threat Reduction and Syria Human Rights Act of 2012, or the Iran Threat Reduction Act, which created new sanctions and strengthened existing sanctions. Among other things, the Iran Threat Reduction Act intensifies existing sanctions regarding the provision of goods, services, infrastructure or technology to Iran’s petroleum or petrochemical sector. The Iran Threat Reduction Act also includes a provision requiring the President of the United States to impose five or more sanctions from Section 6(a) of the Iran Sanctions Act, as amended, on a person the President determines is a controlling beneficial owner of, or otherwise owns, operates, or controls or insures a vessel that was used to transport crude oil from Iran to another country and (1) if the person is a controlling beneficial owner of the vessel, the person had actual knowledge the vessel was so used or (2) if the person otherwise owns, operates, or controls, or insures the vessel, the person knew or should have known the vessel was so used. Such a person could be subject to a variety of sanctions, including exclusion from U.S. capital markets, exclusion from financial transactions subject to U.S. jurisdiction, and exclusion of that person’s vessels from U.S. ports for up to two years.

On November 24, 2013, the P5+1 (the United States, United Kingdom, Germany, France, Russia and China) entered into an interim agreement with Iran entitled the “Joint Plan of Action,” or JPOA. Under the JPOA it was agreed that, in exchange for Iran taking certain voluntary measures to ensure that its nuclear program is used only for peaceful purposes, the U.S. and EU would voluntarily suspend certain sanctions for a period of six months. On January 20, 2014, the U.S. and E.U. indicated that they would begin implementing the temporary relief measures provided for under the JPOA. These measures included, among other things, the suspension of certain sanctions on the Iranian petrochemicals, precious metals, and automotive industries from January 20, 2014 until July 20, 2014. The JPOA was subsequently extended twice.

On July 14, 2015, the P5+1 and the EU announced that they reached a landmark agreement with Iran titled the Joint Comprehensive Plan of Action Regarding the Islamic Republic of Iran’s Nuclear Program, or the JCPOA, which is intended to significantly restrict Iran’s ability to develop and produce nuclear weapons for 10 years while simultaneously easing sanctions directed toward non-U.S. persons for conduct involving Iran, but taking place outside of U.S. jurisdiction and does not involve U.S. persons. On January 16, 2016, the United States joined the EU and the UN in lifting a significant number of their nuclear-related sanctions on Iran following an announcement by the International Atomic Energy Agency, or the IAEA that Iran had satisfied its respective obligations under the JCPOA.

U.S. sanctions prohibiting certain conduct that is now permitted under the JCPOA have not actually been repealed or permanently terminated at this time. Rather, the U.S. government has implemented changes to the sanctions regime by: (1) issuing waivers of certain statutory sanctions provisions; (2) committing to refrain from exercising certain discretionary sanctions authorities; (3) removing certain individuals and entities from OFAC's sanctions lists; and (4) revoking certain Executive Orders and specified sections of Executive Orders. These sanctions will not be permanently "lifted" until the earlier of “Transition Day,”

set to occur on October 20, 2023, or upon a report from the IAEA stating that all nuclear material in Iran is being used for peaceful activities.

As a result of the crisis in Ukraine and the annexation of Crimea by Russia earlier in 2014, both the U.S. and EU have implemented sanctions against certain persons and entities. In addition, various restrictions on trade have been implemented which, amongst others, include a prohibition on the import into the EU of goods originating in Crimea or Sevastopol as well as restrictions on trade in certain dual-use and military items and restrictions in relation to various items of technology associated with the oil industry for use in deep water exploration and production, Arctic oil exploration and production, or shale oil projects in Russia. The U.S. has imposed sanctions against certain designated Russian entities and individuals, or U.S. Russian Sanctions Targets. These sanctions block the property and all interests in property of the U.S. Russian Sanctions Targets. This effectively prohibits U.S. persons from engaging in any economic or commercial transactions with the U.S. Russian Sanctions Targets unless the same are authorized by the U.S. Treasury Department. While the prohibitions of these sanctions are not directly applicable to us, we have compliance measures in place to guard against transactions with U.S. Russian Sanctions Targets which may involve the United States or U.S. persons and thus implicate prohibitions.

Although we believe that we have been in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. We are subject to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take actions determined to be in violation of such sanctions and embargo laws. Any such violation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business, and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these investors not to invest in, or to divest from, our common stock may adversely affect the price at which our common stock trades. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other activities, such as entering into charters with individuals or entities in countries subject to U.S. sanctions and embargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant to contracts with third parties that are unrelated to those countries or entities controlled by their governments. Investor perception of the value of our common stock may be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries.

Our vessels operating in international waters, now or in the future, will be subject to various federal, state and local laws and regulations relating to protection of the environment.

Our vessels traveling in international waters are subject to various existing regulations published by the IMO, such as marine pollution and prevention requirements imposed by the IMO.

The IMO International Convention for the Prevention of Pollution from Ships of 1973 as from time to time amended, and generally referred to as MARPOL, can affect our operations. In addition, our LNG vessels may become subject to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, or the HNS, adopted in 1996 and subsequently amended by the April 2010 Protocol, which is discussed further below.

In addition, national laws generally provide for a LNG carrier or offshore LNG facility owner or operator to bear strict liability for pollution, subject to a right to limit liability under applicable national or international regimes for limitation of liability. However, some jurisdictions are not a party to an international regime limiting maritime pollution liability, and, therefore, a vessel owner’s or operator’s rights to limit liability for maritime pollution in such jurisdictions may be uncertain.

Our vessels operating in U.S. waters now or, in the future, will be subject to various federal, state and local laws and regulations relating to protection of the environment, including the Oil Pollution Act of 1990, or the OPA, the U.S. Comprehensive Environmental Response, Compensation, and Liability Act, or the CERCLA, the Clean Water Act, or the CWA, and the Clean Air Act, or the CAA. In some cases, these laws and regulations require us to obtain governmental permits and authorizations before we may conduct certain activities. These environmental laws and regulations may impose substantial penalties for noncompliance and substantial liabilities for pollution. Failure to comply with these laws and regulations may result in substantial civil and criminal fines and penalties. As with the industry generally, our operations will entail risks in these areas, and compliance with these laws and regulations, which may be subject to frequent revisions and reinterpretation, may increase our overall cost of business.

Please see “Item 4. Information on the Company-B. Business Overview-Environmental and Other Regulations- International Maritime Regulations of LNG Vessels" and "-Other Regulations" below for a more detailed discussion on these topics.

Our operations are subject to substantial environmental and other regulations, which may significantly increase our expenses.

Our operations are affected by extensive and changing international, national and local environmental protection laws, regulations, treaties and conventions in force in international waters, the jurisdictional waters of the countries in which our vessels operate, as well as the countries of our vessels’ registration, including those governing oil spills, discharges to air and water, and the handling and disposal of hazardous substances and wastes. These regulations include, but are not limited to, MARPOL, including designation of Emission Control Areas, or ECAs, thereunder, the IMO International Convention on Civil Liability for Oil Pollution Damage of 1969, as from time to time amended and generally referred to as CLC, the International Convention on Civil Liability for Bunker Oil Pollution Damage, or Bunker Convention, the IMO International Convention for the Safety of Life at Sea of 1974, as from time to time amended and generally referred to as SOLAS, the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention, or ISM Code, the IMO International Convention on Load Lines of 1966, as from time to time amended, the International Convention for the Control and Management of Ships’ Ballast Water and Sediments in February 2004, or the BWM Convention, the HNS, the OPA, requirements of the U.S. Coast Guard, or USCG, and the U.S. Environmental Protection Agency, or EPA, the CERCLA, the CWA, the CAA, the U.S. Outer Continental Shelf Lands Act, the U.S. Maritime Transportation Security Act of 2002, or the MTSA, and European Union, or EU, regulations.

Many of these requirements are designed to reduce the risk of oil spills and other pollution. In addition, we believe that the heightened environmental, quality and security concerns of insurance underwriters, regulators and charterers will lead to additional regulatory requirements, including enhanced risk assessment and security requirements and greater inspection and safety requirements on vessels. We expect to incur substantial expenses in complying with these laws and regulation, including expenses for vessel modifications and changes in operating procedures.

These requirements can affect the resale value or useful lives of our vessels, ship modifications or operational changes or restrictions, lead to decreased availability of insurance coverage for environmental matters or result in the denial of access to certain jurisdictional waters or ports, or detention in, certain ports. Under local, national and foreign laws, as well as international treaties and conventions, we could incur material liabilities, including cleanup obligations, in the event that there is a release of hazardous substances from our vessels or otherwise in connection with our operations. We could also become subject to personal injury or property damage claims relating to the release of or exposure to hazardous materials associated with our operations. In addition, failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations, including, in certain instances, seizure or detention of our vessels.

Further changes to existing environmental legislation that is applicable to international and national maritime trade may have an adverse effect on our business.

In June 2015 the IMO formally adopted the International Code of Safety for Ships using Gases or Low flashpoint Fuels, or the IGF Code, which is designed to minimize the risks involved with ships using low flashpoint fuels- including LNG. The IGF Code will be mandatory under SOLAS through the adopted amendments. The IGF Code and the amendments to SOLAS became effective January 1, 2017.

Further legislation, or amendments to existing legislation, applicable to international and national maritime trade are expected over the coming years in areas such as ship recycling, sewage systems, emission control (including emissions of greenhouse gases), ballast treatment and handling, etc. The United States has recently enacted legislation and regulations that require more stringent controls of air and water emissions from ocean-going vessels. Such legislation or regulations may require additional capital expenditures or operating expenses (such as increased costs for low-sulfur fuel) in order for us to maintain our vessels’ compliance with international and/or national regulations.

Climate change and greenhouse gas restrictions may adversely impact our operations and markets.

Due to concern over the risk of climate change, a number of countries, U.S. states, the E.U. and the IMO have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emission from vessel emissions. These regulatory measures may include, among others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards,

and incentives or mandates for renewable energy. Additionally, a treaty may be adopted in the future that includes restrictions on shipping emissions. Compliance with changes in laws and regulations relating to climate change could increase our costs of operating and maintaining our vessels and could require us to make significant financial expenditures that we cannot predict with certainty at this time.

Adverse effects upon the oil and gas industry relating to climate change, including growing public concern about the environmental impact of climate change, may also have an effect on demand for our services. For example, increased regulation of greenhouse gases or other concerns relating to climate change may reduce the demand for oil and gas in the future or create greater incentives for use of alternative energy sources. Any long-term material adverse effect on the oil and gas industry could have a significant financial and operational adverse impact on our business that we cannot predict with certainty at this time.

Maritime claimants could arrest our vessels, which could interrupt our cash flow.

Crew members, suppliers of goods and services to our vessels, shippers of cargo or other parties may be entitled to a maritime lien against one or more of our vessels for unsatisfied debts, claims or damages. In many jurisdictions, a maritime lien holder may enforce its lien by arresting a vessel through foreclosure proceedings. In a few jurisdictions, such as South Africa, claimants could try to assert “sister ship” liability against one vessel in our fleet for claims relating to another of our vessels. The arrest or attachment of one or more of our vessels could interrupt our cash flow and require us to pay large sums of money to have the arrest lifted. In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel which is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner under some of our present charters. If the vessel is arrested or detained for as few as 14 days as a result of a claim against us, we may be in default of our charter and the charterer may terminate the charter

Governments could requisition our vessels during a period of war or emergency.

A government could requisition for title or seize our vessels. Requisition for title occurs when a government takes control of a vessel and becomes the owner. Also, a government could requisition our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Government requisition of one or more of our vessels may negatively impact our business, financial condition, results of operations, cash flows, and ability to pay dividends.

Compliance with safety and other vessel requirements imposed by classification societies may be very costly and may adversely affect our business.

The hull and machinery of every large, oceangoing commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. The Golar Arctic , the Golar Frost and the Golar Bear are certified by the American Bureau of Shipping and all our other vessels are each certified by Det Norske Veritas. The American Bureau of Shipping and Det Norske Veritas are all members of the International Association of Classification Societies. All of our vessels have been awarded ISM certification or are in the process of being certified and are currently “in class” other than four LNG carriers, of which the Hilli is currently undergoing FLNG conversion, Gimi and Gandria are layed up and scheduled to be converted by Keppel, and Golar Viking is in cold lay-up.

As part of the certification process, a vessel must undergo annual surveys, intermediate surveys and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. Each of the vessels in our existing fleet is on a planned maintenance system approval, and as such the classification society attends onboard once every year to verify that the maintenance of the equipment onboard is done correctly. Each of the vessels in our existing fleet is required to be qualified within its respective classification society for drydocking once every five years subject to an intermediate underwater survey done using an approved diving company in the presence of a surveyor from the classification society.

If any vessel does not maintain its class or fails any annual survey, intermediate survey or special survey, the vessel will be unable to trade between ports and will be unemployable. We would lose revenue while the vessel was off-hire and incur costs of compliance. This would negatively impact our revenues and reduce our cash available for distributions to our shareholders.

The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.

We expect that our vessels will call in ports where smugglers may attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the extent our vessels are found with contraband, whether inside or attached

to the hull of our vessels and whether with or without the knowledge of any of our crew, we may face governmental or other regulatory claims that could have an adverse effect on our business, financial condition, results of operations, cash flows, and ability to pay dividends.

Changing laws and evolving reporting requirements could have an adverse effect on our business.

Changing laws, regulations and standards relating to reporting requirements, including the UK Modern Slavery Act 2015, will create additional compliance requirements for companies such as ours. To maintain high standards of corporate governance and public disclosure, we have invested in, and intend to continue to invest in, reasonably necessary resources to comply with evolving standards.

The Modern Slavery Act 2015 requires any commercial organizations that carry on a business or part of a business in the UK which both (i) supply goods or services and (ii) have an annual worldwide turnover of £36 million to prepare a slavery and human trafficking statement for each financial year ending on or after March 31, 2016. In this statement, the commercial organization must set out the steps it has taken to ensure there is no modern slavery in its own business and its supply chain, or state that it has taken no such steps. The Secretary of State may enforce the duty to prepare a slavery and human trafficking statement by means of civil proceedings against the organization concerned.

To the extent that we are found to be non-compliant of the requirements of the UK Modern Slavery Act 2015, whether with or without our knowledge, we may face governmental or other regulatory claims that could have an adverse effect on our business, financial condition, results of operations, cash flows, and ability to pay dividends.

Risks Related to our Common Shares

If we fail to meet the expectations of analysts or investors, our stock price could decline substantially.

In some quarters, our results may be below analysts’ or investors’ expectations. If this occurs, the price of our common stock could decline.

Important factors that could cause our revenue and operating results to fluctuate from quarter to quarter include, but are not limited to:


•	prevailing economic and market conditions in the natural gas and energy markets;


•	negative global or regional economic or political conditions, particularly in LNG-consuming regions, which could reduce energy consumption or its growth;


•	declines in demand for LNG or the services of LNG carriers, FSRUs or FLNGs;


•	increases in the supply of LNG carrier capacity operating in the spot/short-term market or the supply of FSRUs or FLNGs;


•	marine disasters; war, piracy or terrorism; environmental accidents; or inclement weather conditions;


•	mechanical failures or accidents involving any of our vessels; and


•	drydock scheduling and capital expenditures.

Most of these factors are not within our control, and the occurrence of one or more of them may cause our operating results to vary widely.

Our common share price may be highly volatile and future sales of our common shares could cause the market price of our common shares to decline.

Historically, the market prices of securities of shipping companies have experienced fluctuations that often have been unrelated or disproportionate to the operating results of those companies. Our common shares have traded on the Nasdaq Global Select Market, or Nasdaq, since December 12, 2002 under the symbol "GLNG." We cannot assure you that an active and liquid public market for our common shares will continue. The market price for our common shares has historically fluctuated over a wide range. In 2016, the closing market price of our common shares on Nasdaq ranged from a low of $10.04 on January 20, 2016 to a high of $25.65 per share on November 16, 2016. As of April 24, 2017 , the closing market price of our common shares on Nasdaq was $26.36. The market price of our common shares may continue to fluctuate significantly in response to many factors such as actual or anticipated fluctuations in our quarterly or annual results and those of other public companies in our industry, the suspension of our dividend payments, mergers and strategic alliances in the shipping industry, market conditions in the LNG shipping industry, developments in our FLNG investments, shortfalls in our operating results from levels forecast by securities analysts, announcements concerning us or our competitors, the general state of the securities market, and other factors, many of which are beyond our control. The market for common shares in this industry may be equally volatile. Therefore, we cannot assure our shareholders that they will be able to sell any of our common shares that they may have purchased at a price greater than or equal to the original purchase price.

Additionally, sales of a substantial number of our common shares in the public market, or the perception that these sales could occur, may depress the market price for our common shares. These sales could also impair our ability to raise additional capital through the sale of our equity securities in the future.

We may issue additional common shares or other equity securities without our shareholders’ approval, which would dilute their ownership interests and may depress the market price of our common shares.

We may issue additional common shares or other equity securities in the future in connection with, among other things, vessel conversions, future vessel acquisitions, repayment of outstanding indebtedness or our equity incentive plan, in each case without shareholder approval in a number of circumstances.

Our issuance of additional common shares or other equity securities would have the following effects:


•	our existing shareholders’ proportionate ownership interest in us will decrease;


•	the amount of cash available for dividends payable on our common shares may decrease;


•	the relative voting strength of each previously outstanding common share may be diminished; and


•	the market price of our common shares may decline.

We are a holding company, and our ability to pay dividends will be limited by the value of investments we currently hold and by the distribution of funds from our subsidiaries and affiliates.

We are a holding company whose assets mainly comprise equity interests in our subsidiaries and other quoted and non-quoted companies and our interest in our affiliates. As a result, should we decide to pay dividends, we would be dependent on the performance of our operating subsidiaries and other investments. If we were not able to receive sufficient funds from our subsidiaries and other investments, including from the sale of our investment interests, we would not be able to pay dividends unless we obtain funds from other sources. We may not be able to obtain the necessary funds from other sources on terms acceptable to us.

Because we are a Bermuda corporation, our shareholders may have less recourse against us or our directors than shareholders of a U.S. company have against the directors of that U.S. Company.

Because we are a Bermuda company, the rights of holders of our common shares will be governed by Bermuda law and our memorandum of association and bye-laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders in other jurisdictions, including with respect to, among other things, rights related to interested directors, amalgamations, mergers and acquisitions, takeovers, the exculpation and indemnification of directors and shareholder lawsuits.

Among these differences is a Bermuda law provision that permits a company to exempt a director from liability for any negligence, default, or breach of a fiduciary duty except for liability resulting directly from that director’s fraud or dishonesty. Our bye-laws provide that no director or officer shall be liable to us or our shareholders unless the director’s or officer’s liability results from that person’s fraud or dishonesty. Our bye-laws also require us to indemnify a director or officer against any losses incurred by that director or officer resulting from their negligence or breach of duty, except where such losses are the result of fraud or dishonesty. Accordingly, we carry directors’ and officers’ insurance to protect against such a risk.

In addition, under Bermuda law, the directors of a Bermuda company owe their duties to that company and not to the shareholders. Bermuda law does not, generally, permit shareholders of a Bermuda company to bring an action for a wrongdoing against the company or its directors, but rather the company itself is generally the proper plaintiff in an action against the directors for a breach of their fiduciary duties. Moreover, class actions and derivative actions are generally not available to shareholders under Bermuda law. These provisions of Bermuda law and our bye-laws, as well as other provisions not discussed here, may differ from the law of jurisdictions with which shareholders may be more familiar and may substantially limit or prohibit a shareholder's ability to bring suit against our directors or in the name of the company. The Bermuda courts, however, would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the violation of the company’s memorandum of association or bye-laws. Furthermore, consideration would be given by a Bermuda court to acts that are alleged to constitute a fraud against minority shareholders or, for instance, where an act requires the approval of a greater percentage of the company’s shareholders than that which actually approved it.

It's also worth noting that under Bermuda law, our directors and officers are required to disclose to our board any material interests they have in any contract entered into by our company or any of its subsidiaries with third parties. Our directors and officers are also required to disclose their material interests in any corporation or other entity which is party to a material contract with our company or any of its subsidiaries. A director who has disclosed his or her interests in accordance with Bermuda law may participate in any meeting of our board, and may vote on the approval of a material contract, notwithstanding that he or she has a material interest.

Because our offices and most of our assets are outside the United States, our shareholders may not be able to bring suit against us, or enforce a judgment obtained against us in the United States.

We, and most of our subsidiaries, are incorporated in jurisdictions outside the U.S. and substantially all of our assets and those of our subsidiaries are located outside the U.S. In addition, most of our directors and officers are non-residents of the U.S., and all or a substantial portion of the assets of these non-residents are located outside the U.S. As a result, it may be difficult or impossible for U.S. investors to serve process within the U.S. upon us, our subsidiaries, or our directors and officers, or to enforce a judgment against us for civil liabilities in U.S. courts. In addition, you should not assume that courts in the countries in which we or our subsidiaries are incorporated or where our or our subsidiaries'’ assets are located would enforce judgments of U.S. courts obtained in actions against us or our subsidiaries based upon the civil liability provisions of applicable U.S. federal and state securities laws, or would enforce, in original actions, liabilities against us or our subsidiaries based on those laws.

We may become subject to taxation in Bermuda which would negatively affect our results.

At the present time, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or inheritance tax payable by us or by our shareholders in respect of our shares. We have obtained an assurance from the Minister of Finance of Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in the event that any legislation is enacted in Bermuda imposing any tax computed on profits or income, or computed on any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance tax, such tax shall not, until March 31, 2035, be applicable to us or to any of our operations or to our shares, debentures or other obligations except insofar as such tax applies to persons ordinarily resident in Bermuda or is payable by us in respect of real property owned or leased by us in Bermuda. We cannot assure you that a future Minister would honor that assurance, which is not legally binding, or that after such date we would not be subject to any such tax. If we were to become subject to taxation in Bermuda, our results of operations could be adversely affected.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

We are a midstream LNG company engaged primarily in the transportation, regasification, liquefaction and trading of LNG. We are engaged in the acquisition, ownership, operation and chartering of LNG carriers and FSRUs, and the development of LNG projects, such as FLNGs, through our subsidiaries, affiliates and joint ventures.

As of April 24, 2017 , we, together with our affiliates Golar Partners and Golar Power, have a combined fleet of 26 vessels, comprised of seven FSRUs and 19 LNG carriers. Of these vessels, six (excluding the Golar Tundra ) of the FSRUs and four of the LNG carriers (including the Golar Grand ) are owned by Golar Partners and are mostly on long-term time charters. Three of our vessels are undergoing or being contemplated for conversion into FLNGs, including the Hilli (with target completion during the second half of 2017), the Gimi and the Gandria . Ten of our LNG carriers (including Golar Power's two vessels) are participating in the LNG carrier pool, referred to as the Cool Pool. In addition, our affiliate Golar Power has one newbuilding commitment for the construction of a FSRU, which is scheduled for delivery in the fourth quarter of 2017.

We intend to leverage our relationships with existing customers and continue to develop relationships with other industry participants. Our goal is to earn higher margins through maintaining strong service-based relationships combined with flexible and innovative LNG shipping, FSRU and FLNG solutions. We believe customers place their confidence in our shipping, storage, regasification and liquefaction services based on the reliable and safe way we conduct our, our affiliates’ and our joint ventures’ LNG operations.

We are listed on Nasdaq under the symbol "GLNG." We were incorporated under the name Golar LNG Limited as an exempted company under the Bermuda Companies Act of 1981 in the Islands of Bermuda on May 10, 2001 and maintain our principal executive headquarters at 2nd Floor, S.E. Pearman Building, 9 Par-la-Ville Road, Hamilton HM 11, Bermuda. Our telephone number at that address is +1 (441) 295-4705. Our principal administrative offices are located at One America Square, 17 Crosswall, London, United Kingdom and our telephone number at that address is +44 207 063 7900.

Golar Partners

In September 2007, we formed Golar Partners under the laws of the Republic of the Marshall Islands as a wholly-owned subsidiary. Golar Partners was formed to own vessels with long-term charters typically five years or longer through wholly-owned subsidiaries in order to distribute the different risk profiles of the different vessel types of total fleet controlled or affiliated with Golar. Golar Operating LLC, or the General Partner, our wholly-owned subsidiary was also formed in September 2007 to act as the general partner of Golar Partners under the limited partnership agreement of Golar Partners, and under that agreement the General Partner received a 2% general partner interest and 100% of the IDRs in Golar Partners.

In April 2011, we completed the IPO of Golar Partners. Golar Partners is listed on Nasdaq under the symbol "GMLP."

We entered into the following agreements with Golar Partners in connection with its IPO: (a) a management and administrative services agreement pursuant to which Golar Management, one of our wholly-owned subsidiaries, provides certain management administrative support services; (b) fleet management agreements pursuant to which certain commercial management and technical management services are provided by our affiliates including Golar Management and Golar Wilhelmsen; and (c) an omnibus agreement, or the Omnibus Agreement, governing, among other things when the Company and Golar Partners may compete against each other as well as rights of first offer on certain FSRUs and LNG carriers.

During the period from the IPO of Golar Partners in April 2011 until the time of its first AGM on December 13, 2012, we retained the sole power to appoint, remove and replace all members of Golar Partners' board of directors. Under the provisions of Golar Partners' partnership agreement, the General Partner, our wholly owned subsidiary, irrevocably delegated the authority

to Golar Partners' board of directors to have the power to oversee and direct the operations of, manage and determine the strategies and policies of the Partnership. From the first AGM of Golar Partners, the majority of the board members became electable by common unitholders and accordingly, from this date we no longer retained the power to control the board directors of Golar Partners. As a result, from December 13, 2012, Golar Partners has been considered as an affiliate entity and not as our controlled subsidiary. As of April 24, 2017 , we own 100% of the general partner units and 30.1% of the limited partner units in Golar Partners.

Since the IPO of Golar Partners, we have sold equity interests in the following six vessels to Golar Partners: the Golar Freeze , the NR Satu , the Golar Grand, the Golar Maria , the Golar Igloo and the Golar Eskimo for an aggregate value of $1.9 billion. In addition, in May 2016, we completed the sale of the Golar Tundra to Golar Partners for $330.0 million less the net lease obligations under the lease agreement with China Merchant Bank Financial Leasing and net working capital adjustments. However, by virtue of the put option within the related sale and purchase agreement, we will continue to consolidate the subsidiary that owns and operates Golar Tundra until the charter with WAGL commences. As of April 24, 2017 , Golar Partners had a fleet of ten vessels (excluding the G olar Tundra ) acquired from or contributed by us.

The majority of the proceeds received from the sales of these vessels to Golar Partners have been used to make installment payments under our newbuilding program. Furthermore, the sale of these assets has made Golar Partners a more profitable company which has resulted in increased distributions to unitholders of Golar Partners. As a major shareholder of Golar Partners and the beneficial owner of Golar Partners' IDRs, we have benefited from the increased distributions.

Golar Power

In order to further develop and finance our LNG based downstream investment opportunities, in July 2016, we formed Golar Power, a 50/50 joint venture with investment vehicles affiliated with the private equity firm Stonepeak Infrastructure Partners, or Stonepeak. The joint venture company, Golar Power, offers integrated LNG based downstream solutions, through the ownership and operation of FSRUs and associated terminal and power generation infrastructure. Golar Power’s asset base includes $100 million invested by Stonepeak, a 50% interest in CELSE, a Brazilian corporation that was formed for the purpose of constructing and operating a combined cycle, gas fired, power plant with installed capacity of 1,515 megawatts located in the municipality of Barra dos Coqueiros in the State of Sergipe in Brazil, which we refer to as the Sergipe Project, a FSRU newbuilding that is currently being constructed at Samsung shipyard, and two modern 160,000 cbm trifuel LNG carriers, suited for conversion to FSRUs. In October 2016, Golar Power reached a final investment decision on the Sergipe Project and, in November 2016, CELSE signed a long-term sale and purchase agreement with Ocean LNG Limited (an affiliate of Qatar Petroleum) for the supply of 1.3 million tons of LNG per annum. Golar Power has entered into an Omnibus Agreement with Golar Partners, under which Golar Partners has a right of first refusal with respect to any transfers or sales of any LNG carrier or FSRU owned by Golar Power and operating under a charter for five or more years.

OneLNG

In July 2016, we formed OneLNG with Schlumberger B.V., or Schlumberger, a subsidiary of Schlumberger Group, which is intended to offer an integrated upstream and midstream solution for the monetization of stranded gas reserves and the conversion of natural gas to LNG. OneLNG will be the exclusive vehicle for both parties for all future projects that involve the conversion of natural gas to LNG and can utilize both Schlumberger’s production management services and Golar’s FLNG capabilities. We hold 51% of the shares and Schlumberger the remaining 49% in OneLNG and the parties share equal management and governance rights. In November 2016, OneLNG and Ophir Holdings & Ventures Ltd. signed a shareholders’ agreement to establish a joint operating company, or JOC, to develop a 2.6 trillion cubic feet gas concession offshore Equatorial Guinea. The effectiveness of the shareholders’ agreement for the JOC and the issuance of the shares is subject to certain conditions precedent, including agreement of final project terms and documentation, execution of documentation for approximately $1.2 billion of project debt financing with respect to the conversion of the Gandria to an FLNG, approval by the government of Equatorial Guinea, and final investment

decision by each of OneLNG and Ophir. The final investment decision is expected to take place during the first half of 2017.

Vessel operations - segment

Vessel acquisitions and capital expenditures

Since January 1, 2014, we invested $1.8 billion in our vessels and equipment, and newbuildings. Since January 1, 2014, we have acquired:


•	eleven newbuildings (eight LNG carriers and three FSRUs); and


•	the LNG carrier, the LNG Abuja , which we acquired for $20 million in April 2015. Albeit she was subsequently sold in July 2015.

Disposals

Since January 1, 2014, we have entered into the following sale and purchase transactions with Golar Partners:


•	In March 2014, we sold our interest in the company that owns and operates the FSRU, Golar Igloo for $310 million, of which $156 million was paid in cash and the remainder was paid through the assumption of $161.3 million of debt associated with the vessel, plus the interest rate swap asset and other purchase price adjustments of $3.6 million and $3.7 million, respectively;


•	In January 2015, we sold our interests in the companies that own and operate the FSRU, Golar Eskimo (including charter) for $388.8 million less the assumed $162.8 million of bank debt plus other purchase price adjustments. Golar Partners financed the remaining purchase price by using $7.2 million cash on hand and the proceeds of a $220 million loan from us, which was fully repaid in 2015; and

•

In May 2016, we sold our equity interests in the company that is the disponent owner of the Golar Tundra and the related time charter for $330 million less the net lease obligations under the related lease agreement with China Merchant Bank Financial Leasing, or CMBL, plus other purchase price adjustments. The outstanding debt in respect of the Golar Tundra due to CMBL stood at $222.7 million at the time of the sale to Golar Partners. At the time of sale, the Golar Tundra was subject to a time charter with West Africa Gas Limited, or WAGL. The Golar Tundra arrived in Ghana at the end of May 2016 and tendered its notice of readiness, or NOR, in mid-June 2016, with payments beginning to accrue under the time charter 30 days thereafter. However, as of the current date WAGL has not accepted the Golar Tundra from Golar Partners, due to delays in the development of the related LNG terminal on the terminal side, even though under the WAGL charter the Golar Tundra has now been deemed accepted by WAGL. In October 2016, in order to protect our legal position, we commenced arbitration proceedings against WAGL. By virtue of a put option in the sale agreement related to Golar Tundra with Golar Partners, in the event that WAGL does not accept the Golar Tundra and commence service under the time charter twelve months from the date of closing of the Golar Tundra sale to Golar Partners, Golar Partners may require that we repurchase the Golar Tundra for the original purchase price. Accordingly, the earnings and net assets of the disponent owner of the Golar Tundra will continue to be reflected within the Company’s financial statements. See note 19 to our consolidated financial statements.

In addition:


•	As discussed above, following the acquisition of the LNG Abuja in April 2015, we subsequently sold her in July 2015 for cash consideration of $19 million, resulting in the recognition of an impairment loss of $1 million;

•

In February 2015, we completed the sale of our LNG carrier, the Golar Viking to a third party for $135.0 million. In connection with the sale, we provided initial bridging finance of $133.0 million plus a revolving credit facility of $5 million. However, due to the acquirer’s difficulties in realizing any short-haul cabotage trade opportunities in Indonesia, we agreed to the repossession of the vessel in consideration for extinguishment for the outstanding balances on the loan receivables. Accordingly, we repossessed the vessel in December 2015; and

•

In connection with the formation of the Golar Power joint venture, we contributed to it our former subsidiaries (i) that own the Golar Penguin and the Golar Celsius, (ii) that holds the FSRU newbuilding contract with Samsung, and (iii) that holds the rights to participate in the Sergipe Project. Subsequently in July 2016, we received net proceeds of $113 million from our sale to Stonepeak of 50% of the ordinary share capital of Golar Power. Accordingly, effective from the date of the sale to Stonepeak, we deconsolidated the results and net assets of Golar Power.

Since January 1, 2014, we have also refinanced certain of our vessels pursuant sale and leaseback arrangements as further described in Note 4 “Variable Interest Entities” to our Consolidated Financial Statements included herein.

Investments

Since January 1, 2014, we have acquired and divested interests in a number of companies including:


•	Golar Partners - In January 2015, we completed a secondary offering of 7,170,000 of Golar Partners common units, at a price of $29.90 per unit, generating net proceeds of approximately $207.4 million. In August 2015, our Board of Directors approved a unit purchase program under which we may purchase up to $25 million worth of Golar Partners outstanding

units over 12 months. As of April 24, 2017 , we have purchased $5.0 million worth of Golar Partners’ units pursuant to this unit purchase program. Further, On October 13, 2016, we entered into an agreement with Golar Partners, which closed on October 19, 2016, to exchange all of the existing incentive distribution rights, or Old IDRs, for the issuance of (i) a new class of incentive distribution rights, or New IDRs, an aggregate of 2,994,364 common units and 61,109 general partner units on the closing date of the exchange, which occurred on October 19, 2016, and (ii) an aggregate of up to 748,592 additional common units and up to 15,278 general partner units, or the Earn-Out Units, that may be issued subject to certain conditions. The Earn-Out Units represent an aggregate of 20% of the total units to be issued in connection with the transaction. The number of Earn-Out Units that will be issued is dependent on the distributions made by Golar Partners for the quarters ending December 31, 2016 through to September 30, 2018. The New IDRs provide for distribution “splits” between the IDR holders and the holders of common units equal to those applicable to the Old IDRs, which have been cancelled. However, the New IDRs provide for higher target distribution levels before distributions are payable with respect to the New IDRs, including an increase of the minimum quarterly distributions from $0.3850 to $0.5775 per common unit, effective with respect to the distribution for the quarter ended December 31, 2016. Accordingly, as of April 24, 2017 , we own the following interests in Golar Partners: 30.1% of the common units, the 2% general partner interest (through our ownership of the general partner) and all the New IDRs. Together, these investments amount to approximately 33.9% of Golar Partners total units outstanding and 100% of the New IDRs.

•

Golar Wilhlemsen - In September 2015, we acquired the remaining 40% interest in GWM from Wilhelmsen Ship Management (Norway) AS, for $0.2 million, making it our wholly owned subsidiary. Golar Management uses the services of GWM to provide the technical, commercial and crew management services both to our and Golar Partners’ vessels. GWM was subsequently renamed Golar Management Norway AS, or GMN.

•

Joint Venture - In June 2015, we announced our intention to form a 50/50 joint venture with Stolt-Nielsen Limited, or Stolt-Nielsen, to pursue opportunities in small-scale LNG production and distribution. The joint venture will draw upon the logistics and small-scale LNG assets controlled by Stolt-Nielsen and the ocean-based LNG midstream assets controlled by us to provide a fully integrated LNG logistics service to consumers of natural gas. Stolt-Nielsen has also made a strategic investment in Golar through open market purchases, representing an ownership stake of approximately, 2.3% as of April 24, 2017 .


•	Golar Power - As discussed above, we entered into certain agreements to form Golar Power, with Stonepeak in June 2016.


•	OneLNG - As discussed above, we entered into a Joint Venture and Shareholders’ Agreement with Schlumberger, to form OneLNG in July 2016.

FLNG – segment

Hilli FLNG conversion

On May 22, 2014, we entered into an Engineering, Procurement and Construction agreement with Keppel for the conversion of the LNG carrier the Hilli to a FLNG. Keppel simultaneously entered into a sub-contract with the global engineering, construction and procurement company Black & Veatch. Black & Veatch, will provide their licensed PRICO ^® technology, perform detailed engineering and process design, specify and procure topside equipment and provide commissioning support for the Golar's topsides and liquefaction process. We also entered into a Tripartite Direct Agreement with Keppel and Black & Veatch, which among other things ensures our ability to enforce all obligations under both the Engineering, Procurement and Construction agreement and the sub-contract. We expect the conversion will be completed and the FLNG delivered in 2017, followed by mobilization to a project site for full commissioning. The total estimated conversion and vessel and site commissioning cost for the Hilli , including contingency, is approximately $1.3 billion. As of December 31, 2016 , the total costs incurred in respect of the Hilli FLNG conversion was $732.0 million . As of March 31, 2017, Keppel has completed approximately 98% of the overall conversion work.

In connection with the conversion of the Hilli to a FLNG, in September 2015 we entered into financing agreements with a subsidiary of CSSC (Hong Kong) Shipping Co. Ltd., or CSSCL. The facility is designed to fund up to 80% of the project cost and is split into two phases; pre-delivery and post-delivery financing. We expect that all remaining conversion and site specific costs will be satisfied by this debt facility. See "Item 5: Operating Review and Financial Review Prospects - Borrowings" for additional detail.

Gimi and Gandria FLNG conversion

In December 2014 and July 2015 respectively, our subsidiaries that own the Gimi and the Gandria entered into contracts with Keppel, for the conversion of the Gimi and the Gandria to FLNGs, subject to certain conditions to the contracts’ effectiveness and notice to proceed with the conversions. These agreements are similar to the agreements that we entered into with respect to the Hilli conversion.

On December 27, 2016, the Gimi contract was extended to December 31, 2017, and all conditions to the contract’s effectiveness, including payments of $30 million to Keppel, were satisfied as of January 2017. The contract requires issuing a final notice to proceed and a payment of $95 million by December 30, 2017 to proceed with the conversion. As of April 24, 2017 , we have made $31 million of payments for the Gimi conversion.

The parties did not satisfy the conditions to effectiveness in the Gandria contract by the required time and the contract recently lapsed. However, we expect to agree terms of the conversion of the Gandria , which we anticipate will be executed in connection with OneLNG making a final investment decision in connection with the Fortuna Project in the first half of 2017.

Presently, the total estimated conversion, vessel and site commissioning cost for the conversion of the Gimi and the Gandria , including contingency, is approximately $1.2 billion and $1.5 billion, respectively. Financing for the Gimi conversion has not yet been determined. Approximately $1.2 billion of project debt financing with respect to the conversion of the Gandria to an FLNG has been agreed and a term sheet has been signed with three leading Chinese lenders, and definitive documentation is being negotiated between the parties. The remaining $0.3 billion for the conversion of the Gandria is expected to come from the parties to the JOC.

Investments and shareholder agreements

Keppel Shareholder Agreement

In September 2014, our subsidiary, Golar GHK Lessors Limited, or GGHK, entered into a share sale and purchase agreement with KSI Production Pte Ltd, or KSI, a subsidiary of Keppel, pursuant to which KSI purchased from GGHK 10% of the shares in Golar Hilli Corporation, or Hilli Corp, the owner of the Hilli . GGHK and KSI, together with Hilli Corp, have also entered into a shareholders' agreement which governs the relationship between GGHK and KSI with respect to the conduct of the business to be undertaken by Hilli Corp, which includes seeking opportunities, and entering into agreements, with respect to the deployment and use of the Hilli for natural gas liquefaction projects. Under the shareholder’s agreement, Golar appoints the majority of directors and certain strategic decisions are subject to shareholder consent. Hilli Corp may call for cash from the shareholders for any future funding requirements, and shareholders are required to contribute to such cash calls up to a defined cash call contribution cap (after which funding is discretionary but non-funding results in dilution of the shareholders' interest).

Black and Veatch Agreement

In November 2014, our subsidiary, GGHK, entered into a Sale and Purchase Agreement with Black & Veatch International Company, or 'B&V, a wholly owned subsidiary of Black & Veatch, to sell 1% of the shares of Hilli Corp for $5.0 million.

Tolling Agreement

In October 2015, Golar Hilli Corporation entered into a binding term sheet for FLNG tolling services with SNH, Perenco, and Golar Cameroon SASU for the development of the Project. We refer to this binding term sheet as the Tolling Agreement. The Hilli is scheduled to provide liquefaction services under the Tolling Agreement for a term of the earlier of (i) eight years from the date the delivered Hilli is accepted by SNH and Perenco, or the Acceptance Date, or (ii) at the time of receipt and processing by the Hilli of 500 billion cubic feet of feed gas. We expect to begin the commissioning process of testing the Hilli and preparing it for service in September 2017, and under the Tolling Agreement the commercial start date to begin providing liquefaction services is the earlier of 180 days after the scheduled commissioning start date or the Acceptance Date, as may be extended by the parties. Under the terms of the Tolling Agreement, the Hilli is required to make available 1.2 million tonnes of liquefaction capacity per annum or pro rata thereof, which capacity will be spread evenly over the course of the contract year. SNH and Perenco will pay us a monthly tolling fee, which will fluctuate to a certain extent in relation to the price of Brent crude. SNH and Perenco will have an option to increase liquefaction capacity for additional tolling fees. The Hilli will have six months from September 2017 to complete the Commissioning process. The Tolling Agreement provides that the parties have a six month period during which no delay penalty can be incurred. After such six month period, there are certain penalties of up to $400 million, payable over time,

due to Perenco and SNH for the Hilli’s under or non performance and covers an eventuality where such under or non performance is prolonged such that Perenco and SNH terminate the Tolling Agreement.

As required under the terms of the Tolling Agreement, we have obtained a $400 million letter of credit issued by a financial institution to SNH and Perenco that guarantees certain payments we are required to make to them under the Tolling Agreement. The letter of credit is currently set to expire on December 31, 2017, but it will automatically extend for successive one year periods until the tenth anniversary of the acceptance of the Hilli to perform the agreed services for the Project, unless the financial institution elects to not extend the letter of credit.

The Tolling Agreement provides certain termination rights to both parties. In particular, SNH and Perenco can terminate the Tolling Agreement for reasons including, but not limited to, (i) the termination or non-renewal of the $400 million letter of credit, unless replaced with replacement security satisfactory to SNH and Perenco within a certain period of time, (ii) no certificate of acceptance is provided by SNH and Perenco within eighteen months of the commercial start date, or (iii) certain instances where liquefaction services are unavailable or available at a reduced capacity for 12 consecutive months. If Perenco and SNH elect to terminate the Tolling Agreement prior to the second anniversary of the Acceptance Date, they are obligated to pay us $400,000,000, with termination payments decreasing if the Tolling Agreement is terminated after the second anniversary.

OneLNG Joint Venture

In July 2016, we formed OneLNG with Schlumberger, which is intended to offer an integrated upstream and midstream solution for the monetization of stranded gas reserves and the conversion of natural gas to LNG. We hold 51% of the shares and Schlumberger the remaining 49% in OneLNG and the parties share equal management and governance rights. Both Golar and Schlumberger have agreed pursuant to the OneLNG Joint Venture and Shareholders’ Agreement that any new FLNG business development will be initiated by OneLNG. If the Board of Directors of OneLNG chooses not to proceed with an identified project, Golar or Schlumberger will be free to pursue the project independently. It is anticipated that we will contribute the Gandria to OneLNG for conversion to an FLNG in connection with the Fortuna Project. Please refer to OneLNG disclosure earlier in this section for further detail.

LNG trading – segment

During 2010, Golar established a wholly-owned subsidiary, Golar Commodities, which positioned us in the market for managing and trading LNG cargoes. Golar Commodities activities include structured services to outside customers, the buying and selling of physical cargoes as well as proprietary trading. Golar Commodities did not enter into any trades during the year ended December 31, 2015.

During the first quarters of 2014 and 2016, we entered into Purchase and Sales Agreements to buy and sell certain LNG cargo. In 2014, the LNG cargo was acquired and subsequently sold on a delivered basis to Kuwait Petroleum Corporation, or KNPC, to facilitate the commissioning of the Golar Igloo , which entered in her long term charter with KNPC in March 2014. In 2016, the LNG cargo was acquired from a third party and subsequently sold on a delivered basis to New Fortress Energy in March 2016 when the Golar Arctic was repositioning to Jamaica in preparation for her charter as a floating storage unit with New Fortress Energy. These transactions were our only transactions since 2011 when we scaled back our LNG trading activities.

Power - segment

In July 2016, we formed a 50/50 joint venture, Golar Power, with Stonepeak. Golar Power offers integrated LNG based downstream solutions, through the ownership and operation of FSRUs and associated terminal and power generation infrastructure. Please refer to Golar Power disclosure earlier in this section for further detail.

B. Business Overview

Together with our affiliates, Golar Partners and Golar Power, we are a leading independent owner and operator of LNG carriers and FSRUs. Collectively, our fleet is comprised of 19 LNG carriers and seven FSRUs. As of April 24, 2017 , Golar Power have one remaining newbuilding commitment for the construction of an FSRU, scheduled to be delivered at the end of 2017, and we have agreements for the conversion of three LNG carriers, the Hilli, the Gimi and the Gandria to FLNGs, with estimated deliveries between 2017 through to late 2020. Our vessels provide or have provided LNG shipping, storage and regasification services to leading participants in the LNG industry including BG Group plc, ENI S.p.A, Petróleo Brasileiro S.A., or Petrobras, Dubai Supply Authority, PT Pertamina (Pesero), the Cool Pool and many others. Our business is focused on providing highly reliable, safe and cost efficient LNG shipping and FSRU operations. We are seeking to further develop our business in other midstream areas of the LNG supply chain with particular emphasis on innovative floating liquefaction solutions.

We intend to leverage our relationships with existing customers and continue to develop relationships with other industry participants. Our goal is to earn higher margins through maintaining strong service-based relationships combined with flexible and innovative LNG shipping, FSRU and FLNG solutions. We believe our customers place their confidence in our shipping, storage and regasification services based on the reliable and safe way we conduct our and our affiliates’ LNG operations.

In line with our ambition to become an integrated LNG midstream asset provider, we are looking to invest in LNG projects and have completed a Front End Engineering and Design, or FEED, study for the conversion of three of our oldest carriers into small to mid-scale floating liquefaction units. The FEED study supported our view that conversion of an old LNG carrier into a FLNG is viable and cost effective. In relation to this, we have entered into definitive contracts with Keppel and Black & Veatch for the conversion of two LNG carriers, the Hilli and the Gimi, to FLNGs. The conversion of the Hilli is well advanced and she is expected to be delivered in the second quarter of 2017 and commence commissioning in Cameroon by September 2017. The conversion of the Gimi will only commence at our option. We have also negotiated and agreed contract terms for the conversion of the Gandria, which we anticipate will be executed in connection with OneLNG making a final investment decision in connection with the Fortuna Project. These developments are complementary to our existing core business, namely LNG shipping and provision of FSRUs. In addition, our aim is to find strong strategic partners that have an interest in utilizing one or more of our or our affiliates’ FLNGs.

As well as growing our core business and pursuing new opportunities along our value chain, we also offer commercial and technical management services for Golar Partners’ and Golar Power's fleet. As of April 24, 2017 , together Golar Partners’ and Golar Power's fleet comprised six FSRUs and six LNG carriers (which are included within the combined fleet of 26 vessels described above). Pursuant to a management and services agreement with Golar Partners and Golar Power, we are reimbursed for all of the operating costs in connection with the management of their fleet. In addition, we also receive a management fee equal to 5% of our costs and expenses incurred in connection with the provision of these services.

We intend to maintain our relationship with Golar Partners and Golar Power and pursue mutually beneficial opportunities, which we believe will include the sale of additional assets to both to provide funding for our LNG projects as well as continue our growth.

Fleet

Current Fleet

As of April 24, 2017 , our current fleet comprises three LNG carriers undergoing or being contemplated for conversions into FLNGs, 11 LNG carriers and one FSRU (which are included within the combined fleet of 26 vessels described above). This includes the Golar Grand which we chartered back from Golar Partners until October 2017.

The following table lists the LNG carriers and FSRUs in our current fleet as of April 24, 2017 :

Vessel Name

Initial Year of

Delivery

Capacity Cubic Metres

Flag

Type

Charterer/ Pool Arrangement

Current Charter/ Pool Expiration

Charter Extension Options

Existing Fleet

Hilli ⁽¹⁾⁽²⁾

1975

125,000

Moss

Perenco

2025

n/a

Gimi ⁽¹⁾

1976

125,000

Moss

n/a

Gandria ⁽¹⁾

1977

126,000

Moss

n/a

Golar Arctic ⁽³⁾

2003

140,000

Membrane

New Fortress Energy Transport Partners LLC

2018

n/a

Golar Viking ⁽⁴⁾

2005

140,000

Membrane

n/a

Golar Seal ⁽⁵⁾

2013

160,000

Membrane

Cool Pool

n/a

Golar Crystal ⁽⁵⁾

2014

160,000

Membrane

Cool Pool

n/a

Golar Bear ⁽⁵⁾

2014

160,000

Membrane

Cool Pool

n/a

Golar Glacier ⁽⁵⁾

2014

162,000

Membrane

Cool Pool

n/a

Golar Frost ⁽⁵⁾

2014

160,000

Membrane

Cool Pool

n/a

Golar Snow ⁽⁵⁾

2015

160,000

Membrane

Cool Pool

n/a

Golar Ice ⁽⁵⁾

2015

160,000

Membrane

Cool Pool

n/a

Golar Kelvin ⁽⁵⁾

2015

162,000

Membrane

Cool Pool

n/a

Golar Tundra ⁽⁶⁾

2015

170,000

Membrane

West Africa Gas Limited ("WAGL")

2021

Five years

Chartered-in

Golar Grand ⁽⁷⁾

2006

145,700

Membrane

New Charter

2019

Up to seven years

Key to flags:

MI – Marshall Islands

(1)

We have contracts with Keppel and Black & Veatch for the conversion of two LNG carriers, the Hilli and the Gimi, to FLNGs, with the Hilli expected to be delivered in the second quarter of 2017 and commence commissioning in Cameroon by September 2017, and we have agreed contract terms for the conversion of the Gandria to an FLNG. The Hilli is in the process of being converted and the Gimi and the Gandria are currently in lay-up awaiting delivery to Keppel for conversion. The conversion agreements for the Gimi and the Gandria are both subject to certain payments and notice to proceed with the conversions.

(2)

We have agreements with Perenco, SNH, and the Republic of Cameroon relating to a floating liquefied natural gas export project offshore Kribi, Cameroon that is expected to employ the converted Hilli . Under the terms of the agreements, the converted Hilli is scheduled to provide liquefaction services to the project during the second half of 2017 for an initial term of eight years. However, these agreements are subject to significant conditions which, if not satisfied, or waived by the customer, may result in termination prior to or after employment commences, in which case we may not realize any revenues under such agreements. We expect the Hilli to be delivered by Keppel in the second quarter of 2017 and commence commissioning in Cameroon by September 2017.


(3)	Commenced in March 2016. The charter expiration date is a date, to be determined at the charterer’s option, within 30 days before or after the 26 month charter term.


(4)	This vessel is currently in lay-up.


(5)	As of April 24, 2017 , we have eight vessels operating in the Cool Pool. See "Cool Pool" below.

(6)

In February 2016, we entered into a sale and purchase agreement for the sale of our equity interests in the disponent owner of the Golar Tundra to Golar Partners. The sale was completed in May 2016. Pursuant to a put option in the sale and purchase agreement with Golar Partners related to our sale of the Golar Tundra to Golar Partners, in the event the WAGL charter does not commence within 12 months from the date of closing of the Golar Tundra sale, Golar Partners may require that Golar repurchase the Golar Tundra for the original purchase price. By virtue of this put option, we will continue to consolidate the subsidiary that controls the Golar Tundra until the charter with WAGL commences.

(7)

In November 2012, we entered into an Option Agreement in connection with the disposal of the Golar Grand, providing Golar Partners with the option to require us to charter the vessel through to October 2017. Golar Partners exercised this option in February 2015. In February 2017, Golar Partners entered into a time charter with a major international oil and gas company (the “New Charter”) for the Golar Grand . We currently charter the Golar Grand from Golar Partners and will therefore sub-charter her back to the Partnership at the same rate as the New Charter, until our charter ends in October 2017. The vessel will be delivered under the New Charter during the second quarter of 2017 for an initial period of two years with a series of options to extend the charter for up to an additional seven years.

Our charterers may suspend their payment obligations under the charter agreements for periods when the vessels are not able to transport cargo (or perform regasification or liquefaction) for various reasons. These periods, which are also called off-hire periods, may result from, among other causes, mechanical breakdown or other accidents, the inability of the crew to operate the vessel, the arrest or other detention of the vessel as a result of a claim against us, or the cancellation of the vessel's class certification. The charters automatically terminate in the event of the loss of a vessel.

Cool Pool

In October 2015, we entered into a Pool Agreement with Dynagas Ltd., or Dynagas, GasLog Carriers Ltd., or GasLog, and a pool manager equally owned by Dynagas, GasLog and Golar, or the Pool Manager, to form a LNG carrier pooling arrangement, or the Cool Pool, to market LNG carriers (154,000-162,000 cbm) that are currently operating in the LNG shipping spot market. We refer to Dynagas, GasLog and Golar collectively as the Pool Participants. The Cool Pool should allow the Pool Participants to optimize the operation of the pool vessels through improved scheduling ability, cost efficiencies and common marketing. The objective of the Cool Pool is to serve the transportation requirements of the LNG shipping market by providing customers with reliable, more flexible, and innovative solutions to meet their increasingly complex shipping requirements.

As of April 24, 2017 , the Cool Pool consisted of 18 modern, high quality and essentially equivalent LNG carriers powered by fuel efficient Tri Fuel Diesel Electric propulsion technology. Dynagas, GasLog and we currently contribute three vessels, five vessels, and ten vessels (including the two owned by Golar Power), respectively, to the Cool Pool. The Pool Participants have agreed under the Pool Agreement to contribute to the Cool Pool any additional vessels with similar specifications that they acquire.

The Pool Agreement provides for the Cool Pool to focus exclusively on charters of 12 months' duration or less. Scheduling the employment of a vessel in excess of 12 months remains the mandate of the respective Pool Participant. If a pool vessel is chartered by a Pool Participant for a charter that exceeds 12 months in duration (or the Pool Participant has agreed to sell the vessel), such vessel may be withdrawn from the Cool Pool provided a minimum commitment period (described below) has passed, the Pool Participant provides 30 days’ notice and such vessel generally satisfies any outstanding charter commitment.

Under the Pool Agreement, the Pool Manager is responsible, as agent, for the marketing and chartering of the participating vessels and paying other voyage costs such as port call expenses and brokers' commissions in relation to employment contracts, but each of the Pool Participants continues to be fully responsible for the financing, insurance, manning and technical management of their respective vessels. For its services, the Pool Manager receives a fee equal to ten percent of the costs and overhead of the Cool Pool. Pool earnings (gross earnings of the pool less costs and overhead of the Cool Pool and fees to the Pool Manager) are aggregated and then allocated to the Pool Participants in accordance with the number of days each of their vessels are entered into the pool during the period.

The Pool Participants have agreed pursuant to the Pool Agreement to participate in the Cool Pool for a minimum commitment period of no less than six months from the date the first pool vessel was chartered by the Pool Manager, which occurred in October 2015. The Cool Pool will, unless otherwise agreed, automatically terminate and be wound down two years after the date the first pool vessel was chartered. After the minimum commitment period, each Pool Participant may terminate its participation in the Cool Pool, provided the Pool Manager is allowed 30 days to complete any charter negotiations and such Pool Participant’s vessels satisfy any charter commitments.

Golar Partners' Charters

The LNG carrier, Golar Mazo , which is jointly owned by Golar Partners and Chinese Petroleum Corporation, Taiwan, transports LNG from Indonesia to Taiwan under an 18-year time charter with Pertamina, the state owned oil and gas company of Indonesia. The contract expires at the end of 2017. Pertamina has options to extend the Golar Mazo charter for two additional periods of five years each but no definitive extension terms has been agreed to date.

The LNG carrier, Methane Princess , is currently under a long-term charter with BG Group to transport LNG worldwide. The contract expires in 2024. BG Group has the option to extend the Methane Princess charter for two five-year periods.

The FSRUs, Golar Spirit and the Golar Winter , are currently under long-term charters with Petrobras to provide FSRU services. These contracts expire in 2018 and 2024, respectively. Petrobras has the option to terminate the charters after the fifth anniversary of delivery to Petrobras for a termination fee and also the option to extend the charter period for the Golar Spirit for up to five years. In December 2016, Golar Partners received notice of early termination of the Golar Spirit charter from Petrobras upon payment of contractual termination fees, which will accelerate the charter end date to June 2017.

The FSRU, Golar Freeze , is currently under a long-term charter with Dubai Supply authority, or DUSUP, to provide FSRU services. The contract expires in 2020. DUSUP also has the option to extend this charter until October 2025.

The FSRU, NR Satu , is currently under a long term charter with PT Nusantara Regas that expires in 2022. PT Nusantara Regas has the option to extend the NR Satu charter until 2025.

The LNG carrier, Golar Maria , is under a medium-term charter with LNG Shipping S.p.A, a major Italian energy company. The contract expires in December 2017.

The Golar Grand is being chartered-in by Golar. Under the sale and purchase agreement for the Golar Grand between Golar and Golar Partners, dated November 2012, Golar Partners had the option to require us to charter in the vessel until October 2017 at approximately 75% of the hire rate paid by BG Group under its medium-term charter of the vessel that concluded in 2015. This option was exercised by Golar Partners in February 2015. In February 2017, Golar Partners entered into the New Charter, as discussed under "Fleet" above.

The FSRU, Golar Igloo , is under a medium-term time charter with Kuwait Natural Petroleum Company, or KNPC. The contract is for an initial term of five years and will expire in 2018.

The FSRU, Golar Eskimo , is under a long term charter with the Government of the Hashemite Kingdom of Jordan (or Jordan). The contract expires in 2025.

The FSRU, Golar Tundra , is being chartered-in by Golar. In February 2016, we entered into a sale and purchase agreement for the sale of our equity interests in the disponent owner of the Golar Tundra to Golar Partners. The sale was completed in May 2016. In connection with the closing of the sale of the Golar Tundra , we also entered into an agreement with Golar Partners pursuant to which we will pay Golar Partners a daily fee plus operating expenses for the right to use the vessel from the date of the closing of the sale until the date the vessel commences operations under the charter with WAGL.

Golar Management

Golar Management, our wholly-owned subsidiary which has offices in London, Oslo, Kuala Lumpur and Split, provides commercial, operational and technical support and supervision and accounting and treasury services to our, Golar Partners’ and Golar Power's vessels. In addition, under the management and administrative services agreement we entered into with Golar Partners, Golar Power and OneLNG certain officers and directors of Golar Management provide executive officer functions for their benefit. In addition, the administrative services provided by Golar Management include: (i) assistance in commercial management; (ii) execution of business strategies of Golar Partners, Golar Power and OneLNG; (iii) bookkeeping, audit and accounting services; (iv) legal and insurance services; (v) administrative and clerical services; (vi) banking and financial services; (vii) advisory services; (viii) client and investor relations; and (viii) integration of any acquired business.

Golar Management is reimbursed for reasonable costs and expenses it incurs in connection with the provision of these services. In addition, Golar Management receives a management fee equal to 5% of its costs and expenses incurred in connection with providing these services. Parties may terminate the management and administrative services agreement by providing 120 days written notice.

Golar Management Norway AS ("GMN")

In September 2010, Golar Wilhelmsen, or GWM, was established as a joint venture between Golar and Wilhelmsen Ship Management (Norway) AS, or Wilhelmsen. GWM office staff consisted of both Wilhelmsen and Golar employees. As of September 4, 2015, pursuant to the acquisition of the remaining 40% interest, we held a 100% ownership interest in GWM, thus making it a controlled and fully consolidated subsidiary from that date. Subsequent to the acquisition, Golar Wilhelmsen was renamed Golar Management Norway AS (or "GMN"). The company continues to provide in-house technical, commercial and crew management services, pursuant to the management agreements mentioned above.

Golar Power

OneLNG

Our Business Strategy

Golar’s vision is to break the mould in LNG. We aim to use our marine expertise and innovative floating LNG assets to provide the most competitive LNG solution to monetise natural gas reserves and deliver LNG. Our strategic intent is to become a fully integrated LNG midstream services provider covering floating LNG liquefaction (FLNG), LNG shipping and floating storage and regasification (FSRUs).

Our four strategic focuses are to:


•	Operate a high-quality, first class LNG carrier fleet;


•	Maintain leadership in FSRUs and embed this into future power projects through our affiliate, Golar Power;


•	Develop new FLNG opportunities through our joint venture with Schlumberger, OneLNG; and


•	Leverage our affiliation with Golar Partners to monetize long-term midstream contracts.


•	Operate a high-quality, first class LNG carrier fleet: We own and operate a fleet of high quality LNG carriers with an average age of 4.4 years. Eight of our ten carriers were recently delivered and utilize fuel efficient propulsion and low boil-off technology. Our vessels are compatible with most LNG loading and receiving terminals worldwide.


•	Maintain leadership in FSRUs and embed this into future power projects through our affiliate, Golar Power: We are one of the industry leaders in the development, delivery and operation of FSRUs based on a strong record of successful project

delivery and highly reliable vessel operation. Our joint venture, Golar Power, is now building the skills necessary to embed its FSRUs into power projects.

•

Develop new FLNG opportunities through a JV with Schlumberger, OneLNG: OneLNG offers resource holders an integrated solution to monetize stranded gas reserves. Our OneLNG investment proposition is built on a sound technical and commercial offering, derived from structurally lower unit capital costs and short lead times. OneLNG allows smaller resource holders, developers and customers to enter the LNG business and occupy a legitimate space alongside the largest resource holders, major oil companies and world-scale LNG buyers. For the established LNG industry participants, the prospect of OneLNG’s low-cost, low-risk, fast-track solution should provide a compelling alternative to the traditional giant land-based projects - especially in a low energy price environment.


•	Leverage our affiliation with Golar Partners: We believe our affiliation with Golar Partners positions us to pursue a broader array of opportunities. This is demonstrated by:


•	Pursuit of strategic and mutually beneficial opportunities - since the Partnership’s IPO in April 2011, Golar has sold seven vessels to Golar Partners in exchange for consideration of approximately $2.2 billion. This has helped Golar finance a recent $2.7 billion newbuilding program as well as pursue other growth opportunities including FLNG.

•

Increasing dividend income from our investment - Since Golar Partners' IPO, the quarterly dividend distributions of Golar Partners have increased from $0.385 pro-rated per unit to $0.5775 per unit for the quarter ended December 31, 2016. This represents a 50% increase since the IPO. Golar Partners' long-term charters, provide stable cash flows which allow Golar Partners to meet its quarterly distributions obligations to its unit holders, including us. As of April 24, 2017 , we have a 33.9% interest (including our 2% general partner interest) in Golar Partners and hold 100% of its IDRs.

However, we can provide no assurance that we will be able to implement our business strategies described above. For further discussion of the risks that we face, please read "Item 3. Key Information- D. Risk Factors".

The Natural Gas Industry

Predominantly used to generate electricity and as a heating source, natural gas is one of the "big three" fossil fuels that make up the vast majority of world energy consumption. As a cleaner burning fuel than both oil and coal, natural gas has become an increasingly attractive fuel source in the last decade. The moderate capital cost of gas fired power plants, the relatively high fuel efficiency and attractive pricing of gas together with its cleaner burning credentials and abundance mean that natural gas is expected to account for the largest increase in future global primary energy consumption.

According to the most recent EIA International Energy Outlook (2016), worldwide energy consumption is projected to increase by 48% from 2012 to 2040, with total energy demand in non-OECD countries increasing by 71%, compared with an increase of 18% in OECD countries. Natural gas consumption worldwide is forecast to increase by 69%, from 120 Tcf, in 2012 to 203 Tcf in 2040. Reduced emphasis placed on nuclear power which previously played a more prominent role in Japan and South Korea’s planned energy mix or its subsequent phasing out in other countries such as Germany together with a concerted effort by China to address domestic coal induced air quality issues over the coming years will see natural gas feature more prominently as the substitution fuel of choice.

The lower carbon intensity of natural gas relative to coal and oil makes it an attractive fuel for the industrial and electric power sectors for environmental reasons. Natural gas has an established presence in this sector which can be expected to increase over time. If the market for electrically charged vehicles expands as anticipated, additional demand for electricity and therefore gas, can also be expected. From an environmental perspective, LNG as a direct fuel for transport is also a viable emissions mitigant. Use of LNG in the automotive sector is minimal today but expected to increase over time. Relative to petroleum and other liquids, the International Gas Union, or IGU, states that use of LNG in transportation can reduce emissions of CO2 by up to 20% whilst emissions of nitrogen oxide can be cut by up to 90% and particulate matter by up to 99%. Emissions of sulphur oxide can potentially be eliminated altogether. Increasing concern about sulphur oxide is making LNG an increasingly attractive alternative for fuelling ships. A significant cut in the allowable sulphur content of fuel as directed by the International Maritime Organisation becomes effective in 2020. By then around 1000 vessel newbuilds are expected to be delivered with natural gas engines with an estimated 30% of newbuilds thereafter being LNG-fuelled. Engine manufacturers for buses, heavy trucks, locomotives and drilling equipment have also started building duel fuel engines that use LNG. China is leading the roll-out of LNG corridors for LNG fuelled vehicles and Europe is following suit. Selected railways and heavy vehicle fleet operators in the US are now using LNG as a fuel and maturing small scale LNG technology that can be used to access other isolated customers and reach new markets also represents

a promising opportunity that is being pursued globally. The EIA expects that natural gas as a transportation fuel will grow from 3% in 2012 to 11% in 2040.

Natural gas accounts for approximately 25% of global energy demand according to the IGU. Of this, 10% is supplied in the form of LNG. This compares to just 4% in 1990. Countries that have natural gas demand in excess of the indigenous supply must either import natural gas through a pipeline or, alternatively, in the form of LNG aboard ships. LNG is natural gas that has been converted into its liquid state through a cooling process, which allows for efficient transportation by sea. Upon arrival at its destination, LNG is returned to its gaseous state by either an FSRU or land based regasification facilities for distribution to power stations and consumers through pipelines. The EIA expects that world LNG trade will more than double between 2012 and 2040.

Natural gas is an abundant fuel source, with the Oil and Gas Journal estimating that, as of January 1, 2016, worldwide proved natural gas reserves were 6,950 Tcf having grown by 40% over the past 20 years. Almost three-quarters of the world's natural gas reserves are located in the Middle East and Eurasia. Russia, Iran and Qatar accounted for 54% of the world's natural gas reserves as of January 1, 2016, and the United States, the fourth largest holder of natural gas reserves, will see an increase in production growth from 24 Tcf per annum in 2012 to 35.3 tcf per annum in 2040. Production in the Australia/New Zealand region is forecast to increase from 2.1Tcf per annum in 2012 to 7.0Tcf per annum in 2040 with the majority originating from Australia. A significant portion of the Australian volume is scheduled to reach the market over the next 1-3 years. Sizeable new discoveries have also been made on the east coast of Africa in countries including Mozambique, Tanzania and Kenya. With an average growth rate of 7% since 2000, LNG supply has grown faster than any other source of gas and the IGU expect further expansion of this share going forward.

The EIA predicts a substantial increase in the production of "unconventional" natural gas, including tight gas, shale gas and coalbed methane. Shale gas production is now underway outside the US (Canada) and is slated to commence elsewhere including China, Australia, Mexico, Argentina, Britain and other parts of OECD Europe. Recoverable reserves of this unconventional gas are however variable and uncertain. Improvements in the hydraulic fracturing process used to produce this gas could result in upward revisions to existing reserves however the significant water requirements of the process together with environmental concerns could equally constrain the recoverability of many known reserves.

Although the growth in production of unconventional domestic natural gas has eliminated LNG demand in the US, the long-term impact of shale gas and other unconventional natural gas production on the global LNG trade is unclear. Substantial increases in the extraction of US shale gas in 2008-9 initially suppressed demand for US bound LNG and therefore shipping. Between 2010 and 2014 a number of cargoes were then redirected from the US to the Far East which increased LNG ton miles and demand for LNG shipping. A reduction in inter-basin LNG pricing differentials has more recently supressed this trade and consequently ton miles. Although there may be occasional spikes in ton miles due to regional price differentials, ton miles will likely remain at these lower levels now that Australian volumes which have more proximate off-takers are delivering. Approximately 58 million tons of new liquefaction is however under construction in the US. The first US project commenced production and LNG exports in 2016. In the absence of destination restrictions initial exports have found homes in South America, Europe, the Middle East, India and the Far East. If an increasing portion of these US exports are transported on an LNG carrier to the faster growing and more distant markets of the Middle East, India and the Far East, ton miles could start to increase toward the end of this decade.

Liquefied Natural Gas

Overview

The need to transport natural gas over long distances across oceans led to the development of the international LNG trade. The first shipments were made on a trial basis in 1959 between the United States and the United Kingdom, while 1964 saw the start of the first commercial-scale LNG project to ship LNG from Algeria to the United Kingdom. LNG shipping provides a cost-effective and safe means for transporting natural gas overseas. The LNG is transported overseas in specially built tanks on double-hulled ships to a receiving terminal, where it is offloaded and stored in heavily insulated tanks. In regasification facilities at the receiving terminal, the LNG is returned to its gaseous state (or regasified) and then carried by pipeline for distribution to power stations and other natural gas customers.

The following diagram displays the flow of natural gas and LNG from production to consumption.

LNG Supply Chain

The LNG supply chain involves the following components:

Exploring and drilling: Natural gas is produced and transported via pipeline to natural gas liquefaction facilities located along the coast of the producing country. The advent of floating liquefaction will also see the gas being piped to offshore liquefaction facilities.

Production and liquefaction: Natural gas is cooled to a temperature of minus 162 degrees Celsius, transforming the gas into a liquid, which reduces its volume to approximately 1/600th of its volume in a gaseous state. The reduced volume facilitates economical storage and transportation by ship over long distances, enabling countries with limited natural gas reserves, and limited access to long-distance transmission pipelines or concerns over security of supply to meet their demand for natural gas.

Shipping: LNG is loaded onto specially designed, double-hulled LNG carriers and transported overseas from the liquefaction facility to the receiving terminal.

Regasification: At the receiving terminal (either onshore or aboard specialized LNG carriers called Floating Storage and Regasification Units “FSRU”s), the LNG is returned to its gaseous state, or regasified.

Storage, distribution, marketing & power generation: Once regasified, the natural gas is stored in specially designed facilities or transported to power producers and natural gas consumers via pipelines.

The basic costs of producing, liquefying, transporting and regasifying LNG are much higher than in an equivalent oil supply chain. This high unit cost of supply has, in the recent past, led to the pursuit of ever-larger land based facilities in order to achieve improved economies of scale. In many recent cases, even these large projects have cost substantially more than anticipated. To address the escalating costs, more cost competitive floating liquefaction solutions across a spectrum of project sizes have been developed by a handful of oil majors and also by Golar. Many previously uneconomic pockets of gas can now be monetized and this will add to reserves and further underpin the long term attractiveness of gas. Golar’s FLNG solution, which focusses on the liquefaction of clean, lean, pipeline quality gas, is expected to be one of the cheapest liquefaction alternatives in today’s market. As such, it represents one of the only solutions to have remained economically viable following the substantial drop in oil and LNG prices. FLNG will allow smaller resource holders, developers and customers to enter the LNG business and occupy a legitimate space alongside the largest resource holders, major oil companies and world-scale LNG buyers. For the established LNG industry participants, the prospect of the lower unit costs and lower risk profile of Golar’s FLNG solution provide an important and compelling alternative to the traditional giant land based projects especially in this current energy price environment.

According to Poten and Partners, LNG liquefaction produced 103 million tonnes per annum of LNG in 2000. This increased to around 265 million tonnes per annum by 2016 according to Shell. Approximately 125 million tonnes per annum of new LNG production capacity is expected to come into operation between 2017 and 2021. Based on current trading patterns and ton miles, the order book of approximately 104 conventional LNG carriers together with the current surplus of carriers on the water is anticipated to be insufficient to carry this new expected production.

The LNG Fleet

As at March 10, 2017, the world LNG carrier fleet consisted of 490 LNG vessels (including 24 FSRUs, 30 vessels less than 46,000 cbm, 6 floating storage units, or FSUs and 2 floating liquefaction or FLNG units). There were also orders for 132 new LNG carriers (including 12 FSRUs, 12 vessels less than 46,000 cbm, one FSU and 3 FLNG units), the majority of which will be delivered between now and 2019.

The LNG carriers on order define the next generation of employable carriers in regards to size and propulsion. The current “standard” size for LNG carriers has increased substantially since the 1970s, while propulsion preference has shifted from a steam turbine to the more fuel efficient Dual/Trifuel Diesel Electric or M-type, Electronically-controlled Gas Injection systems.

While there are a number of different types of LNG vessel and "containment system," there are two dominant containment systems in use today:


•	The Moss system was developed in the 1970s and uses free standing insulated spherical tanks supported at the equator by a continuous cylindrical skirt. In this system, the tank and the hull of the vessel are two separate structures.


•	The Membrane system uses insulation built directly into the hull of the vessel, along with a membrane covering inside the tanks to maintain their integrity. In this system, the ship's hull directly supports the pressure of the LNG cargo. The membrane system most efficiently utilizes the entire volume of a ship's hull, and is cheaper to build. Most of our LNG carriers are of the membrane type.

Illustrations of these systems are included below:

Most newbuilds on order employ the membrane containment system because it most efficiently utilizes the entire volume of a ship's hull, is cheaper to build and has historically been more cost effective for canal transits. In general, the construction period for an LNG carrier is approximately 28-34 months.

Seasonality

Historically, LNG trade, and therefore charter rates, increased in the winter months and eased in the summer months as demand for LNG for heating in the Northern Hemisphere rose in colder weather and fell in warmer weather. In general, the tanker industry including the LNG vessel industry, has become less dependent on the seasonal transport of LNG than a decade ago. The advent of FSRUs has opened up new markets and uses for LNG, spreading consumption more evenly over the year. There is a higher seasonal demand during the summer months due to energy requirements for air conditioning in some markets or reduced availability of hydro power in others and a pronounced higher seasonal demand during the winter months for heating in other markets.

Floating LNG Regasification

Floating LNG Storage and Regasification Vessels

Floating LNG storage and regasification vessels are commonly known as FSRUs. The figure below depicts a typical FSRU.

The FSRU regasification process involves the vaporization of LNG and pressurising and injection of the natural gas directly into a pipeline. In order to regasify LNG, FSRUs are equipped with vaporizer systems that can operate in an open-loop mode, a closed-loop mode, or in both modes. In the open-loop mode, seawater is pumped through the system to provide the heat necessary to convert the LNG to the vapor phase. In the closed-loop system, a natural gas-fired boiler is used to heat water that is circulated in a closed-loop through the vaporizer and a steam heater to convert the LNG to the vapor phase. In general, FSRUs can be divided into four subcategories:


•	FSRUs that are permanently located offshore;


•	FSRUs that are permanently near shore and attached to a jetty (with LNG transfer being either directly ship to ship or over a jetty);


•	shuttle carriers that regasify and discharge their cargoes offshore; and


•	shuttle carriers that regasify and discharge their cargoes alongside.

Our business model to date has been focused on FSRUs that are permanently moored offshore or near shore and provide continuous regasification service.

Demand for Floating LNG Regasification Facilities

The long-term outlook for global natural gas supply and demand has stimulated growth in LNG production and trade, which is expected to drive a necessary expansion of regasification infrastructure. While worldwide regasification capacity still exceeds worldwide liquefaction capacity, a large portion of the existing global regasification capacity is concentrated in a few markets such as Japan, Korea, Taiwan, and the U.S. Gulf Coast. There remains a significant demand for regasification infrastructure in growing economies in Asia, Middle-East and Central/South America. We believe that the advantages of FSRUs compared to onshore facilities, as detailed in the paragraphs below, make them highly competitive in these markets. In Asia, the Middle East, Caribbean and South America almost all new regasification projects utilise an FSRU.

Floating LNG regasification projects first emerged as a solution to the difficulties and protracted process of obtaining permits to build shore-based LNG reception facilities (especially along the North American coasts). Due to their offshore location, FSRU facilities are significantly less likely than onshore facilities to be met with resistance in local communities, which is especially important in the case of a facility that is intended to serve a highly populated area where there is a high demand for natural gas. As a result, it is typically easier and faster for FSRUs to obtain necessary permits than for comparable onshore facilities. More recently, cost and time have become the main drivers behind the growing interest in the various types of floating LNG regasification projects. FSRU projects can typically be completed in less time (2 to 3 years compared to 4 or more years for land based projects) and at a significantly lower cost (20-50% less) than land based alternatives.

In addition, FSRUs offer a more flexible solution than land based terminals. They can be used as an LNG carrier, a regasification shuttle vessel or permanently moored as an FSRU. FSRUs can be used on a seasonal basis, as a short-term (1-2 years) regasification solution or as a long-term solution for up to 40 years. FSRUs offer a fast track regasification solution for markets that need immediate access to LNG supply. FSRUs can also be utilized as bridging solutions until a land-based terminal is constructed. In this way, FSRUs are both a replacement for, and complement to, land-based regasification alternatives.

Floating LNG Regasification Vessel Fleet Size and Ownership

Compared to onshore terminals, the floating LNG regasification industry is fairly young. There are only a limited number of companies, including Golar as well as Exmar, Excelerate Energy L.P., Hoegh LNG ASA and BW Gas that are operating FSRU terminals for LNG importers around the world. Golar was the first company to enter into an agreement for the long-term employment of an FSRU based on the conversion of an existing LNG carrier.

Competition - LNG Carriers and FSRUs

As the FSRU market continues to grow and mature there are new competitors entering the market. In addition to Hoegh LNG ASA, Excelerate Energy L.P., Golar, BW Gas and Mitsui O.S.K. Lines have ordered FSRUs. The rapid growth of the FSRU market is giving owners the confidence to place orders for FSRUs before securing charters. The expansion and growth of the FSRU market has led to more competition for mid and long-term LNG charters. Competition for these long-term charters is based primarily on price, LNG storage capacity, efficiency of the regasification process, vessel availability, size, age and condition of the vessel, relationships with LNG carrier users and the quality, LNG experience and reputation of the operator. In addition, FSRUs may operate in the emerging LNG carrier spot market that covers short-term charters of one year or less.

We believe that, together with our affiliates, Golar Partners and Golar Power, we are one of the world's largest independent LNG carrier and FSRU owners and operators. As of April 24, 2017 , we, together with our affiliates Golar Partners and Golar Power, have a fleet of 26 vessels comprised of 19 LNG carriers and seven FSRUs. Our LNG carrier newbuildings have storage capacity of approximately 160,000 cbm to 162,000 cbm storage; a 0.1% boil-off rate; tri-fuel engines; and are capable of charter speeds of up to 19.5 knots. Our newbuild FSRUs range in capacity from 160,000 cbm to 170,000 cbm and can provide regasification throughput of up to 750 thousand cubic feet per day (or 5.8 million tonnes per annum). The FSRUs can, subject to the customer's requirements, remain classified as an LNG carrier, flexible for LNG carrier service, or be classified as an offshore unit, remaining permanently moored at site for a long contract duration without the requirement for periodic dry docking.

We compete with other independent shipping companies who also own and operate LNG carriers.

In addition to independent LNG operators, some of the major oil and gas producers, including Royal Dutch Shell and BP own LNG carriers and have in the recent past contracted for the construction of new LNG carriers. National gas and shipping companies also have large fleets of LNG vessels that have expanded and will likely continue to expand. These include Malaysian International Shipping Company, or MISC, National Gas Shipping Company located in Abu Dhabi and Qatar Gas Transport Company, or Nakilat.

Floating Liquefaction Vessels

Our floating liquefaction strategy is very much analogous to what we have created on the FSRU side of our business and utilizes proven on-shore technology and a quick and a low-cost execution model with a conversion time of less than three years. During 2014, we executed agreements with Keppel and Black & Veatch for the conversion of the LNG carriers the Hilli and the Gimi to FLNG vessels at the Keppel shipyard in Singapore. In July 2015, we executed the same for the conversion of Gandria . When converted, these FLNG vessels will each have a production capacity of up to 2.5 million tonnes per annum and on board storage of approximately 125,000 cubic meters of LNG.

We are targeting liquefaction projects to convert pipeline quality gas and unconventional natural gas reserves (such as coal bed methane and shale gas or lean gas sourced from offshore fields), to LNG. These feed gas streams require little to no gas processing prior to liquefaction.

OneLNG - Golar/Schlumberger FLNG Joint Venture

In July 2016, we formed OneLNG with Schlumberger. OneLNG is intended to offer an integrated upstream and midstream solution for the monetization of stranded gas reserves and the conversion of natural gas to LNG. The combination of Schlumberger's delivering high quality reservoir analysis, infrastructure engineering and sub-sea development together with Golar’s FLNG and shipping experience delivers a unique offering to the market.

OneLNG is now staffed and has started to work on several projects around the world. One of them is the Fortuna Project in Equatorial Guinea. This is expected to involve Schlumberger’s subsea development connecting directly to an FLNG vessel that should enable OneLNG to deliver first gas in 2020. The project involves the formation of the JOC and in the event of a final investment decision, it is expected that Ophir will contribute Ophir’s share of Equatorial Guinea’s Block R license, projected to be equivalent to approximately 2.2-2.5 million tons per annum of LNG production over 15-20 years. Several similar projects are now being considered.

Hilli Conversion Contract

The primary contract for the Hilli conversion was entered into with Keppel during mid-2014. Keppel simultaneously entered into a sub-contract with global engineering, procurement and construction company, Black & Veatch, which will provide their licensed PRICO ^® technology, perform detailed engineering and process design, specify and procure topside equipment and provide commissioning support for Golar’s topsides and liquefaction process.

Following execution of the above contract, we entered into negotiations with a wholly owned subsidiary of Keppel for their purchase of a ten percent interest of our subsidiary which owns the Hilli (Golar Hilli Corporation). Both a share purchase and sale agreement and a shareholders agreement were negotiated and the agreements were executed and the transactions closed in early September 2014. During November 2014, we executed agreements with Black & Veatch International, a subsidiary of Black & Veatch Corporation for a further one percent minority interest in Golar Hilli Corporation.

Gimi and Gandria Conversion Contracts

The parties did not satisfy the conditions to effectiveness in the Gandria contract by the required time and the contract recently lapsed. However, the parties have negotiated and agreed a new contract for the conversion of the Gandria , which we anticipate will be executed in connection with OneLNG making a final investment decision in connection with the Fortuna Project in the first half of 2017.

We currently expect to utilize the Gandria in the Fortuna Project as discussed previously.

Customers

During the year ended December 31, 2016, we received the majority of our revenues from the Cool Pool and the charter agreement with NFE Transport Partners LLC (12% of our total time and voyage charter revenues).

In 2016, we generally had 10 vessels (two of which were contributed to Golar Power in July 2016) operating in the Cool Pool. Our revenues from these vessels were $51.1 million (77% of our total time and voyage charter revenues), $6.0 million and $nil for the years ended December 31, 2016, 2015 and 2014, respectively.

In 2015, we chartered two vessels to Nigeria LNG Ltd which charters were completed in March 2016. Our revenues from Nigeria LNG Ltd. were $5.8 million, $38.0 million (42% of total time and voyage charter revenues) and $nil for the years ended December 31, 2016, 2015 and 2014, respectively.

Vessel Maintenance

We are focused on operating and maintaining our vessels to the highest safety and industry standards and at the same time maximizing revenue from each vessel. It is our policy to have our crews perform planned maintenance on our vessels while underway, to reduce time required for repairs during dry-docking. This reduces the overall off-hire period required for dockings and repairs. Since we generally do not earn hire from a vessel while it is dry-docking we believe that the additional revenue earned from reduced off-hire periods outweighs the expense of the additional crewmembers or subcontractors.

Risk of Loss, Insurance and Risk Management

The operation of any vessel, including LNG carriers and FSRUs, has inherent risks. These risks include mechanical failure, personal injury, collision, property loss, vessel or cargo loss or damage and business interruption due to political circumstances in foreign countries and/or war risk situations or hostilities. In addition, there is always an inherent possibility of marine disaster, including explosion, spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. We believe that our present insurance coverage is adequate to protect us against the accident related risks involved in the conduct of our business and that we maintain appropriate levels of environmental damage and pollution insurance coverage consistent with standard industry practice. However, not all risks can be insured, and there can be no guarantee that any specific claim will be paid, or that we will always be able to obtain adequate insurance coverage at reasonable rates.

We have obtained hull and machinery insurance on all our vessels against marine and war risks, which include the risks of damage to our vessels, salvage or towing costs, and also insure against actual or constructive total loss of any of our vessels. However, our insurance policies contain deductible amounts for which we will be responsible. We have also arranged additional total loss coverage for each vessel. This coverage, which is called hull interest and freight interest coverage, provides us additional coverage in the event of the total loss of a vessel.

We have also obtained loss of hire insurance to protect us against loss of income in the event one of our vessels cannot be employed due to damage that is covered under the terms of our hull and machinery insurance. Under our loss of hire policies, our insurer will pay us the daily rate agreed in respect of each vessel for each day, in excess of a certain number of deductible days, for the time that the vessel is out of service as a result of damage, for a maximum of 218 days. The number of deductible days varies from 14 days for the new ships to 30 days for the older ships, also depending on the type of damage; machinery or hull damage.

Protection and indemnity insurance, which covers our third-party legal liabilities in connection with our shipping activities, is provided by mutual protection and indemnity associations, or P&I clubs. This includes third-party liability and other expenses related to the injury or death of crew members, passengers and other third-party persons, loss or damage to cargo, claims arising from collisions with other vessels or from contact with jetties or wharves and other damage to other third-party property, including pollution arising from oil or other substances, and other related costs, including wreck removal. Subject to the capping discussed below, our coverage, except for pollution, is unlimited.

Our current protection and indemnity insurance coverage for pollution is $1 billion per vessel per incident. The thirteen P&I clubs that comprise the International Group of Protection and Indemnity Clubs insure approximately 90% of the world's commercial tonnage and have entered into a pooling agreement to reinsure each association's liabilities. Each P&I club has capped its exposure in this pooling agreement so that the maximum claim covered by the pool and its reinsurance would be approximately $5.45 billion per accident or occurrence. We are a member of Gard and Skuld P&I Clubs. As a member of these P&I clubs, we are subject to a call for additional premiums based on the clubs' claims record, as well as the claims record of all other members of the P&I clubs comprising the International Group. However, our P&I clubs have reinsured the risk of additional premium calls to limit our additional exposure. This reinsurance is subject to a cap, and there is the risk that the full amount of the additional call would not be covered by this reinsurance.

The insurers providing the Hull and Machinery, Hull and Cargo interests, Protection and Indemnity and Loss of Hire insurances have confirmed that they will consider any FSRUs as vessels for the purpose of providing insurance. For the FSRUs we have also arranged an additional Comprehensive General Liability insurance. This type of insurance is common for offshore operations and is additional to the P&I insurance.

We will use in our operations our thorough risk management program that includes, among other things, computer-aided risk analysis tools, maintenance and assessment programs, a seafarers' competence training program, seafarers' workshops and membership in emergency response organizations. We expect to benefit from our commitment to safety and environmental protection as certain of our subsidiaries assist us in managing our vessel operations. GMN, previously GWM, received its ISO 9001 certification in April 2011, and is certified in accordance with the IMO's International Management Code for the Safe Operation of Ships and Pollution Prevention, or ISM, on a fully integrated basis.

Inspection by Classification Societies

Every large, commercial seagoing vessel must be "classed" by a classification society. A classification society certifies that a vessel is "in class," signifying that the vessel has been built and maintained in accordance with the rules of the vessel's country of registry and the international conventions of which that country is a member. In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on application or by official order, acting on behalf of the authorities concerned.

Generally FSRUs are "classed" as LNG carriers with the additional class notation REGAS-2 signifying that the regasification installations are designed and approved for continuous operation. The reference to "vessels" in the following three paragraphs, also applies to FSRUs.

For maintenance of the class certificate, regular and special surveys of hull, machinery, including the electrical plant and any special equipment classed, are required to be performed by the classification society, to ensure continuing compliance. Vessels are drydocked at least once during a five-year class cycle for inspection of the underwater parts and for repairs related to inspections. If any defects are found, the classification surveyor will issue a "condition of class" which must be rectified by the ship owner within prescribed time limits. The classification society also undertakes on request of the flag state other surveys and checks that are required by the regulations and requirements of that flag state. These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned.

Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as "in class" by a classification society, which is a member of the International Association of Classification Societies. Golar Arctic , Golar Frost and Golar Bear are certified by American Bureau of Shipping and all our other vessels are certified by Det Norske Veritas. Both societies are members of the International Association of Classification Societies. All of our vessels have been awarded ISM certification and are currently “in class” other than four LNG carriers, of which the Hilli is being converted to an FLNG, the Gimi and Gandria are layed up and scheduled to be converted to FLNGs by Keppel, and Golar Viking is in cold lay-up.

In-House Inspections

GMN carries out inspections of the vessels on a regular basis; both at sea and when the vessels are in port, while we carry out inspection and vessel audits to verify conformity with the manager's reports. The results of these inspections result in a report containing recommendations for improvements to the overall condition of the vessel, maintenance, safety and crew welfare. Based in part on these evaluations, we create and implement a program of continual maintenance for our vessels and their systems.

Environmental and Other Regulations

General

Governmental and international agencies extensively regulate the carriage, handling, storage and regasification of LNG. These regulations include international conventions and national, state and local laws and regulations in the countries where our vessels, now or in the future, will operate or where our vessels are registered. We cannot predict the ultimate cost of complying with these regulations, or the impact that these regulations will have on the resale value or useful lives of our vessels. In addition, any serious marine incident that results in significant oil pollution or otherwise causes significant adverse environmental impact, including the 2010 Deepwater Horizon oil spill in the Gulf of Mexico, could result in additional legislation or regulation that could negatively affect our profitability. In April 2015, it was announced that new regulations are expected to be imposed in the United States regarding offshore oil and gas drilling and the U.S. Bureau of Safety and Environmental Enforcement, or BSEE, announced a new Well Control Rule in April 2016. Various governmental and quasi-governmental agencies require us to obtain permits, licenses and certificates for the operation of our vessels.

Although we believe that we are substantially in compliance with applicable environmental laws and regulations and have all permits, licenses and certificates required for our vessels, future non-compliance or failure to maintain necessary permits or approvals could require us to incur substantial costs or temporarily suspend operation of one or more of our vessels. A variety

of governmental and private entities inspect our vessels on both a scheduled and unscheduled basis. These entities, each of which may have unique requirements and each of which conducts frequent inspections, include local port authorities, such as the USCG, harbor master or equivalent, classification societies, flag state, or the administration of the country of registry, charterers, terminal operators and LNG producers.

GMN is operating in compliance with the International Standards Organization, or ISO, Environmental Standard for the management of the significant environmental aspects associated with the ownership and operation of a fleet of LNG carriers. GMN received its ISO 9001 certification (quality management systems) in April 2011 and the ISO 14001 Environmental Standard during summer 2012. This certification requires that Golar and GWM commit managerial resources to act on our environmental policy through an effective management system.

International Maritime Regulations of LNG Vessels

IMO is the United Nations agency that provides international regulations governing shipping and international maritime trade. The requirements contained in the ISM Code promulgated by the IMO, govern our operations. Among other requirements, the ISM Code requires the party with operational control of a vessel to develop an extensive safety management system that includes, among other things, the adoption of a policy for safety and environmental protection setting forth instructions and procedures for operating its vessels safely and also describing procedures for responding to emergencies. Our Ship Manager holds a Document of Compliance, or DoC, under the ISM Code for operation of Gas Carriers.

Vessels that transport gas, including LNG carriers and FSRUs, are also subject to regulation under the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk, or the IGC Code, published by the IMO. The IGC Code provides a standard for the safe carriage of LNG and certain other liquid gases by prescribing the design and construction standards of vessels involved in such carriage. The completely revised and updated IGC Code entered into force on January 1, 2016, with an implementation/application date of July 1, 2016. The amendments were developed following a comprehensive five-year review and are intended to take into account the latest advances in science and technology. Compliance with the IGC Code must be evidenced by a Certificate of Fitness for the Carriage of Liquefied Gases in Bulk. Each of our vessels is in compliance with the IGC Code and each of our new buildings/conversion contracts requires that the vessel receive certification that it is in compliance with applicable regulations before it is delivered. Non-compliance with the IGC Code or other applicable IMO regulations may subject a shipowner or a bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports.

The IMO also promulgates ongoing amendments to the International Convention for the Safety of Life at Sea 1974 and its protocol of 1988, otherwise known as SOLAS. SOLAS provides rules for the construction of and equipment required for commercial vessels and includes regulations for safe operation. It requires the provision of lifeboats and other life-saving appliances, requires the use of the Global Maritime Distress and Safety System which is an international radio equipment and watch keeping standard, afloat and at shore stations, and relates to the International Convention on Standards of Training Certification and Watchkeeping for Seafarers, or STCW, also promulgated by the IMO. Flag states that have ratified SOLAS and STCW generally employ the classification societies, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.

SOLAS and other IMO regulations concerning safety, including those relating to treaties on training of shipboard personnel, lifesaving appliances, radio equipment and the global maritime distress and safety system, are applicable to our operations. Non-compliance with these types of IMO regulations may subject us to increased liability or penalties may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to or detention in some ports. For example, the USCG and EU authorities have indicated that vessels not in compliance with the ISM Code will be prohibited from trading in U.S. and EU ports.

In the wake of increased worldwide security concerns, the IMO amended SOLAS and added the International Ship and Port Facility Security Code, or ISPS Code, as a new chapter to that convention. The objective of the ISPS, which came into effect on July 1, 2004, is to detect security threats and take preventive measures against security incidents affecting ships or port facilities. GMN has developed Security Plans, appointed and trained Ship and Office Security Officers and all of our vessels have been certified to meet the ISPS Code. See “Vessel Security Regulations” for a more detailed discussion about these requirements.

The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulation may have on our operations.

Air Emissions

The International Convention for the Prevention of Pollution from Ships, as amended, or MARPOL, is the principal international convention negotiated by the IMO governing marine pollution prevention and response. MARPOL imposes environmental standards on the shipping industry relating to oil spills, management of garbage, the handling and disposal of noxious liquids, sewage and air emissions. MARPOL Annex VI regulations for the “Prevention of Air Pollution from Ships,” or Annex VI, entered into force on May 19, 2005, and applies to all ships, fixed and floating drilling rigs and other floating platforms. Annex VI sets limits on Sulphur oxide and nitrogen oxide emissions from ship exhausts, emissions of volatile compounds from cargo tanks, incineration of specific substances, and prohibits deliberate emissions of ozone depleting substances. Annex VI also includes a global cap on Sulphur content of fuel oil and allows for special areas to be established with more stringent controls on Sulphur emissions. The certification requirements for Annex VI depend on size of the vessel and time of periodical classification survey. Ships weighing more than 400 gross tons and engaged in international voyages involving countries that have ratified the conventions, or ships flying the flag of those countries, are required to have an International Air Pollution Prevention Certificate, or an IAPP Certificate. Annex VI came into force in the U.S. on January 8, 2009 and has been amended a number of times. As of the current date, all our ships delivered or drydocked since May 19, 2005 have been issued with IAPP Certificates.

In March 2006, the IMO amended Annex I to MARPOL, including a new regulation relating to oil fuel tank protection, which became effective August 1, 2007. The new regulation applies to various ships delivered on or after August 1, 2010. It includes requirements for the protected location of the fuel tanks, performance standards for accidental oil fuel outflow, a tank capacity limit and certain other maintenance, inspection and engineering standards. IMO regulations also require owners and operators of vessels to adopt Shipboard Oil Pollution Emergency Plans. Periodic training and drills for response personnel and for vessels and their crews are required.

On July 1, 2010, amendments proposed by the U.S., Norway and other IMO member states to Annex VI to the MARPOL Convention took effect that require progressively stricter limitations on Sulphur emissions from ships. As of January 1, 2012, fuel used to power ships may contain no more than 3.5% Sulphur. On October 27, 2016, the IMO’s Marine Environment Protection Committee, or MEPC, at its 70 ^th session, or MEPC 90, announced its decision concerning the implementation of regulations mandating a reduction in sulphur emissions from the current 3.5% to 0.5% as of the beginning of 2020 rather than pushing the deadline back to 2025. By 2020 ships will now either remove sulphur from emissions through the use of emission scrubbers or buy fuel with low sulphur content.

The European directive 2005/33/EC, effective as of January 1, 2010, bans the use of fuel oils containing more than 0.1% Sulphur by mass by any merchant vessel while at berth in any EU country. Our vessels have achieved compliance, where necessary, by being arranged to burn gas only in their boilers when alongside. Low sulphur marine diesel oil, or LSDO, has been purchased as the only fuel for the Diesel Generators. In addition we have modified the boilers on all our vessels to also allow operation on LSDO.

Additionally, more stringent emission standards could apply in coastal areas designated as ECAs, such as the U.S. and Canadian coastal areas designated by the MEPC, as discussed in "Clean Air Act" below. Effective August 1, 2012, certain coastal areas of North America were designated ECAs. Furthermore, as of January 1, 2014, portions of the U.S. Caribbean Sea were designated ECAs. Annex VI Regulation 14, which came into effect on January 1, 2015, set a 0.1% sulphur limit in areas of the Baltic Sea, North Sea, North America, and U.S. Caribbean Sea that are ECAs.

Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for new marine engines, depending on their date of installation. At MEPC 70, MEPC approved the North Sea and Baltic Sea as Emission Control Areas, or ECAs, for nitrogen oxides, effective January 1, 2021. It is expected that these areas will be formally designated after draft amendments are presented at MEPC’s next session.

U.S. air emissions standards are now equivalent to these amended Annex VI requirements. Additional or new conventions, laws and regulations may be adopted that could require the installation of expensive emission control systems. Because our vessels are largely powered by means other than fuel oil we do not anticipate that any emission limits that may be promulgated will require us to incur any material costs for the operation of our vessels but that possibility cannot be eliminated.

Ballast Water Management Convention

The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. For example, the IMO adopted an International Convention for the Control and Management of Ships' Ballast Water and Sediments, or the BWM Convention, in February 2004. The BWM Convention's

implementing regulations call for a phased introduction of mandatory concentration limits. All ships will also have to carry a ballast water record book and an International Ballast Water Management Certificate. The BWM Convention enters into force 12 months after 30 states, the combined merchant fleets of which represent not less than 35% of the gross tonnage of the world’s merchant shipping, have either signed it without reservation as to ratification, acceptance, approval, or have deposited the requisite instruments of ratification, acceptance, approval, or accession. The process to verify global tonnage figures to assess the BWM Convention’s entry into force has been completed. On September 8, 2016, this threshold was met (with 52 contracting parties making up 35.14%). Thus, the BWM Convention will enter into force on September 8, 2017. Many of the implementation dates in the BWM Convention have already passed, so that once the BWM Convention enters into force, the period of installation of mandatory ballast water exchange requirements would be extremely short, with several thousand ships a year needing to install ballast water management systems, or BWMS. For this reason, on December 4, 2013, the IMO Assembly passed a resolution revising the application dates of the BWM Convention so that they are triggered by the entry into force date and not the dates originally in the BWM Convention. This, in effect, makes all vessels constructed before the entry into force date “existing vessels” and allows for the installation of a BWMS on such vessels at the first renewal survey following entry into force of the convention. MEPC adopted updated “guidelines for approval of ballast water managements systems (G8)” at MEPC 70. Upon entry into force of the BWM Convention, mid-ocean ballast water exchange would become mandatory for our vessels. When mid-ocean ballast exchange or ballast water treatment requirements become mandatory, the cost of compliance for ocean carriers could be significant and the costs of ballast water treatments may be material. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast exchange, or undertake some alternate measure, and to comply with certain reporting requirements. Although we do not believe that the costs of such compliance would be material, it is difficult to predict the overall impact of such a requirement on our operations.

As referenced below, the USCG issued new ballast water management rules in 2012, and the EPA adopted a new Vessel General Permit in December 2013 that contains numeric technology-based ballast water effluent limitations that will apply to certain commercial vessels with ballast water tanks. Under the requirements of the BWM Convention installation of ballast water treatments, BWT systems, will be needed on all our LNG Carriers. As long as our FSRUs are operating as FSRUs and kept stationary they will not need installation of a BWT system. Ballast water treatment technologies are now becoming more mature, although the various technologies are still developing. The additional costs of complying with these rules, relating to certain of our older vessels are estimated to be in the range of between $2 million and $3 million.

Bunkers Convention / CLC State Certificate

The International Convention on Civil Liability for Bunker Oil Pollution 2001, or the Bunker Convention, entered into force in the states party to the Bunker Convention on November 21, 2008. The Convention provides a liability, compensation and compulsory insurance system for the victims of oil pollution damage caused by spills of bunker oil. The Convention makes the ship owner liable to pay compensation for pollution damage (including the cost of preventive measures) caused in the territory, including the territorial sea of a State Party, as well as its economic zone or equivalent area. Registered owners of any sea going vessel and seaborne craft over 1,000 gross tonnage, of any type whatsoever, and registered in a State Party, or entering or leaving a port in the territory of a State Party, will be required to maintain insurance which meets the requirements of the Convention and to obtain a certificate issued by a State Party attesting that such insurance is in force. The State issued certificate must be carried on board at all times.

P&I Clubs in the International Group issue the required Bunkers Convention "Blue Cards" to enable signatory states to issue certificates. All of our vessels have received “Blue Cards” from their P&I Club and are in possession of a CLC State-issued certificate attesting that the required insurance cover is in force.

The flag state, as discussed in the United Nations Convention on Law of the Sea, has overall responsibility for the implementation and enforcement of international maritime regulations for all ships granted the right to fly its flag. The Shipping Industry Flag State Performance tables evaluates flag states based on factors such as ratification of international maritime treaties, implementation and enforcement of international maritime regulations, and participation at IMO meetings.

United States Environmental Regulation of LNG Vessels

Our vessels operating in U.S. waters now or in the future will be subject to various federal, state and local laws and regulations relating to protection of the environment. In some cases, these laws and regulations require us to obtain governmental permits and authorizations before we may conduct certain activities. These environmental laws and regulations may impose substantial penalties for noncompliance and substantial liabilities for pollution. Failure to comply with these laws and regulations may result in substantial civil and criminal fines and penalties. As with the industry generally, our operations will entail risks in

these areas, and compliance with these laws and regulations, which may be subject to frequent revisions and reinterpretation, increases our overall cost of business.

Anti-Fouling Requirements

In 2001, the IMO adopted the International Convention on the Control of Harmful Anti-fouling Systems on Ships, or the Anti-fouling Convention. The Anti-fouling Convention, which entered into force on September 17, 2008, prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels. The exterior of vessels constructed prior to January 1, 2003 that have not been drydocked must, as of September 17, 2008, either not contain the prohibited compounds or have coatings applies to the vessel exterior that act as a barrier to the leaching of the prohibited compounds. Vessels of over 400 gross tons engaged in international voyages must obtain an International Anti-fouling System Certificate and undergo a survey before the vessel is put into service or when the anti-fouling systems are altered or replaced. We have obtained Anti-fouling System Certificates for all of our vessels, and we do not believe that maintaining such certificates will have an adverse financial impact on the operation of our vessels.

Oil Pollution Act and The Comprehensive Environmental Response Compensation and Liability Act

The U.S. Oil Pollution act of 1990 or OPA, established an extensive regulatory and liability regime for environmental protection and clean up of oil spills. OPA affects all owners and operators whose vessels trade with the U.S. or its territories or possessions, or whose vessels operate in the waters of the U.S., which include the U.S. territorial waters and the 200 nautical mile exclusive economic zone of the U.S. The Comprehensive Environmental Response Compensation and Liability Act, or CERCLA, applies to the discharge of hazardous substances whether on land or at sea. While OPA 90 and CERCLA would not apply to the discharge of LNG, they may affect us because we carry oil as fuel and lubricants for our engines, and the discharge of these could cause an environmental hazard. Under OPA 90, vessel operators, including vessel owners, managers and bareboat or “demise” charterers, are “responsible parties” who are all liable regardless of fault, individually and as a group, for all containment and clean-up costs and other damages arising from oil spills from their vessels. These “responsible parties” would not be liable if the spill results solely from the act or omission of a third party, an act of God or an act of war. The other damages aside from clean-up and containment costs are defined broadly to include:


•	injury to, destruction or loss of, or loss of use of, natural resources and the costs of assessment thereof;

• injury to, or economic losses resulting from, the destruction of real and personal property;

• net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property, or natural resources;

• loss of subsistence use of natural resources that are injured, destroyed or lost;

• lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources;

• net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards.

Effective December 21, 2005, the USCG adjusted the limits of OPA liability to the greater of $2,200 per gross ton or $18,796,800 (subject to possible adjustment for inflation) for tank vessels greater than 3,000 gross tons, other than a single tank vessel (relevant to the Company's LNG carriers). These limits of liability do not apply, however, where the incident is caused by violation of applicable U.S. federal safety, construction or operating regulations, or by the responsible party's gross negligence or willful misconduct. These limits likewise do not apply if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with the substance removal activities. OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, and some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters. In some cases, states, which have enacted their own legislation, have not yet issued implementing regulations defining ship owners' responsibilities under these laws.

CERCLA, which also applies to owners and operators of vessels, contains a similar liability regime and provides for cleanup, removal and natural resource damages for releases of "hazardous substances." Liability under CERCLA is limited to the greater of $300 per gross ton or $0.5 million for each release from vessels not carrying hazardous substances as cargo or residue, and $300 per gross ton or $5 million for each release from vessels carrying hazardous substances as cargo or residue. As with OPA , these limits of liability do not apply where the incident is caused by violation of applicable U.S. federal safety, construction or operating regulations, or by the responsible party's gross negligence or willful misconduct or if the responsible party fails or refuses to report the incident or to cooperate and assist in connection with the substance removal activities. OPA and CERCLA

each preserve the right to recover damages under existing law, including maritime tort law. We believe that we are in substantial compliance with OPA , CERCLA and all applicable state regulations in the ports where our vessels call.

OPA requires owners and operators of vessels to establish and maintain with the USCG evidence of financial responsibility sufficient to meet the limit of their potential strict liability under OPA /CERCLA. Under the regulations, evidence of financial responsibility may be demonstrated by insurance, surety bond, self-insurance or guaranty. Under OPA regulations, an owner or operator of more than one vessel is required to demonstrate evidence of financial responsibility for the entire fleet in an amount equal only to the financial responsibility requirement of the vessel having the greatest maximum liability under OPA /CERCLA. We currently maintain each of our ship owning subsidiaries that has vessels trading in U.S. waters has applied for, and obtained from the USCG National Pollution Funds Center, three-year certificates of financial responsibility, or COFR, supported by guarantees which we purchased from an insurance based provider. We believe that we will be able to continue to obtain the requisite guarantees and that we will continue to be granted certificates of financial responsibility from the USCG for each of our vessels that is required to have one.

In response to the BP Deepwater Horizon oil spill, the U.S. Congress is currently considering a number of bills that could potentially increase or even eliminate the limits of liability under OPA. Compliance with any new requirements of OPA may substantially impact our cost of operations or require us to incur additional expenses to comply with any new regulatory initiatives or statutes. For example, in April 2015, it was announced that new regulations are expected to be imposed in the U.S. regarding offshore oil and gas drilling and the BSEE announced a new Well Control Rule in April 2016. Additional legislation or regulation applicable to the operation of our vessels that may be implemented in the future as a result of the 2010 BP Deepwater Horizon oil spill in the Gulf of Mexico could adversely affect our business and ability to make distributions to our shareholders.

Clean Water Act

The U.S. Clean Water Act, the CWA, prohibits the discharge of oil or hazardous substances in U.S. navigable waters unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. In addition, many U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law.

The EPA and USCG, have enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial cost, and/or otherwise restrict our vessels from entering U.S. waters.

The EPA regulates the discharge of ballast and bilge water and other substances in U.S. waters under the CWA. The EPA regulations require vessels 79 feet in length or longer (other than commercial fishing vessels and recreational vessels) comply with a permit that regulates ballast water discharges and other discharges incidental to the normal operation of certain vessels within U.S. waters - the Vessel General Permit for Discharges Incidental to the Normal Operation of Vessels, VGP. For a new vessel delivered to an owner or operator after September 19, 2009 to be covered by the VGP, the owner must submit a Notice of Intent at least 30 days before the vessel operates in U.S. waters. In March 2013 the EPA re-issued the VGP for another five years, and the new VGP took effect in December 2013. The 2013 VGP focuses on authorizing discharges incidental to operations of commercial vessels and the 2013 VGP contains ballast water discharge limits for most vessels to reduce the risk of invasive species in US waters, more stringent requirements for exhaust gas scrubbers and the use of environmentally acceptable lubricants.

USCG regulations adopted and proposed for adoption under the U.S. National Invasive Species Act, NISA, also impose mandatory ballast water management practices for all vessels equipped with ballast water tanks entering or operating in U.S. waters, which require the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures, or otherwise restrict our vessels from entering U.S. waters. As of June 21, 2012, the USCG implemented revised regulations on ballast water management by establishing standards on the allowable concentration of living organisms in ballast water discharged from ships in U.S. waters. The USCG must approve any technology before it is placed on a vessel.

As of January 1, 2014, vessels became technically subject to the phasing-in of these standards. However, it was not until December 2016, the USCG first approved said technology. The USCG previously provided waivers to vessels which cannot install the as-yet unapproved technology and vessels now requiring a waiver will need to show why they cannot install the approved technology. The EPA, on the other hand, has taken a different approach to enforcing ballast discharge standards under the VGP. In December 2013, the EPA issued an enforcement response policy in connection with the new VGP in which the EPA indicated that it would take into account the reasons why vessels do not have the requisite technology installed, but will not grant any waivers.

It should also be noted that in October 2015, the Second Circuit Court of Appeals issued a ruling that directed the EPA to redraft the sections of the 2013 VGP that address ballast water. However, the Second Circuit stated that 2013 VGP will remains in effect until the EPA issues a new VGP. In the fall of 2016, sources reported the EPA indicated it was working on a new VGP. It presently remains unclear how the ballast water requirements set forth by the EPA, the USCG, and BWM Convention, some of which are in effect and some which are pending, will co-exist.

In addition to the requirements in the VGP, vessel owners and operators must meet twenty-five sets of state-specific requirements under the CWA’s § 401 certification process. Because the CWA § 401 process allows tribes and states to impose their own requirements for vessels operating within their waters, vessels operating in multiple jurisdictions could face potentially conflicting conditions specific to each jurisdiction that they travel through.

Clean Air Act

The U.S. Clean Air Act of 1970, as amended, or the CAA, requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. Our vessels are subject to vapor control and recovery requirements for certain cargoes when loading, unloading, ballasting, cleaning and conducting other operations in regulated port areas and emission standards for so-called “Category 3” marine diesel engines operating in U.S. waters. The marine diesel engine emission standards are currently limited to new engines beginning with the 2004 model year. On April 30, 2010, the EPA promulgated final emission standards for Category 3 marine diesel engines equivalent to those adopted in the amendments to Annex VI to MARPOL. The emission standards apply in two stages: near-term standards for newly-built engines apply from 2011, and long-term standards requiring an 80% reduction in nitrogen dioxides, or NOx, apply from 2016. Compliance with these standards may cause us to incur costs to install control equipment on our vessels in the future.

Regulation of Greenhouse Gas Emissions

In February 2005, the Kyoto Protocol entered into force. Pursuant to the Kyoto Protocol, adopting countries are required to implement national programs to reduce emissions of certain gases, generally referred to as greenhouse gases, which are suspected of contributing to global warming. Currently, the emissions of greenhouse gases from international transport are not subject to the Kyoto Protocol. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions. In addition, in December 2011, the Conference of the Parties to the United Nations Convention on Climate Change adopted the Durban Platform which calls for a process to develop binding emissions limitations on both developed and developing countries under the United Nations Framework Convention on Climate Change applicable to all Parties. The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016. The Paris Agreement does not directly limit greenhouse gas emissions from ships. The EU has indicated that it intends to propose an expansion of the existing EU emissions trading scheme to include emissions of greenhouse gases from marine vessels. In April 2015, a regulation was adopted requiring that large ships (over 5,000 gross tons) calling at European ports from January 2018 collect and publish data on carbon dioxide omissions.

As of January 1, 2013, all ships, including rigs and drillships, must comply with mandatory requirements adopted by the MEPC in July 2011 relating to greenhouse gas emissions. Under those measures by 2025 all new ships built will be 30% more energy efficient than those built in 2014. The amendments to MARPOL Annex VI Regulations for the prevention of air pollution from ships add a new Chapter 4 to Annex VI on Regulations on energy efficiency requiring the Energy Efficiency Design Index, or EEDI, for new ships, and the Ship Energy Efficiency Management Plan, or SEEMP, for all ships. These measures entered into force on January 1, 2013. Other amendments to Annex VI add new definitions and requirements for survey and certification, including the format for the International Energy Efficiency Certificate. The regulations apply to all ships of 400 gross tonnage and above. When these regulations enter into force, these new rules will likely affect the operations of vessels that are registered in countries that are signatories to MARPOL Annex VI or vessels that call upon ports located within such countries. The implementation of the EEDI and SEEMP standards could cause us to incur additional compliance costs. The IMO is also considering the implementation of a market-based mechanism for greenhouse gas emissions from ships, but it is impossible to predict the likelihood that such a standard might be adopted or its potential impact on our operations at this time.

In the U.S., the EPA has issued a final finding that greenhouse gases threaten public health and safety, and has promulgated regulations that regulate the emission of greenhouse gases. The EPA enforces both the CAA and the international standards found in Annex VI of MARPOL concerning marine diesel emissions, and the sulphur content found in marine fuel. Other federal and state regulations relating to the control of greenhouse gas emissions may follow, including climate change initiatives that have been considered in the U.S. Congress. Moreover, in the U.S. individual states can also enact environmental regulations. For example, California has introduced caps for greenhouse gas emissions and, in the end of 2016, signalled it may take additional action regarding climate change. Any passage of climate control legislation or other regulatory initiatives by the IMO, the E.U.,

the U.S., or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol or the Paris Agreement, that restrict emissions of greenhouse gases could require us to make significant financial expenditures that we cannot predict with certainty at this time. In addition, even without such regulation, our business may be indirectly affected to the extent that climate change results in sea level changes or more intense weather events.

Vessel Safety Regulations

The Maritime Safety Committee adopted a new paragraph 5 of SOLAS regulation III/1 to require lifeboat on-load release mechanisms not complying with new International Life-Saving Appliances, or LSA Code requirements to be replaced no later than the first scheduled dry-docking of the ship after 1 July 2014 but, in any case, not later than 1 July 2019. The SOLAS amendment, which entered into force on 1 January 2013, is intended to establish new, stricter, safety standards for lifeboat release and retrieval systems, aimed at preventing accidents during lifeboat launching, and will require the assessment and possible replacement of a large number of lifeboat release hooks.

All Golar vessels that were docked in 2014 had the lifeboat release and retrieval systems overhauled and modified where found necessary.

According to SOLAS Ch V/19.2.10, all vessels shall have an Electronic Chart Display and Information Systems, or ECDIS, installed in the period from 2012 to 2018. Our LNG vessels must have approved ECDIS fitted no later than the first survey on or after July 1, 2015. All our vessels now have an ECDIS installed and our Officers have been sent to specific training courses.

Vessel Security Regulations

Since the terrorist attacks of September 11, 2001, there have been a variety of initiatives intended to enhance vessel security. On November 25, 2002, the Maritime Transportation Act of 2002, or MTSA, came into effect. To implement certain portions of the MTSA, in July 2003, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the U.S. Similarly, in December 2002, amendments to SOLAS created a new chapter of the convention dealing specifically with maritime security. The new chapter became effective in July 2004 and imposes various detailed security obligations on vessels and port authorities, most of which are contained in the ISPS Code. The ISPS Code is designed to protect ports and international shipping against terrorism. After July 1, 2004, to trade internationally, a vessel must attain an International Ship Security Certificate, or ISSC, from a recognized security organization approved by the vessel's flag state. The following are among the various requirements, some of which are found in SOLAS:


•	on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship's identity, position, course, speed and navigational status;


•	on-board installation of ship security alert systems, which do not sound on the vessel but only alerts the authorities on shore;


•	the development of vessel security plans;


•	ship identification number to be permanently marked on a vessel's hull;


•	a continuous synopsis record kept onboard showing a vessel's history including, the name of the ship and of the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and


•	compliance with flag state security certification requirements.

The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from obtaining USCG-approved MTSA vessel security plans provided such vessels have on board an ISSC that attests to the vessel's compliance with SOLAS security requirements and the ISPS Code.

GMN has developed Security Plans, appointed and trained Ship and Office Security Officers and each of our vessels in our fleet complies with the requirements of the ISPS Code, SOLAS and the MTSA.

Other Regulations

Our LNG vessels may become subject to the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious Substances by Sea, or HNS, adopted in 1996, the HNS Convention, and subsequently amended by the April 2010 Protocol. The HNS Convention introduces strict liability for the shipowner and covers pollution damage as well as the risks of fire and explosion, including loss of life or personal injury and damage to property. HNS includes, among other things, liquefied natural gas. However, the HNS Convention has lacked the ratifications required to come into force. In April 2010, a consensus at the Diplomatic Conference convened by the IMO adopted the 2010 Protocol.

The 2010 Protocol sets up a two-tier system of compensation composed of compulsory insurance taken out by ship owners and an HNS fund that comes into play when the insurance is insufficient to satisfy a claim or does not cover the incident. Under the 2010 Protocol, if damage is caused by bulk HNS, claims for compensation will first be sought from the ship owner up to a maximum of 100 million Special Drawing Rights, or SDR. If the damage is caused by packaged HNS or by both bulk and packaged HNS, the maximum liability is 115 million SDR. Once the limit is reached, compensation will be paid from the HNS Fund up to a maximum of 250 million SDR. The 2010 Protocol has yet entered into effect. It will enter into force, eighteen months after the date on which certain consent and administrative requirements are satisfied. While a majority of the necessary number of states has indicated their consent to be bound by the 2010 Protocol, the required minimum has not been met. We cannot estimate the costs that may be needed to comply with any such requirements that may be adopted with any certainty at this time.

C. Organizational Structure

Unless otherwise indicated, we own a 100% controlling interest in each of the following subsidiaries as of April 24, 2017 . The following excludes our non-consolidated affiliates, including Golar Partners, Golar Power and OneLNG.



Name	Jurisdiction of Incorporation	Purpose
Golar LNG 2216 Corporation	Marshall Islands	Owns Golar Arctic
Golar Management Limited	United Kingdom	Management company
Golar Management Malaysia Sdn. Bhd.	Malaysia	Management company
Golar Management Norway AS	Norway	Management company
Golar GP LLC – Limited Liability Company	Marshall Islands	Holding company
Golar LNG Energy Limited	Bermuda	Holding company
Golar Gimi Corporation	Marshall Islands	Owns Gimi
Golar Hilli Corporation (89%)*	Marshall Islands	Owns Hilli
Golar Gandria N.V.	Netherlands	Owns and operates Gandria
Golar Hull M2021 Corporation	Marshall Islands	Leases and operates Golar Seal**
Golar Hull M2022 Corporation	Marshall Islands	Leases and operates Golar Crystal
Golar Hull M2027 Corporation	Marshall Islands	Owns and operates G olar Bear
Golar Hull M2047 Corporation	Marshall Islands	Leases and operates Golar Snow**
Golar Hull M2048 Corporation	Marshall Islands	Leases and operates Golar Ice**
Golar LNG NB10 Corporation	Marshall Islands	Leases and operates Golar Glacier**
Golar LNG NB11 Corporation	Marshall Islands	Leases and operates Golar Kelvin**
Golar LNG NB12 Corporation	Marshall Islands	Owns and operates Golar Frost
Golar LNG NB13 Corporation	Marshall Islands	Leases and operates Golar Tundra**
GVS Corporation	Marshall Islands	Owns and operates Golar Viking

* The Hilli was sold to Golar Hilli Corporation prior to the commencement of her conversion to a FLNG. Keppel and Black & Veatch hold the remaining 10% and 1% interest, respectively, in the issued share capital of Golar Hilli Corporation.

** The above table excludes mention of the lessor VIEs that we have leased vessels from under finance leases. The lessor VIEs are wholly-owned, special purpose vehicles, or SPVs, of relevant financial institutions. While we do not hold any equity investments in these SPVs, we have concluded that we are the primary beneficiary of these lessor VIEs and accordingly have consolidated these entities into our financial results. Refer to note 4 in the Consolidated Financial Statements included herein for additional detail.

D. Property, Plant and Equipment

For information on our fleet, please see the section of this item entitled "Fleet."

We do not own any interest in real property. We lease approximately 7,000 square feet of office space in London, 32,000 square feet of sublet office space in Oslo, for our ship management operations, 1,600 square feet of office space in Malaysia, 4,000 square feet of office space in Croatia and approximately 1,300 square feet of office space in Bermuda.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion of our financial condition and results of operations should be read in conjunction with the sections of this Annual Report entitled “Item 4. Information on the Company" and our audited financial statements and notes thereto, included herein. Our financial statements have been prepared in accordance with U.S. GAAP. This discussion includes forward-looking statements based on assumptions about our future business. You should also review the section of this Annual Report entitled "Cautionary Statement Regarding Forward Looking Statements" and “Item 3. Key Information-D. Risk Factors" for a discussion of important factors that could cause our actual results to differ materially from the results described in or implied by certain forward-looking statements.

Overview and Background

As of April 24, 2017 , we, together with our affiliates Golar Partners and Golar Power, have a combined fleet of 26 vessels, comprised of seven FSRUs and 19 LNG carriers. Of these vessels, seven (including the Golar Tundra ) of the FSRUs and four of the LNG carriers (including the Golar Grand ) are owned by Golar Partners and are mostly on long-term time charters. We own 100% of the general partner units and approximately 34% of the limited partner units in Golar Partners. Three of our vessels are undergoing or being contemplated for conversion into FLNGs, including the Hilli (with target completion during the first half of 2017), the Gimi and the Gandria . Eight of our LNG carriers are participating in the LNG carrier pool, referred to as the Cool Pool. In addition, our affiliate Golar Power has one newbuilding commitment for the construction of a FSRU, which is scheduled for delivery in the fourth quarter of 2017. Please see “Item 4. Information on the Company-B. Business Overview-Fleet" for additional information regarding our, Golar Partners' and Golar Power's vessels.

Market Overview and Trends

Historically, spot and short-term charter hire rates for LNG carriers have been uncertain, which reflects the variability in the supply and demand for LNG carriers. The industry has not, however, experienced a structural surplus of LNG carriers since the 1980s with fluctuations in rates and utilization over the intervening decades reflecting short-term timing disconnects between the delivery of new vessels and delivery of the new LNG they were ordered to transport. During the last cycle an excess of LNG carriers first became evident in 2004, before reaching a peak in the second quarter of 2010, when spot and short term charter hire rates together with utilization reached near historic lows. Due to a lack of newbuild orders placed between 2008 and 2010, this trend then reversed from the third quarter of 2010 such that the demand for LNG shipping was not being met by available supply in 2011 and the first half of 2012. Spot and short to medium term charter hire rates together with fleet utilization reached historic highs as a result. Since then, hire rates and utilization slowly declined from these all-time highs reaching an equilibrium around the third quarter of 2013 when the supply and demand of vessels was broadly in alignment. Subsequent to this, the pace of newbuild LNG carrier deliveries has outstripped the supply of new LNG liquefaction, with the supply of LNG carriers exceeding shipping requirements throughout 2014, 2015 and into 2016. Historically low charter rates and levels of utilization in 2015 and the first

half of 2016 were the result of this, however the second half of 2016 started showing signs of recovery with a general improvement in utilization and hire rates. Such improvement is forecast to continue and we expect to see it gather momentum throughout 2017. The anticipated arrival of substantial new LNG volumes should start to absorb the built-up surplus of LNG carriers. We expect the market to reach an equilibrium position during the second half of 2017.

There are significantly less FSRUs in operation than LNG carriers but the market for them has grown rapidly from zero in 2005 to 24 as of March 31, 2017. There are also 12 FSRUs currently on order. Continued plentiful supply of LNG at historically lower prices has encouraged continued growth in demand for FSRUs and we expect this to continue. However, the number of competitors for FSRU business has increased and is expected to continue to increase which would have a negative impact on margins.

Please see the section of this Annual Report entitled “Item 4. Information on the Company- B. Business Overview - The Natural Gas Industry" for further discussion of the LNG market.

Factors Affecting the Comparability of Future Results

Our historical results of operations and cash flows are not necessarily indicative of results of operations and cash flows to be expected in the future, principally for the following reasons:

•

Our results will be dependent in part on the performance of the Cool Pool. In October 2015, we, along with GasLog and Dynagas, established the Cool Pool, to market our LNG carriers which are currently operating in the LNG shipping spot market. As of April 24, 2017 , we had contributed 8 of the 18 vessels to the pool. Each of the vessel owners continues to be responsible for the manning and the technical management of its respective vessels. Our share of the net pool revenues will be dependent upon the performance of the Pool Manager in securing employment and negotiating rates for all of the pool vessels.

•

For periods when vessels are in lay-up, vessel operating and voyage costs will be lower. Five of our vessels have been laid-up. The Hilli and the Gandria were placed into lay-up in April 2013, the Gimi from January 2014 and the Golar Grand and the Golar Viking in December 2015. However, the Hilli was delivered to Keppel in September 2014 and commenced her conversion to a FLNG. The Golar Grand recently finished her scheduled drydocking and commenced a two year charter in February 2017. Both the Gimi and the Gandria are currently still in lay-up but have been earmarked for use in our FLNG vessel conversion projects pending lodgment of their final notices to proceed. We receive no revenues for vessels while they are in lay-up or being converted, but we benefit from lower vessel operating costs, principally from reduced crew on board, and minimal maintenance requirements and voyage costs.

•

We, or our consolidated entities, may enter into different financing arrangements. Our current financing arrangements may not be representative of the arrangements we will enter into in the future. For example, we may amend our existing credit facilities or enter into other financing arrangements, which may be more expensive. In addition, by virtue of the sale and leaseback transactions we have entered into with certain lessor VIEs, where we are deemed to be the primary beneficiary of the VIEs, we are required to consolidate these VIEs into our results. Although consolidated into our results, we have no control over the funding arrangements negotiated by these lessor VIEs such as interest rates, maturity and repayment profiles. For additional detail refer to note 4 "Variable Interest Entities" to our Consolidated Financial Statements. As of December 31, 2016, we consolidated lessor VIEs in connection with the lease financing transactions for six of our vessels. For descriptions of our current financing arrangements, please read "Item 5. Operating and Financial Review and Prospects-B Liquidity and Capital Resources-Borrowing Activities".


•	The costs of our projects may change. We are continuing to invest in and develop our various projects, such as FLNG conversion. The costs we have incurred historically for our projects may not be indicative of future costs.

•

Our results are affected by fluctuations in the fair value of our derivative instruments . The change in fair value of some of our derivative instruments is included in our net income. These changes may fluctuate significantly as interest rates or the price of our common shares fluctuate. Our Total Return Swap has a credit arrangement, whereby we are required to provide cash collateral on the initial acquisition price and to subsequently post additional cash collateral that corresponds to any further unrealized loss.


•	Expansion of our fleet. As of April 24, 2017 , our fleet comprises 15 vessels (including the Golar Grand chartered-in from Golar Partners, and the Golar Tundra ), of which 9 are newbuilds (eight LNG carriers and one FSRU) delivered between 2013 and 2015, and the Hilli.


•	Conversion of vessels to FLNGs. Three of our vessels are undergoing or being contemplated for conversion into FLNGs, including the Hilli (with target completion during the second half of 2017), the Gimi and the Gandria .


•	Gains or losses from the disposal of our investments . In January 2015, we disposed of 7.2 million of our common units in Golar Partners.


•	Deconsolidation of Golar Power from July 2016. Pursuant to the disposal of a 50% ownership interest in Golar Power to Stonepeak in July 2016, Golar Power was deconsolidated by Golar. A summary of the key significant changes impacting the income statement that occurred in 2016, when compared to historic periods, as a consequence of the deconsolidation, include:


◦	A decrease in operating income and individual line items therein, specifically relating to the two trading LNG carriers, the Golar Celsius and the Golar Penguin that were operating in the Cool Pool.


◦	On deconsolidation of Golar Power in July 2016, we recognized a loss on loss of control of $8.5 million.

◦

Equity in net earnings (losses) of affiliates, to reflect our 50% share of the results of Golar Power from its deconsolidation date in July 2016. Included within this line item for 2016, was our share of the fair value remeasurement gain arising on Golar Power’s 50% retained investment in the entity which holds the investment in the Sergipe Project. The recognition of this gain was triggered by Golar Power’s step acquisition of the other 50% equity interest as held by the project developer, Genpower in October 2016.

Factors Affecting Our Results of Operations

We believe the principal factors that will affect our future results of operations include:


•	the number and types of vessels in our fleet and the fleets of our affiliates;


•	our ability to maintain good working relationships with our key existing charterers and to increase the number of our charterers through the development of new working relationships;


•	increased demand for LNG shipping services, including FSRU services, and in connection with this underlying demand for and supply of natural gas and specifically LNG;


•	our ability to employ our vessels operating in the spot market and rates and levels of utilization achieved by our vessels;


•	the success of the Pool Manager in finding employment and negotiating charter rates for our vessels and the vessels other participants in the Cool Pool;


•	the success or failure of the LNG infrastructure (including FLNG) projects that we and our affiliates are working on or may work on in the future;


•	our ability to successfully employ our vessels at profitable rates;


•	our ability to execute strategic and mutually beneficial sales of our assets, similar to the past sale of seven of our vessels conducted with Golar Partners, for aggregate purchase consideration of approximately $2.2 billion, and our ability to secure charters of an appropriate duration for the assets being sold;


•	our ability to obtain funding in respect of our capital commitments;


•	the success of our affiliates in their operations;


•	the effective and efficient technical management of ours, Golar Partners' and Golar Power's vessels;


•	our ability to obtain and maintain major international energy company approvals and to satisfy their technical, health, safety and compliance standards; and


•	economic, regulatory, political and governmental conditions that affect the shipping industry, including changes in the number of LNG importing countries and regions and availability of surplus LNG from projects around the world, as well as structural LNG market changes allowing greater flexibility and enhanced competition with other energy sources.

In addition to the factors discussed above, we believe certain specific factors related to our and our affiliates' operations have impacted, and will continue to impact, our results of operations. These factors include:


•	employment of vessels;


•	the hire rate earned by vessels and unscheduled off-hire days;


•	non-utilization of vessels not subject to fixed rate charters;


•	pension and share option expenses;


•	mark-to-market charges in interest rate and equity swaps and foreign currency derivatives;


•	foreign currency exchange gains and losses;


•	access to capital required to acquire additional vessels and/or to implement business strategy;


•	the performance of our equity interests;


•	equity in earnings of affiliates;


•	increases in operating costs; and


•	level of debt and the related interest expense and amortization of principal.

Please see the section of this Annual Report entitled “Item 3. Key Information-D. Risk Factors" for a discussion of certain risks inherent in our business.

Important Financial and Operational Terms and Concepts

We use a variety of financial and operational terms and concepts when analyzing our performance. These include the following:

Operating revenues (including revenue from collaborative arrangement) . Total operating revenues primarily refers to time and voyage charter revenues. We recognize revenues from time and voyage charters over the term of the charter as the applicable vessel operates under the charter. We do not recognize revenue during days when the vessel is off-hire, unless the charter agreement makes a specific exception. Operating revenues includes revenues from vessels engaged in collaborative arrangements, such as the Cool Pool. Specifically, for the Cool Pool, pool earnings (gross earnings of the pool less costs and overheads of the Cool Pool and fees to the Pool Manager) are aggregated and then allocated to the Pool Participants in accordance with the number of days each of their vessels are entered into the pool during the period.

Off-hire (including commercial waiting time). Our vessels may be out of service, off-hire, for three main reasons: scheduled drydocking or special survey or maintenance, which we refer to as scheduled off-hire; days spent waiting for a charter, which we refer to as commercial waiting time; and unscheduled repairs or maintenance, which we refer to as unscheduled off-hire.

Voyage, charterhire expenses and commission expenses (including expenses from collaborative arrangement). Voyage expenses, which are primarily fuel costs but which also include other costs such as port charges, are paid by our charterers under our time charters. However, we may incur voyage related expenses during off-hire periods when positioning or repositioning vessels before or after the period of a time charter or before or after drydocking. While a vessel is on-hire, fuel costs are typically paid by the charterer, whereas during periods of commercial waiting time, fuel costs are paid by us. Charter-hire expenses refer to the cost of chartering-in vessels to our fleet and commissions relate to brokers' commissions. Furthermore, voyage, charterhire expenses and commission expenses includes related expenses attributable to vessels engaged in collaborative arrangements, such as the Cool Pool. In relation to the vessels participating in the Cool Pool, voyage expenses and commissions include a net allocation from the pool participants' vessels less the other participants' share of the net revenues earned by our vessels included in the Cool Pool.

Time charter equivalent earnings. In order to compare vessels trading under different types of charters, it is standard industry practice to measure the revenue performance of a vessel in terms of average daily time charter equivalent earnings, or TCE. This is calculated by dividing time and voyage charter revenues (including those from collaborative arrangements, such as the Cool Pool), less any voyage expenses, by the number of calendar days minus days for scheduled off-hire. Where we are paid a fee to position or reposition a vessel before or after a time charter, this additional revenue, less voyage expenses, is included in the calculation of TCE. TCE is a non-U.S. GAAP financial measure. Please see the section of this Annual Report entitled “Item 3. Key Information-A. Selected Financial Data" for a reconciliation of TCE to our total operating revenues.

Vessel operating expenses . Vessel operating expenses include direct vessel operating costs associated with operating a vessel, such as crew wages, which are the most significant component, vessel supplies, routine repairs, maintenance, lubricating oils, insurance and management fees for the provision of commercial and technical management services.

Depreciation and amortization. Depreciation and amortization expense, or the periodic cost charged to our income for the reduction in usefulness and long-term value of our vessels, is related to the number of vessels we own or operate under long-term capital leases. We depreciate the cost of our owned vessels, less their estimated residual value, and amortize the amount of our capital lease assets over their estimated economic useful lives, on a straight-line basis. We amortize our deferred drydocking costs over two to five years based on each vessel's next anticipated drydocking.

Administrative expenses. Administrative expenses are comprised of general overhead, including personnel costs, legal and professional fees, costs associated with project development, property costs and other general administration expenses. Included within administrative expenses are pension and share option expenses. Pension expense includes costs associated with a defined benefit pension plan we maintain for some of our office-based employees (the U.K. Scheme). Although this scheme is now closed to new entrants the cost of provision of this benefit will vary with the movement of actuarial variables and the value of the pension fund assets.

Interest expense and interest income. Interest expense depends on our overall level of borrowings and may significantly increase when we acquire or lease vessels. In addition, by virtue of the sale and leaseback transactions we have entered into with lessor VIEs, where we are deemed to be the primary beneficiary, we are required to consolidate these VIEs into our results. Accordingly, although consolidated into our results, we have no control over the funding arrangements negotiated by these lessor VIE entities which includes the interest rates to be applied. For additional detail refer to note 4 "Variable Interest Entities" to our Consolidated Financial Statements. Furthermore, our estimation process is dependent upon the timeliness of receipt and accuracy of financial information provided by these lessor VIE entities. During construction of a newbuilding, FSRU or FLNG retrofitting period, interest expense incurred is capitalized in the cost of the newbuilding or retrofitted vessel. Interest expense may also change with prevailing interest rates, although interest rate swaps or other derivative instruments may reduce the effect of these changes. Interest income will depend on prevailing interest rates and the level of our cash deposits and restricted cash deposits.

Impairment of long-term assets . Our vessels are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In assessing the recoverability of our vessels' carrying amounts, we make assumptions regarding estimated future cash flows, the vessels' economic useful life and estimates in respect of residual or scrap value.

Other financial items. Other financial items include financing fee arrangement costs such as commitment fees on credit facilities, market valuation adjustments for derivatives, interest rate cash settlements and foreign exchange gains/losses. The market valuation adjustment for our derivatives may have a significant impact on our results of operations and financial position although it does not impact our liquidity. Although for certain of our derivative arrangements such as our total return equity swap cash collateral maybe required to be posted. As at December 31, 2016 cash collateral amounting to $70.0 million has been provided against our Total Return Swap (see note 20 to the Consolidated Financial Statements contained herein).

Inflation and Cost Increases

Although inflation has had a moderate impact on operating expenses, interest costs, drydocking expenses and overhead, we do not expect inflation to have a significant impact on direct costs in the current and foreseeable economic environment other than potentially in relation to insurance costs and crew costs. It is anticipated that insurance costs, which have risen over the last three years, will continue to rise over the next few years, and rates may exceed the general level of inflation. LNG transportation is a business that requires specialist skills that take some time to acquire and the number of vessels is increasing. Therefore, there has been an increased demand for qualified crews, which has and will continue to the same extent to put inflationary pressure on crew costs. Only vessels on full cost pass-through charters would be fully protected from crew cost increases.

Results of Operations

Our results for the years ended December 31, 2016, 2015 and 2014 were affected by several key factors:


•	Six of our newbuildings (including the Golar Igloo , prior to her disposal to Golar Partners in March 2014), were delivered in 2014, and one of our newbuildings, Golar Tundra , was delivered in 2015, all of which were affected by commercial waiting time;


•	Our vessels were affected by commercial waiting time, including our newbuildings and vessels in lay-up. The Hilli and the Gandria were placed into lay-up in April 2013, the Gimi in January 2014 and the Golar Grand and the Golar Viking in December 2015;


•	Charter-hire expenses of $28.4 million and $28.7 million in 2016 and 2015, arising from the charter-back of the Golar Grand from Golar Partners, under an agreement executed at the time of the disposal to Golar Partners;


•	Additional operating costs of $2.0 million, $1.8 million and $9.9 million in 2016, 2015 and 2014, respectively, in connection with the increase in our crewing pool in anticipation of the delivery of our newbuilds;


•	Bank loans and other financing arrangements we entered into or terminated. This included the entry into the $1.125 billion financing agreement in July 2013 relating to financing for eight of our newbuildings, which resulted in the recognition of $5.6 million commitment fees in 2014;

•

Interest costs of $50.3 million, $7.1 million and $21.5 million were capitalized in 2016, 2015 and 2014, respectively, in relation to our newbuilding under construction (prior to the transfer of this newbuilding to Golar Power upon the deconsolidation of Golar Power in July 2016 - see note 7 "Deconsolidation of Golar Power Entities" to our Consolidated Financial Statements included herein) and the FLNG conversion of the Hilli ;


•	Gains or losses arising on the disposal of our investment in the common units of Golar Partners. This includes deemed disposals, being the dilutive impact on our ownership interest due to further issuances of common units by the Partnership;


•	Gains arising from disposals to Golar Partners;


•	The sale and subsequent reacquisition of the our interest in the company that owns and operates the Golar Viking ;


•	Deconsolidation of Golar Power in July 2016, which resulted in the recognition of a loss on loss of control of $8.5 million;


•	The realized and unrealized gains and losses on mark-to-market adjustments for our derivative instruments of $17.5 million gain, $96.5 million loss and $63.1 million loss in 2016, 2015 and 2014, respectively, and the impact of hedge accounting, which we ceased during 2015, for certain of our interest rate and equity swap derivatives;

•

Impairment loss arising on the loan and associated interest receivables from the Douglas Channel Project consortium. Given the announcement of a negative Final Investment Decision, we reassessed the recoverability of the loan and accrued interest receivables from the Douglas Channel LNG Assets Partnership, or DCLAP, and concluded that DCLAP would not have the means to satisfy its obligations under the loan. Accordingly, we recognized an impairment charge of $7.6 million in 2016;


•	Impairment loss arising on certain loan facilities granted to Equinox in February 2015, in connection with their acquisition of the vessel, the Golar Viking , from us. Due to concerns with recoverability of these loans, we recognized a loss of $15 million upon repossession of the vessel;


•	Share options expense on options granted during 2016, 2015 and 2014; and


•	Project expenses such as those relating to FLNG project development.

The impact of these factors is discussed in more detail below.

A. Operating Results

Year ended December 31, 2016, compared with the year ended December 31, 2015

As of December 31, 2016 , we managed our business and analyzed and reported our results of operations on the basis of four segments: vessel operations, LNG trading, FLNG and Power. In order to provide investors with additional information, we have provided analysis divided between these four segments: vessel operations, LNG trading, FLNG and Power. See note 8 "Segment information" to our Consolidated Financial Statements included herein.

The following details our consolidated revenues and expense information for the four segments for each of the years ended December 31, 2016 and 2015:

Vessel operations



	December 31,
(in thousands of $, except average daily TCE)	2016		2015		Change		% Change

Operating revenues (including revenue from collaborative arrangement)	80,257		102,674		(22,417	)	(22	)%
Vessel operating expenses	(53,163	)	(56,347	)	3,184		(6	)%
Voyage, charterhire and commission expenses (including expenses from collaborative arrangement)	(47,563	)	(69,042	)	21,479		(31	)%
Administrative expenses	(42,384	)	(28,657	)	(13,727	)	48	%
Depreciation and amortization	(72,972	)	(73,732	)	760		(1	)%
Impairment of long-term assets	(1,706	)	(1,957	)	251		(13	)%
Gain on disposals to Golar Partners	—		102,406		(102,406	)	(100	)%
Loss on disposal of vessel held-for-sale	—		(5,824	)	5,824		(100	)%
Loss on loss of control of Golar Power	(8,483	)	—		(8,483	)	100	%
Impairment of vessel held-for-sale	—		(1,032	)	1,032		(100	)%
Other non-operating (expense) income	(132	)	(27	)	(105	)	389	%
Interest income	2,969		6,896		(3,927	)	(57	)%
Interest expense	(71,201	)	(68,793	)	(2,408	)	4	%
Other financial items, net	8,691		(112,722	)	121,413		(108	)%
Income taxes	589		3,053		(2,464	)	(81	)%
Equity in net earnings of affiliates	37,344		55,985		(18,641	)	(33	)%
Net loss	(167,754	)	(147,119	)	(20,635	)	14	%
Net income attributable to non-controlling interests	(25,751	)	(19,158	)	(6,593	)	34	%
Net loss attributable to Golar LNG Ltd	(193,505	)	(166,277	)	(27,228	)	16	%
Average Daily TCE ⁽¹⁾ (to the closest $100)	10,100		14,900		(4,800	)	(32	)%


⁽¹⁾	TCE is a non-GAAP financial measure. For a reconciliation of TCE rates, please see “Item 3. Key Information-A. Selected Financial Data."

Operating revenues: Operating revenues decreased by $22.4 million to $80.3 million for the year ended December 31, 2016 compared to $102.7 million in 2015 . This was principally due to a decrease in revenue of:


•	$21.7 million from the Golar Crystal and Golar Frost following the conclusion of their charters with Nigeria LNG in March 2016 and their subsequent entry into the Cool Pool;


•	$10.0 million from the Golar Celsius and Golar Penguin following the deconsolidation of Golar Power, and thus its fleet, from July 6, 2016;


•	$2.0 million from the Golar Arctic as she was mostly off-hire during the first quarter of 2016 prior to the commencement of her two year floating storage unit charter on March 23, 2016 with New Fortress Energy in Jamaica;


•	$1.4 million from the Golar Eskimo relating to revenue earned prior to her disposal to Golar Partners in January 2015; and


•	$1.3 million from the Golar Grand relating to revenue earned prior to her being placed into cold lay-up in December 2015.

This was partially offset by an increase in revenue of:


•	$11.2 million in respect of six of our vessels (excluding the Golar Crystal and the Golar Frost ) currently operating in the Cool Pool (i.e. Golar Bear , Golar Glacier , Golar Ice , Golar Kelvin , Golar Seal and Golar Snow ) due to the overall increase in utilization for these vessels in the period;


•	$1.0 million from the Golar Tundra relating to revenue earned from the WAGL time charter; and


•	$1.7 million to $14.2 million with respect to management fee income from the provision of services to Golar Partners under our management and administrative services and fleet management agreements compared to $12.5 million for the same period in 2015.



	2016		2015		Change			Change
Calendar days less scheduled off-hire days	4,034		4,481		(447		)	(10	)%

Average daily TCE rate (to the closest $100)	$	10,100	$	14,900	$	(4,800	)	(32	)%

The decrease of $4,800 in average daily TCE rate to $10,100 for 2016 compared to $14,900 in 2015 is primarily due to the overall decline in charter rates and low utilization levels of our vessels in 2016.

For a reconciliation of TCE rates, please see “Item 3. Key Information-A. Selected Financial Data."

Vessel operating expenses: Vessel operating expenses decreased by $3.2 million to $53.2 million for the year ended December 31, 2016 , compared to $56.3 million in 2015 . This was principally due to a decrease of:


•	$4.2 million in operating costs in relation to the Golar Celsius and Golar Penguin following the deconsolidation of Golar Power, and thus its fleet, from July 6, 2016;


•	$2.7 million in operating costs in relation to our eight vessels operating in the Cool Pool;


•	$1.2 million in management fee costs due to our bringing in-house the technical operations;


•	$0.3 million from the Golar Eskimo in connection with her disposal to Golar Partners in January 2015; and


•	lower operating costs from our vessels in lay-up, namely the Gimi , the Gandria and the Golar Viking .

This was partially offset by an increase of $5.0 million of operating costs in relation to the Golar Tundra , which was delivered in November 2015.

Voyage, charterhire and commission expenses: Voyage, charterhire and commission expenses largely relate to charterhire expenses and fuel costs associated with commercial waiting time and vessel positioning costs. The decrease in voyage, charterhire and commission expenses of $21.5 million to $47.6 million for the year ended December 31, 2016 compared to $69.0 million in 2015 was primarily due to a decrease of:


•	$13.8 million in charterhire expense relating to the charter-back of the Golar Eskimo from Golar Partners. The charter-back arrangement with Golar Partners was in connection with the disposal of the Golar Eskimo in January 2015, with the arrangement ending in June 2015. No comparable charterhire expense was therefore recognized in 2016; and

•

$13.3 million in charterhire expense relating to the charter-back of the Golar Grand from Golar Partners. The charter-back arrangement was pursuant to Golar Partners' exercise of its option in February 2015 under the Option Agreement executed in connection with the disposal of the vessel to Golar Partners in 2012. In 2015 these costs included $8.8 million of incremental liability arising from the re-measurement of Golar's guarantee obligation to Golar Partners. In addition, pursuant to entry of the Golar Grand into lay-up in December 2015, the daily charterhire rate was lowered to account for operating costs savings.

This was partially offset by an increase of:


•	$1.4 million of voyage expense in relation to the Golar Tundra , which was delivered in November 2015; and


•	$3.3 million of voyage, charterhire and commission expense in relation to the Golar Crystal and Golar Frost following the conclusion of their charters with Nigeria LNG in March 2016 and their subsequent entry into the Cool Pool.

Administrative expenses: Administrative expenses increased by $13.7 million to $42.4 million for the year ended December 31, 2016 compared to $28.7 million in 2015 . This was primarily due an increase of (i) $7.0 million in salaries and benefits following an increase in headcount partly due to the bringing in-house of technical operations; (ii) $2.0 million in professional fees as a result of increased projects and business expansion activities; (iii) $2.1 million in share options expense pursuant to the grants in 2016; and (iv) partially offset by a decrease in administration expenses due to capitalization of certain costs directly associated to the conversion of the Hilli to a FLNG.

Depreciation and amortization: Depreciation and amortization decreased by $0.8 million to $73.0 million for the year ended December 31, 2016 compared to $73.7 million in 2015 . This was primarily due to lower depreciation of $5.2 million from the Golar Celsius and Golar Penguin following the deconsolidation of Golar Power from July 2016, and lower depreciation in relation to the Golar Tundra upon its classification as held-for-sale from December 31, 2015 upon which depreciation ceased to be recognized.

This was partially offset by an increase of:


•	$0.9 million from our newbuildings delivered in the first quarter of 2015 (i.e. Golar Ice , Golar Kelvin and Golar Snow ); and


•	$3.7 million from the Golar Viking , which was sold on January 20, 2015 but subsequently reacquired on December 4, 2015, resulting in a full twelve months' depreciation charge in 2016.

Impairment of long-term assets: In December 31, 2016 , we realized an impairment charge amounting to $1.7 million related to equipment classified as "Other long-term assets" due to the uncertainty of its future usage. During the year ended December 31, 2015 , the impairment charge amounting to $2.0 million relates to parts initially ordered for the Golar Spirit FSRU retrofitting in 2007, which were not utilized following changes to the original project specifications. Some of these parts were used in subsequent conversions, however, due to the deterioration in the market in 2015, the carrying value of the residual parts were fully impaired.

Gain on disposals to Golar Partners: In January 2015, we sold 100% of our interests in the companies that own and operate the FSRU, the Golar Eskimo , to Golar Partners and recognized a gain on disposal of $102.4 million.

Loss on disposal of vessel held-for-sale: In February 2015, we sold the LNG carrier, Golar Viking , to PT Perusahaan Pelayaran Equinox, or Equinox, at a sale price of $135.0 million resulting in a loss on disposal of $5.8 million. There was no comparable transaction in 2016.

Loss on loss of control of Golar Power: On July 6, 2016 we closed the disposal of a 50% ownership interest in Golar Power, the entity that owns and operates Golar Penguin , Golar Celsius , newbuild FSRU 8 and LNG Power Limited, which resulted in a loss of $8.5 million.

Impairment of vessel held-for-sale: In April 2015, we acquired the LNG vessel, LNG Abuja , for $20.0 million. In July 2015, she was sold to a third party for $19.0 million. Accordingly, as of the reporting period ended June 30, 2015, the vessel was classified as held-for-sale and we recognized an impairment loss of $1.0 million.

Interest income: Interest income decreased by $3.9 million to $3.0 million for the year ended December 31, 2016 compared to $6.9 million for the same period in 2015 . The decrease was primarily due to:


•	the higher interest income recognized in 2015 from the $220 million Eskimo vendor loan provided to Golar Partners in January 2015 to partly finance its acquisition of the Golar Eskimo. The Eskimo vendor loan was repaid in full in November 2015, thus there is no comparable interest income in 2016; and


•	the interest income earned on the loan facilities granted to Equinox in connection with their acquisition of the LNG carrier, Golar Viking , in February 2015. Following the impairment of the loan receivables in the third quarter of 2015, we ceased recognition of interest income. There was no comparable interest income in 2016.

Interest expense: Interest expense decreased by $2.4 million to $71.2 million for the year ended December 31, 2016 compared to $68.8 million for the same period in 2015 and is primarily due to higher capitalized interest on borrowing costs recognized in 2016 in respect of the Hilli FLNG conversion. This is partially offset by (i) higher interest expense arising on the loan facilities of the ICBC, CMBL and CCBFL lessor VIEs; and (ii) additional interest on the new financing facility in connection with the Golar Viking .

Other financial item s : Other financial items decreased by $121.4 million to a gain of $8.7 million for the year ended December 31, 2016 compared to a loss of $112.7 million for the same period in 2015 as set forth in the table below:



	December 31,
(in thousands of $)	2016		2015		Change		% Change
Mark-to-market adjustment for interest rate swap derivatives	2,818		(12,798	)	15,616		(122	)%
Interest expense on undesignated interest rate swaps	(10,153	)	(15,797	)	5,644		(36	)%
Net realized and unrealized losses on interest rate swap agreements	(7,335	)	(28,595	)	21,260		(74	)%
Mark-to-market adjustment for equity derivatives	24,819		(67,925	)	92,744		(137	)%
Impairment of loan	(7,627	)	(15,010	)	7,383		(49	)%
Financing arrangement fees and other costs	(404	)	(1,841	)	1,437		(78	)%
Amortization of debt guarantee	1,563		2,800		(1,237	)	(44	)%
Foreign exchange loss on operations	(1,909	)	(2,126	)	217		(10	)%
Other	(416	)	(25	)	(391	)	1,564	%
	8,691		(112,722	)	121,413		(108	)%

Net realized and unrealized losses on interest rate swap agreements : Net realized and unrealized losses on interest rate swaps decreased to a loss of $7.3 million for the year ended December 31, 2016 from a loss of $28.6 million for the same period in 2015 .

As of December 31, 2016 , we have an interest rate swap portfolio with a notional amount of $1.3 billion, none of which are designated as hedges for accounting purposes. The decrease in mark-to-market losses from our interest rate swaps is due to the increase in long-term swap rates for the year ended December 31, 2016 .

Mark-to-market adjustment for equity derivatives (or equity swap): In December 2014, we established a three month facility for a Stock Indexed Total Return Swap Programme or Equity Swap Line with DNB Bank ASA in connection with a share buy back scheme. The facility has been subsequently extended to June 2017. The equity swap derivatives mark-to-market adjustment resulted in a net gain of $24.8 million recognized in the year ended December 31, 2016 compared to a net loss of $67.9 million for the same period in 2015 . The gain in 2016 , from a loss in 2015 , is a reflection of the improvement in the company's share price during 2016 .

Impairment of loan: Given the announcement of a negative final investment decision from the Douglas Channel Project consortium, we reassessed the recoverability of the loan previously granted by Golar and accrued interest receivables from DCLAP, and concluded that DCLAP would not have the means to satisfy its obligations under the loan. Accordingly, during the year ended December 31, 2016 , we recognized an impairment charge of $7.6 million . For the year ended December 31, 2015 we recognized a $15.0 million impairment loss on the loan receivable due from Equinox entered into in connection with the disposal of the vessel, the Golar Viking , in February 2015.

Financing arrangement fees and other costs: The higher financing arrangement fees and other costs of $1.8 million in 2015 arose mainly from the recognition of a $1.2 million counter-guarantee liability, wherein we had agreed to act as a guarantor for 49% of the maximum potential liability that Genpower was exposed to after entering into an insurance agreement policy to cover the execution of the works for the implementation of the TPP Porto de Sergipe I Project in Brazil. There is no comparable cost in 2016.

Amortization of debt guarantee : The amortization of debt guarantee of $1.6 million for the year ended December 31, 2016 decreased by $1.2 million compared to the same period in 2015 . This is primarily due the prior year ended December 31, 2015 including the release of our debt guarantee provision of $2.2 million pursuant to the refinancing of certain debt facilities in Golar Partners for which we had previously provided a guarantee.

Income taxes: Income taxes relate principally to the taxation of U.K. based entities offset by the amortization of the deferred gains on the intra-group transfers on long-term assets resulting in an income tax credit.

Equity in net earnings of affiliates:



	December 31,
(in thousands of $)	2016		2015	Change		% Change
Share of net earnings in Golar Partners	37,716		23,124	14,592		63	%
Net gain on disposal of investments in Golar Partners	—		32,580	(32,580	)	(100	)%
Share of net (loss) earnings in other affiliates	(372	)	281	(653	)	(232	)%
	37,344		55,985	(18,641	)	(33	)%

Our share of net earnings in Golar Partners is partially offset by a charge for the amortization of the basis difference in relation to the gain on loss of control recognized on deconsolidation in 2012.

The net gain on disposal of investments in Golar Partners of $32.6 million relates to the disposal of 7.2 million common units in Golar Partners in January 2015.

Net income attributable to non-controlling interests: During 2016, we were party to sale and leaseback arrangements for six vessels (2015: five) with the lessor VIEs. While we do not hold any equity investments in these lessor VIEs, we are the primary beneficiary. Accordingly, these lessor VIEs are consolidated into our financial results and thus the equity attributable to the financial institutions in their respective variable interest entities are included in non-controlling interests in our consolidated results.

LNG trading



	December 31,
(in thousands of $)	2016	2015	Change	% Change
Other operating gains and losses	16	—	16	100	%
Net income	16	—	16	100	%

In 2016, we entered into a Purchase and Sales Agreement to buy and sell LNG cargo. The LNG cargo was acquired from a third party and subsequently sold on a delivered basis to New Fortress Energy in March 2016 when the Golar Arctic was repositioning to Jamaica in preparation for her charter as a floating storage unit with New Fortress Energy. There was no LNG trading activity for the year ended December 31, 2015 .

FLNG



	December 31,
(in thousands of $)	2016		2015		Change	% Change
Administrative expenses	(3,576	)	(4,869	)	1,293	(27	)%
Net loss	(3,576	)	(4,869	)	1,293	(27	)%

The net loss relates to non-capitalized project related expenses comprising of legal, professional and consultancy costs.

Hilli FLNG conversion

On May 22, 2014, we entered into an Engineering, Procurement and Construction agreement with Keppel for the conversion of the LNG carrier the Hilli to a FLNG. Keppel simultaneously entered into a sub-contract with the global engineering, construction and procurement company Black & Veatch. Black & Veatch will provide their licensed PRICO ^® technology, perform detailed engineering and process design, specify and procure topside equipment and provide commissioning support for the FLNG topsides and liquefaction process. We also entered into a Tripartite Direct Agreement with Keppel and Black & Veatch which, among other things, ensures our ability to enforce all obligations under both the Engineering, Procurement and Construction agreement and the sub-contract. In September 2014, the Hilli was delivered to Keppel Shipyard Management, or Keppel, in Singapore for commencement of her FLNG conversion. We expect the conversion will be completed and the converted Hilli FLNG delivered in 2017, followed by mobilization to a project site for full commissioning. The total estimated conversion and vessel and site commissioning cost for the Hilli , including contingency, is approximately $1.3 billion.

As of December 31, 2016 and 2015 , the total costs incurred and capitalized in respect of the Hilli conversion amounted to $732.0 million and $501.0 million , respectively.

Other FLNG conversions

In December 2014 and July 2015, respectively, our subsidiaries that own the Gimi and the Gandria entered into contracts with Keppel for the conversion of the Gimi and the Gandria to FLNGs, subject to certain conditions to the contracts’ effectiveness and notice to proceed with the conversions. These agreements are similar to the agreements that we entered into with respect to the Hilli conversion.

The total estimated conversion, vessel and site commissioning cost for the conversion of the Gimi and the Gandria , including contingency, is approximately $1.2 billion and $1.5 billion, respectively. As of December 31, 2016, we have made $31.0 million of payments relating to long lead items ordered in preparation for the conversion of the Gimi to a FLNG.

Formation of OneLNG

In July 2016, we formed a joint venture with Schlumberger with the intention to offer an integrated upstream and midstream solution for the development of low cost gas reserves to LNG. OneLNG will be the exclusive vehicle for all projects that involve the conversion of natural gas to LNG which require both Schlumberger and Golar’s expertise. We hold a 51% interest in OneLNG and Schlumberger holds the remaining 49% but, by virtue of substantive participation rights held by Schlumberger we account for our investment in OneLNG under the equity method. Accordingly, our initial equity contribution of $10.2 million in OneLNG has been presented within “Investments in affiliates”. Until the final investment decision has been taken on OneLNG’s first project, which is likely to be the Fortuna Project, each party will principally bear their own costs.

Power



	December 31,
(in thousands of $)	2016	2015	Change	% Change
Equity in net earnings of affiliates	10,534	—	10,534	(100	)%
Net loss	10,534	—	10,534	(100	)%

Pursuant to the deconsolidation of Golar Power in July 2016, we have accounted for our remaining 50% ownership interest in Golar Power under the equity method.

Our share of net earnings in Golar Power in 2016 includes $21.9 million, being our share of the fair value remeasurement gain arising on Golar Power’s 50% retained investment in the entity which holds the investment in the Sergipe Project. The recognition of this gain was triggered by Golar Power’s step acquisition of the other 50% equity interest as held by the project developer, Genpower, in October 2016. The balance principally relates to trading activity of the Golar Celsius and the Golar Penguin operating as LNG carriers within the Cool Pool arrangement (further described in note 31, "Related Parties" of our Consolidated Financial Statements contained herein).

Year ended December 31, 2015, compared with the year ended December 31, 2014

As of December 31, 2015 , we managed our business and analyzed and reported our results of operations on the basis of three segments: vessel operations, LNG trading and FLNG. In order to provide investors with additional information, we have provided analysis divided between these three segments: vessel operations, LNG trading and FLNG. See note 8 "Segmental information" to our Consolidated Financial Statements included herein.

The following details our consolidated revenues and expense information for the three segments for each of the years ended December 31, 2015 and 2014:

Vessel operations



	December 31,
(in thousands of $, except average daily TCE)	2015		2014		Change		% Change

Operating revenues (including revenue from collaborative arrangement)	102,674		106,155		(3,481	)	(3	)%
Vessel operating expenses	(56,347	)	(49,570	)	(6,777	)	14	%
Voyage, charterhire and commission expenses (including expenses from collaborative arrangement)	(69,042	)	(27,340	)	(41,702	)	153	%
Administrative expenses	(28,657	)	(17,468	)	(11,189	)	64	%
Depreciation and amortization	(73,732	)	(49,561	)	(24,171	)	49	%
Impairment of long-term assets	(1,957	)	(500	)	(1,457	)	291	%
Gain on disposals to Golar Partners	102,406		43,287		59,119		137	%
Loss on disposal of vessel held-for-sale	(5,824	)	—		(5,824	)	(100	)%
Impairment of vessel held-for-sale	(1,032	)	—		(1,032	)	(100	)%
Other operating loss	—		(6,387	)	6,387		(100	)%
Other non-operating (expense) income	(27	)	(446	)	419		(100	)%
Interest income	6,896		716		6,180		863	%
Interest expense	(62,911	)	(14,222	)	(48,689	)	342	%
Other financial items, net	(118,604	)	(74,094	)	(44,510	)	60	%
Income taxes	3,053		1,114		1,939		174	%
Equity in net earnings of affiliates	55,985		42,220		13,765		33	%
Net loss	(147,119	)	(46,096	)	(101,023	)	219	%
Net income attributable to non-controlling interests	(19,158	)	(1,655	)	(17,503	)	1,058	%
Net loss attributable to Golar LNG Ltd	(166,277	)	(47,751	)	(118,526	)	248	%
Average Daily TCE ⁽¹⁾ (to the closest $100)	14,900		33,100		(18,200	)	(55	)%


⁽¹⁾	TCE is a non-GAAP financial measure. For a reconciliation of TCE rates, please see “Item 3. Key Information-A. Selected Financial Data."

Operating revenues: The decrease in total operating revenues of $3.5 million to $102.7 million in 2015 compared to $106.2 million in 2014 was primarily due to:


•	a decline of $40.2 million in revenues relating to the Golar Arctic , as she was off-hire for a significant amount of time in 2015 compared to her full employment in 2014 following the expiry of a charter in February 2015;


•	a decrease in revenue of $4.8 million relating to the Golar Viking , pursuant to her disposal in February 2015, albeit she was repossessed in December 2015; and


•	a net reduction in revenues of $4.5 million relating to the Golar Seal and Golar Celsius , principally due to the overall net increase in commercial waiting time suffered by these vessels in 2015.

Partially offset by:


•	$11.5 million of additional revenue related to our four newbuildings delivered in 2015 and also the availability of both the Golar Grand and the Golar Eskimo which were chartered back from Golar Partners in 2015 under agreements executed at the time of their disposals to Golar Partners, although the Golar Eskimo charter-back arrangement with Golar Partners ceased in June 2015;


•	$32.7 million higher revenue in 2015 compared to 2014 related to our six newbuildings delivered in 2014 (net of the effect of the disposal of the Golar Igloo in March 2014), reflecting both higher operating days and improved utilization for these vessels in 2015; and


•	an increase of $1.8 million in management fee income to $12.5 million in 2015 from the provision of services to Golar Partners under our management and administrative services and fleet management agreements compared to $10.8 million in 2014.



	2015		2014		Change			Change
Calendar days less scheduled off-hire days	4,481		2,059		2,422			118	%

Average daily TCE rate (to the closest $100)	$	14,900	$	33,100	$	(18,200	)	(55	)%

The decrease of $18,200 in average daily TCE rate to $14,900 for 2015 compared to $33,100 in 2014 is primarily due to the overall decline in charter rates and low utilization levels of our vessels, which was further impacted by the significant expansion of our fleet with the delivery of our eleven newbuildings during 2014 and 2015.

For a reconciliation of TCE rates, please see “Item 3. Key Information-A. Selected Financial Data."

Vessel operating expenses: Vessel operating expenses increased by $6.8 million to $56.3 million for the year ended December 31, 2015 compared to $49.6 million in 2014 primarily due to additional operating costs of $15.5 million in relation to our newbuildings delivered in 2014 and 2015 (excluding the effect of vessels disposed of in 2015). This was partially offset by the decrease in vessel operating expenses of $6.2 million arising from the disposal of the Golar Igloo in March 2015, the Golar Eskimo in January 2015 (although chartered back from Golar Partners through to June 2015) and the Golar Viking in February 2015, albeit the Golar Viking was repossessed in December 2015.

Voyage, charter-hire and commission expenses: The increase in voyage, charter-hire and commission expense of $41.7 million to $69.0 million in 2015, compared to $27.3 million in 2014 was primarily due to:

•

an additional $32.6 million of charter-hire expense recognized in 2015 arising from the charter-back of the Golar Grand from Golar Partners, pursuant to the exercise of their option in February 2015 under the Option Agreement executed in connection with the disposal of the vessel to Golar Partners in 2012. Included within the $32.6 million is an amount of $3.9 million representing the incremental liability recognized in 2015 upon re-measurement of the guarantee obligation, net of the impact of the respective amortization expense during 2015;


•	an additional $12.9 million of charter-hire expense recognized in 2015 relating to the charter-back of the Golar Eskimo from Golar Partners for the period from January through to the end of June 2015. The charter-back arrangement with Golar Partners was in connection with the disposal of the Golar Eskimo in January 2015; and

•

an increase of $8.1 million in voyage expenses mainly as a result of higher fuel costs due to increased commercial waiting (during which we are required to pay for fuel for the vessel) due to both the continued softening of the LNG shipping market and the significant expansion in our fleet with the delivery of our ten newbuildings during 2014 and 2015. Accordingly, we suffered a higher number of off-hire days in aggregate of 2,622 in 2015, compared to 1,018 off-hire days in 2014.

This was partially offset by a decrease in voyage expenses of $10.9 million in 2015 relating to the Golar Viking as a consequence of her disposal in February 2015, albeit she was repossessed in December 2015.

Administrative expenses: The increase of $11.2 million in administrative expenses to $28.7 million in 2015 compared to $17.5 million in 2014 was mainly due to (i) an increase in salary and benefit costs of $2.6 million mainly as a result of headcount specifically with the bringing in-house of technical operations in September 2015; (ii) an increase in share options expense by $2.1 million pursuant to the grants in 2014 and 2015; and (iii) an increase in legal and professional fees largely attributable to the general effect of expansion of our fleet and thus commercial activity and increase in business development activity. In addition this includes legal costs incurred with the step acquisition of GMN in September 2015.

Depreciation and amortization: Depreciation and amortization expense increased by $24.2 million to $73.7 million in 2015 compared to $49.6 million in 2014. This was primarily due to $38.3 million additional depreciation expense incurred in 2015 arising on our newbuildings delivered between 2014 and 2015.

Partially offset by:


•	lower depreciation of $4.1 million in relation to the Hilli following the commencement of her conversion into a FLNG resulting in suspension of depreciation from July 2014. We will recommence her depreciation after completion of her conversion, which is expected to be in 2017;


•	a decrease of $4.4 million in depreciation expense attributable to the Golar Viking pursuant to her disposal in February 2015, albeit she was repossessed in December 2015; and


•	a decline of $4.7 million with respect to the Gimi and Gandria due to the full amortization of their drydock costs in 2014. Given both vessels are in lay-up and designated for FLNG conversion, no drydock was scheduled for these vessels during 2015.

Impairment of long-term assets: The impairment charge of long-term assets relates to parts initially ordered for the Golar Spirit FSRU retrofitting in 2007, but un-utilized following changes to the original project specifications. Some of these parts were used in subsequent conversions. However, due to the deterioration in the market in 2015, the carrying value of the residual parts were fully impaired in the period.

Gain on disposal to Golar Partners: The gain on disposal to Golar Partners in 2015 resulted from the sale of our interests in the companies that own and operate the Golar Eskimo in January 2015 to Golar Partners. The gain on disposal to Golar Partners in 2014 resulted from the sale of our interests in the company that owns and operates the Golar Igloo in March 2014 to Golar Partners.

Loss on disposal of vessel: The $5.8 million loss on disposal of vessel in 2015 resulted from the disposal of the LNG carrier, the Golar Viking , to Equinox in February 2015 at a sale price of $135.0 million.

Impairment of vessel held-for-sale: In April 2015, we acquired the LNG carrier, the LNG Abuja for a purchase consideration of $20.0 million. In July 2015, we sold her to a third party for $19.0 million. Accordingly, as of the reporting period ended June 30, 2015, the vessel was classified as held-for-sale, and thus we recognized an impairment loss of $1.0 million against this vessel during 2015.

Other operating loss: The other operating loss in 2014 of $6.4 million relates to a provision with respect to a legal claim made against the Golar Viking for which arbitration proceedings had commenced. The claim was subsequently settled in January 2015.

Interest income : Interest income increased by $6.2 million to $6.9 million in 2015 compared to $0.7 million in 2014 principally due to: (i) interest income arising on the $220 million vendor loan provided to Golar Partners to partly finance their acquisition of Golar Eskimo in February 2015, which earned interest at LIBOR plus a blended margin of 2.84%. $120 million of the vendor loan was settled in June 2015, with the balance fully repaid in November 2015; (ii) interest income earned on the loan facilities granted to Equinox in connection with its acquisition of the LNG carrier, the Golar Viking , in February 2015. Albeit, following impairment of the loan receivables in the third quarter of 2015, we ceased recognition of interest income. There was no comparable income in 2014.

Interest expense: Interest expense increased by $48.7 million to $62.9 million in 2015 compared to $14.2 million in 2014, mainly due to (i) higher interest incurred on our $1.125 billion debt facility relating initially to eight of our newbuildings (albeit in connection with the sale of the equity interests in the two vessels, the associated debt was also assumed by Golar Partners), reflecting a full year's interest in 2015 with respect to drawdown of funds upon delivery of the remaining four associated newbuildings in the fourth quarter of 2014; (ii) higher interest expense arising on the ICBC VIE loan facilities entered into by our lessor VIEs, relating to the delivery and thus drawdown of funds on four of our newbuildings (of which, one was delivered in October 2014, and the remaining three were delivered in 2015); and (iii) lower capitalization of deemed interest following the deliveries of our newbuildings between 2014 and 2015.

Other financial item s : Other financial items increased by $44.5 million to a loss of $118.6 million for the year ended December 31, 2015 compared to a loss of $74.1 million for the same period in 2014 as set forth in the table below:



	December 31,
(in thousands of $)	2015		2014		Change		% Change
Mark-to-market adjustment for interest rate swaps	(12,798	)	(28,996	)	16,198		(56	)%
Interest expense on undesignated interest rate swaps	(15,797	)	(20,424	)	4,627		(23	)%
Net realized and unrealized losses on interest rate swaps	(28,595	)	(49,420	)	20,825		(42	)%
Mark-to-market adjustments for equity derivatives	(67,925	)	(13,657	)	(54,268	)	397	%
Mark-to-market adjustments for foreign currency derivatives	—		94		(94	)	(100	)%
Impairment of loan	(15,010	)	—		(15,010	)	(100	)%
Financing arrangement fees and other costs	(1,841	)	(7,157	)	5,316		(74	)%
Other	(5,233	)	(3,954	)	(1,279	)	32	%
	(118,604	)	(74,094	)	(44,510	)	60	%

Net realized and unrealized losses on interest rate swap agreements : Net unrealized and realized losses on mark-to-market adjustments for interest rate swap derivatives decreased by $20.8 million to $28.6 million in 2015 compared to $49.4 million in 2014. The decrease in losses was due to the increase in long-term swap rates in 2015. As of December 31, 2015, we have an interest rate swap portfolio with a notional amount of $1.3 billion, none of which are designated as hedges for accounting purposes.

Mark-to-market adjustment for equity derivatives (or equity swap): Mark-to-market adjustments for equity derivatives increased by $54.3 million to $67.9 million in 2015 compared to $13.7 million in 2014. In December 2014, we established a three month facility for a Stock Indexed Total Return Swap Programme or Equity Swap Line with DNB Bank ASA, or DNB, in connection with a share buy back scheme of ours, which we extended to December 2015. In March 2016, the facility was extended for a further three months. The increase is a reflection of the volatility and temporary decline in the Company's share price during 2015.

Impairment of loan: The impairment loss on loan arose on certain loan facilities granted to Equinox in February 2015, in connection with their acquisition of the vessel, the Golar Viking . Given Equinox’s difficulties in realizing any short-haul cabotage trade opportunities in Indonesia as originally envisaged, this raised concerns as to the recoverability of these loans, and thus we agreed to the repossession of the vessel (based on a current vessel market valuation of $125.0 million) in consideration for extinguishment of the total outstanding balance on the loan receivables of $138.5 million. Accordingly, we recognized an impairment provision (net of repossession costs) of $15.0 million in 2015.

Financing arrangement fees and other costs: The higher financing arrangement fees and other costs of $7.2 million in 2014 arose mainly from commitment fees incurred on our $1.125 billion debt facility relating to the funding for eight of our newbuild vessels. By the end of December 2014, all eight of these newbuild vessels had been delivered and thus the funds drawn down on the debt facilities, such that there is no comparable cost in 2015.

Other : Other items represent, among other things, bank charges and debt guarantees.

Income taxes: Income taxes relate primarily to the taxation of our U.K. based vessel and lessor operating companies offset by the amortization of the deferred gains on the intra-group transfers on long-term assets resulting in an income tax credit. The increase in the income tax credit of $1.9 million , to $3.1 million in 2015 was due to the recognition of an additional tax provision during 2014 arising from the reassessment of prior year tax positions.

Equity in net earnings of affiliates:



	December 31,
(in thousands of $)	2015	2014	Change		% Change
Share of net earnings in Golar Partners	23,124	41,131	(18,007	)	(44	)%
Gain on disposal of investments in Golar Partners	32,580	—	32,580		100	%
Share of net earnings in other affiliates	281	1,089	(808	)	(74	)%
	55,985	42,220	13,765		33	%

Our share of net earnings in Golar Partners is partially offset by a charge of $34.6 million and $41.7 million for the year ended December 31, 2015 and 2014, respectively. This represents the amortization of the basis difference in relation to the $854.0 million gain on loss of control recognized upon deconsolidation in 2012. The decrease of $18.0 million in our share of net earnings in Golar Partners to $23.1 million in 2015 was mainly attributable to the decrease in our ownership interest in the partnership following our disposal in January 2015 of 7.2 million common units in Golar Partners. The disposal resulted in a gain on disposal of $32.6 million

Net income attributable to non-controlling interests: In 2014 and 2015, we entered into sale and leaseback arrangements for five vessels (2014: one) with the lessor VIEs. While we do not hold any equity investments in these lessor VIEs, we are the primary beneficiary. Accordingly, these lessor VIEs are consolidated into our financial results and thus the equity attributable to the financial instiutions in their respective variable interest entities are included in non-controlling interests in our consolidated results.

LNG trading



	December 31,
(in thousands of $)	2015	2014		Change		% Change
Administrative expenses	—	64		(64	)	(100	)%
Depreciation	—	250		(250	)	(100	)%
Other operating gains	—	(1,317	)	1,317		100	%
Other non-operating income	—	(718	)	718		(100	)%
Net financial expenses	—	252		(252	)	(100	)%
Net income	—	(1,469	)	1,469		(100	)%

Golar Commodities generated net income of $ nil and $1.5 million in 2015 and 2014, respectively.

Other operating gains represent the realized losses on physical cargo trades, financial derivative contracts and proprietary trades entered into. During 2015, we did not enter into any trades. However, in 2014, we entered into a Purchase and Sales Agreement to buy and sell LNG cargo. The LNG cargo was acquired and subsequently sold on a delivered basis to Kuwait Petroleum Corporation to facilitate the commissioning of the Golar Igloo which entered in her long-term charter with KNPC in March 2014. The transaction was our first since 2011 when we scaled back our LNG trading activities.

FLNG



	December 31,
(in thousands of $)	2015		2014		Change		% Change
Administrative expenses	(4,869	)	(1,735	)	(3,134	)	181	%
Net loss	(4,869	)	(1,735	)	(3,134	)	181	%

The net loss for FLNG in 2015 and 2014 amounted to $4.9 million and $1.7 million , respectively, which relates to non-capitalized project related expenses comprising of legal, professional and consultancy costs.

Hilli FLNG conversion

As described in the year ended December 31, 2016 operational review above, subtopic, FLNG, we entered into an Engineering, Procurement and Construction agreement with Keppel for the conversion of the LNG carrier the Hilli to a FLNG. As at December 31, 2015 and 2014, the total costs incurred in respect of the Hilli conversion amounted to $501.0 million and $345.2 million, respectively.

Other FLNG conversions

As at December 31, 2015 , $41.0 million has been invested in the Gimi FLNG conversion and $nil in the Gandria FLNG conversion.

B. Liquidity and Capital Resources

Liquidity and Cash Requirements

We operate in a capital intensive industry and we have historically financed the purchase of our vessels, conversion projects and other capital expenditures through a combination of borrowings from debt transactions, leasing arrangements with financial institutions, cash generated from operations, sales of vessels to Golar Partners and equity capital. Our liquidity requirements relate to servicing our debt, funding our conversion projects, funding our newbuildings, funding investments, including the equity portion of investments in vessels and investment in the development of our project portfolio, including our affiliates, funding working capital, payment of dividends and maintaining cash reserves to satisfy certain of our borrowing covenants (including cash collateral requirements in respect of certain of our derivatives and as security for the provision of letters of credit) and to offset fluctuations in operating cash flows.

Our funding and treasury activities are conducted within corporate policies to maximize investment returns while maintaining appropriate liquidity for our requirements. Cash and cash equivalents are held primarily in U.S. dollars with some balances held in British Pounds, Singapore Dollars, Norwegian Kroners and Euros. We have not made use of derivative instruments other than for interest rate and currency risk management purposes, except in the case of our equity swaps.

Our short-term liquidity requirements are primarily for the servicing of debt, working capital requirements (which included our maturing convertible bonds), investments in Golar Power and OneLNG and conversion project related commitments due within the next 12 months. The short-term outlook in the LNG shipping market has improved over the last few months. Whilst certain challenges remain, as anticipated the second half of 2016 started showing signs of recovery with a general improvement in utilization and hire rates. Such improvement is forecast to continue but primarily in the second half of 2017. However, the extent and the pace of the recovery and the impact on the Company's results is unknown. Accordingly, we may require additional working capital for the continued operation of our vessels in the spot market (via the Cool Pool). The need for additional working capital is dependent upon the employment of all the vessels participating in the Cool Pool and fuel costs incurred during idle time. We remain responsible for manning and technical management of our vessels in the Cool Pool. We estimate that total forecast vessel operating expenses relating to our eight vessels in the Cool Pool (excluding the two vessels that form part of the Golar Power fleet) for the next 12 months is $38.0 million, based on our historical average operating costs. However, we have limited working capital requirements for the Hilli , which is currently undergoing conversion to a FLNG vessel, as progress payments are funded by the FLNG Hilli facility. Additionally, we require a small amount of working capital for our three vessels that are currently in lay-up.

As of April 24, 2017 , we have a fleet of 15 vessels (including the Golar Grand which we are obligated to charter back from Golar Partners through to October 31, 2017), of which one vessel is on a medium term charter, eight vessels are operating on the spot market (via the Cool Pool), three vessels are in lay-up, the Golar Tundra is awaiting the commencement of its charter with WAGL and the Hilli is undergoing her FLNG conversion.

Whilst we completed the dropdown of the Golar Tundra in May 2016 to Golar Partners, by virtue of the put option in the side agreement to the sale and purchase agreement with Golar Partners, in the event the WAGL charter does not commence by May 23, 2017, or no satisfactory mitigating arrangement is agreed, Golar Partners may require that Golar repurchase the Golar Tundra for the original purchase price agreed and paid of $330 million, less the net lease obligations under the lease agreement with CMBL and net working capital adjustments prevailing at the time of dropdown. The Golar Tundra was expected to commence operations in Ghana pursuant to the WAGL charter to serve the related LNG project in the second quarter of 2016. However, as of the current date, due to delays in that LNG project, WAGL has not been able to accept the vessel. We have, however, been informed by WAGL that they have received parliamentary approval for its Gas Sales Agreement with the Government of Ghana, the lack of which had been the major impediment to progress of the project. We are preserving our legal rights under the charter

agreement and are continuing commercial discussions with WAGL, including later start up and extension of the term. As of December 31, 2016, we reassessed the held-for-sale classification for the Golar Tundra . We concluded that, based on the positive status of the negotiations with WAGL and their progress on the Ghana project, the held-for-sale classification remains appropriate.

As of December 31, 2016 , we had cash and cash equivalents (including short-term deposits) of $ 640.1 million , of which $ 415.9 million is restricted cash. Included within restricted cash is $231.9 million in respect of the issuance of the letter of credit to our FLNG project partners on the FLNG Hilli, $70.0 million cash collateral on our Total Return Swap, and the balance mainly relates to the cash belonging to Lessor VIEs that we are required to consolidate under U.S. GAAP. Refer to note 20 "Restricted Cash" of our Consolidated Financial Statements contained herein for additional detail.

Since December 31, 2016 , significant transactions impacting our cash flows include:

Receipts:


•	In March 2017, on closing of the margin loan facility, we received loan proceeds, net of fees, of $149.2 million;


•	In March 2017, we completed the refinancing of the Golar Crystal , which provided approximately $9.2 million excess cash to liquidity;


•	In February 2017, we completed the issuance of new convertible bonds raising proceeds, net of costs and fees, of $360.2 million; and


•	In February 2017, Golar Partners made a cash distribution of $0.5775 per unit in respect of the quarter ended December 31, 2016, of which we received $12.8 million in relation to our interests in the common units, subordinated units, 2% general partner interest and IDRs held at the record date.

Payments:

•

Payments for our FLNG conversions are made in installments in accordance with our contract with Keppel. A further $ 429.4 million of conversion payments are due within the year ended December 31, 2017. By virtue of the FLNG Hilli - pre-delivery facility we executed in September 2015 (described further below), we are able to time our drawdown on this facility with payments made, resulting in a largely cash neutral effect. Since January 1, 2017, we have received an additional $50 million under the FLNG Hilli pre-delivery facility;


•	In January 2017 and March 2017, we made further capital contributions of $20.0 million and $12.0 million, respectively, to Golar Power;


•	In March 2017, our existing convertible bonds matured resulting in a settlement payment, including interest, of $221.8 million;


•	In March 2017, we paid Golar Partners $9.8 million in relation to the charter hire of the Golar Grand ;


•	As of April 24, 2017 , we have made $21.8 million of scheduled debt repayments during 2017. This excludes the debt repayments relating to the refinancing of the Crystal as discussed above; and


•	During 2017 through to April 24, 2017 , we have made dividend payments to our shareholders totaling $5.0 million in respect of the fourth quarter of 2016.

To address our anticipated working capital requirements over the next 12 months, we remain in ongoing negotiations with financial institutions for the refinancing of one or more of our vessels. However, given the challenging market conditions, albeit signs of an anticipated recovery have been observed, timing of these refinancings remains uncertain. While we believe we will be able to obtain the necessary funds from these refinancings, we cannot be certain that the proposed new credit facilities will be executed in time or at all. However, we have a track record of successfully financing and refinancing our vessels, even in the absence of term charter coverage, and our recent success has included the refinancing of the Golar Crystal in March 2017, in connection with which we raised an additional $9.2 million in additional cash and also allowed the release of $6.8 million from restricted cash. In addition to vessel refinancing, if market and economic conditions are favorable, we may also consider issuance of corporate debt or equity to increase liquidity, as demonstrated by our recent equity offering in November 2016 and convertible bond offering in February 2017.

Furthermore, with respect to our recently formed Golar Power joint venture with Stonepeak, under the shareholders' agreement, we and Stonepeak have agreed to contribute additional funding to Golar Power, on a pro rata basis, including (i) an aggregate of $150 million in the period through to the second half of 2018; and (ii) additional amounts as may be required by Golar Power, subject to the approval of its board of directors. In connection with Golar Power’s election in October 2016 to increase its ownership interest in the Sergipe project from 25% to 50% by buying out the project developer GenPower, this is expected to result in an additional funding requirement of between $20 million to $50 million to be shared with Stonepeak, with the initial $20 million being required on financial close of the project financing for the power plant, which is expected to occur by December 31, 2017.

In connection with our joint venture OneLNG, under the joint venture and shareholders' agreement with Schlumberger, once a OneLNG project reaches final investment decision, we and Schlumberger will each be required to provide $250 million of new equity. Contributions to this new equity may include intellectual property amongst other items. As further described in “Item 4. Information on the Company - OneLNG”, OneLNG and Ophir have signed a shareholders' agreement to develop a project in Equatorial Guinea. The effectiveness of the shareholders' agreement is subject to certain conditions precedent including final investment decisions by OneLNG and Ophir, securing of financing and governmental approval which may occur in the first half of 2017. Accordingly, we anticipate in the event of a final investment decision, to fund the estimated $2 billion project cost, assuming debt financing of $1.2 billion and Ophir’s investment of $150 million, OneLNG will be expected to invest approximately $650 million (this is inclusive of the aggregate of $500 million new equity required under the OneLNG shareholders' agreement). The cash contribution from the Company to the project remains uncertain as the timing of capital expenditure for the project is not yet finalized due to the payment profile of certain contracts continuing to be negotiated. Furthermore, the amount of our contribution to the project within the next twelve months will be determined by the timing of the final investment decision, which is yet to be taken. The convertible bond that we concluded in February 2017 will contribute towards our 51% share of the equity contribution into OneLNG in the 2017 to 2020 period. Credit can be expected for both the intellectual property and the LNG carrier Gandria contributed by Golar into the Equatorial Guinea project.

We have performed stress testing of our forecast cash reserves under various theoretical scenarios, which include assumptions such as extremely prudent revenue contributions from our fleet, full operating costs and maintaining our dividend payments based on our most recent pay out, and accordingly are confident of our ability to manage through the near term cash requirements.

Medium to Long-term Liquidity and Cash Requirements

Our medium and long-term liquidity requirements are primarily for funding the investments for our conversion projects including investments into our new joint ventures, Golar Power and OneLNG, as discussed above, and repayment of long-term debt balances. Sources of funding for our medium and long-term liquidity requirements include new loans, refinancing of existing financing arrangements, public and private debt or equity offerings, potential sales of our interests in our vessel owning subsidiaries operating under long-term charters, and potential further sales of our holdings in the common units of Golar Partners subject to adherence to certain debt covenant requirements as to the maintenance of minimum holdings.

In connection with the conversion of the Hilli to a FLNG, we entered into the FLNG Hilli facility in September 2015. The FLNG Hilli facility is designed to fund up to 80% of the project cost and is split into two phases: a pre-delivery credit facility and post-delivery sale and leaseback financing. The first phase enables us to draw down up to 60% of the construction cost, however not more than $700 million, from the pre-delivery facility to fund the ongoing conversion. The second phase is triggered upon the delivery of the converted Hilli from Keppel and the satisfaction of certain additional performance milestones, and will allow for the aggregate draw down of up to 80% of the construction cost, however not more than an aggregate of $960 million. We expect that all remaining conversion and commissioning costs for the Hilli will be satisfied by this debt facility, but additional costs may arise. To date we have drawn down $300 million under the pre-delivery facility. As of December 31, 2016, the outstanding capital commitments in relation to the Hilli conversion was $ 485.1 million .

We have also executed FLNG conversion contracts for both the Gimi and the Gandria . As of the current date, we have not executed notices to proceed for either vessel. As of December 31, 2016, we have made $31.0 million of advances in relation to the conversion of the Gimi , but none for the Gandria . The Gimi conversion contract provides us flexibility wherein certain beneficial cancellation provisions exist which, if exercised prior to contract expiry, will allow termination of the contracts and recovery of previous milestone payments, less cancellation fees. The Gimi contract has recently been extended to expire in December 2017. The Gandria contract has recently been renegotiated in anticipation of the Fortuna Project taking final investment decision during the first half of 2017. In view of the prevailing uncertainty in the energy markets and the delay in the timing of the final investment decision of Ophir's Fortuna Project to mid-2017, we do not intend to accelerate the conversion of either vessel before satisfactory financing and/or firm client contracts are in place.

Cash Flows

The following table summarizes our cash flows from operating, investing and financing activities for the periods indicated.



	Year ended December 31,
	2016		2015		2014
(in millions of $)
Net cash (used in) provided by operating activities	(38.6	)	(344.6	)	24.9
Net cash used in investing activities	(2.2	)	(256.0	)	(1,429.3	)
Net cash provided by financing activities	159.7		514.4		1,470.5
Net increase (decrease) in cash and cash equivalents	119.0		(86.2	)	66.1
Cash and cash equivalents at beginning of year	105.2		191.4		125.3
Cash and cash equivalents at end of year	224.2		105.2		191.4

In addition to our cash and cash equivalents noted above, as of December 31, 2016, we had restricted cash and short-term deposits of $415.9 million . The restricted cash was comprised principally of (i) $231.9 million cash collateral deposited in connection with the issuance of a $400.0 million letter of credit by a financial institution to our project partner involved in the Hilli FLNG project; (ii) $70.0 million in relation to the cash collateral requirements in relation to our Total Return Swap; (iii) $69.9 million held by the lessor VIE entities that we are required to consolidate under U.S. GAAP into our financial statements as VIEs (see note 4 to our Consolidated Financial Statements included herein for further detail); and (iv) $43.7 million of cash deposits required in connection with the financial covenant compliance related to the financing of three of our vessels.

Net cash (used in) provided by operating activities

Cash utilized by operating activities decreased by $304.9 million to $38.6 million in 2016 compared to cash utilized of $344.6 million in 2015. The decrease in cash utilized in 2016 was primarily due to:


•	in the prior year 2015, we made a net deposit of $280.0 million cash collateral in connection with the issuance of the $400 million letter of credit to our project partner, upon execution of the tolling agreement. In addition, during 2016, $48.1 million of cash was returned to Golar;


•	a $10.4 million decrease in drydock expenditures in 2016 compared to the same period in 2015; and


•	improvement in the general timing of working capital in 2016 compared to the same period in 2015.

Cash utilized by operating activities increased by $369.5 million to $344.6 million in 2015 compared to cash generated of $24.9 million in 2014. The increase in cash utilized in 2015 was primarily due to (i) restricted cash net outflows of $280.0 million relating to the cash collateral deposited in relation to the issuance of a $400 million letter of credit by a financial institution to our project partners involved in the Hilli FLNG project in connection with the execution of the revenue (tolling) contract. Accordingly, this cashflow has been classified as operating; and (ii) the continued softening of the LNG shipping market which resulted in an overall decline in charter rates and lower utilization levels of our vessels trading on the spot market. Our exposure to the spot market increased further following the delivery of our eleven newbuilds delivered between 2014 and 2015, and the charter back of two vessels, the Golar Grand and the Golar Eskimo , from Golar Partners (arising from agreements dating back to the original disposals of the respective vessel interests to Golar Partners) for periods in 2015, which were also key contributory factors. In addition, total dividend receipts of $52.8 million in 2015 received from our various classes of equity investments in Golar Partners fell by $9.2 million, compared to $62.0 million in 2014. This reduction is explained by our sale of 7,170,000 of Golar Partners' common units in a secondary offering in January 2015.

Net cash used in investing activities

Net cash used in investing activities of $2.2 million in 2016 comprised mainly of:


•	installment payments of $19.2 million in respect of FSRU 8 prior to its disposal to Golar Power;

• milestone payments of $200.8 million relating to the FLNG conversion of the Hilli ;

• payment of $10.2 million in respect of our investment in OneLNG; and

• additions to vessels and equipment of $14.5 million .

This was partially offset by:


•	purchase consideration received of $107.2 million from Golar Partners in respect of the sale of the Golar Tundra in May 2016;


•	net purchase consideration received of $113.3 million from Stonepeak in respect of their acquisition of a 50% interest in Golar Power in July 2016; and


•	net cash inflows of $22.9 million from restricted cash primarily due to the decrease in cash collateral requirements provided against our Total Return Swap.

Net cash used in investing activities of $256.0 million in 2015 comprised mainly of:


•	newbuild installment payments of $559.7 million , reflecting the final installments due upon delivery of four of our newbuildings in 2015 (including the Golar Eskimo prior to her disposal to Golar Partners in January 2015). This contrasts to the seven newbuildings delivered in 2014 which resulted in significantly higher installment payments in 2014;

• milestone payments of $111.6 million relating to the FLNG conversion of the Hilli ;


•	restricted cash net outflows of $25.3 million which is mainly attributable to the increase in the cash collateral requirements on our Total Return Swap as a result of the volatility and temporary decline in the Company's share price during 2015;


•	payment of $20 million relating to the acquisition of the LNG carrier, the LNG Abuja , less the proceeds of $19 million, received upon the disposal of the vessel in July 2015, resulting in an overall net cash outflow of $1 million; and


•	open market purchases of common units in Golar Partners amounting to $5 million in the third quarter of 2015.

This was partially offset by:

•

an aggregate of $226.9 million cash proceeds received from Golar Partners in respect of the disposal of our 100% interests in the companies that own and operate the Golar Eskimo in January 2015. This provided an initial cash payment of $6.9 million. In addition, we received a further $120 million in June 2015, with the balance of $100 million received in November 2015, in connection with the vendor bridging financing we provided to Golar Partners at the time of the sale;


•	net proceeds of $207.4 million received from the sale of 7,170,000 Golar Partners common units in a secondary offering in January 2015; and


•	receipts of $20 million from Golar Partners in settlement and expiry of the short-term revolving credit facility granted at the time of Golar Partners’ IPO.

Net cash used in investing activities of $1,429.3 million is primarily due to:


•	higher installment payments made in respect of our newbuilds, following the delivery of seven newbuilds (including the Golar Igloo prior to her disposal to Golar Partners in March 2014);


•	milestone payments of $313.6 million relating to the FLNG conversion of the Hilli ;


•	payments to other long-term assets of $49.9 million relating to long lead items ordered in preparation for the conversion of the Gimi to a FLNG;


•	increases in restricted cash and short-term deposits of $48.0 million primarily due to cash collateral provided against our Total Return Swap we entered into in December 2014; and


•	a short-term loan of $20 million we granted to Golar Partners.

This was partially offset by consideration of $155.3 million received from Golar Partners in respect of the sale of Golar Igloo in March 2014.

Net cash provided by financing activities

Net cash provided by financing activities is principally generated from funds from new debt and new equity issuance offset by debt repayments. Net cash provided by financing activities in 2016 of $ 159.7 million was primarily a result of the following:


•	$200 million drawn down on the FLNG Hilli facility in relation to the conversion of the Hilli to a FLNG;


•	$205.8 million of debt proceeds which refers to amounts drawn down by our lessor VIEs under their respective loan arrangements (see note 4, “Variable Interest Entities” of our Consolidated Financial Statements contained herein),

in connection with our refinancing of the Golar Seal debt facility amounting to $162.4 million, the releveraging of the Golar Tundra lease by $25.5 million and the balance of $17.9 million relating to short-term debt proceeds arising in the ICBCL lessor VIEs; and


•	proceeds of $169.9 million in relation to a registered equity offering which was closed in November 2016.

This was partially offset by:


•	loan repayments of $271.9 million , which includes the settlement of the balance outstanding on the refinanced Golar Seal facility of $106.6 million in March 2016;


•	payment of dividends of $54.3 million ;


•	net cash outflows of $74.6 million relating to restricted cash balances held by our lessor VIEs as well as the cash collateral requirements with respect to the Golar Bear , Golar Crystal and Golar Frost financing arrangements; and


•	purchases of our common shares at an aggregate cost of $8.2 million .

Net cash provided by financing activities in 2015 of $ 514.4 million was primarily a result of the following:


•	aggregate proceeds of $738.8 million drawn down by our lessor VIEs under their respective loan arrangements to fund the final installments due upon delivery of our four newbuildings ( Golar Kelvin , Golar Snow , Golar Ice and Golar Tundra ), less payment of related financing costs of $13.2 million;


•	proceeds of $62.5 million from the new Golar Viking (2015) facility, which we entered into upon repossession of the Golar Viking from Equinox in December 2015;


•	proceeds of $50.0 million from a related party in November 2015 under a short-term, interest bearing credit facility (we repaid the outstanding balance of $50.0 million in December 2015); and


•	proceeds of $50.0 million representing the first draw down of the FLNG Hilli pre-delivery facility for the reimbursement of FLNG conversion costs already paid.

This was partially offset by:


•	loan repayments of $165.4 million (excluding the amounts repaid under the related party $50 million short-term credit facility referred to above). Of this amount, $82.0 million relates to the settlement of the balance outstanding on the Viking loan facility of $82.0 million in preparation of the sale of the vessel in February 2015 to Equinox;


•	payment of dividends of $121.4 million;


•	net cash outflows of restricted cash of $32.3 million, representing primarily cash balances as held by ICBC or CMBL VIE lessors, which we are required to consolidate as VIEs under US GAAP (refer to note 4 "Variable Interest Entities" to the Consolidated Financial Statements contained herein); and


•	purchases of our common shares an aggregate cost of $12.3 million.

Net cash provided by financing activities in 2014 of $1,470.5 million was primarily a result of the following:

•

$841.5 million drawn down under our $1.125 billion facility to fund the final installment payments of the Golar Igloo , Golar Crystal , Golar Penguin , Golar Bear , Golar Frost and Golar Eskimo less payment of $18.7 million of related financing costs. The debt in relation to the Golar Igloo was assumed by Golar Partners on its acquisition of the company that owns and operates the vessel in March 2014. The debt in relation to the Golar Eskimo was classified under liabilities held-for-sale in our consolidated balance sheet;


•	net proceeds of $660.9 million received from our June 2014 equity offering of 12,650,000 shares of our common stock, which included 1,650,000 common shares purchased pursuant to the Underwriters' option to purchase additional common shares. The issue price was $54.0 per share;


•	$185.6 million drawn down under the ICBC finance leasing arrangement to fund the final installment payment of the Golar Glacier by its owner, 1401 Limited;


•	proceeds from the new Golar Arctic facility of $87.5 million, which was used to repay the existing Golar Arctic facility due in January 2015;


•	$67.6 million draw down from the short-term facility to fund the LNG cargo trade during the first quarter of 2014. This was paid subsequently in April 2014 with the receipt of $71.6 million upon settlement of the related LNG cargo trade receivable; and


•	proceeds of $40.6 million as shareholder loans from KSI and B&V to fund the Hilli conversion.

Partially offset by:


•	payment of dividends during the year of $156.0 million; and


•	repayment of short-term and long-term debts (including debt due to related parties) of $239.9 million.

Borrowing Activities

As of December 31, 2016, we had total outstanding borrowings, gross of capitalized borrowing costs, of $1.6 billion, secured by, among other things, our vessels, and unsecured convertible bonds outstanding of $218.9 million. Please refer to Note 25 "Debt" to our Consolidated Financial Statements included herein for further detailed information on our borrowings as of December 31, 2016 as well as Note 34 “Subsequent Events” to our Consolidated Financial Statements for further detailed information on our borrowing activities since January 1, 2017.

Derivatives

We use financial instruments to reduce the risk associated with fluctuations in interest rates and foreign currency exchange rates. We have a portfolio of interest rate swaps that exchange or swap floating rate interest to fixed rates, which from a financial perspective, hedges our obligations to make payments based on floating interest rates. We have also entered into equity derivative swaps, Total Return Swap Agreements, or TRS, in line with our new share repurchase programme.

Interest rate swap agreement

As of December 31, 2016, we have interest rate swaps with a notional amount of $1.3 billion representing approximately 69.4% of our total debt. Our swap agreements have expiration dates between 2018 and 2021 and have fixed rates of between 1.13% and 1.94%. The total unrealized gain recognized in the consolidated statement of operations relating to our interest rate swap agreement in 2016 was $2.8 million .

Total return swap agreement

In December 2015 we entered into a Total Return Swap agreement, or TRS, related to 3.0 million of our common shares, which is indexed to our own common shares. In addition, we entered into a forward contract for the acquisition of 107,000 shares in Golar Partners at an average price of $18.75. The total unrealized gain recognized in the consolidated statement of operations relating to our TRS agreement in 2016 was $24.8 million .

The settlement amount for the TRS transaction will be (A) the market value of the shares at the date of settlement plus all dividends paid by the Company between entering into and settling the contract, less (B) the reference price of the shares agreed at the inception of the contract plus the counterparty's financing costs. Settlement will be either a payment by the counterparty to us, if (A) is greater than (B), or a payment by us to the counterparty, if (B) is greater than (A). There is no obligation for us to purchase any shares under the agreement and this arrangement has been recorded as a derivative transaction, with the fair value of the TRS recognized as an asset or liability as appropriate, and changes in fair values recognized in the consolidated statement of operations.

In addition to the above TRS transaction, we may from time to time enter into short-term TRS arrangements relating to securities in other companies. The above TRS transaction indexed to our own common shares was our only TRS agreement as of December 31, 2016.

Other derivative arrangements

The majority of our gross earnings are receivable in U.S. dollars. The majority of our transactions, assets and liabilities are denominated in U.S. dollars, our functional currency. However, we also incur a small portion of expenditure in other currencies. We are affected by foreign currency fluctuations primarily through expenditure in respect of our ships drydocking, some operating expenses including the effect of paying the majority of our seafaring officers in Euros and the administrative costs of our U.K. office. The currencies which impact us the most include, but are not limited to, Euros, Norwegian Kroner, Singaporean Dollars and, to a lesser extent, British Pounds.

Capital Commitments

FLNG conversion

Our FLNG conversion commitments is described in Item 18 - Financial Statements: note 32, "Capital Commitments".

Critical Accounting Policies and Estimates

The preparation of our financial statements in accordance with U.S. GAAP requires that management make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The following is a discussion of the accounting policies applied by us that are considered to involve a higher degree of judgment in their application. See note 2, "Accounting Policies" to our Consolidated Financial Statements included herein.

Revenue and related expense recognition

Revenues include minimum lease payments under time charters, fees for repositioning vessels and gross pool revenues. Revenues generated from time charters, which we classify as operating leases, are recorded over the term of the charter as service is provided. However, we do not recognize revenue if a charter has not been contractually committed to by a customer and ourselves, even if the vessel has discharged its cargo and is sailing to the anticipated load port on its next voyage.

Repositioning fees (which are included in time charter revenue) received in respect of time charters are recognized at the end of the charter when the fee becomes fixed and determinable. However, where there is a fixed amount specified in the charter, which is not dependent upon redelivery location, the fee will be recognized evenly over the term of the charter. Where a vessel undertakes multiple single voyage time charters, revenue is recognized, including the repositioning fee if fixed and determinable, on a discharge-to-discharge basis. Under this basis, revenue is recognized evenly over the period from departure of the vessel from its last discharge port to departure from the next discharge port. For arrangements where operating costs are borne by the charterer on a pass through basis, the pass through of operating costs is reflected in revenue and expenses.

Revenues generated from management fees are recorded rateably over the term of the contract as services are provided.

Under time charters, voyage expenses are generally paid by our customers. Voyage related expenses, principally fuel, may also be incurred when positioning or repositioning the vessel before or after the period of time charter and during periods when the vessel is not under charter or is offhire, for example when the vessel is undergoing repairs. These expenses are recognized as incurred.

Vessel operating expenses, which are recognized when incurred, include crewing, repairs and maintenance, insurance, stores, lube oils, communication expenses and third party management fees. Bunkers consumption represents mainly bunkers consumed during unemployment and off-hire. Furthermore in relation to the vessels participating in the pool, voyage expenses and commissions include a net allocation from the pool participants' vessels less the other participants' share of the net revenues earned by our vessels included in the pool. Each participants' share of the net pool revenues is based on the number of pool points attributable to its vessels and the number of days such vessels participated in the pool.

Pool revenues and expenses under the Cool pool arrangement have been accounted for in accordance with the guidance for collaborative arrangements. Accordingly, we have presented our share of the net income earned under the cool pool arrangement across a number of line items in the income statement. For net revenues incurred relating specifically to Golar’s vessels and for which we are deemed the principal, these will be presented gross on the face of the income statement in the line items “Time charter and voyage revenues” and “Vessel operating expenses”. For pool net revenues generated by the other participants in the pooling arrangement these will be presented separately in revenue and expenses from collaborative arrangements.

Vessels and impairment

We review vessels and equipment for impairment whenever events or circumstances indicate the carrying value of the vessel may not be fully recoverable. When such events or circumstances are present, we assess recoverability by comparing the vessel's projected undiscounted net cash flows to its carrying value. If the total projected undiscounted net cash flows is lower than the vessel’s carrying value, we recognize an impairment loss measured as the excess of the carrying amount over the fair value of the vessel. As of December 31, 2016, for eight of our vessels the carrying value was higher than their estimated market values (based on third party ship broker valuations). Refer to note 9, "Impairment of Long-term Assets" to our Consolidated Financial Statements included herein for details. As a result, we concluded that an impairment trigger existed and so performed a recoverability assessment for each of these vessels. However, no impairment loss was recognized as for each of these vessels, the projected undiscounted net cash flows was significantly higher than its carrying value. Significant assumptions used included, among others, charter rates, ship operating expenses, utilization, drydocking requirements and residual value. These assumptions

are based on historical trends but adjusted for future expectations. Specifically, forecast charter rates are based on information of existing charters in the market including forecasts from the Cool Pool arrangement, in addition to industry analyst and broker reports. Estimated outflows for operating expenses and drydockings are based on historical costs adjusted for assumed inflation.

Furthermore for the Gandria , although earmarked for conversion to a FLNG, until she satisfies the criteria to be classified as an asset under development to a FLNG for the purpose of the impairment review, the projected undiscounted net cash flows for the vessel were based on her reactivation and operation as a Floating Storage Unit ("FSU") and not the higher net cash flows as a FLNG. Charter hire for the vessel was assessed based on the Golar Arctic FSU charter rate as a basis for the estimate of the rate achievable by the Gandria as a FSU. After reactivation, it is expected that the vessel will be operational for a further five years. Forecast reactivation costs and operating expenses are based on internal technical knowledge and assumption of inflation.

The cash flows on which our assessment is based is highly dependent upon our forecasts, which are highly subjective. Although we believe the underlying assumptions supporting this assessment are reasonable, if charter rate trends and the length of the current market downturn vary significantly from our forecasts, management may be required to perform step two of the impairment analysis that could expose us to material impairment charges in the future.

Vessel market values

Under "Vessels and impairment", we discuss our policy for assessing impairment of the carrying values of our vessels. During the past few years, the market values of certain vessels in the worldwide fleet have experienced particular volatility, with substantial declines in many vessel classes. There is a future risk that the sale value of certain of our vessels could decline below those vessels' carrying value, even though we would not recognize an impairment for those vessels' due to our belief that projected undiscounted net cash flows expected to be earned by such vessels over their operating lives would exceed such vessels' carrying amounts.

Our estimates of market value assume that our vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified in class without notations of any kind. Our estimates for our LNG carriers and FSRUs are based on approximate vessel market values that have been received from third party ship brokers, which are commonly used and accepted by our lenders for determining compliance with the relevant covenants in our credit facilities. Vessel values can be highly volatile, such that our estimates may not be indicative of the current or future market value of our vessels or prices that we could achieve if we were to sell. In addition, the determination of estimated market values may involve considerable judgment given the illiquidity of the secondhand market for these types of vessels.

With respect to the Hilli , which is currently undergoing her conversion to a FLNG vessel, a discounted cash flow approach was adopted given the unique nature of the vessel and that the FLNG markets are considered to be illiquid, difficult to observe and therefore judgmental. Furthermore, no broker valuations exist for this vessel as a FLNG. Our key assumptions include cash flow projections relating to pricing and volume, operating costs, and levels of future capital investment. Other assumptions include that she operates as intended and project forecasts based upon our understanding of the economics of future FLNG projects.

Furthermore, in relation to the vessels currently in lay-up, the Gimi and the Gandria , whilst they have been earmarked for conversion to FLNG vessels, instead of the discounted cash flow approach adopted for the Hilli above, for consistency with the methodology applied in our impairment review, estimated vessel market values for these vessels is on the basis they operate as LNG carriers/FSUs.

While we intend to hold and operate our vessels, were we to hold them for sale, we have determined that, as of December 31, 2016, the fair market value of our vessels, with the exception of eight vessels, were greater than their carrying value. With respect to these eight vessels, the aggregate carrying value of these vessels exceeded their aggregate market value by approximately $81 million. However, as discussed above, for each of these vessels, the carrying value was less than its projected undiscounted net cash flows, consequently, no impairment loss was recognized.

Consolidation of lessor VIE entities

quarterly basis, we must make assumptions regarding the debt amortization profile and the interest rate to be applied against the VIEs’ debt principle. Our estimates are therefore dependent upon the timeliness of receipt and accuracy of financial information provided by these lessor VIE entities. Upon receipt of the audited annual financial statements of the lessor VIEs, we will make a true-up adjustment for any material differences.

Exchange of Incentive Distribution Rights “IDR Reset”

On October 13, 2016, we entered into an equity exchange agreement with Golar Partners in which we reset our rights to receive cash distributions in respect of our interests in the incentive distribution rights, or Old IDRs, in exchange for the issuance of (i) New IDRs, (ii) an aggregate of 2,994,364 common units and 61,109 general partner units, and (iii) an aggregate of up to 748,592 additional common units and up to 15,278 additional general partner units that may be issued if target distributions are met (“the Earn-Out Units”). Half of the Earn-Out Units (“first tranche”) will vest if we pay a distribution equal to or greater than $0.5775 per common unit in each of the quarterly periods ended December 31, 2016, March 31, 2017, June 30, 2017 and September 30, 2017. The remaining Earn-Out Units (“second tranche”) will be issued if the first tranche of the Earn-Out Units vest and we pay a distribution equal to $0.5775 per common unit in the periods ending December 31, 2017, March 31, 2018, June 30, 2018 and September 30, 2018.

The New IDRs result in the minimum distribution level increasing from $0.3850 per common unit to $0.5775 per common unit. The fair value of the Old IDRs is not materially different to the fair value of all of the newly issued instruments.

In relation to this IDR reset transaction, we analogized to the guidance within ASC 845 (non-monetary transactions) for the exchange of a controlled asset or group of assets that does not meet the definition of a business for a non-controlling interest. Under this guidance, we elected for the accounting policy choice to apply “carry over” accounting to the exchange and any future transactions which fall under the remit of the same guidance. The application of “carry over” accounting means that there is no Income Statement impact from the transaction.

Furthermore, we considered the nature of the Earn-Out Units and determined that they met the definition of a derivative.

Analogizing to the step acquisition guidance in ASC 323 (Investments - Equity Method and Joint Ventures) we calculated a new basis difference on the new units that were issued as part of the equity exchange.

The overall effect of the IDR Reset on the transaction date was (i) a reclassification of the initial fair value of the derivative from “Investment in affiliates” to “Other non-current assets” of $15.0 million, and (ii) the residual carrying value of the Old IDRs (after reclassification of the derivative fair value) was reallocated across the new instruments on a relative fair value basis.

Recently Issued Accounting Standards

See Item 18. Financial Statements: note 5, "Recently Issued Accounting Standards".

C. Research and Development, Patents and Licenses

Not applicable.

D. Trend Information

Please see the section of this item entitled "- Market Overview and Trends" and “Item 4. Information on the Company - B. Business Overview - The Natural Gas Industry.”

E. Off-Balance Sheet Arrangements

We are also committed to make rental payments under operating leases for office premises under operating leases. The future minimum rental payments under our non-cancellable operating leases for office premises are disclosed below in the tabular disclosure of contractual obligations.

F. Contractual Obligations

The following table sets forth our contractual obligations for the periods indicated as at December 31, 2016 :



(in millions of $)	Total Obligation	Due in 2017	Due in 2018 – 2019	Due in 2020 – 2021	Due Thereafter
Long-term and short-term debt ⁽¹⁾	1,798.4	674.3	485.7	266.6	371.8
Interest commitments on long-term debt and other interest rate swaps ⁽²⁾	335.0	78.7	115.5	61.1	79.7
Operating lease obligations ⁽³⁾	28.4	23.7	2.4	2.3	—
Purchase obligations:
Egyptian Venture ⁽⁴⁾	—	—	—	—	—
FLNG conversion ⁽⁵⁾	485.2	429.4	55.8	—	—
Other long-term liabilities ⁽⁶⁾	—	—	—	—	—
Total	2,647.0	1,206.1	659.4	330.0	451.5

(1)

The amounts repayable in 2017 includes $219.7 million of our convertible bonds maturing in March 2017. As further described in note 34 to the Consolidated Financial Statements contained herein, we closed a new $402.5 million five year convertible bond in February 2017 and a $150 million margin loan in March 2017. Accordingly, as a result of the refinancing, the carrying amount of $218.9 million has been reclassified to non-current debt on the face of the consolidated balance sheet in the Consolidated Financial Statements contained herein. The obligations under long-term and short-term debt above are presented gross of deferred finance charges and exclude interest.


(2)	Our interest commitment on our long-term debt is calculated based on an assumed average USD LIBOR of 1.98% and taking into account our various margin rates and interest rate swaps associated with each financing arrangement.

(3)

The above table includes operating lease payments to Golar Partners relating to the Option Agreement entered into in connection with the disposal of the Golar Grand in November 2012. Under the Option Agreement, in the event that the charterer did not renew or extend its charter beyond February 2015, Golar Partners had the option to require us to charter the vessel through to October 2017. Golar Partners exercised this option in February 2015.

(4)

As at December 31, 2016, we had a commitment to pay $1.0 million to an unrelated third party, contingent upon the conclusion of a material commercial business transaction by the Egyptian Natural Gas Holding Company, or ECGS, as consideration for work performed in connection with the setting up and incorporation of ECGS. This liability has been excluded from the above table, as the timing of any cash payment is uncertain.


(5)	This refers to our committed costs for the completion of the conversion of the Hilli into a FLNG. It does not include the Gimi and the Gandria since these vessels have not yet entered into conversion and conversion is subject to delivering the notice to proceed, among other conditions.

(6)

Our Consolidated Balance Sheet as of December 31, 2016, includes $52.2 million classified as "Other long-term liabilities" of which $37.9 million represents liabilities under our pension plans and $11.4 million represents other guarantees provided to Golar Partners. These liabilities have been excluded from the above table as the timing and/or the amount of any cash payment is uncertain. See note 26 ''Other Long-Term Liabilities'' to our Consolidated Financial Statements included herein for additional information regarding our other long-term liabilities.

For details of the Company's outstanding legal proceedings and claims, please see note 33 "Other Commitments and Contingencies" to our Consolidated Financial Statements included herein.

G. Safe Harbor

Forward-looking information discussed in this Item 5 includes assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as "forward-looking statements." We caution that assumptions, expectations, projections, intentions and beliefs about future events may and often do vary from actual results and the differences can be material. Please see "Cautionary Statement Regarding Forward-Looking Statements" in this report.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

Directors

The following provides information about each of our directors as of April 24, 2017 .



Name	Age	Position
Daniel Rabun	62	Chairman of our board of directors, director, Audit Committee member and Nomination Committee member
Tor Olav Trøim	54	Director
Fredrik Halvorsen	43	Director
Carl Steen	66	Director, Audit Committee member, Compensation Committee member and Nomination Committee member
Niels Stolt-Nielsen	52	Director and Compensation Committee member
Lori Wheeler Naess	46	Director and Audit Committee Chairperson
Andrew Whalley	50	Director

Daniel Rabun has served as a director since February 2015 and was appointed Chairman in September 2015. He joined Ensco in March 2006 as President and as a member of the Board of Directors. Mr. Rabun was appointed to serve as Ensco's Chief Executive Officer from January 1, 2007 and elected Chairman of the Board of Directors in 2007. Mr. Rabun retired from Ensco in May 2014. Prior to joining Ensco, Mr. Rabun was a partner at the international law firm of Baker & McKenzie LLP where he had practiced law since 1986. In May 2015 Mr. Rabun became a member of the Management Development and Compensation Committee of Apache Corporation. He has been a Certified Public Accountant since 1976 and a member of the Texas Bar since 1983. Mr. Rabun holds a Bachelor of Business Administration Degree in Accounting from the University of Houston and a Juris Doctorate Degree from Southern Methodist University.

Tor Olav Trøim has served as a director of the Company since September 2011, having previously served as a director and vice-president of the Company from its incorporation in May 2001 until October 2009, after which time he served as a director and Chairman of the Company's listed subsidiary, Golar LNG Energy Limited. Mr. Trøim graduated with a M.Sc Naval Architect from the University of Trondheim, Norway in 1985. He was formerly an Equity Portfolio Manager with Storebrand ASA (1987-1990), and Chief Executive Officer for the Norwegian Oil Company DNO AS (1992-1995). Mr. Trøim was a director of Seatankers Management in Cyprus from 1995 until September 2014. Mr. Trøim also served as a director and Chairman of ITCL, a director of Seadrill Limited, Golden Ocean Group Limited, Golden State Petro (IOM I-A) Plc, Archer Limited, Golar LNG Partners LP, Seadrill Partners LLC and as an alternate director of Frontline Ltd until September 2014. He currently holds controlling interests in Magni Partners Bermuda and Magni Partners UK. He also serves as a director in Stolt-Nielsen Limited, Borr Drilling and Valerenga Football Club.

Fredrik Halvorsen has served as a director since February 2015. He is the founder of Ubon Partners, a private investment company focused on technology and growth companies, and chairman of Acano, one of its core holdings. He was CEO and President of Seadrill Management UK from October 2012 until July 2013 and also worked for Frontline Corporate Services Ltd from October 2010 until July 2013. Prior to this, Mr. Halvorsen held various roles including CEO of Tandberg ASA (until the Company was sold to Cisco Systems), senior positions at Cisco Systems Inc. as well as at McKinsey & Company.

Carl Steen has served as a director of the Company since July 2012, and a director of Golar Partners since his appointment in August 2012. Mr. Steen initially graduated in 1975 from ETH Zurich Switzerland with a M.Sc. in Industrial and Management Engineering. After working for a number of high profile companies, Mr. Steen joined Nordea Bank from January 2001 to February 2011 as head of the bank's Shipping, Oil Services & International division. Currently, Mr. Steen holds directorship positions in various Norwegian and international companies including Wilh. Wilhelmsen Holding ASA and Euronav NV.

Lori Wheeler Naess was appointed as a director and Audit Committee Chairperson in February 2016. Ms. Naess was most recently a director with PricewaterhouseCoopers, or PWC, in Oslo and was a Project Leader for the Capital Markets Group. Between 2010 and 2012 she was a Senior Advisor for the Financial Supervisory Authority in Norway and prior to this she was also with PWC in the U.S., Norway and Germany. Ms. Naess is a U.S. Certified Public Accountant.

Andrew Whalley has served as a director since February 2015, he also served as our company secretary until October 2016. He is a Bermudian lawyer called to the Bar in 1995. He has experience in aviation and shipping law, as well as general corporate matters. He is currently of Counsel to Alexanders, a Bermuda law firm, and is also an independent consultant providing legal and corporate secretarial services. Mr. Whalley is a director and co-founder of Provenance Information Assurance Limited, a company involved in the development of software for the legalization of documents.

Executive Officers

The following provides information about each of our executive officers as of April 24, 2017 .



Name	Age	Position
Oscar Spieler	56	Chief Executive Officer – Golar Management
Oistein Dahl	56	Chief Operating Officer – Golar Management Norway
Brian Tienzo	43	Chief Financial Officer – Golar Management
Hugo Skår	49	Chief Technical Officer – Golar Management

Oscar Spieler has been the Chief Executive Officer of Golar Management since May 2016 and prior to this was Executive Advisor to the Board of Directors of Golar LNG Limited from 2011 to 2016. Mr. Spieler has also previously served as Chief Executive Officer of Golar LNG Energy Limited from July 2009 to June 2011. Prior to this appointment, Mr. Spieler had served as Chief Executive Officer of Sea Production Ltd. from October 2006 to October 2008 and as Chief Executive Officer of Frontline Management AS from 2003 to 2006. Mr. Spieler has also previously served as Technical Director of Frontline Management AS from November 1999 until 2003. From 1995 to 1999, he served as Fleet Manager for Bergesen, a major Norwegian gas tanker and VLCC owner. From 1986 to 1995, Mr. Spieler worked with the Norwegian classification society DNV-GL, working with both shipping marine operations and offshore assets. Mr. Spieler has also served as a Director of Archer Limited (formerly, Seawell Limited). Mr Spieler holds a Masters degree in Naval Architecture from the Norwegian University of Science and Technology.

Oistein Dahl has served as the Chief Operating Officer and the Managing Director of Golar Management Norway (previously Golar Wilhelmsen) since April 2012. Mr. Dahl started at Golar in September 2011. He previously worked for Höegh Fleet, where he was President for four years. He had served at Höegh Fleet for several years and had several positions within vessel management, newbuildings and projects, as well as business development. Mr. Dahl has also worked within offshore engineering and with the Norwegian Class Society DNV-GL. Mr. Dahl has a MSc degree from the NTNU technical university in Trondheim.

Brian Tienzo has served as the Chief Financial Officer of Golar Management since June 2011. He previously served as the Group Financial Controller of Golar Management from 2008, having joined Golar Management in February 2001 as the Group Management Accountant. From 1995 to 2001 he worked for Z-Cards Europe Limited, Parliamentary Communications Limited and Interoute Communications Limited in various financial management positions. He is a member of the Association of Certified Chartered Accountants. Mr. Tienzo has also served as the Principal Accounting Officer for Golar LNG Partners LP since April 2011.

Hugo Skår has served as Vice President, Project Management for Golar Management since 2004 and became Chief Technical Officer in 2009. Mr. Skår has been responsible for our successful FSRU conversion projects. Mr. Skår has a MSc degree in Naval Architecture. He worked for nine years at Bergesen (Newbuilding & Project Division) and has extensive experience from newbuilding supervision and VLCC conversions to floating production storage offshore. From 2001 to 2004, he served as Site Manager and Project Manager for the construction of Bergesen's new LNG carriers.

B. Compensation

For the year ended December 31, 2016, we paid to our directors and executive officers aggregate cash compensation (including bonus) of $3.0 million and an aggregate amount of $0.8 million for pension and retirement benefits. During the year ended December 31, 2016, we granted options covering 0.9 million common shares at a weighted average exercise price of $26.21 with an expiration date of 2022. For a description of our stock option plan please refer to the section of this item entitled "E. Share Ownership - Option Plan" below.

In addition to cash compensation, during 2016 we also recognized an expense of $2.5 million relating to stock options issued to certain of our directors and employees. See note 28 “Share Capital and Share Options” to our Consolidated Financial Statements included herein.

C. Board Practices

Our directors do not have service contracts with the Company and do not receive any benefits upon termination of their directorships. Our board of directors established an audit committee in July 2005, which is responsible for overseeing the quality and integrity of our financial statements and its accounting, auditing and financial reporting practices, our compliance with legal and regulatory requirements, the independent auditor's qualifications, independence and performance and our internal audit function. Our audit committee consists of three members, Lori Wheeler Naess, Daniel Rabun and Carl Steen who are all Company directors. In addition, the board of directors also has compensation and nominations committees, details of which are further described in "Item 16G. Corporate Governance."

Our board of directors is elected annually at the annual general meeting. Officers are appointed from time to time by our board of directors and hold office until a successor is elected.

As a foreign private issuer we are exempt from certain Nasdaq requirements that are applicable to U.S. listed companies. Please see the section of this Annual Report entitled “Item 16G. Corporate Governance" for a discussion of how our corporate governance practices differ from those required of U.S. companies listed on the Nasdaq.

D. Employees

As of December 31, 2016, we employed approximately 120 people in our offices in Croatia, London and Oslo. We also employ approximately 492 seagoing employees. These employees serve both Golar and Golar Partners.

E. Share Ownership

The table below shows the number and percentage of our issued and outstanding common shares beneficially owned by our directors and officers as of April 24, 2017 . Also shown are their interests in share options awarded to them under our various share option schemes. The subscription price for options granted under the schemes will normally be reduced by the amount of all dividends declared by us in the period from the date of grant until the date the option is exercised.



Director or Officer	Beneficial Ownership in Common Shares			Interest in Options
	Number of shares	%		Total number of options	Exercise price		Expiry date
Daniel Rabun	*	*		75,000	$	21.55	2021
				11,905	$	27.26	2022
Tor Olav Trøim	3,562,445	3.56	%	8,251	$	5.38	2017
				2,750	$	1.38	2017
				150,000	$	56.00	2019
				5,310	$	21.55	2021
				103,970	$	27.26	2022
Fredrik Halvorsen	*	*		5,310	$	21.55	2021
				3,970	$	27.26	2022
Carl Steen	—	—		5,310	$	21.55	2021
				3,970	$	27.31	2022
Niels Stolt-Nielsen	2,391,813	2.39	%	5,310	$	21.55	2021
				3,970	$	27.26	2022
Lori Wheeler Naess	—	—		5,310	$	21.55	2021
				3,970	$	27.26	2022
Oscar Spieler	—	—		150,000	$	56.00	2019
				9,100	$	56.00	2020
				125,000	$	21.45	2021
				65,220	$	23.40	2021
Oistein Dahl	*	*		25,000	$	24.35	2017
				6,100	$	56.00	2020
				75,000	$	56.00	2019
				50,000	$	23.40	2021
Brian Tienzo	—	—		11,797	$	5.38	2017
				6,766	$	1.38	2017
				8,000	$	56.00	2020
				125,000	$	56.00	2019
				50,000	$	23.40	2021
Hugo Skar	—	—		100,000	$	56.00	2019
				6,100	$	56.00	2020
				50,000	$	23.40	2021

^{* Less than 1%}

Our directors and executive officers have the same voting rights as all other holders of our Common Shares.

Option Plans

Our board of directors adopted an Employee Share Option Plan, or the Plan, in February 2002, as amended and restated in October 2007. The Plan authorized our board to award, at its discretion, options to purchase our common shares to employees of the Company, who were contracted to work more than 20 hours per week and to any director of the Company.

Under the terms of the Plan, the board of directors could determine the exercise price of the options, provided that the exercise price per share is not lower than the then current market value. Options that have not lapsed will become immediately exercisable at the earlier of the vesting date, the option holder's death or change of control of the Company. All options will expire on the tenth anniversary of the option's grant or at such earlier date as the board of directors may from time to time prescribe.

As of December 31, 2016, 0.8 million of our authorized and unissued common shares were reserved for issue pursuant to subscription under options granted under the Company's share option plans. For further detail on share options please see note 28 "Share Capital and Share Options" to our Consolidated Financial Statements included herein.

The exercise price of options, granted in 2006 and later, are reduced by the value of dividends paid, on a per share basis. Accordingly, the above figures show the reduced exercise price as of April 24, 2017 .

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major shareholders

The following table presents certain information as of April 24, 2017 regarding the beneficial ownership of our common shares with respect to each shareholder that we know to beneficially own more than 5% of our issued and outstanding common shares:




	Common Shares
Owner	Number	Percent
Capital Research Global Investors ⁽¹⁾	11,706,182	11.60	%
FMR LLC ⁽²⁾	10,006,463	9.99	%
Barrow, Hanley, Mewhinney and Strauss, LLC ⁽³⁾	7,250,202	7.25	%

⁽¹⁾ Information derived from the Schedule 13G/A of Capital Research Global Investors filed with the Commission on February 25, 2017.

⁽²⁾ Information derived from the Schedule 13G/A of FMR LLC filed with the Commission on February 13, 2017.

⁽³⁾ Information derived from the Schedule 13G of Barrow, Hanley, Mewhinney and Strauss LLC filed with the Commission on December 31, 2016.

Our major shareholders have the same voting rights as all of our other common shareholders. To our knowledge, no corporation or foreign government owns more than 50% of issued and outstanding common shares. We are not aware of any arrangements the operation of which may, at a subsequent date, result in our change of control of the Company.

B. Related party transactions

There are no provisions in our Memorandum of Association or Bye-Laws regarding related party transactions. The Bermuda Companies Act of 1981 provides that a company, or one of its subsidiaries, may enter into a contract with an officer of the company, or an entity in which an officer has a material interest, if the officer notifies the directors of their interest in the contract or proposed contract.

The related party transactions that we were party to between January 1, 2016 and December 31, 2016 are described in Note 31, "Related Party Disclosures" to our Consolidated Financial Statements included herein.

C. Interests of Experts and Counsel

Not applicable.

ITEM 8. FINANCIAL INFORMATION

A. Consolidated Financial Statements and Other Financial Information

See ''Item 18. Financial Statements''

Legal proceedings and claims

As of December 31, 2016 , the FSRU, the Golar Tundra had yet to commence operations with WAGL under the terms of her time charter party. In October 2016, we formally commenced arbitration proceedings against WAGL to recover amounts due under the charter arrangement. We believe we have strong merits to our case. However, there can be no assurance that our position will prevail or that we are able to negotiate a mutually agreeable way forward. As of December 31, 2016 , we have recognized revenues of only $1.0 million representing cash received from WAGL in the period.

We may, from time to time, be involved in legal proceedings and claims that arise in the ordinary course of business. A provision will be recognized in the financial statements only where we believe that a liability will be probable and for which the amounts are reasonably estimable, based upon the facts known prior to the issuance of the financial statements.

UK tax lease benefits

During 2003 we entered into six UK tax leases. Under the terms of the leasing arrangements, the benefits are derived primarily from the tax depreciation assumed to be available to the lessors as a result of their investment in the vessels. HMRC has been challenging the use of similar lease structures and has been engaged in litigation of a test case, with an unrelated party, for some years. In August 2015, following an appeal to the Court of Appeal by the HMRC which set aside previous judgments in favor of the tax payer, the First Tier Tribunal (UK court) ruled in favor of HMRC. We have reviewed the details of the case and the basis of the judgment with our legal and tax advisers to ascertain what impact, if any, the judgment may have on us and the possible range of loss. We are currently in conversation with HMRC on this matter, presenting the factual background of our position. See Note 33 “Other Commitments and Contingencies” to our Consolidated Financial Statements included herein for further details.

Dividend distribution policy

Our long-term objective is to pay a regular dividend in support of our main objective to provide significant returns to shareholders. The level of our dividends will be guided by current earnings, market prospects, capital expenditure requirements and investment opportunities.

Any future dividends declared will be at the discretion of the board of directors and will depend upon our financial condition, earnings and other factors, such as any restrictions in our financing arrangements. Our ability to declare dividends is also regulated by Bermuda law, which prohibits us from paying dividends if, at the time of distribution, we will not be able to pay our liabilities as they fall due or the value of our assets is less than the sum of our liabilities, issued share capital and share premium.

In addition, since we are a holding company with no material assets other than the shares of our subsidiaries and affiliates through which we conduct our operations, our ability to pay dividends will depend on our subsidiaries and affiliates distributing to us their earnings and cash flow. Some of our loan agreements limit or prohibit our and our subsidiaries' and affiliates' ability to make distributions to us without the consent of our lenders.

For 2016, our board of directors declared quarterly dividends in June 2016, September 2016, December 2016 and February 2017 in the aggregate amount of $19.5 million , or $0.20 per share.

For 2015, our board of directors declared quarterly dividends in June 2015, September 2015, December 2015 and February 2016 in the aggregate amount of $130.8 million , or $1.40 per share.

For 2014, our board of directors declared quarterly dividends in June 2014, September 2014, December 2014 and February 2015 in the aggregate amount of $162.3 million , or $1.80 per share.

B. Significant Changes

There have been no significant changes since the date of our Consolidated Financial Statements included in this report, other than as described in note 34 ''Subsequent Events''.

ITEM 9. THE OFFER AND LISTING

Listing Details and Markets

Our common shares have traded on the Nasdaq since December 12, 2002 under the symbol "GLNG".

The following table sets forth, for the periods indicated the high and low prices for the common shares on the Nasdaq.



	Nasdaq
	High		Low
Year ended December 31
2016	$	26.49	$	9.42
2015	$	51.89	$	13.50
2014	$	74.44	$	31.21
2013	$	41.55	$	30.51
2012	$	47.82	$	31.71



	Nasdaq
	High		Low
Quarter ended
Second quarter 2017 ⁽¹⁾	$	28.64	$	25.42
First quarter 2017	$	29.18	$	23.33
Fourth quarter 2016	$	26.49	$	20.22
Third quarter 2016	$	22.89	$	14.96
Second quarter 2016	$	24.67	$	14.32
First quarter 2016	$	21.53	$	9.42
Fourth quarter 2015	$	34.69	$	13.50
Third quarter 2015	$	50.00	$	25.52
Second quarter 2015	$	51.89	$	32.97
First quarter 2015	$	37.24	$	27.72



	Nasdaq
	High		Low
Month ended
April 2017 (1)	$	28.64	$	25.42
March 2017	$	29.18	$	26.12
February 2017	$	28.64	$	25.74
January 2017	$	28.42	$	23.33
December 2016	$	25.45	$	22.72
November 2016	$	26.49	$	20.22
October 2016	$	24.74	$	20.69

(1) For the period from April 1, 2017 through to April 24, 2017 .

ITEM 10. ADDITIONAL INFORMATION

This section summarizes our share capital and the material provisions of our Memorandum of Association and Bye-Laws, including rights of holders of our common shares. The description is only a summary and does not describe everything that our Memorandum of Association and Bye-laws contain. The Memorandum of Association and the Bye-Laws of the Company have previously been filed as Exhibits 1.1 and 1.2, respectively to the Company's Registration Statement on Form 20-F, (File No. 000-50113) filed with the Commission on November 27, 2002, and are hereby incorporated by reference into this Annual Report.

At the 2013 Annual General Meeting of the Company, our shareholders voted to amend the Company's Bye-laws to ensure conformity with revisions to the Bermuda Companies Act 1981, as amended. These amended Bye-laws of the Company as adopted on September 20, 2013, were filed as Exhibit 3.1 to our report on Form 6-K filed with the Commission on July 1, 2014, and are hereby incorporated by reference into this Annual Report.

A. Share capital

Not applicable.

B. Memorandum of Association and Bye-laws

The object of our business, as stated in Section Six of our Memorandum of Association, is to engage in any lawful act or activity for which companies may be organized under the Companies Act, 1981 of Bermuda, or the Companies Act, other than to issue insurance or re-insurance, to act as a technical advisor to any other enterprise or business or to carry on the business of a mutual fund. Our Memorandum of Association and Bye-laws do not impose any limitations on the ownership rights of our shareholders.

Shareholder Meetings . Under our Bye-laws, annual shareholder meetings will be held in accordance with the Companies Act at a time and place selected by our board of directors. The quorum at any annual or general meeting is equal to one or more shareholders, either present in person or represented by proxy, holding in the aggregate shares carrying 33 1/3% of the exercisable voting rights. Special meetings may be called at the discretion of the board of directors and at the request of shareholders holding at least one-tenth of all outstanding shares entitled to vote at a meeting. Annual shareholder meetings and special meetings must be called by not less than seven days' prior written notice specifying the place, day and time of the meeting. The board of directors may fix any date as the record date for determining those shareholders eligible to receive notice of and to vote at the meeting.

The Companies Act provides that a company must have a general meeting of its shareholders in each calendar year. The Companies Act does not impose any general requirements regarding the number of voting shares which must be present or represented at a general meeting in order for the business transacted at the general meeting to be valid. The Companies Act generally leaves the quorum for shareholder meetings to the company to determine in its Bye-laws. The Companies Act specifically imposes special quorum requirements where the shareholders are being asked to approve the modification of rights attaching to a particular class of shares (33.33%) or an amalgamation or merger transaction (33.33%) unless in either case the Bye-laws provide otherwise. The Company's Bye-laws do not provide for a quorum requirement other than 33.33%.

There are no limitations on the right of non-Bermudians or non-residents of Bermuda to hold or vote our common shares.

The key powers of our shareholders include the power to alter the terms of the Company's Memorandum of Association and to approve and thereby make effective any alterations to the Company's Bye-laws made by the directors. Dissenting shareholders holding 20% of the Company's shares may apply to the Court to annul or vary an alteration to the Company's Memorandum of Association. A majority vote against an alteration to the Company's Bye-laws made by the directors will prevent the alteration from becoming effective. Other key powers are to approve the alteration of the Company's capital including a reduction in share capital, to approve the removal of a director, to resolve that the Company be wound up or discontinued from Bermuda to another jurisdiction or to enter into an amalgamation or winding up. Under the Companies Act, all of the foregoing corporate actions require approval by an ordinary resolution (a simple majority of votes cast), except in the case of an amalgamation or merger transaction, which requires approval by 75% of the votes cast unless the Bye-Laws provide otherwise. The Company's Bye-laws only require an ordinary resolution to approve an amalgamation. In addition, the Company's Bye-laws confer express power on the board to reduce its issued share capital selectively with the authority of an ordinary resolution.

The Companies Act provides shareholders holding 10% of the Company's voting shares the ability to request that the board of directors shall convene a meeting of shareholders to consider any business which the shareholders wish to be discussed by the shareholders including (as noted below) the removal of any director. However, the shareholders are not permitted to pass any resolutions relating to the management of the Company's business affairs unless there is a pre-existing provision in the Company's Bye-laws which confers such rights on the shareholders. Subject to compliance with the time limits prescribed by the Companies Act, shareholders holding 20% of the voting shares (or alternatively, 100 shareholders) may also require the directors to circulate a written statement not exceeding 1000 words relating to any resolution or other matter proposed to be put before, or dealt with at, the annual general meeting of the Company.

Majority shareholders do not generally owe any duties to other shareholders to refrain from exercising all of the votes attached to their shares. There are no deadlines in the Companies Act relating to the time when votes must be exercised.

The Companies Act provides that a company shall not be bound to take notice of any trust or other interest in its shares. There is a presumption that all the rights attaching to shares are held by, and are exercisable by, the registered holder, by virtue of being registered as a member of the company. The company's relationship is with the registered holder of its shares. If the registered holder of the shares holds the shares for someone else (the beneficial owner) then if the beneficial owner is entitled to the shares, the beneficial owner may give instructions to the registered holder on how to vote the shares. The Companies Act provides that the registered holder may appoint more than one proxy to attend a shareholder meeting, and consequently where rights to shares are held in a chain, the registered holder may appoint the beneficial owner as the registered holder's proxy.

Directors. The Companies Act provides that the directors shall be elected or appointed by the shareholders. A director may be elected by a simple majority vote of shareholders, at a meeting where shareholders holding not less than 33.33% of the voting shares are present in person or by proxy. A person holding 50% or more of the voting shares of the Company will be able to elect all of the directors, and to prevent the election of any person whom such shareholder does not wish to be elected. There are no provisions for cumulative voting in the Companies Act or the Bye-laws and the Company's Bye-laws do not contain any super-majority voting requirements. The appointment and removal of directors is covered by Bye-laws 86, 87 and 88.

There are procedures for the removal of one or more of the directors by the shareholders before the expiration of his term of office. Shareholders holding 10% or more of the voting shares of the Company may require the board of directors to convene a shareholder meeting to consider a resolution for the removal of a director. At least 14 days’ written notice of a resolution to remove a director must be given to the director affected, and that director must be permitted to speak at the shareholder meeting at which the resolution for his removal is considered by the shareholders.

The Companies Act stipulates that an undischarged bankruptcy of a director (in any country) shall prohibit that director from acting as a director, directly or indirectly, and taking part in or being concerned with the management of a company, except with leave of the court. The Company's Bye-Law 89 is more restrictive in that it stipulates that the office of a Director shall be vacated upon the happening of any of the following events (in addition to the Director's resignation or removal from office by the shareholders):


•	If he becomes of unsound mind or a patient for any purpose of any statute or applicable law relating to mental health and the Board resolves that he shall be removed from office;


•	If he becomes bankrupt or compounds with his creditors;


•	If he is prohibited by law from being a Director; or


•	If he ceases to be a Director by virtue of the Companies Act.

Under the Company's Bye-laws, the minimum number of directors comprising the board of directors at any time shall be two. The board of directors currently consists of seven directors. The quorum necessary for the transaction of business of the board may be fixed by the board and shall constitute a majority of the board. The minimum and maximum number of directors comprising the board of directors from time to time shall be determined by way of an ordinary resolution of the shareholders of the Company. The shareholders may, at the annual general meeting by ordinary resolution, determine that one or more vacancies in the board of directors be deemed casual vacancies. The board of directors, so long as a quorum remains in office, shall have the power to fill such casual vacancies. Each director will hold office until the next annual general meeting or until his successor is appointed or elected. The shareholders may call a Special General Meeting for the purpose of removing a director, provided notice is served upon the concerned director 14 days prior to the meeting and he is entitled to be heard. Any vacancy created by such a removal may be filled at the meeting by the election of another person by the shareholders or in the absence of such election, by the board of directors.

Subject to the provisions of the Companies Act, a director of a company may, notwithstanding his office, be a party to or be otherwise interested in any transaction or arrangement with that company, and may act as director, officer, or employee of any party to a transaction in which the company is interested. Under our Bye-Law 92, provided an interested director declares the nature of his or her interest immediately or thereafter at a meeting of the board of directors, or by writing to the directors as required by the Companies Act, a director shall not by reason of his office be held accountable for any benefit derived from any outside office or employment. The vote of an interested director, provided he or she has complied with the provisions of the Companies Act and our Bye-Laws with regard to disclosure of his or her interest, shall be counted for purposes of determining the existence of a quorum.

The Company’s Bye-law 94 provides the board of directors with the authority to exercise all of the powers of the Company to borrow money and to mortgage or charge all or any part of our property and assets as collateral security for any debt, liability or obligation. The Company’s directors are not required to retire because of their age, and the directors are not required to be holders of the Company’s common shares. Directors serve for a one year term, and shall serve until re-elected or until their successors are appointed at the next annual general meeting. The Company’s Bye-laws provide that no director, alternate director, officer or member of a committee, if any, resident representative, or his heirs, executors or administrators, whom we refer to collectively as an indemnitee, is liable for the acts, receipts, neglects or defaults of any other such person or any person involved in our formation, or for any loss or expense incurred by us through the insufficiency or deficiency of title to any property acquired by us, or for the insufficiency or deficiency of any security in or upon which any of our monies shall be invested, or for any loss or damage arising from the bankruptcy, insolvency, or tortuous act of any person with whom any monies, securities, or effects shall be deposited, or for any loss occasioned by any error of judgment, omission, default, or oversight on his part, or for any other loss, damage or misfortune whatever which shall happen in relation to the execution of his duties, or supposed duties, to us or otherwise in relation thereto. Each indemnitee will be indemnified and held harmless out of our funds to the fullest extent permitted by Bermuda law against all liabilities, loss, damage or expense (including but not limited to liabilities under contract, tort and statute or any applicable foreign law or regulation and all reasonable legal and other costs and expenses properly payable) incurred or suffered by him as such director, alternate director, officer, committee member or resident representative (or in his reasonable belief that he is acting as any of the above). In addition, each indemnitee shall be indemnified against all liabilities incurred in defending any proceedings, whether civil or criminal, in which judgment is given in such indemnitee’s favour, or in which he is acquitted or in connection with any application under the Companies Act in which relief from liability is granted to him by the court. The Company is authorized to purchase insurance to cover any liability it may incur under the indemnification provisions of its Bye-laws. The indemnity provisions are covered by Bye-laws 138 through 146.

Dividends. Holders of common shares are entitled to receive dividend and distribution payments, pro rata based on the number of common shares held, when, as and if declared by the board of directors, in its sole discretion. Any future dividends declared will be at the discretion of the board of directors and will depend upon our financial condition, earnings and other factors.

As a Bermuda exempted company, we are subject to Bermuda law relating to the payment of dividends. We may not pay any dividends if, at the time the dividend is declared or at the time the dividend is paid, there are reasonable grounds for believing that, after giving effect to that payment;


•	we will not be able to pay our liabilities as they fall due; or


•	the realizable value of our assets is less than our liabilities.

In addition, since we are a holding company with no material assets, and conduct our operations through subsidiaries and our affiliates, our ability to pay any dividends to shareholders will depend on our subsidiaries' and affiliates distributing to us their earnings and cash flow. Some of our loan agreements currently limit or prohibit our subsidiaries' ability to make distributions to us and our ability to make distributions to our shareholders.

Share repurchases and preemptive rights . Subject to certain balance sheet restrictions, the Companies Act permits a company to purchase its own shares if it is able to do so without becoming cash flow insolvent as a result. The restrictions are that the par value of the share must be charged against the company's issued share capital account or a company fund which is available for dividend or distribution or be paid for out of the proceeds of a fresh issue of shares. Any premium paid on the repurchase of shares must be charged to the company's current share premium account or charged to a company fund which is available for dividend or distribution. The Companies Act does not impose any requirement that the directors shall make a general offer to all shareholders to purchase their shares pro rata to their respective shareholdings. The Company's Bye-Laws do not contain any specific rules regarding the procedures to be followed by the Company when purchasing its own shares, and consequently the primary source of the Company's obligations to shareholders when the Company tenders for its shares will be the rules of the listing exchanges on which the Company's shares are listed. The Company’s power to purchase its own shares is covered by Bye-laws 9, 10 and 11.

The Companies Act does not confer any rights of pre-emption on shareholders when a company issues further shares, and no such rights of pre-emption are implied as a matter of common law. The Company's Bye-Laws do not confer any rights of pre-emption. Bye-Law 8 specifically provides that the issuance of more shares ranking pari passu with the shares in issue shall not constitute a variation of class rights, unless the rights attached to shares in issue state that the issuance of further shares shall constitute a variation of class rights. Bye-Law 12 confers on the directors the right to dispose of any number of unissued shares forming part of the authorized share capital of the Company without any requirement for shareholder approval. The Company’s power to issue shares is covered by Bye-laws 12, 13, 14, and 15.

Liquidation. In the event of our liquidation, dissolution or winding up, the holders of common shares are entitled to share in our assets, if any, remaining after the payment of all of our debts and liabilities, subject to any liquidation preference on any outstanding preference shares.

C. Material contracts

The following is a list of each material contract, other than material contracts entered into in the ordinary course of business, to which we or any of our subsidiaries is a party, for the two years immediately preceding the date of this Annual Report, each of which is included in the list of exhibits in Item 19:


1.


1.	Rules of Golar LNG Limited Bermuda Employee Share Option Scheme.


2.	Omnibus Agreement dated April 13, 2011, by and among Golar LNG Limited, Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited.


3.	Amendment No. 1 to Omnibus Agreement, dated October 5, 2011 by and among Golar LNG Limited, Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited.


4.	Bermuda Tax Assurance, dated May 23, 2011.


5.	Bond Agreement dated March 5, 2012 between Golar LNG Ltd and Norsk Tillitsmann ASA as bond trustee.


6.	Purchase, Sale and Contribution Agreement, dated December 15, 2014, by and among Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Limited, providing for, among other things, the sale of the Golar Eskimo .


7.	Memorandum of Agreement, dated December 19, 2014, by and between Golar LNG 1460 Corporation and P T Perusahaan Pelayaran Equinox , providing for, among other things, the sale of the Golar Viking .


8.	Engineering, Procurement and Construction Contract, dated May 22, 2014 by and between Golar Hilli Corporation and Keppel Shipyard Limited.


9.	Facilities Agreement, by and among Golar Hull M2021 Corp, Golar Hull M2026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for a $1.125 billion facility, dated July 25, 2013.


10.	Supplemental Agreement between Golar Hull M2021 Corp, Golar Hull M2026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated October 1, 2013.


11.	Second Supplemental Agreement between Golar Hull M2021 Corp, Golar Hull M2026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated August 28, 2014.


12.	Third Supplemental Agreement between Golar Hull M021 Corp, Golar Hull M026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated December 11, 2014.


13.	Letter Agreement, dated as of January 20, 2015, by and between Golar LNG Limited and Golar LNG Partners LP.


14.	Loan Agreement, dated as of January 20, 2015, by and between Golar LNG Limited and Golar LNG Partners LP.


15.	LNG Time Charter Party, dated May 27, 2015, by and between Golar Grand Corporation and Golar Trading Corporation.


16.	Memorandum of Agreement, dated September 9, 2015, by and between Golar Hilli Corporation and Fortune Lianjing Shipping S.A.


17.	Pre-delivery Financing Agreement related to the Hilli conversion dated September 9, 2015 by and between Fortune Lianjing Shipping S.A. and Golar Hilli Corporation.


18.	Purchase, Sale and Contribution Agreement, dated February 10, 2016, by and between Golar Partners Operating LLC and Golar LNG Ltd, providing for, among other things, the sale of the Golar Tundra .


19.	Management and Administrative Services Agreement, effective as of April 1, 2016, between Golar LNG Partners LP and Golar Management Limited. Share Purchase Agreement, dated June 17, 2016, by and between Golar LNG and Stonepeak Infrastructure Fund II Cayman (G) Ltd.


20.	Investment and Shareholders Agreement, dated July 5, 2016, by and among Golar LNG Limited, Stonepeak Infrastructure Fund II Cayman (G) Ltd and Golar Power Limited.


21.	Joint Venture and Shareholders' Agreement, dated July 25, 2016, by and between Golar GLS UK Limited and Schlumberger B.V.


22.	Second Amended and Restated Agreement of Limited Partnership of Golar LNG Partners LP dated October 19, 2016.


23.	Exchange Agreement, dated October 13, 2016, by and among Golar LNG Partners LP, Golar LNG Limited and Golar GP LLC.


24.	Engineering, Procurement and Construction Contract, dated December 27, 2016, by and between Golar Gimi Corporation and Keppel Shipyard Limited.


25.	Indenture, dated February 17, 2017, between Golar LNG Limited and Deutsche Bank Trust Company Americas as a Bond Trustee.


26.	Loan Agreement, dated March 3, 2017, by and between Golar ML LLC and Citibank N.A.


27.	General Management Agreement, dated April 4, 2017, by and between Golar Management Ltd and Golar Power Limited.

For a further discussion of these contracts and the related transactions, please refer to "Item 4. Information on the Company-A. History and Development of the Company," "Item 4. Information on the Company-B. Business Overview," “Item 5. Operating and Financial Review and Prospects-A. Operating Results,” "Item 5. Operating and Financial Review and Prospects-B. Liquidity and Capital Resources," “Item 6. Directors, Senior Management and Employees--E. Share Ownership,” "Item 7. Major Shareholders and Related Party Transactions-B. Related Party Transactions" and “Item 10. Additional Information--E. Taxation.”

D. Exchange Controls

The Bermuda Monetary Authority, or the BMA, must give permission for all issuances and transfers of securities of a Bermuda exempted company like us, unless the proposed transaction is exempted by the BMA's written general permissions. We have received a general permission from the BMA to issue any unissued common shares, and for the free transferability of the common shares as long as our common shares are listed on the Nasdaq. Our common shares may therefore be freely transferred among persons who are residents or non-residents of Bermuda.

Although we are incorporated in Bermuda, we are classified as non-resident of Bermuda for exchange control purposes by the BMA. Other than transferring Bermuda Dollars out of Bermuda, there are no restrictions on our ability to transfer funds into or out of Bermuda to pay dividends to U.S. residents who are holders of our common shares or other non-resident holders of our common shares in currency other than Bermuda Dollars.

E. Taxation

The following is a discussion of the material U.S. federal income tax, Bermuda tax and Liberian tax considerations relevant to a U.S. Holder, as defined below, of our common stock. This discussion does not purport to deal with the tax consequences of owning our common stock to all categories of investors, some of which, such as financial institutions, regulated investment companies, real estate investment trusts, tax-exempt organizations, insurance companies, persons holding our common stock as part of a hedging, integrated, conversion or constructive sale transaction or a straddle, traders in securities that have elected the mark-to-market method of accounting for their securities, persons liable for alternative minimum tax, persons who are investors in partners or other pass-through entities for U.S. federal income tax purposes, dealers in securities or currencies, U.S. Holders whose functional currency is not the U.S. dollar and investors that own, actually or under applicable constructive ownership rules, 10% or more of our shares of common stock, may be subject to special rules. This discussion deals only with holders who hold the shares of our common stock as a capital asset. You are encouraged to consult your own tax advisors concerning the overall tax consequences arising in your own particular situation under U.S. federal, state, local or foreign law of the ownership of our common stock.

Taxation of Operating Income

U.S. Taxation of our Company

Shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States will be considered to be 50% derived from sources within the United States. Shipping income attributable to transportation that both begins and ends in the United States will be considered to be 100% derived from sources within the United States. We are not permitted by law to engage in transportation that gives rise to 100% U.S. source income.

Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside of the United States. Shipping income derived from sources outside of the United States will not be subject to U.S. federal income tax.

Unless exempt from U.S. federal income tax under section 883 of the Code, we will be subject to U.S. federal income tax, in the manner discussed below, to the extent our shipping income is derived from sources within the United States.

Based upon our current and anticipated shipping operations, our vessels are and will be operated in various parts of the world, including to or from U.S. ports. For the 2016, 2015 and 2014 taxable years, the U.S. source gross income that we derived from our vessels trading to or from U.S. ports was $nil, $nil and $nil, respectively, and the potential U.S. federal income tax liability resulting from this income, in the absence of our qualification for exemption from tax under section 883 of the Code, or an applicable U.S. income tax treaty, as described below, would have been $nil, $nil and $nil, respectively.

Application of Section 883 of the Code

We have made special U.S. federal tax elections in respect of all our vessel-owning or vessel-operating subsidiaries incorporated in the United Kingdom that are potentially subject to U.S. federal income tax on shipping income derived from sources within the United States. The effect of such elections is to disregard the subsidiaries for which such elections have been made as separate taxable entities for U.S. federal income tax purposes.

Under section 883 of the Code and the Treasury Regulations promulgated thereunder, we, and each of our subsidiaries, will be exempt from U.S. federal income taxation on our respective U.S. source shipping income if both of the following conditions are met:


•	we and each subsidiary are organized in a "qualified foreign country," defined as a country that grants an equivalent exemption from tax to corporations organized in the United States in respect of the shipping income for which exemption is being claimed under section 883 of the Code; this is also known as the "Country of Organization Requirement"; and


•	either


•	more than 50% of the value of our stock is treated as owned, directly or indirectly, by individuals who are "residents" of qualified foreign countries; this is also known as the "Ownership Requirement"; or


•	our stock is "primarily and regularly traded on an established securities market" in the United States or any qualified foreign country; this is also known as the "Publicly-Traded Requirement".

The U.S. Treasury Department has recognized (i) Bermuda, our country of incorporation, and (ii) the countries of incorporation of each of our subsidiaries that has earned shipping income from sources within the United States as qualified foreign countries. Accordingly, we and each such subsidiary satisfy the Country of Organization Requirement.

Due to the public nature of our shareholdings, we do not believe that we will be able to substantiate that we satisfy the Ownership Requirement. However, as described below, we believe that we will be able to satisfy the Publicly-Traded Requirement.

The Treasury Regulations under section 883 of the Code provide that the stock of a foreign corporation will be considered to be "primarily traded" on an "established securities market" if the number of shares of each class of stock that are traded during any taxable year on all "established securities markets" in that country exceeds the number of shares in each such class that are traded during that year on "established securities markets" in any other single country. Our stock was "primarily traded" on the Nasdaq, an "established securities market" in the United States, during 2016.

Under the Treasury Regulations, our common stock will be considered to be "regularly traded" on an "established securities market" if one or more classes of our stock representing more than 50% of our outstanding shares, by total combined voting power of all classes of stock entitled to vote and total value, is listed on the market; this is also known as the "Listing Requirement". Since our common shares are listed on the Nasdaq, we will satisfy the Listing Requirement.

The Treasury Regulations further require that with respect to each class of stock relied upon to meet the Listing Requirement: (i) such class of stock is traded on the market, other than in minimal quantities, on at least 60 days during the taxable year or one-sixth of the days in a short taxable year; this is also known as the "Trading Frequency Test"; and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year, or as appropriately adjusted in the case of a short taxable year; this is also known as the "Trading Volume Test." We believe that our common shares satisfied the Trading Frequency Test and the Trading Volume Test in 2016. Even if this were not the case, the Treasury Regulations provide that the Trading Frequency Test and the Trading Volume Test will be deemed satisfied by a class of stock if, as we expect to be the case with our common shares, such class of stock is traded on an "established securities market" in the United States and such class of stock is regularly quoted by dealers making a market in such stock.

Notwithstanding the foregoing, the Treasury Regulations provide that our common shares will not be considered to be "regularly traded" on an "established securities market" for any taxable year in which 50% or more of the outstanding common shares, by vote and value, are owned, for more than half the days of the taxable year, by persons who each own 5% or more of the vote and value of the outstanding common shares; this is also known as the "5% Override Rule." The 5% Override Rule will not apply, however, if in respect of each category of shipping income for which exemption is being claimed, we can establish that individual residents of qualified foreign countries, or "Qualified Shareholders," own sufficient common shares to preclude non-Qualified Shareholders from owning 50% or more of the total vote and value of our common shares for more than half the number of days during the taxable year; this is also known as the "5% Override Exception."

Based on our public shareholdings for 2016, we were not subject to the 5% Override Rule for 2016. Therefore, we believe that we satisfied the Publicly-Traded Requirement for 2016 and we and each of our subsidiaries are entitled to exemption from U.S. federal income tax under section 883 of the Code in respect of our U.S. source shipping income. To the extent that we become subject to the 5% Override Rule in future years (as a result of changes in the ownership of our common shares), it may be difficult for us to establish that we qualify for the 5% Override Exception.

If we were not eligible for the exemption under section 883 of the Code, our U.S. source shipping income would be subject to U.S. federal income tax as described in more detail below.

Taxation in Absence of Exemption Under Section 883 of the Code

To the extent the benefits of section 883 of the Code are unavailable with respect to any item of U.S. source shipping income earned by us or by our subsidiaries, such U.S. source shipping income would be subject to a 4% U.S. federal income tax imposed by section 887 of the Code on a gross basis, without benefit of deductions. Since under the sourcing rules described above, no more than 50% of the shipping income earned by us or our subsidiaries would be derived from U.S. sources, the maximum effective rate of U.S. federal income tax on such gross shipping income would never exceed 2%. For the calendar year 2016, we and our subsidiaries would be subject to $nil aggregated tax under section 887 of the Code.

Gain on Sale of Vessels

If we and our subsidiaries qualify for exemption from tax under section 883 of the Code in respect of our U.S. source shipping income, the gain on the sale of any vessel earning such U.S. source shipping income should likewise be exempt from U.S. federal income tax. Even if we and our subsidiaries are unable to qualify for exemption from tax under section 883 of the Code and we or any of our subsidiaries, as the seller of such vessel, is considered to be engaged in the conduct of a U.S. trade or business, gain on the sale of such vessel would not be subject to U.S. federal income tax provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. If the sale is considered to occur within the United States, any gain on such sale may be subject to U.S. federal income tax as "effectively connected" income at a rate of up to 54.5%. To the extent circumstances permit, we intend to structure sales of our vessels in such a manner, including effecting the sale and delivery of vessels outside of the United States, so as to not give rise to "effectively connected" income.

U.S. Taxation of U.S. Holders

The term "U.S. Holder" means a beneficial owner of our common shares that is a U.S. citizen or resident, U.S. corporation or other U.S. entity taxable as a corporation, an estate, the income of which is subject to U.S. federal income tax regardless of its source, or a trust if a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, and owns our common shares as a capital asset, generally, for investment purposes.

If a partnership holds our common shares, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding our common shares, you are encouraged to consult your tax advisor.

Distributions

Any distributions made by us with respect to our common shares to a U.S. Holder will generally constitute dividends to the extent of our current and accumulated earnings and profits, as determined under U.S. federal income tax principles. We expect that dividends paid by us to a non-corporate U.S. Holder will be eligible for preferential U.S. federal income tax rates provided that the non-corporate U.S. Holder has owned the common shares for more than 60 days in the 121-day period beginning 60 days before the date on which our common shares becomes ex-dividend and certain other conditions are satisfied. However, there is no assurance that any dividends paid by us will be eligible for these preferential tax rates in the hands of a non-corporate U.S. Holder. Any dividends paid by us, which are not eligible for these preferential tax rates will be taxed as ordinary income to a non-corporate U.S. Holder. Because we are not a U.S. corporation, U.S. Holders that are corporations will not be entitled to claim a dividends-received deduction with respect to any distributions they receive from us.

Distributions in excess of our earnings and profits will be treated first as a non-taxable return of capital to the extent of the U.S. Holder's tax basis in its common shares, and thereafter as a taxable capital gain.

Sale, Exchange or other Disposition of Our Common Shares

Subject to the discussion below under "Passive Foreign Investment Company," a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder's tax basis in the common shares. Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder's holding period in such common shares is greater than one year at the time of the sale, exchange or other disposition. Otherwise, such gain or loss will be treated as short-term capital gain or loss. A U.S. Holder's ability to deduct capital losses is subject to certain limitations.

Passive Foreign Investment Company

Notwithstanding the above rules regarding distributions and dispositions, special rules may apply to U.S. Holders (or, in some cases, U.S. persons who are treated as owning our common shares under constructive ownership rules) if we are treated as a "passive foreign investment company, or a PFIC for U.S. federal income tax purposes. We will be a PFIC if either:


•	at least 75% of our gross income in a taxable year is "passive income"; or


•	at least 50% of our assets in a taxable year (averaged over the year and generally determined based upon value) are held for the production of, or produce, "passive income."

For purposes of determining whether we are a PFIC, we will be treated as earning and owning the income and assets, respectively, of any of our subsidiary corporations in which we own 25% or more of the value of the subsidiary's stock, which includes Golar Partners. To date, our subsidiaries and we have derived most of our income from time and voyage charters, and we expect to continue to do so. This income should be treated as services income, which is not "passive income" for PFIC purposes. We believe there is substantial legal authority supporting our position consisting of case law and U.S. Internal Revenue Service, also known as the "IRS", pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is also authority which characterizes time charter income as rental income rather than services income for other tax purposes.

Based on the foregoing, we believe that we are not currently a PFIC and do not expect to be a PFIC in the foreseeable future. However, in the absence of any legal authority specifically relating to the Code provisions governing PFICs, the IRS or a court could disagree with our position. In addition, there can be no assurance that we will not become a PFIC if our operations change in the future.

If we become a PFIC (and regardless of whether we remain a PFIC), each U.S. Holder who owns or is treated as owning our common shares during any period in which we are so classified, would be subject to U.S. federal income tax, at the then highest applicable income tax rates on ordinary income, plus interest, upon certain "excess distributions" and upon dispositions of our common shares including, under certain circumstances, a disposition pursuant to an otherwise tax free reorganization, as if the distribution or gain had been recognized ratably over the U.S. Holder's entire holding period of our common shares. An "excess distribution" generally includes dividends or other distributions received from a PFIC in any taxable year of a U.S. Holder to the extent that the amount of those distributions exceeds 125% of the average distributions made by the PFIC during a specified base period. The tax at ordinary rates and interest resulting from an excess distribution would not be imposed if the U.S. Holder makes a "mark-to-market" election, as discussed below.

If we become a PFIC and, provided that, as is currently the case, our common shares are treated as "marketable stock," a U.S. Holder may make a "mark-to-market" election with respect to our common shares. Under this election, any excess of the fair market value of the common shares at the close of any tax year over the U.S. Holder's adjusted tax basis in the common shares is included in the U.S. Holder's income as ordinary income. In addition, the excess, if any, of the U.S. Holder's adjusted tax basis at the close of any taxable year over the fair market value of the common shares is deductible in an amount equal to the lesser of the amount of the excess or the net "mark-to-market" gains that the U.S. Holder included in income in previous years. If a U.S. Holder makes a "mark-to-market" election after the beginning of its holding period of our common shares, the U.S. Holder does not avoid the PFIC rules described above with respect to the inclusion of ordinary income, and the imposition of interest thereon, attributable to periods before the election.

In some circumstances, a shareholder in a PFIC may avoid the unfavorable consequences of the PFIC rules by making a "qualified electing fund" election. However, a U.S. Holder cannot make a "qualified electing fund" election with respect to us unless such U.S. Holder complies with certain reporting requirements. We do not intend to provide the information necessary to meet such reporting requirements.

In addition to the above consequences, if we were to be treated as a PFIC for any taxable year ending on or after December 31, 2013, a U.S. Holder would be required to file IRS form 8621 with the IRS for that year with respect to such U.S. Holder's common stock.

Backup Withholding and Information Reporting

In general, dividend payments, or other taxable distributions, made within the United States will be subject to information reporting requirements. Such payments will also be subject to "backup withholding" if made to a non-corporate U.S. Holder and such U.S. Holder:


•	fails to provide an accurate taxpayer identification number;


•	provides us with an incorrect taxpayer identification number;


•	is notified by the IRS that it has failed to report all interest or dividends required to be shown on its U.S. federal income tax returns; or


•	in certain circumstances, fails to comply with applicable certification requirements.

If a shareholder sells our common shares to or through a U.S. office or broker, the payment of the proceeds is subject to both U.S. information reporting and "backup withholding" unless the shareholder establishes an exemption. If the shareholder sells our common shares through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to the shareholder outside the United States, then information reporting and "backup withholding" generally will not apply to that payment. However, U.S. information reporting requirements, but not "backup withholding," will apply to a payment of sales proceeds, including a payment made to a shareholder outside the United States, if the shareholder sells the common shares through a non-U.S. office of a broker that is a U.S. person or has some other contacts with the United States.

"Backup withholding" is not an additional tax. Rather, a taxpayer generally may obtain a refund of any amounts withheld under "backup withholding" rules that exceed such taxpayer's U.S. federal income tax liability by filing a refund claim with the IRS, provided that the required information is furnished to the IRS.

Individuals who are U.S. Holders (and to the extent specified in the applicable Treasury Regulations, certain individuals who are non-U.S. Holders and certain U.S. entities) who hold "specified foreign financial assets" (as defined in Section 6038D of the Code and the applicable Treasury Regulations) are required to file IRS Form 8938 (Statement of Specified Foreign Financial Assets) with information relating to each such asset for each taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year. Specified foreign financial assets would include, among other assets, our common stock, unless the common stock were held through an account maintained with a U.S. financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, the statute of limitations on the assessment and collection of U.S. federal income tax with respect to a taxable year for which the filing of IRS Form 8938 is required may not close until three years after the date on which IRS Form 8938 is filed. U.S. Holders (including U.S. entities) and non-U.S. Holders are encouraged to consult their own tax advisors regarding their reporting obligations under Section 6038D of the Code.

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Bermuda Taxation

Bermuda currently imposes no tax (including a tax in the nature of an income, estate, duty, inheritance, capital transfer or withholding tax) on profits, income, capital gains or appreciations derived by us, or dividends or other distributions paid by us to shareholders of our common shares. Bermuda has undertaken not to impose any such Bermuda taxes on shareholders of our common shares prior to the year 2035 except in so far as such tax applies to persons ordinarily resident in Bermuda.

The Minister of Finance in Bermuda has granted the Company a tax exempt status until March 31, 2035, under which no income taxes or other taxes (other than duty on goods imported into Bermuda and payroll tax in respect of any Bermuda-resident employees) are payable by the Company in Bermuda. If the Minister of Finance in Bermuda does not grant a new exemption or extend the current tax exemption, and if the Bermudian Parliament passes legislation imposing taxes on exempted companies, the Company may become subject to taxation in Bermuda after March 31, 2035.

Liberian Taxation

Under the Consolidated Tax Amendments Act of 2010, our Liberian subsidiaries should be considered non-resident Liberian corporations which are wholly exempted from Liberian taxation effective as of 1977.

F. Dividends and Paying Agents

Not applicable.

G. Statements by Experts

Not applicable.

H. Documents on Display

We will file reports and other information with the U.S. Securities and Exchange Commission, or the Commission. These materials, including this document and the accompanying exhibits, may be inspected and copied, at prescribed rates, at the public reference facilities maintained by the Commission at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling 1 (800) SEC-0330. The Commission maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission.

I. Subsidiary Information

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to various market risks, including interest rate and foreign currency exchange risks. We enter into a variety of derivative instruments and contracts to maintain the desired level of exposure arising from these risks.

Our policy is to hedge our exposure to risks, when possible, within boundaries deemed appropriate by management.

A discussion of our accounting policies for derivative financial instruments is included in note 2 “Accounting Policies” to our Consolidated Financial Statements included herein. Further information on our exposure to market risk is included in note 30 “Financial Instruments” to our Consolidated Financial Statements.

The following analyses provide quantitative information regarding our exposure to foreign currency exchange rate risk and interest rate risk. There are certain shortcomings inherent in the sensitivity analyses presented, primarily due to the assumption that exchange rates change in a parallel fashion and that interest rates change instantaneously.

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Interest rate risk. A significant portion of our long-term debt obligation is subject to adverse movements in interest rates. Our interest rate risk management policy permits economic hedge relationships in order to reduce the risk associated with adverse fluctuations in interest rates. We use interest rate swaps and fixed rate debt to manage the exposure to adverse movements in interest rates. Interest rate swaps are used to convert floating rate debt obligations to a fixed rate in order to achieve an overall desired position of fixed and floating rate debt. Credit exposures are monitored on a counterparty basis, with all new transactions subject to senior management approval. As of December 31, 2016, we are over hedged. This is in connection with the FLNG Hilli facility, which currently bears a fixed interest rate, but will convert to a floating rate interest, upon delivery of the Hilli as a converted FLNG and subject to satisfaction of certain conditions.

As of December 31, 2016, the notional amount of interest rate swaps outstanding in respect of our debt obligation was $1.3 billion. The principal of our floating rate loans outstanding as of December 31, 2016 was $891.5 million. Based on our floating rate debt at December 31, 2016, a one-percentage point increase in the floating interest rate would increase our interest expense by $5.1 million per annum. For disclosure of the fair value of the derivatives and debt obligations outstanding as of December 31, 2016, see note 30 “Financial Instruments” to our Consolidated Financial Statements.

Foreign currency risk . The majority of our transactions, assets and liabilities are denominated in U.S. Dollars, our functional currency. Periodically, we may be exposed to foreign currency exchange fluctuations as a result of expenses paid by certain subsidiaries in currencies other than U.S. Dollars, which includes British Pounds, or GBP, Norwegian Kroners, or NOK, and Euros, in relation to our administrative office in the U.K. and operating expenses incurred in a variety of foreign currencies. Based on our GBP expenses for 2016, a 10% depreciation of the U.S. Dollar against GBP would have increased our expenses by approximately $1.9 million.

We operate a branch in Norway, where the majority of expenses are incurred in NOK. Based on our NOK administrative expenses incurred in 2016, a 10% depreciation of the U.S Dollar against NOK would have increased our expenses by $2.1 million.

The base currency of the majority of our seafaring officers' remuneration was the Euro. Based on the crew costs incurred in 2016, a 10% depreciation of the U.S. Dollar against the Euro would have increased our crew cost for 2015 by approximately $2.0 million.

Equity risk. As of December 31, 2016 , we are party to a Total Return Swap, or TRS, contract indexed to 3,000,000 of our own shares, whereby we carry the risk of fluctuations in the market price of our shares. The settlement amount for the contract will be (A) the market value of the shares at the date of settlement plus the amount of dividends paid on the shares by us between entering into and settling the contract, less (B) the reference price of the shares agreed at the inception of the contract plus the counterparty's financing costs. Settlement will be either a payment from or to the counterparty, depending on whether (A) is more or less than (B). The contract has been extended to expire in June 2017. The weighted average reference price was $42.03 per common share. As of December 31, 2016, we had also entered into a forward contract for the acquisition of 107,000 shares in Golar Partners at an average price of $18.75. The open position of both contracts at December 31, 2016, exposes us to market risk associated with our share price and the share price of Golar Partners, and it is estimated that a 10% reduction in both share prices as at December 31, 2016, would generate an adverse mark-to-market adjustment of approximately $7.1 million, which would be recorded in our consolidated statement of operations.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

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ITEM 15. CONTROLS AND PROCEDURE

(a) Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Under the supervision of our Company’s Chief Executive Officer and Chief Financial Officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures, pursuant to Rule 13a-15(e) of the Exchange Act of 1934, as of December 31, 2016. At the time our Annual Report on Form 20-F for the year ended December 31, 2016 was filed on May 1, 2016, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2016.

(b) Management's annual report on internal controls over financial reporting

In accordance with the requirements of Rule 13a-15 of the Securities Exchange Act of 1934, as amended, the following report is provided by management in respect of our internal control over financial reporting. As defined in the Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended, internal control over financial reporting is a process designed by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Consolidated Financial Statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:


•	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;


•	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and


•	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934, as amended. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of our published Consolidated Financial Statements for external purposes under generally accepted accounting principles.

Management previously reported a material weakness in the Company’s internal control over financial reporting related to the design of our control over the accounting for significant and complex transactions in the Annual Report form 20-F/A for the year ended December 31, 2015.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

In connection with the preparation of our annual Consolidated Financial Statements, management has undertaken an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control - Integrated Framework (2013), issued by the Committee of Sponsoring Organisations of the Treadway Commission.

Management’s assessment included an evaluation of the design of the Company's internal control over financial reporting and testing of the operational effectiveness of those controls. Based on this assessment, management has concluded and hereby reports that as of December 31, 2016, the Company’s internal control over financial reporting was effective.

The Company’s independent registered public accounting firm has issued an attestation report on the effectiveness of the Company’s internal control over financial reporting.

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The effectiveness of the Company's internal control over financial reporting as of December 31, 2016 has been audited by Ernst and Young LLP, an independent registered public accounting firm, as stated in their report which appears on page F-3 of our Consolidated Financial Statements.

(d) Changes in internal control over financial reporting

In 2016, the company enhanced its control over the accounting for significant and complex transactions by implementing:


•	a more rigorous process to identify and stratify significant transactions based upon their complexity; and


•	a formal preparation and review (including escalation) process for the accounting analysis of such transactions dependent upon the level of complexity and extent of judgment involved. This may include the engagement of appropriately qualified third party experts as required.

The company completed the documentation and testing of the corrective actions and, as of December 31, 2016, has concluded that the steps taken have remediated the material weakness related to the accounting for significant and complex transactions.

In addition, the company implemented its planned transition of the processes and controls formerly provided by Wilhelmsen into GMN. The transition included an implementation of IT systems as well as a re-design of the certain processes and controls. The transition was fully completed in the final quarter of 2016. Furthermore, the company has also designed and implemented processes and controls in relation to the reliance of the financial information provided by the Cool Pool. The implementation of these controls were completed in the final quarter of 2016.

Aside from the above-mentioned completed remediation actions and changes, there were no changes in the group’s internal controls over financial reporting that occurred during the period covered by the Form 20-F that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

Our board of directors has determined that Lori Wheeler Naess, a director, qualifies as an audit committee financial expert and is independent, in accordance with SEC Rule 10a-3 pursuant to Section 10A of the Securities Exchange Act of 1934.

ITEM 16B. CODE OF ETHICS

We have adopted a Code of Ethics that applies to all the employees of the company and its subsidiaries. A copy of our Code of Ethics may be found on our website www.golarlng.com . This web address is provided as an inactive textual reference only. Information contained on our website does not constitute part of this Annual Report. We will provide any person, free of charge, a copy of our Code of Ethics upon written request to our registered office

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

(a) Audit Fees

The following table sets forth, for the two most recent fiscal years, the aggregate fees billed for professional services rendered by the principal accountant for the audit of the Company's annual financial statements and services provided by the principal accountant in connection with statutory and regulatory filings or engagements for the two most recent fiscal years.



Fiscal year ended December 31, 2016*	$	1,989,721
Fiscal year ended December 31, 2015	$	1,259,082

* includes fees in relation to the restatement of the 2015 Form 20-F.

Total audit fees incurred with respect to Ernst & Young LLP were approximately $2.0 million and $1.3 million for 2016 and 2015, respectively.

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(b) Audit-Related Fees

The following table sets forth, for the two most recent fiscal years, the aggregate fees billed for assurance and related services, not included under "(a) Audit Fees", rendered by the principal accountant for the audit of the Company's annual financial statements and services provided by the principal accountant in connection with statutory and regulatory filings or engagements for the two most recent fiscal years.



Fiscal year ended December 31, 2016	$	63,636
Fiscal year ended December 31, 2015	$	—

The following table sets forth, for the two most recent fiscal years, the aggregate fees billed for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning.



Fiscal year ended December 31, 2016	$	109,663
Fiscal year ended December 31, 2015	$	335,853

(d) All Other Fees

The following table sets forth, for the two most recent fiscal years, the aggregate fees billed for professional services rendered by the principal accountant for other services that are not included in the scope of the current year audit or tax services as mentioned above. This majority of the balance comprises of advisory services provided during the year.



Fiscal year ended December 31, 2016	$	170,416
Fiscal year ended December 31, 2015	$	—

(e) Audit Committee's Pre-Approval Policies and Procedures

The Company's board of directors has adopted pre-approval policies and procedures in compliance with paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X that require our board of directors to approve the appointment of the independent auditor of the Company before such auditor is engaged and approve each of the audit and non-audit related services to be provided by such auditor under such engagement by the Company. All services provided by the principal auditor in 2016 and 2015 were approved by our board of directors pursuant to the pre-approval policy.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

105

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

In November 2014, our Board of Directors approved the purchase of up to 5% of the outstanding common stock of the Company over a two year period. Accordingly, as of December 31, 2016 and 2015, we had repurchased 0.2 million and 0.3 million shares respectively for an aggregate cost of $20.5 million.



	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programme	Maximum number of shares that may be purchased under the plans or programme ⁽¹⁾
October 2015	300,000	$	40.90	300,000	4,400,000
January 2016	200,000	$	41.07	200,000	4,200,000
As of December 31, 2016	500,000	$	40.97	500,000	—

(1) The Board approval lapsed in November 2016 and therefore, as of December 31, 2016 , no further shares may be purchased under the plans or programme.

In connection with the Board approved share repurchase scheme discussed above, this is being partly financed through the use of total return swap or equity swap facilities with third party banks, indexed to our own shares. We carry the risk of fluctuations in the share price of those acquired shares. The banks are compensated at their cost of funding plus a margin. As at December 31, 2016, the counterparty to the equity swap transactions had acquired 3.0 million shares in the Company at a price of $42.03. The effect of our Total Return Swap in our consolidated statement of operations as at December 31, 2016 is a unrealized marked-to-market gain of $24.8 million. There is at present no obligation for us to purchase any shares from the counterparty.

ITEM 16F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G. CORPORATE GOVERNANCE

Pursuant to an exception under Nasdaq Rule 5615, or Nasdaq listing standards available to foreign private issuers, we are not required to comply with all of the corporate governance practices followed by U.S. companies under the Nasdaq's listing standards, which are available at www.nasdaq.com. As a foreign private issuer, we are permitted to follow our home country practices in lieu of certain Nasdaq corporate governance requirements. We have certified to Nasdaq that our corporate governance practices are in compliance with, and are not prohibited by, the laws of Bermuda.

We are exempt from many of the Nasdaq's corporate governance practices other than the requirements regarding the disclosure of a going concern audit opinion, submission of a listing agreement, notification of material non-compliance with Nasdaq's corporate governance practices and the establishment and composition of an audit committee and a formal written audit committee charter. The practices we follow in lieu of Nasdaq's corporate governance requirements are as follows:

Independence of directors . We are exempt from certain Nasdaq requirements regarding independence of directors. Consistent with Bermuda law, our board of directors is not required to be composed of a majority of independent directors. Currently, four of the seven members of the board of directors, Daniel Rabun, Lori Wheeler Naess, Carl Steen and Fredrik Halvorsen are independent according to Nasdaq's standards for independence. Our board of directors does not hold meetings at which only independent directors are present.

Audit Committee . We are exempt from certain Nasdaq requirements regarding our audit committee. Consistent with Bermuda law, the directors on our audit committee are not required to comply with certain of Nasdaq’s independence requirements for audit committee members, and the Company's management is responsible for the proper and timely preparation of the Company's annual reports, which are audited by independent auditors. The committee currently consists of three directors, Lori Wheeler Naess, Daniel Rabun and Carl Steen.

106

Compensation Committee . We are exempt from certain Nasdaq requirements regarding our compensation committee. Consistent with Bermuda law, our compensation committee may consist of members who are not independent directors. The committee is currently comprised of Carl Steen and Niels Stolt-Nielsen. The primary responsibility of this committee is to review, approve and make recommendations to the board regarding compensation for directors.

Nomination Committee . We are exempt from certain Nasdaq requirements regarding our nomination committee. Consistent with Bermuda law, our nomination committee may consist of members who are not independent directors. The committee is currently comprised of Carl Steen and Daniel Rabun. The primary responsibility of this committee is to select and recommend to the board, director and committee member candidates.

Share Issuance . In lieu of obtaining shareholder approval prior to the issuance of securities in certain circumstances, consistent with Bermuda law and our Bye-Laws, the board of directors approves share issuances.

As a foreign private issuer, we are not required to solicit proxies or provide proxy statements to Nasdaq pursuant to Nasdaq's corporate governance rules or Bermuda law. Consistent with Bermuda law, and as provided in our amended Bye-laws, we will notify our shareholders of shareholder meetings at least seven days before such meeting. This notification will contain, among other things, information regarding business to be transacted at the meeting.

We believe that our established corporate governance practices satisfy the Nasdaq listing standards.

107

ITEM 16H. MINE SAFETY DISCLOSURE

Not applicable.

ITEM 17. FINANCIAL STATEMENTS

Not applicable.

ITEM 18. FINANCIAL STATEMENTS

The following financial statements listed below and set forth on pages F-1 through to F-70 are filed as part of this Annual Report.

Separate consolidated financial statements and notes thereto for Golar Partners for each of the years ended December 31, 2016, 2015 and 2014 are being provided as a result of Golar Partners meeting a significance test pursuant to Rule 3-09 of Regulation S-X for the three years ended December 31, 2016 and, accordingly, the financial statements of Golar Partners for the year ended December 31, 2016 as filed in the Annual Report on Form 20-F of Golar Partners, filed with the Commission on May 1, 2017 are hereby incorporated by reference and considered to be filed as part of this Annual Report on Form 20-F.

108

ITEM 19. EXHIBITS

The following exhibits are filed as part of this Annual report:



Number	Description of Exhibit
1.1**	Memorandum of Association of Golar LNG Limited as adopted on May 9, 2001, incorporated by reference to Exhibit 1.1 of Golar LNG Limited’s Registration Statement on Form 20-F, filed with the SEC on November 27, 2002, File No. 00050113, or the Original Registration Statement.
1.2**	Bye-Laws of Golar LNG Limited amended and adopted September 20, 2013, incorporated by reference to Exhibit 3.1 to Golar LNG Limited’s Report of Foreign Issuer on Form 6-K filed on July 1, 2014.
1.3**	Certificate of Incorporation as adopted on May 10, 2001, incorporated by reference to Exhibit 1.3 of Golar LNG Limited’s Original Registration Statement.
1.4**	Certificate of deposit of memorandum of increase of share capital of Golar LNG Limited registered on June 20, 2001 (increasing Golar LNG Limited’s authorized capital), incorporated by reference to Exhibit 1.4 of Golar LNG Limited’s Original Registration Statement.
1.5**	Certificate of deposit of memorandum of increase of share capital of Golar LNG Limited registered November 6, 2014, incorporated by reference to Exhibit 1.6 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2014.
2.1**	Form of share certificate incorporated by reference to Exhibit 2.1 of Golar LNG Limited’s Annual Report on Form 20-F for the fiscal year ended December 31, 2010.
2.2*	Indenture, dated February 17, 2017, between Golar LNG Limited and Deutsche Bank Trust Company Americas as a Bond Trustee
4.1**	Rules of the Bermuda Employee Share Option Scheme, incorporated by reference to Exhibit 4.6 of Golar LNG Limited’s Original Registration Statement.
4.2**	Omnibus Agreement dated April 13, 2011, by and among Golar LNG Limited, Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited, incorporated by reference to Exhibit 4.2* of Golar LNG Partners L.P. Annual Report on Form 20-F for the fiscal year ended December 31, 2011.
4.3**	Amendment No. 1 to Omnibus Agreement, dated October 5, 2011 by and among Golar LNG Limited, Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited, incorporated by reference to Exhibit 4.2(a)* of Golar LNG Partners L.P. Annual Report on Form 20-F for the fiscal year ended December 31, 2011.
4.4**	Bermuda Tax Assurance, dated May 23, 2011, incorporated by reference to Exhibit 4.4 of Golar LNG Limited’s Annual Report on Form 20-F for the fiscal year ended December 31, 2013.
4.5**	Bond Agreement dated March 5, 2012 between Golar LNG Ltd and Norsk Tillitsmann ASA as bond trustee, incorporated by reference to Exhibit 4.6 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2012.
4.6**	Purchase, Sale and Contribution Agreement, dated December 15, 2014, by and among Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Limited, providing for, among other things, the sale of the Golar Eskimo, incorporated by reference to Exhibit 4.9 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2014.
4.7**	Memorandum of Agreement, dated December 19, 2014, by and between Golar LNG 1460 Corporation and P T Perusahaan Pelayaran Equinox , providing for, among other things, the sale of the Golar Viking, incorporated by reference to Exhibit 4.10 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2014.
4.8**	Engineering, Procurement and Construction Contract, dated May 22, 2014 by and between Golar Hilli Corporation and Keppel Shipyard Limited, incorporated by reference to Exhibit 5.1 to Golar LNG Limited’s Report of Foreign Issuer on Form 6-K filed on September 4, 2014.
4.9**	Facilities Agreement by and among Golar Hull M2021 Corp, Golar Hull M2026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for a $1.125 billion facility, dated July 25, 2013, incorporated by reference to Exhibit 4.9 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2013.
4.10**	Supplemental Agreement between Golar Hull M2021 Corp, Golar Hull M2026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated October 1, 2013, incorporated by reference to Exhibit 4.14 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2014.

109



4.11**	Second Supplemental Agreement, by and among Golar Hull M2021 Corp, Golar Hull M2026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated August 28, 2014, incorporated by reference to Exhibit 4.15 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2014.
4.12**	Third Supplemental Agreement between Golar Hull M2021 Corp, Golar Hull M2026 Corp, Golar Hull M2031 Corp, Golar Hull M2022 Corp, Golar Hull M2023 Corp, Golar Hull M2027 Corp, Golar Hull M2024 Corp, Golar LNG NB 12 Corporation, and a consortium of banks for $1.125 billion facility, dated December 11, 2014, incorporated by reference to Exhibit 4.16 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2014.
4.13**	Letter Agreement, dated as of January 20, 2015, by and between Golar LNG Partners LP and Golar LNG Limited, incorporated by reference to Exhibit 4.17 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2014.
4.14**	Loan Agreement, dated as of January 20, 2015, by and between Golar LNG Partners LP and Golar LNG Limited, incorporated by reference to Exhibit 4.18 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2014.
4.15**	LNG Time charter party dated May 27, 2015 between Golar Grand Corporation and Golar Trading Corporation, incorporated by reference to Exhibit 4.1 to Golar LNG Limited’s Report of Foreign Issuer on Form 6-K filed on August 13, 2015.
4.16**	Engineering, Procurement and Construction Contract, dated July 21, 2015 by and between Golar Gandria N.V. and Keppel Shipyard Limited, incorporated by reference to Exhibit 4.20 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2015.
4.17**	Memorandum of Agreement, dated September 9, 2015, by and between Golar Hilli Corporation and Fortune Lianjing Shipping S.A., providing for, among other things, the sale and leaseback of the Hilli , incorporated by reference to Exhibit 4.21 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2015.
4.18**	Pre-delivery Financing Agreement related to the Hilli conversion dated September 9, 2015 by and between Fortune Lianjing Shipping S.A. and Golar Hilli Corporation, incorporated by reference to Exhibit 4.2 to Golar LNG Limited’s Report of Foreign Issuer on Form 6-K filed on December 24, 2015.
4.19**	Purchase, Sale and Contribution Agreement, dated February 10, 2016, by and between Golar Partners Operating LLC and Golar LNG Limited, providing for, among other things, the sale of the Golar Tundra, incorporated by reference to Exhibit 4.23 of Golar LNG Limited Annual Report on Form 20-F for the fiscal year ended December 31, 2015.
4.20*	Management and Administrative Services Agreement, effective as of April 1, 2016, between Golar LNG Partners LP and Golar Management Limited.
4.21*	Share Purchase Agreement, dated June 17, 2016, by and between Golar LNG and Stonepeak Infrastructure Fund II Cayman (G) Ltd.
4.22*	Investment and Shareholders Agreement, dated July 5, 2016, by and among Golar LNG Limited, Stonepeak Infrastructure Fund II Cayman (G) Ltd and Golar Power Limited.
4.23*	Joint Venture and Shareholders' Agreement, dated July 25, 2016, by and between Golar GLS UK Limited and Schlumberger B.V.
4.24**	Exchange Agreement, dated October 13, 2016, by and among Golar LNG Partners LP, Golar LNG Limited and Golar GP LLC, incorporated by reference to Exhibit 10.1 to Golar LNG Limited’s Report of Foreign Issuer on Form 6-K of Golar LNG Partners LP, filed on October 19, 2016.
4.25**	Second Amended and Restated Agreement of Limited Partnership of Golar LNG Partners LP dated October 19, 2016, incorporated by reference to Exhibit 3.2 to the Registration Statement on Form 8-A/A of Golar LNG Partners LP, filed on October 19, 2016.
4.26*	Engineering, Procurement and Construction Contract, dated December 27, 2016, by and between Golar Gimi Corporation and Keppel Shipyard Limited.
4.27*	Loan Agreement, dated March 3, 2017, by and between Golar ML LLC and Citibank N.A.
4.28*	General Management Agreement, dated April 4, 2017, by and between Golar Management Ltd and Golar Power Limited.
8.1*	Golar LNG Limited subsidiaries.
11.1**	Golar LNG Limited Corporate Code of Business Ethics and Conduct, incorporated by reference to Exhibit 14.1 of Golar LNG Limited’s Annual Report on Form 20-F for the year ended December 31, 2003.
12.1*	Certification of the Principal Executive Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
12.2*	Certification of the Principal Financial Officer under Section 302 of the Sarbanes-Oxley Act of 2002.
13.1*	Certification under Section 906 of the Sarbanes-Oxley act of 2002 of the Principal Executive Officer.
13.2*	Certification under Section 906 of the Sarbanes-Oxley act of 2002 of the Principal Financial Officer.

110



15.1*	Consent of Independent Registered Public Accounting Firm - Ernst & Young LLP.

_________________________

* Filed herewith.

** Incorporated by reference.

101. INS* XBRL Instance Document

101. SCH* XBRL Taxonomy Extension Schema

101. CAL* XBRL Taxonomy Extension Schema Calculation Linkbase

101. DEF* XBRL Taxonomy Extension Schema Definition Linkbase

101. LAB* XBRL Taxonomy Extension Schema Label Linkbase

101. PRE* XBRL Taxonomy Extension Schema Presentation Linkbase

111

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.



		Golar LNG Limited
		(Registrant)

Date	May 1, 2017	By	/s/ Brian Tienzo
			Brian Tienzo
			Principal Financial and Accounting Officer

112

GOLAR LNG LIMITED

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS



	Page
Reports of Independent Registered Public Accounting Firm s	F-2
Audited Consolidated Statements of Operations for the years ended December 31, 2016, 2015 and 2014	F-4
Audited Consolidated Statements of Comprehensive Income for the years ended December 31, 2016, 2015 and 2014	F-5
Audited Consolidated Balance Sheets as of December 31, 201 6 and 2015	F-6
Audited Consolidated Statements of Cash Flows for the years ended December 31, 2016, 2015 and 2014	F-7
Audited Consolidated Statements of Changes in Equity for the years ended December 31, 2016, 2015 and 2014	F-9
Notes to Consolidated Financial Statements	F-10

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of Golar LNG Limited

We have audited the accompanying consolidated balance sheets of Golar LNG Limited as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income, cash flows and changes in equity for each of the three years in the period ended December 31, 2016. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Golar LNG Limited at December 31, 2016 and 2015, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2016, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Golar LNG Limited’s internal control over financial reporting as of December 31, 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated May 1, 2017 expressed an unqualified opinion thereon.



/s/ Ernst & Young LLP
London, United Kingdom
May 1, 2017

F-2

The Board of Directors and Shareholders of Golar LNG Limited

We have audited Golar LNG Limited’s internal control over financial reporting as of 31 December 2016, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Golar LNG Limited management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Golar LNG Limited maintained, in all material respects, effective internal control over financial reporting as of 31 December 2016, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the 2016 consolidated financial statements of Golar LNG Limited and our report dated May 1, 2017 expressed an unqualified opinion thereon.



/s/ Ernst & Young LLP
London, United Kingdom
May 1, 2017

F-3

Golar LNG Limited

Consolidated Statements of Operations for the years ended December 31, 2016 , 2015 and 2014

(in thousands of $, except per share data)



	Notes	2016			2015			2014
Operating revenues
Time and voyage charter revenues*		52,302			90,127			95,399
Time charter revenues - collaborative arrangement*	14	13,730			—			—
Vessel and other management fees*		14,225			12,547			10,756
Total operating revenues		80,257			102,674			106,155
Operating expenses
Vessel operating expenses		53,163			56,347			49,570
Voyage, charter-hire and commission expenses*		36,423			69,042			27,340
Voyage, charter-hire and commission expenses - collaborative arrangement*	14	11,140			—			—
Administrative expenses		45,960			33,526			19,267
Depreciation and amortization		72,972			73,732			49,811
Impairment of long-term assets		1,706			1,957			500
Total operating expenses		221,364			234,604			146,488
Gain on disposals to Golar Partners*	6	—			102,406			43,287
Other operating loss		—			—			(6,387		)
Impairment of vessel held-for-sale	19	—			(1,032		)	—
Other operating gains - LNG trading		16			—			1,317
Loss on disposal of vessel held-for-sale	19	—			(5,824		)	—
Operating loss		(141,091		)	(36,380		)	(2,116		)
Other non-operating (expense) income
Net loss on loss of control of Golar Power	7	(8,483		)	—			—
Other non-operating (expense) income		(132		)	(27		)	272
Total other non-operating (expense) income		(8,615		)	(27		)	272
Financial income (expense)
Interest income*		2,969			6,896			716
Interest expense*		(71,201		)	(68,793		)	(17,785		)
Other financial items, net	10	8,691			(112,722		)	(70,783		)
Net financial expense		(59,541		)	(174,619		)	(87,852		)
Loss before equity in net earnings of affiliates, income taxes and non-controlling interests		(209,247		)	(211,026		)	(89,696		)
Income taxes	11	589			3,053			1,114
Equity in net earnings of affiliates	14	47,878			55,985			42,220
Net loss		(160,780		)	(151,988		)	(46,362		)
Net income attributable to non-controlling interests		(25,751		)	(19,158		)	(1,655		)
Net loss attributable to stockholders of Golar LNG Ltd		(186,531		)	(171,146		)	(48,017		)
Loss per share attributable to Golar LNG Ltd stockholders Per common share amounts:
Loss per share – basic and diluted	12	$	(1.99	)	$	(1.83	)	$	(0.55	)
Cash dividends declared and paid		$	0.60		$	1.35		$	1.80

* This includes amounts arising from transactions with related parties (see note 31).

The accompanying notes are an integral part of these consolidated financial statements.

F-4

Golar LNG Limited

Consolidated Statements of Comprehensive Loss for the years ended December 31, 2016 , 2015 and 2014

(in thousands of $)



	Notes	2016		2015		2014
COMPREHENSIVE LOSS
Net loss		(160,780	)	(151,988	)	(46,362	)
Other comprehensive (loss) income:
(Loss) gain associated with pensions, net of tax	27, 29	(556	)	2,851		(2,520	)
Net gain (loss) on qualifying cash flow hedging instruments ⁽¹⁾⁽²⁾	29	3,606		(4,440	)	6,669
		3,050		(1,589	)	4,149
Comprehensive loss		(157,730	)	(153,577	)	(42,213	)

Comprehensive (loss) income attributable to:
Stockholders of Golar LNG Limited		(183,481	)	(172,735	)	(43,868	)
Non-controlling interests		25,751		19,158		1,655
Comprehensive loss		(157,730	)	(153,577	)	(42,213	)

(1) Includes share of net gain of $3.6 million , net loss of $4.8 million and $nil on qualifying cash flow hedging instruments held by an affiliate for the years ended December 31, 2016, 2015 and 2014, respectively. Refer to note 29.

(2) No tax impact for the years ended December 31, 2016, 2015 and 2014.

The accompanying notes are an integral part of these consolidated financial statements.

F-5

Golar LNG Limited

Consolidated Balance Sheets as of December 31, 2016 and 2015

(in thousands of $)



	Notes	2016		2015
ASSETS
Current assets
Cash and cash equivalents		224,190		105,235
Restricted cash and short-term deposits	20	183,525		228,202
Trade accounts receivable*		3,567		4,474
Prepaid expenses and other assets	15	7,330		24,753
Inventories		7,257		8,650
Assets held-for-sale	19	271,307		267,034
Total current assets		697,176		638,348
Long-term assets
Restricted cash	20	232,335		180,361
Investments in affiliates	14	648,780		541,565
Cost method investment	21	7,347		7,347
Newbuildings	16	—		13,561
Asset under development	17	731,993		501,022
Vessels and equipment, net	18	1,883,066		2,336,144
Other non-current assets	22	56,214		50,850
Total assets		4,256,911		4,269,198
LIABILITIES AND EQUITY
Current liabilities
Current portion of long-term debt and short-term debt	25	451,454		491,398
Trade accounts payable		23,790		53,281
Accrued expenses	23	75,081		53,333
Amounts due to related parties	31	135,668		7,128
Other current liabilities	24	78,983		148,077
Liabilities held-for-sale	19	209,296		201,213
Total current liabilities		974,272		954,430
Long-term liabilities
Long-term debt	25	1,320,599		1,344,509
Other long-term liabilities	26	52,214		54,080
Total liabilities		2,347,085		2,353,019
Commitments and contingencies EQUITY	32, 33
Share capital 101,080,673 common shares of $1.00 each issued and outstanding (2015: 93,546,663)	28	101,081		93,547
Treasury shares		(20,483	)	(12,269	)
Additional paid-in capital		1,488,556		1,317,806
Contributed surplus		200,000		200,000
Accumulated other comprehensive loss		(9,542	)	(12,592	)
Retained earnings		103,650		308,874
Total stockholders' equity		1,863,262		1,895,366
Non-controlling interests	4	46,564		20,813
Total equity		1,909,826		1,916,179
Total liabilities and equity		4,256,911		4,269,198

* This includes amounts arising from transactions with related parties (see note 31).

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Golar LNG Limited

Consolidated Statements of Cash Flows for the years ended December 31, 2016 , 2015 and 2014

(in thousands of $)



	Notes	2016		2015		2014
Operating activities
Net loss		(160,780	)	(151,988	)	(46,362	)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Depreciation and amortization		72,972		73,732		49,811
Amortization of deferred charges and debt guarantee		13,732		(2,073	)	2,459
Equity in net earnings of affiliates		(47,878	)	(55,985	)	(42,220	)
Gain on disposals to Golar Partners	6	—		(102,406	)	(43,287	)
Loss on loss of control of Golar Power	7	8,483		—		—
Loss on disposal of vessel held-for-sale		—		5,824		—
Impairment of vessel held-for-sale		—		1,032		—
Dividends received		55,517		52,800		61,967
Compensation cost related to stock options		5,816		4,125		1,619
Net foreign exchange losses		1,429		2,404		1,314
Amortization of deferred tax benefits on intra-group transfers		(1,715	)	(3,488	)	(3,488	)
Impairment of long-term assets	9	1,706		1,957		500
Impairment of loan receivable	10	7,627		15,010		—
Drydocking expenditure		—		(10,405	)	(8,947	)
Change in assets and liabilities, net of effects from the sale of Golar Eskimo , Golar Igloo and Golar Maria :
Restricted cash	20	47,834		(280,000	)	—
Trade accounts receivable		(567	)	911		(10,533	)
Inventories		987		(2,252	)	(809	)
Prepaid expenses, accrued income and other assets		14,924		(6,361	)	27,612
Amounts due to related companies		(9,444	)	15,259		(6,003	)
Trade accounts payable		(28,511	)	8,944		(1,746	)
Accrued expenses		(3,410	)	21,479		13,802
Other current liabilities ⁽¹⁾		(17,273	)	66,832		29,184
Net cash (used in) provided by operating activities		(38,551	)	(344,649	)	24,873
Investing activities
Additions to vessels and equipment		(14,477	)	(26,110	)	(2,359	)
Additions to newbuildings		(19,220	)	(559,667	)	(1,150,669	)
Additions to asset under development		(200,821	)	(111,572	)	(313,645	)
Investment in subsidiary, net of cash acquired		—		(16	)	—
Proceeds from disposal of investments in affiliates		—		207,428		—
Additions to investments in affiliates		(10,200	)	(5,023	)	—
Short-term loan granted		(1,000	)	(2,000	)	—
Proceeds from repayment of short-term loan granted		—		400		—

Investing activities (continued)
Proceeds from disposals to Golar Partners, net of cash disposed		107,247		226,872		155,319
Proceeds from loss of control of Golar Power, net of cash disposed	7	113,321		—		—

F-7



Short-term loan granted to Golar Partners		—		—		(20,000	)
Additions to other long-term assets		—		—		(49,873	)
Proceeds from repayment of short-term loan granted to Golar Partners		—		20,000		—
Proceeds from disposal of fixed assets		—		18,987		—
Restricted cash and short-term deposits		22,928		(25,255	)	(48,043	)
Net cash used in investing activities		(2,222	)	(255,956	)	(1,429,270	)
Financing activities
Proceeds from short-term and long-term debt (including related parties)	25	405,817		918,801		1,222,746
Repayments of short-term and long-term debt (including related parties)	25	(271,858	)	(215,363	)	(239,903	)
Financing costs paid		(8,372	)	(23,266	)	(18,672	)
Cash dividends paid	24	(54,348	)	(121,358	)	(155,996	)
Proceeds from exercise of share options		1,435		225		1,338
Purchase of treasury shares		(8,214	)	(12,269	)	—
Proceeds from issuance of equity	28	169,876		—		660,947
Restricted cash and short-term deposits		(74,608	)	(32,340	)	—
Net cash provided by financing activities		159,728		514,430		1,470,460
Net increase (decrease) in cash and cash equivalents		118,955		(86,175	)	66,063
Cash and cash equivalents at beginning of period		105,235		191,410		125,347
Cash and cash equivalents at end of period		224,190		105,235		191,410

Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest paid, net of capitalized interest		25,437		37,964		11,372
Income taxes paid		555		1,278		1,372

(1) Includes accretion of discount on convertible bonds of $5.7 million , $5.3 million and $5.0 million for the years ended December 31, 2016, 2015 and 2014, respectively.

F-8

Golar LNG Limited

Consolidated Statements of Changes in Equity for the years ended December 31, 2016 , 2015 and 2014

(in thousands of $)



	Notes	Share Capital	Treasury Shares		Additional Paid-in Capital		Contributed Surplus	Accumulated Other Compre- hensive Loss		Retained Earnings		Non-controlling Interest	Total Equity
Balance at December 31, 2013		80,580	—		656,018		200,000	(10,728	)	845,857		—	1,771,727
Net loss		—	—		—		—	—		(48,017	)	1,655	(46,362	)
Dividends		—	—		—		—	—		(155,996	)	—	(155,996	)
Exercise of share options		185	—		1,153		—	—		—		—	1,338
Grant of share options		—	—		1,619		—	—		—		—	1,619
Net proceeds from issuance of shares		12,650	—		648,297		—	—		—		—	660,947
Other comprehensive income	29	—	—		—		—	4,149		—		—	4,149
Balance at December 31, 2014		93,415	—		1,307,087		200,000	(6,579	)	641,844		1,655	2,237,422
Net loss		—	—		—		—	—		(171,146	)	19,158	(151,988	)
Dividends	24	—	—		—		—	—		(161,824	)	—	(161,824	)
Exercise of share options		132	—		93		—	—		—		—	225
Grant of share options		—	—		6,358		—	—		—		—	6,358
Forfeiture of share options		—	—		(2,521	)	—	—		—		—	(2,521	)
Cancellation of share options		—	—		786		—	—		—		—	786
Transfer of additional paid-in capital		—	—		6,003		—	(4,424	)	—		—	1,579
Other comprehensive loss	29	—	—		—		—	(1,589	)	—		—	(1,589	)
Treasury shares		—	(12,269	)	—		—	—		—		—	(12,269	)
Balance at December 31, 2015		93,547	(12,269	)	1,317,806		200,000	(12,592	)	308,874		20,813	1,916,179
Net loss		—	—		—		—	—		(186,531	)	25,751	(160,780	)
Dividends	24	—	—		—		—	—		(18,693	)	—	(18,693	)
Exercise of share options		59	—		1,376		—	—		—		—	1,435
Grant of share options		—	—		7,865		—	—		—		—	7,865
Forfeiture of share options		—	—		(892	)	—	—		—		—	(892	)
Net proceeds from issuance of shares	28	7,475	—		162,401		—	—		—		—	169,876
Other comprehensive income	29	—	—		—		—	3,050		—		—	3,050
Treasury shares		—	(8,214	)	—		—	—		—		—	(8,214	)
Balance at December 31, 2016		101,081	(20,483	)	1,488,556		200,000	(9,542	)	103,650		46,564	1,909,826

The accompanying notes are an integral part of these consolidated financial statements.

F-9

Golar LNG Limited

Notes to Consolidated Financial Statements



1.	GENERAL

Golar LNG Limited (the "Company" or "Golar") was incorporated in Hamilton, Bermuda on May 10, 2001 for the purpose of acquiring the liquefied natural gas ("LNG") shipping interests of Osprey Maritime Limited ("Osprey"), which was owned by World Shipholding Limited ("World Shipholding").

As of December 31, 2016 , our fleet comprises of fourteen LNG carriers (including the Golar Grand , which we have chartered back from Golar Partners until October 2017) and one Floating Storage Regasification Unit ("FSRU") (the Golar Tundra , which we sold to Golar Partners in May 2016 but we are required to consolidate until she commences service under the WAGL charter).We also operate, under management agreements, Golar LNG Partners LP's ("Golar Partners" or the "Partnership") fleet of nine vessels (excluding the Golar Grand and the Golar Tundra ), and since July 6, 2016, Golar Power Limited's ("Golar Power") fleet of two LNG carriers and one newbuilding commitment. Collectively with Golar Partners and Golar Power, our combined fleet is comprised of nineteen LNG carriers and seven FSRUs.

In July 2014, we ordered our first Floating Liquefaction Natural Gas Vessel ("FLNG") based on the conversion of our existing LNG carrier, the Hilli. The Hilli is currently undergoing its FLNG conversion with an expected completion and redelivery date in 2017. We signed agreements for the conversion of the LNG carriers the Gimi and the Gandria to FLNGs in December 2014 and July 2015, respectively. While both agreements have expired, the Gimi conversion agreement was extended and we expect to agree terms for the conversion of the Gandria shortly. We are yet to lodge our final notices to proceed on either of these vessels.

We are listed on the Nasdaq under the symbol: GLNG.

As used herein and unless otherwise required by the context, the terms "Golar", the "Company", "we", "our" and words of similar import refer to Golar or anyone or more of its consolidated subsidiaries, or to all such entities.

Golar Partners

Golar Partners is our former subsidiary, which is an owner and operator of FSRUs and LNG carriers under long-term charters (defined as five years or longer from the date of the dropdown). In April 2011, we completed the initial public offering ("IPO") of Golar Partners and its listing on the Nasdaq stock exchange. As a result of the offering, our ownership interest was reduced to 65.4% (including our 2% general partner interest). Our ownership interest in Golar Partners as of December 31, 2016 and 2015 is 33.9% and 30.7% , respectively.

Under the provisions of the partnership agreement, the general partner irrevocably delegated the authority to the Partnership's board of directors to have the power to oversee and direct the operations as well as manage and determine the strategies and policies of the Partnership. During the period from the IPO in April 2011 until the time of Golar Partners' first Annual General Meeting (''AGM'') on December 13, 2012, we retained the sole power to appoint, remove and replace all members of Golar Partners' board of directors. From the first Golar Partners' AGM, the majority of the board members became electable by the common unitholders and accordingly, from this date, we no longer retain the power to control the board of Golar Partners. As a result, from December 13, 2012, Golar Partners has been considered as an affiliate entity and not as our controlled subsidiary.

Golar Power

In June 2016, we entered into certain agreements forming a 50/50 joint venture, Golar Power, with a private equity firm Stonepeak Infrastructure Partners ("Stonepeak"). Golar Power, offers integrated LNG based downstream solutions, through the ownership and operation of FSRUs and associated terminal and power generation infrastructure that was formed for the purpose of constructing and operating a combined cycle, gas fired, power plant in the State of Sergipe in Brazil ("Sergipe Project"). Please see note 14 for further details.

OneLNG

On July 25, 2016 Golar and Schlumberger B.V. ("Schlumberger") entered into an agreement to form OneLNG, a joint venture, with the intention to offer an integrated upstream and midstream solution for the development of low cost gas reserves to LNG. In accordance with the joint venture and shareholders' agreement, Golar holds 51% and Schlumberger the remaining 49% of OneLNG. Please see note 14 for further details.

F-10

Going Concern

The financial statements have been prepared on a going concern basis. As of December 31, 2016, the debt outstanding in respect of our convertible bonds, which were due to mature in March 2017, was $218.9 million . We will fund the settlement of the maturing convertible bonds with (i) the proceeds of a new margin loan facility of up to $150 million with Citibank N.A. which closed in March 2017; and (ii) available cash which includes proceeds from our recently completed convertible bond issuance in February 2017, which raised net proceeds of approximately $360.2 million .

Whilst we completed the dropdown of the Golar Tundra in May 2016 to Golar Partners, by virtue of the put option in the side agreement to the sale and purchase agreement with Golar Partners, in the event the WAGL charter does not commence by May 23, 2017, or no satisfactory mitigating arrangement is agreed, Golar Partners may require that Golar repurchase the Golar Tundra for the original purchase price agreed and paid of $ 330 million , less the net lease obligations under the lease agreement with CMBL and net working capital adjustments prevailing at the time of dropdown. The Golar Tundra was expected to commence operations in Ghana pursuant to the WAGL charter to serve the related LNG project in the second quarter of 2016. However, as of the current date, due to delays in that LNG project, WAGL has not been able to accept the vessel. We have, however, been informed by WAGL that they have received Parliamentary approval for its Gas Sales Agreement with the Government of Ghana, the lack of which had been the major impediment to progress of the project. We are preserving our legal rights under the charter agreement and are continuing commercial discussions with WAGL, including later start up and extension of the term. As of December 31, 2016, we reassessed the held-for-sale classification for the Golar Tundra . We concluded that, based on the positive status of the negotiations with WAGL and their progress on the Ghana project, the held-for-sale classification remains appropriate.

Furthermore, with respect to our recently formed Golar Power joint venture with Stonepeak, under the shareholders' agreement, we and Stonepeak have agreed to contribute additional funding to Golar Power, on a pro rata basis, including (i) an aggregate of $ 150 million in the period through to the second half of 2018; and (ii) additional amounts as may be required by Golar Power, subject to the approval of its board of directors. In connection with Golar Power’s election in October 2016 to increase its ownership interest in the Sergipe project from 25% to 50% by buying out the project developer GenPower, this is expected to result in an additional funding requirement of between $ 20 million to $ 50 million to be shared with Stonepeak, with the initial $ 20 million being required on financial close of the project financing for the power plant, which is expected to occur by December 31, 2017.

In connection with our joint venture OneLNG, under the joint venture and shareholders' agreement with Schlumberger, once a OneLNG project reaches final investment decision, we and Schlumberger will each be required to provide $ 250 million of new equity. Contributions may include intellectual property amongst other items. OneLNG and Ophir have signed a shareholders' agreement to develop a project in Equatorial Guinea. The effectiveness of the shareholders' agreement is subject to certain conditions precedent including final investment decisions by OneLNG and Ophir, securing of financing and governmental approval which may occur in the first half of 2017. Accordingly, we anticipate in the event of a final investment decision, to fund the estimated $ 2 billion project cost, assuming debt financing of $ 1.2 billion and Ophir’s investment of $ 150 million , OneLNG will be expected to invest approximately $ 650 million (this is inclusive of the aggregate of $ 500 million new equity required under the OneLNG shareholders' agreement). The cash contribution from the Company to the project remains uncertain as the timing of capital expenditure for the project is not yet finalized due to the payment profile of certain contracts continuing to be negotiated. Furthermore, the amount of our contribution to the project within the next twelve months will be determined by the timing of the final investment decision, which is yet to be taken. The convertible bond that we concluded in February 2017 will contribute towards our 51% share of the equity contribution into OneLNG in the 2017 to 2020 period. Credit can be expected for both the intellectual property and the LNG carrier Gandria contributed by Golar into the Equatorial Guinea project.

Accordingly, we believe that, based on our plans as outlined above, we will have sufficient facilities to meet our anticipated liquidity requirements for our business for at least the next twelve months as of May 1, 2017 and that our working capital is sufficient for our present requirements. While we cannot be certain of execution or timing of all or any of the above financings,

F-11

we are confident of our ability to do so. Furthermore, we have performed stress testing of our forecast cash reserves under extreme and largely theoretical scenarios, which include assumptions such as $ nil revenue contributions from our fleet, full operating costs and maintaining our dividend payments based on our most recent payout, and accordingly are confident of our ability to manage through the near term cash requirements.



2.	ACCOUNTING POLICIES

Basis of accounting and presentation

The financial statements are prepared in accordance with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements present our financial position, our consolidated subsidiaries and our interest in associated entities.

The year ended December 31, 2016 includes out of period corrections of (i) $13.2 million for capitalized borrowing costs resulting in a reduction to ''Interest expense'' (vessel operations segment) in the consolidated statements of income and an increase to ''Asset under development'' (FLNG segment) of $13.2 million in the consolidated balance sheet and (ii) $5.9 million pertaining to the amortization of deferred financing costs, resulting in an increase to ''Interest expense'' in the consolidated statements of income and an increase in "Long-term debt" in the consolidated balance sheet. Management believes these out of period corrections are not material to the annual consolidated financial statements for the year ended December 31, 2016, or any previously issued financial statements.

We identified line items in the statement of operations with respect to the amortization of deferred finance charges that were not presented in accordance with current guidance. In prior periods, we had presented the amortization of deferred finance charges within “Other financial items” but should have presented this within “Interest expense.” As a result of this misclassification, other financial items has been overstated and correspondingly interest expense has been understated in respect of prior years (2015: $5.9 million and 2014: $3.3 million ). This misclassification however nets off within the net financial expenses category leaving $nil impact to net loss. There is also no impact on the balance sheet, statement of changes in equity or the statement of cashflows.

The accounting policies set out below have been applied consistently to all periods in these consolidated financial statements, unless otherwise noted.

Principles of consolidation

Investments in companies in which we directly or indirectly hold more than 50% of the voting control are consolidated in the financial statements, as well as certain variable interest entities in which the Company is deemed to be subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns, or both. All inter-company balances and transactions are eliminated. The non-controlling interests of subsidiaries were included in the Consolidated Balance Sheets and Statements of Operations as "Non-controlling interests".

A variable interest entity ("VIE"), is defined by the accounting standard as a legal entity where either (a) equity interest holders as a group lack the characteristics of a controlling financial interest, including decision making ability and an interest in the entity's residual risks and rewards, or (b) the equity holders have not provided sufficient equity investment to permit the entity to finance its activities without additional subordinated financial support, or (c) the voting rights of some investors are not proportional to their obligations to absorb the expected losses of the entity, their rights to receive the expected residual returns of the entity, or both and substantially all of the entity's activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. A party that is a variable interest holder is required to consolidate a VIE if the holder has both (a) the power to direct the activities that most significantly impact the entity's economic performance and (b) the obligation to absorb losses that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE.

F-12

Business combinations

Business combinations of subsidiaries are accounted for under the acquisition method. On acquisition, the identifiable assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognized as goodwill. Any deficiency of the cost of acquisition below the fair values of the identifiable net assets acquired (i.e. bargain purchase) is credited to the statement of operations in the period of acquisition. The consideration transferred for an acquisition is measured at fair value of the consideration given. Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The results of subsidiary undertakings are included from the date of acquisition.

Reporting currency

The consolidated financial statements are stated in U.S dollars. Our functional currency is the U.S. dollar as the majority of the revenues are received in U.S. dollars and a majority of our expenditures are made in U.S. dollars. Our reporting currency is U.S. dollars. Transactions in other currencies during the year are converted into U.S. dollars at the rates of exchange in effect at the date of the transaction. Non-monetary assets and liabilities are converted using historical rates of exchange. At the balance sheet date, monetary assets and liabilities that are denominated in currencies other than the U.S. dollar are translated to reflect the year-end exchange rates. Resulting gains or losses are reflected separately in the accompanying consolidated statements of operations.

Use of estimates

The preparation of financial statements in accordance with United States Generally Accepted Accounting Principles ("US GAAP") requires that management make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

As of December 31, 2016, we leased six vessels under finance leases from wholly owned special purpose vehicles (“lessor SPVs”) of financial institutions in connection with our sale and leaseback transactions. While we do not hold any equity investments in these lessor SPVs, we have determined that we are the primary beneficiary of these entities and accordingly, we are required to consolidate these VIEs into our financial results. The key line items impacted by our consolidation of these VIEs are short-term and long-term debt, restricted cash and short-term deposits, non-controlling interests and interest expense. In consolidating these lessor VIEs, on a quarterly basis, we must make assumptions regarding the debt amortization profile and the interest rate to be applied against the VIEs’ debt principal. Our estimates are therefore dependent upon the timeliness of receipt and accuracy of financial information provided by these lessor VIE entities. Upon receipt of the audited annual financial statements of the lessor VIEs, we will make a true-up adjustment for any material differences.

In assessing the recoverability of our vessels’ carrying amounts, we make assumptions regarding estimated future cash flows and estimates in respect of residual or scrap value. Significant assumptions used include, among others, charter rates, ship operating expenses, utilization, drydocking requirements and residual value.

Fair value measurements

We account for fair value measurement in accordance with the accounting standards guidance using fair value to measure assets and liabilities. The guidance provides a single definition of fair value, together with a framework for measuring it, and requires additional disclosure about the use of fair value to measure assets and liabilities.

Revenue and related expense recognition

F-13

Revenues generated from management fees are recorded rateably over the term of the contract as services are provided.

Cash and cash equivalents

We consider all demand and time deposits and highly liquid investments with original maturities of three months or less to be equivalent to cash.

Restricted cash and short-term deposits

Restricted cash consist of bank deposits which may only be used to settle certain pre-arranged loans, bid bonds in respect of tenders for projects we have entered into, cash collateral required for certain swaps and other claims which require us to restrict cash.

Short-term deposits represents highly liquid deposits placed with financial institutions, primarily from our consolidated VIEs, which are readily convertible into known amounts of cash with original maturities of less than 12 months.

Trade receivables

Trade receivables are presented net of allowances for doubtful balances. At each balance sheet date, all potentially uncollectible accounts are assessed individually for purposes of determining the appropriate provision for doubtful accounts.

Inventories

Inventories, which are comprised principally of fuel, lubricating oils and ship spares, are stated at the lower of cost or market value. Cost is determined on a first-in, first-out basis.

F-14

Investments in affiliates

Affiliates are entities over which we generally have between 20% and 50% of the voting rights, or over which we have significant influence, but over which we do not exercise control, or have the power to control the financial and operational policies. Investments in these entities are accounted for by the equity method of accounting. This also extends to entities in which we hold a majority ownership interest, but we do not control, due to the participating rights of non-controlling interests. Under this method, we record an investment in the common stock (or “in-substance common stock”) of an affiliate at cost (or fair value if a consequence of deconsolidation), and adjust the carrying amount for our share of the earnings or losses of the affiliate subsequent to the date of the investment and report the recognized earnings or losses in income. Dividends received from an affiliate in connection with their common stock interest reduce the carrying amount of the investment. The excess, if any, of the purchase price over book value of our investments in equity method affiliates, or basis difference, is included in the consolidated balance sheet as "Investment in affiliates". We allocate the basis difference across the assets and liabilities of the affiliate, with the residual assigned to goodwill. The basis difference will then be amortized through the statement of operations as part of the equity method of accounting. When our share of losses in an affiliate equals or exceeds its interest, we do not recognize further losses, unless the Company has incurred obligations or made payments on behalf of the affiliate.

We recognize gains and losses in earnings for the issuance of shares by our affiliates, provided that the issuance of such shares qualifies as a sale of such shares.

Exchanges of a controlled asset or group of assets that does not meet the definition of a business for a non-controlling interest

Under the guidance of ASC 845, we have elected the accounting policy choice to apply “carry over” accounting to any applicable exchanges which fall under the remit of this guidance. The application of “carry over” accounting means that any such in-scope exchange will have an initial $nil income statement impact.

Cost-method investments

Cost-method investments are initially recorded at cost and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Dividends received from cost method investments are recorded in the consolidated statement of operations in the line item "Dividend income".

Newbuildings

Newbuilds are stated at cost. All pre-delivery costs incurred during the construction of newbuilds, including purchase installments, interest, supervision and technical costs, are capitalized. Capitalization ceases and depreciation commences when the vessel is available for its intended use.

Vessels and equipment

Vessels and equipment are stated at cost less accumulated depreciation. The cost of vessels and equipment less the estimated residual value is depreciated on a straight-line basis over the assets' remaining useful economic lives. Depreciation includes depreciation on all owned vessels and amortization of vessels accounted for as capital leases. Management estimates the residual values of our vessels based on a scrap value cost of steel and aluminium times the weight of the ship noted in lightweight ton. Residual values are periodically reviewed and revised to recognize changes in conditions, new regulations or other reasons.

Refurbishment costs incurred during the period are capitalized as part of vessels and equipment and depreciated over the vessels' remaining useful economic lives. Refurbishment costs are costs that appreciably increase the capacity, or improve the efficiency or safety of vessels and equipment.

Drydocking expenditures are capitalized when incurred and amortized over the period until the next anticipated drydocking, which is generally between two and five years. For vessels that are newly built or acquired, we have adopted the "built-in overhaul" method of accounting. The built-in overhaul method is based on the segregation of vessel costs into those that should be depreciated over the useful life of the vessel and those that require drydocking at periodic intervals to reflect the different useful lives of the components of the assets. The estimated cost of the drydocking component is amortized until the date of the first drydocking following acquisition, upon which the cost is capitalized and the process is repeated. When a vessel is disposed, any unamortized drydocking expenditure is charged against income in the period of disposal.

F-15

Vessel reactivation costs incurred on vessels leaving lay-up include both costs of a capital and expense nature. The capital costs include the addition of new equipment or modifications to the vessel which enhance or increase the operational efficiency and functionality of the vessel. These expenditures are capitalized and depreciated over the remaining useful life of the vessel. Expenditures of a routine repairs and maintenance nature that do not improve the operating efficiency or extend the useful lives of the vessels are expensed as incurred as mobilization costs.

Useful lives applied in depreciation are as follows:



Vessels	40 years
Deferred drydocking expenditure	two to five years
Office equipment and fittings	three to six years

Asset under development

An asset is classified as asset under development when there is a firm commitment from us to proceed with the construction of the asset and the likelihood of conversion is virtually certain to occur. An asset under development is classified as non-current and is stated at cost. All costs incurred during the construction of the asset, including conversion installment payments, interest, supervision and technical costs are capitalized. Interest costs directly attributable to construction of the asset is added to the cost of the asset. Capitalization ceases and depreciation commences once the asset is completed and available for its intended use.

Held-for-sale assets and disposal group

Individual assets or subsidiaries to be disposed of, by sale or otherwise in a single transaction, are classified as “held-for-sale” if the following criteria are met at the period end:


•	Management, having the authority to approve the action, commits to a plan to sell the vessel;


•	The non-current asset or subsidiaries are available for immediate sale in its present condition subject only to terms that are usual and customary for such sales;


•	An active program to locate a buyer and other actions required to complete the plan to sell have been initiated;


•	The sale is probable; and


•	The transfer is expected to qualify for recognition as a completed sale, within one year.

The term probable refers to a future sale that is likely to occur, the asset or subsidiaries (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

A disposal group is classified as discontinued operations if the following criteria are met: (1) a component of an entity or group of components that has been disposed of by sale, disposed of other than by sale or is classified as held-for-sale that represents a strategic shift that has or will have a major effect on our financial results or (2) an acquired business or non-profit activity (the entity to be sold) that is classified as held-for-sale on the date of the acquisition.

Assets or subsidiaries held for sale are carried at the lower of their carrying amount and fair value less costs to sell. Interest and other expenses attributable to the liabilities of a disposal group classified as held-for-sale shall continue to be accrued. On classification as held-for-sale, the assets are no longer depreciated.

Impairment of long-term assets

We continually monitor events and changes in circumstances that could indicate carrying amounts of long-term assets may not be recoverable. When such events or changes in circumstances are present, we assess the recoverability of long-term assets by determining whether the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the total of the future cash flows is less than the carrying amount of those assets, we recognize an impairment loss based on the excess of the carrying amount over the lower of the fair market value of the assets, less cost to sell, and the net present value (“NPV”) of estimated future undiscounted cash flows from the employment of the asset (“Value in use”).

F-16

Our estimates of fair market value assume that our vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified in class without notations of any kind. Our estimates for our LNG carriers are based on approximate vessel market values that have been received from third party ship brokers, which are commonly used and accepted by our lenders for determining compliance with the relevant covenants in our credit facilities. Vessel values can be highly volatile, such that our estimates may not be indicative of the current or future market value of our vessels or prices that we could achieve if we were to sell.

Other-than temporary impairment of investments

Where there are indicators that fair value is below carrying value of our investments, we will evaluate these for other-than-temporary impairment. Consideration will be given to (1) the length of time and the extent to which fair value is below carrying value, (2) the financial condition and near-term prospects of the investee, and (3) our intent and ability to hold the investment until any anticipated recovery. Where determined other-than-temporary impairment, we will recognize an impairment loss in the period.

Interest costs capitalized

Interest is capitalized on all qualifying assets that require a period of time to get them ready for their intended use. Qualifying assets consist of vessels under construction, assets under development and vessels undergoing conversion into FSRUs or FLNGs for our own use. The interest capitalized is calculated using the rate of interest on the loan to fund the expenditure or our weighted average cost of borrowings where appropriate, from commencement of the newbuilding and conversion work until substantially all the activities necessary to prepare the assets for its intended use are complete.

If our financing plans associate a specific borrowing with a qualifying asset, we use the rate on that borrowing as the capitali z ation rate to be applied to that portion of the average accumulated expenditures for the asset provided that does not exceed the amount of that borrowing. We do not capitali z e amounts beyond the actual interest expense incurred in the period.

Deferred charges

Costs associated with long-term financing, including debt arrangement fees are deferred and amortized over the term of the relevant loan. These costs are presented as a deduction from the corresponding liability, consistent with debt discounts.

Derivatives

We use derivatives to reduce market risks associated with our operations. We use interest rate swaps for the management of interest rate risk exposure. The interest rate swaps effectively convert a portion of our debt from a floating to a fixed rate over the life of the transactions without an exchange of underlying principal.

We seek to reduce our exposure to fluctuations in foreign exchange rates through the use of foreign currency forward contracts.

From time to time, we enter into equity swaps. Under these facilities, we swap with our counterparty (usually a major bank) the risk of fluctuations in our share price and the benefit of any dividends, for a fixed payment of LIBOR plus margin. The counterparty may acquire shares in the Company to hedge its own position.

All derivative instruments are initially recorded at cost as either assets or liabilities in the accompanying Consolidated Balance Sheet and subsequently remeasured to fair value, regardless of the purpose or intent for holding the derivative. Where the fair value of a derivative instrument is a net liability, the derivative instrument is classified in "Other current liabilities" in the Consolidated Balance Sheet. Where the fair value of a derivative instrument is a net asset, the derivative instrument is classified in "Other non-current assets" in the Consolidated Balance Sheet. The method of recognizing the resulting gain or loss is dependent on whether the derivative contract is designed to hedge a specific risk and also qualifies for hedge accounting. The Company has historically hedge accounted for certain of its interest rate swap arrangements designated as cash flow hedges. However since 2015, the Company ceased hedge accounting for any of its derivatives. For derivative instruments that are not designated or do not qualify as hedges under the guidance, the changes in fair value of the derivative financial instrument are recognized each period in current earnings in "Other financial items" in the Consolidated Statement of Operations.

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When a derivative is designated as a cash flow hedge, we formally document the relationship between the derivative and the hedged item. This documentation includes the strategy risk and risk management for undertaking the hedge and the method that will be used to assess effectiveness of the hedge. If the derivative is an effective hedge, changes in the fair value are initially recorded as a component of accumulated other comprehensive income in equity. The ineffective portion of the hedge is recognized immediately in earnings, as are any gains or losses on the derivative that are excluded from the assessment of hedge effectiveness. We do not apply hedge accounting if we determine that the hedge was not effective or will no longer be effective, the derivative was sold or exercised, or the hedged item was sold or repaid.

In the periods when the hedged items affect earnings, the associated fair value changes on the hedged derivatives are transferred from equity to the corresponding earnings line item on the settlement of a derivative. The ineffective portion of the change in fair value of the derivative financial instrument is immediately recognized in earnings. If a cash flow hedge is terminated and the originally hedged item is still considered probable of occurring, the gains and losses initially recognized in equity remain there until the hedged item impacts earnings at which point they are transferred to the corresponding earnings line item (i.e. interest expense). If the hedged items are no longer probable of occurring, amounts recognized in equity are immediately reclassified to earnings.

Cash flows from derivative instruments that are accounted for as cash flow hedges are classified in the same category as the cash flows from the items being hedged. Cashflows from economic hedges are classified in the same category from the items subject to the economic hedging relationship.

Convertible bonds

In accordance with accounting guidance "Debt with conversion and other options", we account for debt instruments with convertible features in accordance with the details and substance of the instruments at the time of their issuance. For convertible debt instruments issued at a substantial premium to equivalent instruments without conversion features, or those that may be settled in cash upon conversion, it is presumed that the premium or cash conversion option represents an equity component.

Accordingly, we determine the carrying amounts of the liability and equity components of such convertible debt instruments by first determining the carrying amount of the liability component by measuring the fair value of a similar liability that does not have an equity component. The carrying amount of the equity component representing the embedded conversion option is then determined by deducting the fair value of the liability component from the total proceeds from the issue. The resulting equity component is recorded, with a corresponding offset to debt discount which is subsequently amortized to interest cost using the effective interest method over the period the debt is expected to be outstanding as an additional non-cash interest expense. Transaction costs associated with the instrument are allocated pro-rata between the debt and equity components.

For conventional convertible bonds which do not have a cash conversion option or where no substantial premium is received on issuance, it may not be appropriate to separate the bond into the liability and equity components.

Provisions

In the ordinary course of business, we are subject to various claims, law suits and complaints. Management, in consultation with internal and external advisers, will provide for a contingent loss in the financial statements if the contingency had occurred at the date of the financial statements and the likelihood of loss was probable and the amount can be reasonably estimated. If we determine that the reasonable estimate of the loss is a range and there is no best estimate within the range, we will provide the lower amount within the range.

Pensions

Defined benefit pension costs, assets and liabilities requires adjustment of the significant actuarial assumptions annually to reflect current market and economic conditions. Our accounting policy states that full recognition of the funded status of defined benefit pension plans is to be included within our balance sheet. The pension benefit obligation is calculated by using a projected unit credit method.

Defined contribution pension costs represent the contributions payable to the scheme in respect of the accounting period and are recorded in the Consolidated Statement of Operations.

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Guarantees

Guarantees issued by us, excluding those that are guaranteeing our own performance, are recognized at fair value at the time that the guarantees are issued, or upon the deconsolidation of a subsidiary, and reported in "Other long-term liabilities." A liability for the fair value of the obligation undertaken in issuing the guarantee is recognized. If it becomes probable that we will have to perform under a guarantee, we will recognize an additional liability if the amount of the loss can be reasonably estimated. The recognition of fair value is not required for certain guarantees such as the parent's guarantee of a subsidiary's debt to a third party. For those guarantees excluded from the above guidance requiring the fair value recognition provision of the liability, financial statement disclosures of such items are made.

Treasury shares

Treasury shares are recognized as a separate component of equity at cost. Upon subsequent disposal of treasury shares, any consideration is recognized directly in equity.

Stock-based compensation

In accordance with the guidance on "Share Based Payment", we are required to expense the fair value of stock options issued to employees over the period the options vest. We amortize stock-based compensation for awards on a straight-line basis over the period during which the employee is required to provide service in exchange for the reward - the requisite service (vesting) period. No compensation cost is recognized for stock options for which employees do not render the requisite service. The fair value of employee share options is estimated using the Black-Scholes option-pricing model.

Earnings per share

Basic earnings per share ("EPS") is computed based on the income available to common stockholders and the weighted average number of shares outstanding for basic EPS. Treasury shares are not included in the calculation. Diluted EPS includes the effect of the assumed conversion of potentially dilutive instruments. Such potentially dilutive common shares are excluded when the effect would be to increase earnings per share or reduce a loss per share.

Operating leases

Initial direct costs (those directly related to the negotiation and consummation of the lease) are deferred and allocated to earnings over the lease term. Rental income and expense are amortized over the lease term on a straight-line basis.

Income taxes

Income taxes are based on a separate return basis. The guidance on "Accounting for Income Taxes" prescribes a recognition threshold and measurement attributes for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

Deferred tax assets and liabilities are recognized principally for the expected tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Realization of the deferred income tax asset is dependent on generating sufficient taxable income in future years.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on the tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Income tax relating to items recognized directly in the statement of comprehensive income is recognized in the statement of changes in equity and not in the statement of operations.

Penalties and interest related to uncertain tax positions are recognized in “Income taxes” in the Consolidated Statements of Operations.

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Related parties

Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or significant influence.

Gain on issuance of shares by subsidiaries

We recognize a gain or loss when a subsidiary issues its stock to third parties at a price per share in excess or below its carrying value resulting in a reduction in our ownership interest in the subsidiary. The gain or loss is recorded in the line "Additional paid-in capital".

Gain on disposals to Golar Partners

Where we have a gain or loss upon disposal of a subsidiary or business to Golar Partners, or where a subsidiary or business is deconsolidated, the gain or loss is recognized in the income statement at the time of sale as a component of operating income.

LNG trading

We trade in physical cargoes, futures, swaps and options, all of which are traded on and recognized in liquid markets. Purchases and sales are recognized on the trade date. Open trading positions are stated at fair value based on closing market price on the balance sheet date. The market values of open positions are shown in debtors if positive or creditors if negative. Realized and unrealized gains and losses are recognized in current earnings in "Other operating gains and losses".

Contracts to buy and sell physical cargoes for future delivery settled on the bill of lading date are recognized at their fair value at the balance sheet date.

Segment reporting

A segment is a distinguishable component of the business that is engaged in business activities from which we earn revenues and incur expenses whose operating results are regularly reviewed by the chief operating decision maker, and which are subject to risks and rewards that are different from those of other segments. We have identified four reportable industry segments: vessel operations, LNG trading, FLNG and Power (see note 8).

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3.	SUBSIDIARIES

The following table lists our significant subsidiaries and their purpose as at December 31, 2016 . Unless otherwise indicated, we own a 100% controlling interest in each of the following subsidiaries.



Name	Jurisdiction of Incorporation	Purpose
Golar LNG 2216 Corporation	Marshall Islands	Owns Golar Arctic
Golar Management Limited	United Kingdom	Management company
Golar Management Malaysia Sdn. Bhd.	Malaysia	Management company
Golar Management Norway AS	Norway	Management company
Golar GP LLC – Limited Liability Company	Marshall Islands	Holding company
Golar LNG Energy Limited	Bermuda	Holding company
Golar Gimi Corporation	Marshall Islands	Owns Gimi
Golar Hilli Corporation (89%)*	Marshall Islands	Owns Hilli
Golar Gandria N.V.	Netherlands	Owns and operates Gandria
Golar Hull M2021 Corporation	Marshall Islands	Leases and operates Golar Seal**
Golar Hull M2022 Corporation	Marshall Islands	Owns and operates Golar Crystal
Golar Hull M2027 Corporation	Marshall Islands	Owns and operates G olar Bear
Golar Hull M2047 Corporation	Marshall Islands	Leases and operates Golar Snow**
Golar Hull M2048 Corporation	Marshall Islands	Leases and operates Golar Ice**
Golar LNG NB10 Corporation	Marshall Islands	Leases and operates Golar Glacier**
Golar LNG NB11 Corporation	Marshall Islands	Leases and operates Golar Kelvin**
Golar LNG NB12 Corporation	Marshall Islands	Owns and operates Golar Frost
Golar Tundra Corporation	Marshall Islands	Leases Golar Tundra**
GVS Corporation	Marshall Islands	Owns and operates Golar Viking

* The Hilli was sold to Golar Hilli Corporation prior to the commencement of her conversion to a FLNG. Keppel Shipyard Limited and Black & Veatch hold the remaining 10% and 1% interest, respectively, in the issued share capital of Golar Hilli Corporation.

** The above table excludes mention of the lessor variable interest entities (''lessor VIEs'') that we have leased vessels from under finance leases. The lessor VIEs are wholly-owned, newly formed special purpose vehicles ("SPVs") of financial institutions. While we do not hold any equity investments in these SPVs, we have concluded that we are the primary beneficiary of these lessor VIEs and accordingly have consolidated these entities into our financial results. Refer to note 4 for additional detail.



4.	VARIABLE INTEREST ENTITIES ("VIE")

As of December 31, 2016, we leased six vessels (December 31, 2015: five vessels) from VIEs under finance leases, of which four were with ICBC Finance Leasing Co. Ltd, or ICBCL, entities, one was with a subsidiary of China Merchants Bank Co. Ltd, or CMBL, and one was with CCB Financial Leasing Corporation Limited, or CCBFL. Each of the ICBCL, CMBL and CCBFL entities are wholly-owned, newly formed SPVs.

ICBCL Lessor VIEs

Commencing in October 2014, we sold the Golar Glacier , followed by the remaining three newbuilds (the Golar Kelvin , Golar Snow and Golar Ice ) to ICBCL entities in the first quarter of 2015. The vessels were simultaneously leased back on bareboat charters for a term of ten years . We have several options to repurchase the vessels at fixed predetermined amounts during the charter periods with the earliest date from the fifth year anniversary of commencement of the bareboat charter, and an obligation to purchase the assets at the end of the ten year lease period.

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CMBL Lessor VIE

In November 2015, we sold the Golar Tundra to a CMBL entity and subsequently leased back the vessel on a bareboat charter for a term of ten years . We have options to repurchase the vessel throughout the charter term at fixed pre-determined amounts, commencing from the third year anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the ten year lease period.

CCBFL Lessor VIE

In March 2016, we sold the Golar Seal to a CCBFL entity and subsequently leased back the vessel on a bareboat charter for a term of ten years. We have options to repurchase the vessel throughout the charter term at fixed pre-determined amounts, commencing from the fifth year anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the ten year lease period.

While we do not hold any equity investments in the above ICBCL, CMBL and CCBFL SPVs, we have determined that we have a variable interest in these SPVs and that these lessor entities, that own the vessels, are VIEs. Based on our evaluation of the agreements, we have concluded that we are the primary beneficiary of these VIEs and, accordingly, these VIEs are consolidated into our financial results. We did not record any gains or losses from the sale of these vessels as they continued to be reported as vessels at their original costs in our consolidated financial statements at the time of each transaction. The equity attributable to ICBCL, CMBL and CCBFL in their respective VIEs are included in non-controlling interests in our consolidated results. As of December 31, 2016 and 2015, the respective vessels are reported under “Vessels and equipment, net” in our consolidated balance sheet.

The following table gives a summary of the sale and leaseback arrangements, including repurchase options and obligations as of December 31, 2016:



Vessel	Effective from	Sales value (in $ millions)	First repurchase option (in $ millions)	Date of first repurchase option	Repurchase obligation at end of lease term (in $ millions)	End of lease term
Golar Glacier	October 2014	204.0	173.8	October 2019	142.7	October 2024
Golar Kelvin	January 2015	204.0	173.8	January 2020	142.7	January 2025
Golar Snow	January 2015	204.0	173.8	January 2020	142.7	January 2025
Golar Ice	February 2015	204.0	173.8	February 2020	142.7	February 2025
Golar Tundra	November 2015	254.6	194.1	November 2018	101.8	November 2025
Golar Seal	March 2016	203.0	132.8	March 2021	87.4	March 2026

A summary of our payment obligations (excluding repurchase options and obligations) under the bareboat charters with the lessor VIEs as of December 31, 2016, are shown below:



(in $ thousands)	2017	2018	2019	2020	2021	2022+
Golar Glacier	17,100	17,100	17,100	17,147	17,100	47,084
Golar Kelvin	17,100	17,100	17,100	17,147	17,100	49,895
Golar Snow	17,100	17,100	17,100	17,147	17,100	49,895
Golar Ice	17,100	17,100	17,100	17,147	17,100	52,800
Golar Tundra ⁽¹⁾⁽²⁾	20,910	20,446	19,934	19,466	18,953	68,097
Golar Seal	15,151	15,151	15,193	15,151	15,151	60,646

⁽¹⁾ As a result of the sale of the Golar Tundra to Golar Partners in May 2016 (see "Tundra Corp VIE" below), the payment obligations under the bareboat charter with the Golar Tundra lessor VIE are borne by Golar Partners. However, by virtue of the put option contained within the sale and purchase arrangements, we will continue to consolidate the Golar Tundra related entities until the charter with WAGL commences.

⁽²⁾ This includes variable rental payments due under the lease based on an assumed LIBOR of 0.39% plus margin.

The assets and liabilities of the ICBCL, CMBL and CCBFL lessor VIEs that most significantly impact our consolidated balance sheet as of December 31, 2016 and 2015, are as follows:

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(in $ thousands)	Golar Glacier	Golar Kelvin	Golar Snow	Golar Ice	Golar Tundra	Golar Seal	2016	2015
Assets							Total	Total
Restricted cash and short-term deposits (see note 20)	10,912	35,369	12,230	10	—	11,332	69,853	35,450
Restricted cash - held-for-sale current assets ⁽¹⁾ (see note 19)	—	—	—	—	168	—	168	3,618
	10,912	35,369	12,230	10	168	11,332	70,021	39,068

Liabilities
Debt:
Short-term interest bearing debt (see note 25)	31,648	182,540	22,384	152,056	—	—	388,628	408,978
Long-term interest bearing debt - current portion (see note 25)	7,650	—	8,000	—	—	5,882	21,532	15,650
Long-term interest bearing debt - non-current portion (see note 25)	129,068	—	138,933	—	—	151,238	419,239	285,700
Short-term interest bearing debt - held-for-sale ⁽¹⁾ (see note 19)	—	—	—	—	205,145	—	205,145	201,725
	168,366	182,540	169,317	152,056	205,145	157,120	1,034,544	912,053

⁽¹⁾ The assets and liabilities relating to the Golar Tundra lessor VIE have been reclassified as “held-for-sale” in connection with the sale of our interests in the companies that own and operate the vessel to Golar Partners (see note 19).

The most significant impact of the consolidated SPVs' operations on our consolidated statements of operations is interest expense of $44.3 million , $31.6 million and $2.1 million for the years ended December 31, 2016 , 2015 and 2014, respectively. The most significant impact of the consolidated SPVs' cash flows on our consolidated statements of cash flows is net cash received in financing activities of $154.2 million , $704.2 million and $185.6 million for the years ended December 31, 2016 , 2015 and 2014, respectively.

Tundra Corp VIE

In February 2016, we entered into a sale and purchase agreement with Golar Partners for the sale of the disponent owner and operator of the FSRU the Golar Tundra ("Tundra Corp"). The transaction closed in May 2016. Concurrent with the closing we entered into an agreement with Golar Partners which includes a put option, that in the event the vessel has not commenced service under the charter with WAGL by May 23, 2017, Golar Partners shall have the option to require that we repurchase the Tundra Corp equal to the purchase consideration. Accordingly, we have determined that Tundra Corp is a VIE and that until the put option expires, we remain the primary beneficiary and thus we will continue to consolidate the entities that own and lease the Golar Tundra until her charter with WAGL commences (see note 31).



5.	RECENTLY ISSUED ACCOUNTING STANDARDS

Adoption of new accounting standards

In August 2014, the Financial Accounting Standards Board (the "FASB") issued guidance to ASU 2014-15 " Presentation of Financial Statements - Going Concern (Subtopic 205-40) ". The standard requires an entity’s management to evaluate, for each reporting period, whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued. Additional disclosures are required if management concludes that conditions or events raised substantial doubt about the entity’s ability to continue as a going concern. The adoption of this guidance has had no material impact on our Consolidated Financial Statements and related disclosures.

In November 2014, the FASB issued ASU 2014-16 “Derivatives and Hedging”. The guidance provides a methodology for determining the nature of a host contract in a hybrid instrument. The amendment requires an entity to assess the entire hybrid instrument including any embedded derivatives which are being considered for bifurcation. The purpose of the guidance was to eliminate divergence in practice. The adoption of this guidance did not have an impact on our Consolidated Financial Statements

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and related disclosures.

In February 2015, the FASB issued ASU 2015-02 " Amendments to the Consolidation Analysis", amendments to ASC 810, requiring re-evaluation of all legal entities under the revised consolidation model. This is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Specifically, the amendments:


•	modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities;


•	eliminate the presumption that a general partner should consolidate a limited partnership;


•	affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships; and


•	provide a scope exception from consolidation guidance for reporting entities with interest in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds.

The adoption of this guidance has had no material impact on our Consolidated Financial Statements and related disclosures.

In July 2015 the FASB issued ASU 2015-12 " Plan Investment Disclosures, Part II" to reduce complexity in employee benefit plan accounting. The objective of the update is to reduce the complexity and disclosure requirements under ASC 960, 962, and 965. The adoption of this guidance has had no material impact on our disclosures made pertaining to our employee benefit plan.

In March 2016, the FASB issued ASU 2016-07 “ Investments - Equity Method and Joint Ventures: Simplifying the Transition to the Equity Method of Accounting ”. The update eliminates the requirement that when an investment qualifies for use of the equity method as a result of an increase in the level of ownership interest or degree of influence an investor must retrospectively apply equity method accounting as if the equity method had been in effect during all previous periods. A prospective approach is required and the amendment is effective for fiscal years beginning after December 15, 2016. In accordance with the guidance, management has elected to early adopt which had no impact on our Consolidated Financial Statements and related disclosures.

Accounting pronouncements that have been issued but not adopted

In May 2014, the FASB issued ASU 2014-09 " Revenue from Contracts With Customers (Topic 606) " and subsequent amendments. The standard provides a single, comprehensive revenue recognition model and requires an entity to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard introduces a new concept of “series provision” which provides accounting guidance for entities that engage in repetitive service contracts. There are also new requirements which impact the timing of costs that are reimbursed at the start or near the inception of a contract. The guidance is effective from January 1, 2018 and requires enhanced disclosures. It may be applied retrospectively to each prior period presented subject to practical expedients (“full retrospective”) or a cumulative-effect adjustment as of the date of adoption (“modified retrospective approach”).

We are currently in the process of evaluating the impact that the standard could have on our revenue. Specifically we are assessing if the revised agent-principal guidance will have an Income Statement classification impact for revenue earned under ASC 808 “Collaborative Arrangements”. In addition we are assessing whether the timing of our management services income and time charter revenues will be impacted under the new standard. Depending on the conclusion, the timing of our revenue could differ, however, the total amount earned from contracts over all periods will remain the same. We expect to finalize our assessment in the second half of the year.

In March 2016, the FASB issued guidance to ASU 2016-02 " Leases (Topic 842) ". This update requires an entity to recognize right-of-use assets and lease liabilities on its balance sheet and disclose key information about leasing arrangements regarding timing and uncertainty of cash flows arising from leases. It also offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. The standard will be effective for fiscal years beginning after December 15, 2018 including interim periods within those fiscal years, and early adoption is permitted. The Company is in the process of evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.

In July 2015, the FASB issued ASU 2015-11 " Inventory: Simplifying the Measurement of Inventory" , amendments to ASC 330 that simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value. The guidance is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016. We believe the adoption of this guidance will not have a material impact on our Consolidated Financial Statements and related disclosures.

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In January 2016, the FASB issued amendments to ASU 2016-01 " Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities ", which made targeted improvements to the recognition, measurement, presentation, and disclosure of financial instruments. The update changes how entities measure equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) and how they present changes in the fair value of financial liabilities measured under the fair value option that are attributable to their own credit. The guidance also provides for enhanced disclosures. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. We are currently in the process of evaluating the impact of this standard on its Consolidated Financial Statements and related disclosures.

In March 2016, the FASB issued ASU 2016-06 “Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments” which clarifies the requirements for assessing whether contingent call (put) options that can accelerate the payment of principal on debt instruments are clearly and closely related to their debt hosts. The entities will be effective for financial statements after December 15, 2016 and interim periods within those fiscal years. The amendments should be applied on a modified retrospective basis to existing debt instruments as of the beginning of the fiscal year for which the amendments are effective. We are assessing the impact of this update on our Consolidated Financial Statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09 " Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ". This standard primarily requires the recognition of excess tax benefits for share-based awards in the statement of operations and the classification of excess tax benefits as an operating activity within the statement of Cash Flows. The guidance allows an entity to elect to account for forfeitures when they occur. The new standard is effective for annual reporting periods beginning after December 15, 2016. The company is currently in the process of evaluating the impact of this standard on our Consolidated Financial Statements and related disclosures.

In August 2016, the FASB issued guidance to ASU 2016-15 " Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments ". The guidance addresses eight cash flow related issues including distributions received from equity investees. The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods therein. Early adoption is permitted. We are assessing what impact the adoption of this guidance will have on our Statement of Consolidated Cash Flows.

In October 2016, the FASB issued guidance to ASU 2016-16 " Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory " to improve the accounting for the income tax consequences of intra-entity transfers of assets other than inventory. The impact would be that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Consequently, the amendments in this update eliminate the exception for an intra-entity transfer of an asset other than inventory. The amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. We are assessing what impact, if any, the adoption of this guidance will have on our Consolidated Financial Statement and related disclosures.

In November 2016, the FASB issued guidance to ASU 2016-18 " Statement of Cash Flows (Topic 230): Restricted Cash ", which requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts described as restricted cash or restricted cash equivalents. In essence amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on cash flow. The amendments are effective for fiscal years beginning after December 15, 2017, and interim periods therein. Early adoption is permitted, including adoption in an interim period. We are assessing what impact the adoption of this guidance will have on our Statement of Consolidated Cash Flows.

In January 2017, the FASB issued guidance to ASU 2017-01 " Business Combinations (Topic 805): Clarifying the Definition of a Business ". The amendments provide guidance on evaluating whether transactions should be accounted for as an asset acquisition or a business combination (or disposal). The guidance requires that in order to be considered a business, a transaction must include, at a minimum, an input and a substantial process that together significantly contribute to the ability to create output. The guidance removes the evaluation of whether a market participant could replace the missing elements. The revised guidance is effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. The amendments are to be applied prospectively. Preliminarily, management believe that this could impact the accounting for disposals to its affiliates but is currently evaluating the impact that the standard will have on future transactions.

In February 2017, the FASB issued ASU 2017-05 “ Other Income - Gains and Losses from the Derecognition of Non-Financial Assets ”. The guidance provides clarification on the definition of “in substance non-financial assets”, the scope exemption with ASC 610 and partial sales of non-financial assets. The guidance is effective for periods beginning after December 15, 2017. We are assessing what impact, if any, the adoption of this guidance will have our Consolidated Financial Statements and related disclosures.

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In March 2017, the FASB issued ASU 2017-07 "Compensation - Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost" , primarily to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. Under generally accepted accounting principles (GAAP), defined benefit pension cost and postretirement benefit cost (net benefit cost) comprise several components that reflect different aspects of an employer’s financial arrangements as well as the cost of benefits provided to employees. Those components are aggregated for reporting in the financial statements. Topic 715, Compensation- Retirement Benefits, does not prescribe where the amount of net benefit cost should be presented in an employer’s income statement and does not require entities to disclose by line item the amount of net benefit cost that is included in the income statement or capitalized in assets. The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2017. We are assessing what impact, if any, the adoption of this guidance will have on our Consolidated Financial Statements and related disclosures.



6.	DISPOSALS TO GOLAR PARTNERS

In January 2015, we sold our interests in the company that owns and operates the Golar Eskimo to Golar Partners.



(in thousands of $)	Golar Eskimo
Cash consideration received ⁽¹⁾	226,010
Carrying value of the net assets sold to Golar Partners	(123,604	)
Gain on disposal	102,406

The gain from the sale of the Golar Eskimo in January 2015 was $102.4 million and has been recognized in the consolidated statements of operation under "Gain on disposals to Golar Partners" for the year ended December 31, 2015.

(1) The cash consideration for the Golar Eskimo comprised of $390.0 million for the vessel and charter less the assumed bank debt of $162.8 million less purchase price adjustments of $1.2 million .

In March 2014, we sold our interests in the company that owns and operates the Golar Igloo to Golar Partners.



(in thousands of $)	Golar Igloo
Cash consideration received ⁽²⁾	156,001
Carrying value of the net assets sold to Golar Partners	(112,714	)
Gain on disposal	43,287

The gain from the sale of the Golar Igloo in March 2014 was $43.3 million and has been recognized in the consolidated statements of operation under "Gain on disposals to Golar Partners" for the year ended December 31, 2014.

(2) The cash consideration for the Golar Igloo comprised of $ 310.0 million for the vessel and charter less the assumed bank debt of $ 161.3 million plus purchase price adjustments of $ 7.3 million .



7.	DECONSOLIDATION OF GOLAR POWER ENTITIES

In June 2016, we entered into certain agreements forming a 50/50 joint venture, Golar Power Ltd ("Golar Power"), with investment vehicles affiliated with the private equity firm Stonepeak Infrastructure Partners ("Stonepeak"). The purpose of Golar Power is to offer integrated LNG based downstream solutions through the ownership and operation of FSRUs and associated terminal and power generation infrastructure. The transaction closed on July 6, 2016 with the receipt of net proceeds of $113 million from the disposal of 50% of our holding in the ordinary share capital of Golar Power to Stonepeak. Accordingly, effective from this date, we deconsolidated the results and net assets relating to the two vessels; the Penguin and the Celsius , the newbuild FSRU 8 and LNG Power Limited which holds the rights to participate in the Sergipe Power Plant project. On the same date, we commenced equity accounting for our residual interest in Golar Power and we recorded an investment in Golar Power of $116 million , which represents the fair value of our remaining 50% holding in Golar Power's ordinary share capital. We calculated a loss on disposal of $8.5 million , which is based on estimates and thus subject to change, including finalization of certain post-closing adjustments relating to working capital.

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The table below illustrates how the loss on loss of control has been calculated:



(in thousands of $)	As of July 6, 2016
Net proceeds (a)	113,000
Fair value of 50% retained investment in Golar Power (b)	116,000
Fair value of counter guarantees from Golar Power (c)	3,701
Total fair value of Golar Power	232,701

Less:
Carrying value of Golar Power’s net assets (d)	236,713
Guarantees issued by Golar to Golar Power (e)	4,471

Loss on loss of control of Golar Power	(8,483	)

(a) Net proceeds received for the disposal of 50% in Golar Power

The table below shows the purchase consideration we received for the disposal of a 50% interest in the ordinary share capital in Golar Power that was acquired by Stonepeak:



(in thousands of $)	As of July 6, 2016
Consideration received from Stonepeak	116,000
Less: Fee paid in relation to the transaction (see note 31)	(3,000	)
Net proceeds	113,000

(b) Fair value of the retained investment in Golar Power

The fair value of our retained investment, being the 50% interest in the ordinary share capital in Golar Power has been recorded at $116 million . The fair value was determined with reference to the consideration of $116 million we received from Stonepeak pertaining to the 50% ordinary share capital interest they acquired. Thus given that this was negotiated between third parties, this is representative of fair value.

A number of counter guarantees were entered into by Golar Power for the benefit of Golar LNG, specifically to reimburse Golar for the historic legacy debt guarantees discussed in (e) below. In aggregate, based on the agreed premiums the fair value of these counter guarantees were calculated as $3.7 million .

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(d) Carrying value of Golar Power's net assets

The table below shows the underlying carrying value of Golar Powers' net assets at the deconsolidation date:



(in thousands of $)	As at July 6, 2016
ASSETS
Current
Cash and cash equivalents	10,992
Restricted cash	15,463
Trade accounts receivable	1,474
Other receivables, prepaid expenses and accrued income	178
Short term amounts due from related parties	3,000
Inventory	952
Total current assets	32,059
Non-current
Newbuildings	50,436
Vessels, net	387,261
Total assets	469,756

LIABILITIES AND STOCKHOLDERS' EQUITY
Current
Current portion of long-term debt	20,032
Trade accounts payable	969
Accrued expenses	21,357
Total current liabilities	42,358
Non-current
Long-term debt	190,685
Total liabilities	233,043

Equity
Stockholders’ equity	236,713

Total liabilities and stockholders' equity	469,756

(e) Guarantees issued by Golar to Golar Power

In accordance with ASC 460, the guarantees issued by us in respect of Golar Power and its subsidiaries (previously not recognized) were fair valued as of the deconsolidation date which amounted to a liability of $4.5 million . This comprises of the following items:



(in thousands of $)		As of July 6, 2016
Debt guarantees		3,283
Shipyard guarantee		1,188
Total guarantees		4,471

Debt guarantees - The debt guarantees were previously issued by Golar to third party banks in respect of certain secured debt facilities relating to Golar Power and subsidiaries. The liability which is recorded in "Other long-term liabilities" is being amortized over the remaining term of the respective debt facilities with the credit being recognized in "Other financial items". See "Transactions with Golar Power and subsidiaries" in note 31.

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Shipyard guarantee - Golar has provided Samsung with a guarantee of settlement in relation to the shipbuilding contract of Golar FSRU 8, which now forms part of Golar Power's asset base. The liability which is recorded in "Other current liabilities" is being amortized on a straight line basis until delivery of the vessel with the credit being recognized in "Other financial items". See "Transactions with Golar Power and subsidiaries" in note 31.



8.	SEGMENT INFORMATION

Since the initial public offering ("IPO") of Golar Partners, we have become a project development company. Our reportable segments consist of the primary services each provides. We own and operate LNG carriers and FSRUs and provide these services under time charters under varying periods, trade in physical and future LNG contracts, are in the process of developing our first FLNG and have entered the power market in an effort to become a midstream LNG solution provider. Although our segments are generally influenced by the same economic factors, each represents a distinct product in the LNG industry. There have not been any intersegment sales during the periods presented. Segment results are evaluated based on net income. The accounting principles for the segments are the same as for our consolidated financial statements. Indirect general and administrative expenses are allocated to each segment based on estimated use.

The split of the organization of the business into four reportable segments is based on differences in management structure and reporting, economic characteristics, customer base, asset class and contract structure. As of December 31, 2016 , we operate in the following four reportable segments:


•	Vessel operations – We operate and subsequently charter out LNG carriers and FSRUs on fixed terms to customers.


•	LNG trading – We provide physical and financial risk management in LNG and gas markets for customers around the world. Activities include structured services to outside customers, arbitrage service as well as proprietary trading.

The LNG trading operations meets the definition of an operating segment as the business is a financial trading business and its financial results are reported directly to the chief operating decision maker. The LNG trading segment is a distinguishable component of the business from which we earn revenues and incur expenses and whose operating results are regularly reviewed by the chief operating decision maker, and which is subject to risks and rewards different from the vessel operations segment.


•	FLNG – In 2014, we ordered our first FLNG based on the conversion of our existing LNG carrier, the Hilli. The Hilli FLNG conversion is expected to commence commissioning in 2017.

FLNG meets the definition of an operating segment as the business is a distinguishable component of the business from which, once the first FLNG is delivered to us, we will earn revenues and incur expenses and whose operating results will be regularly reviewed by the chief operating decision maker and, due to its nature, is subject to risks and rewards different from the vessel operations segment or the LNG trading segment.


•	Power – In July 2016, we entered into certain agreements forming a 50/50 joint venture, Golar Power, with private equity firm Stonepeak. Golar Power offers integrated LNG based downstream solutions, through the ownership and operation of FSRUs and associated terminal and power generation infrastructure.

In October 2016, the Sergipe project obtained FID thus differentiating Golar Power’s risks and long term business prospects from the other reporting segments. Golar Power meets the definition of an operating segment as the business is a distinguishable component of the business from which we earn revenues and incur expenses and whose operating results will be regularly reviewed by the chief operating decision maker.

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(in thousands of $)	2016								2015							2014
	Vessel operations		LNG trading	FLNG		Power	Total		Vessel operations		LNG trading	FLNG		Total		Vessel operations		LNG trading		FLNG		Total
Time and voyage charter revenues	52,302		—	—		—	52,302		90,127		—	—		90,127		95,399		—		—		95,399
Time charter revenues - collaborative arrangement	13,730		—	—		—	13,730		—		—	—		—		—		—		—		—
Vessel and other management fees	14,225		—	—		—	14,225		12,547		—	—		12,547		10,756		—		—		10,756
Vessel and voyage operating expenses	(89,586	)	—	—		—	(89,586	)	(125,389	)	—	—		(125,389	)	(76,910	)	—		—		(76,910	)
Voyage, charter-hire and commission expenses - collaborative arrangement	(11,140	)	—	—		—	(11,140	)	—		—	—		—		—		—		—		—
Administrative expenses	(42,384	)	—	(3,576	)	—	(45,960	)	(28,657	)	—	(4,869	)	(33,526	)	(17,468	)	(64	)	(1,735	)	(19,267	)
Impairment of long-term assets	(1,706	)	—	—		—	(1,706	)	(1,957	)	—	—		(1,957	)	(500	)	—		—		(500	)
Depreciation and amortization	(72,972	)	—	—		—	(72,972	)	(73,732	)	—	—		(73,732	)	(49,561	)	(250	)	—		(49,811	)
Other operating loss	—		—	—		—	—		—		—	—		—		(6,387	)	—		—		(6,387	)
Other operating gains - LNG trade	—		16	—		—	16		—		—	—		—		—		1,317		—		1,317
Gain on disposals to Golar Partners (including amortization of deferred gain)	—		—	—		—	—		102,406		—	—		102,406		43,287		—		—		43,287
Impairment of vessel held-for-sale	—		—	—		—	—		(1,032	)	—	—		(1,032	)	—		—		—		—
Loss on disposal of vessel	—		—	—		—	—		(5,824	)	—	—		(5,824	)	—		—		—		—
Operating (loss) income	(137,531	)	16	(3,576	)	—	(141,091	)	(31,511	)	—	(4,869	)	(36,380	)	(1,384	)	1,003		(1,735	)	(2,116	)
Total other non-operating (loss) income	(8,615	)	—	—		—	(8,615	)	(27	)	—	—		(27	)	(446	)	718		—		272
Net financial expense	(59,541	)	—	—		—	(59,541	)	(174,619	)	—	—		(174,619	)	(87,600	)	(252	)	—		(87,852	)
Income taxes	589		—	—		—	589		3,053		—	—		3,053		1,114		—		—		1,114
Equity in net earnings of affiliates	37,344		—	—		10,534	47,878		55,985		—	—		55,985		42,220		—		—		42,220
Net (loss) income	(167,754	)	16	(3,576	)	10,534	(160,780	)	(147,119	)	—	(4,869	)	(151,988	)	(46,096	)	1,469		(1,735	)	(46,362	)
Non-controlling interests	(25,751	)	—	—		—	(25,751	)	(19,158	)	—	—		(19,158	)	(1,655	)	—		—		(1,655	)
Net (loss) income attributable to Golar LNG Ltd	(193,505	)	16	(3,576	)	10,534	(186,531	)	(166,277	)	—	(4,869	)	(171,146	)	(47,751	)	1,469		(1,735	)	(48,017	)
Total assets	3,288,497		—	968,414		—	4,256,911		3,398,394		—	870,804		4,269,198		3,538,287		1,335		360,120		3,899,742
Investment in affiliates	512,046		—	10,200		126,534	648,780		541,565		—	—		541,565		746,263		—		—		746,263
Capital expenditures	33,698		—	200,820		—	234,518		565,777		—	111,572		677,349		1,202,901		—		313,645		1,516,546

Revenues from external customers

During the year ended December 31, 2016 , our vessels operated predominately within the Cool Pool and with NFE Transport Partners LLC. During the year ended December 31, 2015 , our vessels operated under time charters with three main charterers: a major Japanese trading company, a major commodity trading company, and Nigeria LNG Ltd.

In the years ended December 31, 2016 , 2015 and 2014 , revenues from the following customers accounted for over 10% of our consolidated time and voyage charter revenues:



(in thousands of $)	2016			2015			2014
The Cool Pool ⁽¹⁾	51,075	77	%	5,771	6	%	—	—	%
NFE Transport Partners LLC	7,975	12	%	—	—	%	—	—	%
Nigeria LNG Ltd	—	—	%	37,994	42	%	—	—	%
Major commodity trading company	—	—	%	16,167	18	%	15,761	17	%
Major Japanese trading company	—	—	%	—	—	%	55,975	59	%

F-30

⁽¹⁾ The 2016 Cool Pool revenue of $51.1 million includes revenue of $13.7 million that is separately disclosed in the consolidated statements of operations as from a "collaborative arrangement". The balance of $37.3 million was derived from Golar vessels operating within the Cool Pool, and is included within the caption "Time and voyage charter revenues" in the consolidated statements of operations. See note 31.

The above revenues exclude vessel and other management fees from Golar Partners (see note 31).

Geographic segment data

In time and voyage charters for LNG carriers, the charterer, not us, controls the routes of our vessels. These routes can be worldwide as determined by the charterers. Accordingly, our management, including the chief operating decision maker, do not evaluate our performance either according to customer or geographical region except for our FSRU, the Golar Tundra , which is stationed offshore Ghana under the WAGL charter. The following geographical data presents the carrying value of the Golar Tundra as at December 31, 2016 and 2015 :



9.	IMPAIRMENT OF LONG-TERM ASSETS

Vessels

The following table presents the market values and carrying values of eight of our vessels that we have determined to have market values that are less than their carrying values as of December 31, 2016 . However, based on the estimated future undiscounted cash flows of these vessels, which are significantly greater than the respective carrying values, no impairment was recognized on these vessels.

(in thousands of $)



Vessel	2016 Market value ⁽¹⁾	2016 Carrying value	Deficit
Gandria	20,300	23,300	3,000
Golar Arctic	108,300	143,500	35,200
Golar Frost	197,300	199,500	2,200
Golar Glacier	190,500	195,000	4,500
Golar Ice	193,000	204,100	11,100
Golar Kelvin	192,000	197,200	5,200
Golar Snow	193,000	203,700	10,700
Golar Viking	111,300	120,400	9,100

⁽¹⁾ Market values are determined using reference to average broker values provided by independent brokers. Broker values are considered an estimate of the market value for the purpose of determining whether an impairment trigger exist. Broker values are commonly used and accepted by our lenders in relation to determining compliance with relevant covenants in applicable credit facilities for the purpose of assessing security quality.

Since vessel values can be volatile, our estimates of market value may not be indicative of either the current or future prices we could obtain if we sold any of the vessels. In addition, the determination of estimated market values may involve considerable judgment, given the illiquidity of the second-hand markets for these types of vessels.

Long-lived assets

The following table presents the impairment charge recognized in relation to equipment acquired due to uncertainty of the future usage of this equipment:



(in thousands of $)	2016	2015	2014
Impairment charge	1,706	1,957	500

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10.	OTHER FINANCIAL ITEMS, NET



(in thousands of $)	2016		2015		2014
Mark-to-market adjustment for interest rate swap derivatives (see note 30)	2,818		(12,798	)	(28,996	)
Interest expense on undesignated interest rate swaps (see note 30)	(10,153	)	(15,797	)	(20,424	)
Mark-to-market adjustment for equity derivatives (see note 30)	24,819		(67,925	)	(13,657	)
Mark-to-market adjustment for foreign currency derivatives (see note 30)	—		—		94
Impairment of loan ⁽¹⁾⁽²⁾	(7,627	)	(15,010	)	—
Financing arrangement fees and other costs	(404	)	(1,841	)	(7,157	)
Amortization of debt guarantee	1,563		2,800		852
Foreign exchange loss on operations	(1,909	)	(2,126	)	(1,200	)
Other	(416	)	(25	)	(295	)
	8,691		(112,722	)	(70,783	)

⁽¹⁾ Given the announcement of a negative Final Investment Decision from the Douglas Channel Project consortium in 2014, we reassessed the recoverability of the loan and accrued interest receivables from the Douglas Channel LNG Assets Partnership ("DCLAP") and concluded that DCLAP would not have the means to satisfy its obligations under the loan. Accordingly, we recognized an impairment charge of $7.6 million in 2016.

⁽²⁾ The amount for the year ended December 31, 2015 relates to the impairment of the loan due from Equinox in connection with the disposal of the Golar Viking to Equinox in February 2015.



11.	INCOME TAXES

The components of income tax expense are as follows:



(in thousands of $)	2016		2015		2014
Current tax expense:
U.K.	712		435		2,212
Norway	272		—		—
Croatia	45		—		—
Malaysia	6		—		—
Total current tax expense	1,035		435		2,212
Deferred tax expense:
U.K.	90		—		161
Amortization of tax benefit arising on intra-group transfers of long-term assets	(1,714	)	(3,488	)	(3,487	)
Total income tax benefit	(589	)	(3,053	)	(1,114	)

The income taxes for the years ended December 31, 2016, 2015 and 2014 differed from the amount computed by applying the Bermuda statutory income tax rate of 0% as follows:



	Year ended December 31
(in thousands of $)	2016		2015		2014
Income taxes at statutory rate	—		—		—
Effect of deferred tax benefit on intra-group transfers of long-term assets	(1,714	)	(3,488	)	(3,487	)
Effect of movement in other deferred tax balances	90		—		—
Effect of adjustments in respect of current tax in prior periods	(334	)	(330	)	1,411
Effect of taxable income in various countries	1,369		765		962
Total tax credit	(589	)	(3,053	)	(1,114	)

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Bermuda

Under current Bermuda law, we are not required to pay corporate income taxes or other taxes (other than duty on goods imported into Bermuda and payroll tax in respect of any Bermuda-resident employees). We have received written assurance from the Minister of Finance in Bermuda that, in the event of any such taxes being imposed, we will be exempted from taxation until March 31, 2035.

United States

Pursuant to the Internal Revenue Code of the United States (the "Code"), U.S. source income from the international operations of ships is generally exempt from U.S. tax if the company operating the ships meets certain requirements. Among other things, in order to qualify for this exemption, the company operating the ships must be incorporated in a country which grants an equivalent exemption from income taxes to U.S. citizens and U.S. corporations and must be more than 50% owned by individuals who are residents, as defined, in such country or another foreign country that grants an equivalent exemption to U.S. citizens and U.S. corporations. The management of the company believes that we satisfied these requirements and therefore by virtue of the above provisions, we were not subject to tax on our U.S. source income.

United Kingdom

Current taxation of $ 0.7 million , $0.4 million and $2.2 million for the years ended December 31, 2016 , 2015 and 2014 , respectively, relates to taxation of the operations of our United Kingdom subsidiaries. Taxable revenues in the U.K. are generated by our U.K. subsidiary companies and are comprised of management fees received from Golar group companies (including related parties) as well as revenues from the operation of certain of Golar's vessels. These vessels are sub-leased from other non-U.K Golar companies.

As at December 31, 2016 , our 2016 U.K. income tax returns have not been filed. Accordingly, once filed, the tax years 2013 to 2016 remain open for examination by the U.K. tax authorities. As at December 31, 2016 , the statutory rate in the U.K. was 20% .

There are ongoing inquiries and discussions with the U.K. tax authorities for certain subsidiaries in relation to tax depreciation claims. If the U.K. tax authorities successfully challenged the availability of the tax depreciation claims, this would impact ours or that of the lessor banks' tax returns from 2003 onwards. Further detail on this matter is included within ''Other commitments and contingencies'' (see note 33).

Deferred income tax assets are summarized as follows:



(in thousands of $)	2016	2015
Deferred tax assets, gross	4	260

We recorded deferred tax assets of $0.0 million and $0.3 million as of December 31, 2016 and 2015 , respectively, which have been classified as non-current and included within Note 22, ''Other non-current assets''. These assets relate to differences for depreciation and other temporary differences.

Other jurisdictions

Taxable income in Norway, Croatia and Malaysia relate to taxation of the operations of our Norway, Croatia and Malaysia subsidiaries and are comprised of management fees received from Golar group companies.

No tax has been levied on income derived from our subsidiaries registered in Liberia, the Marshall Islands and the British Virgin Islands. Under the Consolidated Tax Amendments Act of 2010, our Liberian subsidiaries should be considered non-resident Liberian corporations which are wholly exempted from Liberian taxation effective as of 1977.

There are no potential deferred tax liabilities arising on undistributed earnings within the Company. This is because no tax should arise on the distribution of any retained earnings.

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12.	LOSS PER SHARE

Basic earnings (loss) per share ("EPS") is calculated with reference to the weighted average number of common shares outstanding during the year. Treasury shares are not included in the calculation. The computation of diluted EPS for the years ended December 31, 2016 , 2015 and 2014 , assumes the conversion of potentially dilutive instruments.

The components of the numerator for the calculation of basic and diluted EPS are as follows:



(in thousands of $)	2016		2015		2014
Net loss attributable to Golar LNG Ltd stockholders - basic and diluted	(186,531	)	(171,146	)	(48,017	)

The components of the denominator for the calculation of basic and diluted EPS are as follows:



(in thousands)	2016	2015	2014
Basic and diluted loss per share:
Weighted average number of common shares outstanding	93,933	93,357	87,013

Loss per share are as follows:



	2016			2015			2014
Basic and diluted	$	(1.99	)	$	(1.83	)	$	(0.55	)

The effect of stock options and convertible bonds, have been excluded from the calculation of diluted EPS for the year end December 31, 2016 and 2015 because the effect was anti-dilutive.



13.	OPERATING LEASES

Rental income

The minimum contractual future revenues to be received on time charters in respect of vessels owned and operated as of December 31, 2016 , were as follows:



Year ending December 31
(in thousands of $)
2017	9,235
2018 and thereafter	3,618
Total	12,853

The cost and accumulated depreciation of vessels leased to third parties at December 31, 2016 and 2015 were $191.1 million and $47.5 million , and $416.9 million and $15.2 million , respectively.

The above table excludes the contracted revenues arising under the contract with West Africa Gas Limited (''WAGL'') for FSRU services provided by the Golar Tundra . For the year ended December 31, 2016 , no revenues have been recognized due the Golar Tundra not yet being accepted by WAGL as a result of delays in the Ghana LNG Project. We commenced arbitration proceedings against WAGL in October 2016 in order to collect amounts due under the charter. Golar and WAGL continue to engage in dialogue and on November 29, 2016, the first payment of $1.0 million from WAGL's parent guarantor for amounts due under the charter was received by the disponent owner and operator of the Golar Tundra , for the benefit of Golar, pursuant to the agreement entered into between Golar and Golar Partners.

F-34

Rental expense

Charter hire payments for certain contracted-in vessels are accounted for as operating leases. Additionally, we are committed to making rental payments under operating leases for office premises. The future minimum rental payments under our non-cancellable operating leases are as follows:



Year ending December 31	Total
(in thousands of $)
2017	23,711
2018	1,273
2019	1,130
2020	1,130
2021	1,130
Total minimum lease payments ⁽¹⁾	28,374

⁽¹⁾ The above table includes operating lease charter-hire payments to Golar Partners relating to the Option Agreement entered into in connection with the disposal of the Golar Grand in November 2012. In the event that the charterer did not renew or extend its charter beyond February 2015, Golar Partners had the option to require us to charter the vessel through to October 2017. Golar Partners exercised this option in February 2015 (see note 31).

Total rental expense for operating leases was $29.6 million , $42.8 million and $0.6 million for the years ended December 31, 2016 , 2015 and 2014 , respectively.



14.	INVESTMENTS IN AFFILIATES AND JOINT VENTURES

At December 31, 2016 and 2015 , we have the following participation in investments that are recorded using the equity method:



	2016		2015
Golar Partners ⁽¹⁾	33.9	%	30.7	%
Egyptian Company for Gas Services S.A.E ("ECGS")	50	%	50	%
Golar Power Limited ("Golar Power")	50	%	—	%
OneLNG	51	%	—	%
The Cool Pool Limited ("Pool Manager") ⁽²⁾	33	%	33	%

(1) As of December 31, 2016, we held a 33.9% (2015: 30.7% ) ownership interest in Golar Partners and 100% of IDRs.

(2) Pool Manager is a Marshall Islands service company that was established in September 2015 to facilitate the joint operations under the Cool Pool.

The carrying amounts of our investments in our equity method investments as at December 31, 2016 and 2015 are as follows:



(in thousands of $)	2016	2015
Golar Partners	507,182	536,090
ECGS	4,864	5,475
Golar Power	126,534	—
OneLNG	10,200	—
Equity in net assets of affiliates	648,780	541,565

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The components of equity in net assets of non-consolidated affiliates are as follows:



(in thousands of $)	2016		2015
Cost	746,918		635,714
Dividend	(234,597	)	(179,079	)
Equity in net earnings of other affiliates	133,001		85,122
Share of other comprehensive (loss) income in affiliate	3,458		(192	)
Equity in net assets of affiliates	648,780		541,565

Quoted market prices for ECGS, Golar Power and OneLNG are not available because these companies are not publicly traded.

Golar Partners

Golar Partners is an owner and operator of FSRUs and LNG carriers under long-term charters. Golar Partners is listed on the NASDAQ. Since the deconsolidation date of Golar Partners in December 2012, we have accounted for all our investments in Golar Partners under the equity method. The initial carrying value of our investments in Golar Partners was based on the fair value on the deconsolidation date.

Significant transactions arising in 2016 (i) included the end of the subordination period and the conversion of all the 15.9 million subordinated units (as held by us) to common units on a one-for-one basis in June 2016; and (ii) the IDR reset transaction in October 2016. The detail of which is described further below.

Exchange of Incentive Distribution Rights "IDR Reset"

On October 13, 2016, we entered into an equity exchange agreement with Golar Partners in which we reset our rights to receive cash distributions in respect of our interests in the incentive distribution rights, or Old IDRs, in exchange for the issuance of (i) New IDRs, (ii) an aggregate of 2,994,364 common units and 61,109 general partner units, and (iii) an aggregate of up to 748,592 additional common units and up to 15,278 additional general partner units that may be issued if target distributions are met ("the Earn-Out Units"). Half of the Earn-Out Units ("first tranche") will vest if we pay a distribution equal to or greater than $0.5775 per common unit in each of the quarterly periods ended December 31, 2016, March 31, 2017, June 30, 2017 and September 30, 2017. The remaining Earn-Out Units ("second tranche") will be issued if the first tranche of the Earn-Out Units vest and we pay a distribution equal to $0.5775 per common unit in the periods ending December 31, 2017, March 31, 2018, June 30, 2018 and September 30, 2018.

In relation to this IDR Reset transaction, we analogized to the guidance within ASC 845 (non-monetary transactions) for the exchange of a controlled asset or group of assets that does not meet the definition of a business for a non-controlling interest. Under this guidance, we elected for the accounting policy choice to apply "carry over" accounting to the exchange and any future transactions which fall under the remit of the same guidance. The application of "carry over" accounting means that there is no income statement impact from the transaction. Furthermore, we considered the nature of the Earn-Out Units and determined that they met the definition of a derivative

The overall effect of the IDR Reset on the transaction date was (i) a reclassification of the initial fair value of the derivative from "Investment in affiliates" to "Other non-current assets" of $15.0 million , and (ii) the residual carrying value of the Old IDRs (after reclassification of the derivative fair value) was reallocated across the new instruments on a relative fair value basis.

As of December 31, 2016, the aggregate carrying value of our investments in Golar Partners was $507.2 million , which represents our total ownership interest in the Partnership of 33.9% and the IDRs. The estimated market value of our investments in Golar Partners are determined with reference to the quoted price of the common units, but adjusted to reflect the different rights associated with each class of investment.

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Dividends received for the year ended December 31, 2016 and 2015, in relation to our investment in Golar Partners amounted to $55.3 million and $52.1 million , respectively.

ECGS

In December 2005, we entered into an agreement with the Egyptian Natural Gas Holding Company ("EGAS") and HK Petroleum Services to establish a jointly owned company ECGS, to develop operations in Egypt particularly in hydrocarbon and LNG related areas.

In March 2006, we acquired 0.5 million common shares in ECGS at a subscription price of $1 per share. This represents a 50% interest in the voting rights of ECGS and in December 2011, ECGS called up its remaining share capital amounting to $7.5 million . Of this, we paid $3.75 million to maintain our 50% equity interest.

As ECGS is jointly owned and operated together with other third parties, we have adopted the equity method of accounting for our 50% investment in ECGS, as we consider we have joint control. Dividends received for each of the years ended December 31, 2016 and 2015 were $0.2 million and $0.7 million , respectively.

Golar Power

In July 2016, we entered into certain agreements forming a 50/50 joint venture with a private equity firm Stonepeak Infrastructure Partners ("Stonepeak"). Under the terms of the shareholders' agreement with Stonepeak in relation to the formation of the joint venture company, Golar Power, we have disposed of the entities that own and operate Golar Penguin , Golar Celsius , newbuild FSRU 8 and LNG Power Limited to Golar Power. As a result, commencing July 6, 2016, Golar Power and its subsidiaries have been considered as our affiliates and not as controlled subsidiaries of the Company. Accordingly, with effect from July 6, 2016 have been accounted for under the equity method accounting. See note 7.

Golar Power, offers integrated LNG based downstream solutions, through the ownership and operation of FSRUs and associated terminal and power generation infrastructure that was formed for the purpose of constructing and operating a combined cycle, gas fired, power plant in the State of Sergipe in Brazil ("Sergipe Project"). In October 2016, Golar Power reached a final investment decision on the Sergipe Project and, in November 2016, CELSE signed a long-term sale and purchase agreement with Ocean LNG Limited (an affiliate of Qatar Petroleum) for the supply of 1.3 million tons of LNG per annum.

OneLNG

On July 25, 2016 Golar and Schlumberger B.V. ("Schlumberger") entered into an agreement to form OneLNG, a joint venture, with the intention to offer an integrated upstream and midstream solution for the development of low cost gas reserves to LNG. OneLNG will be the exclusive vehicle for all projects that involve the conversion of natural gas to LNG which require both Schlumberger Production Management services and Golar's FLNG expertise. In accordance with the joint venture and shareholders' agreement, Golar holds 51% and Schlumberger the remaining 49% of OneLNG. By virtue of substantive participation rights held by Schlumberger we account for our investment in OneLNG under the equity method of accounting.

The Cool Pool ("Pool Manager")

In October 2015, we entered into an LNG carrier pooling arrangement with GasLog Carriers Ltd ("GasLog") and Dynagas Ltd ("Dynagas") to market our vessels which are currently operating in the LNG shipping spot market. As of December 31, 2016, the Cool Pool comprised of sixteen vessels, of which eight vessels were contributed by us, three vessels by GasLog, three vessels by Dynagas and two vessels by Golar Power. The vessel owner continues to be fully responsible for the manning and the technical management of their respective vessels. For the operation of the Cool Pool, a Marshall Islands service company ("Pool Manager") was established in September 2015. The Pool Manager is jointly owned and controlled by us, GasLog and Dynagas.

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Summarized financial information of the affiliated undertakings shown on a 100% basis are as follows:



(in thousands of $)	December 31, 2016							December 31, 2015
	ECGS		Golar Partners	Pool Manager	Golar Power	OneLNG		ECGS	Golar Partners	Pool Manager
Balance Sheet
Current assets	34,415		160,927	9,695	59,419	19,939		38,030	131,851	4,901
Non-current assets	163		2,091,781	—	567,646	—		205	2,099,811	—
Current liabilities	23,648		215,472	9,695	60,613	1,137		27,320	262,966	4,901
Non-current liabilities	1,203		1,432,807	—	211,060	—		20	1,372,181	—
Non-controlling interest	—		67,976	—	—	—		—	66,765	—

Statement of Operations
Revenue	60,786		441,598	73,348	4,059	—		72,298	434,687	8,356
Net (loss) income	(595	)	185,742	—	21,068	(1,200	)	661	172,683	—



15.	PREPAID EXPENSES AND OTHER ASSETS



(in thousands of $)	2016	2015
Prepaid expenses	2,982	3,580
Other receivables	4,348	17,697
Corporation tax receivable	—	3,476
	7,330	24,753

Included in the December 31, 2015, balance of other receivables is a short-term loan receivable balance plus accrued interest of $6.4 million , provided to one of our partners in the Douglas Channel project. In March, 2016 we reassessed the recoverability of the loan previously granted by Golar and its related accrued interest receivables from the DCLAP and concluded that DCLAP would not have the means to satisfy its obligations under the loan. Accordingly, in 2016, we recognized an impairment charge of $7.6 million . See note 10.



16.	NEWBUILDINGS



(in thousands of $)	2016	2015
Purchase price installments	—	12,375
Interest costs capitalized	—	1,139
Other costs capitalized	—	47
	—	13,561

In July 2016, in connection with the formation of the joint venture, Golar Power, and closing of the agreement with Stonepeak, we contributed our subsidiary that owns the FSRU newbuilding to Golar Power (see note 7). As at December 31, 2016 , we have no remaining newbuild commitments.

Interest costs capitalized in connection with the newbuildings for the years ended December 31, 2016 , 2015 and 2014 were $ nil , $3.9 million and $21.1 million , respectively. Other capitalized costs include site supervision and other miscellaneous construction costs.

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17.	ASSET UNDER DEVELOPMENT



(in thousands of $)	2016	2015
Purchase price installments	653,378	495,518
Interest costs capitalized	53,985	4,187
Other costs capitalized	24,630	1,317
	731,993	501,022

In May 2014, we entered into agreements for the conversion of the Hilli to a FLNG. The primary contract was entered into with Keppel Shipyard Limited ("Keppel"). Following our payment of the initial milestone installment, these agreements became fully effective on July 2, 2014. The Hilli was delivered to the Keppel shipyard in Singapore to undergo her conversion in September 2014. We expect the conversion will require 31 months to complete, followed by mobilization to a project for full commissioning.

Accordingly, the carrying value of the Hilli of $31.0 million , was reclassified from "Vessels and equipment, net" to "Asset under development". The total estimated conversion and vessel and site commissioning cost for the Hilli , is approximately $1.3 billion . Interest costs capitalized in connection with the Hilli conversion for the year ended December 31, 2016 was $49.8 million (2015: $3.7 million ).



18.	VESSELS AND EQUIPMENT, NET



(in thousands of $)	2016		2015
Cost	2,167,247		2,572,740
Accumulated depreciation	(284,181	)	(236,596	)
Net book value	1,883,066		2,336,144

As at December 31, 2016 , the carrying value of vessels presented within this caption refers to thirteen within our fleet (2015: fifteen ). The decrease in vessels in 2016 is a result of the deconsolidation of Golar Power from July 2016, further described in note 7. This also excludes the carrying value of the Golar Tundra , which has been included within assets held-for-sale (see note 19) as of December 31, 2016 and 2015.

Drydocking costs of $38.2 million and $43.1 million are included in the cost amounts above as of December 31, 2016 and 2015 , respectively. Accumulated amortization of those costs as of December 31, 2016 and 2015 were $22.7 million and $18.2 million , respectively.

Depreciation and amortization expense for each of the years ended December 31, 2016 , 2015 and 2014 was $73.0 million , $73.7 million and $49.8 million , respectively.

As at December 31, 2016 and 2015 , vessels with a net book value of $ 2,106.1 million and $2,543.0 million , respectively, were pledged as security for certain debt facilities (see note 33). These totals include the Golar Tundra which has been classified as held-for-sale .

As at December 31, 2016 and 2015 , included in the above amounts is office equipment with a net book value of $3.9 million and $2.8 million , respectively.



19.	HELD-FOR-SALE

a) Assets and liabilities held-for-sale

In February 2016, we entered into an agreement to sell our interests in the companies that own and operate the FSRU, the Golar Tundra , to Golar Partners. The assets and liabilities held within our consolidated balance sheet that are related to the disposal group have been reclassified as held-for-sale and depreciation has ceased for this vessel. The sale of the Golar Tundra was completed in May 2016. Until the Golar Tundra commences operations and the arrangements between Golar Partners expires (including

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Golar Partners' right to require that we repurchase the shares of Tundra Corp, the disponent owner and operator of the Golar Tundra ), we will continue to consolidate Tundra Corp. Accordingly, during this time, the earnings and net assets of Tundra Corp will continue to be reflected within our financial statements.

As of December 31, 2016, we reassessed the held-for-sale classification for the Golar Tundra . We concluded that, based on the positive status of the negotiations with WAGL and their progress on the Ghana project, the held-for-sale classification remained appropriate.

Assets and liabilities included in our consolidated balance sheet presented as held-for-sale are shown below:



(in thousands of $)	2016		2015

ASSETS
Current assets
Restricted cash	168		3,618
Other receivables, prepaid expenses and accrued income	180		217
Inventories	—		572
Total current assets	348		4,407

Non-current assets
Vessels and equipment, net	270,959		262,627
Total non-current assets	270,959		262,627
Total assets ⁽²⁾	271,307		267,034

LIABILITIES
Current liabilities
Current portion of long-term debt and short-term debt ⁽¹⁾	—		(199,300	)
Trade accounts payable	(768	)	(844	)
Accrued expenses	(3,383	)	(1,019	)
Amounts due to related parties	—		(50	)
Total current liabilities	(4,151	)	(201,213	)

Non-current liabilities
Long-term debt ⁽¹⁾	(205,145	)	—
Total non-current liabilities	(205,145	)	—
Total liabilities ⁽²⁾	(209,296	)	(201,213	)

⁽¹⁾ As of December 31, 2016 , long-term debt contains $205.1 million ( December 31, 2015 : $199.3 million classified as short-term debt) that relates to long-term debt financing arrangements entered into by the CMBL lessor VIE in respect of the Golar Tundra . The debt facilities are denominated in USD, bear interest at LIBOR plus a margin and are repayable with a final balloon payment of $205.1 million . Although we have no control over the funding arrangements of the CMBL lessor VIE, as we consider ourselves the primary beneficiary of the VIE, we are required to consolidate this loan facility into our financial results. Refer to note 4 for additional detail.

⁽²⁾ We have classified all assets and liabilities as current on the consolidated balance sheets.

We have not presented any of our held-for-sale assets or disposal groups as discontinued operations in our statements of operations as we consider ourselves a project development company, such that our strategy encompasses the disposal of vessels and related interests for the purpose of financing our projects, thus they do not represent a strategic shift and do not have a major effect on our operations and financial results.

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b) Vessels held-for-sale

In February 2015, we closed the sale of the Golar Viking to Equinox at a sale price of $135.0 million , resulting in a loss on disposal of $5.8 million . This vessel had previously been classified as held-for-sale in our consolidated balance sheet as at December 31, 2014.

In April 2015, we purchased the vessel LNG Abuja for a consideration of $20.0 million . In June 2015, we agreed the sale of the vessel to a third party for $19.0 million and the transaction was completed in July 2015. Accordingly, as of June 30, 2015, the vessel was classified as held-for-sale resulting in an impairment loss of $1.0 million recognized in 2015.

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20.	RESTRICTED CASH AND SHORT-TERM DEPOSITS

Our restricted cash and short-term deposits balances are as follows:



(in thousands of $)	2016	2015
Restricted cash relating to the total return equity swap (see note 30) (i)	70,016	92,752
Restricted cash in relation to the Hilli (ii)	231,947	280,000
Restricted cash and short-term deposits held by lessor VIEs (see note 4) (iii)	69,853	35,450
Restricted cash relating to the Golar Bear , Golar Crystal and Golar Frost (iv)	43,656	—
Restricted cash relating to office lease	388	361
Total restricted cash	415,860	408,563
Less: Amounts included in current restricted cash and short-term deposits	183,525	228,202
Long-term restricted cash	232,335	180,361

(i) Restricted cash relating to the share repurchase forward swap refers to the collateral required by the bank with whom we entered into a total return equity swap requiring a collateral of 20% of the total purchase price and subsequently adjusted with reference to the Company's share price.

(ii) In November 2015, in connection with the issuance of a $400 million letter of credit by a financial institution to our project partner involved in the Hilli FLNG project, we posted an initial cash collateral sum of $305 million to support the performance guarantee. Of this amount, pursuant to progression with the syndication process, $25 million was released to us in December 2015 as free cash. Accordingly, as of December 31, 2015, the restricted cash balance amounted to $280 million . During the year ended December 31, 2016, pursuant to further progression with the syndication process, an additional $48 million was released to us as free cash. Accordingly, as of December 31, 2016, the restricted cash balance amounted to $232 million .

Under the provisions of the $400 million letter of credit, the terms allow for a stepped reduction in the value of the guarantee over time and thus conversely a reduction in the cash collateral requirements. After one year of full production, following conversion and commissioning, the cash collateral requirements will reduce to $112.5 million in 2018 and again to $45 million potentially in 2019 after the second year of full production. Following such conditions, the full amount of the Hilli restricted cash is presented as long-term restricted cash as of December 31, 2016.

In November 2016, after certain conditions precedent were satisfied by the Company, the letter of credit required in accordance with the signed Perenco Tolling Agreement was re-issued and will now expire on December 31, 2017. The letter of credit will automatically extend, on an annual basis, until the tenth anniversary of the acceptance date of the Hilli by the charterer, unless the bank should exercise its option to exit from this arrangement prior to the annual renewal date.

(iii) These are amounts held by lessor VIE entities that we are required to consolidate under US GAAP into our financial statements as VIEs (see note 4).

(iv) Restricted cash relating to the Golar Bear , Golar Crystal and Golar Frost refers to cash deposits required in connection with the financial covenant compliance related to the financing of these vessels (see note 25). The covenant requires that on the second anniversary of drawdown under the facility, where we fall below a prescribed EBITDA to debt service ratio, additional cash deposits with the financial institution are required to be made or maintained.

Restricted cash does not include minimum consolidated cash balances of $50.0 million (see note 25) required to be maintained as part of the financial covenants for our loan facilities, as these amounts are included in "Cash and cash equivalents".



21.	COST METHOD INVESTMENT



(in thousands of $)	2016	2015
OLT Offshore LNG Toscana S.p.A ("OLT–O")	7,347	7,347

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OLT-O is an Italian incorporated unlisted company, which is involved in the construction, development, operation and maintenance of an FSRU terminal to be situated off the Livorno coast of Italy. As of December 31, 2016 , our investment in OLT-O was $7.3 million , representing 2.7% interest in OLT–O's issued share capital. We received no dividends from our investment in OLT-O for either of the years ended December 31, 2016 and 2015.



22.	OTHER NON-CURRENT ASSETS



(in thousands of $)	2016	2015
Mark-to-market interest rate swaps valuation (see note 30)	5,022	5,330
Derivatives - other (see note 30) ⁽¹⁾	15,000	—
Other long-term assets, including deferred tax asset (see note 11) ⁽²⁾	36,192	45,520
	56,214	50,850

(1) "Derivatives - other" refers to the Earn-Out Units issued to us in connection with the IDR Reset transaction with Golar Partners in October 2016. See note 14 for further details.

(2) "Other long-term assets" is mainly comprised of:

(i) payments made relating to long lead items ordered in preparation for the conversion of the Gimi to a FLNG following agreements to convert her. As of December 31, 2016 and 2015 the carrying value was $31.0 million and $41.0 million , respectively. The decrease of $10.0 million to $31.0 million in 2016 is mainly due to an agreement with Keppel to allow a further $10.0 million of the payments earmarked for the Gimi to be utilized against the Hilli conversion to a FLNG in 2016. The Gimi conversion contract provides the flexibility wherein certain beneficial cancellation provisions exist which, if exercised prior to contract expiry, will allow termination of contracts and recovery of previous milestone payments, less cancellation fees. The Gimi contract has recently been extended to expire on December 30, 2017; and

(ii) $2.8 million , representing the non-current portion of the counter guarantee recognized at fair value on deconsolidation of Golar Power in July 2016. See note 7 for further details.



23.	ACCRUED EXPENSES



(in thousands of $)	2016	2015
Vessel operating and drydocking expenses	6,080	5,003
Administrative expenses	8,814	11,460
Interest expense	59,248	36,870
Provision for taxes	939	—
	75,081	53,333

Vessel operating and drydocking expense related accruals are composed of vessel operating expenses including direct vessel operating costs associated with operating a vessel, such as crew wages, vessel supplies, routine repairs, maintenance, drydocking, lubricating oils, insurances and management fees for the provision of commercial and technical management services.

Administrative expenses related accruals are comprised of general overhead, including personnel costs, legal and professional fees, costs associated with project development, property costs and other general expenses.

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24.	OTHER CURRENT LIABILITIES



(in thousands of $)	2016	2015
Deferred drydocking, operating cost and charterhire revenue	1,036	1,327
Mark-to-market interest rate swaps valuation (see note 30)	1,470	4,597
Mark-to-market currency swaps valuation (see note 30)	993	—
Mark-to-market equity swaps valuation (see note 30)	56,763	81,581
Guarantees issued to Golar Partners (see note 31)	5,064	6,096
Dividends payable	5,047	40,466
Other	8,610	14,010
	78,983	148,077

As of December 31, 2016, included within "Other" is $6.5 million due to Keppel (see note 25).

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25.	DEBT



(in thousands of $)	2016		2015

Total long-term and short-term debt	1,772,053		1,835,907
Less: current portion of long-term debt and short-term debt	(451,454	)	(491,398	)
Long-term debt	1,320,599		1,344,509

The outstanding debt as of December 31, 2016 is repayable as follows:



Year ending December 31
(in thousands of $)
2017	674,257
2018	320,601
2019	165,083
2020	92,703
2021	173,877
2022 and thereafter	371,840
Total	1,798,361
Deferred finance charges	(26,308	)
Total	1,772,053

The amounts repayable in 2017 includes $219.7 million of our convertible bonds maturing in March 2017. As further described in note 34, we closed a new $402.5 million five year convertible bond in February 2017 and a $150 million margin loan in March 2017. Accordingly, as a result of the refinancing, the carrying amount of $218.9 million has been reclassified to non-current debt on the face of the consolidated balance sheet.

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At December 31, 2016 and 2015, our debt was as follows:



(in thousands of $)	2016		2015		Maturity date
Golar Arctic facility	72,900		80,200		2019
Golar Viking facility	57,292		62,500		2020
Convertible bonds	218,851		243,369		2017
FLNG Hilli facility	250,000		50,000		2018
Hilli shareholder loans:
- Keppel loan	44,066		44,066		2027
- B&V loan	5,000		5,000		2027
$1.125 billion facility:
- Golar Seal facility	—		106,612		2018/2025*
- Golar Celsius facility	—		107,020		2018/2025*
- Golar Crystal facility	101,280		111,941		2019/2026*
- Golar Penguin facility	—		118,144		2019/2026*
- Golar Bear facility	107,749		118,524		2019/2026*
- Golar Frost facility	109,415		120,357		2019/2026*
Subtotal	966,553		1,167,733
ICBC VIE loans:
- Golar Glacier facility	169,526		177,176		2017/2024**
- Golar Snow facility	170,566		178,566		2017/2025**
- Golar Kelvin facility	182,540		182,540		**
- Golar Ice facility	152,056		172,046		**
CCBFL VIE loan:
- Golar Seal facility	157,120		—		2026**
Total debt	1,798,361		1,878,061
Deferred finance charges	(26,308	)	(42,154	)
Total debt	1,772,053		1,835,907

* The commercial loan tranche matures earlier of the two dates, with the remaining balancing maturing at the latter date.

** This represents the total loan facilities drawn down by subsidiaries of ICBC and by CCBFL which we consider as VIEs. We determined that we are the primary beneficiary of these VIEs, as we are expected to absorb the majority of the VIEs’ losses and residual gains associated with the vessels sold and leased backed from them. Accordingly, these VIEs and their related loan facilities are consolidated in our results. In consolidating these VIEs, on a quarterly basis, we must make assumptions regarding (i) the debt amortization profile; (ii) the interest rate to be applied against the VIEs’ debt principal; and (iii) the VIE’s application of cash receipts. Our estimates are therefore dependent upon the timeliness of receipt and accuracy of financial information provided by these lessor VIE entities. Upon receipt of the audited financial statements of the lessor VIEs, we will make a true-up adjustment for any material differences.

Golar Arctic facility

In December 2014, we entered into a secured loan facility for $87.5 million for the purpose of refinancing the Golar Arctic . The Golar Arctic facility bears interest at LIBOR plus a margin of 2.25% and is repayable in quarterly installments over a term of five years with a final balloon payment of $52.8 million due in December 2019.

Golar Viking facility

In December 2015, we entered into a $62.5 million secured loan facility, with certain lenders, to finance the Golar Viking upon repossession of the vessel from Equinox. The facility is repayable in quarterly installments over a term of five years with a final balloon payment of $37.8 million due in December 2020. This facility bears interest at LIBOR plus a margin of 2.5% .

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Convertible bonds

In March 2012, we completed a private placement offering for convertible bonds, for gross proceeds of $250.0 million . On inception we recognized a liability of $ 221.9 million and an equity portion of $ 25.0 million . The liability component is recorded at its present value (discounted using an equivalent borrowing rate which does not include the conversion option) and the accretion from its initial discounted value to par. The equity component is valued as the residual of par less the liability value. The impact of this treatment over the life of the instrument is to increase the interest charge to a "normalized" interest rate as the discount on the liability unwinds over the period to settlement. These convertible bonds have an annual coupon rate of 3.75% which is payable quarterly in arrears and have a conversion price of $55.0 . We declared dividends of $0.20 and $1.40 relating to the years ended December 31, 2016 and 2015, respectively. The conversion price was adjusted from $45.82 to $45.37 effective on December 31, 2016 . At December 31, 2016 , we have secured 13.0 million of our holdings in the common units of Golar Partners against these convertible bonds. At December 31, 2016 , we had redeemed $30.3 million of the convertible bonds, with the remaining convertible bonds being fully redeemed by March 6, 2017. In addition, please refer to note 20 for details of our restricted cash balances.

FLNG Hilli facility

In September 2015, in connection with the conversion of the Hilli to a FLNG, we entered into agreements with a subsidiary of CSSCL for a pre-delivery credit facility and post-delivery sale and leaseback financing. Both the pre-delivery facility and the post-delivery sale and leaseback financings are dependent upon certain conditions precedent before drawing down, in the case of the pre-delivery financing, or execution of the sale and leaseback, in the case of the post-delivery financing.

Hilli pre-delivery facility

Under the pre-delivery credit facility, a subsidiary of CSSCL will lend us up to $700 million or 60% of the initial project budget for the conversion of the Hilli to partly finance the costs of conversion. The credit facility is non-amortizing with the principal payable at the earlier of August 30, 2018 or sale of the converted Hilli to a subsidiary of CSSCL under the sale and leaseback arrangement (described below under “Hilli post-delivery sale and leaseback financing”). The facility bears interest at a fixed rate of 6.25% per annum. Having satisfied all conditions precedent, we completed our first drawdown on the facility. During 2016, further drawdowns were completed and, accordingly, as of December 31, 2016, the balance outstanding under the pre-delivery facility was $250 million . Subsequent drawdowns are dependent upon reaching further conversion milestones relating to project spend.

Hilli post-delivery sale and leaseback financing

Pursuant to a memorandum agreement with a subsidiary of CSSCL, we have agreed to sell the converted Hilli upon satisfaction of certain conditions precedent on or before August 30, 2018, for the purchase price of $1.2 billion . The proceeds of this sale will be used, in part, to pay off the Hilli pre-delivery financing described above. We will subsequently lease back the vessel on a bareboat charter for a term of 10 years. We have options to repurchase the vessel throughout the charter term, commencing from the fifth year anniversary of the commencement of the bareboat charter, with an obligation to repurchase the vessel at the end of the ten year lease period.

Hilli shareholder loans

Keppel loan

In September 2014, our subsidiary, Golar GHK Lessors Limited ("GGHK"), entered into a Sale and Purchase Agreement with KSI Production Pte Ltd (''KSI''), a subsidiary of Keppel, to sell 10% of its ownership in Golar Hilli Corporation ("Hilli Corp") for $21.7 million . In consideration KSI paid the equity value of the shares and acquired a portion of the loans made by GGHK to Hilli Corp. The loan amounted to $21.7 million and is shown under "Long-term debt" in our consolidated financial statements. The loan bears interest at 6% per annum. Installment payments of 2.5% of the value of the loan are payable on a six -monthly basis beginning 12 months after final acceptance of the FLNG with a balloon payment 120 months after final acceptance. Since September 2014 through to December 31, 2015, additional cash calls have been issued to meet funding requirements relating to the conversion of the Hilli to a FLNG. However, during 2015, due to surplus cash balances it was agreed by the Hilli Corp shareholders to return an amount of surplus cash to both KSI and Golar. The amount to be returned to KSI was $9 million and resulted in a decrease in the Keppel loan by the same ⁽¹⁾ . Accordingly, as of December 31, 2016 and 2015, the balance outstanding under the Keppel shareholder loan was $44.1 million .

(1) As of December 31, 2016, $6.5 million surplus cash remains to be returned to KSI and is captured within “Other current liabilities” (see note 24).

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B&V loan

In November 2014, our subsidiary, GGHK, entered into a Sale and Purchase Agreement with Black & Veatch International Company (''B&V'') to sell 11 shares of the registered issued share capital of Hilli Corp for $5.0 million . In consideration B&V paid the equity value of the shares and acquired a portion of the loans made by GGHK to Hilli Corp. The loan amounted to $5.0 million and is shown under "Long-term debt" in our consolidated financial statements. The loan bears interest at 6% per annum. Installment payments of 2.5% of the value of the loan is payable on a six -monthly basis beginning 12 months after final acceptance of the FLNG with a balloon payment 120 months after final acceptance.

$1.125 billion facility

In July 2013, we initially entered into a $1.125 billion facility to fund eight of our newbuildings. Following our contribution of our subsidiaries that own the Golar Celsius and Golar Penguin to Golar Power, the subsidiaries continue to owe the debt associated with the Golar Celsius and Golar Penguin to the lenders under this $1.125 billion loan facility, which we guarantee. The facility bears interest at LIBOR plus a margin. The facility is divided into three tranches, with the following general terms:



Tranche	Amount	Proportion of facility	Term of loan from date of drawdown	Repayment terms
K-Sure	$449.0 million	40%	12 years	Six-monthly installments
KEXIM	$450.0 million	40%	12 years	Six-monthly installments
Commercial	$226.0 million	20%	5 years	Six-monthly installments, unpaid balance to be refinanced after 5 years

The facility bears interest at LIBOR plus a margin of 2.10% for the K-Sure tranche of the facility and 2.75% for both the KEXIM and commercial tranche of the loan.

The K-Sure tranche is funded by a consortium of lenders of which 95% is guaranteed by a Korean Trade Insurance Corporation (or K-Sure) policy; the KEXIM tranche is funded by the Export Import Bank of Korea (or KEXIM). Repayments under the K-Sure and KEXIM tranches are due semi-annually with a twelve year repayment profile. The commercial tranche is funded by a syndicate of banks and is for a term of five years from date of drawdown with a final balloon payment of $131.0 million depending on drawdown dates on certain vessels. In the event the commercial tranche is not refinanced prior to the end of the five years, KEXIM has an option to demand repayment of the balance outstanding under the KEXIM tranche.

The facility is further divided into vessel-specific tranches dependent upon delivery and drawdown, with each borrower being the subsidiary owning the respective vessel. Upon delivery of a newbuild, we have the ability to drawdown on the facility. On drawdown, the vessel will become secured against the facility. A commitment fee is chargeable on any undrawn portion of this facility. By December 31, 2014, all eight vessels had been delivered and the facility had been fully drawn down.



Date of drawdown	Vessel	$1.125 billion facility	Amount drawn down
October 2013	Golar Seal*	$133.2 million	$127.9 million
October 2013	Golar Celsius**	$133.2 million	$128.4 million
May 2014	Golar Crystal	$133.2 million	$127.9 million
September 2014	Golar Penguin**	$133.2 million	$128.9 million
September 2014	Golar Bear	$133.2 million	$129.3 million
October 2014	Golar Frost	$134.8 million	$131.3 million
February 2014	Golar Igloo***	$161.3 million	$161.3 million
December 2014	Golar Eskimo****	$162.8 million	$162.8 million
As at December 2014		$1,125 million	$1,098 million

* In March 2016, we completed the refinancing of the Golar Seal , which provided approximately $50 million excess cash to liquidity.

** In July 2016, we closed the transaction forming the 50/50 joint venture, Golar Power, with investment vehicles affiliated with the private equity firm Stonepeak, and, as part of the transaction, we deconsolidated the net assets relating to the Golar Celsius and Golar Penguin (see note 7). The Golar Celsius and Golar Penguin debts were assumed by Golar Power, however we continue to guarantee this debt.

*** In March 2014, we sold the Golar Igloo to Golar Partners. The Golar Igloo debt of $161.3 million was assumed by Golar Partners.

**** In January 2015, we completed the sale of our interests in the companies that own and operate the Golar Eskimo to Golar Partners. The adjusted consideration for the sale was $388.8 million less Golar Partners’ assumption of the Golar Eskimo debt (see note 6).

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ICBC VIE loans

The following loans relate to ICBCL lessor entities that we consolidate as variable interest entities (“VIEs”). Although we have no control over the funding arrangements of these ICBCL entities, we consider ourselves the primary beneficiary of these VIEs and we are therefore required to consolidate these loan facilities into our financial results. Refer to note 4 for additional information.

Golar Glacier facility

In October 2014, the special purpose vehicle ("SPV"), Hai Jiao 1401 Limited, which owns the Golar Glacier , entered into secured financing agreements for $184.8 million consisting of a senior and junior facilities which are denominated in USD. The senior loan facility of $153 million is a 10 year non-recourse loan provided by ICBC Brussels, with first priority mortgage on the Golar Glacier. The facility bears interest at LIBOR plus a margin and is repayable in semi-annual installments with a balloon payment on maturity. The short-term junior loan facility of $31.8 million is provided by ICBCIL Finance Co., a related party of ICBCL. The junior loan facility bears interest at 6% and is repayable on demand.

Golar Snow facility

In January 2015, the SPV, Hai Jiao 1402 Limited, which owns the Golar Snow , entered into secured financing agreements for $182.6 million consisting of senior and junior loan facilities which are denominated in USD. The senior loan facility of $160.0 million is a 10 year non-recourse loan provided by ICBC Brussels, with a first priority mortgage on the Golar Snow . The senior loan facility bears interest at LIBOR plus a margin and is repayable in semi-annual installments with a balloon payment on maturity. The junior loan facility of $22.6 million is provided by ICBCIL Finance Co., a related party of ICBCL. The junior loan facility bears interest at 6% and is repayable on demand.

Golar Kelvin facility

In January 2015, the SPV, Hai Jiao 1405 Limited, which owns the Golar Kelvin , entered into a secured financing agreement for $182.5 million . The loan facility is provided by ICBCIL Finance Co., a related party of ICBCL. The loan facility is denominated in USD, bears interest at 6% and is repayable on demand.

Golar Ice facility

In February 2015, the SPV, Hai Jiao 1406 Limited, which owns the Golar Ice , entered into a secured financing agreement for $172.0 million . The loan facility is provided by Skysea Malta Capital, a related party of ICBCL. The loan facility is denominated in USD, bears interest at 3.00% and is repayable on demand.

CCBFL VIE loan

The following loan relates to the CCBFL lessor entity that we consolidate as a VIE. Although we have no control over the funding arrangements of this CCBFL entity, we consider ourselves the primary beneficiary of this VIE and we are therefore required to consolidate this loan facility into our financial results. Refer to note 4 for additional information.

Golar Seal facility

In March 2016, the SPV, Seal SPV, which owns the Golar Seal , entered into a long-term loan facility for $162.4 million . The loan facility is denominated in USD, is a 10 year loan, bears interest at LIBOR plus a margin and is repayable in quarterly installments with a balloon payment on maturity.

CMBL VIE loan

In November 2015, the SPV, Sea 24 Leasing Co Ltd, which owns the Golar Tundra , entered into a secured financing agreement. The loan facility is denominated in USD, bears interest at LIBOR plus a margin and was repayable in 2016. In April 2016, Sea 24 Leasing Co Ltd refinanced its debt facilities and entered into long-term debt facilities (the “Tundra Lessor VIE Debt facilities”). The Tundra Lessor VIE Debt facilities bear interest at LIBOR plus a margin and are repayable as balloon payments on maturity. However, as of December 31, 2015 and onwards, the Tundra Lessor VIE Debt facilities have been classified within "liabilities held for sale - current" in connection with the disposal of the Golar Tundra to Golar Partners in May 2016. Refer to note 19 for additional detail.

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Debt restrictions

Certain of our debts are collateralized by ship mortgages and, in the case of some debt, pledges of shares by each guarantor subsidiary. The existing financing agreements impose operating and financing restrictions which may significantly limit or prohibit, among other things, our ability to incur additional indebtedness, create liens, sell capital shares of subsidiaries, make certain investments, engage in mergers and acquisitions, purchase and sell vessels, enter into time or consecutive voyage charters or pay dividends without the consent of the lenders. In addition, lenders may accelerate the maturity of indebtedness under financing agreements and foreclose upon the collateral securing the indebtedness upon the occurrence of certain events of default, including a failure to comply with any of the covenants contained in the financing agreements. Many of our debt agreements contain certain covenants, which require compliance with certain financial ratios. Such ratios include current assets: liabilities and equity ratio covenants and minimum free cash restrictions. With regards to cash restrictions, we have covenanted to retain at least $50.0 million of cash and cash equivalents on a consolidated group basis. In addition, there are cross default provisions in certain of our and Golar Partners loan and lease agreements.

In addition to mortgage security, some of our debt is also collaterized through pledges of equity shares by our guarantor subsidiaries.

As of December 31, 2016, we were in compliance with all our covenants under our various loan agreements.



26.	OTHER LONG-TERM LIABILITIES



(in thousands of $)	2016	2015
Pension obligations (see note 27)	37,873	36,279
Guarantees issued to Golar Partners (see note 31)	11,429	16,493
Other	2,912	1,308
	52,214	54,080



27.	PENSIONS

Defined contribution scheme

We operate a defined contribution scheme. The pension cost for the period represents contributions payable by us to the scheme. The charge to net income for the years ended December 31, 2016 , 2015 and 2014 was $1.3 million , $0.2 million and $0.9 million , respectively.

The total contributions to our defined contribution scheme were as follows:



(in thousands of $)	2016	2015	2014
Employers' contributions	1,324	1,035	684

Defined benefit schemes

We have two defined benefit pension plans both of which are closed to new entrants but which still cover certain of our employees. Benefits are based on the employee's years of service and compensation. Net periodic pension plan costs are determined using the Projected Unit Credit Cost method. Our plans are funded by us in conformity with the funding requirements of the applicable government regulations. Plan assets consist of both fixed income and equity funds managed by professional fund managers.

We use December 31 as a measurement date for our pension plans.

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The components of net periodic benefit costs are as follows:



(in thousands of $)	2016		2015		2014
Service cost	302		379		369
Interest cost	2,051		2,042		2,359
Expected return on plan assets	(806	)	(946	)	(984	)
Recognized actuarial loss	1,060		1,195		998
Net periodic benefit cost	2,607		2,670		2,742

The estimated net loss for the defined benefit pension plans that will be amortized from accumulated other comprehensive income into net periodic pension benefit cost during the year ended December 31, 2016 is $1.2 million .

The change in benefit obligation and plan assets and reconciliation of funded status as of December 31 are as follows:



(in thousands of $)	2016		2015
Reconciliation of benefit obligation:
Benefit obligation at January 1	49,473		53,166
Service cost	302		379
Interest cost	2,051		2,042
Actuarial loss (gain)	3,547		(2,547	)
Foreign currency exchange rate changes	(1,887	)	(509	)
Benefit payments	(3,110	)	(3,058	)
Benefit obligation at December 31	50,376		49,473

The accumulated benefit obligation at December 31, 2016 and 2015 was $49.1 million and $48.5 million , respectively.



(in thousands of $)	2016		2015
Reconciliation of fair value of plan assets:
Fair value of plan assets at January 1	13,194		14,496
Actual return on plan assets	1,994		(155	)
Employer contributions	2,342		2,411
Foreign currency exchange rate changes	(1,917	)	(500	)
Benefit payments	(3,110	)	(3,058	)
Fair value of plan assets at December 31	12,503		13,194



(in thousands of $)	2016		2015
Projected benefit obligation	(50,376	)	(49,473	)
Fair value of plan assets	12,503		13,194
(Unfunded) funded status ⁽¹⁾	(37,873	)	(36,279	)

Employer contributions and benefits paid under the pension plans include $2.3 million (2015: $2.4 million ) paid from employer assets for the year ended December 31, 2016 .

(1) Our plans compose of two plans. The details of these plans are as follows:



	December 31, 2016						December 31, 2015
(in thousands of $)	UK Scheme		Marine Scheme		Total		UK Scheme		Marine Scheme		Total
Projected benefit obligation	(10,461	)	(39,915	)	(50,376	)	(10,145	)	(39,328	)	(49,473	)
Fair value of plan assets	10,651		1,852		12,503		10,277		2,917		13,194
Funded status at end of year	190		(38,063	)	(37,873	)	132		(36,411	)	(36,279	)

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The fair value of our plan assets, by category, as of December 31, 2016 and 2015 were as follows:



(in thousands of $)	2016	2015
Equity securities	8,936	9,620
Debt securities	2,860	3,032
Cash	707	542
	12,503	13,194

The amounts recognized in accumulated other comprehensive income consist of:



(in thousands of $)	2016	2015
Net actuarial loss	12,956	12,400

The actuarial loss recognized in the other comprehensive income is net of tax of $0.0 million , $0.0 million , and $0.2 million for the years ended December 31, 2016 , 2015 and 2014 , respectively.

The asset allocation for our Marine scheme at December 31, 2016 and 2015 , by asset category are as follows:



Marine scheme	2016 (%)	2015 (%)
Equity	30-65	30-65
Bonds	10-50	10-50
Other	20-40	20-40
Total	100	100

The asset allocation for our UK scheme at December 31, 2016 and 2015 , by asset category are as follows:



UK scheme	2016 (%)	2015 (%)
Equity	75.2	75.7
Bonds	24.8	24.3
Total	100	100

Our investment strategy is to balance risk and reward through the selection of professional investment managers and investing in pooled funds.

We are expected to make the following contributions to the schemes during the year ended December 31, 2017, as follows:



(in thousands of $)	UK scheme	Marine scheme
Employer contributions	370	1,800

We are expected to make the following pension disbursements as follows:



(in thousands of $)	UK scheme	Marine scheme
2017	284	3,000
2018	370	3,000
2019	308	3,000
2020	432	3,000
2021	493	3,000
2022 - 2026	2,467	15,000

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The weighted average assumptions used to determine the benefit obligation for our plans for the years ended December 31 are as follows:



	2016		2015
Discount rate	3.87	%	4.34	%
Rate of compensation increase	2.38	%	2.07	%

The weighted average assumptions used to determine the net periodic benefit cost for our plans for the years ended December 31 are as follows:



	2016		2015
Discount rate	4.34	%	3.95	%
Expected return on plan assets	6.75	%	6.75	%
Rate of compensation increase	2.07	%	2.21	%

The overall expected long-term rate of return on assets assumption used to determine the net periodic benefit cost for our plans for the years ended December 31, 2016 and 2015 is based on the weighted average of various returns on assets using the asset allocation as at the beginning of 2016 and 2015. For equities and other asset classes, we have applied an equity risk premium over ten year governmental bonds.



28.	SHARE CAPITAL AND SHARE OPTIONS

Our ordinary shares are listed on the Nasdaq Stock Exchange.

As at December 31, 2016 and 2015 , our authorized and issued share capital is as follows:

Authorized share capital:



(in thousands of $, except per share data)	2016	2015
150,000,000 (2015: 150,000,000) common shares of $1.00 each	150,000	150,000

Issued share capital:



(in thousands of $, except per share data)	2016	2015
101,080,673 (2015: 93,546,663) outstanding issued common shares of $1.00 each	101,081	93,547

We issued 0.1 million and 0.1 million common shares upon the exercise of stock options for the years ended December 31, 2016 and 2015 , respectively.

On November 18, 2016, we closed a registered offering of 7,475,000 of our common shares, par value $1.00 per share. We raised proceeds, net of the underwriters discount and offering fees, of approximately $170 million .

Treasury shares

In November 2014, our board of directors approved a new share repurchase program under which we may repurchase up to 5% of Golar's outstanding stock over the next two years. As at December 31, 2016 , we had repurchased 0.3 million ( December 31, 2015 : 0.3 million ) shares for a consideration of $8.2 million ( December 31, 2015 : $12.3 million ) and was party to a Total Return Swap, or TRS, indexed to 3.0 million of Golar's shares at an average price of $42.03 . There is at present no obligation for us to purchase any shares from the counterparty

Share options

Golar share options

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In February 2002, our board of directors approved the Golar LNG Limited Share Option Scheme ("Golar Scheme"). The Golar Scheme permits the board of directors, at its discretion, to grant options to acquire shares in the Company to employees and directors of the Company or its subsidiaries. Options granted under the scheme will vest at a date determined by the board at the date of the grant. The options granted under the plan to date have five year terms and vest equally over a period of three to four years. There is no maximum number of shares authorized for awards of equity share options, and either authorized unissued shares or treasury shares in the Company may be used to satisfy exercised options.

During 2016 and 2015, the Company granted 1.9 million and 0.9 million share options, respectively, to directors and employees.

As at December 31, 2016 , 2015 and 2014 , the number of options outstanding in respect of Golar shares was 3.8 million , 2.2 million and 2.1 million , respectively.

The fair value of each option award is estimated on the grant date or modification date using the Black-Scholes option pricing model. The weighted average assumptions as at grant date are noted in the table below:



	2016		2015		2014
Risk free interest rate	1.8	%	1.8	%	1.8	%
Expected volatility of common stock	55.0	%	53.1	%	53.6	%
Expected dividend yield	0.0	%	0.0	%	0.0	%
Expected life of options (in years)	5.0 years		5.0 years		5.0 years

The assumption for expected future volatility is based primarily on an analysis of historical volatility of our common stock.

Historically, we used the simplified method to estimate the expected term of options, based on the vesting period of the award and this represents the period of time that options granted are expected to be outstanding. We cease to use the simplified method when the exercise of the awarded share options is higher than the market value of the Company's shares.

The dividend yield has been estimated at 0.0% as the exercise price of the options, granted in 2006 and later, are reduced by the value of dividends, declared and paid on a per share basis.

A summary of option activity as at December 31, 2016 is presented below:



(in thousands of $, except per share data)	Shares (in '000s)		Weighted average exercise price		Weighted average remaining contractual term (years)
Options outstanding at December 31, 2015	2,195		$	52.02	3.9
Exercised during the year	(77	)	$	2.65
Forfeited during the year	(173	)	$	56.88
Granted during the year	1,890		$	26.21
Options outstanding at December 31, 2016	3,835		$	39.81	3.9



Options exercisable at:
December 31, 2016	108	$	2.84	0.83
December 31, 2015	190	$	3.97	0.87
December 31, 2014	317	$	4.09	1.83

The exercise price of all options except for those issued in 2001, is reduced by the amount of the dividends declared and paid; the above figures for options granted, exercised and forfeited show the average of the prices at the time of granting, exercising and forfeiting of the options, and for options outstanding at the beginning and end of the year, the average of the reduced option prices is shown.

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The intrinsic value of share options exercised in the years ended December 31, 2016 , 2015 and 2014 was $1.3 million , $0.4 million and $7.8 million , respectively.

As at December 31, 2016 , the intrinsic value of share options that were both outstanding and exercisable was $2.2 million ( 2015 : $ nil ).

The total fair value of share options which fully vested in the years ended December 31, 2016 , 2015 and 2014 was $0.1 million , $0.1 million and $2.1 million , respectively.

Compensation cost of $5.8 million , $3.7 million and $1.6 million has been recognized in the consolidated statement of operations for the years ended December 31, 2016 , 2015 and 2014 , respectively.

As of December 31, 2016 , the total unrecognized compensation cost amounted to $44.2 million ( 2015 : $31.0 million ) relating to options outstanding is expected to be recognized over a weighted average period of 3.8 years .



29.	ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

Accumulated Other Comprehensive Loss

As at December 31, 2016 , 2015 and 2014 , our accumulated other comprehensive (loss) income balances consisted of the following components:



(in thousands of $)	2016		2015		2014
Net gain (loss) on qualifying cash flow hedging instruments, including share of affiliate	3,414		(192	)	8,672
Losses associated with pensions	(12,956	)	(12,400	)	(15,251	)
Accumulated other comprehensive loss	(9,542	)	(12,592	)	(6,579	)

The components of accumulated other comprehensive (loss) income consisted of the following:

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	Pension and post retirement benefit plan adjustments		Gains (losses) on cash flow hedges		Share of affiliates comprehensive income		Total accumulated comprehensive (loss) income
Balance at December 31, 2013	(12,731	)	(2,676	)	4,679		(10,728	)
Other comprehensive (loss) income income before reclassification	(2,520	)	3,483		(49	)	914
Amount reclassified from accumulated other comprehensive income	—		3,235		—		3,235
Net current-period other comprehensive (loss) income	(2,520	)	6,718		(49	)	4,149
Balance at December 31, 2014	(15,251	)	4,042		4,630		(6,579	)
Other comprehensive income (loss) before reclassification	2,851		—		(4,822	)	(1,971	)
Amount reclassified from accumulated other comprehensive income	—		382		—		382
Net current-period other comprehensive income (loss)	2,851		382		(4,822	)	(1,589	)
Transfer of additional paid in capital	—		(4,424	)	—		(4,424	)
Balance at December 31, 2015	(12,400	)	—		(192	)	(12,592	)
Other comprehensive (loss) income income before reclassification	(556	)	—		3,606		3,050
Amount reclassified from accumulated other comprehensive income	—		—		—		—
Net current-period other comprehensive (loss) income	(556	)	—		3,606		3,050
Transfer of additional paid in capital	—		—		—		—
Balance at December 31, 2016	(12,956	)	—		3,414		(9,542	)

The amounts reclassified from accumulated other comprehensive loss for the years ended December 31, 2016, 2015 and 2014 consisted of the following:



Details of accumulated other comprehensive income components	Amounts reclassified from accumulated other comprehensive loss			Affected line item in the statement of operations
	2016	2015	2014
Losses on cash flow hedges:
Interest rate swap	—	382	3,235	Other financial items, net
Total reclassifications for the year	—	382	3,235



30.	FINANCIAL INSTRUMENTS

Interest rate risk management

In certain situations, we may enter into financial instruments to reduce the risk associated with fluctuations in interest rates. We have entered into swaps that convert floating rate interest obligations to fixed rates, which from an economic perspective hedge the interest rate exposure. We do not hold or issue instruments for speculative or trading purposes. The counterparties to such contracts are major banking and financial institutions. Credit risk exists to the extent that the counterparties are unable to perform under the contracts; however we do not anticipate non-performance by any of our counterparties.

We manage our debt portfolio with interest rate swap agreements in U.S. dollars to achieve an overall desired position of fixed and floating interest rates. Historically, we hedge accounted for certain of our interest rate swap arrangements designated as cash flow hedges. The net gains and losses had been reported in a separate component of accumulated other comprehensive income to the extent the hedges were effective. The amount recorded in accumulated other comprehensive income would have subsequently been reclassified into earnings in the same period as the hedged items affected earnings. However, since 2015, we have ceased hedge accounting for any of our derivatives.

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For the years ended December 31, 2016, 2015 and 2014 we recognized a net gain of $ nil , $ nil and net gain of $0.9 million , respectively, in earnings relating to the ineffective portion of our interest rate swap agreements designated as hedges.

As of December 31, 2016, we have entered into the following interest rate swap transactions involving the payment of fixed rates in exchange for LIBOR as summarized below:



Instrument (in thousands of $)	Year end	Notional value	Maturity Dates	Fixed Interest Rates
Interest rate swaps:
Receiving floating, pay fixed	2016	1,250,000	2018/ 2021	1.13% to 1.94%
Receiving floating, pay fixed	2015	1,250,000	2018/ 2021	1.13% to 1.94%

The effect of cash flow hedging relationships relating to swap agreements on the consolidated statements of operations is as follows:



(in thousands of $)	Effective portion gain/ (loss) reclassified from Accumulated Other Comprehensive Loss			Ineffective Portion
Derivatives designated as hedging instruments	2016	2015	2014	2016	2015	2014
Interest rate swaps Other financial items, net	—	382	3,235	—	—	876

The effect of cash flow hedging relationships relating to interest rate swap agreements to the consolidated statements of changes in equity is as follows:



(in thousands of $)	Amount of gain recognized in other comprehensive income on derivative (effective portion)
Derivatives designated as hedging instruments	2016	2015	2014
Interest rate swaps	—	—	3,483

As of December 31, 2016 and 2015, our accumulated other comprehensive loss included $ nil and $ nil of unrealized losses, respectively, on interest rate swap agreements designated as cash flow hedges. Additionally, as of December 31, 2016, our accumulated other comprehensive loss included $3.6 million (2015: $ 0.2 million loss) of unrealized gains being our share of Golar Partners' other comprehensive income or loss on swap agreements designated as cash flow hedges (see note 29).

As of December 31, 2016, we do not expect any material amounts to be reclassified from accumulated other comprehensive income to earnings during the next twelve months. However, our affiliate expects reclassification from accumulated other comprehensive income to earnings during the next twelve months which will impact 'Equity in net earnings of affiliate' in our Consolidated Statement of Operations.

Foreign currency risk

The majority of the vessels' gross earnings are receivable in U.S. dollars. The majority of our transactions, assets and liabilities are denominated in U.S. dollars, our functional currency. However, we incur expenditure in other currencies. There is a risk that currency fluctuations will have a negative effect on the value of our cash flows.

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Equity price risk

Our Board of the Directors have approved a share repurchase scheme, which is being partly financed through the use of total return swap or equity swap facilities with third party banks, indexed to our own shares. We carry the risk of fluctuations in the share price of those acquired shares. The banks are compensated at their cost of funding plus a margin. As at December 31, 2016 , the counterparty to the equity swap transactions had acquired 3.0 million shares in the Company at an average price of $42.03 . In addition, we entered into a forward contract for the acquisition of 107,000 shares in Golar Partners at an average price of $19.18 . The effect of our total return swap facilities in our consolidated statement of operations as at December 31, 2016 is a gain of $24.8 million . There is at present no obligation for us to purchase any shares from the counterparty.

In addition to the above equity swap transactions linked to our own securities, we may from time to time enter into short-term equity swap arrangements relating to securities of other companies.

Fair values of financial instruments

We recognize our fair value estimates using a fair value hierarchy based on the inputs used to measure fair value. The fair value hierarchy has three levels based on reliability of inputs used to determine fair value as follows:

Level 1: Quoted market prices in active markets for identical assets and liabilities;

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data; and

Level 3: Unobservable inputs that are not corroborated by market data.

There have been no transfers between different levels in the fair value hierarchy during the year.

The carrying value and fair value of our financial instruments, excluding short-term receivables and payables, at December 31, 2016 and 2015 are as follows:



	Fair value	2016	2016	2015	2015
(in thousands of $)	Hierarchy	Carrying Value	Fair Value	Carrying Value	Fair Value

Non-Derivatives ⁽⁸⁾ :
Cash and cash equivalents	Level 1	224,190	224,190	105,235	105,235
Restricted cash and short-term deposits	Level 1	415,860	415,860	408,563	408,563
Cost method investments ⁽¹⁾	Level 3	7,347	7,347	7,347	7,347
Short-term loans receivable ⁽²⁾	Level 2	—	—	6,375	6,375
Current portion of long-term debt and short-term debt ⁽²⁾ ⁽³⁾	Level 2	484,705	484,705	501,618	501,618
Long-term debt – convertible bond ⁽³⁾	Level 2	218,851	219,428	243,369	231,945
Long-term debt ⁽³⁾	Level 2	1,124,105	1,124,105	1,133,074	1,133,074
Derivatives:
Interest rate swaps asset ^{(4) (5)}	Level 2	5,022	5,022	5,330	5,330
Interest rate swaps liability ^{(4) (5)}	Level 2	1,470	1,470	4,597	4,597
Foreign exchange swaps liability ⁽⁴⁾⁽⁵⁾	Level 2	993	993	—	—
Total return equity swap liability ^{(4) (6)}	Level 2	56,763	56,763	81,581	81,581
Earn-Out Units asset ⁽⁴⁾⁽⁷⁾	Level 2	15,000	15,000	—	—

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^1.	^{The carrying value of our cost method investments refers to our holdings in OLT Offshore LNG Toscana S.p.A (or OLT-O), as we have no established method of determining the fair value of this investment, we have not estimated its fair value as of December 31, 2016, but have not identified any changes in circumstances which would alter our view of fair value as disclosed.}


^2.	^{The carrying amounts of our short-term debts and loans receivable approximate their fair values because of the near term maturity of these instruments.}


^3.	^{Our debt obligations are recorded at amortized cost in the consolidated balance sheets. The amounts presented in the table, are gross of the deferred charges amounting to $} ^{26.3 million} ^{and $} ^{42.2 million} ^at ^{December 31, 2016} ^and ^{December 31, 2015} ^{, respectively.}


^4.	^{Derivative liabilities are captured within other current liabilities and derivative assets are captured within long-term assets on the balance sheet.}


^5.	^{The fair value of our derivative instruments is the estimated amount that we would receive or pay to terminate the agreements at the reporting date, taking into account current interest rates, foreign exchange rates, closing quoted market prices and our creditworthiness and that of our counterparties.}


^6.	^{The fair value of total return equity swaps is calculated using the closing prices of the underlying listed shares, dividends paid since inception and the interest rate charged by the counterparty.}


^7.	^{The Earn-Out Units were issued to Golar in connection with the IDR Reset transaction between Golar and Golar Partners in October 2016. Refer to note 14 for further detail.}


^8.	^{Excludes assets and liabilities that are recorded within assets and liabilities held-for-sale.}

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

The carrying values of accounts receivable, accounts payable, accrued liabilities and working capital facilities approximate fair values because of the near term maturity of these instruments.

The carrying value of cash and cash equivalents, which are highly liquid, is a reasonable estimate of fair value.

The carrying value for restricted cash and short-term deposits is considered to be equal to the estimated fair value because of their near term maturity.

The estimated fair value for the liability component of the unsecured convertible bonds is based on the quoted market price as at the balance sheet date.

The estimated fair values for both the floating long-term debt and short-term debt to a related party are considered to be equal to the carrying values since they bear variable interest rates, which are adjusted on a quarterly or six-monthly basis.

The estimated fair value of the financial guarantees is considered to be equal to the carrying amount. The financial guarantees were fair valued as of the deconsolidation date, December 13, 2012 or inception date. We did not identify any material changes in the fair value of the financial guarantees as at December 31, 2016.

The fair value measurement of a liability must reflect the non-performance of the entity. Therefore, the impact of our credit worthiness has also been factored into the fair value measurement of the derivative instruments in a liability position.

The fair value of the Earn-Out Units was determined using a Monte-Carlo simulation method. This simulation was performed within the Black Scholes option pricing model then solved via an iterative process by applying the Newton-Raphson method for the fair value of the Earn-Out Units, such that the price of a unit output by the Monte-Carlo simulation equaled the price observed in the market. The method took into account the historical volatility, dividend yield as well as the share price of the Golar Partners common units as of the IDR Reset date and at balance sheet date.

The credit exposure of interest rate swap agreements is represented by the fair value of contracts with a positive value at the end of each period, reduced by the effects of master netting arrangements. It is our policy to enter into master netting agreements with counterparties to derivative financial instrument contracts, which give us the legal right to discharge all or a portion of the amounts owed to the counterparty by offsetting them against amounts that the counterparty owes to us.

Our pension plan assets are primarily invested in funds holding equity and debt securities, which are valued at quoted market price. These plan assets are classified within Level 1 of the fair value hierarchy (see note 27).

The following table summarizes the fair value of derivative instruments on a gross basis recorded in our consolidated balance sheets as of December 31, 2016 and 2015:

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	Balance sheet classification	2016	2015
(in thousands of $)
Asset Derivatives
Earn-Out Units asset	Other non-current assets	15,000	15,000
Interest rate swaps not designated as hedges	Other non-current assets	5,022	5,330

Liability Derivatives
Interest rate swaps not designated as hedges	Other current liabilities	1,470	4,597
Foreign exchange swaps not designated as hedges	Other current liabilities	993	—
Total return equity swap not designated as hedge	Other current liabilities	56,763	81,581
Total liability derivatives		59,226	86,178

We have elected not to offset the fair values of derivative assets and liabilities executed with the same counterparty that are generally subject to enforceable master netting arrangements. However, if we were to offset and record the asset and liability balances of derivatives on a net basis, the amounts presented in our consolidated balance sheets as of December 31, 2016 and 2015 would be adjusted as detailed in the following table:



	2016				2015
	Gross amounts presented in the consolidated balance sheet	Gross amounts not offset in the consolidated balance sheet subject to netting agreements		Net amount	Gross amounts presented in the consolidated balance sheet	Gross amounts not offset in the consolidated balance sheet subject to netting agreements		Net amount
(in thousands of $)
Total asset derivatives	5,022	(1,351	)	3,671	5,330	(216	)	5,114
Total liability derivatives	1,470	(1,351	)	119	4,597	(216	)	4,381

The total return equity swap has a credit arrangement that requires us to provide cash collateral equaling 20% of the initial purchase price and to subsequently post additional cash collateral that corresponds to any further unrealized loss. As at December 31, 2016 cash collateral amounting to $70.0 million has been provided (see note 20).

Concentrations of risk

There is a concentration of credit risk with respect to cash and cash equivalents and restricted cash to the extent that substantially all of the amounts are carried with Nordea Bank of Finland PLC, DNB Bank ASA, Citibank and Standard Chartered. However, we believe this risk is remote, as they are established and reputable establishments with no prior history of default.

There is a concentration of financing risk with respect to our long-term debt to the extent that a substantial amount of our long-term debt is carried with K-Sure, KEXIM and commercial lenders of our $1.125 billion facility, as well as with ICBCL, CMBL and CCBFL in regards to our VIE loans (see notes 4 and 25). We believe these counterparties to be sound financial institutions. Therefore, we believe this risk is remote.

We have a substantial equity investment in our former subsidiary, Golar Partners, that from December 13, 2012 is considered as our affiliate and not our controlled subsidiary. As of December 31, 2016, our ownership interest was 33.9% and the aggregate value of the investments recorded in our balance sheet as of December 31, 2016 was $507.2 million being the total of our ownership interest (common and general partner interests) plus IDRs. Accordingly, the value of our investments and the income generated from Golar Partners is subject to specific risks associated with its business. Golar Partners operates in the same business as us and as of December 31, 2016 had a fleet of ten vessels managed by us, under contract, operating under medium to long-term charters with a concentrated number of charterers; BG Group, Petrobras, Pertamina, DUSUP, Nusantara Regas, KNPC, Eni and NEPCO. Furthermore, in the event the decline in the fair value of these investments falls below the carrying value and it was determined to be other-than-temporary, we would be required to recognize an impairment loss.

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A further concentration of supplier risk exists in relation to our vessels undergoing FLNG conversion with Keppel and Black and Veatch. However, we believe this risk is remote as Keppel are global leaders in the shipbuilding and vessel conversion sectors while B&V is a global engineering, procurement and construction company. As is typical with newbuilding and conversion contracts, we have entered into either refund guarantee agreements with several banks in respect of newbuilding yards or we have been given guarantees by conversion yards.

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31.	RELATED PARTY TRANSACTIONS

a) Transactions with Golar Partners and subsidiaries:

Income (expenses):



(in thousands of $)	2016		2015		2014
Management and administrative services fees revenue (i)	4,251		2,949		2,877
Ship management fees revenue (ii)	6,466		7,577		7,746
Charter-hire expenses (iii)	(28,368	)	(41,555	)	—
Gain on disposals to Golar Partners (iv)	—		102,406		43,287
Interest income on vendor financing loan (iv)	—		4,217		—
Interest expense on short-term credit facility (v)	(122	)	(203	)	—
Share options expense recharge (vii)	181		297		—
Interest expense on deposit payable (viii)	(1,967	)	—		—
Total	(19,559	)	75,688		53,910

Receivables (payables): The balances with Golar Partners and subsidiaries as of December 31, 2016 and 2015 consisted of the following:



(in thousands of $)	2016		2015
Trading balances (owing to) due from Golar Partners and subsidiaries (v)	(21,792	)	(4,400	)
Methane Princess lease security deposit movements (vi)	(2,006	)	(2,728	)
Deposit payable (viii)	(107,247	)	—
Total	(131,045	)	(7,128	)

(i) Management and administrative services agreement - On March 30, 2011, Golar Partners entered into a management and administrative services agreement with Golar Management, a wholly-owned subsidiary of Golar, pursuant to which Golar Management will provide to Golar Partners certain management and administrative services. The services provided by Golar Management are charged at cost plus a management fee equal to 5% of Golar Management’s costs and expenses incurred in connection with providing these services. Golar Partners may terminate the agreement by providing 120 days written notice.

(ii) Ship management fees - Golar and certain of its affiliates charge ship management fees to Golar Partners for the provision of technical and commercial management of Golar Partners' vessels. Each of Golar Partners’ vessels is subject to management agreements pursuant to which certain commercial and technical management services are provided by Golar Management. Golar Partners may terminate these agreements by providing 30 days written notice.

(iii) Charter-hire expenses - This consists of the charterhire expenses that we incurred for the charter back from Golar Partners of the Golar Grand in 2015 and 2016, and for the comparative period in 2015 this also includes the Golar Eskimo .

In connection with the sale of the Golar Grand to Golar Partners in November 2012, we issued an option where, in the event that the charterer did not renew or extend its charter for the Golar Grand beyond February 2015, the Partnership had the option to require us to charter the vessel through to October 2017. In February 2015, the option was exercised. Accordingly, we recognized charterhire costs of $28.4 million and $28.7 million for the year ended December 31, 2016 and 2015, respectively, in relation to the Golar Grand. This excludes the release of $6.1 million and $3.9 million representing the amortization for the year December 31, 2016 and 2015, respectively, in respect of the guarantee obligation. Furthermore the expense of $8.8 million , representing the incremental liability recognized upon re-measurement of the guarantee obligation is also excluded from the 2015 comparative.

In connection with the sale of the Golar Eskimo in January 2015, we entered into an agreement with Golar Partners to charter back the vessel until June 30, 2015. Accordingly, we recognized charterhire costs of $nil and $12.9 million for the years ended December 31, 2016 and 2015, respectively.

In addition, in exchange for entering into the charter back arrangement for the Golar Eskimo we agreed with Golar Partners that should we achieve a favorable renegotiation and extension of the charter with the charterer, which increased the value of the charter

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sold along with the vessel, Golar Partners would pay additional consideration to us equivalent to any increase in value. No charter renegotiation took place and no additional consideration was due or paid.

(iv) Gain on disposals - This refers to the gains arising on the disposals of the Golar Eskimo, the Golar Igloo and the Golar Maria to Golar Partners. These disposals are further described in note 6.

In January 2015, we completed the disposal of our interests in the companies that own and operate the FSRU, the Golar Eskimo , which resulted in a gain on disposal of $102.4 million . To part fund the purchase, we provided Golar Partners with a $220.0 million loan facility which was non-amortizing with a balloon payment due in December 2016 and bore interest at a rate equal to LIBOR plus a blended margin of 2.84% . The loan facility also contained an early repayment incentive fee of up to 1.0% of the loan amount which was called by Golar Partners following early repayment of the loan in November 2015. As a result we incurred an incentive fee of $ 1.1 million .

In March 2014, we completed the sale of our interests in the company that owns and operates the FSRU, the Golar Igloo, which resulted in a gain on disposal of $43.3 million .

(v) Trading balances - Receivables and payables with Golar Partners and its subsidiaries are comprised primarily of unpaid management fees and expenses for management, advisory and administrative services and may include working capital adjustments in respect of disposals to the Partnership, as well as charterhire expenses. In addition, certain receivables and payables arise when we pay an invoice on behalf of a related party and vice versa. Receivables and payables are generally settled quarterly in arrears. Trading balances owing to or due from Golar Partners and its subsidiaries are unsecured, interest-free and intended to be settled in the ordinary course of business. They primarily relate to recharges for trading expenses paid on behalf of Golar Partners, including ship management and administrative service fees due to us. In January 2016, we received funding from Golar Partners in the amount of $30 million for a fixed period of 60 days. Golar Partners charged interest on this balance at a rate of LIBOR plus 5.0% . In November 2015, we received funding from Golar Partners in the amount of $50 million for a fixed period of 28 days. Golar Partners charged interest on this balance at a rate of LIBOR plus 5.0% .

The increase in trading balances to $21.8 million as of December 31, 2016 from $4.4 million as of December 31, 2015 is mainly attributable to amounts due to Golar Partners for charterhire expenses relating to Golar Grand discussed in (iii) above and amounts under the Golar Tundra Sale agreement discussed in (viii) below.

(vi) Methane Princess lease security deposit movements - This represents net advances from Golar Partners since its IPO, which correspond with the net release of funds from the security deposits held relating to a lease for the Methane Princess . This is in connection with the Methane Princess tax lease indemnity provided to Golar Partners under the Omnibus Agreement. Accordingly, these amounts will be settled as part of the eventual termination of the Methane Princess lease.

(vii) Share options expense - This relates to a recharge of share option expense to Golar Partners in relation to share options in Golar granted to certain of Golar Partners directors and officers during 2016 and 2015.

(viii) Deposit - In February 2016, we entered into a purchase agreement for the sale of our equity interests in the company (“Tundra Corp”) that is the disponent owner and operator of the Golar Tundra to Golar Partners for the purchase price of $330 million , less the net lease obligations under the lease agreement with CMBL and net working capital adjustments (“Golar Tundra Sale”). The Golar Tundra is subject to a time charter (“Golar Tundra Time Charter”) with West Africa Gas Limited (“WAGL”), a company jointly owned by the Nigerian National Petroleum Corporation and Sahara Energy Resource Ltd, for an initial term of five years, which may be extended for an additional five years at WAGL’s option. In February 2016, we received a $30 million deposit from Golar Partners towards the purchase price. The outstanding debt in respect of the Golar Tundra due to CMBL stood at $222.7 million at the time of the sale to Golar Partners. On May 23, 2016, the sale was completed and Golar Partners settled in cash the outstanding $77.3 million due to Golar.

In connection with the closing of the Golar Tundra Sale, we also entered into an agreement with Golar Partners pursuant to which we will pay Golar Partners a daily fee plus operating expenses for the right to use the Golar Tundra from the date of the closing of the Golar Tundra Sale until the date that the vessel commences operations under the Golar Tundra Time Charter with WAGL. In return, Golar Partners will remit to us any hire income received with respect to the Golar Tundra during this period. If for any reason the Golar Tundra Time Charter has not commenced by the 12 month anniversary of the closing of the Golar Tundra Sale, Golar Partners has the right to require that we repurchase the shares of Tundra Corp at a price equal to the purchase price.

Until the Golar Tundra commences operations and the arrangements between Golar Partners expires (including Golar Partners' right to require that the Company repurchase the shares of Tundra Corp, the disponent owner and operator of the Golar Tundra ), the Company will continue to consolidate Tundra Corp. Accordingly, for the year ended December 31, 2016, we accounted for

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the amount received in relation to the Golar Tundra Sale as a deposit payable and $2.0 million as interest expense with respect to these arrangements.

Other transactions:

Payment under Omnibus Agreement

In 2013, Golar Partners incurred expenses of $3.3 million which were indemnified and settled by us in accordance with the terms of the Omnibus Agreement. This was recorded in our statement of operations as "Other non-operating expense". Accordingly, for each of the years ended December 31, 2016, 2015 and 2014, in respect of this indemnification, we recognized an expense in our statement of operations of $ nil , $nil and $0.5 million , respectively.

Golar Partners distributions to us

Golar Partners has declared and paid quarterly distributions totaling $55.3 million , $52.1 million , and $61.3 million to us for each of the years ended December 31, 2016, 2015 and 2014, respectively.

Exchange of Incentive Distribution Rights

Pursuant to the terms of an Exchange Agreement (the “Exchange Agreement”) by and between Golar and Golar Partners we exchanged all of our incentive distribution rights in the Partnership (“Old IDRs”) in October 2016 (see note 14).

Indemnifications and guarantees:

a) Tax lease indemnifications: Under the Omnibus Agreement, we have agreed to indemnify Golar Partners in the event of any tax liabilities in excess of scheduled or final settlement amounts arising from the Methane Princess leasing arrangement and the termination thereof.

In addition, to the extent Golar Partners incurs any liabilities as a consequence of a successful challenge by the U.K. Tax Authorities with regard to the initial tax basis of the transactions relating to any of the U.K. tax leases or in relation to the lease restructuring terminations in 2010, we have agreed to indemnify Golar Partners.

The maximum possible amount in respect of the tax lease indemnification is not known as the determination of this amount is dependent on our intention of terminating this lease and the various market factors present at the point of termination. As of December 31, 2016, we recognized a liability of $11.5 million in respect of the tax lease indemnification to Golar Partners representing the fair value at deconsolidation in December 2012 (2015: $11.5 million ).

b) Performance guarantees: We issued performance guarantees to third party charterers in connection with the Time Charter Party agreements entered into with the vessel operating entities who are now subsidiaries of Golar Partners. These performance guarantees relate to the Golar Spirit , the Golar Freeze , the Methane Princess , the Golar Winter and the Golar Mazo . The maximum potential exposure in respect of the performance guarantees issued by the Company is not known as these matters cannot be absolutely determined. The likelihood of triggering the performance guarantees is remote based on the past performance of both our and Golar Partners' combined fleets.

Omnibus Agreement

In connection with the IPO of Golar Partners, we entered into an Omnibus Agreement with Golar Partners governing, among other things, when we and Golar Partners may compete against each other as well as rights of first offer on certain FSRUs and LNG carriers. Under the Omnibus Agreement, Golar Partners and its subsidiaries agreed to grant a right of first offer on any proposed sale, transfer or other disposition of any vessel it may own. Likewise, we agreed to grant a similar right of first offer to Golar Partners for any vessel under a charter for five or more years that we may own. These rights of first offer will not apply to a (a) sale, transfer or other disposition of vessels between any affiliated subsidiaries, or pursuant to the terms of any current or future charter or other agreement with a charter party or (b) merger with or into, or sale of substantially all of the assets to, an unaffiliated third-party. In addition, the Omnibus Agreement provides for certain indemnities to Golar Partners in connection with the assets transferred from us.

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b) Transactions with Golar Power and affiliates:

Net revenues: The transactions with Golar Power and its affiliates for the twelve months ended December 31, 2016 consisted of the following:



(in thousands of $)	2016
Management and administrative services revenue	1,965
Ship management fees income	335
Surety bond and debt guarantee compensation (i)	488
Total	2,788

Payables: The balances with Golar Power and its affiliates as of December 31, 2016 consisted of the following:



(in thousands of $)	2016
Trading balances due to Golar Power and affiliates (ii)	(4,442	)
Total	(4,442	)

(i) Surety bond and debt guarantee compensation - In connection with the closing of the Golar Power and Stonepeak transaction, Golar Power entered into agreements to compensate Golar in relation to the surety bond and certain debt guarantees (as further described under the subheading "Guarantees and other") relating to Golar Power and subsidiaries. This compensation amounted to an aggregate of $0.5 million income for the year ended December 31, 2016. Accordingly we have recognized an asset for the counter guarantee as part of the deconsolidation of the Golar Power entity, see note 7.

As at December 31, 2016 the surety bond guarantee had been terminated and thus no further compensation will be received in relation to the surety bond guarantee.

(ii) Trading balances - Receivables and payables with Golar Power and its subsidiaries are comprised primarily of unpaid management fees, charterhire expenses, advisory and administrative services and may include working capital adjustments in connection with the initial formation of the joint venture and transaction with Stonepeak as further described in note 7. In addition, certain receivables and payables arise when we pay an invoice on behalf of a related party and vice versa. Receivables and payables are generally settled quarterly in arrears. Trading balances owing to or due from Golar Power and its subsidiaries are unsecured, interest-free and intended to be settled in the ordinary course of business. They primarily relate to recharges for trading expenses paid on behalf of Golar Power, including ship management and administrative service fees due to us.

Guarantees and other:

a) Debt guarantees - The debt guarantees were previously issued by Golar to third party banks in respect of certain secured debt facilities relating to Golar Power and subsidiaries. The liability which is recorded in "Other long-term liabilities" is being amortized over the remaining term of the respective debt facilities with the credit being recognized in "Other financial items". As of December 31, 2016, the Company guaranteed $203.7 million of Golar Power's long-term debt obligations. The debt facilities are secured against specific vessels. As described in (i) above we receive compensation from Golar Power in relation to the provision of the guarantees.

b) Shipyard guarantee - In connection with the newbuilding contract for the construction of a FSRU, we provided a guarantee to cover the remaining milestone payments due to the shipyard. Pursuant to the formation of Golar Power and closing of the Stonepeak transaction, Golar Power's subsidiary, entered into a counter guarantee with us to indemnify us in the event we are required to pay out any monies due under the shipyard guarantee.

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c) Golar Power Purchase Option - Under the shareholders' agreement, Golar Power has the right for 18 months from July 6, 2016 to purchase another two of our vessels at their respective fair values. In connection with any such transaction, Ordinary Shares will be issued based on the fair market value of the vessel(s) at the time of their respective contribution.

d) Golar Power contributions - under the shareholders' agreement, we and Stonepeak have agreed to contribute additional funding to Golar Power, on a pro rata basis, including (i) an aggregate of $150 million in the period through to the second half of 2018; and (ii) additional amounts as may be required by Golar Power, subject to the approval of its board of directors.

c) Transactions with OneLNG and subsidiaries:

On July 25, 2016 Golar and Schlumberger B.V. ("Schlumberger") entered into a joint venture and shareholders' agreement to form OneLNG, a joint venture, with the intention to offer an integrated upstream and midstream solution for the development of low cost gas reserves to LNG. In accordance with the joint venture and shareholders' agreement, Golar holds 51% and Schlumberger the remaining 49% of OneLNG. Both Golar and Schlumberger have agreed pursuant to the OneLNG joint venture and Shareholders’ Agreement that any new FLNG business development will be initiated by OneLNG. If the Board of Directors of OneLNG chooses not to proceed with an identified project, Golar or Schlumberger will be free to pursue the project independently. By virtue of substantive participation rights held by Schlumberger we account for our investment in OneLNG under the equity method of accounting.

Net revenues: The transactions with OneLNG and its subsidiaries for the twelve months ended December 31, 2016 consisted of the following:



(in thousands of $)	2016
Management and administrative services revenue	586
Total	586

Receivables: The balances with OneLNG and its subsidiaries as of December 31, 2016 consisted of the following:



(in thousands of $)	2016
Trading balances due from OneLNG (i)	719
Total	719

(i) Trading balances - Receivables and payables with One LNG and its subsidiaries are comprised primarily of unpaid management fees, charterhire expenses, advisory and administrative services. In addition, certain receivables and payables arise when we pay an invoice on behalf of a related party and vice versa. Receivables and payables are generally settled quarterly in arrears. Trading balances owing to or due from OneLNG are unsecured, interest-free and intended to be settled in the ordinary course of business.

Guarantees and other:

a) OneLNG contributions - In connection with our newly formed joint venture, OneLNG, (see note 14) under the joint venture and shareholders' agreement with Schlumberger, once a OneLNG project reaches final investment decision, we and Schlumberger will each be required to provide $250 million of new equity. Contributions may include intellectual property amongst other items.

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d) Transaction with other related parties:

Net revenues (expenses): The transactions with other related parties for the twelve months ended December 31, 2016, 2015 and 2014 consisted of the following:



(in thousands of $)	2016		2015		2014
Frontline (i)	—		—		34
Seatankers (i)	—		—		(112	)
Ship Finance (i)	—		—		116
Seadrill (i)	—		—		(5	)
Golar Wilhelmsen (ii)	—		(2,246	)	(7,031	)
The Cool Pool (iii)	32,254		1,992		—
Magni Partners (iv)	(4,282	)	—		—
Total	27,972		(254	)	(6,998	)

Receivables (Payables): The balances with other related parties as of December 31, 2016 and 2015 consisted of the following:



(in thousands of $)	2016		2015
The Cool Pool (iii)	3,490		2,000
Magni Partners (iv)	(137	)	—
Total	3,353		2,000

(i) On September 10, 2014 following a secondary offering of 32 million of our common shares by World Shipholding Limited (''World Shipholding''), its stake in us was reduced from 36.2% to 1.9% . As of December 31, 2016 and 2015, World Shipholding owned 0.0% of Golar. Following this, World Shipholding, Frontline Ltd (''Frontline''), Seatankers Management Company Limited (''Seatankers''), Ship Finance AS (''Ship Finance'') and Seadrill Ltd (''Seadrill''), ceased to be our related parties.

(ii) As of September 4, 2015, pursuant to the acquisition of the remaining 40% interest, we held a 100% ownership interest in Golar Wilhelmsen, thus making it a controlled and fully consolidated subsidiary from that date. Previous to that we held a 60% ownership interest in Golar Wilhelmsen, which we accounted for using the equity method. Golar Wilhelmsen recharges management fees in relation to provision of technical and ship management services. Accordingly, from September 4, 2015, these management fees are eliminated on consolidation.

(iii) The Cool Pool - For the year ended December 31, 2016 we recognized net income of $32.3 million from our participation in the Cool Pool. Trade accounts receivable includes amounts due from the Cool Pool, amounting to $3.5 million as of December 31, 2016 (December 31, 2015: $2.0 million ).

The table below summarizes our earnings generated from our participation in The Cool Pool:



(in thousands of $)	2016		2015
Time and voyage charter revenues	37,345		5,771
Time charter revenues - collaborative arrangement	13,730		—
Voyage, charter-hire expenses and commission expenses	(7,681	)	(3,779	)
Voyage, charter-hire and commission expenses - collaborative arrangement	(11,140	)	—
Net income from The Cool Pool	32,254		1,992

(iv) Magni Partners - Tor Olav Trøim is the founder of, and partner in, Magni Partners Limited, a privately held UK company, and is the ultimate beneficial owner of the company. Pursuant to a management agreement between Magni Partners Limited and a Golar subsidiary, for the year ended December 31, 2016, Golar was recharged $3.9 million (this includes $3.0 million in relation to the transaction with Golar Power which has been recorded as part of the loss on disposal of Golar Power in the income statement, see note 7) for advisory services from a partner and director of Magni Partners Limited, other than Mr Trøim. In addition, Golar was recharged $0.1 million for travel relating to certain board members and $0.3 million for other travel and out of pocket expenses. All charges have been recharged to Golar at cost.

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32.	CAPITAL COMMITMENTS

FLNG conversions

We entered into agreements for the conversion of the Hilli, the Gimi and the Gandria to FLNGs in May 2014, December 2014, and July 2015, respectively, with Keppel and B&V. As at December 31, 2016, the estimated timing of the outstanding payments in connection with the Hilli conversion are as follows:



(in thousands of $)
Payable within 12 months to December 31, 2017	429,370
Payable within 12 months to December 31, 2018	55,768
	485,138

As we have not lodged our final notice to proceed on the Gimi and the Gandria conversion contracts, we have excluded the Gimi and the Gandria capital commitments in the above table. If we decide to lodge our final notice to proceed, we will have further contractual obligations of approximately $700.0 million and $1.0 billion for the Gimi and the Gandria , respectively. If we do not issue our final notice to proceed for the Gimi conversion, we would have to pay a maximum of $20.0 million in termination fees.



33.	OTHER COMMITMENTS AND CONTINGENCIES

Assets pledged



(in thousands of $)	December 31, 2016	December 31, 2015
Book value of vessels secured against long-term loans ⁽¹⁾⁽²⁾	2,106,062	2,543,012

⁽¹⁾ This includes the Golar Tundra which is classified as held-for-sale (see note 19).

⁽²⁾ This excludes the Hilli which is classified as "asset under development". The Hilli is secured against the FLNG Hilli facility (see note 17).

As at December 31, 2016 , we have secured 13.0 million of our holdings in the subordinated units of Golar Partners against our convertible bonds which were fully redeemed on March 6, 2017. See notes 20 and 25 for further detail.

Other contractual commitments and contingencies

UK tax lease benefits

During 2003 we entered into six UK tax leases. Under the terms of the leasing arrangements, the benefits are derived primarily from the tax depreciation assumed to be available to the lessors as a result of their investment in the vessels. As is typical in these leasing arrangements, as the lessee we are obligated to maintain the lessor’s after-tax margin. Accordingly, in the event of any adverse tax changes or a successful challenge by the UK Tax Authorities (''HMRC'') with regard to the initial tax basis of the transactions, or in relation to the 2010 lease restructurings, or in the event of an early termination of the Methane Princess lease, we may be required to make additional payments principally to the UK vessel lessor, which could adversely affect our earnings or financial position. We would be required to return all, or a portion of, or in certain circumstances significantly more than, the upfront cash benefits that we received in respect of our lease financing transactions, including the 2010 restructurings and subsequent termination transactions. The gross cash benefit we received upfront on these leases amounted to approximately £41 million British Pounds (before deduction of fees).

Of these six leases we have since terminated five , with one lease remaining, being that of the Methane Princess lease. Pursuant to the deconsolidation of Golar Partners in 2012, Golar Partners is no longer considered a controlled entity but an affiliate and therefore as at December 31, 2016, the capital lease obligation relating to this remaining UK tax lease is not included on our consolidated balance sheet. However, under the indemnity provisions of the Omnibus Agreement or the respective share purchase agreements, we have agreed to indemnify Golar Partners in the event of any tax liabilities in excess of scheduled or final scheduled amounts arising from the Methane Princess leasing arrangements and termination thereof.

HMRC has been challenging the use of similar lease structures and has been engaged in litigation of a test case for some years. In August 2015, following an appeal to the Court of Appeal by the HMRC which set aside previous judgments in favor of the tax payer, the First Tier Tribunal (UK court) ruled in favor of HMRC. The tax payer in this particular ruling has the election to appeal

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the courts’ decision, but no appeal has been filed. The judgments of the First Tier Tribunal do not create binding precedent for other UK court decisions and therefore the ruling in favor of HMRC is not binding in the context of our structures. Further, we consider there are differences in the fact pattern and structure between this case and our 2003 leasing arrangements and therefore is not necessarily indicative of any outcome should HMRC challenge us and we remain confident that our fact pattern is sufficiently different to succeed if we are challenged by HMRC. HMRC have written to our lessor to indicate that they believe our lease may be similar to the case noted above. We have reviewed the details of the case and the basis of the judgment with our legal and tax advisers to ascertain what impact, if any, the judgment may have on us and the possible range of exposure has been estimated at approximately £ nil to £108 million British Pounds. We are currently in conversation with HMRC on this matter, presenting the factual background of our position.

Legal proceedings and claims

Other

In December 2005, we signed a shareholders' agreement in connection with the setting up of a jointly owned company to be named Egyptian Company for Gas Services S.A.E ("ECGS"), which was to be established to develop hydrocarbon business and in particular LNG related business in Egypt. As at December 31, 2016 , we had a commitment to pay $1.0 million to a third party, contingent upon the conclusion of a material commercial business transaction by ECGS as consideration for work performed in connection with the setting up and incorporation of ECGS.



34.	SUBSEQUENT EVENTS

On February 17, 2017, we closed a new $402.5 million senior unsecured five years 2.75% convertible bond. The conversion rate for the bonds will initially equal 26.5308 common shares per $1,000 principal amount of the bonds. This is equivalent to an initial conversion price of $37.69 per common share, or a 35% premium on the February 13, 2017 closing share price of $27.92 . The conversion price is subject to adjustment for dividends paid. To mitigate the dilution risk of conversion to common equity, we also entered into capped call transactions costing approximately $31.2 million . The capped call transactions cover approximately 10,678,647 common shares, have an initial strike price of $37.69 , and an initial cap price of $48.86 . The cap price of $48.86 , which is a proxy for the revised conversion price, represents a 75% premium on the February 13, 2017 closing share price of $27.92 . Including the $31.2 million cost of the capped call, the all-in cost of the bond is approximately 4.3% . Bond proceeds, net of fees and the cost of the capped call, amounted to $360.2 million .

In February 2017, Golar Partners entered into a time charter with a major international oil and gas company (the “New Charter”) for the Golar Grand . We currently charter the Golar Grand from Golar Partners and will therefore sub-charter her back to the Partnership at the same rate as the New Charter, until our charter ends in October 2017. The vessel will be delivered under the New Charter during the second quarter of 2017 for an initial period of two years with a series of options to extend the charter for up to an additional seven years.

On February 28, 2017, we declared a dividend of $ 0.05 per share in respect of the quarter ended December 31, 2016 and paid this in April 2017. In addition, Golar Partners made a final cash distribution of $ 0.58 per unit in February 2017 in respect of the quarter ended December 31, 2016, of which we received $ 12.8 million of dividend income in relation to our common, subordinated and general partner units and IDRs held at the record date.

We entered into a loan agreement, dated March 3, 2017, among one of our wholly-owned subsidiaries, as borrower, Golar LNG Limited, as guarantor, Citibank, N.A., as administrative agent, initial collateral agent and calculation agent, and Citibank, N.A., as lender. We refer to this as the Margin Loan Facility. Pursuant to the Margin Loan Facility, on March 3, 2017 Citibank, N.A. provided a loan in the amount of $150 million . The Margin Loan Facility has a term of three years, an interest rate of LIBOR plus a margin and is secured by our Golar Partners common units and their associated distributions, and in certain cases, cash or cash

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equivalents. The Margin Loan Facility contains conditions, representations and warranties, covenants (including loan to value requirements), mandatory prepayment events, facility adjustment events, events of default and other provisions customary for a facility of this nature. The loan was primarily used to pay a portion of the amounts due under our 3.75% convertible senior secured bonds due March 2017, or the Prior Convertible Bonds. Concurrently with the repayment of the Prior Convertible Bonds, the trustee for these bonds released our Golar Partners common units that had been pledged to secure them. In connection with the Margin Loan Facility, Golar LNG Limited contributed 20,852,291 Golar Partners common units to the relevant borrower subsidiary under the Margin Loan Facility, and Golar LNG Limited and the relevant borrower subsidiary entered into the pledge agreement pursuant to which the 20,852,291 Golar Partners common units were pledged as security for the obligations under the Margin Loan Facility.

On March 10, 2017 we drew down an additional $50 million in connection with the FLNG Hilli facility entered into in September 2015. To date we have drawn down $300 million under this facility.

On March 14, 2017, we completed the refinancing of the Golar Crystal . The financing structure funded 60% of the market value of the Golar Crystal . At funding, the vessel was simultaneously bareboat chartered by the Company at a fixed rate for a firm period of 10 years.

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EXECUTION VERSION

________________________________________________

GOLAR LNG LIMITED
(Company)
DEUTSCHE BANK TRUST COMPANY AMERICAS
(Trustee)

2.75% Convertible Senior Notes due 2022

INDENTURE

Dated as of February 17, 2017

____________________________________________

TABLE OF CONTENTS

Page

ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION 1

Section 1.01 Definitions 1

Section 1.02 References to Interest 13

Section 1.03 Acts of Holders 13

ARTICLE 2 THE NOTES 15

Section 2.01 Title and Terms; Payments. 15

Section 2.02 Ranking 16

Section 2.03 Denominations 16

Section 2.04 Execution, Authentication, Delivery and Dating 16

Section 2.05 Temporary Notes 16

Section 2.06 Registration; Registration of Transfer and Exchange. 16

Section 2.07 Transfer Restrictions. 18

Section 2.08 Expiration of Restrictions. 20

Section 2.09 Mutilated, Destroyed, Lost and Stolen Notes 21

Section 2.10 Persons Deemed Owners 22

TABLE OF CONTENTS

(continued)

Page

Section 2.11 Transfer and Exchange. 22

Section 2.12 Cancellation 25

Section 2.13 CUSIP Numbers 26

Section 2.14 Payment and Computation of Interest 26

Section 2.15 Business Day 27

ARTICLE 3 REPURCHASE AT THE OPTION OF THE HOLDERS 27

Section 3.01 Purchase at Option of Holders upon a Fundamental Change 27

Section 3.02 Fundamental Change Company Notice. 27

Section 3.03 Repurchase Procedures. 29

Section 3.04 Effect of Fundamental Change Purchase Notice 30

Section 3.05 Withdrawal of Fundamental Change Purchase Notice 30

Section 3.06 Deposit of Fundamental Change Purchase Price 30

Section 3.07 Notes Purchased in Whole or in Part 31

Section 3.08 Covenant To Comply with Applicable Laws upon Purchase of Notes 31

Section 3.09 Repayment to the Company 31

TABLE OF CONTENTS

(continued)

Page

ARTICLE 4 CONVERSION 31

Section 4.01 Right To Convert 31

Section 4.02 Conversion Procedures. 34

Section 4.03 Settlement Upon Conversion. 36

Section 4.04 Adjustment of Conversion Rate 39

Section 4.05 Discretionary and Voluntary Adjustments. 49

Section 4.06 Adjustment to Conversion Rate Upon Conversion in Connection with a Make-Whole Fundamental Change. 50

Section 4.07 Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale. 51

Section 4.08 Certain Covenants. 53

Section 4.09 Responsibility of Trustee 53

Section 4.10 Notice of Adjustment to the Trustee 54

Section 4.11 Notice to Holders. 54

ARTICLE 5 COVENANTS 56

Section 5.01 Payment of Principal, Interest and Fundamental Change Purchase Price . 56

TABLE OF CONTENTS

(continued)

Page

Section 5.02 Maintenance of Office or Agency. 56

Section 5.03 Provisions as to Paying Agent. 57

Section 5.04 Reports. 58

Section 5.05 Statements as to Defaults 59

Section 5.06 Additional Interest Notice 59

Section 5.07 Compliance Certificate and Opinions of Counsel. 59

Section 5.08 Additional Interest. 60

Section 5.09 Corporate Existence 61

Section 5.10 Restriction on Resales 61

Section 5.11 Company to Furnish Trustee Names and Addresses of Holders 61

Section 5.12 Additional Amounts. 61

ARTICLE 6 REMEDIES 65

Section 6.01 Events of Default 65

Section 6.02 Acceleration; Waiver. 66

Section 6.03 Additional Interest. 67

TABLE OF CONTENTS

(continued)

Page

Section 6.04 Control by Majority 68

Section 6.05 Limitation on Suits 68

Section 6.06 Rights of Holders to Receive Payment and to Convert 69

Section 6.07 Collection of Indebtedness; Suit for Enforcement by Trustee 69

Section 6.08 Trustee May Enforce Claims Without Possession of Notes 69

Section 6.09 Trustee May File Proofs of Claim 69

Section 6.10 Restoration of Rights and Remedies 70

Section 6.11 Rights and Remedies Cumulative 70

Section 6.12 Delay or Omission Not a Waiver 70

Section 6.13 Priorities 70

Section 6.14 Undertaking for Costs 71

Section 6.15 Waiver of Stay, Extension and Usury Laws 71

ARTICLE 7 SATISFACTION AND DISCHARGE 71

Section 7.01 Discharge of Liability on Notes 71

Section 7.02 Deposited Monies to Be Held in Trust by Trustee 72

TABLE OF CONTENTS

(continued)

Page

Section 7.03 Paying Agent to Repay Monies Held 72

Section 7.04 Return of Unclaimed Monies 72

Section 7.05 Reinstatement 72

ARTICLE 8 SUPPLEMENTAL INDENTURES 73

Section 8.01 Supplemental Indentures Without Consent of Holders. 73

Section 8.02 Supplemental Indentures With Consent of Holders. 73

Section 8.03 Notice of Amendment or Supplement 75

Section 8.04 Trustee to Sign Amendments, Etc. 75

ARTICLE 9 SUCCESSOR COMPANY 75

Section 9.01 Company May Consolidate, Etc. on Certain Terms 75

Section 9.02 Successor Corporation to Be Substituted 76

Section 9.03 Opinion of Counsel to Be Given to Trustee 77

ARTICLE 10 THE TRUSTEE 77

Section 10.01 Duties and Responsibilities of Trustee. 77

Section 10.02 Notice of Defaults 79

TABLE OF CONTENTS

(continued)

Page

Section 10.03 Reliance on Documents, Opinions, Etc 79

Section 10.04 No Responsibility for Recitals, Etc 80

Section 10.05 Trustee, Paying Agents, Exchange Agents or Registrar May Own Notes 80

Section 10.06 Monies to be Held in Trust 81

Section 10.07 Compensation, Expenses and Indemnity of Trustee 81

Section 10.08 Officer’s Certificate as Evidence 82

Section 10.09 [Reserved]. 82

Section 10.10 Eligibility of Trustee 82

Section 10.11 Resignation or Removal of Trustee. 82

Section 10.12 Acceptance by Successor Trustee 83

Section 10.13 Succession by Merger, Etc 84

Section 10.14 [Reserved]. 84

Section 10.15 Trustee’s Application for Instructions from the Company 84

ARTICLE 11 NO OPTIONAL REDEMPTION 85

Section 11.01 No Right to Redeem 85

TABLE OF CONTENTS

(continued)

Page

ARTICLE 12 MISCELLANEOUS 85

Section 12.01 Effect on Successors and Assigns 85

Section 12.02 Governing Law 85

Section 12.03 No Note Interest Created 85

Section 12.04 Voting 85

Section 12.05 Benefits of Indenture 86

Section 12.06 Calculations 86

Section 12.07 Execution in Counterparts 86

Section 12.08 Notices, Etc. to Trustee and Company. 86

Section 12.09 No Recourse Against Others 87

Section 12.10 Tax Withholding 87

Section 12.11 Waiver of Jury Trial 87

Section 12.12 U.S.A. Patriot Act 88

Section 12.13 Force Majeure 88

INDENTURE, dated as of February 17, 2017, between Golar LNG Limited, a Bermuda exempted company, as issuer (the “Company”), and Deutsche Bank Trust Company Americas, a New York banking corporation, as trustee (the “Trustee”).

RECITALS OF THE COMPANY

WHEREAS, the Company has duly authorized the creation of an issue of the Company’s 2.75% Convertible Senior Notes due 2022 (the “Notes”), having the terms, tenor, amount and other provisions hereinafter set forth, and, to provide therefor, has duly authorized the execution and delivery of this Indenture; and

WHEREAS, all things necessary to make the Notes, when duly executed by the Company and authenticated and delivered hereunder and duly issued by the Company, the legal, valid and binding obligations of the Company, in accordance with the terms of the Notes and this Indenture, have been done and performed, and the execution of this Indenture and the issue hereunder of the Notes have in all respects been duly authorized;

NOW, THEREFORE, THIS INDENTURE WITNESSETH, for and in consideration of the premises and the purchases of the Notes by the Holders thereof, it is mutually agreed, for the benefit of the Company and the equal and proportionate benefit of all Holders, as follows:

ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

Section 1.01 Definitions. The terms defined in this Section 1.01 (except as herein otherwise expressly provided or unless the context otherwise requires) for all purposes of this Indenture and of any indenture supplemental hereto shall have the respective meanings specified in this Section 1.01. The words “herein”, “hereof’, “hereunder” and words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other Subdivision. The word “or” is not exclusive and the word “including” means including without limitation. The terms defined in this Article include the plural as well as the singular.

“Act” has the meaning specified in Section 1.03 hereof.

“Additional Amounts” has the meaning specified in Section 5.12 hereof.

“Additional Interest” means all amounts, if any, payable pursuant to Section 5.08 and Section 6.03 hereof.

“Additional Notes” means any Notes (other than the Initial Notes) issued under this Indenture in accordance with Section 2.01 hereof, with the same terms as the Initial Notes.

“Additional Shares” has the meaning specified in Section 4.06(a) hereof.

“Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Agent Members” has the meaning specified in Section 2.06(b) hereof. “Applicable AML Law” has the meaning specified in Section 2.06(b) hereof.

“Applicable Procedures” means, with respect to any matter at any time, the policies and procedures of a Depositary, if any, that are applicable to such matter at such time.

“Applicable Taxes” has the meaning specified in Section 5.12 hereof.

“Authenticating Agent” means any Person authorized by the Trustee to act on behalf of the Trustee to authenticate Notes.

“Authorized Officer” means any Person (whether designated by name or office) appointed by or pursuant to a Board Resolution for the purpose, or a particular purpose, of this Indenture; provided that written notice of such appointment shall have been given to the Trustee.

“Averaging Period” has the meaning specified in Section 4.04(e) hereof.

“Bid Solicitation Agent” means the Person appointed by the Company, from time to time, to solicit secondary market bid quotations for the Trading Price of the Notes in accordance with Section 4.01(b)(2) hereof. The Company shall be the initial Bid Solicitation Agent. The Company may appoint another person (or itself) as the Bid Solicitation Agent without prior notice to Holders.

“Board of Directors” means either the board of directors of the Company or any duly authorized committee of that board.

“Board Resolution” when used with reference to the Company means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee.

“Business Day” means any day other than a Saturday, a Sunday or a day on which the Federal Reserve Bank of New York is authorized or required by law or executive order to close or to be closed; provided that, solely for the purposes of any payment required to be made on any such date, “Business Day” shall not include days in which the office where the place of payment is authorized or required by law to close.

“Capital Stock” means, for any Person, any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) the equity of such Person, but excluding any debt securities convertible into such equity.

“Cash Settlement” has the meaning specified in Section 4.03(a) hereof. “Clause A Distribution” has the meaning specified in Section 4.04(c) hereof. “Clause B Distribution” has the meaning specified in Section 4.04(c) hereof. “Clause C Distribution” has the meaning specified in Section 4.04(c) hereof. “Close of Business” means 5:00 p.m., New York City time.

“Combination Settlement” has the meaning specified in Section 4.03(a) hereof.

“Commission” means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act.

“Common Equity” of any Person means the Capital Stock of such Person that is generally entitled (a) to vote in the election of directors of such Person or (b) if such Person is not a corporation, to vote or otherwise participate in the selection of the governing body, partners, managers or others that will control the management or policies of such Person.

“Common Shares” means, subject to Section 4.07, the common shares, par value $1.00 per share, of the Company authorized at the date of this instrument as originally executed or shares of any class or classes of common shares resulting from any reclassification or reclassifications thereof; provided, however, that if at any time there shall be more than one such resulting class, the shares so issuable on conversion of Notes shall include shares of all such classes, and the shares of each such class then so issuable shall be substantially in the proportion which the total number of shares of such class resulting from all such reclassifications bears to the total number of shares of all such classes resulting from all such reclassifications.

“common stock” includes any stock of any class of Capital Stock which has no preference in respect of dividends or of amounts payable in the event of any voluntary or involuntary liquidation, dissolution or winding up of the issuer thereof and which is not subject to redemption by the issuer thereof.

“Company” has the meaning specified in the first paragraph of this Indenture, and subject to the provisions of Article 9, shall include its successors and assigns.

“Company Order” means a written request or order signed in the name of the Company by an Officer thereof.

“Conversion Agent” has the meaning specified in Section 5.02 hereof. “Conversion Date” has the meaning specified in Section 4.02(b) hereof. “Conversion Notice” has the meaning specified in Section 4.02(b) hereof.

“Conversion Price” means, in respect of each Note, as of any date, $1,000 divided by the Conversion Rate in effect on such date.

“Conversion Rate” means initially 26.5308 Common Shares per $1,000 principal amount of Notes, subject to adjustment as set forth herein.

“Corporate Trust Office” means, with respect to the office of the Trustee, the designated corporate trust office of the Trustee, which office at the date hereof is located at Deutsche Bank Trust Company Americas, Corporate Trust, 60 Wall Street, 16 ^th Floor MS: NYC60-1630, New York, New York 10005, Attn: Corporates Team Deal Manager — Golar LNG Limited, Fax: 732-578-4635, with a copy of all notices to: Deutsche Bank Trust Company Americas, c/o Deutsche Bank National Trust Company, Corporate Trust, 100 Plaza One, Mailstop JCY03-0699, Jersey City, New Jersey 07311, Attn: Corporates Team Deal Manager - Golar LNG Limited, Fax: 732-578-4635 or such other address as the Trustee may designate from time to time by notice to the Holders and the Company, or the principal corporate trust office of any successor Trustee (or such other address as such successor Trustee may designate from time to time by notice to the Holders and the Company).

“Corporation” means a corporation, association, joint stock company, limited liability company or business trust.

“Custodian” means the Trustee, as custodian for the Depositary with respect to the Notes (so long as the Notes constitute Global Notes), or any successor entity.

“Daily Conversion Value” means, for each of the 40 consecutive VWAP Trading Days during any Observation Period, one-fortieth (1/40th) of the product of (i) the Conversion Rate in effect on such VWAP Trading Day and (ii) the Daily VWAP on such VWAP Trading Day.

“Daily Measurement Value” means the Specified Dollar Amount divided by 40.

“Daily Settlement Amount” shall consist of, for each $1,000 principal amount of Notes for each of the 40 consecutive VWAP Trading Days during the Observation Period, (i) cash equal to the lesser of (A) the Daily Measurement Value and (B) the Daily Conversion Value for the relevant VWAP Trading Day; and (ii) if the Daily Conversion Value exceeds the Daily Measurement Value, a number of Common Shares equal to (A) the difference between the Daily Conversion Value and the Daily Measurement Value, divided by (B) the Daily VWAP for such VWAP Trading Day.

“Daily VWAP” means, for each of the 40 consecutive VWAP Trading Days during the applicable Observation Period (or, if applicable, the VWAP Trading Day referred to in Section 4.03(b)(i)), the per share volume-weighted average price as displayed under the heading “Bloomberg VWAP” on Bloomberg page “GLNG <equity> AQR” (or its equivalent successor if such page is not available) in respect of the period from the scheduled open of trading until the scheduled close of trading of the primary trading session on such VWAP Trading Day (or if such volume-weighted average price is unavailable, the market value of one Common Share on such VWAP Trading Day determined, using a volume-weighted average method, by a nationally or internationally recognized independent investment banking firm retained for this purpose by the Company). The “Daily VWAP” will be determined without regard to after-hours trading or any other trading outside of the regular trading session trading hours.

“Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

“Depositary” means, with respect to the Notes issuable or issued in the form of a Global Note, the Depository Trust Company or the Person designated as Depositary by the Company pursuant to the applicable provisions of this Indenture until a successor Depositary shall have become such pursuant to the applicable provisions of this Indenture, and thereafter “Depositary” shall mean or include each Person who is then a Depositary hereunder, and if at any time there is more than one such Person, “Depositary” as used with respect to the Notes of any such series shall mean the Depositary with respect to the Notes of that series.

“Distributed Property” has the meaning specified in Section 4.04(c) hereof. “Dividend Threshold” has the meaning specified in Section 4.04(d) hereof.

“Dollar” or “$” means a dollar or other equivalent unit in such coin or currency of the United States of America that is legal tender for the payment of public and private debts at the time of payment.

“Effective Date” means, with respect to a Fundamental Change or a Make-Whole Fundamental Change, as applicable, the date such Fundamental Change or Make-Whole Fundamental Change, as applicable, occurs or becomes effective.

“event” has the meaning specified in the definition of “Fundamental Change” hereof.

“Event of Default” has the meaning specified in Section 6.01 hereof.

“Ex-Dividend Date” means the first date on which the Common Shares trade on the applicable exchange or in the applicable market, regular way, without the right to receive the issuance, dividend or distribution in question.

“Excepted Transfers” means (i) vessel charters, (ii) sale and leaseback transactions entered into for financing purposes, (iii) requisitions for hire and not for title (meaning when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates) and (iv) transfers to Golar LNG Partners LP for so long as it remains listed on a national securities exchange (as defined in the Exchange Act), in each case, with the exception of clause (iii) of this definition, in the ordinary course of the Company’s business and consistent with past practice.

“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

“Form of Assignment and Transfer” means the “Form of Assignment and Transfer” attached as Attachment 3 to the Form of Note attached hereto as Exhibit A.

“Form of Fundamental Change Purchase Notice” means the “Form of Fundamental Change Purchase Notice” attached as Attachment 2 to the Form of Note attached hereto as Exhibit A.

“Form of Notice of Conversion” means the “Form of Notice of Conversion” attached as Attachment 1 to the Form of Note attached hereto as Exhibit A.

“Free Trade Date” means the date that is one year after the last date of original issuance of the Notes.

“Free Transferability Certificate” means a certificate substantially in the form attached hereto as Exhibit B.

“Freely Tradable” means, with respect to any Notes, that such Notes are eligible to be sold by a Person who is not an Affiliate of the Company (within the meaning of Rule 144) and has not been an Affiliate of the Company (within the meaning of Rule 144) during the immediately preceding 90 days without any volume or manner of sale restrictions under the Securities Act.

“Fundamental Change” shall be deemed to have occurred at the time after the Notes are originally issued if any of the following occurs:

(1) any “person” or “group” (within the meaning of Section 13(d) of the Exchange Act) files a Schedule TO or any schedule, form or report under the Exchange Act disclosing that such Person or group has become the direct or indirect ultimate “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of the Company’s Common Equity representing more than 50.0% of the voting power of the Company’s Common Equity;

(2) the consummation of (A) any recapitalization, reclassification or change of Common Shares (other than changes resulting from a subdivision or combination) pursuant to which the Common Shares would be converted into, or exchanged for, stock, other securities, other property or assets, (B) any share exchange, consolidation, merger or similar event involving the Company pursuant to which Common Shares will be converted into or exchanged for, cash, securities or other property or (C) any sale, lease or other transfer of all or substantially all of the consolidated assets of the Company, its Subsidiaries and its variable interest entities, taken as a whole, to any Person other than one or more of the Company’s wholly owned Subsidiaries (other than Excepted Transfers) (any such share exchange, consolidation, merger, similar event, transaction or series of transactions being referred to in this clause (2), an “event”); provided that any such event described in clause (B) above where the holders of the Company’s voting stock immediately prior to such event own, directly or indirectly, more than 50% of the voting stock of the continuing or surviving person or transferee or the parent thereof immediately after such event and such holders’ proportional voting power immediately after such event vis-a-vis each other with respect to the securities they receive in such event will be in substantially the same proportions as their respective voting power vis-a-vis each other immediately prior to such event will not constitute a Fundamental Change under such clause (B);

(3) (3) the Company’s stockholders approve any plan or proposal for the liquidation or dissolution of the Company; or

(4) the Common Shares (or American Depositary Receipts or American Depositary Shares representing Common Shares (collectively, “ADRs”) or other common stock into which the Notes are then convertible) ceases to be listed on at least The New York Stock Exchange, The NYSE MKT, The NASDAQ Capital Market, The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective successors);

provided, however, that in the case of a transaction or event described in clause (1) or (2) above, if at least 90% of the consideration received or to be received by holders of the Common Shares (excluding cash payments for fractional shares) in the transaction or transactions that would otherwise constitute a “Fundamental Change” consists of common shares, Common Equity interests or ADRs that are traded on any of The New York Stock Exchange, The NYSE MKT, The NASDAQ Capital Market, The NASDAQ Global Market or The NASDAQ Global Select Market (or their respective successors) or that will be so traded when issued or exchanged in connection with the transaction that would otherwise constitute a “Fundamental Change” under clause (1) or (2) above, and as a result of such transaction or transactions, the Notes become convertible into such consideration, excluding cash payments for fractional shares (subject to settlement in accordance with the provisions of Sections 4.03, 4.04 and 4.06 hereof), such event shall not be a “Fundamental Change.”

If any transaction in which the Common Shares are replaced by the securities of another entity occurs, following completion of any related Make-Whole Fundamental Change Period and any related Fundamental Change Purchase Date, references to the Company in the definition of “Fundamental Change” above will apply to such other entity instead.

“Fundamental Change Company Notice” has the meaning specified in Section 3.02(a) hereof.

“Fundamental Change Expiration Time” has the meaning specified in Section 3.03(a) hereof.

“Fundamental Change Purchase Date” has the meaning specified in Section 3.01(a) hereof.

“Fundamental Change Purchase Notice” has the meaning specified in Section 3.03(a) hereof.

“Fundamental Change Purchase Price” has the meaning specified in Section 3.01(a) hereof.

“Global Note” means a Note evidencing all or part of a series of Notes, issued to the Depositary for such series or its nominee, and registered in the name of such Depositary or nominee

”Holder” means the Person in whose name a Note is registered in the Register.

“Indenture” means this Indenture as amended or supplemented from time to

time.

“Initial Notes” has the meaning specified in Section 2.01 hereof.

“Initial Purchasers” means the “Purchasers” listed in Schedule 1 to the Purchase Agreement.

“Interest Payment Date” means, with respect to the payment of interest on the Notes, each February 15 and August 15 of each year, beginning on August 15, 2017.

“Issue Date” means, with respect to any Note, the first date of original issuance of such Note (and not, for the avoidance of doubt, the date of issuance of any Note issued in whole or in part upon registration or transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.05, 2.06, 2.07, 2.08, 2.09, 2.11 or 3.07).

“Last Original Issuance Date” means February 17, 2017.

“Last Reported Sale Price” of the Common Shares for any Trading Day means the closing sale price per share (or, if no closing sale price is reported, the average of the last bid and last ask prices or, if more than one in either case, the average of the average last bid and the average last ask prices) on that Trading Day as reported in composite transactions for the principal U.S. national or regional securities exchange on which the Common Shares are traded. If the Common Shares are not listed for trading on a U.S. national or regional securities exchange on the relevant Trading Day, the “Last Reported Sale Price” will be the last quoted bid price for the Common Shares in the over-the-counter market on the relevant date as reported by OTC Markets Group Inc. or a similar organization. If the Common Shares are not so quoted, the “Last Reported Sale Price” will be the average of the mid-point of the last bid and last ask prices for the Common Shares on the relevant Trading Day from each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose, which may include one or more of the Initial Purchasers. Any such determination will be conclusive absent manifest error.

“Make-Whole Fundamental Change” means any event that (i) is a Fundamental Change pursuant to clause (1), (2) or (4) under such definition (subject to any exceptions or exclusions to the definition thereof) or (ii) would be a Fundamental Change, but for the proviso in clause (2) of the definition of “Fundamental Change.”

“Make-Whole Fundamental Change Period” has the meaning specified in Section 4.06(a) hereof.

“Market Disruption Event” means, if the Common Shares are listed for trading on The NASDAQ Global Select Market or listed on another U.S. national or regional securities exchange, the occurrence or existence during the one-half hour period ending on the scheduled close of trading on any Scheduled Trading Day of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the stock exchange or otherwise) in the Common Shares or in any options contracts or futures contracts relating to the Common Shares.

”Maturity Date” means February 15, 2022.

“Measurement Period” has the meaning specified in Section 4.01(b) hereof.

“Note” or “Notes” has the meaning specified in the first paragraph of the Recitals of this Indenture.

“Notice of Default” has the meaning specified in Section 6.01(f) hereof.

“Observation Period” means, with respect to any Note surrendered for conversion, (i) subject to the immediately succeeding clause (ii), if the relevant Conversion Date occurs prior to August 15, 2021, the 40 consecutive VWAP Trading Days beginning on, and including, the second VWAP Trading Day after such Conversion Date; and (ii) if the relevant Conversion Date occurs on or after August 15, 2021, the 40 consecutive VWAP Trading Days beginning on, and including, the 42nd Scheduled Trading Day immediately preceding the Maturity Date.

“Offer Expiration Date” has the meaning specified in Section 4.04(e) hereof.

“Officer” or “officer” shall mean, any director of the Board of Directors, the Chief Executive Officer, the Chief Financial Officer, the Chief Accounting Officer, the President, a Vice President (whether or not designated by a number or word or words added before or after the title “Vice President”), the Treasurer, an Assistant Treasurer, the Corporate Secretary or the Group Financial Controller.

“Officer’s Certificate” means a certificate signed by an Authorized Officer and delivered to the Trustee.

“Open of Business” means 9:00 a.m., New York City time.

“Opinion of Counsel” means a written opinion of counsel, who may be an internal legal counsel of, or external counsel for, the Company or an Affiliate of the Company and reasonably acceptable to the Trustee.

“Outstanding” means, subject to Section 12.04, with respect to the Notes, any Notes authenticated by the Trustee except (i) Notes cancelled by it, (ii) Notes delivered to it for cancellation, (iii) Notes paid pursuant to Section 2.09 hereof and (iv)(A) Notes replaced pursuant to Section 2.09 hereof, on and after the time such Note is replaced (unless the Trustee and the Company receive proof satisfactory to them that such Note is held by a bona fide purchaser), (B) Notes converted pursuant to Article 4 hereof, on and after their Conversion Date, (C) any and all Notes, as of the Maturity Date, if the Paying Agent holds, in accordance with this Indenture, money sufficient to pay all of the Notes then payable, and (D) any and all Notes owned by the Company or any other obligor upon the Notes.

“Paying Agent” means any Person authorized by the Company to pay the principal amount of, any premium on, interest on, or the Fundamental Change Purchase Price, any Notes on behalf of the Company.

“Person” means any individual, corporation, partnership, limited liability company, joint venture, trust, unincorporated organization or government or any agency or political subdivision thereof.

“Physical Notes” means permanent certificated Notes in definitive, fully registered form issued in denominations of $1,000 principal amount and integral multiples of $1,000 in excess thereof.

“Physical Settlement” has the meaning set forth in Section 4.03(a) hereof.

“Preliminary Offering Memorandum” means the Preliminary Offering Memorandum dated February 13, 2017 related to the offering of the Initial Notes.

“Purchase Agreement” means that certain Purchase Agreement, dated February 14, 2017, among the Company and the representatives of the Initial Purchasers, on behalf of the Initial Purchasers.

“Reference Property” has the meaning specified in Section 4.07(a) hereof.

“Reference Property Unit” has the meaning specified in Section 4.07(a) hereof.

“Register” and “Registrar” have the respective meanings specified in Section 2.06.

“Regular Record Date” means, with respect to any Interest Payment Date, February 1 (whether or not a Business Day) or August 1 (whether or not a Business Day), as the case may be, immediately preceding such Interest Payment Date.

“Relevant Taxing Jurisdiction” has the meaning specified in Section 5.12 hereof.

“Reporting Event of Default” has the meaning specified in Section 6.03 hereof.

“Resale Restriction Termination Date” has the meaning specified in Section 2.08(b)(ii) hereof.

“Responsible Officer” when used with respect to the Trustee, means any officer within the corporate trust department having direct responsibility for the administration of this Indenture, or any other officer to whom any corporate trust matter is referred because of his or her knowledge of and familiarity with the particular subject.

“Restricted Global Note” has the meaning specified in Section 2.08(b)(i) hereof.

“Restricted Note” has the meaning specified in Section 2.07(a)(i) hereof.

“Restricted Notes Legend” has the meaning specified in the Form of Note attached hereto as Exhibit A.

“Restricted Share” has the meaning specified in Section 2.07(b)(i) hereof.

“Restricted Share Legend” means a legend substantially in the form set forth in Exhibit C hereto.

“Rule 144” means Rule 144 under the Securities Act (including any successor rule thereto), as the same may be amended from time to time.

“Scheduled Trading Day” means a day that is scheduled to be a Trading Day on the principal U.S. national or regional securities exchange or market on which the Common Shares are listed or admitted for trading. If the Common Shares are not listed or admitted for trading, “Scheduled Trading Day” means a Business Day.

“Securities Act” means the U.S. Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

“Settlement Amount” has the meaning specified in Section 4.03(a) hereof.

“Settlement Election” has the meaning specified in Section 4.03(a) hereof.

“Settlement Election Notice” has the meaning specified in Section 4.03(a) hereof.

“Settlement Method” means, with respect to any conversion of Notes, Physical Settlement, Cash Settlement or Combination Settlement, as elected (or deemed to be elected) by the Company in accordance with Section 4.03(a)(i) hereof.

“Share Exchange Event” has the meaning specified in Section 4.07(a) hereof.

“Share Price” has the meaning specified in Section 4.06(c) hereof.

“Significant Subsidiary” means, with respect to any Person, a Subsidiary of such Person that would constitute a “significant subsidiary” as such term is defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as in effect on the original date of issuance of the Notes.

“Specified Dollar Amount” means the maximum cash amount per $1,000 principal amount of Notes to be received by the Holder upon conversion as specified in the Company’s Specified Dollar Amount Election Notice (which may be part of the Settlement Election Notice).

“Specified Dollar Amount Election” has the meaning specified in Section 4.03(a) hereof.

“Specified Dollar Amount Election Notice” has the meaning specified in Section 4.03(a) hereof.

“Spin-Off’ has the meaning specified in Section 4.04(c) hereof.

“Subsidiary” means, with respect to any specified Person:

(1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency and after giving effect to any voting agreement or stockholders’ agreement that effectively transfers voting power) to vote in the election of directors, managers or trustees of the corporation, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(2) any partnership or limited liability company of which (a) more than 50% of the capital accounts, distribution rights, total equity and voting interests or general and limited partnership interests, as applicable, are owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person or a combination thereof, whether in the form of membership, general, special or limited partnership interests or otherwise, and (b) such Person or any Subsidiary of such Person is a controlling general partner or otherwise controls such entity.

“Successor Company” has the meaning specified in Section 9.01(a) hereof.

“Trading Day” means a Scheduled Trading Day on which (i) there is no Market Disruption Event, and (ii) trading in the Common Shares generally occurs on The NASDAQ Global Select Market or, if the Common Shares are not then listed on The NASDAQ Global Select Market, on the principal other U.S. national or regional securities exchange on which the Common Shares are then listed or, if the Common Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Shares are then traded. If the Common Shares are not so listed or traded, “Trading Day” means a “Business Day.”

“Trading Price” of the Notes on any Trading Day means the average of the secondary market bid quotations obtained by the Bid Solicitation Agent for $1,000,000 principal amount of the Notes at approximately 3:30 p.m., New York City time, on such Trading Day from three independent nationally recognized securities dealers selected by the Company for this purpose, which may include one or more of the Initial Purchasers; provided that, if three such bids cannot reasonably be obtained by the Bid Solicitation Agent but two such bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Bid Solicitation Agent that one bid shall be used. If the Bid Solicitation Agent cannot reasonably obtain at least one bid for $1,000,000 principal amount of the Notes from a nationally recognized securities dealer on any Trading Day, then the Trading Price per $1,000 principal amount of Notes on such Trading Day will be deemed to be less than 98% of the product of (i) the Last Reported Sale Price of the Common Shares on such Trading Day and (ii) the Conversion Rate in effect on such Trading Day. Any such determination will be conclusive absent manifest error. If the Company does not instruct the Bid Solicitation Agent to obtain bids when required, or the Bid Solicitation Agent fails to solicit bids when required, the Trading Price per $1,000 principal amount of the Notes will be deemed to be less than 98% of the product of (i) the Last Reported Sale Price of the Common Shares and (ii) the Conversion Rate, in each case, for each Trading Day on which the Company or the Bid Solicitation Agent fails to do so, as the case may be.

“Trigger Event” has the meaning specified in Section 4.04(c) hereof.

“Trustee” means the Person named as the “Trustee” in the first paragraph of this Indenture until a successor Trustee shall have become such pursuant to Section 10.12 hereof, and thereafter “Trustee” shall mean or include each Person who is then a Trustee hereunder.

“U.S.” means the United States of America.

“Valuation Period” has the meaning specified in Section 4.04(c) hereof.

“VWAP Market Disruption Event” means (i) a failure by the primary U.S. national or regional securities exchange or market on which the Common Shares are listed or admitted to trading to open for trading during its regular trading session or (ii) the occurrence or existence, prior to 1:00 p.m., New York City time, on any Scheduled Trading Day for the Common Shares for more than a one half-hour period in the aggregate during regular trading hours of any suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the relevant securities exchange or otherwise) in the Common Shares or in any options contracts or future contracts relating to the Common Shares.

“VWAP Trading Day” means a Scheduled Trading Day on which (i) there is no VWAP Market Disruption Event and (ii) trading in the Common Shares generally occurs on The NASDAQ Global Select Market or, if the Common Shares are not then listed on The NASDAQ Global Select Market, on the principal other U.S. national or regional securities exchange on which the Common Shares are then listed or, if the Common Shares are not then listed on a U.S. national or regional securities exchange, on the principal other market on which the Common Shares are then listed or admitted for trading. If the Common Shares are not so listed or admitted for trading, “VWAP Trading Day” means a “Business Day.”

Section 1.02 References to Interest. Any reference to interest on, or in respect of, any Note in the Indenture shall be deemed to include Additional Interest, if, in such context, Additional Interest is, was or would be payable pursuant hereto. Any express mention of the payment of Additional Interest in any provision hereof shall not be construed as excluding Additional Interest in those provisions hereof where such express mention is not made.

Section 1.03 Acts of Holders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Indenture to be made, given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of Notes, shall be sufficient for any purpose of this Indenture and (subject to Section 10.01 hereof) conclusive in favor of the Trustee and the Company, if made in the manner provided in this Section.

(a) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient.

(b) The amount of Notes held by any Person executing any such instrument or writings as the Holder thereof, and the numbers of such Notes, and the date of his holding the same, may be proved by the production of such Notes or by a certificate executed, as depositary, by any trust company, bank, banker or member of a national securities exchange (wherever situated), if such certificate is in form satisfactory to the Trustee, showing that at the date therein mentioned such Person had on deposit with such depositary, or exhibited to it, the Notes therein described; or such facts may be proved by the certificate or affidavit of the Person executing such instrument or writing as the Holder thereof, if such certificate or affidavit is in form satisfactory to the Trustee. The Trustee and the Company may assume that such ownership of any Notes continues until (1) another certificate bearing a later date issued in respect of the same Notes is produced or (2) such Notes are produced by some other Person or (3) such Notes are no longer Outstanding.

(c) The fact and date of execution of any such instrument or writing and the amount and number of Notes held by the Person so executing such instrument or writing may also be proved in any other manner that the Trustee deems sufficient; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section 1.03.

(d) The principal amount and serial numbers of Notes held by any Person, and the date of holding the same, shall be proved by the Registrar.

(e) Any request, demand, authorization, direction, notice, consent, election, waiver or other Act of the Holder of any Note shall bind every future Holder of the same Note and the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee or the Company in reliance thereon, whether or not notation of such action is made upon such Note.

(f) The Company may but shall not be obligated to set a record date for purposes of determining the identity of Holders of any Outstanding Notes of any series entitled to vote or consent to any action by vote or consent authorized or permitted by Section 2.11, 6.02, 6.04, 6.05, 8.02 or 10.11. Such record date shall be not less than 10 nor more than 60 days prior to the first solicitation of such consent or the date of the most recent list of Holders of such Notes furnished to the Trustee pursuant to Section 5.13 prior to such solicitation.

(g) If the Company solicits from Holders any request, demand, authorization, direction, notice, consent, election, waiver or other Act, the Company may, at its option, fix in advance a record date for the determination of Holders entitled to give such request, demand, authorization, direction, notice, consent, election, waiver or other Act, but the Company shall have no obligation to do so. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, election, waiver or other Act may be given before or after such record date, but only the Holders of record at the Close of Business on the record date shall be deemed to be Holders for the purposes of determining whether Holders of the requisite proportion of the Outstanding Notes have authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, election, waiver or other Act, and for that purpose the Outstanding Notes shall be computed as of the record date; provided that no such authorization, agreement or consent by the Holders on such record date shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date.

ARTICLE 2
THE NOTES

Section 2.01 Title and Terms; Payments .

The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is initially limited to $402,500,000 aggregate principal amount (the “Initial Notes”) except for Notes authenticated and delivered upon registration or transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.05, 2.06, 2.07, 2.08, 2.09, 2.11, 3.07 or 4.02. The Company may, from time to time after the execution of this Indenture, without notice to or the consent of the Holders, execute and deliver to the Trustee for authentication Additional Notes with the same CUSIP number as the Initial Notes in an unlimited aggregate principal amount, and the Trustee shall thereupon authenticate and deliver said Additional Notes to or upon receipt of a Company Order, without any further action by the Company hereunder; provided, however, that (1) if any such Additional Notes are not fungible with the Initial Notes for U.S. federal income tax purposes or securities laws purposes, any such Additional Notes will have one or more separate CUSIP numbers so long as they remain not fungible; (2) such Additional Notes must have the same terms as the Initial Notes (other than issue price and date from which interest shall accrue and except for such differences determined by the Company as appropriate to reflect the later issuance of the Additional Notes and for U.S. federal income tax purposes and securities law purposes); and (3) the Trustee must receive an Officer’s Certificate and an Opinion of Counsel to the effect that such issuance of Additional Notes complies with the provisions of this Indenture, including each provision of this paragraph.

The Notes shall be known and designated as the “2.75% Convertible Senior Notes due 2022” of the Company. The principal amount shall be payable on the Maturity Date.

The principal amount of and premium, if any, on any Physical Notes shall be payable at the Corporate Trust Office and at any other office or agency in the continental United States maintained by the Company for such purpose. Interest on Physical Notes will be payable (i) to Holders holding Physical Notes having an aggregate principal amount of $1,000,000 or less of Notes, by check mailed to such Holders at the address set forth in the Register and (ii) to Holders holding Physical Notes having an aggregate principal amount of more than $1,000,000 of Notes, by wire transfer in immediately available funds to an account within the United States designated by such Holder in a written application delivered by such Holder to the Trustee and the Paying Agent not later than one Business Day prior to the relevant Regular Record Date for such interest payment, which application shall remain in effect until such Holder notifies the Trustee and Paying Agent to the contrary in writing. The Company will pay or cause the Paying Agent to pay principal of and premium, if any, and interest on, Global Notes in immediately available funds to the Depositary, as the case may be, as the registered holder of such Global Note, on each Interest Payment Date, Fundamental Change Purchase Date or other payment date, as the case may be.

Any Notes repurchased by the Company will be retired and no longer Outstanding hereunder.

Section 2.02 Ranking. The Notes constitute general unsecured obligations of the Company.

Section 2.03 Denominations . The Notes shall be issuable only in registered form without coupons and in denominations of $1,000 and any integral multiple of $1,000 in excess thereof.

Section 2.04 Execution, Authentication, Delivery and Dating . The Notes shall be executed by manual, PDF or facsimile signature on behalf of the Company by any Officer of the Company.

Notes bearing the manual, PDF or facsimile signatures of individuals who were at any time an Officer of the Company shall bind the Company, notwithstanding that such individual has ceased to hold such office prior to the authentication and delivery of such Notes or did not hold such office at the date of such Notes.

At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Notes executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Notes. The Company Order shall specify the amount of Notes to be authenticated, and shall further specify the amount of such Notes to be issued as one or more Global Notes or as one or more Physical Notes. The Trustee in accordance with such Company Order shall authenticate and deliver such Notes as provided in this Indenture and not otherwise.

Each Note shall be dated the date of its authentication.

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by an authorized signatory of the Trustee by manual signature, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

Section 2.05 Temporary Notes. Pending the preparation of Physical Notes, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the Physical Notes in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the Officer executing such Notes may determine, as evidenced by such Officer’s execution of such Notes; provided, that any such temporary Notes shall bear legends on the face of such Notes as set forth in the Form of Note attached hereto as Exhibit A and/or Sections 2.07 and 2.11.

After the preparation of Physical Notes, the temporary Notes shall be exchangeable for Physical Notes upon surrender of the temporary Notes at any office or agency of the Company designated pursuant to Section 5.02, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Notes, the Company shall execute and the Trustee shall, upon Company Order, authenticate and deliver in exchange therefor a like principal amount of Physical Notes of authorized denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Physical Notes.

Section 2.06 Registration; Registration of Transfer and Exchange .

(a) The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register in the continental United States (the register maintained in such office and in any other office or agency designated pursuant to Section 5.02 being herein sometimes collectively referred to as the “Register”) in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Notes and of transfers of Notes. The Trustee is hereby appointed “Registrar” (the “Registrar”) for the purpose of registering Notes and transfers of Notes as herein provided.

Upon surrender for registration of transfer of any Note at an office or agency of the Company designated pursuant to Section 5.02 for such purpose, the Company shall execute, and upon receipt of a Company Order the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Notes of any authorized denomination and of a like aggregate principal amount and tenor, each such Note bearing such restrictive legends as may be required by this Indenture (including the Form of Note attached hereto as Exhibit A and Sections 2.07 and 2.11).

At the option of the Holder and subject to the other provisions of Sections 2.07 and 2.11, Notes may be exchanged for other Notes of any authorized denomination and of a like aggregate principal amount and tenor, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, the Company shall execute, and the Trustee shall, upon receipt of a Company Order, authenticate and deliver, the Notes which the Holder making the exchange is entitled to receive.

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

Every Note presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. As a condition to the registration of transfer of any Restricted Notes, the Company or the Trustee may require evidence satisfactory to them as to the compliance with the restrictions set forth in the legend on such Notes.

No service charge shall be made for any registration of transfer or exchange of Notes, but the Company and the Registrar may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.11 not involving any transfer.

Neither the Company nor the Registrar shall be required to exchange or register a transfer of any Note in the circumstances set forth in Section 2.11(a)(iv).

(b) Neither any members of, or participants in, the Depositary (collectively, the “Agent Members”) nor any other Persons on whose behalf any Agent Member may act shall have any rights under this Indenture with respect to any Global Note registered in the name of the Depositary or any nominee thereof, or under any such Global Note, and the Depositary or such nominee, as the case may be, may be treated by the Company, the Trustee and any agent of the Company or the Trustee as the absolute owner and Holder of such Global Note for all purposes whatsoever. The Trustee shall have no liability, responsibility or obligation to any Agent Members or any other Person on whose behalf Agent Members may act with respect to (i) any ownership interests in the Global Note, (ii) the accuracy of the records of the Depositary or its nominee, (iii) any notice required hereunder, (iv) any payments under or with respect to the Global Note (v) or actions taken or not taken by any Agent Members.

(c) Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written or electronic certification, proxy or other authorization furnished by the Depositary or such nominee, as the case may be, or impair, as between the Depositary, its Agent Members and any other Person on whose behalf an Agent Member may act, the operation of customary practices of such Persons governing the exercise of the rights of a Holder of any Note. The registered Holder of a Global Note may grant proxies and otherwise authorize any Person, including Agent Members and persons that may hold interests through Agent Members, to take any action that a Holder is entitled to take under this Indenture or the Notes.

Section 2.07 Transfer Restrictions .

(a) Restricted Notes .

(i) Every Note (and all securities issued in exchange therefor or substitution thereof) that bears, or that is required under this Section 2.07 to bear, the Restricted Notes Legend will be deemed to be a “Restricted Note.” Each Restricted Note will be subject to the restrictions on transfer set forth in this Indenture (including in the Restricted Notes Legend) and will bear a restricted CUSIP number for the Notes unless such restrictions on transfer are eliminated or otherwise waived by written consent of the Company (including without limitation, by the Company’s delivery of the Free Transferability Certificate as provided herein), and each Holder of a Restricted Note, by such Holder’s acceptance of such Restricted Note, will be deemed to be bound by the applicable restrictions on transfer applicable to such Restricted Note.

(ii) Until the Resale Restriction Termination Date, any Note will bear the Restricted Notes Legend unless:

(A) such Note was transferred to a Person (other than the Company or an affiliate of the Company (within the meaning of Rule 144)) pursuant to a registration statement that was effective under the Securities Act at the time of such transfer; or

(B) such Note was transferred pursuant to the exemption from registration provided by Rule 144 or any similar provision then in force under the Securities Act; or

(C) the Company delivers written notice to the Trustee and the Registrar (including, without limitation, by the Company’s delivery of the Free Transferability Certificate as provided herein) stating that the Restricted Notes Legend may be removed from such Note and all Applicable Procedures have been complied with.

(iii) In addition, until the Resale Restriction Termination Date:

(A) no transfer of any Note will be registered by the Registrar unless the transferring Holder delivers a notice substantially in the form of the Form of Assignment and Transfer, with the appropriate box checked, to the Trustee and such transfer complies with the transfer restrictions set forth in the Restricted Notes Legend; and

(B) the Registrar will not register any transfer of any Note that is a Restricted Note to a Person that is an affiliate of the Company or has been an affiliate of the Company (within the meaning of Rule 144) within the 90 days immediately preceding the date of such proposed transfer.

(iv) On and after the Resale Restriction Termination Date, any Note will bear the Restricted Notes Legend at any time the Company determinates that, to comply with law, such Note must bear the Restricted Notes Legend.

(b) Restricted Shares .

(i) Every Common Share that bears, or that is required under this Section 2.07 to bear, the Restricted Share Legend, will be deemed to be a “Restricted Share”. Each Restricted Share will be subject to the restrictions on transfer set forth in this Indenture (including in the Restricted Share Legend) and will bear a restricted CUSIP number unless such restrictions on transfer are eliminated or otherwise waived by written consent (including, without limitation, by the Company’s delivery of the Free Transferability Certificate as provided herein) of the Company, and each Holder of Restricted Shares, by such Holder’s acceptance of Restricted Shares, will be deemed to be bound by the restrictions on transfer applicable to such Restricted Shares.

(ii) Until the Resale Restriction Termination Date, any Common Shares issued upon the conversion of a Restricted Note, will be issued in book-entry form and will bear the Restricted Share Legend, unless the Company delivers written notice to the Trustee, the Registrar and the transfer agent for the Common Shares stating that such Common Shares need not bear the Restricted Share Legend.

(iii) On and after the Resale Restriction Termination Date, Common Shares issued upon conversion of a Restricted Note will be issued in book-entry or certificated form (as determined by the Company) and will bear the Restricted Share Legend at any time the Company reasonably determines that, to comply with law, such Common Shares must bear the Restricted Share Legend.

(c) As used in this Section 2.07, the term “transfer” means any sale, pledge, transfer, loan, hypothecation or other disposition whatsoever of any Restricted Note, any interest therein or any Restricted Shares.

Section 2.08 Expiration of Restrictions .

(a) Physical Notes. Any Physical Note (or any security issued in exchange or substitution therefor) that does not constitute a Restricted Note may be exchanged for a new Note or Notes of like tenor and aggregate principal amount that do not bear the Restricted Notes Legend. To exercise such right of exchange, the Holder of such Note must surrender such Note in accordance with the provisions of Section 2.11 and deliver any additional documentation reasonably required by the Company, the Trustee or the Registrar in connection with such exchange.

(b) Restricted Global Notes; Resale Restriction Termination Date .

(i) If, on the Free Trade Date, or the next succeeding Business Day if the Free Trade Date is not a Business Day, any Notes are represented by a Global Note that is a Restricted Note (any such Global Note, a “Restricted Global Note”), the Company will use reasonable efforts to effect an exchange of every beneficial interest in each Restricted Global Note for beneficial interests in Global Notes that are not subject to the restrictions set forth in the Restricted Notes Legend and in Section 2.07 hereof on or prior to the 375 ^th day after the Issue Date.

(ii) To effect such exchange, the Company will use reasonable efforts to (A) deliver to the Depositary an instruction letter for the Depositary’s mandatory exchange process within a period of time that is reasonably likely to result in such exchange occurring on or prior to the 375th day after the Issue Date and (B) deliver to each of the Trustee and the Registrar a duly completed Free Transferability Certificate promptly after the Free Trade Date. The first date on which both the Trustee and the Registrar have received the Free Transferability Certificate will be known as the “Resale Restriction Termination Date”.

(iii) Immediately upon receipt of the Free Transferability Certificate by each of the Trustee and the Registrar:

(A) the Restricted Notes Legend will be deemed removed from each of the Global Notes specified in such Free Transferability Certificate and the restricted CUSIP number will be deemed removed from each of such Global Notes and deemed replaced with an unrestricted CUSIP number specified in the relevant Free Transferability Certificate;

(B) the Restricted Share Legend will be deemed removed from any Common Shares previously issued upon conversion of the Notes; and

(C) thereafter, Common Shares issued upon conversion of the Notes will be assigned an unrestricted CUSIP number and will not bear the Restricted Share Legend (except as provided in Section 2.07(b)(iii)) or any similar legend.

(iv) Promptly after the Resale Restriction Termination Date, the Company will provide Bloomberg LLP (if then generally in use) with a copy of the Free Transferability Certificate and will use reasonable efforts to cause Bloomberg LLP (if then generally in use) to adjust its screen page for the Notes to indicate that the Notes are no longer Restricted Notes and are then identified by an unrestricted CUSIP number.

(v) Prior to the Company’s delivery of the Free Transferability Certificate and afterwards, the Company and the Trustee will comply with the Applicable Procedures and otherwise use reasonable efforts to cause each Global Note to be identified by an unrestricted CUSIP number in the facilities of the Depositary by the date the Free Transferability Certificate is delivered to the Trustee and the Registrar or as promptly as possible thereafter.

(vi) Notwithstanding anything to the contrary in Sections 2.08(b)(i), (ii) or (iii), the Company will not be required to deliver the Free Transferability Certificate if it reasonably believes that removal of the Restricted Notes Legend or the changes to the CUSIP numbers for the Notes could result in or facilitate transfers of the Notes in violation of applicable law.

Section 2.09 Mutilated, Destroyed, Lost and Stolen Notes. If any mutilated Note is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Note of like tenor and principal amount and bearing a number not contemporaneously outstanding.If there shall be delivered to the Company and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Note and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless and such other reasonable requirements as may be imposed by the Company as permitted by Section 8-405 of the Uniform Commercial Code have been satisfied, then, in the absence of notice to the Company or the Trustee that such Note has been acquired by a protected purchaser, the Company shall execute and the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a new Note of like tenor and principal amount and bearing a number not contemporaneously outstanding.

In case any such mutilated, destroyed, lost or stolen Note has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Note, pay such Note.

Upon the issuance of any new Note under this Section 2.09, the Company may require payment by the Holder 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 Trustee) connected therewith.

Every new Note issued pursuant to this Section 2.09 in lieu of any destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Company, whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

Section 2.10 Persons Deemed Owners. Prior to due presentment of a Note for registration of transfer, the Company, the Trustee, the Registrar and any agent of the Company, the Trustee or the Registrar may treat the Person in whose name such Note is registered in the Register as the owner of such Note for the purpose of receiving payment of the principal of such Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the Company, the Trustee, the Registrar nor any agent of the Company, the Trustee or the Registrar shall be affected by notice to the contrary.

Section 2.11 Transfer and Exchange .

(a) Provisions Applicable to All Transfers and Exchanges .

(i) Subject to the restrictions set forth in Section 2.07 and this Section 2.11, Physical Notes and beneficial interests in Global Notes may be transferred or exchanged from time to time as desired, and each such transfer or exchange will be noted by the Registrar in the Register.

(ii) All Notes issued upon any registration of transfer or exchange in accordance with this Indenture will be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture as the Notes surrendered upon such registration of transfer or exchange.

(iii) No service charge will be imposed on any Holder of a Physical Note or any owner of a beneficial interest in a Global Note for any exchange or registration of transfer, but each of the Company, the Trustee or the Registrar may require such Holder or owner of a beneficial interest to pay a sum sufficient to cover any transfer tax, stamp tax, assessment or other governmental charge imposed in connection with such registration of transfer or exchange required by law or permitted by this Indenture.

(iv) Unless the Company specifies otherwise, none of the Company, the Trustee, the Registrar or any co-Registrar will be required to exchange or register a transfer of any Note (i) that has been surrendered for conversion or (ii) as to which a Fundamental Change Purchase Notice has been delivered and not withdrawn, except to the extent any portion of such Note is not subject to the foregoing.

(v) The Trustee will have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depositary participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

(b) In General; Transfer and Exchange of Beneficial Interests in Global Notes. So long as the Notes are eligible for book-entry settlement with the Depositary, unless otherwise required by law, except to the extent required by Section 2.11(c):

(i) all Notes will be represented by one or more Global Notes;

(ii) every registration of transfer and exchange of a beneficial interest in a Global Note will be effected through the Depositary in accordance with the Applicable Procedures and the provisions of this Indenture (including the restrictions on transfer set forth in Section 2.07); and

(iii) each Global Note may be transferred only as a whole and only (A) by the Depositary to a nominee of the Depositary, (B) by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or (C) by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

(i) Notwithstanding any other provision of this Indenture, each Global Note will be exchanged for Physical Notes if the Depositary delivers notice to the Company that:

(A) the Depositary is unwilling or unable to continue to act as Depositary; or

(B) the Depositary is no longer permitted under applicable law to continue as Depositary for such Global Note;

and, in each case, the Company promptly delivers a copy of such notice to the Trustee and the Company fails to appoint a successor Depositary within 90 days after receiving notice from the Depositary.

In each such case, each Global Note will be deemed surrendered to the Trustee for cancellation, and the Trustee will cause each Global Note to be cancelled in accordance with the Applicable Procedures, and the Company, in accordance with Section 2.04, will promptly execute, and, upon receipt of a Company Order, the Trustee will, in accordance with Section 2.04, will promptly authenticate and deliver, for each beneficial interest in each Global Note so exchanged, an aggregate principal amount of Physical Notes equal to the aggregate principal amount of such beneficial interest, registered in such names and in such authorized denominations as the Depositary specifies, and bearing any legends that such Physical Notes are required to bear under Section 2.07.

(ii) In addition, if (x) the Company, in its sole discretion, notifies the Trustee in writing that it wishes to terminate and exchange all or part of a Global Note for Physical Notes and the beneficial owners of the majority of the principal amount of such Global Note (or portion thereof) to be exchanged consent to such exchange, the Company may exchange all beneficial interests in such Global Note (or portion thereof) for Physical Notes by delivering a written request to the Registrar or (y) an Event of Default has occurred with regard to the Notes represented by the relevant Global Note and such Event of Default has not been cured or waived, any owner of a beneficial interest in a Global Note may deliver a written request to the Registrar to exchange such beneficial interest for Physical Notes.

In such case, (A) the Registrar will deliver notice of such request to the Company and the Trustee, which notice will identify the aggregate principal amount of such beneficial interest and the CUSIP number(s) of the relevant Global Note; (B) the Company will, in accordance with Section 2.04, promptly execute, and, upon receipt of a Company Order, the Trustee, in accordance with Section 2.04, will promptly authenticate and deliver, to such owner, for the beneficial interest so exchanged by such owner, Physical Notes registered in such owner’s name having an aggregate principal amount equal to the aggregate principal amount of such beneficial interest and bearing any legends that such Physical Notes are required to bear under Section 2.07, and (C) the Registrar, in accordance with the Applicable Procedures, will cause the principal amount of such Global Note to be decreased by the aggregate principal amount of the beneficial interest so exchanged. If all of the beneficial interests in a Global Note are so exchanged, such Global Note will be deemed surrendered to the Trustee for cancellation, and the Trustee will cause such Global Note to be cancelled in accordance with the Applicable Procedures.

(d) Transfer and Exchange of Physical Notes .

(i) If Physical Notes are issued, a Holder may transfer a Physical Note by: (A) surrendering such Physical Note for registration of transfer to the Registrar, together with any endorsements or instruments of transfer required by any of the Company, the Trustee or the Registrar; (B) if such Physical Note is a Restricted Note, delivering any documentation that the Company, the Trustee or the Registrar require to ensure that such transfer complies with Section 2.07 and any applicable securities laws; and (C) satisfying all other requirements for such transfer set forth in this Section 2.11 and Section 2.07. Upon the satisfaction of conditions (A), (B) and (C), the Company, in accordance with Section 2.04, will promptly execute and deliver to the Trustee, and the Trustee, upon receipt of a Company Order, will, in accordance with Section 2.04, promptly authenticate and deliver, in the name of the designated transferee or transferees, one or more new Physical Notes, of any authorized denomination, having like aggregate principal amount and bearing any restrictive legends required by Section 2.07 and/or the Form of Note attached hereto as Exhibit A.

(ii) If Physical Notes are issued, a Holder may exchange a Physical Note for other Physical Notes of any authorized denominations and aggregate principal amount equal to the aggregate principal amount of the Notes to be exchanged by surrendering such Notes, together with any endorsements or instruments of transfer required by any of the Company, the Trustee or the Registrar, at any office or agency maintained by the Company for such purposes pursuant to Section 5.02. Whenever a Holder surrenders Notes for exchange, the Company, in accordance with Section 2.04, will promptly execute and deliver to the Trustee, and the Trustee, upon receipt of a Company Order, will, in accordance with Section 2.04, promptly authenticate and deliver the Notes that such Holder is entitled to receive, bearing registration numbers not contemporaneously outstanding and any restrictive legends that such Physical Notes are required to bear under Section 2.07.

(iii) If Physical Notes are issued, a Holder may transfer or exchange a Physical Note for a beneficial interest in a Global Note by (A) surrendering such Physical Note for registration of transfer or exchange, together with any endorsements or instruments of transfer required by any of the Company, the Trustee or the Registrar, at any office or agency maintained by the Company for such purposes pursuant to Section 5.05; (B) if such Physical Note is a Restricted Note, delivering any documentation the Company, the Trustee or the Registrar reasonably require to ensure that such transfer complies with Section 2.07 and any applicable securities laws; (C) satisfying all other requirements for such transfer set forth in this Section 2.11 and Section 2.07; and (D) providing written instructions to the Trustee to make, or to direct the Registrar to make, an adjustment in its books and records with respect to the applicable Global Note to reflect an increase in the aggregate principal amount of the Notes represented by such Global Note, which instructions will contain information regarding the Depositary account to be credited with such increase. Upon the satisfaction of conditions (A), (B), (C) and (D), the Trustee will cancel such Physical Note and cause, or direct the Registrar to cause, in accordance with the Applicable Procedures, the aggregate principal amount of Notes represented by such Global Note to be increased by the aggregate principal amount of such Physical Note, and will credit or cause to be credited the account of the Person specified in the instructions provided by the exchanging Holder in an amount equal to the aggregate principal amount of such Physical Note. If no Global Notes are then Outstanding, the Company, in accordance with Section 2.04, will promptly use reasonable efforts to execute and deliver to the Trustee, and the Trustee, upon receipt of a Company Order, will, in accordance with Section 2.04, authenticate, a new Global Note in the appropriate aggregate principal amount.

Section 2.12 Cancellation. The Company at any time may deliver to the Trustee for cancellation any Notes previously authenticated and delivered hereunder that the Company may have acquired in any manner whatsoever, and may deliver to the Trustee for cancellation any Notes previously authenticated hereunder which the Company has not issued and sold. The Trustee shall cancel all Notes surrendered for registration of transfer, exchange, payment, purchase, repurchase, conversion or cancellation in accordance with its customary practices. The Notes acquired by the Company, while held by or on behalf of the Company or any of its Subsidiaries, shall not entitle the Holder thereof to convert the Notes. The Company may not issue new Notes to replace Notes it has paid in full or delivered to the Trustee for cancellation. The Company or any of its Subsidiaries may from time to time repurchase Notes in open market purchases or negotiated transactions without giving prior notice to Holders. Any Notes purchased by the Company or its Subsidiaries will be retired and no longer Outstanding under this Indenture.

The Registrar shall retain, in accordance with its customary procedures, copies of all letters, notices and other written communications received pursuant to this Section 2.12. The Company shall have the right to inspect and make copies of all such letters, notices or other written communications at any reasonable time upon the giving of reasonable written notice to the Registrar.

None of the Trustee, the Registrar or the Paying Agent shall have any responsibility or obligation to any beneficial owner of an interest in a Global Note, any Agent Member or other member of, or a participant in, the Depositary or other Person with respect to the accuracy of the records of the Depositary or any nominee or participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any Agent Member or other participant, member, beneficial owner or other Person (other than the Depositary) of any notice or the payment of any amount or delivery of any Notes (or other security or property) under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders in respect of the Notes shall be given or made only to or upon the order of the registered Holders (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depositary, subject to its applicable rules and procedures. The Trustee, Note Registrar and Paying Agent may rely and shall be fully protected in relying upon information furnished by the Depositary with respect to its Agent Members and other members, participants and any beneficial owners.

Neither the Trustee nor any agent shall have any responsibility or liability for any actions taken or not taken by the Depositary.

Section 2.13 CUSIP Numbers. In issuing the Notes, the Company may use “CUSIP” numbers (if then generally in use); provided that the Trustee shall have no liability for any defect in the CUSIP numbers as they appear on any Notes, notice, or elsewhere and; provided further, that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Notes and that reliance may be placed only on the other identification numbers printed on the Notes. The Company will promptly notify the Trustee in writing of any change in the “CUSIP” numbers.

Section 2.14 Payment and Computation of Interest. The Notes will bear cash interest at a rate of 2.75% per year until the Maturity Date. Interest on the Notes will accrue from the most recent date on which interest has been paid or duly provided for or, if no interest has been paid or duly provided for (i) in the case of the Initial Notes, February 17, 2017 or (ii) in the case of the Additional Notes, the date provided under such Notes. Interest will be paid to the Person in whose name a Note is registered at the Close of Business on the Regular Record Date immediately preceding the relevant Interest Payment Date semiannually in arrears on each Interest Payment Date; provided, alternate record dates may be established by the Company and the Trustee with respect to any interest not paid on its originally scheduled due date. Interest on the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month. For the avoidance of doubt, the payment, or lack of payment, of interest on Notes surrendered for conversion will be governed by Section 4.03(d).

Section 2.15 Business Day. If any Interest Payment Date, the Maturity Date or any Fundamental Change Purchase Date falls on a day that is not a Business Day, the required payment will be made on the next succeeding Business Day and no interest on such payment will accrue in respect of the additional period of time before payment.

ARTICLE 3
REPURCHASE AT THE OPTION OF THE HOLDERS

Section 3.01 Purchase at Option of Holders upon a Fundamental Change. If a Fundamental Change occurs at any time, then each Holder shall have the right, at such Holder’s option, to require the Company to purchase for cash all or any portion of such Holder’s Notes such that the remaining principal amount of each Note that is not purchased in full equals $1,000 or an integral multiple of $1,000 in excess thereof, on a date (the “Fundamental Change Purchase Date”) specified by the Company that is not less than 20 Business Days or more than 35 Business Days following the date on which the Company delivers the Fundamental Change Company Notice, at a purchase price equal to 100% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to, but excluding, the Fundamental Change Purchase Date (the “Fundamental Change Purchase Price”); provided, however, that if the Company purchases a Note on a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the Interest Payment Date corresponding to such Regular Record Date, the Company shall instead pay the full amount of such accrued and unpaid interest on such Note on the Interest Payment Date to the Holder of record of such Note as of such Regular Record Date and the Fundamental Change Purchase Price shall then be equal to 100% of the principal amount of the Note the Company purchases on such Fundamental Change Purchase Date. Notwithstanding the foregoing, there shall be no purchase of any Notes pursuant to this if the principal amount of the Notes has been accelerated, and such acceleration has not been rescinded, on or prior to the Fundamental Change Purchase Date (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Purchase Price with respect to such Notes). The Paying Agent will promptly return to the respective Holders thereof any Physical Notes held by it during the acceleration of the Notes (except in the case of an acceleration resulting from a Default by the Company in the payment of the Fundamental Change Purchase Price with respect to such Notes) and shall deem to be cancelled any instructions for book-entry transfer of the Notes in compliance with the Applicable Procedures, in which case, upon such return or cancellation, as the case may be, the Fundamental Change Purchase Notice with respect thereto shall be deemed to have been withdrawn.

Section 3.02 Fundamental Change Company Notice .

(a) General. Promptly (but in no event later than ten calendar days) after the occurrence of a Fundamental Change, the Company shall provide to all Holders of the Notes, the Trustee and the Paying Agent (in the case of any Paying Agent other than the Trustee) a written notice (the “Fundamental Change Company Notice”) of the occurrence of such Fundamental Change and of the purchase right at the option of the Holders arising as a result thereof. Such notice shall be sent by first class mail or, in the case of any Global Notes, in accordance with the Applicable Procedures for providing notices. Simultaneously with providing such Fundamental Change Company Notice, the Company shall publish a press release and publish such information on the Company’s website. Each Fundamental Change Company Notice shall specify:

(i) the events causing the Fundamental Change;

(ii) the Effective Date of the Fundamental Change, and whether the Fundamental Change is a Make-Whole Fundamental Change, in which case the Effective Date of the Make-Whole Fundamental Change;

(iii) the last date on which a Holder of Notes may exercise the purchase right pursuant to Section 3.01;

(iv) the Fundamental Change Purchase Price;

(v) the Fundamental Change Purchase Date;

(vi) the name and address of the Paying Agent and the Conversion Agent, if applicable;

(vii) the applicable Conversion Rate and any adjustments to the applicable Conversion Rate resulting from the Fundamental Change;

(viii) if applicable, that the Notes with respect to which a Fundamental Change Purchase Notice has been delivered by a Holder may be converted only if the Holder withdraws the Fundamental Change Purchase Notice in accordance with this Indenture;

(ix) that the Holder must exercise the purchase right prior to the Fundamental Change Expiration Time;

(x) that the Holder shall have the right to withdraw any Notes surrendered for purchase prior to the Fundamental Change Expiration Time; and

(xi) the procedures that Holders must follow to require the Company to purchase their Notes.

(b) No failure of the Company to give the foregoing notices and no defect therein shall limit the Holders’ repurchase rights or affect the validity of the proceedings for the repurchase of the Notes pursuant to Section 3.01.

(c) At the Company’s written request, the Trustee shall give such notice in the Company’s name and at the Company’s expense; provided, however, that, in all cases, the text of such Fundamental Change Company Notice shall be prepared by the Company; provided, further that the Company shall have delivered to the Trustee, at least five (5) Business Days before the Fundamental Change Company Notice is required to be mailed (or such shorter period agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the complete form of such notice and the information to be stated in such notice. Neither the Trustee nor the Paying Agent shall be responsible for determining if a Fundamental Change has occurred or for delivering a Fundamental Change Company Notice to Holders.

Section 3.03 Repurchase Procedures .

(a) Purchases of Notes under Section 3.01 shall be made, at the option of the Holder thereof, upon:

(i) if the Notes to be purchased are Physical Notes, delivery to the Paying Agent by the Holder of a duly completed notice (the “Fundamental Change Purchase Notice”), in the form set forth in Attachment 2 to the Form of Note attached hereto as Exhibit A, together with the Notes duly endorsed for transfer, prior to Close of Business on or before the second Business Day immediately preceding the Fundamental Change Purchase Date, (the “Fundamental Change Expiration Time”); and

(ii) if the Notes to be purchased are Global Notes, delivery of the Notes, by book-entry transfer, in compliance with the Applicable Procedures and the satisfaction of any other requirements of the Depositary in connection with delivering beneficial interests in a Global Note for purchase, by the Fundamental Change Expiration Time.

The Fundamental Change Purchase Notice in respect of any Notes to be purchased shall state:

(i) if certificated, the certificate numbers of such Notes;

(ii) the portion of the principal amount of such Notes to be purchased, which must be such that the principal amount of each Note that is not to be purchased in full equals $1,000 or an integral multiple of $1,000 in excess thereof; and

(iii) that such Notes are to be purchased by the Company pursuant to the applicable provisions of the Notes and this Indenture.

(b) Notice to Company. The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental Change Purchase Notice or written notice of withdrawal thereof.

Section 3.04 Effect of Fundamental Change Purchase Notice. Upon receipt by the Paying Agent of a Fundamental Change Purchase Notice specified in Section 3.03, the Holder of the Note in respect of which such Fundamental Change Purchase Notice was given shall (unless such Fundamental Change Purchase Notice is withdrawn in accordance with Section 3.05) thereafter be entitled to receive solely the Fundamental Change Purchase Price in cash with respect to such Note (and any previously accrued and unpaid interest on such Note if not included in the Fundamental Change Purchase Price). Such Fundamental Change Purchase Price shall be paid promptly to such Holder, subject to receipt of funds from the Company by the Paying Agent, on the later of (x) the applicable Fundamental Change Purchase Date (provided the conditions in this Article 3 have been satisfied) and (y) the time of delivery or book-entry transfer of such Note to the Paying Agent by the Holder thereof in the manner required by Section 3.01.

Section 3.05 Withdrawal of Fundamental Change Purchase Notice. A Fundamental Change Purchase Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal delivered to the Paying Agent in accordance with the Fundamental Change Company Notice at any time prior to the Fundamental Change Expiration Time specifying:

(a) the principal amount of the Notes with respect to which such notice of withdrawal is being submitted;

(b) if certificated, the certificate numbers of the withdrawn Notes; and

(c) the principal amount, if any, of each Note that remains subject to the Fundamental Change Purchase Notice which must be such that the principal amount not to be purchased equals $1,000 or an integral multiple of $1,000 in excess thereof;

provided, however, that if the Notes are Global Notes, the notice must comply with the Applicable Procedures.

The Paying Agent will promptly return to the respective Holders thereof any Physical Notes with respect to which a Fundamental Change Purchase Notice, has been withdrawn in compliance with the provisions of this Section 3.05.

Section 3.06 Deposit of Fundamental Change Purchase Price. Prior to 10:00 a.m., New York City time, on the Fundamental Change Purchase Date the Company shall deposit with the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is acting as the Paying Agent, shall segregate and hold in trust as provided herein) an amount of money in U.S. dollars (in immediately available funds if deposited on such Business Day) sufficient to pay the Fundamental Change Purchase Price of all the Notes or portions thereof that are to be purchased as of the Fundamental Change Purchase Date. If the Paying Agent holds cash sufficient to pay the Fundamental Change Purchase Price of the Notes for which a Fundamental Change Purchase Notice has been delivered and not withdrawn in accordance with this Indenture on the Fundamental Change Purchase Date then as of such Fundamental Change Purchase (a) such Notes will cease to be Outstanding and interest will cease to accrue thereon (whether or not book-entry transfer of such Notes is made or such Notes have been delivered to the Paying Agent) and (b) all other rights of the Holders in respect thereof will terminate (other than the right to receive the Fundamental Change Purchase Price and any previously accrued and unpaid interest, if not included in the Fundamental Change Purchase Price, on such Notes upon delivery or book-entry transfer of such Notes).

Section 3.07 Notes Purchased in Whole or in Part. Any Note that is to be purchased pursuant to this Article 3, whether in whole or in part, shall be surrendered at the office of the Paying Agent (with due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing) and, to the extent that only a part of the Note so surrendered is to be purchased, the Company shall execute and, upon receipt of a Company Order, the Trustee shall authenticate and deliver to the Holder of such Note, without service charge, a new Note or Notes, of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the Note so surrendered that is not purchased.

Section 3.08 Covenant To Comply with Applicable Laws upon Purchase of Notes. In connection with any offer to purchase Notes under Sections 3.01, the Company shall, in each case if required by law (i) comply with Rule 13e-4, Rule 14e-1 and any other tender offer rules under the Exchange Act that may then be applicable, (ii) file a Schedule TO or any other required schedule under the Exchange Act and (iii) otherwise comply with all U.S. federal or state securities laws applicable to the Company in connection with such purchase offer, in each case, so as to permit the rights and obligations under this Article 3 to be exercised in the time and in the manner specified under this Article 3.

Section 3.09 Repayment to the Company. To the extent that the aggregate amount of cash deposited by the Company pursuant to Section 3.06 exceeds the aggregate Fundamental Change Purchase Price of the Notes or portions thereof that the Company is obligated to purchase as of the Fundamental Change Purchase Date then, following the Fundamental Change Purchase Date the Paying Agent shall promptly return any such excess to the Company.

ARTICLE 4
CONVERSION

Section 4.01 Right To Convert . Subject to and upon compliance with the provisions of the Indenture, each Holder shall have the right, at such Holder’s option, to convert any or all of its Notes, or any portion thereof, such that the principal amount that remains Outstanding of each Note that is not converted in full equals $1,000 or an integral multiple of $1,000 in excess thereof, into the Settlement Amount determined in accordance with Section 4.03(a)(ii) hereof, (x) prior to the Close of Business on the Business Day immediately preceding August 15, 2021, only upon satisfaction of one or more of the conditions described in Section 4.01(b) hereof, and (y) on or after August 15, 2021, at any time prior to the Close of Business on the second Scheduled Trading Day immediately preceding the Maturity Date regardless of the conditions described in Section 4.01(b) hereof.

(a) Prior to the Close of Business on the Business Day immediately preceding August 15, 2021, a Holder may surrender all or a portion of its Notes for conversion during any fiscal quarter commencing after June 30, 2017 (and only during such fiscal quarter) if the Last Reported Sale Price per Common Share for each of at least 20 Trading Days (whether or not consecutive) during the period of 30 consecutive Trading Days ending on and including the last Trading Day of the immediately preceding fiscal quarter is greater than or equal to 130% of the applicable Conversion Price in effect on each applicable Trading Day.

(i) Prior to the Close of Business on the Business Day immediately preceding August 15, 2021, a Holder may surrender all or a portion of its Notes for conversion during the five consecutive Business Day period immediately after any five consecutive Trading Day period (the “Measurement Period”) in which the Trading Price per $1,000 principal amount of Notes, as determined following a request by a Holder in accordance with the procedures set forth in this Section 4.01(b)(ii), for each Trading Day of such Measurement Period was less than 98% of the product of (x) the Last Reported Sale Price of the Common Shares on such Trading Day and (y) the Conversion Rate in effect on such Trading Day. The Trading Price shall be determined by the Company or the Bid Solicitation Agent, as applicable, pursuant to this Section 4.01(b)(ii) and the definition of “Trading Price” set forth in Section 1.01 hereof. The Company shall provide notice to the Bid Solicitation Agent of the three independent nationally recognized securities dealers selected by the Company in accordance with the definition of Trading Price, along with the appropriate contact information for each. The Bid Solicitation Agent (if other than the Company) shall have no obligation to determine the Trading Price of the Notes unless the Company has requested such determination; and the Company shall have no obligation to make such request (or, if the Company is acting as Bid Solicitation Agent, the Company shall have no obligation to determine the Trading Price) unless a Holder of at least $5,000,000 aggregate principal amount of Notes provides it with reasonable evidence that the Trading Price per $1,000 principal amount of Notes would be less than 98% of the product of (x) the Last Reported Sale Price of the Common Shares on such Trading Day and (y) the Conversion Rate in effect on such Trading Day. At such time, the Company shall instruct the Bid Solicitation Agent (if other than the Company) to determine (or, if the Company is acting as Bid Solicitation Agent, it shall determine) the Trading Price per $1,000 principal amount of the Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 principal amount of Notes for a Trading Day is greater than or equal to 98% of the product of (x) the Last Reported Sale Price of the Common Shares on such Trading Day and (y) the Conversion Rate in effect on such Trading Day. Whenever the condition to conversion set forth in this Section 4.01(b)(ii) has been met, the Company shall so notify the Holders, the Trustee and the Conversion Agent (if other than the Trustee). If, at any time after the condition to conversion set forth in this Section 4.01(b)(ii) has been met, the condition to conversion set forth in this Section 4.01(b)(ii) ceases to be met, the Company will so notify the Holders, the Trustee and the Conversion Agent (if other than the Trustee). The Trustee shall have no obligation to determine the Trading Price of the Notes. For the avoidance of doubt, the failure to provide the notice referred to in the immediately preceding sentence will not extend the five consecutive Business Day period during which the Notes will be convertible as described in this Section 4.01(b)(ii).

(ii) If the Company (x) issues to all or substantially all holders of the Common Shares any rights, options or warrants entitling them for a period of not more than 45 calendar days after the date of such issuance to subscribe for or purchase Common Shares, at a price per share less than the average of the Last Reported Sale Prices of the Common Shares for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance; or (y) distributes to all or substantially all holders of the Common Shares the Company’s assets, debt securities or rights to purchase the Company’s securities, which distribution has a per share value, as reasonably determined by the Board of Directors, exceeding 10% of the Last Reported Sale Price of the Common Shares on the Trading Day immediately preceding the date of announcement of such distribution, then, in either case, the Company must deliver notice of such issuance or distribution, and of the Ex-Dividend Date for such issuance or distribution, to the Holders at least 45 Scheduled Trading Days prior to the Ex-Dividend Date for such issuance or distribution. After the Company has delivered such notice, Holders may surrender all or a portion of their Notes for conversion at any time until the earlier of (a) Close of Business on the Business Day immediately preceding such Ex-Dividend Date and (b) the Company’s announcement that such issuance or distribution will not take place, even if the Notes are not otherwise convertible at such time.

(iii) If the Company publicly announces a transaction or event that would, if consummated, constitute a Fundamental Change, a Make-Whole Fundamental Change or Share Exchange Event, or if any such transaction or event occurs (regardless of whether the Holders would have the right to require the Company to purchase their Notes pursuant to Article 3), the Company shall mail notice (a “Specified Corporate Transaction Notice”) of such specified corporate transaction or event to the Holders as promptly as practicable following the first public announcement by the Company of such transaction or event or, in the case that no public announcement is made, the occurrence of such transaction or event. Upon receiving notice or otherwise becoming aware of a transaction or event that would, if consummated, constitute a Fundamental Change, Make-Whole Fundamental Change or Share Exchange Event, the Company will use commercially reasonable efforts to announce or cause the announcement of such transaction or event in time to deliver the related Specified Corporate Transaction Notice at least 45 Scheduled Trading Days prior to the anticipated effective date for such transaction or event or if the Company does not have knowledge of such transaction or event at least 45 Scheduled Trading Days prior to the anticipated effective date of such transaction or event, within one Business Day of the date upon which the Company receives notice, or otherwise become aware, of such transaction or event; provided that in no event will the Company be required to provide such notice to the Holders before the earlier of such time as the Company or its Affiliates (a) have publicly disclosed or acknowledged the circumstances giving rise to such transaction or event and (b) are required to publicly disclose under applicable law or the rules of any stock exchange on which the Common Shares are then listed the circumstances giving rise to such transaction or event. For any such potential Fundamental Change, Make-Whole Fundamental Change or Share Exchange Event, the Specified Corporate Transaction Notice shall describe:

(A) the transaction or event;

(B) the anticipated effective date of such transaction or event;

(D) the Conversion Rate in effect on the date the Company mails such notice;

(E) that an adjustment to the Conversion Rate is expected to be made pursuant to Section 4.05 as a result of such transaction or event and the formula for determining such adjustment;

(F) whether the relevant transaction or event is expected to constitute a Share Exchange Event, and, if so, that the Notes will become convertible into Reference Property, subject to the settlement provisions of this Indenture;

(G) whether the relevant transaction or event is expected to constitute a Fundamental Change, and, if so, that Holders will have the right to require the Company to purchase their Notes pursuant to Article 3; and

(H) whether the relevant transaction or event is expected to constitute a Make-Whole Fundamental Change, and, if so, that the Conversion Rate will be increased under Section 4.06 for Notes converted in connection with such Make-Whole Fundamental Change.

Upon the Company’s delivery of a Specified Corporate Transaction Notice, a Holder may surrender its Notes for conversion at any time until the 35th Trading Day immediately following the effective date of such transaction or event or, if such transaction or event constitutes a Fundamental Change, the Business Day immediately preceding the related Fundamental Change Purchase Date.

Section 4.02 Conversion Procedures .

(a) Each Note shall be convertible at the office of the Conversion Agent and, if applicable, in accordance with the Applicable Procedures.

(b) To exercise the conversion privilege with respect to a beneficial interest in a Global Note, the Holder must comply with the Applicable Procedures for converting a beneficial interest in a Global Note and pay the funds, if any, required by Section 4.02(f) and any taxes or duties in connection therewith if required pursuant to Section 4.02(g), and the Conversion Agent must be informed of the conversion in accordance with the customary practice of the Depositary.

To exercise the conversion privilege with respect to any Physical Notes, the Holder of such Physical Notes shall:

(i) complete and manually sign a conversion notice in the form set forth in the Form of Notice of Conversion as Attachment 1 to the Physical Note (the “Conversion Notice”) or a PDF or facsimile of the Conversion Notice;

(ii) deliver the Conversion Notice, which is irrevocable, and the Physical Note to the Conversion Agent;

(iii) if required, furnish appropriate endorsements and transfer documents;

(iv) if required, pay all transfer, stamp or similar taxes as set forth in Section 4.02(g); and

(v) if required, make any payment required under Section 4.02(f).

If a Note has been submitted for repurchase pursuant to a Fundamental Change Purchase Notice such Note may not be converted except to the extent such Note has been withdrawn by the Holder and is no longer submitted for repurchase pursuant to a Fundamental Change Purchase Notice prior to the time such Notes are repurchased or unless such Fundamental Change Purchase Notice is withdrawn in accordance with Section 3.05 hereof prior to the relevant Fundamental Change Expiration Time.

For any Note, the date on which the Holder of such Note satisfies all of the applicable requirements set forth above with respect to such Note shall be the “Conversion Date” with respect to such Note.

Each conversion shall be deemed to have been effected as to any such Notes (or portion thereof) surrendered for conversion at the Close of Business on the applicable Conversion Date; provided, however, that except to the extent required by Section 4.04 hereof, the Person in whose name any Common Shares shall be issuable upon conversion, if any, shall be treated as a stockholder of record (i) as of the Close of Business on the last VWAP Trading Day of the applicable Observation Period in the case of Combination Settlement and (ii) as of the Close of Business on the Conversion Date in the case of Physical Settlement. For the avoidance of doubt, until a Holder is deemed to become the holder of record of Common Shares issuable upon conversion of such Holder’s Notes as contemplated in the immediately preceding sentence, such Holder shall not have any rights as a holder of the Common Shares with respect to Common Shares issuable upon conversion of such Notes. At the Close of Business on the Conversion Date for a Note, the converting Holder shall no longer be the Holder of such Note.

(c) Endorsement. Any Notes surrendered for conversion shall, unless Common Shares issuable on conversion are to be issued in the same name as the registration of such Notes, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company duly executed by, the Holder or its duly authorized attorney.

(d) Physical Notes. If any Physical Notes in a denomination greater than $1,000 shall be surrendered for partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to the Holder of the Physical Notes so surrendered, without charge, new Physical Notes in authorized denominations in an aggregate principal amount equal to the unconverted portion of the surrendered Physical Notes.

(e) Global Notes. Upon the conversion of a beneficial interest in Global Notes, the Conversion Agent shall make a notation in its records as to the reduction in the principal amount represented thereby. The Company shall notify the Trustee in writing of any conversions of Notes effected through any Conversion Agent other than the Trustee.

(f) Interest Due Upon Conversion. If a Holder converts a Note after the Close of Business on a Regular Record Date but prior to the Open of Business on the Interest Payment Date corresponding to such Regular Record Date, such Holder must accompany such Note with an amount of cash equal to the amount of interest that will be payable on such Note on the corresponding Interest Payment Date (regardless of whether such converting Holder was the Holder of record on the such Regular Record Date); provided, however, that a Holder need not make such payment (1) if the Conversion Date follows the Regular Record Date immediately preceding the Maturity Date; (2) if the Company has specified a Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the Business Day immediately following the corresponding Interest Payment Date and the relevant Conversion Date occurs after such Regular Record Date and on or prior to such Interest Payment Date; or (3) to the extent of any overdue interest, if any overdue interest exists at the time of conversion with respect to such Notes.

(g) Taxes Due upon Conversion. If a Holder converts a Note, the Company will pay any documentary, stamp or similar issue or transfer tax due on the issuance of any Common Shares upon the conversion, unless the tax is due because the Holder requests that any shares be issued in a name other than the Holder’s name, in which case the Holder will pay that tax.

Section 4.03 Settlement Upon Conversion .

(a) Settlement. Upon conversion of any Note, the Company shall pay or deliver, as the case may be, to Holders, in full satisfaction of its conversion obligation under Section 4.01 hereof, in respect of each $1,000 principal amount of Notes being converted, a Settlement Amount consisting of, at the election of the Company, solely cash (“Cash Settlement”), solely Common Shares (together with cash in lieu of any fractional Common Shares pursuant to Section 4.03(b)) (“Physical Settlement”) or a combination of cash and Common Shares (“Combination Settlement”).

(i) Settlement Election. All conversions occurring on or after August 15, 2021 shall be settled using the same Settlement Method. Prior to August 15, 2021, the Company will use the same Settlement Method for all conversions occurring on the same Conversion Date, but the Company shall not have any obligation to use the same Settlement Method with respect to conversions that occur on different Conversion Dates. If the Company elects a Settlement Method (a “Settlement Election”) and a Specified Dollar Amount, if applicable (a “Specified Dollar Amount Election”), the Company shall provide to the Holders so converting through the Trustee a notice of such Settlement Method (each such notice, a “Settlement Election Notice”) or such Specified Dollar Amount (each such notice, a “Specified Dollar Amount Election Notice”), no later than the Close of Business on the second Scheduled Trading Day immediately following the related Conversion Date (or, in the case of any conversions occurring on or after August 15, 2021, no later than August 15, 2021). If the Company does not timely elect a Settlement Method, the Company shall no longer have the right to elect Cash Settlement or Physical Settlement, and the Company shall be deemed to have elected Combination Settlement in respect of its Conversion Obligation, and the Specified Dollar Amount per $1,000 principal amount of Notes shall be deemed to be $1,000. If the Company elects Combination Settlement but does not timely notify converting Holders of the Specified Dollar Amount per $1,000 principal amount of Notes, such Specified Dollar Amount will be deemed to be $1,000.

(ii) Settlement Amount. The cash, Common Shares or combination of cash and Common Shares in respect of any conversion of Notes (the “Settlement Amount”) shall be computed as follows:

(A) if the Company elects Physical Settlement, the Company shall deliver to the converting Holder, in respect of each $1,000 principal amount of its Notes being converted, a number of Common Shares equal to the applicable Conversion Rate, together with cash in lieu of any fractional Common Shares pursuant to Section 4.03(b);

(B) if the Company elects Cash Settlement, the Company shall pay to the converting Holder, in respect of each $1,000 principal amount of its Notes being converted, cash in an amount equal to the sum of the Daily Conversion Values for each of the 40 consecutive VWAP Trading Days during the related Observation Period; and

(C) if the Company elects (or is deemed to have elected) Combination Settlement, the Company shall pay or deliver, as the case may be, to the converting Holder, in respect of each $1,000 principal amount of its Notes being converted, an amount of cash and number of Common Shares, if any, equal to the sum of the Daily Settlement Amounts for each of the 40 consecutive VWAP Trading Days during the related Observation Period.

(iii) Delivery Obligation. The Company shall pay or deliver, as the case may be, the Settlement Amount due in respect of its conversion obligation under Section 4.03 hereof, (i) on the third Business Day immediately following the relevant Conversion Date, if the Company elects Physical Settlement and (ii) on the third Business Day immediately following the last VWAP Trading Day of the related Observation Period, if the Company elects Cash Settlement or Combination Settlement.

(b) Fractional Shares. Notwithstanding the foregoing, the Company will not issue fractional Common Shares as part of the Settlement Amount due with respect to any converted Note. Instead, if any Settlement Amount includes a fraction of a Common Share, the Company will, in lieu of delivering such fraction of a Common Share, pay an amount of cash equal to the product of such fraction of a share and (i) in a Physical Settlement, the Daily VWAP on the relevant Conversion Date, or if such Conversion Date is not a VWAP Trading Day, the immediately preceding VWAP Trading Day or (ii) in a Combination Settlement, the Daily VWAP on the last VWAP Trading Day of the relevant Observation Period (subject to Section 4.03(c) immediately below).

(c) Conversion of Multiple Notes by a Single Holder. If a Holder surrenders more than one Note for conversion on a single Conversion Date or with respect to which a single Observation Period (including, for the avoidance of doubt, the same VWAP Trading Days therein) would apply, the Company will calculate the amount of cash and the number of Common Shares due with respect to such Notes as if such Holder had surrendered for conversion one Note having an aggregate principal amount equal to the sum of the principal amounts of each of the Notes surrendered for conversion by such Holder on the same Conversion Date.

(d) Settlement of Accrued Interest and Deemed Payment of Principal. If a Holder converts a Note, the Company will not adjust the Conversion Rate to account for any accrued and unpaid interest on such Note, and the Company’s delivery or payment, as the case may be, of cash, Common Shares or a combination of cash and Common Shares into which a Note is convertible will be deemed to satisfy and discharge in full the Company’s obligation to pay the principal of, and accrued and unpaid interest, if any, on, such Note to, but excluding, the relevant Conversion Date; provided, however, that subject to Section 4.02(f), if a Holder converts a Note after the Close of Business on a Regular Record Date and prior to the Open of Business on the corresponding Interest Payment Date, the Company will still be obligated to pay the interest due on such Interest Payment Date to the Holder of such Note on such Regular Record Date.

As a result, except as otherwise provided in the proviso to the immediately preceding sentence, any accrued and unpaid interest with respect to a converted Note will be deemed to be paid in full rather than cancelled, extinguished or forfeited. In addition, if the Settlement Amount for any Note includes both cash and Common Shares, accrued and unpaid interest will be deemed to be paid first out of the amount of cash delivered upon such conversion.

(e) Notices. Whenever a Conversion Date occurs with respect to a Note, the Conversion Agent will, as promptly as possible, and in no event later than the Open of Business on the Business Day immediately following such Conversion Date, deliver to the Company and the Trustee, if it is not then the Conversion Agent, notice that a Conversion Date has occurred, which notice will state such Conversion Date, the principal amount of Notes converted on such Conversion Date and the names of the Holders that converted Notes on such Conversion Date.

On the first Business Day immediately following the last VWAP Trading Day of the Observation Period applicable to any Note surrendered for conversion in a Cash Settlement or a Combination Settlement, the Company will deliver a written notice to the Conversion Agent and the Trustee (if not also the Conversion Agent) stating the amount of cash and the number of Common Shares, if any, that the Company is obligated to pay or deliver, as the case may be, to satisfy its conversion obligation with respect to each Note converted on such Conversion Date.

Section 4.04 Adjustment of Conversion Rate. The Conversion Rate will be adjusted as described in this Section 4.04, except that the Company shall not make any adjustment to the Conversion Rate if Holders participate (other than in the case of a share split or share combination) at the same time and upon the same terms as holders of the Common Shares and as a result of holding the Notes, in any of the transactions described below without having to convert their Notes, as if they held a number of Common Shares equal to the applicable Conversion Rate, multiplied by the principal amount (expressed in thousands) of Notes held by such Holder.

(a) If the Company exclusively issues Common Shares as a dividend or distribution on all or substantially all Common Shares, or if the Company effects a share split or share combination, the Conversion Rate will be adjusted based on the following formula:

OS ₁
CR ₁ = CR0 x OS ₀

where,


CR ₀ =	the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date of such dividend or distribution, or immediately prior to the Open of Business on the effective date of such share split or combination, as applicable;


CR ₁ =	the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date or such effective date, as applicable;


OS ₀ =	the number of Common Shares outstanding immediately prior to the Open of Business on such Ex-Dividend Date or such effective date, as applicable; and


OS ₁ =	the number of Common Shares outstanding immediately after giving effect to such dividend, distribution, share split or share combination, as applicable.

Any adjustment made under this Section 4.04(a) shall become effective immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution, or immediately after the Open of Business on the effective date for such share split or share combination, as applicable. If any dividend or distribution of the type described in this Section 4.04(a) is declared but not so paid or made, the Conversion Rate shall be immediately readjusted, effective as of the date the Board of Directors determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(b) If the Company issues to all or substantially all holders of the Common Shares any rights, options or warrants entitling them, for a period of not more than 45 calendar days after the date of such issuance, to subscribe for or purchase Common Shares, at a price per share less than the average of the Last Reported Sale Prices of the Common Shares for the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of such issuance, the Conversion Rate will be increased based on the following formula:

OS _{0 + X}
CR ₁ = CR ₀ X OS _{0 + X}


CR ₀ =	the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such issuance;


CR _i =	the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;


OS ₀ =	the number of Common Shares outstanding immediately prior to the Open of Business on such Ex-Dividend Date;


X	the total number of Common Shares issuable pursuant to such rights, options or warrants; and


Y	the number of Common Shares equal to the aggregate price payable to exercise such rights, options or warrants divided by the average of the Last Reported Sale Prices of the Common Shares over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the date of announcement of the issuance of such rights, options or warrants.

Any increase made under this Section 4.04(b) will be made successively whenever any such rights, options or warrants are issued and shall become effective immediately after the Open of Business on the Ex-Dividend Date for such issuance. To the extent that such rights, options or warrants are not exercised prior to their expiration or Common Shares are not delivered upon the expiration of such rights, options or warrants, the Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect had the increase with respect to the issuance of such rights, options or warrants been made on the basis of delivery of only the number of Common Shares actually delivered. If such rights, options or warrants are not so issued, or if such rights, options or warrants are not exercised prior to their expiration, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such issuance had not occurred.

For purposes of this Section 4.04(b) and Section 4.01(b)(iii)(x) hereof, in determining whether any rights, options or warrants entitle the holders of the Common Shares to subscribe for or purchase Common Shares at a price per share less than such average of the Last Reported Sale Prices of the Common Shares for the 10 consecutive Trading Day period ending on the Trading Day immediately preceding the date of announcement of such issuance, and in determining the aggregate offering price of such Common Shares, there shall be taken into account any consideration received by the Company for such rights, options or warrants and any amount payable on exercise thereof, the value of such consideration, if other than cash, to be determined by the Board of Directors.

(c) If the Company distributes shares of its Capital Stock, evidences of its indebtedness, other assets or property of the Company or rights, options or warrants to acquire its Capital Stock or other securities, to all or substantially all holders of the Common Shares, excluding:

(i) dividends or distributions, rights options or warrants described in Section 4.04(a) hereof or Section 4.04(b) hereof;

(ii) dividends or distributions paid exclusively in cash as to which the provisions set forth in Section 4.04(d) below shall apply and regular quarterly dividends that do not exceed the Dividend Threshold per Common Share; and

(iii) Spin-Offs as to which the provisions set forth below in this Section 4.04(c) shall apply;

(any of such shares of Capital Stock, evidences of indebtedness, other assets or property or rights, options or warrants to acquire Capital Stock or other securities of the Company, the “Distributed Property”), then the Conversion Rate shall be increased based on the following formula:



CR ₁ = CR ₀ x	SP ₀
	SP ₀ - FMV

where,


CR ₀ =	the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such distribution;


CR ₁ =	the Conversion Rate in effect immediately after the Open of Business on such Ex-Dividend Date;


SP ₀ =	the average of the Last Reported Sale Prices of the Common Shares over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Ex-Dividend Date for such distribution; and


FMV =	the fair market value (as determined by the Board of Directors) of Distributed Property with respect to each outstanding Common Share as of the Open of Business on the Ex-Dividend Date for such distribution.

If “FMV” (as defined above) is equal to or greater than the “5P ₀ ” (as defined above), in lieu of the foregoing increase, each Holder of Notes shall receive, in respect of each $1,000 principal amount of Notes it holds, at the same time and upon the same terms as holders of the Common Shares, the amount and kind of Distributed Property that such Holder would have received as if such Holder owned a number of Common Shares equal to the Conversion Rate in effect immediately prior to the record date for the distribution.

Any increase made pursuant to the formula above will become effective immediately after the Open of Business on the Ex-Dividend Date for such distribution. If such distribution (including a Spin-Off) is not so paid or made, the Conversion Rate shall be decreased to be the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

With respect to an adjustment pursuant to this Section 4.04(c) where there has been a payment of a dividend or other distribution on the Common Shares of shares of Capital Stock of any class or series, or similar equity interest, of or relating to any Subsidiaries of the Company or business units of the Company, and such Capital Stock or similar equity interest is listed or quoted (or will be listed or quoted upon the consummation of the distribution) on a U.S. national securities exchange (a “Spin-Off’), the Conversion Rate will be increased based on the following formula:



CR ₁ = CR ₀ x	FMV ₀ + MP ₀
	MP ₀

where,


CR ₀ =	the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such Spin-Off;


CR ₁ =	the Conversion Rate in effect immediately after the Open of Business on the Ex-Dividend Date for such Spin-Off;


FMV ₀ =	the average of the Last Reported Sale Prices of the Capital Stock or similar equity interest distributed to holders of Common Shares applicable to one Common Share over the first 10 consecutive Trading Day period after, but excluding, the effective date of the Spin-Off (the “Valuation Period”); and


MP ₀ =	the average of the Last Reported Sale Prices of Common Shares over the Valuation Period.

If a Holder converts a Note, Cash Settlement or Combination Settlement is applicable to such Note and the first VWAP Trading Day of the Observation Period applicable to such Note occurs after the first Trading Day of the Valuation Period for a Spin-Off, but on or before the last Trading Day of the Valuation Period for such Spin-Off, then the reference in the above definition of “FMV ₀ ” to “10” Trading Days shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the first Trading Day of the Valuation Period for such Spin-Off to, but excluding, the first VWAP Trading Day of such Observation Period. If a Holder converts a Note, Cash Settlement or Combination Settlement is applicable to such Note and one or more VWAP Trading Days of the Observation Period for such Note occurs on or after the Ex-Dividend Date for a Spin-Off but on or prior to the first Trading Day of the Valuation Period for such Spin-Off, such Observation Period will be suspended from, and including, the first such VWAP Trading Day to, and including, the first Trading Day of the Valuation Period for such Spin-Off and will resume immediately after the first Trading Day of the Valuation Period for such Spin-Off, with the reference in the above definition of “FMV ₀ ” to “10 consecutive” Trading Days deemed replaced with a reference to “one (1)” Trading Day.

For purposes of the second adjustment formula set forth in this Section 4.04(c), (i) the Last Reported Sale Price of any Capital Stock or similar equity interest shall be calculated in a manner analogous to that used to calculate the Last Reported Sale Price of the Common Shares in the definition of “Last Reported Sale Price” set forth in hereof, (ii) whether a day is a Trading Day (and whether a day is a Scheduled Trading Day and whether a Market Disruption Event has occurred) for such Capital Stock or similar equity interest shall be determined in a manner analogous to that used to determine whether a day is a Trading Day (or whether a day is a Scheduled Trading Day and whether a Market Disruption Event has occurred) for the Common Shares, and (iii) whether a day is a Trading Day to be included in a Valuation Period will be determined based on whether a day is a Trading Day for both the Common Shares and such Capital Stock or similar equity interest.

Subject to Section 4.04(g), for the purposes of this Section 4.04(c), rights, options or warrants distributed to all or substantially all holders of the Common Shares entitling them to acquire the Company’s Capital Stock or other securities, (either initially or under certain circumstances), which rights, options or warrants, until the occurrence of a specified event or events (a “Trigger Event”): (1) are deemed to be transferred with such Common Shares; (2) are not exercisable; and (3) are also issued in respect of future issuances of Common Shares, shall be deemed not to have been distributed for purposes of this Section 4.04(c) (and no adjustment to the Conversion Rate under this

Section 4.04(c) will be required) until the occurrence of the earliest Trigger Event, whereupon such rights, options or warrants shall be deemed to have been distributed and an appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section 4.04(c). If any such rights, options or warrants, distributed prior to the first date of original issuance of the Initial Notes are subject to events, upon the occurrence of which such rights, options or warrants become exercisable to purchase different securities, evidences of indebtedness or other assets, then the date of the occurrence of any and each such event shall be deemed to be the date of distribution and Ex-Dividend Date of such deemed distribution (in which case the original rights, options or warrants shall be deemed to terminate and expire on such date without exercise by any of the holders). In addition, in the event of any distribution or deemed distribution of rights, options or warrants, or any Trigger Event or other event (of the type described in the preceding sentence) with respect thereto that was counted for purposes of calculating a distribution amount for which an adjustment to the Conversion Rate under this

Section 4.04(c) was made, (1) in the case of any such rights, options or warrants which shall all have been redeemed or purchased without exercise by any Holders thereof, upon such final redemption or purchase (x) the Conversion Rate shall be readjusted as if such rights, options or warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it were a cash distribution, equal to the per share redemption or purchase price received by holders of Common Shares with respect to such rights, options or warrants (assuming each such holder had retained such rights, options or warrants), made to all holders of Common Shares as of the date of such redemption or purchase, and (2) in the case of such rights, options or warrants which shall have expired or been terminated without exercise by any holders thereof, the Conversion Rate shall be readjusted as if such rights and warrants had not been issued.

For purposes of Section 4.04(a) hereof, Section 4.04(b) hereof and this Section 4.04(c), if any dividend or distribution to which this Section 4.04(c) applies includes one or both of:

(A) a dividend or distribution of Common Shares to which Section 4.04(a) hereof also applies (the “Clause A Distribution”); or

(B) an issuance of rights, options or warrants entitling holders of the Common Shares to subscribe for or purchase Common Shares to which Section 4.04(b) hereof also applies (the “Clause B Distribution”),

then (i) such dividend or distribution, other than the Clause A Distribution and the Clause B Distribution, shall be deemed to be a distribution to which this Section 4.04(c) applies (the “Clause C Distribution”) and any Conversion Rate adjustment required to be made under this Section 4.04(c) with respect to such Clause C Distribution shall be made, (ii) the Clause B Distribution, if any, shall be deemed to immediately follow the Clause C Distribution and any Conversion Rate adjustment required by Section 4.04(b) hereof with respect thereto shall then be made, except that, if determined by the Company, (A) the “Ex-Dividend Date” of the Clause B Distribution and the Clause A Distribution, if any, shall be deemed to be the Ex-Dividend Date of the Clause C Distribution and (B) any Common Shares included in the Clause A Distribution or the Clause B Distribution shall not be deemed to be “outstanding immediately prior to the Open of Business on such Ex-Dividend Date” within the meaning of Section 4.04(b) hereof, and (iii) the Clause A Distribution, if any, shall be deemed to immediately follow the Clause C Distribution or the Clause B Distribution, as the case may be, except that, if determined by the Company, (A) the “Ex-Dividend Date” of the Clause A Distribution and the Clause B Distribution, if any, shall be deemed to be the Ex-Dividend Date of the Clause C Distribution, and (B) any Common Shares included in the Clause A Distribution shall not be deemed to be “outstanding immediately prior to the Open of Business on such Ex-Dividend Date or such effective date” within the meaning of Section 4.04(a) hereof.

(d) If any cash dividend or distribution is made to all or substantially all holders of the Common Shares, other than a regular quarterly cash dividend that does not exceed the Dividend Threshold per Common Share, the Conversion Rate shall be adjusted based on the following formula:



CR ₁ = CR ₀ x	SP ₀ - T
	SP ₀ - C

where,


CR _o =	the Conversion Rate in effect immediately prior to the Open of Business on the Ex-Dividend Date for such dividend or distribution;


CR _i =	the Conversion Rate in effect immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution;


SP _o =	the Last Reported Sale Price of the Common Shares on the Trading Day immediately preceding the Ex-Dividend Date for such dividend or distribution;


C	the amount in cash per Common Share that the Company distributes to holders of the Common Shares; and

an amount (subject to the proviso below, the “Dividend Threshold”) initially equal to $0.05 per Common Share; provided, however, that (x) if such dividend or distribution is not a regular quarterly cash dividend on the Common Shares, then the Dividend Threshold will be deemed to be zero per Common Share with respect to such dividend or distribution; and (y) the Dividend Threshold will be adjusted in the same manner as, and at the same time and for the same events for which the Conversion Rate is adjusted as a result of the operation of clauses (a), (b) and (c) above and clause (e) below.

If “C” (as defined above) is equal to or greater than “SP ₀ ” (as defined above), in lieu of the foregoing increase, each Holder shall receive, for each $1,000 principal amount of Notes it holds, at the same time and upon the same terms as holders of Common Shares, the amount of cash that such Holder would have received if such Holder had owned a number of Common Shares equal to the Conversion Rate in effect immediately prior to the record date for such cash dividend or distribution. Such increase shall become effective immediately after the Open of Business on the Ex-Dividend Date for such dividend or distribution. If such dividend or distribution is not so paid, the Conversion Rate shall be decreased, effective as of the date the Board of Directors determines not to pay such dividend or distribution, to the Conversion Rate that would then be in effect if such dividend or distribution had not been declared.

(e) If the Company or any of its Subsidiaries make a payment in respect of a tender offer or exchange offer for the Common Shares, to the extent that the cash and value of any other consideration included in the payment per Common Share exceeds the Last Reported Sale Price of the Common Shares on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer (the “Offer Expiration Date”), the Conversion Rate shall be increased based on the following formula:

CR ₁ = CR ₀ x AC + (SP ₁ x OS ₁ )

OS ₀ x SP ₁

where,


CR ₀ =	the Conversion Rate in effect immediately prior to the Close of Business on the Offer Expiration Date;


CR ₁ =	the Conversion Rate in effect immediately after the Close of Business on the Offer Expiration Date;


AC =	the aggregate value of all cash and any other consideration (as determined by the Board of Directors) paid or payable for Common Shares purchased in such tender or exchange offer;


OS ₀ =	the number of Common Shares outstanding immediately prior to the expiration time of the tender or exchange offer on the Offer Expiration Date (prior to giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer);


OS ₁ =	the number of Common Shares outstanding immediately after the expiration time of the tender or exchange offer on the Offer Expiration Date (after giving effect to the purchase of all shares accepted for purchase or exchange in such tender or exchange offer); and


SP ₁ =	the average of the Last Reported Sale Prices of the Common Shares over the ten consecutive Trading Day period commencing on, and including, the Trading Day next succeeding the Offer Expiration Date (the “Averaging Period”).

(f) Special Settlement Provisions .

If a Holder converts a Note, Cash Settlement or Combination Settlement is applicable to such Note, and the first VWAP Trading Day of the Observation Period for such Note occurs after the first Trading Day of the Averaging Period for a tender or exchange offer, but on or before the last Trading Day of the Averaging Period for such tender or exchange offer, the reference in the above definition of “SP1” to “ten” shall be deemed replaced with such lesser number of Trading Days as have elapsed from, and including, the first Trading Day of the Averaging Period for such tender or exchange offer to, but excluding, the first VWAP Trading Day of such Observation Period. If a Holder converts a Note, Cash Settlement or Combination Settlement is applicable to such Note and one or more VWAP Trading Days of the Observation Period for such Note occurs on or after the Offer Expiration Date for a tender or exchange offer, but on or prior to the first Trading Day in the Averaging Period for such tender or exchange offer, such Observation Period will be suspended on the first such VWAP Trading Day and will resume immediately after the first Trading Day of the Averaging Period for such tender or exchange offer and the reference in the above definition of “SP1” to “ten” shall be deemed replaced with a reference to “one.”

Notwithstanding anything to the contrary herein, if a Holder converts a Note, Combination Settlement is applicable to such Note and the Daily Settlement Amount for any VWAP Trading Day during the Observation Period applicable to such Note:

(i) is calculated based on a Conversion Rate adjusted on account of any event described in clauses (a) through (e) above; and

(ii) includes any Common Shares that, but for this provision, would entitle their holder to participate in such event;

then, although the Company shall otherwise treat such Holder as the holder of record of such Common Shares on the last VWAP Trading Day of such Observation Period, the Company shall not permit such Holder to participate in such event on account of such Common Shares.

In addition, if a Holder converts a Note and:

(iii) Combination Settlement is applicable to such Note;

(iv) the record date, effective date or expiration date for any event that requires an adjustment to the Conversion Rate under any of clauses (a) through (e) above occurs:

(A) on or after the first VWAP Trading Day of such Observation Period; and

(B) on or prior to the last VWAP Trading Day of such Observation Period; and

(v) the Daily Settlement Amount for any VWAP Trading Day in such Observation Period that occurs on or prior to such record date, effective date or expiration date:

(A) includes Common Shares that do not entitle their holder to participate in such event; and

(B) is calculated based on a Conversion Rate that is not adjusted on account of such event;

then, on account of such conversion, the Company shall, on such record date, effective date or expiration date, treat such Holder, as a result of having converted such Notes, as though it were the record holder of a number of Common Shares equal to the total number of Common Shares that:

(vi) are deliverable as part of the Daily Settlement Amount:

(A) for a VWAP Trading Day in such Observation Period that occurs on or prior to such record date, effective date or expiration date; and

(B) is calculated based on a Conversion Rate that is not adjusted for such event; and

(vii) if not for this provision, would not entitle such Holder to participate in such event.

(g) Poison Pill. If a Holder converts a Note, to the extent that the Company has a rights plan in effect, if Physical Settlement applies to such Note, on the Conversion Date applicable to such Note, and if Combination Settlement applies to such Note on any VWAP Trading Day in the Observation Period applicable to such Note, the Holder converting such Note will receive, in addition to any Common Shares otherwise received in connection with such conversion on such Conversion Date or such VWAP Trading Day, as the case may be, the rights under the rights plan, unless prior to such Conversion Date or such VWAP Trading Day, as the case may be, the rights have separated from the Common Shares, in which case, and only in such case, the Conversion Rate will be adjusted at the time of separation as if the Company distributed to all holders of the Common Shares, Distributed Property as described in Section 4.04(c) hereof, subject to readjustment in the event of the expiration, termination or redemption of such rights.

(h) Limitation on Transactions. Notwithstanding anything to the contrary herein, the Company shall not undertake any transaction that would result in its being required, pursuant to this Indenture, to adjust the Conversion Rate such that the Conversion Price per Common Share will be less than the par value of the Common Shares.

(i) Limitation on Adjustments. Except as stated in this Section 4.04, the Company will not adjust the Conversion Rate for the issuance of Common Shares or any securities convertible into or exchangeable for Common Shares or the right to purchase Common Shares or such convertible or exchangeable securities. If, however, the application of the formulas in Sections 4.04(a) through (e) hereof would result in a decrease in the Conversion Rate, then, except to the extent of any readjustment to the Conversion Rate, no adjustment to the Conversion Rate will be made (other than as a result of a reverse share split or share combination).

In addition, notwithstanding anything to the contrary herein, the Conversion Rate will not be adjusted:

(i) on account of stock repurchases that are not tender offers referred to in Section 4.04(e) hereof, including structured or derivative transactions, or transactions pursuant to a stock repurchase program approved by the Board of Directors or otherwise;

(ii) upon the issuance of any Common Shares pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on the Company’s securities and the investment of additional optional amounts in Common Shares under any plan;

(iii) upon the issuance of any Common Shares or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan, program or agreement of or assumed by the Company or any of its Subsidiaries;

(iv) upon the issuance of any Common Shares pursuant to any option, warrant, right or exercisable, exchangeable or convertible security not described in Section 4.04(i)(iii) immediately above and outstanding as of the date the Notes were first issued;

(v) for a change in the par value of the Common Shares; or

(vi) for accrued and unpaid interest on the Notes, if any.

(j) For purposes of this Section 4.04, the number of Common Shares at any time outstanding shall not include shares held in the treasury of the Company so long as the Company does not pay any dividend or make any distribution on Common Shares held in the treasury of the Company, but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of Common Shares.

Section 4.05 Discretionary and Voluntary Adjustments .

(a) Discretionary Adjustments. Whenever any provision of this Indenture requires the Company to calculate the Last Reported Sale Prices, the Daily VWAPs or any function thereof over a span of multiple days (including during an Observation Period), the Company will make appropriate adjustments to each to account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an adjustment to the Conversion Rate where the effective date, Ex-Dividend Date or Offer Expiration Date of the event occurs, at any time during the period when such Last Reported Sale Prices, the Daily VWAPs or function thereof is to be calculated.

(b) Voluntary Adjustments. To the extent permitted by applicable law and applicable requirements of The NASDAQ Global Select Market, the Company is permitted (but not required) to increase the Conversion Rate of the Notes (i) by any amount for a period of at least 20 Business Days if the Board of Directors determines that such increase would be in the Company’s best interest or (ii) to avoid or diminish income tax to holders of Common Shares or rights to purchase Common Shares in connection with a dividend or distribution of shares (or rights to acquire shares) or similar event.

Section 4.06 Adjustment to Conversion Rate Upon Conversion in Connection with a Make-Whole Fundamental Change .

(a) Increase in the Conversion Rate. If a Make-Whole Fundamental Change occurs and a Holder elects to convert its Notes in connection with such Make-Whole Fundamental Change, then the Company shall, to the extent provided herein, increase the Conversion Rate for the Notes so surrendered for conversion by a number of additional Common Shares (the “Additional Shares”), as described in this Section 4.06. A conversion of Notes shall be deemed for these purposes to be “in connection with” a Make-Whole Fundamental Change if the relevant Conversion Notice is received by the Conversion Agent during the period from, and including, the Effective Date of the Make-Whole Fundamental Change up to, and including, the Close of Business on the Business Day immediately prior to the related Fundamental Change Purchase Date or, if such Make-Whole Fundamental Change is not also a Fundamental Change, the 35th Trading Day immediately following the Effective Date for such Make-Whole Fundamental Change (such period, the “Make-Whole Fundamental Change Period”).

(b) Cash Mergers. Notwithstanding anything to the contrary herein, if the consideration paid to holders of the Common Shares in any Make-Whole Fundamental Change described in clause (2) of the definition of “Fundamental Change” is comprised entirely of cash, then, for any conversion of Notes following the Effective Date of such Make-Whole Fundamental Change, the payment and delivery obligations upon the conversion of each $1,000 principal amount of Notes shall be calculated based solely on the Share Price (determined in the manner described in Section 4.06(c)) for such Make-Whole Fundamental Change and shall be deemed to be an amount equal to the applicable Conversion Rate (including any adjustment as described in this Section 4.06) multiplied by such Share Price. In such event, the Company’s conversion obligation will be determined and paid to Holders in cash on the third Business Day following the applicable Conversion Date. Otherwise, the Company will settle any conversion of the Notes following the Effective Date for a Make-Whole Fundamental Change in accordance with Section 4.03 hereof (but subject to Section 4.04 hereof).

(c) Determining the Number of Additional Shares. The number of Additional Shares, if any, by which the Conversion Rate will be increased for a Holder that converts its Notes in connection with a Make-Whole Fundamental Change shall be determined by reference to the table attached as Schedule A hereto, based on the Effective Date of the Make-Whole Fundamental Change and the price per Common Share paid (or deemed paid) in the Make-Whole Fundamental Change (the “Share Price”), as determined under the two immediately following sentences. If the holders of the Common Shares receive only cash in a Make-Whole Fundamental Change described in clause (2) of the definition of “Fundamental Change,” the Share Price shall be the cash amount paid per Common Share. Otherwise, the Share Price shall be the average of the Last Reported Sale Prices of the Common Shares over the 10 consecutive Trading Day period ending on, and including, the Trading Day immediately preceding the Effective Date of the Make-Whole Fundamental Change.

(d) Interpolation and Limits. The exact Share Prices and Effective Dates may not be set forth in the table in Schedule A, in which case:

(i) If the Share Price is between two Share Prices in the table or the Effective Date is between two Effective Dates in the table, the number of Additional Shares shall be determined by a straight-line interpolation between the number of Additional Shares set forth for the higher and lower Share Prices and the earlier and later dates, as applicable, based on a 365- or 366-day year, as applicable.

(ii) If the Share Price is greater than $250.00 per share (subject to adjustment in the same manner as the Share Prices set forth in the column headings of the table in Schedule A hereof), no Additional Shares will be added to the Conversion Rate.

(iii) If the Share Price is less than $27.92 per share (subject to adjustments in the same manner as the Share Prices set forth in the column headings of the table in Schedule A hereof), no Additional Shares will be added to the Conversion Rate.

Notwithstanding the foregoing, in no event will the Conversion Rate be increased on account of a Make-Whole Fundamental Change to exceed 35.8166 Common Shares per $1,000 principal amount of Notes, subject to adjustments in the same manner as the Conversion Rate is required to be adjusted as set forth in Section 4.04 hereof.

(iv) The Share Prices set forth in the column headings of the table in Schedule A hereto shall be adjusted as of any date on which the Conversion Rate of the Notes is otherwise required to be adjusted. The adjusted Share Prices shall equal the Share Prices applicable immediately prior to such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate immediately prior to such adjustment giving rise to the Share Price adjustment and the denominator of which is the Conversion Rate as so adjusted. The number of Additional Shares set forth in such table shall be adjusted in the same manner and at the same time as the Conversion Rate is required to be adjusted as set forth in Section 4.04.

(e) Notices. The Company shall notify the Holders of the Effective Date of any Make-Whole Fundamental Change and issue a press release announcing such Effective Date no later than five Business Days after such Effective Date.

Section 4.07 Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale .

(a) Share Exchange Events . In the case of:

(i) any recapitalization, reclassification or change of Common Shares (other than changes resulting from a stock split, reverse stock split or other subdivision or combination);

(ii) any consolidation, merger, combination or similar transaction involving the Company;

(iii) any sale, lease or other transfer to a third party of substantially all of the consolidated assets of the Company, its Subsidiaries and its variable interest entities, taken together as a whole; or

(iv) any statutory share exchange,

in each case, as a result of which the Common Shares would be converted into, or exchanged for, or represent solely the right to receive, stock, other securities or other property or assets (including cash or any combination thereof) (any such event, a “Share Exchange Event” and any such stock, other securities or other property or assets, “Reference Property,” and the amount of Reference Property that a holder of one Common Share immediately prior to such Share Exchange Event would have been entitled to receive upon the occurrence of such Share Exchange Event, a “Reference Property Unit”), then the Company or the successor or purchasing company, as the case may be, shall execute with the Trustee a supplemental indenture providing that, at and after the effective time of such Share Exchange Event, the consideration due upon conversion of any Notes, and the conditions to any such conversion, will be determined in the same manner as if each reference to any number of Common Shares in Article 4 were instead a reference to the same number of Reference Property Units.

If a Share Exchange Event causes the Common Shares to be converted into, or exchanged for, or represent solely the right to receive, more than a single type of consideration (determined based in part upon any form of stockholder election), then (i) the Reference Property shall be deemed to be the weighted average, per Common Share, of the types and amounts of consideration received by the holders of Common Shares that affirmatively make such an election, and (ii) the Reference Property Unit for purposes of the immediately preceding paragraph shall refer to the consideration referred to in clause (i) attributable to one Common Share. The Company shall notify Holders, the Trustee and the Conversion Agent (if other than the Trustee) of such weighted average as soon as practicable after such determination is made. Notwithstanding anything to the contrary herein, if the Reference Property Unit consists entirely of cash, then the Company will be deemed to elect Cash Settlement in respect of all conversions whose Conversion Date occurs after the effective date of the Share Exchange Event described above, and the Company will pay the cash due upon such conversions no later than the third Business Day after the Conversion Date. For these purposes, the Daily VWAP or Last Reported Sale Price of any Reference Property Unit or portion thereof that does not consist of a class of securities will be the fair value of such Reference Property unit or portion thereof, as applicable, determined in good faith by the Company (or, in the case of cash denominated in U.S. dollars, the face amount thereof).

Such supplemental indenture described in the second immediately preceding paragraph shall provide, to the extent the Reference Property is comprised, in whole or in part, of Common Equity, for anti-dilution and other adjustments that are as nearly equivalent as possible to the adjustments provided for in this Article 4. If the Reference Property in respect of any Share Exchange Event includes shares of stock, securities or other property or assets of a Person other than the Company or, in the case of a transaction described in Article 9, the Successor Company, then such supplemental indenture shall also be executed by such other Person and shall contain such additional provisions to protect the interests of the Holders of Notes, including the right of Holders to require the Company to purchase their Notes upon a Fundamental Change pursuant to Article 3, as the Board of Directors shall reasonably consider necessary by reason of the foregoing.

(b) If the Company executes a supplemental indenture pursuant to this Section 4.07, as promptly as practicable, the Company shall file with the Trustee an Officer’s Certificate briefly describing such Share Exchange Event, the composition of a Reference Property Unit for such Share Exchange Event, any adjustment to be made with respect thereto and that all conditions precedent to such Share Exchange Event under this Indenture have been complied with. Any failure to deliver such Officer’s Certificate shall not affect the legality or validity of such supplemental indenture. The Company shall also issue a press release containing such information and shall make such press release available on its website.

(c) The Company shall not become a party to any Share Exchange Event unless its terms are consistent with this Section 4.07. None of the foregoing provisions shall affect the right of a Holder of Notes to convert its Notes as set forth in Section 4.01 and Section 4.02 prior to the effective date of such Share Exchange Event.

(d) The provisions of this Section 4.07 shall apply successively to successive Share Exchange Events.

(e) In connection with any transaction described in this Section 4.07, the Company shall also adjust the Dividend Threshold based on the number of Common Shares comprising the Reference Property and (if applicable) the value of any non-stock consideration comprising the Reference Property. If the Reference Property is comprised solely of non-stock consideration, then the Dividend Threshold shall be zero.

Section 4.08 Certain Covenants .

(a) Reservation of Shares. To the extent necessary to satisfy its obligations under this Indenture, prior to issuing any Common Shares, the Company will reserve out of its authorized but unissued Common Shares a sufficient number of Common Shares to permit the conversion of the Notes.

(b) Certain other Covenants. The Company covenants that all Common Shares that may be issued upon conversion of Notes shall be issued in book-entry format, shall be newly issued shares or treasury shares, shall be duly authorized, validly issued, fully paid and non-assessable and shall be free from preemptive rights and free from any tax, lien or charge (other than those created by the Holder or due to a change in registered owner). The Company shall list or cause to have quoted any Common Shares to be issued upon conversion of Notes on each national securities exchange or over-the-counter or other domestic market on which the Common Shares are then listed or quoted.

Section 4.09 Responsibility of Trustee. The Trustee and any Conversion Agent shall not at any time be under any duty or responsibility to any Holder of Notes to determine or calculate the Conversion Rate, to determine whether any facts exist which may require any adjustment of the Conversion Rate, or to confirm the accuracy of any such adjustment when made or the appropriateness of the method employed, or herein or in any supplemental indenture provided to be employed, in making the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any Common Shares or of any other securities or property that may at any time be issued or delivered upon the conversion of any Notes; and the Trustee and the Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any Common Shares or stock certificates or other securities or property or cash upon the surrender of any Notes for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article 4. The rights, privileges, protections, immunities and benefits given to the Trustee, including without limitation its right to be compensated, reimbursed and indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, including its capacity as Conversion Agent.

Section 4.10 Notice of Adjustment to the Trustee. Whenever the Conversion Rate is adjusted as herein provided, the Company shall promptly (i) file with the Trustee and any Conversion Agent (if other than the Trustee) an Officer’s Certificate setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment; provided that unless and until a Responsible Officer of the Trustee shall have received such Officer’s Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the Conversion Rate and may assume that the last Conversion Rate of which it has knowledge is still in effect and (ii) deliver written notice to the Holders, at his or her last address appearing on the Register provided for in Section 2.06 of this Indenture, stating that such adjustment has become effective and the Conversion Rate or conversion privilege as adjusted. Failure to deliver such notice shall not affect the legality, effectiveness or validity of any such adjustment and shall not be an Event of Default under this Indenture.

Section 4.11 Notice to Holders .

(a) Notice to Holders Prior to Certain Actions. The Company shall deliver written notices of the events specified below at the times specified below and containing the information specified below unless, in each case (i) pursuant to this Indenture, the Company is already required to deliver notice of such event containing at least the information specified below at an earlier time or (ii) the Company, at the time it is required to deliver a notice, does not have knowledge of all of the information required to be included in such notice, in which case, the Company shall (A) deliver notice at such time containing only the information that it has knowledge of at such time (if it has knowledge of any such information at such time), and (B) promptly upon obtaining knowledge of any such information not already included in a notice delivered by the Company, deliver notice to each Holder containing such information. In each case, the failure by the Company to give such notice, or any defect therein, shall not affect the legality or validity of such event.

(i) Issuances, Distributions, and Dividends and Distributions. If the Company (A) announces any issuance of any rights, options or warrants that would require an adjustment in the Conversion Rate pursuant to Section 4.04(b) hereof; (B) authorizes any distribution that would require an adjustment in the Conversion Rate pursuant to Section 4.04(c) hereof (including any separation of rights from the Common Shares described in Section 4.04(g) hereof); or (C) announces any dividend or distribution that would require an adjustment in the Conversion Rate pursuant to Section 4.04(d) hereof, then the Company shall deliver to the Holders, as promptly as practicable after the holders of the Common Shares are notified of such event, notice describing such issuance, dividend or distribution, as the case may be, and stating the expected Ex-Dividend Date and record date for such issuance, dividend or distribution, as the case may be. In addition, the Company shall deliver to the Holders written notice if the consideration included in such issuance, dividend or distribution, or the Ex-Dividend Date or record date of such issuance, dividend or distribution, as the case may be, changes.

(ii) Tender and Exchange Offers. If the Company announces any tender or exchange offer that could require an adjustment in the Conversion Rate pursuant to Section 4.04(e) hereof, the Company shall deliver to the Holders on the day it announces such tender or exchange offer, and, if the Company is required to file with the Commission a Schedule TO in connection with such tender or exchange offer, an additional written notice (i) when the Company first files such Schedule TO, which notice shall include the address at which such Schedule TO is available on the Commission’s EDGAR system (or any successor thereto), and (ii) whenever the Company files an amendment to such Schedule TO, which notice shall include the address at which such amendment is available on the Commission’s EDGAR system (or any successor thereto).

(iii) Voluntary Increases. If the Company increases the Conversion Rate pursuant to Section 4.05(b), the Company shall deliver notice to the Holders at least two Scheduled Trading Days prior to the date on which such increase will become effective, which notice shall state the date on which such increase will become effective and the amount by which the Conversion Rate will be increased.

(iv) Dissolutions, Liquidations and Winding-Ups. If there is a voluntary or involuntary dissolution, liquidation or winding-up of the Company, the Company shall deliver notice to the Holders at promptly as possible, but in any event prior to the earlier of (i) the date on which such dissolution, liquidation or winding-up, as the case may be, is expected to become effective or occur, and (ii) the date as of which it is expected that holders of Common Shares of record shall be entitled to exchange their Common Shares for securities or other property deliverable upon such dissolution, liquidation or winding-up, as the case may be, which notice shall state the expected effective date and record date for such event, as applicable, and the amount and kind of property that a holder of one Common Share is expected to be entitled, or may elect, to receive in such event. The Company shall deliver an additional written notice to Holders, as promptly as practicable, whenever the expected effective date or record date, as applicable, or the amount and kind of property that a holder of one Common Share is expected to be entitled to receive in such event, changes.

ARTICLE 5
COVENANTS

Section 5.01 Payment of Principal, Interest and Fundamental Change Purchase Price .

The Company covenants and agrees that it will cause to be paid the principal of (including the Fundamental Change Purchase Price) and accrued and unpaid interest, if any, on each of the Notes at the places, at the respective times and in the manner provided herein and in the Notes.

Section 5.02 Maintenance of Office or Agency .

The Company will maintain in the continental United States an office of the Paying Agent, an office of the Registrar and an office or agency where Notes may be surrendered for conversion (“Conversion Agent”) and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office or the office or agency of the Trustee.

The Company may also from time to time designate as co-registrars one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the continental United States for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The terms “Paying Agent” and “Conversion Agent” include any such additional or other offices or agencies, as applicable.

The Company hereby initially designates the Trustee as the Paying Agent, Registrar, Custodian and Conversion Agent, and its Corporate Trust Office, which shall be in the continental United States, shall be considered as one such office or agency of the Company for each of the aforesaid purposes. The Company may, however, change the Paying Agent or Registrar without notice to the Holders. The Company or its Affiliates may act as Paying Agent or Registrar.

With respect to any Global Note, the Corporate Trust Office of the Trustee or any Paying Agent shall be the place of payment where such Global Note may be presented or surrendered for payment or conversion or for registration of transfer or exchange, or where successor Notes may be delivered in exchange therefor; provided, however, that any such payment, conversion, presentation, surrender or delivery effected pursuant to the Applicable Procedures for such Global Note shall be deemed to have been effected at the place of payment for such Global Note in accordance with the provisions of this Indenture.

Section 5.03 Provisions as to Paying Agent .

(a) If the Company shall appoint a Paying Agent other than the Trustee, the Company will cause such Paying Agent to execute and deliver to the Trustee an instrument in which such agent shall agree with the Trustee, subject to the provisions of this Section 5.03:

(i) that it will hold all sums held by it as such agent for the payment of the principal of, any premium on, accrued and unpaid interest, if any, on, or any Fundamental Change Purchase Price for, the Notes held in trust for the benefit of the holders of the Notes;

(ii) that it will give the Trustee prompt written notice of any failure by the Company to make any payment of the principal of, any premium on, accrued and unpaid interest, if any, on, or any Fundamental Change Purchase Price for, the Notes when the same shall be due and payable; and

(iii) that at any time during the continuance of an Event of Default, upon request of the Trustee, it will forthwith pay to the Trustee all sums so held in trust.

The Company shall, on or before each due date of the principal of, any premium on, accrued and unpaid interest, if any, on, or any Fundamental Change Purchase Price for, the Notes, deposit with the Paying Agent a sum in U.S. dollars sufficient to pay such principal, premium, accrued and unpaid interest, or any Fundamental Change Purchase Price, as the case may be, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee in writing of any failure to take such action, provided that, if such deposit is made on the due date, such deposit must be received by the Paying Agent by 10:00 a.m., New York City time, on such date.

(b) If the Company shall act as its own Paying Agent, it will, on or before each due date of the principal of, any premium on, accrued and unpaid interest, if any, on, or any Fundamental Change Purchase Price for, the Notes, set aside, segregate and hold in trust for the benefit of the Holders of the Notes a sum sufficient to pay such amount so becoming due and will promptly notify the Trustee in writing of any failure to take such action and of any failure by the Company to make any such payment when the same shall become due and payable.

(c) Anything in this Section 5.03 to the contrary notwithstanding, the Company may, at any time, for the purpose of obtaining a satisfaction and discharge of this Indenture, or for any other reason, pay or cause to be paid to the Trustee all sums held in trust by the Company or any Paying Agent hereunder as required by this Section 5.03, such sums to be held by the Trustee upon the trusts herein contained and upon such payment by the Company or any Paying Agent to the Trustee, the Company or such Paying Agent shall be released from all further liability with respect to such sums.

(d) Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, any premium on, accrued and unpaid interest, if any, on, or any Fundamental Change Purchase Price for, any Note and remaining unclaimed for two years after such principal, premium, accrued and unpaid interest, or any Fundamental Change Purchase Price has become due and payable shall be paid to the Company on request of the Company contained in an Officer’s Certificate, or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that before the Trustee or such Paying Agent are required to make any such repayment, the Company shall cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The Borough of Manhattan, The City of New York, New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 calendar days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Company.

Section 5.04 Reports .

(a) The Company will file with the Trustee, within 15 calendar days after it is required to file the same with the Commission, copies of the quarterly and annual reports and of the information, documents and other reports, if any, that it is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act. Any such report, information or document that the Company files with the Commission through the EDGAR system (or any successor thereto) will be deemed to be delivered to the Trustee for the purposes of this Section 5.04 at the time of such filing through the EDGAR system (or such successor thereto); provided, however, that the Trustee shall have no responsibility to determine whether such filings have been made.

(b) Delivery of any such reports, information and documents to the Trustee shall be for informational purposes only, and the Trustee’s receipt of such reports, information and documents shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officer’s Certificates).

(c) At any time the Company is not subject to Section 13 or 15(d) of the Exchange Act, the Company will, so long as any of the Notes or the Common Shares delivered upon conversion of the Notes will, at such time, constitute “restricted securities” within the meaning of Rule 144(a)(3) under the Securities Act, promptly provide to the Trustee and will, upon written request, provide to any Holder, beneficial owner or prospective purchaser of such Notes or such Common Shares the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act to facilitate the resale of such Notes or such Common Shares pursuant to Rule 144A under the Securities Act. The Company will take such further action as any Holder or beneficial owner of such Notes or such Common Shares may reasonably request from time to time to enable such Holder or beneficial owner to sell such Notes or such Common Shares in accordance with Rule 144A under the Securities Act, as such rule may be amended from time to time.

Section 5.05 Statements as to Defaults . The Company is required to deliver to the Trustee, within 135 days after the end of each fiscal year beginning with the end of the year of the original issue date of the Notes, an Officer’s Certificate, stating whether or not to the knowledge of the signer thereof the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period of grace or requirement of notice provided under this Indenture) and, if the Company is in default, specifying all such Default or Event of Defaults and the nature and the status thereof of which he or she may have knowledge. In addition, the Company shall deliver to the Trustee, as soon as possible, and in any event within 30 calendar days after the Company becomes aware of the occurrence of any Default or Event of Default, an Officer’s Certificate setting forth the details of such Default or Event of Default, its status and the action that the Company proposes to take with respect thereto. Such Officer’s Certificate shall also comply with any additional requirements set forth in Section 5.07 hereof. The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Responsible Officer of the Trustee has received notice thereof.

Section 5.06 Additional Interest Notice . If Additional Interest is payable by the Company pursuant to Section 5.08 hereof or Section 6.03 hereof, the Company shall deliver to the Trustee an Officer’s Certificate, prior to the Regular Record Date for each applicable Interest Payment Date, to that effect stating (a) the amount of such Additional Interest that is payable and (b) the date on which such interest is payable. Unless and until a Responsible Officer of the Trustee receives at the Corporate Trust Office such a certificate, the Trustee may assume without inquiry that no such Additional Interest is payable. If the Company has paid Additional Interest directly to the Persons entitled to it, the Company shall deliver to the Trustee an Officer’s Certificate setting forth the particulars of such payment.

Section 5.07 Compliance Certificate and Opinions of Counse l.

(a) Except as otherwise expressly provided in this Indenture, upon any application or request by the Company to the Trustee to take any action under any provision of this Indenture, the Company shall furnish to the Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished.

(b) Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

(i) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto;

(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

(iii) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and

(iv) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with.

(c) All applications, requests, certificates, statements or other instruments given under this Indenture shall be without personal recourse to any individual giving the same and may include an express statement to such effect.

Section 5.08 Additional Interest .

(a) If, at any time during the six-month period beginning on, and including, the date which is six months after the Last Original Issuance Date, the Company fails to timely file any document or report that the Company is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, as applicable, or the Notes are not otherwise Freely Tradable, including pursuant to Rule 144 under the Securities Act, by Holders other than “affiliates” (within the meaning of Rule 144) of the Company or Holders that were “affiliates” (within the meaning of Rule 144) of the Company during the 90 days immediately preceding the date of the proposed transfer (as a result of restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes) the Company shall pay Additional Interest that will accrue on the Notes at the rate of 0.50% per annum of the principal amount of Notes then Outstanding for each day during such period for which the Company’s failure to file has occurred and is continuing or the Notes are not otherwise Freely Tradable by Holders other than “affiliates” (within the meaning of Rule 144) of the Company or Holders that were “affiliates” (within the meaning of Rule 144) of the Company during the 90 days immediately preceding the date of the proposed transfer; provided that such period shall end on the date that is one year from the Last Original Issuance Date.

(b) The Company will use reasonable efforts to cause the Notes, to bear an unrestricted CUSIP number no later than the 370 ^th day after the Last Original Issuance Date of the Notes, subject to the Applicable Procedures. If, and for so long as, the Restricted Notes Legend has not been removed (or deemed removed) from the Notes, the Notes are not assigned (or deemed assigned) an unrestricted CUSIP number or the Notes are not otherwise Freely Tradable by Holders other than “affiliates” (within the meaning of Rule 144) of the Company or Holders that were “affiliates” (within the meaning of Rule 144) of the Company during the 90 days immediately preceding the date of the proposed transfer (without restrictions pursuant to U.S. securities laws or the terms of this Indenture or the Notes) as of the 370th day after the Last Original Issuance Date, the Company will pay Additional Interest on the Notes. Additional Interest will accrue on the Notes at the rate of 0.50% per annum of the principal amount of Notes then outstanding until such Restricted Notes Legend is removed (or deemed removed), the Notes are assigned (or deemed assigned) an unrestricted CUSIP number and the Notes are Freely Tradable by Holders other than “affiliates” (within the meaning of Rule 144) of the Company or Holders that were “affiliates” (within the meaning of Rule 144) of the Company during the 90 days immediately preceding the date of the proposed transfer.

(c) Such Additional Interest that is payable shall be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes and, subject to 5.08(d), will be in addition to any Additional Interest that may accrue as described under Section 6.03.

Section 5.09 Corporate Existence. Subject to Article 9, the Company will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence, rights (charter and statutory) and franchises; provided, however, that the Company shall not be required to preserve any such right or franchise if, in the judgment of the Company, the preservation thereof is no longer desirable in the conduct of the business of the Company.

Section 5.10 Restriction on Resales . The Company shall not, and shall use reasonable efforts to not permit any Affiliate of the Company to, resell any of the Notes that have been reacquired by the Company or any of such Affiliate.

Section 5.11 Company to Furnish Trustee Names and Addresses of Holders. The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If at any time the Trustee is not the Registrar, the Company will furnish or cause to be furnished to the Trustee

(a) semi-annually, not later than the 15th day after each Regular Record Date, a list, in such form as the Trustee may reasonably require, containing all the information in the possession or control of the Company, or any of its Paying Agents other than the Trustee, of the names and addresses of the Holders, as of such preceding Regular Record Date, and

(b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished.

Section 5.12 Additional Amounts .

(a) All payments and deliveries made by, or on behalf of the Company (including, for the purposes of this Section 5.12, any successor to the Company) under or with respect to the Notes, including, but not limited to, payments of principal (including, if applicable, the Fundamental Change Purchase Price), payments of interest and deliveries of Common Shares or other Reference Property (together with payment of cash in lieu of any fractional Common Shares) upon conversion, shall be made without withholding or deduction for, or on account of, any present or future taxes, duties, assessments or governmental charges of whatever nature (including interest and penalties related thereto) (collectively, “Applicable Taxes”) imposed or levied by or within the jurisdiction in which the Company is, for tax purposes, organized or resident or doing business or through which payment is made or deemed made by or on behalf of the Company for purposes of the tax law of that jurisdiction (or, in each case, any political subdivision or taxing authority thereof or therein) (each, as applicable, a “Relevant Taxing Jurisdiction”), unless such withholding or deduction is required by law or by regulation or governmental policy having the force of law. In the event that any such withholding or deduction is so required, the Company shall pay to the Holder of each Note such additional amounts (the “Additional Amounts”) as may be necessary to ensure that the net amount received by the beneficial owners after such withholding or deduction (and after deducting any Applicable Taxes imposed or levied by a Relevant Taxing Jurisdiction on the Additional Amounts) shall equal the amounts that would have been received by such beneficial owners had no such withholding or deduction been required; provided, however, that no Additional Amounts will be payable:

(i) for or on account of:

(A) any Applicable Taxes to the extent such Applicable Taxes would not have been imposed but for:

(1) the existence of any present or former connection between the Holder or such beneficial owners of such Note and the Relevant Taxing Jurisdiction, including, without limitation, being or having been a national, domiciliary or resident of such Relevant Taxing Jurisdiction or treated as a resident thereof or being or having been physically present or engaged in a trade or business therein or having or having had a permanent establishment therein, but excluding the mere holding or enforcement of such Note or the receipt of payments thereunder;

(2) the presentation of such Note (in cases in which presentation is required) more than 30 days after the later of the date on which the payment of the principal of (including the Fundamental Change Purchase Price, if applicable) and interest on, such Note or the delivery of Common Shares and other Reference Property (together with payment of cash in lieu of any fractional Common Shares) upon conversion of such Note became due and payable pursuant to the terms thereof or was made or duly provided for; or

(3) the failure of the Holder or such beneficial owners to the extent they were legally entitled to do so, to comply with a timely request from the Company to provide certification, information, documents or other evidence concerning such Holder’s or such beneficial owners’ nationality, residence, identity or connection with the Relevant Taxing Jurisdiction, or to make any declaration or satisfy any other reporting requirement relating to such matters, if and to the extent that due and timely compliance with such request is required by statute, regulation, treaty or administrative practice of the Relevant Taxing Jurisdiction in order to reduce or eliminate any withholding or deduction as to which Additional Amounts would have otherwise been payable to such Holder or beneficial owners;

(B) any estate, inheritance, gift, sale, transfer, personal property or similar Applicable Taxes;

(C) any Applicable Taxes to the extent such Applicable Taxes result from the presentation of any Note for payment (where presentation is required for payment) and the payment can be made without such withholding or deduction by the presentation of the Note for payment by at least one other Paying Agent in a member state of the European Union;

(D) any Applicable Taxes that are payable otherwise than by withholding from payments under or with respect to the Notes;

(E) any Applicable Taxes required by sections 1471 through 1474 of the United States Internal Revenue Code of 1986, as amended (“FATCA”), any current or future Treasury Regulations or rulings promulgated thereunder, any law, regulation or other official guidance enacted in any jurisdiction implementing FATCA, any intergovernmental agreement between the United States and any other jurisdiction to implement FATCA or any law enacted by such other jurisdiction to give effect to such agreement, or any agreement with the U.S. Internal Revenue Service under FATCA; or

(F) any combination of Applicable Taxes referred to in the preceding clauses (A) through (E).

(ii) In addition to the foregoing, the Company shall pay and indemnify the Holder or beneficial owner for any present or future stamp, issue, registration, transfer, court or documentary taxes, or any other excise or property taxes, charges or similar levies or Applicable Taxes levied by any jurisdiction on the execution, delivery, registration or enforcement of any of the Notes or any other document or instrument referred to therein, or the receipt of any payments with respect thereto (limited, solely in the case of Applicable Taxes attributable to the receipt of any payments with respect thereto, to any such taxes imposed in a Relevant Tax Jurisdiction that are not excluded under clauses (A) through (D) and (E) or any combination thereof).

(iii) If the Company becomes aware that it will be obligated to pay Additional Amounts with respect to any payment under or with respect to the Notes, the Company shall deliver to the Trustee on a date at least 30 days prior to the date of payment (unless the obligation to pay Additional Amounts arises after the 30th day prior to that payment date, in which case the Company shall notify the Trustee promptly thereafter) an Officer’s Certificate stating the fact that Additional Amounts will be payable and the amount estimated to be so payable. The Officer’s Certificate must also set forth any other information reasonably necessary to enable the Paying Agent to pay Additional Amounts on the relevant payment date. The Trustee shall be entitled to rely solely on such Officer’s Certificate as conclusive proof that such payments are necessary. The Company shall provide the Trustee with documentation reasonably satisfactory to the Trustee evidencing the payment of Additional Amounts.

(iv) The Company shall make all withholdings and deductions required by law and will remit the full amount deducted or withheld to the relevant taxing authority in accordance with applicable law. The Company shall use reasonable efforts to obtain tax receipts from each taxing authority evidencing the payment of any Applicable Taxes so deducted or withheld. The Company shall furnish to the Holders, within 60 days after the date the payment of any Applicable Taxes so deducted or withheld is made, certified copies of tax receipts evidencing payment by the Company or if, notwithstanding the Company’s efforts to obtain receipts, receipts are not obtained, other evidence of payments by the Company.

(v) Furthermore, Additional Amounts shall not be paid for any Applicable Taxes with respect to any payment of the principal of (including the Fundamental Change Purchase Price, if applicable) and interest on, such Note or the delivery of Common Shares or other Reference Property (together with payment of cash in lieu of any fractional Common Shares) upon conversion of such Note to a Holder, if the Holder is a fiduciary, partnership or Person other than the sole beneficial owner of that payment to the extent that such payment would be required to be included in the income under the laws of the Relevant Taxing Jurisdiction, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a partner or member of that partnership or a beneficial owner who would not have been entitled to such Additional Amounts had that beneficiary, settlor, partner, member or beneficial owner been the Holder thereof.

(b) Any reference in this Indenture or the Notes in any context to the delivery of Common Shares or other Reference Property (together with payment of cash in lieu of any fractional Common Shares) upon conversion of any Note or the payment of principal of (including the Fundamental Change Purchase Price, if applicable) and interest on, any Note or any other amount payable with respect to such Note, shall be deemed to include payment of Additional Amounts to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to this Section 5.12.

(c) Each Holder entitled to any Additional Amounts shall cooperate with the Company and the Trustee in providing any information or documentation reasonably requested by the Company or the Trustee to confirm the identity and/or tax status of such Holder and any affected beneficial owner (to the extent necessary to establish such Holder’s entitlement to Additional Amounts) and to assist the Company or the Trustee in determining the applicable withholding tax rate and the amount of Additional Amounts payable in respect thereof. The Company shall furnish to the Trustee documentation reasonably satisfactory to the Trustee evidencing the payment of any Applicable Taxes so deducted or withheld and the amount of any Additional Amounts payable thereon. Copies of such documentation shall be made available by the Trustee to the relevant Holders upon written request to the Trustee.

(d) The above obligations will survive termination, defeasance or discharge of this Indenture or any transfer by a Holder or beneficial owner of its Notes and will apply mutatis mutandis to any jurisdiction where any successor to the Company is, for tax purposes, organized or resident or doing business or through which payment is made or deemed made by, or on behalf of, any successor to the Company (or any political subdivision or taxing authority thereof or therein).

ARTICLE 6
REMEDIES

Section 6.01 Events of Default. Each of the following events shall be an “Event of Default” with respect to the Notes:

(a) default in any payment of interest on any Note when due and payable, and the default continues for a period of more than 30 calendar days;

(b) default in the payment of the principal of or premium, if any, on any Note (including the Fundamental Change Purchase Price, if applicable) when due and payable on the Maturity Date, upon required repurchase, upon declaration of acceleration or otherwise;

(c) failure by the Company to comply with its obligations under Article 4 hereof to convert the Notes into cash, Common Shares or a combination of cash and Common Shares, as applicable, upon exercise of a Holder’s conversion right and such failure continues for a period of five Business Days;

(d) failure by the Company to comply with its obligations under Article 9 hereof;

(e) failure by the Company to issue a notice in accordance with the provisions of Section 3.02 hereof;

(f) failure by the Company for 90 days after written notice from the Trustee or the Holders of at least 25% in principal amount of the Notes then Outstanding (a copy of which notice, if given by Holders, must also be given to the Trustee) has been received by the Company to comply with any of its other agreements contained in the Notes or this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section 6.01 specifically provided for or that is not applicable to the Notes), which notice shall state that it is a “Notice of Default” hereunder;

(g) default by the Company or any of its Subsidiaries with respect to any mortgage, agreement or other instrument under which there may be outstanding, or by which there may be secured or evidenced any indebtedness for money borrowed in excess of $10,000,000 (or its foreign currency equivalent at the time) in the aggregate of the Company and/or any of the Subsidiaries of the Company, whether such indebtedness now exists or shall hereafter be created (i) resulting in such indebtedness becoming or being declared immediately due and payable or (ii) constituting a failure to pay the principal or interest of any such indebtedness when due and payable at its stated maturity, upon required repurchase, upon declaration of acceleration or otherwise;

(h) a final judgment for the payment of $10,000,000 (or its foreign currency equivalent at the time) or more (excluding any amounts covered by insurance or bond) rendered against the Company or any of its Subsidiaries by a court of competent jurisdiction, which judgment is not discharged, stayed, vacated, paid or otherwise satisfied within 60 days after (i) the date on which the right to appeal thereof has expired if no such appeal has commenced, or (ii) the date on which all rights to appeal have been extinguished; or

(i) the Company or any Significant Subsidiary of the Company shall commence a voluntary case or other proceeding seeking the liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary of the Company or any substantial part of the Company’s or such Significant Subsidiary of the Company’s property, or shall consent to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or shall make a general assignment for the benefit of creditors, or shall fail generally to pay its debts as they become due; or

(j) an involuntary case or other proceeding shall be commenced against the Company or any Significant Subsidiary of the Company seeking liquidation, reorganization or other relief with respect to the Company or such Significant Subsidiary of the Company or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of the Company or such Significant Subsidiary of the Company or any substantial part of its property, and such involuntary case or other proceeding shall remain undismissed and unstayed for a period of sixty consecutive days.

Section 6.02 Acceleration; Waiver .

(a) If an Event of Default (other than an Event of Default specified in Section 6.01(i) hereof or Section 6.01(j) hereof with respect to the Company) occurs and is continuing, and is known to a Responsible Officer of the Trustee, the Trustee by notice to the Company, or the Holders of at least 25% in principal amount of the Notes then Outstanding by written notice to the Company and the Trustee, may, and the Trustee at the request of such Holders shall, declare 100% of the principal of, premium, if any, and accrued and unpaid interest, if any, on all the Notes then Outstanding to be due and payable immediately. Upon such a declaration, such principal, premium, if any, and accrued and unpaid interest, if any, shall be due and payable immediately. If an Event of Default specified in Section 6.01(i) or Section 6.01(j) with respect to the Company occurs and is continuing, 100% of the principal of, premium, if any, and accrued and unpaid interest, if any, on all Notes shall automatically become due and payable.

(b) The Holders of a majority in aggregate principal amount of Notes at the time outstanding, by written notice to the Trustee and the Company, may waive any current Default or Event of Default (except with respect to (i) any failure by the Company to pay the principal of or accrued interest on the Notes (including the Fundamental Change Purchase Price, if applicable), (ii) any failure by the Company to comply with its obligations to purchase Notes when required to do so under Article 3, (iii) any failure by the Company to pay or deliver, as the case may be, the consideration due upon conversion of the Notes or (iv) any covenant or provision of this Indenture or the Notes that cannot be modified or amended without the consent of all Holders as provided for in Section 8.02) and may rescind any acceleration of the notes if (x) the rescission would not conflict with any judgment or decree of a court of competent jurisdiction, (y) all existing Events of Default, other than the nonpayment of the principal of and interest on the Notes have become due solely by such acceleration, have been cured or waived and (z) the Company has paid the Trustee its reasonable compensation and reimbursed the Trustee for its reasonable expenses (including the fees and expenses of its counsel), disbursements and advances.

(c) Each Holder shall have the right to receive payment or delivery, as the case may be, of: (i) the principal (including the Fundamental Change Purchase Price, if applicable) of; (ii) accrued and unpaid interest on; and (iii) the consideration due upon conversion of its Notes, on or after the respective due dates expressed or provided for herein, or to institute suit for the enforcement of any such payment or delivery, as the case may be, and such right to receive such payment or delivery, as the case may be, on or after such respective dates shall not be impaired or affected without the consent of such Holder.

Section 6.03 Additional Interest .

(a) Notwithstanding Section 6.02 hereof, to the extent the Company elects, the sole remedy for an Event of Default under Section 6.01(f) relating to the Company’s failure to comply with Section 5.04(a) hereof (such Event of Default, a “Reporting Event of Default”), will, after the occurrence of such Reporting Event of Default, consist exclusively of the right to receive Additional Interest on the Notes at a rate equal to 0.50% per annum of the principal amount of the Notes Outstanding for each day during the 180-day period beginning on, and including, the day on which such Reporting Event of Default occurs and is continuing (and neither waived nor cured).

(b) On the 181st day after the date on which the Reporting Event of Default occurred (if such Reporting Event of Default has not been cured or waived prior to such 181st day), the Notes will be subject to acceleration as provided in Section 6.02 hereof.

(c) In order to elect to pay the Additional Interest as the sole remedy during the first 180 days after the occurrence of a Reporting Event of Default, the Company must notify all Holders of Notes, the Trustee and the Paying Agent of such election prior to the beginning of such 180-day period. Upon the Company’s failure to timely give such notice, the Notes shall be immediately subject to acceleration as provided in Section 6.02 hereof. In the event the Company does not elect to pay Additional Interest following a Reporting Event of Default or the Company elects to pay Additional Interest but does not pay the Additional Interest when due, the Notes will be subject to acceleration as provided in Section 6.02 hereof. Except as provided in the Section 6.03(d) below, nothing in this Section 6.03 shall affect the rights of Holders of Notes in the event of the occurrence of any other Event of Default.

(d) Such Additional Interest will be payable in arrears on each Interest Payment Date following accrual in the same manner as regular interest on the Notes and will be separate and distinct from, and in addition to any Additional Interest that may accrue pursuant to Section 5.08.

(e) With regard to any Reporting Event of Default, no Additional Interest shall accrue, and no right to declare the principal or other amounts due and payable in respect of the Notes shall exist, after such Reporting Event of Default has been cured.

Section 6.04 Control by Majority. At any time, the Holders of a majority of the aggregate principal amount of the then Outstanding Notes may direct in writing the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture or, subject to the Trustee’s duties under Article 12 hereof, that the Trustee determines to be unduly prejudicial to the rights of a Holder or to the Trustee, or that would potentially involve the Trustee in personal liability unless the Trustee is offered reasonable indemnity or security reasonably satisfactory to it against any loss, liability or expense to the Trustee that may result from the Trustee’s instituting such proceeding as the Trustee. Prior to taking any action hereunder, the Trustee will be entitled to indemnification reasonably satisfactory to it in its sole discretion against all losses and expenses caused by taking or not taking such action.

Section 6.05 Limitation on Suits. Subject to Section 6.06 hereof, no Holder may pursue a remedy with respect to this Indenture or the Notes unless:

(a) such Holder has previously delivered to the Trustee written notice that an Event of Default has occurred and is continuing;

(b) the Holders of at least 25% of the aggregate principal amount of the then Outstanding Notes deliver to the Trustee a written request that the Trustee pursue a remedy with respect to such Event of Default;

(c) such Holder or Holders have offered and, if requested, provided to the Trustee indemnity reasonably satisfactory to the Trustee against any loss, liability or other expense of compliance with such written request;

(d) the Trustee has not complied with such written request within 60 days after receipt of such written request and offer of indemnity or security; and

(e) during such 60-day period, the Holders of a majority of the aggregate principal amount of the then Outstanding Notes did not deliver to the Trustee a direction inconsistent with such written request.

Section 6.06 Rights of Holders to Receive Payment and to Convert. Notwithstanding anything to the contrary elsewhere in this Indenture, the right, which is absolute and unconditional, of any Holder to receive payment of the principal of, premium, if any, interest on, Fundamental Change Purchase Price for, on or after the respective due date, and to convert its Notes and receive the payment or delivery of cash, Common Shares or combination of cash and Common Shares, if any, as the case may be, due with respect to such Notes in accordance with Article 4 hereof, or to bring suit for the enforcement of any such payment or conversion rights, will not be impaired or affected without the consent of such Holder and will not be subject to the requirements of Section 6.05 hereof.

Section 6.07 Collection of Indebtedness; Suit for Enforcement by Trustee. If an Event of Default specified in Section 6.01(a), 6.01(b) or 6.01(c) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium on, interest on, Fundamental Change Purchase Price for, and the amount of cash, the number of Common Shares or the combination of cash and Common Shares, if any, as the case may be, due upon the conversion of, the Notes, as the case may be, and such further amount as is sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, as well as any other amounts that may be due under Section 10.07 hereof.

Section 6.08 Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or the Notes may be prosecuted and enforced by the Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the compensation, and reasonable expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders in respect of which such judgment has been recovered.

Section 6.09 Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable to have the claims of the Trustee and the Holders allowed in any judicial proceedings relative to the Company, its creditors or its property and, unless prohibited by law or applicable regulations, will be entitled to collect, receive and distribute any money or other property payable or deliverable on any such claims, and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and, in the event that the Trustee consents to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 10.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 10.07 hereof out of the estate in any such proceeding, will be denied for any reason, payment of the same will be secured by a lien on, and is paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding, whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained will be deemed to authorize the Trustee to authorize or consent to, or to accept or to adopt on behalf of any Holder, any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.10 Restoration of Rights and Remedies . If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

Section 6.11 Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes in Section 2.09 hereof, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

Section 6.12 Delay or Omission Not a Waiver. No delay or omission of the Trustee or of any Holder to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article 6 or by law to the Trustee or to the Holders may be exercised from time to time and as often as may be deemed expedient by the Trustee (subject to the limitations contained in this Indenture) or by the Holders, as the case may be.

Section 6.13 Priorities. If the Trustee collects any money pursuant to this Article 6, it will pay out the money in the following order:

FIRST: to the Trustee, its agents and attorneys for amounts due under Section 10.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

SECOND: to the Holders, for any amounts due and unpaid on the principal of, premium on, accrued and unpaid interest on, Fundamental Change Purchase Price for, and any cash due upon conversion of, any Note, without preference or priority of any kind, according to such amounts due and payable on all of the Notes; and

THIRD: the balance, if any, to the Company or to such other party as a court of competent jurisdiction directs.

The Trustee may fix a record date and payment date for any payment to the Holders pursuant to this Section 6.13. If the Trustee so fixes a record date and a payment date, at least 15 calendar days prior to such record date, the Trustee will deliver to each Holder a written notice, which notice will state such record date, such payment date and the amount of such payment.

Section 6.14 Undertaking for Costs. All parties to this Indenture agree, and each Holder, by such Holder’s acceptance of a Note, shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided, however, that the provisions of this Section 6.14 shall not apply to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in aggregate principal amount of the Notes then Outstanding, or to any suit instituted by any Holder for the enforcement of the payment of the principal of, any premium on, accrued and unpaid interest, if any, on, Fundamental Change Purchase Price for, any Note on or after the due date expressed or provided for in this Indenture or to any suit for the enforcement of the right to convert any Note in accordance with the provisions of Article 4 hereof.

Section 6.15 Waiver of Stay, Extension and Usury Laws. The Company covenants that, to the extent that it may lawfully do so, it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company, to the extent that it may lawfully do so, hereby expressly waives all benefit or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will instead suffer and permit the execution of every such power as though no such law has been enacted.

ARTICLE 7
SATISFACTION AND DISCHARGE

Section 7.01 Discharge of Liability on Notes. When (a) the Company shall deliver to the Registrar for cancellation all Notes theretofore authenticated (other than any Notes that have been destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) and not theretofore canceled, or (b) all the Notes not theretofore canceled or delivered to the Trustee for cancellation shall have become due and payable (whether on the Maturity Date, on any Fundamental Change Purchase Date, upon conversion or otherwise) and the Company shall deposit with the Trustee, in trust, or deliver to the Holders, as applicable, an amount of cash, a number of Common Shares, or a combination of cash and Common Shares, if any, as the case may be (solely to settle amounts due with respect to outstanding conversions), sufficient to pay all amounts due on all of such Notes (other than any Notes that shall have been mutilated, destroyed, lost or stolen and in lieu of or in substitution for which other Notes shall have been authenticated and delivered) not theretofore canceled or delivered to the Trustee for cancellation, including principal and interest due, accompanied, except in the event the Notes are due and payable solely in cash at the Maturity Date or upon an earlier Fundamental Change Purchase Date, by a verification report as to the sufficiency of the deposited amount from an independent certified accountant or other financial professional reasonably satisfactory to the Trustee, and if the Company shall also pay or cause to be paid all other sums payable hereunder by the Company, then this Indenture shall cease to be of further effect (except as to (i) rights hereunder of Holders to receive from such trust all amounts owing upon the Notes and the other rights, duties and obligations of Holders, as beneficiaries hereof with respect to the amounts, if any, so deposited with the Trustee and (ii) the rights, obligations and immunities of the Trustee hereunder), and the Trustee, on written demand of the Company accompanied by an Officer’s Certificate and an Opinion of Counsel and at the cost and expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture; the Company, however, hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly incurred by the Trustee, including the fees and expenses of its counsel, and to compensate the Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection with this Indenture or the Notes.

Section 7.02 Deposited Monies to Be Held in Trust by Trustee. Subject to Section 7.04 hereof, all monies and Common Shares, as the case may be, deposited with the Trustee pursuant to Section 7.01 hereof shall be held in trust for the sole benefit of the Holders of the Notes, and such monies and Common Shares shall be applied by the Trustee to the payment, either directly or through any Paying Agent (including the Company if acting as its own Paying Agent), to the Holders of the particular Notes for the payment or settlement of which such monies or Common Shares, or both, as the case may be, have been deposited with the Trustee, of all sums or amounts due and to become due thereon for principal and interest, if any.

Section 7.03 Paying Agent to Repay Monies Held. Upon the satisfaction and discharge of this Indenture, all monies and Common Shares, as the case may be, then held by any Paying Agent (if other than the Trustee) shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be released from all further liability with respect to such monies and Common Shares, or both, as the case may be.

Section 7.04 Return of Unclaimed Monies. Subject to the requirements of applicable law, any monies and Common Shares deposited with or paid to the Trustee for payment of the principal of or interest, if any, on the Notes and not applied but remaining unclaimed by the Holders of the Notes for two (2) years after the date upon which the principal of or interest, if any, on such Notes, as the case may be, shall have become due and payable, shall be repaid to the Company by the Trustee on demand, and all liability of the Trustee shall thereupon cease with respect to such monies and Common Shares; and the Holder shall thereafter look only to the Company for any payment or delivery that such Holder may be entitled to collect unless an applicable abandoned property law designates another Person.

Section 7.05 Reinstatement . If the Trustee or the Paying Agent is unable to apply any money or Common Shares, or both, as the case may be, in accordance with Section 7.02 hereof by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s obligations under the Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 7.01 hereof until such time as the Trustee or the Paying Agent is permitted to apply all such money and Common Shares in accordance with Section 7.02 hereof; provided, however, that if the Company makes any payment of interest on, principal of or payment or delivery in respect of any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Common Shares, if any, held by the Trustee or Paying Agent.

ARTICLE 8
SUPPLEMENTAL INDENTURES

Section 8.01 Supplemental Indentures Without Consent of Holders .

Without the consent of any Holder, the Company and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes:

(a) to cure any ambiguity, defect or inconsistency in this Indenture or the Notes;

(b) to conform the terms of this Indenture or the Notes to the description thereof in the Preliminary Offering Memorandum, as supplemented by the pricing term sheet related to the offering of the Notes;

(c) to evidence the succession by a Successor Company and to provide for the assumption by a Successor Company of the Company’s obligations under the Indenture;

(d) to add guarantees with respect to the Notes;

(e) to secure the Notes;

(f) to add to the Company’s covenants such further covenants, restrictions or conditions for the benefit of the Holders or surrender any right or power conferred upon the Company by the Indenture;

(g) to make any other change that does not adversely affect the rights of any Holder in any material respect (other than any Holder that consents to such change);

(h) to provide for a successor Trustee;

(i) upon the occurrence of a Share Exchange Event, solely (x) to provide that the Notes are convertible into Reference Property, as required under Section 4.07, and (y) to effect the related changes to the terms of the Notes required under Section 4.07, in each case, in accordance with the applicable provisions hereof;

(j) to comply with the Applicable Procedures; or

(k) to irrevocably elect a Settlement Method or eliminate, in the aggregate, any one or two Settlement Methods or, in the case of Combination Settlement, irrevocably elect a Specified Dollar Amount.

Section 8.02 Supplemental Indentures With Consent of Holders .

With the consent of the Holders of not less than a majority in principal amount of the Outstanding Notes (including, without limitation, consents obtained in connection with a purchase of, or tender or exchange offer for, Notes) (i) the Company, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under this Indenture and (ii) any past Default or compliance with any covenants or provisions of this Indenture may be waived (other than a Default or an Event of Default resulting from the failure to pay principal or interest on the Notes, the Fundamental Change Purchase Price, to pay or deliver, as the case may be, the amount of cash, the number of Common Shares or combination of cash and Common Shares, if any, as the case may be, due upon conversion of a Note); provided, however, that no such supplemental indenture or waiver shall, without the consent of the Holder of each Outstanding Note affected thereby:

(a) reduce the percentage in aggregate principal amount of Notes then Outstanding necessary to waive any past Default or Event of Default;

(b) reduce the rate of interest on any Note or change the time for payment of interest on any Note;

(d) change the place or currency of payment on any Note;

(e) make any change that impairs or adversely affects the conversion rights of any Notes;

(f) reduce the Fundamental Change Purchase Price of any Note or amend or modify in any manner adverse to the rights of the Holders of the Notes the Company’s obligation to pay the Fundamental Change Purchase Price, whether through an amendment or waiver of provisions in the covenants, definitions or otherwise;

(g) impair the right of any Holder of Notes to receive payment of principal of, premium, if any, and interest, if any, on, its Notes, or the right to receive payment or delivery, as the case may be, of the amount of cash, the number of Common Shares or the combination of cash and Common Shares, if any, as the case may be, due upon conversion of its Notes on or after the due dates therefor or to institute suit for the enforcement of any such payment or delivery, as the case may be, with respect to such Holder’s Notes;

(h) modify the ranking provisions of this Indenture in a manner that is adverse to the rights of the Holders of the Notes;

(i) change the provisions of Section 5.12; or

(j) make any change to the provisions of this Article 8 that requires each Holder’s consent or in the waiver provisions of this Indenture if such change is adverse to the rights of Holders of the Notes.

Notwithstanding the foregoing, any Holder may agree to waive any rights such Holder (and only such Holder) may have with respect to Notes held by such Holder.

It shall not be necessary for any Act or consent of Holders under this Section 8.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act or consent shall approve the substance thereof. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any indenture supplemental hereto. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to consent to such supplemental indenture, whether or not such Holders remain Holders after such record date; provided that, unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 90 calendar days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect.

Section 8.03 Notice of Amendment or Supplement . After an amendment or supplement under this Article 8 becomes effective, the Company shall provide to the Holders a written notice briefly describing such amendment or supplement. However, the failure to give such notice to all the Holders, or any defect in the notice, shall not impair or affect the validity of the amendment or supplement.

Section 8.04 Trustee to Sign Amendments, Etc.. The Trustee shall sign any amendment or supplement authorized pursuant to this Article 8 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment or supplement, the Trustee shall receive, and, shall be fully protected in conclusively relying upon, an Officer’s Certificate and an Opinion of Counsel provided at the expense of the Company, each stating that such amendment or supplement is authorized or permitted by the Indenture and that such amendment or supplement is the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

ARTICLE 9
SUCCESSOR COMPANY

Section 9.01 Company May Consolidate, Etc. on Certain Terms. The Company shall not amalgamate or consolidate with, merge with or into or convey, transfer or lease its properties and assets substantially as an entirety to another Person (other than Excepted Transfers), unless:

(a) the resulting, surviving or transferee Person (the “Successor Company”) is a corporation organized and validly existing under the laws of the United States of America, any State thereof, the District of Columbia, the Islands of Bermuda, the Republic of the Marshall Islands, the United Kingdom, Norway or Cyprus, and the Successor Company (if not the Company) expressly assumes, by a supplemental indenture, executed and delivered to the Trustee, all of the obligations of the Company under the Notes and this Indenture as applicable to the Notes (including, for the avoidance of doubt, the obligation to pay Additional Amounts, as set forth in Section 5.12);

(b) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing under this Indenture with respect to the Notes;

(c) if, upon the occurrence of any such transaction, the Notes would become convertible into, or exchangeable for, securities issued by an issuer other than the Successor Company pursuant to the terms of this Indenture, then (x) such securities are common shares issued by a corporation organized and existing under the laws of the United States of America, any State thereof, the District of Columbia, the Islands of Bermuda, the Republic of the Marshall Islands, the United Kingdom, Norway or Cyprus and (y) if such Successor Company is a wholly owned subsidiary of the issuer of such securities based on which the Notes have become convertible or exchangeable, such other issuer shall fully and unconditionally guarantee on a senior basis the Successor Company’s obligations under the Notes;

(d) all the conditions specified in this Article 9 are met.

Upon any such amalgamation, consolidation, merger, conveyance, transfer or lease, the Successor Company (if not the Company) shall succeed to, and may exercise every right and power of the Company under this Indenture, and the Company shall be discharged from its obligations under the Notes and the Indenture except in the case of any such lease.

For purposes of this Section 9.01, the conveyance, transfer or lease of the properties and assets of one or more Subsidiaries of the Company substantially as an entirety to another Person (other than Excepted Transfers), which properties and assets, if held by the Company instead of such Subsidiary or Subsidiaries, would constitute the properties and assets of the Company substantially as an entirety on a consolidated basis, shall be deemed to be the transfer of the properties and assets of the Company substantially as an entirety to another Person.

Section 9.02 Successor Corporation to Be Substituted. In case of any such amalgamation, consolidation, merger, conveyance, transfer or lease and upon the assumption by the Successor Company (if other than the Company), by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the due and punctual payment of the principal of and premium (including any Fundamental Change Purchase Price), if any, accrued and unpaid interest, if any, on all of the Notes, the due and punctual delivery or payment, as the case may be, of any Settlement Amount due upon conversion of the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Company under this Indenture, such Successor Company shall succeed to and be substituted for, and may exercise every right and power of, the Company under this Indenture, with the same effect as if it had been named herein as the party of the first part; provided, however, that in the case of a conveyance, transfer or lease to one or more of its Subsidiaries of all or substantially all of the properties and assets of the Company, the Notes will remain convertible based on the Common Shares and into cash, Common Shares, or a combination of cash and Common Shares, if any, as the case may be, in accordance with Section 4.03 hereof, but subject to adjustment (if any) in accordance with Section 4.07 hereof. Such Successor Company thereupon may cause to be signed, and may issue either in its own name or in the name of the Company any or all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee; and, upon the order of such Successor Company instead of the Company and subject to all the terms, conditions and limitations in this Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause to be authenticated and delivered, any Notes that previously shall have been signed and delivered by the officers of the Company to the Trustee for authentication, and any Notes that such Successor Company thereafter shall cause to be signed and delivered to the Trustee for that purpose. All the Notes so issued shall in all respects have the same legal rank and benefit under this Indenture as the Notes theretofore or thereafter issued in accordance with the terms of this Indenture as though all of such Notes had been issued at the date of the execution hereof. In the event of any such amalgamation, consolidation, merger, conveyance or transfer (but not in the case of a lease), the Person named as the “Company” in the first paragraph of this Indenture or any successor that shall thereafter have become such in the manner prescribed in this Article 9 may be dissolved, wound up and liquidated at any time thereafter and, except in the case of a lease, such Person shall be released from its liabilities as obligor and maker of the Notes and from its obligations under this Indenture.

In case of any such amalgamation, consolidation, merger, conveyance, transfer or lease, such changes in phraseology and form (but not in substance) may be made in the Notes thereafter to be issued as may be appropriate.

Section 9.03 Opinion of Counsel to Be Given to Trustee. In the case of any such amalgamation, merger, consolidation, conveyance, transfer or lease the Trustee shall receive an Officer’s Certificate and an Opinion of Counsel each stating that any such amalgamation, consolidation, merger, conveyance, transfer or lease and any such assumption and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture, complies with the provisions of this Indenture.

ARTICLE 10
THE TRUSTEE

Section 10.01 Duties and Responsibilities of Trustee .

(a) The Trustee, prior to the occurrence of an Event of Default and after the curing of all Events of Default which may have occurred, undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee. In case an Event of Default has occurred (which has not been cured or waived) and a Responsible Officer of the Trustee has notice of such fact, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care in their exercise, as a prudent person would use in the conduct of his or her own affairs.

(b) No provision of this Indenture shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

(i) prior to the occurrence of an Event of Default and after the curing or waiving of all Events of Default which may have occurred:

(A) the duties and obligations of the Trustee shall be determined solely by the express provisions of this Indenture and applicable law, and the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(B) in the absence of bad faith on the part of the Trustee, the Trustee may conclusively rely as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but, in the case of any such certificates or opinions which by any provisions hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the accuracy of any mathematical calculations or other facts stated therein);

(ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer of the Trustee, unless the Trustee was negligent in ascertaining the pertinent facts;

(iii) the Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the written direction of the Holders of not less than a majority in principal amount of the Notes at the time Outstanding determined as provided in Section 1.03 relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture;

(iv) whether or not therein provided, every provision of this Indenture relating to the conduct or affecting the liability of, or affording protection to, the Trustee shall be subject to the provisions of this Section;

(v) the Trustee shall not be liable in respect of any payment (as to the correctness of amount, entitlement to receive or any other matters relating to payment) or notice effected by the Company or any Paying Agent or any records maintained by any co-Registrar with respect to the Notes; and

(vi) if any party fails to deliver a notice relating to an event the fact of which, pursuant to this Indenture, requires notice to be sent to the Trustee, the Trustee may conclusively rely on its failure to receive such notice as reason to act as if no such event occurred.

None of the provisions contained in this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, if there is reasonable ground for believing that the repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

Section 10.02 Notice of Defaults. The Trustee shall give the Holders notice of any Default of which a Responsible Officer of the Trustee has received written notice of within 90 days after the occurrence thereof so long as such Default is continuing; provided, that (except in the case of any Default in the payment of principal amount of, or interest on, any of the Notes or Fundamental Change Purchase Price or a default in the delivery of the consideration due upon conversion), the Trustee shall be protected in withholding such notice if and so long as it in good faith determines that the withholding of such notice is in the interest of the Holders of Notes.

Section 10.03 Reliance on Documents, Opinions, Etc . Except as otherwise provided in Section 10.01:

(a) the Trustee may conclusively rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, note, coupon or other paper or document (whether in its original, PDF or facsimile form) believed by it in good faith to be genuine and to have been signed or presented by the proper party or parties;

(b) any request, direction, order or demand of the Company mentioned herein shall be sufficiently evidenced by an Officer’s Certificate (unless other evidence in respect thereof be herein specifically prescribed); and any resolution of the Board of Directors may be evidenced to the Trustee by a Board Resolution;

(c) the Trustee may consult with counsel of its own selection and any advice or Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken or omitted by it hereunder in good faith and in accordance with such advice or Opinion of Counsel;

(d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request, order or direction of any of the Holders pursuant to the provisions of this Indenture (including upon the occurrence and during the continuance of an Event of Default), unless such Holders shall have offered to the Trustee security or indemnity reasonably satisfactory to it against any loss, expenses and liabilities which may be incurred therein or thereby;

(e) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company, personally or by agent or attorney (at the reasonable expense of the Company and shall incur no liability of any kind by reason of such inquiry or investigation);

(f) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed by it with due care hereunder;

(g) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture;

(h) in no event shall the Trustee be responsible or liable for special, indirect, consequential or punitive loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action;

(i) the Trustee shall not be deemed to have notice of any Default or Event of Default unless written notice of any event which is in fact such a default is received by a Responsible Officer of the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and the Indenture;

(j) the rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and each agent, custodian and other Person employed to act hereunder;

(k) the Trustee shall not be required to give any bond or surety in respect of the performance of its powers and duties hereunder;

(l) the Trustee may request that the Company deliver a certificate setting forth the names of individuals and/or titles of officers authorized at such time to take specified actions pursuant to this Indenture; and

(m) the permissive rights of the Trustee enumerated herein shall not be construed as duties.

Section 10.04 No Responsibility for Recitals, Etc. The recitals contained herein and in the Notes (except in the Trustee’s certificate of authentication) shall be taken as the statements of the Company, and the Trustee assumes no responsibility for the correctness of the same. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Notes. The Trustee shall not be accountable for the use or application by the Company of any Notes or the proceeds of any Notes authenticated and delivered by the Trustee in conformity with the provisions of this Indenture.

Section 10.05 Trustee, Paying Agents, Exchange Agents or Registrar May Own Notes . The Trustee, any Paying Agent, any Conversion Agent or Registrar, in its individual or any other capacity, may become the owner or pledgee of Notes with the same rights it would have if it were not Trustee, Paying Agent, Conversion Agent or Registrar.

Section 10.06 Monies to be Held in Trust . Subject to the provisions of Section 10.07, all monies and properties received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as may be agreed in writing from time to time by the Company and the Trustee.

Section 10.07 Compensation, Expenses and Indemnity of Trustee. The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be entitled to, such compensation for all services rendered by it hereunder in any capacity (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) as mutually agreed to from time to time in writing between the Company and the Trustee, and the Company will pay or reimburse the Trustee upon its request for all reasonable, out-of-pocket expenses, disbursements and advances reasonably incurred or made by the Trustee in accordance with any of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of its counsel and of all Persons not regularly in its employ) except any such expense, disbursement or advance as may arise from its negligence or willful misconduct.

The Company also covenants to indemnify the Trustee (or any officer, director or employee of the Trustee), in any capacity under this Indenture and its agents and any Authenticating Agent for, and to hold them harmless against, any and all loss, liability, claim or expense incurred without negligence or willful misconduct on the part of the Trustee or such officers, directors, employees and agent or Authenticating Agent, as the case may be, and arising out of or in connection with the acceptance or administration of this trust or in any other capacity hereunder, including the costs and expenses of defending themselves against any claim (whether asserted by the Company, a Holder or any other Person) of liability in the premises. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have one firm of separate counsel except in the event local counsel shall be required and the Company shall pay the reasonable fees and expenses of such counsel and local counsel, as applicable. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.

The obligations of the Company under this Section 10.07 to compensate or indemnify the Trustee and to pay or reimburse the Trustee for expenses, disbursements and advances shall be secured by a lien prior to that of the Notes upon all property and funds held or collected by the Trustee as such, except funds held in trust for the benefit of the Holders of particular Notes. The obligation of the Company under this Section shall survive the satisfaction and discharge of this Indenture and the resignation or removal of the Trustee.

When the Trustee and its agents and any Authenticating Agent incur expenses or render services after an Event of Default specified in Section 6.01(i) and 6.01(j) with respect to the Company occurs, the expenses and the compensation for the services are intended to constitute expenses of administration under any bankruptcy, insolvency or similar laws.

Section 10.08 Officer’s Certificate as Evidence. Except as otherwise provided in Section 10.01, whenever in the administration of the provisions of this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or omitting any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of negligence or willful misconduct on the part of the Trustee, be deemed to be conclusively proved and established by an Officer’s Certificate delivered to the Trustee.

Section 10.09 [Reserved] .

Section 10.10 Eligibility of Trustee. There shall at all times be a Trustee hereunder which shall be a Person that has a combined capital and surplus of at least $50,000,000 (or if such Person is a member of a bank holding company system, its bank holding company shall have a combined capital and surplus of at least $50,000,000). If such Person publishes reports of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority, then for the purposes of this Section the combined capital and surplus of such Person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section 10.10, it shall resign immediately in the manner and with the effect hereinafter specified in this Article.

Section 10.11 Resignation or Removal of Trustee .

(a) The Trustee may at any time resign by giving written notice of such resignation to the Company and to the Holders of Notes. Upon receiving such notice of resignation, the Company shall promptly appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the resigning Trustee and one copy to the successor trustee. If no successor trustee shall have been so appointed and have accepted appointment thirty (30) days after the mailing of such notice of resignation to the Holders, the resigning Trustee may, upon ten (10) Business Days’ notice to the Company and the Holders, petition, at the expense of the Company, any court of competent jurisdiction for the appointment of a successor trustee, or, if any Holder who has been a bona fide Holder of a Note or Notes for at least six (6) months may, subject to the provisions of Section 6.14, on behalf of himself and all others similarly situated, petition any such court for the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, appoint a successor trustee.

(b) In case at any time any of the following shall occur:

(i) the Trustee shall cease to be eligible in accordance with the provisions of Section 10.10 and shall fail to resign after written request therefor by the Company or by any such Holder; or

(ii) the Trustee shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation;

then, in any such case, the Company may remove the Trustee and appoint a successor trustee by written instrument, in duplicate, executed by order of the Board of Directors, one copy of which instrument shall be delivered to the Trustee so removed and one copy to the successor trustee, or, subject to the provisions of Section 6.14, any Holder who has been a bona fide Holder of a Note or Notes for at least six (6) months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor trustee; provided, however, that if no successor Trustee shall have been appointed and have accepted appointment thirty (30) days after either the Company or the Holders has removed the Trustee, the Trustee so removed may petition at the Company’s expense any court of competent jurisdiction for an appointment of a successor trustee. Such court may thereupon, after such notice, if any, as it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.

(c) The Holders of a majority in aggregate principal amount of the Notes at the time Outstanding may at any time remove the Trustee and nominate a successor trustee which shall be deemed appointed as successor trustee unless, within ten (10) days after notice to the Company of such nomination, the Company objects thereto, in which case the Trustee so removed or any Holder, or if such Trustee so removed or any Holder fails to act, the Company, upon the terms and conditions and otherwise as provided in Section 10.11(a), may petition, at the expense of the Company, any court of competent jurisdiction for an appointment of a successor trustee.

(d) Any resignation or removal of the Trustee and appointment of a successor trustee pursuant to any of the provisions of this Section 10.11 shall become effective upon acceptance of appointment by the successor trustee as provided in Section 10.12.

Section 10.12 Acceptance by Successor Trustee . Any successor trustee appointed as provided in Section 10.11 shall execute, acknowledge and deliver to the Company and to its predecessor trustee an instrument accepting such appointment hereunder, and thereupon the resignation or removal of the predecessor trustee shall become effective and such successor trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, duties and obligations of its predecessor hereunder, with like effect as if originally named as trustee herein; but, nevertheless, on the written request of the Company or of the successor trustee, the trustee ceasing to act shall, upon payment of any amount then due it pursuant to the provisions of Section 10.07, execute and deliver an instrument transferring to such successor trustee all the rights and powers of the trustee so ceasing to act. Upon request of any such successor trustee, the Company shall execute any and all instruments in writing for more fully and certainly vesting in and confirming to such successor trustee all such rights and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon all property and funds held or collected by such trustee as such, except for funds held in trust for the benefit of Holders of particular Notes, to secure any amounts then due it pursuant to the provisions of Section 10.07.

No successor trustee shall accept appointment as provided in this Section 10.12 unless, at the time of such acceptance, such successor trustee shall be eligible under the provisions of Section 10.10.

Upon acceptance of appointment by a successor trustee as provided in this Section 10.12, the Company (or the former trustee, at the written direction of the Company) shall mail or cause to be mailed notice of the succession of such trustee hereunder to the Holders of Notes at their addresses as they shall appear on the Register. If the Company fails to mail such notice within ten (10) days after acceptance of appointment by the successor trustee, the successor trustee shall cause such notice to be mailed at the expense of the Company.

Section 10.13 Succession by Merger, Etc. Any corporation into which the Trustee may be merged or exchanged or with which it may be consolidated, or any corporation resulting from any merger, exchange or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee (including any trust created by this Indenture), shall be the successor to the Trustee hereunder without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that in the case of any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, such corporation shall be eligible under the provisions of Section 10.10.

In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture, any of the Notes shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee or Authenticating Agent appointed by such predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Trustee or any Authenticating Agent appointed by such successor trustee may authenticate such Notes in the name of the successor trustee; and in all such cases such certificates shall have the full force that is provided in the Notes or in this Indenture; provided, however, that the right to adopt the certificate of authentication of any predecessor Trustee or authenticate Notes in the name of any predecessor Trustee shall apply only to its successor or successors by merger, exchange or consolidation.

Section 10.14 [Reserved] .

Section 10.15 Trustee’s Application for Instructions from the Company. Any application by the Trustee for written instructions from the Company (other than with regard to any action proposed to be taken or omitted to be taken by the Trustee that affects the rights of the Holders of the Notes under this Indenture) may, at the option of the Trustee, set forth in writing any action proposed to be taken or omitted by the Trustee under this Indenture and the date on and/or after which such action shall be taken or such omission shall be effective. The Trustee shall not be liable for any action taken by, or omission of, the Trustee in accordance with a proposal included in such application on or after the date specified in such application (which date shall not be less than three (3) Business Days after the date any officer of the Company actually receives such application, unless any such officer shall have consented in writing to any earlier date) unless prior to taking any such action (or the effective date in the case of an omission), the Trustee shall have received written instructions in response to such application specifying the action to be taken or omitted.

ARTICLE 11
NO OPTIONAL REDEMPTION

Section 11.01 No Right to Redeem. The Company may not redeem the Notes prior to the Maturity Date, and no sinking fund is provided for the Notes.

ARTICLE 12
MISCELLANEOUS

Section 12.01 Effect on Successors and Assigns. All agreements of the Company, the Trustee, the Registrar, the Paying Agent, the Bid Solicitation Agent and the Conversion Agent in this Indenture and the Notes will bind their respective successors .

Section 12.02 Governing Law. This Indenture and the Notes, and any claim, controversy or dispute arising under or related to the Indenture or the Notes, will be governed by, and construed in accordance with, the laws of the State of New York. To the fullest extent permitted by applicable law, the Company hereby irrevocably submits to the jurisdiction of any Federal or State court located in the Borough of Manhattan in The City of New York, New York in any suit, action or proceeding based on or arising out of or relating to this Indenture or any Notes and irrevocably agrees that all claims in respect of such suit or proceeding may be determined in any such court. The Company irrevocably waives, to the fullest extent permitted by law, any objection which it may have to the laying of the venue of any such suit, action or proceeding brought in an inconvenient forum. The Company agrees that final judgment in any such suit, action or proceeding brought in such a court shall be conclusive and binding upon the Company, and may be enforced in any courts to the jurisdiction of which the Company is subject by a suit upon such judgment, provided, that service of process is effected upon the Company in the manner specified herein or as otherwise permitted by law.

Section 12.03 No Note Interest Created. Nothing in this Indenture or in the Notes, expressed or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect, in any jurisdiction.

Section 12.04 Voting. In determining whether the Holders of the requisite aggregate principal amount of Notes have concurred in any direction, consent, waiver or other action under this Indenture, Notes that are owned by the Company, by any of its Subsidiaries or by any person or entity directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or any of its Subsidiaries shall be disregarded and deemed not to be outstanding for the purpose of any such determination, except that in determining whether the Trustee shall be protected in relying upon any request, demand, authorization, direction, notice, consent or waiver or other action that is to be made by a requisite principal amount of Outstanding Notes, only such Notes which a Responsible Officer of the Trustee actually knows to be so owned shall be disregarded. Notes so owned that have been pledged in good faith may be regarded as outstanding for such purposes if the pledgee shall establish its right to so act with respect to such Notes and that the pledgee is not the Company, one of its Subsidiaries or a person or entity directly or indirectly controlling or controlled by or under direct or indirect common control with the Company or one of its Subsidiaries.

Section 12.05 Benefits of Indenture . Nothing in this Indenture or in the Notes, expressed or implied, will give to any Person, other than the parties hereto, any Paying Agent, any Conversion Agent, any Authenticating Agent, any Registrar or their successors hereunder or the Holders of the Notes, any benefit or any legal or equitable right, remedy or claim under this Indenture.

Section 12.06 Calculations. Except as otherwise provided in this Indenture, the Company shall be responsible for making all calculations called for under the Indenture and the Notes. These calculations include, but are not limited to, determinations of the Last Reported Sale Prices, Trading Prices and Daily VWAPs of the Common Shares, accrued interest payable on the Notes and the Conversion Rate. The Company shall make all these calculations in good faith and, absent manifest error, its calculations will be final and binding on Holders. The Company shall provide a schedule of its calculations to each of the Trustee, the Bid Solicitation Agent and the Conversion Agent, and each of the Trustee, the Bid Solicitation Agent and the Conversion Agent is entitled to rely conclusively upon the accuracy of the Company’s calculations without independent verification. The Trustee shall forward the Company’s calculations to any Holders upon the written request of that Holder.

Whenever the Company is required to calculate or make adjustments to the Conversion Rate, the Company will do so to the nearest 1/10,000th of a Common Share, rounding any additional decimal places up or down in a commercially reasonable manner.

Section 12.07 Execution in Counterparts. This Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original signatures for all purposes.

Section 12.08 Notices, Etc. to Trustee and Company .

(a) Except as otherwise provided herein, any request, demand, authorization, direction, notice, consent, election, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with,

(i) the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (including facsimile or electronically in PDF format) to or with the Trustee at its Corporate Trust Office; or

(ii) the Company by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid (and, in the case of securities held in book-entry form, by facsimile or by electronic transmission), to the Company addressed to it at the address of its principal office at 2nd Floor, S.E., Pearman Building, 9 Par-la-Ville Road, Hamilton HIM 11, Bermuda or at any other address furnished in writing to the Trustee by the Company prior to such mailing or electronically in PDF format.

(b) The Company or the Trustee, by notice given to the other in the manner provided in this Section 12.08, may designate additional or different addresses for subsequent notices or communications.

(c) Whenever the Company is required to deliver notice to the Holders, the Company will, by the date it is required to deliver such notice to the Holders, deliver a copy of such notice to the Trustee, the Paying Agent, the Registrar and the Conversion Agent. Each notice to the Trustee, the Paying Agent, the Registrar and the Conversion Agent shall be sufficiently given if in writing and mailed, first-class postage prepaid to the address most recently sent by the Trustee, the Paying Agent, the Registrar or the Conversion Agent, as the case may be, to the Company.

(d) Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by the Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

(e) Where this Indenture provides for notice of any event to a Holder of a Global Note, such notice shall be sufficiently given if given to the Depositary for such Note (or its designee), pursuant to its Applicable Procedures, not later than the latest date (if any), and not earlier than the earliest date (if any), prescribed for the giving of such notice.

Section 12.09 No Recourse Against Others. No director, officer, employee, incorporator or stockholder of the Company shall have any liability for any obligations of the Company under the Notes, the Indenture or any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder, by accepting a Note, waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes.

Section 12.10 Tax Withholding. Notwithstanding anything herein to the contrary, the Company or any other withholding agent is permitted to withhold, or backup withhold, from interest payments and payments upon conversion, repurchase or maturity of the Notes, any amounts the Company or other withholding agent is required to withhold or backup withhold by law. If the Company or other withholding agent pays withholding taxes or backup withholding on behalf of a Holder or beneficial owner, the Company or other withholding agent may, at its option, set off any such payment against payments of cash and Common Shares payable on the Notes or proceeds paid or credited to the Holder or beneficial owner.

Section 12.11 Waiver of Jury Trial. EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES OR THE TRANSACTION CONTEMPLATED HEREBY

Section 12.12 U.S.A. Patriot Act. In order to comply with the laws, rules, regulations and executive orders in effect from time to time applicable to banking institutions, including, without limitation, those relating to the funding of terrorist activities and money laundering, including Section 326 of the USA PATRIOT Act of the United States (“Applicable AML Law”), the Trustee is required to obtain, verify, record and update certain information relating to individuals and entities which maintain a business relationship with the Trustee. Accordingly, each of the parties agree to provide to the Trustee, upon its request from time to time such identifying information and documentation as may be available for such party in order to enable the Trustee to comply with Applicable AML Law.

Section 12.13 Force Majeure. In no event shall the Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services or the unavailability of the Federal Reserve Bank wire or facsimile or other wire or communication facility; it being understood that the Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances.

[Remainder of the page intentionally left blank]

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

GOLAR LNG LIMITED

By: /s/Brian Tienzo
Name: Brian Tienzo
Title: CHIEF FINANCIAL OFFICER

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee

By: Deutsche Bank National Trust Company

By:_________________________________
Name:
Title:

By:________________________________
Name:
Title:

IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

GOLAR LNG LIMITED

By: ______________________________
Name: Brian Tienzo
Title: CHIEF FINANCIAL OFFICER

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee

By: Deutsche Bank National Trust Company

By: /s/Annie Jaghatspanyan
Name: Annie Jaghatspanyan
Title: Vice President

By: /s/Robert S. Peschler
Name: Robert S. Peschler
Title: Vice President

SCHEDULE A

The following table sets forth the number of Additional Shares by which the Conversion Rate shall be increased pursuant to Section 4.06 based on the Share Price and the Effective Date set forth below.



Share Price
Effective Date		$27.92	$30.00	$35.00	$37.69	$45.00	$49.00	$60.00	$75.00	$100.00	$125.00	$150.00	$200.00	$250.00
February 17, 2017	9.2858		8.0511	5.8887	5.0521	3.4865	2.9140	1.9054	1.2038	0.6748	0.4390	0.3054	0.1610	0.0868
February 15, 2018	9.2858		8.0311	5.7235	4.8432	3.2260	2.6499	1.6654	1.0160	0.5545	0.3623	0.2529	0.1332	0.0710
February 15, 2019	9.2858		7.9245	5.4429	4.5132	2.8512	2.2806	1.3517	0.7872	0.4262	0.2793	0.1962	0.1036	0.0544
February 15 2020	9.2858		7.6808	4.9733	3.9865	2.2987	1.7554	0.9424	0.5140	0.2839	0.1910	0.1361	0.0721	0.0368
February 15, 2021	9.2858		7.0955	4.0620	3.0173	1.3996	0.9582	0.4223	0.2305	0.1424	0.0999	0.0722	0.0380	0.0185
February 15, 2022	9.2858		6.8025	2.0406	-	-	-	-	-	-		-	-	-

EXHIBIT A

[FORM OF FACE OF NOTE]

[For Global Notes, include the following legend:]

[THIS SECURITY IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]

[For all Notes that are Restricted Notes, include the following legend (the “Restricted Notes Legend”):]

[NO AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY (OTHER THAN PURSUANT TO SECTION 2.12 OF THE INDENTURE) OR PERSON THAT HAS BEEN AN AFFILIATE (AS DEFINED IN RULE 144 UNDER THE SECURITIES ACT) OF THE COMPANY DURING THE IMMEDIATELY PRECEDING THREE MONTHS MAY PURCHASE, OTHERWISE ACQUIRE OR HOLD THIS SECURITY OR A BENEFICIAL INTEREST HEREIN.

THIS SECURITY AND THE COMMON SHARES, IF ANY, ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(1) REPRESENTS THAT IT AND ANY ACCOUNT FOR WHICH IT IS ACTING IS A “QUALIFIED INSTITUTIONAL BUYER” (WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT) AND THAT IT EXERCISES SOLE INVESTMENT DISCRETION WITH RESPECT TO EACH SUCH ACCOUNT, AND

(2) AGREES FOR THE BENEFIT OF THE COMPANY THAT IT WILL NOT OFFER, SELL, PLEDGE OR OTHERWISE TRANSFER THIS SECURITY OR ANY BENEFICIAL INTEREST HEREIN PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), EXCEPT:

(A) TO GOLAR LNG LIMITED (THE “COMPANY”) OR ANY SUBSIDIARY THEREOF;

(B) PURSUANT TO, AND IN ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER;

(C) TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT; OR

(D) UNDER ANY OTHER AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (INCLUDING, IF AVAILABLE, THE EXEMPTION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT).

THE “RESALE RESTRICTION TERMINATION DATE” MEANS THE LATEST OF: (1) THE DATE THAT IS ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THIS SECURITY OR SUCH SHORTER PERIOD OF TIME PERMITTED BY RULE 144 OR ANY SUCCESSOR PROVISION THERETO; (2) THE DATE ON WHICH THE COMPANY HAS INSTRUCTED THE TRUSTEE THAT THE FOREGOING RESTRICTIONS WILL NO LONGER APPLY IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE AND (3) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW.

WITH RESPECT TO ANY TRANSFER PURSUANT TO THE FOREGOING CLAUSE (D), PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, THE COMPANY AND THE TRUSTEE RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE AND MAY RELY UPON TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.]

Golar LNG Limited

2.75% Convertible Senior Notes due 2022

No.: [ ]

CUSIP: [ ]

ISIN: [ ]

Principal


Amount $	[ ] [For Global Notes, include the following: as revised by the Schedule of Increases and Decreases in the Global Note attached hereto]

Golar LNG Limited, a Bermuda exempted company (the “Company”), promises to pay to [ ] [include “Cede & Co.” for Global Note] or registered assigns, the principal amount of [add principal amount in words] $[ ] on February 15, 2022 (the “Maturity Date”).

Interest Payment Dates: February 15 and August 15.

Regular Record Dates: February 1 and August 1.

Additional provisions of this Note are set forth on the other side of this Note.

IN WITNESS WHEREOF, Golar LNG Limited has caused this instrument to be signed manually or by PDF or facsimile by one of its duly authorized Officers.

GOLAR LNG LIMITED

By:_____________________________

Name:
Title:

This is one of the Notes of the series designated herein, referred to in the within-mentioned Indenture.

Dated:

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Trustee

By: ___________________________
Authorized Signatory

[FORM OF REVERSE OF NOTE]

Golar LNG Limited

2.75% Convertible Senior Notes due 2022

This Note is one of a duly authorized issue of securities of the Company (herein called the “Notes”), issued under the Indenture dated as of February 17, 2017 by and between the Company and Deutsche Bank Trust Company Americas, herein called the “Trustee,” and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the Notes are, and are to be, authenticated and delivered. In the event of a conflict between the terms of the Indenture and this Note, the terms of the Indenture shall govern.

The Company will pay cash interest on the unpaid principal amount of this Note at a rate of 2.75% per year. Interest will accrue from the most recent date on which interest has been paid or duly provided for or, if no interest has been paid, from February 17, 2017. Except as provided in the Indenture, interest will be paid to the Person in whose name this Note is registered at the Close of Business on the Regular Record Date immediately preceding the relevant Interest Payment Date semiannually in arrears on each Interest Payment Date; provided that, if any Interest Payment Date, Maturity Date or Fundamental Change Purchase Date with respect to this Note falls on a day that is not a Business Day, the required payment will be made on the next succeeding Business Day and no interest on such payment will accrue in respect of the additional period of time before payment. Interest on the Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months and, for partial months, on the basis of the number of days actually elapsed in a 30-day month. Except as provided in the Indenture, no interest shall be paid with respect to Notes surrendered for conversion.

The Company may not redeem the Notes prior to the Maturity Date. This Note does not benefit from a sinking fund.

As provided in and subject to the provisions of the Indenture, upon the occurrence of a Fundamental Change the Holder of this Note will have the right, at such Holder’s option, to require the Company to purchase this Note, or any portion of this Note such that the principal amount of this Note that is not purchased equals $1,000 or an integral multiple of $1,000 in excess thereof, on the Fundamental Change Purchase Date at a price equal to the Fundamental Change Purchase Price for such Fundamental Change Purchase Date.

As provided in and subject to the provisions of the Indenture, the Holder hereof has the right, at its option (i) during certain periods and upon the occurrence of certain conditions specified in the Indenture, prior to the Close of Business on the Business Day immediately preceding August 15, 2021, and (ii) on or after August 15, 2021, at any time prior to the Close of Business on the second Scheduled Trading Day immediately preceding the Maturity Date, to convert this Note or a portion of this Note such that the principal amount of this Note that is not converted equals $1,000 or an integral multiple of $1,000 in excess thereof, into an amount of cash, a number of Common Shares, or a combination of cash and Common Shares, if any, as the case may be, determined in accordance with Article 4 of the Indenture.

As provided in and subject to the provisions of the Indenture, the Company will make all payments in respect of the Fundamental Change Purchase Price for, and the principal amount of, this Note to the Holder that surrenders this Note to the Paying Agent to collect such payments in respect of this Note. The Company will pay cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes to be effected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Notes at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes at the time Outstanding, on behalf of the Holders of all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain past Defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

As provided in and subject to the provisions of the Indenture, the Holder of this Note shall not have the right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or trustee, or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Note, the Holders of not less than 25% in principal amount of the Notes at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee indemnity reasonably satisfactory thereto, and the Trustee shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity, and shall not have received from the Holders of a majority in principal amount of Notes at the time Outstanding a direction inconsistent with such request. The foregoing shall not apply to any suit instituted by the Holder of this Note for the enforcement of any payment of the principal hereof, premium, if any, or interest hereon, the Fundamental Change Purchase Price, and the amount of cash, the number of Common Shares or the combination thereof, as the case may be, due upon conversion of this Note or after the respective due dates expressed in the Indenture.

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay or deliver, as the case may be, the principal of (including the Fundamental Change Purchase Price), premium, interest on and the amount of cash, a number of Common Shares or a combination of cash and Common Shares, if any, as the case may be, due upon conversion of this Note at the time, place and rate, and in the coin and currency herein prescribed.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Register, upon surrender of this Note for registration of transfer to the Trustee, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Registrar duly executed by, the Holder hereof or its attorney duly authorized in writing, and thereupon a new Note of this series and of like tenor for the same aggregate principal amount will be issued to the designated transferee.

The Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or Trustee may treat the Person in whose name the Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

Customary abbreviations may be used in the name of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (= tenants by the entirety), JT TEN (= joint tenants with rights of survivorship and not as tenants in common), CUST (= custodian) and U/G/M/A (= Uniform Gift to Minors Act).

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

All defined terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. If any provision of this Note limits, qualifies or conflicts with a provision of the Indenture, such provision of the Indenture shall control.

ATTACHMENT 1

[FORM OF NOTICE OF CONVERSION]

To: Golar LNG Limited

Deutsche Bank Trust Company Americas

Corporate Trust

60 Wall Street, 16 ^th Floor

MS: NYC60-1630

New York, New York 10005

The undersigned owner of this Note hereby irrevocably exercises the option to convert this Note, or a portion hereof (which is such that the principal amount of the portion of this Note that will not be converted equals $1,000 or an integral multiple of $1,000 in excess thereof) below designated, into an amount of cash, a number of Common Shares or a combination of cash and Common Shares, if any, as the case may be, in accordance with the terms of the Indenture referred to in this Note, and directs that any cash payable and any Common Shares issuable and deliverable upon conversion, together with any Notes representing any unconverted principal amount hereof, be paid and/or issued and/or delivered, as the case may be, to the registered Holder hereof unless a different name is indicated below.

Subject to certain exceptions set forth in the Indenture, if this notice is being delivered after the Close of Business on a Regular Record Date and prior to the Open of Business on the Interest Payment Date corresponding to such Regular Record Date, this notice must be accompanied by payment of an amount equal to the interest payable on such Interest Payment Date on the principal amount of this Note to be converted. If any Common Shares are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect to such issuance and transfer as set forth in the Indenture.

Principal amount to be converted (if less than all):

Dated: __________

Signature(s)

(Sign exactly as your name appears on the other

side of this Note)

Signature Guarantee

Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP) or

(iv) another guarantee program acceptable to the Trustee.)

Fill in if a check is to be issued, or Common Shares or Notes are to be registered, otherwise than to or in the name of the registered Holder.

(Name)

(Address)

Please print name and address
(including zip code)

(Social Security or other Taxpayer
Identifying Number)

Dated: ________________

Signature(s)

(Sign exactly as such Person’s name appears above)

Signature Guarantee

(Signature(s) must be guaranteed by an institution which is a member of one of the following recognized signature Guarantee Programs: (i) The Notes Transfer Agent Medallion Program (STAMP); (ii) The New York Stock Exchange Medallion Program (MNSP); (iii) The Stock Exchange Medallion Program (SEMP) or (iv) another guarantee program acceptable to the Trustee.)

ATTACHMENT 2

[FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE]

To: Golar LNG Limited

Deutsche Bank Trust Company Americas

Corporate Trust

60 Wall Street, 16 ^th Floor

MS: NYC60-1630

New York, New York 10005

The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Golar LNG Limited (the “Company”) as to the occurrence of a Fundamental Change with respect to the Company and specifying the Fundamental Change Purchase Date and requests and instructs the Company to pay to the registered holder hereof in accordance with the applicable provisions of the Indenture referred to in this Note (i) the entire principal amount of this Note, or the portion thereof (that is such that the portion not to be purchased has a principal amount equal to $1,000 or an integral multiple of $1,000 in excess thereof) below designated, and (ii) if such Fundamental Change Purchase Date does not occur during the period after a Regular Record Date and on or prior to the Interest Payment Date corresponding to such Regular Record Date, accrued and unpaid interest, if any, thereon to, but excluding, such Fundamental Change Purchase Date.

Principal amount to be purchased (if less than all):

Certificate number (if Notes are in certificated form)

Dated: _______

Signature(s)

(Sign exactly as your name appears on the other

side of this Note)

Social Security or Other Taxpayer Identification Number

ATTACHMENT 3

[FORM OF ASSIGNMENT AND TRANSFER]

For value received,

hereby sell(s), assign(s) and transfer(s) unto

(Please insert social security or Taxpayer Identification Number of assignee)

the within Note, and hereby irrevocably constitutes and appoints to transfer the said Note on the books of the Company, with full power of substitution in the premises.

In connection with any transfer of the within Note occurring prior to the Resale Restriction Termination Date, as defined in the Indenture governing such Note, the undersigned confirms that such Note is being transferred:

To Golar LNG Limited or a subsidiary thereof; or

Pursuant to a registration statement which has become effective under the Securities Act of 1933, as amended; or

To a qualified institutional buyer in compliance with Rule 144A under the Securities Act of 1933, as amended; or

Pursuant to an exemption from registration provided by Rule 144 under the Securities Act of 1933, as amended, or any other available exemption from the registration requirements of the Securities Act of 1933, as amended.

TO BE COMPLETED BY PURCHASER IF THE THIRD BOX ABOVE IS CHECKED

The undersigned represents and warrants that it is purchasing this Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.

Date: Signed:___________________________

Unless one of the above boxes is checked, the Trustee will refuse to register any of the Notes evidenced by this certificate in the name of any Person other than the registered Holder thereof, provided that if the fourth box is checked, the Company or the Trustee may require, prior to registering any such transfer of the Notes, in its sole discretion, such legal opinions, certifications and other information as the Company or the Trustee may reasonably request to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act.

If none of the foregoing boxes is checked, the Trustee or Registrar shall not be obligated to register this Note in the name of any Person other than the Holder hereof unless and until the conditions to any such transfer of registration set forth herein and in Section 2.11 of the Indenture shall have been satisfied.

Date: Signed:___________________________

(Sign exactly as your name appears on the other side of this Note)

Signature Guarantee

ATTACHMENT 4

[Insert for Global Note]

SCHEDULE OF INCREASES AND DECREASES IN THE GLOBAL NOTE
Initial Principal Amount of Global Note: [ ]



Date	Amount of Increase in Principal Amount of Global Note	Amount of Decrease in Principal Amount of Global Note	Principal Amount of Global Note After Increase or Decrease	Notation by Registrar, Note Custodian or authorized signatory of Trustee

EXHIBIT B

[FORM OF FREE TRANSFERABILITY CERTIFICATE]
Officer’s Certificate

[NAME OF OFFICER], the [TITLE] of Golar LNG Limited, a Bermuda exempted company (the “Company”), does hereby certify, in connection with the sale of $402,500,000 aggregate principal amount of the Company’s 2.75% Convertible Senior Notes due 2022 (the “Notes”) pursuant to the terms of the Indenture, dated as of February 17, 2017 (as may be amended or supplemented from time to time, the “Indenture”), by and among the Company and Deutsche Bank Trust Company Americas (the “Trustee”), that:

1. The undersigned is permitted to sign this “Officer’s Certificate” on behalf of the Company, as the term “Officer’s Certificate” is defined in the Indenture.

2. The undersigned has read the Indenture and the definitions therein relating thereto.

3. In the opinion of the undersigned, the undersigned has made such examination as is necessary to enable the undersigned to express an informed opinion as to whether or not all conditions precedent to the delivery of this certificate provided for in the Indenture have been complied with.

4. To the best knowledge of the undersigned, all conditions precedent described herein as provided for in the Indenture have been complied with.

In accordance with Section 2.08 of the Indenture, the Company hereby instructs the Trustee as follows:

1. To take those actions necessary so that the Restricted Notes Legend and set forth on the Restricted Global Notes shall be deemed removed from such Global Notes in accordance with the terms and conditions of the Notes and as provided in the Indenture, without further action on the part of the Holders.

2. To take those actions necessary so that the restricted CUSIP number for the Restricted Global Notes shall be removed from such Global Notes and replaced with an unrestricted CUSIP number, which unrestricted CUSIP number shall be [ ], in accordance with the terms and conditions of the Restricted Global Notes and as provided in the Indenture, without further action on the part of the Holders.

[Signature page follows.]

IN WITNESS WHEREOF, we have signed this certificate as of [ ].

GOLAR LNG LIMITED

By:________________________________

Name:
Title:

EXHIBIT C

[FORM OF RESTRICTED SHARE LEGEND]

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, PRIOR TO THE RESALE RESTRICTION TERMINATION DATE (AS DEFINED BELOW), MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE ACQUIRER:

(A) TO GOLAR LNG LIMITED (THE “COMPANY”) OR ANY SUBSIDIARY THEREOF;

(B) PURSUANT TO, AND IN ACCORDANCE WITH, A REGISTRATION STATEMENT THAT IS EFFECTIVE UNDER THE SECURITIES ACT AT THE TIME OF SUCH TRANSFER;

(C) TO A PERSON THAT YOU REASONABLY BELIEVE TO BE A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT; OR

THE “RESALE RESTRICTION TERMINATION DATE” MEANS THE LATEST OF: (1) THE DATE THAT IS ONE YEAR AFTER THE LAST DATE OF ORIGINAL ISSUANCE OF THE COMPANY’S 2.75% CONVERTIBLE SENIOR NOTES DUE 2022 (THE “NOTES”)(INCLUDING THE LAST DATE OF ISSUANCE OF ADDITIONAL NOTES PURSUANT TO THE EXERCISE OF THE INITIAL PURCHASERS’ OPTION TO PURCHASE ADDITIONAL NOTES) OR SUCH SHORTER PERIOD OF TIME PERMITTED BY RULE 144 OR ANY SUCCESSOR PROVISION THERETO; (2) THE DATE ON WHICH THE COMPANY HAS INSTRUCTED THE TRUSTEE FOR THE NOTES THAT THE SUBSTANTIALLY SIMILAR RESTRICTIONS APPLICABLE TO THE NOTES WILL NO LONGER APPLY IN ACCORDANCE WITH THE PROCEDURES DESCRIBED IN THE INDENTURE GOVERNING THE NOTES AND (3) SUCH LATER DATE, IF ANY, AS MAY BE REQUIRED BY APPLICABLE LAW.

WITH RESPECT TO ANY TRANSFER PURSUANT TO THE FOREGOING CLAUSE (D), PRIOR TO THE RESALE RESTRICTION TERMINATION DATE, THE COMPANY AND THE COMPANY’S TRANSFER AGENT RESERVE THE RIGHT TO REQUIRE THE DELIVERY OF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THEY MAY REASONABLY REQUIRE AND MAY RELY UPON TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

SK 03849 0004 7462218

MANAGEMENT AND ADMINISTRATIVE SERVICES AGREEMENT

THIS AGREEMENT made effective as of the 1st day of April 2016 (the “ Agreement ”), by and between GOLAR LNG PARTNERS LP, a limited partnership duly organized and existing under the laws of the Marshall Islands with its registered office at Trust Company Complex, Ajeltake Island, Ajeltake Road, Majuro, Marshall Islands MH96960 (“ GLP ”), and GOLAR MANAGEMENT LTD, a company duly organized and existing under the laws of the United Kingdom with its registered office at 13th Floor, One America Square, 17 Crosswall, London EC3N 2LB, United Kingdom (“ GML ”).

WHEREAS:


A.	GLP, a limited partnership whose common units are listed and trade on The Nasdaq Global Market, owns interests in certain floating storage and regasification units and LNG carriers and requires certain management and administrative support services in connection with the operation of its business;


B.	GLP and GML previously entered into that certain Amended and Restated Management and Administrative Services Agreement dated as of July 1, 2011 (the “ Prior Agreement ”) in order to allow GML to provide such management and administrative support services to GLP;


C.	The term of the Prior Agreement has ended; and


D.	GLP wishes to engage GML to provide such management and administrative support services to GLP commencing as of April 1, 2016 on the terms set out herein.

NOW THEREFORE, the parties hereto agree that, in consideration for GML providing the Managers (as defined in Section 3(a) of this Agreement) to perform executive officer functions for the benefit of GLP and be responsible for the day-to-day management of GLP as described in Section 3 of this Agreement (the “ Management Services ”) and the administrative support services set forth in Schedule A to this Agreement (the “ Administrative Services ,” and together with the Management Services, the “ Services ”), GLP shall compensate GML as provided in Section 6 of this Agreement.

IN WITNESS WHEREOF the Parties have executed this Agreement by their duly authorized signatories with effect on the date first above written.

GOLAR LNG PARTNERS LP

By: /s/ Graham Robjohns

Name: Graham Robjohns

Title: Attorney-in-fact

GOLAR MANAGEMENT LTD

By: /s/ Brian Tienzo

Name: Brian Tienzo

Title: Attorney-in-fact

Section 1. Definitions . In this Agreement, the term:

“ Board ” means the Board of Directors of GLP;

“ Change of Control ” means with respect to any entity, an event in which securities of any class entitling the holders thereof to elect a majority of the members of the board of directors or other similar governing body of the entity are acquired, directly or indirectly, by a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act), who did not immediately before such acquisition own securities of the entity entitling such person or group to elect such majority (and for the purpose of this definition, any such securities held by another person who is related to such person shall be deemed to be owned by such person);

“ Costs and Expenses ” has the meaning set forth in Section 6 of this Agreement;

“ Due Date ” has the meaning set forth in Section 6 of this Agreement;

“ GGP ” means Golar GP LLC, a limited liability company duly organized and existing under the laws of the Marshall Islands and the general partner of GLP;

“ GLP Group ” means GLP, GGP and subsidiaries of GLP;

“ Limited Partnership Agreement ” means the First Amended and Restated Agreement of Limited Partnership of GLP, dated as of April 13, 2011, as from time to time amended or restated;

“ Managers ” has the meaning set forth in Section 3(a) of this Agreement;

“ Management Fee ” has the meaning set forth in Section 6 of this Agreement;

“ Officers ” has the meaning given to such term in the Limited Partnership Agreement;

“ Person ” means any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or governmental authority; and

“ Unitholders ” means holders of common units representing limited partnership interests in GLP.

Section 2. General . GML shall provide all or such portion of the Services, in a commercially reasonable manner, as GLP, may from time to time direct, all under the supervision of the Board.

Section 3. Covenants . During the term of this Agreement, GML shall:

(a) cause certain of its officers and directors as set forth on Schedule B to this Agreement and any of its additional officers, directors or other employees as the Board may from time to time request (collectively, the “ Managers ”) to perform the Management Services with all of the duties of Officers of the Partnership as provided by the Board pursuant to the terms of the Limited Partnership Agreement, subject to the sole direction of the Board and subject to Section 10 hereof;

(b) diligently provide or sub-contract for the provision of (in accordance with Section 19 hereof) the Administrative Services to GLP as an independent contractor, and be responsible to GLP for the due and proper performance of same;

(d) keep full and proper books, records and accounts showing clearly all transactions relating to its provision of Services in accordance with established general commercial practices and in accordance with United States generally accepted accounting principles, and allow GLP and its representatives to audit and examine such books, records and accounts at any time during customary business hours.

Section 4. Non-Exclusivity . GML and its employees may provide services of a nature similar to the Services to any other Person. There is no obligation for GML to provide the Services to GLP on an exclusive basis.

Section 5. Confidential Information . GML shall be obligated to keep confidential, both during and after the term of this Agreement, all information it has acquired or developed in the course of providing Services under this Agreement. GLP shall be entitled to any equitable remedy available at law or equity, including specific performance, against a breach by GML of this obligation. GML shall not resist such application for relief on the basis that GLP has an adequate remedy at law, and GML shall waive any requirement for the securing or posting of any bond in connection with such remedy.

Section 6. Compensation of GML . In consideration for GML providing the Services, GLP agrees to compensate GML as follows:

(a) GLP agrees to reimburse GML for all costs and expenses reasonably incurred by GML (the “ Costs and Expenses ”) in connection with the provision of the Management Services and the Administrative Services by GML to GLP for such month; and

(b) GLP shall pay to GML a management fee equal to 5% of the Costs and Expenses for such month (the “ Management Fee ”).

Within 30 days after the end of each month, GML shall submit to GLP for payment an invoice covering the Management Fee and the Costs and Expenses. Each invoice will contain such supporting detail as may be reasonably required to validate such amounts due.

GLP shall make payment within 15 days of the date of each invoice (any such day on which a payment is due, the “ Due Date ”). All invoices for Management Services and Administrative Services are payable in U.S. dollars. All amounts not paid within 10 days after the Due Date shall bear interest at the rate of 1.00% per annum over US$ LIBOR from such Due Date until the date payment is received in full by GML.

Section 7. General Relationship Between the Parties . The relationship between the parties is that of independent contractor. The parties to this Agreement do not intend, and nothing herein shall be interpreted so as, to create a partnership or joint venture relationship, or, except with respect to the provision of the Management Services by the Managers, employee or agency relationship between GML and any one or more of GLP, GGP or any other member of the GLP Group.

Section 8. Indemnity . GLP shall indemnify and hold harmless GML and its employees and agents against all actions, proceedings, claims, demands or liabilities which may be brought against them due to this Agreement including, without limitation, all actions, proceedings, claims, demands or liabilities brought under the environmental laws of any jurisdiction, and against and in respect of all costs and expenses (including legal costs and expenses on a full indemnity basis) they may suffer or incur due to defending or settling same, provided, however, that such indemnity shall exclude any or all losses, actions, proceedings, claims, demands, costs, damages, expenses and liabilities whatsoever which may be caused by or due to the fraud, gross negligence or willful misconduct of GML or its employees or agents.

Section 9. NO CONSEQUENTIAL DAMAGES . NEITHER GML NOR ANY OF ITS AFFILIATES SHALL BE LIABLE FOR INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES SUFFERED BY GLP, OR FOR PUNITIVE DAMAGES, WITH RESPECT TO ANY TERM OR THE SUBJECT MATTER OF THIS AGREEMENT, EVEN IF INFORMED OF THE POSSIBILITY THEREOF IN ADVANCE. THIS LIMITATION APPLIES TO ALL CAUSES OF ACTION, INCLUDING, WITHOUT LIMITATION, BREACH OF CONTRACT, BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY, FRAUD, MISREPRESENTATION AND OTHER TORTS.

Section 10. Term and Termination . This Agreement shall have a term of [five] years unless terminated:

(a) by the Board upon 120 days’ written notice for any reason in its sole discretion; or

(b) by GML upon 120 days’ written notice if:


(i)	there is a Change of Control of GLP or GGP;


(ii)	a receiver is appointed for all or substantially all of the property of GLP;


(iii)	an order is made to wind up GLP’s partnership;


(iv)	a final judgment, order or decree which materially and adversely affects the ability of GLP to perform under this Agreement shall have been obtained or entered against GLP, and such judgment, order or decree shall not have been vacated, discharged or stayed; or


(v)	GLP makes a general assignment for the benefit of its creditors, files a petition in bankruptcy or for liquidation, is adjudged insolvent or bankrupt, commences any proceeding for a reorganization or arrangement of debts, dissolution or liquidation under any law or statute or of any jurisdiction applicable thereto or if any such proceeding shall be commenced.

Notwithstanding the foregoing, the arrangement with respect the provision of the Management Services by any or all of the Managers may be terminated at any time with respect to any or all of such Managers by the Board in its sole discretion. Such Management Services shall terminate immediately upon delivery by the Board of written notice to GML. The termination of the Management Services with respect to any or all of the Managers shall not constitute a termination of the other provisions of this Agreement.

Section 11. Costs and Expenses Upon Termination . Upon termination of this Agreement and/or the Management Services in accordance with Section 10 hereof, GLP shall be obligated to pay GML any and all amounts payable pursuant to Section 6 hereof for the applicable Services provided prior to the time of termination.

Section 12. Surrender of Books and Records . Upon termination of this Agreement, GML shall forthwith surrender to GLP any and all books, records, documents and other property in the possession or control of GML relating to this Agreement and to the business, finance, technology, trademarks or affairs of GLP and any member of the GLP Group and, except as required by law, shall not retain any copies of same.

Section 13. Force Majeure . Neither party shall be liable for any failure to perform this Agreement due to any cause beyond its reasonable control.

Section 14. Entire Agreement . This Agreement forms the entire agreement between the parties with respect to the subject matter hereof and supersedes and replaces all previous agreements, written or oral, with respect to the subject matter hereof.

Section 15. Severability . If any provision herein is held to be void or unenforceable, the validity and enforceability of the remaining provisions herein shall remain unaffected and enforceable.

Section 16. Currency . Unless stated otherwise, all currency references herein are to United States Dollars.

Section 17. Law and Arbitration . This Agreement shall be governed by the laws of the United Kingdom. Any dispute under this Agreement shall be put to arbitration in the United Kingdom, a jurisdiction to which the parties hereby irrevocably submit.

Section 18. Notice . Notice under this Agreement shall be given (via hand delivery or facsimile) as follows:

If to GLP:

2 ^nd Floor, S.E. Pearman Building

9 Par-la-Ville Road

Hamilton HM 11

Bermuda

Attn: [Michael Ashford]

Fax: [441-295-3494]

If to GML:

13th Floor, One America Square

17 Crosswall

London EC3N 2LB

United Kingdom

Attn: [Brian Tienzo]

Fax: [+44 207 063 7901]

Section 19. Sub-Contracting and Assignment . GML shall not assign this Agreement to any party that is not a subsidiary or affiliate of GML except upon written consent of GLP. GML may freely sub-contract or sub-license this Agreement, so long as GML remains liable for performance of the Services and its obligations under this Agreement.

Section 20. Waiver . The failure of either party to enforce any term of this Agreement shall not act as a waiver. Any waiver must be specifically stated as such in writing.

Section 21. Affiliates . This Agreement shall be binding upon and inure to the benefit of the affiliates of GLP and/or GML.

Section 22. Counterparts . This Agreement may be executed in one or more signed counterparts, facsimile or otherwise, which shall together form one instrument.

SCHEDULE A

ADMINISTRATIVE SERVICES

GML shall provide such of the following administrative support services (the “ Administrative Services ”) to GLP, as the Board may from time to time request and direct GML to provide pursuant to the Agreement:

(a) Assist with the commercial management of GLP and the execution of GLP’s business strategies;

(b) Keep and maintain at all times books, records and accounts which shall contain particulars of receipts and disbursements relating to the assets and liabilities of GLP and such books, records and accounts shall be kept pursuant to normal commercial practices that will permit GLP to prepare or cause to be prepared financial statements in accordance with U.S. generally accepted accounting principles and in each case shall also be in accordance with those financial statements required to be kept by GLP under applicable federal securities laws and regulations in the United States and as GLP is required to keep and file under applicable foreign taxing regulations and the U.S. Internal Revenue Code of 1986, as amended, and the regulations applicable with respect thereto, all as amended from time to time;

(c) Prepare all such returns, filings and documents, for review and approval by GLP as may be required under the Limited Partnership Agreement as well as such other returns, filings, documents and instruments as may from time to time be requested or instructed by GLP; and file such documents, as applicable, as directed by GLP with the relevant authority;

(d) Provide, or arrange for the provision of, advisory services to GLP with respect to GLP’s obligations under applicable securities laws and regulations in the United States and assist GLP in arranging for compliance with continuous disclosure obligations under applicable securities laws and regulations and the rules and regulations of the Nasdaq Global Market and any other securities exchange upon which GLP’s securities are listed, including the preparation for review, approval and filing by GLP of reports and other documents with all applicable regulatory authorities, provided that nothing herein shall permit or authorize GML to act for or on behalf of GLP in its relationship with regulatory authorities except to the extent that specific authorization may from time to time be given by GLP;

(e) Provide, or arrange for the provision of, advisory, clerical and investor relations services to assist and support GLP in its communications with its Unitholders, including in connection with disclosures that may be required for regulatory compliance to its Unitholders and the wider financial markets, as GLP may from time to time request or direct, provided that nothing herein shall permit or authorize GML to determine the content of any such communications by GLP to its Unitholders and the wider financial markets;

(f) At the request and under the direction of GLP, handle, or arrange for the handling of, all administrative and clerical matters in respect of (i) the call and arrangement of all meetings of the Unitholders pursuant to the Limited Partnership Agreement, (ii) the preparation of all materials (including notices of meetings and information circulars) in respect thereof and (iii) the submission of all such materials to GLP in sufficient time prior to the dates upon which they must be mailed, filed or otherwise relied upon so that GLP has full opportunity to review, approve, execute and return them to GML for filing or mailing or other disposition as GLP may require or direct;

(g) Provide, or arrange for the provision of, or secure sufficient and necessary office space, equipment and personnel including all accounting, clerical, secretarial, corporate, administrative and information technology services as may be reasonably necessary for the performance of GLP’s business;

(h) Arrange for the provision of such audit, accounting, legal, insurance and other professional services as are reasonably required by GLP from time to time in connection with the discharge of its responsibilities under the Limited Partnership Agreement, to the extent such advice and analysis can be reasonably provided or arranged by GML, provided that nothing herein shall permit GML to select the auditor of GLP, which shall be selected in accordance with the provisions for the appointment of the auditor pursuant to the Limited Partnership Agreement or as otherwise be required by law governing GLP, or to communicate with the auditor other than in the ordinary course of making such books and records available for review as the auditors may require and to respond to queries from the auditors with respect to the accounts and statements prepared by, or arranged by, GML, and in particular GML will not have any of the authorities, rights or responsibilities of the audit committee of the Board, but shall provide, or arrange for the provision of, information to such committee as may from time to time be required or requested; and provided further , that nothing herein shall entitle GML to retain legal counsel for GLP unless such selection is specifically approved by the Board;

(i) Provide, or arrange for the provision of, such assistance and support as GLP may from time to time request in connection with any new or existing financing for GLP, such assistance and support to be provided in accordance with the direction, and under the supervision of the Board;

(j) Provide, or arrange for the provision of, such administrative and clerical services as may be required by GLP to support and assist GLP in considering any future acquisitions or divestments of assets of GLP and for the integration of any businesses or assets acquired by GLP, all in accordance with the direction and under the supervision of the Board;

(k) Provide, or arrange for the provision of, such support and assistance to GLP as GLP may from time to time request in connection with any future offerings of equity or debt securities that GLP may at any time determine is desirable for GLP, all under the direction and supervision of the Board;

(l) Provide, or arrange for the provision of, at the request and under the direction of the Board, such communications to the transfer agent for GLP as may be necessary or desirable;

(m) Prepare and provide, or arrange for the preparation and provision of, regular cash reports and other accounting information for review by GLP, so as to permit and enable the Board to make all determinations of financial matters required to be made pursuant to the Limited Partnership Agreement, including the determination of amounts available for distribution by GLP to its Unitholders, and to assist GLP in making arrangements with the transfer agent for GLP for the payment of distributions to the Unitholders in accordance with the Limited Partnership Agreement;

(n) Provide, or arrange for the provision of, such assistance to GLP as the Board may request or direct with respect to the performance of the obligations to the Unitholders under the Limited Partnership Agreement and to provide monitoring of various obligations and rights under agreements entered into by GLP and provide advance reports on a timely basis to GLP advising of steps, procedures and compliance issues under such agreements, so as to enable GLP to make all such decisions as would be necessary or desirable thereunder;

(o) Provide, or arrange for the provision of, such additional administrative and clerical services pertaining to GLP, the assets and liabilities of GLP and the Unitholders and matters incidental thereto as may be reasonably requested by the Board from time to time;

(p) Negotiate and arrange, at the request and under the direction of the Board, for interest rate swap agreements, foreign currency contracts, forward exchange contracts and any other hedging arrangements;

(q) Provide, or arrange for the provision of, IT services;

(r) Maintain, or arrange for the maintenance of, GLP’s and GLP’s subsidiaries’ existence and good standing in necessary jurisdictions;

(s) Negotiate, at the request and under the direction of the Board, loan and credit terms with lenders and monitor and maintain compliance therewith;

(t) Provide, or arrange for the provision of, at the request and under the direction of Board, cash management and services, including assistance with preparation of budgets, overseeing banking services and bank accounts and arranging for the deposit of funds; and

(u) Monitor the performance of investment managers.

SCHEDULE B

MANAGERS PROVIDING MANAGEMENT SERVICES



Name	Position With GML	Services to be Provided to GLP
Graham Robjohns	Director	Principal Executive Officer
Oistein Dahl	Chief Operating Officer	Chief Operating Officer
Brian Tienzo	Chief Financial Officer	Principal Financial and Accounting Officer

US 4726494v.1

EXECUTION VERSION

_______________________________________________________________________

SHARE PURCHASE AGREEMENT

_______________________________________________________________________

between

GOLAR LNG LIMITED

as Seller

and

STONEPEAK INFRASTRUCTURE FUND II CAYMAN (G) LTD

as Purchaser

regarding shares in

GOLAR POWER LIMITED

This Share Purchase Agreement (the " Agreement ") is dated 17 June 2016 and is made between :

GOLAR LNG LIMITED , a limited liability company incorporated and registered in Bermuda, having company number 30506 and its registered office at 2 ^nd floor, S.E. Pearman Building, 9 Par-la-Ville Road, Hamilton HM11, Bermuda (the " Seller "); and

STONEPEAK INFRASTRUCTURE FUND II CAYMAN (G) LTD , an exempted company organised and existing under the laws of the Cayman Islands having company number MC-306959 and having its registered office at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands (the " Purchaser ")

(hereafter collectively referred to as the " Parties " and individually, a " Party ")

WHEREAS

The Seller has, on 19 May 2016 incorporated Golar Power Limited in Bermuda with Company Number 51481 and having its registered office at at 2 ^nd floor, S.E. Pearman Building, 9 Par-la-Ville Road, Hamilton HM11, Bermuda as a wholly-owned subsidiary (the " Company ").

The Company was incorporated for the purpose of acting as the holding vehicle for various assets of the Seller which, together, will be able to deliver integrated, cost-efficient electricity generation projects based on natural gas as fuel (more particularly defined below as the " Initial Assets ").

The Seller has agreed to transfer the Initial Assets to the Company on the terms of an asset transfer and subscription agreement (more particularly defined below as the " Asset Transfer Agreement ").

Following closing of the transfer of the Initial Assets pursuant to the Asset Transfer Agreement, there are 46,950,154 ordinary shares of USD 5.00 each of the Company in issue, all of which are owned by the Seller (more particularly defined below, the " Shares" ).

The Parties have agreed to cooperate in developing the projects in which the Company, through its subsidiaries, is currently engaged and subsequent projects which utilise the spread between natural gas and power prices by building an integrated chain using natural gas storage, liquefaction, transportation and regasification vessels to feed natural gas fired electricity generating power plants or other industrial consumers or applications.

The Parties have further agreed to use the Company as a joint holding vehicle for their cooperation.

The Purchaser has, in order to implement the agreement referred in Recital (F), agreed to acquire 50% of the Shares (more particularly defined below as the " Sale Shares "); to subscribe for a further number of preference shares to be issued by the Company; and to enter into a shareholders' agreement with the Purchaser setting out the terms of their cooperation as shareholders of the Company (more particularly defined below as the " Shareholders Agreement ").

The Parties have agreed to document the terms of the Purchaser's purchase of the Sale Shares on the terms of this share purchase agreement, such agreement to be supplemented by a subscription agreement setting out the terms of the Purchaser's subscription for preference shares in the Company (more particularly defined below as the " Subscription Agreement ") and the Shareholders Agreement.

NOW THEREFORE , it is hereby agreed as follows

Interpretation

The definitions and rules of interpretation in this Clause and in the background section (above) shall apply in this Agreement.

“ Anti-Corruption Laws ” means the U.S. Foreign Corrupt Practices Act of 1977, as amended, and any rules and regulations promulgated thereunder, and any other laws or regulations relating to anti-bribery or anti-corruption that apply to the business and dealings of the Company and its Subsidiaries.

" Asset Transfer Agreement " means an asset transfer and subscription agreement entered into between the Seller and the Company dated 17 June 2016, pursuant to which the Seller has agreed to transfer the Initial Assets to the Company, a copy of which is included in the Disclosed Information.

“ Bank Approval ” means the unconditional written consent under the Bank Loan Agreement delivered by the Security Agent (on behalf of itself and the Banks) to (i) the transfer of the Golar M2023 Shares and

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the Golar M2026 Shares (as defined in the Asset Transfer Agreement) from the Seller to the Company pursuant to the Asset Transfer Agreement, (ii) any change contemplated by Section 21.7 of the Bank Loan Agreement in connection with the Transaction and (iii) and any other consents required under the Bank Loan Agreement to consummate the transactions contemplated by this Agreement, the Subscription Agreement and/or the Shareholders’ Agreement, in each case on terms satisfactory to Stonepeak.

" Bank Loan Agreement " means a loan facilities agreement dated 23 July 2013 pursuant to which Golar M2023 and Golar M2026 are, together with several other subsidiaries of the Seller, joint borrowers.

" Banks " means certain banks and financial institutions providing secured loan facilities to various subsidiaries of the Seller, including Golar M2023 and Golar M2026, pursuant to the Bank Loan Agreement.

" Business Day " means a day, other than a Saturday or Sunday, on which banks are open for business in Bermuda, London, New York and Oslo.

" Closing " means the completion of the Transaction by the performance by the Parties of their respective obligations under Clause 5 below.

" Closing Date " means the date on which the Closing actually occurs.

“ Company Representative ” is defined Clause 6.1.8.

" Disclosed Information " means the documents and information disclosed in the virtual data room from 20 May 2016 to 17 June 2016 in which certain documentation relating to the Group Companies has been made available for a due diligence review by the Purchaser and its advisors, as evidenced by the CD Rom to be delivered by the Seller to the Purchaser, and all other written or oral information provided to the Purchaser and its advisors in connection with the evaluation and negotiation of the terms of the Transaction.

" Encumbrances " means any interest or equity of any person (including any right to acquire, option or right of pre-emption) or any mortgage, charge, pledge, lien, assignment, hypothecation, security interest, title retention or any other security agreement or arrangement

" Golar M2023 " means the Marshall Islands registered corporation, Golar Hull M2023 Corporation, having registration number 46820 whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.

" Golar M2026 " means the Marshall Islands registered corporation, Golar Hull M2026 Corporation, having registration number 46890 whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.

“ Government Entity ” means (i) any national, federal, state, local or foreign government or any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government, (ii) any public international organization, (iii) any agency, division, bureau, department or other sector of any government, entity or organization described in the foregoing clauses (i) or (ii) of this definition, or (iv) any company, business, enterprise or other entity owned or controlled by any government, entity, organization described in the foregoing clauses (i), (ii) or (iii) of this definition.

“ Government Official ” means (i) officers, employees and other persons working in an official capacity on behalf of any branch of a government (e.g., legislative, executive, judicial, law, military or public education) at any level (e.g., local, county, provincial or central) or any department or agency thereof regardless of their seniority; (ii) members of political parties, political party officials and candidates for political office; (iii) directors, officers and employees of wholly or partially state-owned, state-controlled or state-operated enterprises, regardless of their seniority; and (iv) officers, employees and other persons working in an official capacity on behalf of any public international organization, such as the United Nations or the World Bank, regardless of their seniority.

" Group " means the Company and its Subsidiaries.

" Group Company " means any of the companies in the Group.

" Initial Assets " means the shares and the shareholder loans more particularly described in the Asset Transfer Agreement.

Page 3 of 3

“ LNG Power " means LNG Power Ltd, registered in England with company number 9740657.

“ OFAC ” is defined in Clause 6.1.12.

" Purchase Price " is defined in Clause 2.1.

" Sale Shares " is defined in Clause 2.1

“ Sanctions ” is defined in Clause 6.1.12.

" Security Agent " means Swedbank AB (publ.) of Filipstad Brygge, PO Box 1441 Vika, N-0115 Oslo, Norway.

" Seller’s Bank Account " means the Seller’s bank account details set forth on Schedule 4 .

"Shareholders' Agreement" means a shareholders and investment agreement to be entered into by the Parties in substantially the form set out in Schedule 1 hereto.

" Shares" means 2000 ordinary shares in the Company and representing all of the shares in issue in the Company on the date hereof.

"Share Security Agreements" means two share security agreements, both dated 25 September 2013, pursuant to which all of the issued shares in each of Golar M2023 and Golar M2026 have been charged by the Seller in favour of the Security Agent (as agent for the Banks) as security for the obligations owed to the Banks under the Bank Loan Agreement.

"Signing Date " means the date of this Agreement.

" Subscription Agreement " means a subscription agreement to be entered into by the Company and the Purchaser pursuant to which the Purchaser will subscribe to 20,000,000 preference shares in the Company at a subscription price of USD 5.00 per preference share.

" Subsidiaries " means LNG Power, Golar M2023, Golar M2026 and the Marshall Islands single purpose vessel owning entity, Golar FSRU8 Corporation.

" Transaction " means the sale and purchase of the Sale Shares pursuant to this Agreement.

" Warranties " are the warranties given by the Seller pursuant to Clause 6.

SALE AND PURCHASE

The Seller agrees to sell 50% of the Shares, being 23,475,077 Shares (the " Sale Shares ") with full title guarantee and free from all Encumbrances for a consideration of USD 116m (the " Purchase Price ") and the Purchaser hereby agrees to purchase the Sale Shares and to pay the Purchase Price to the Seller, subject to the terms and conditions set out below.

CONDITIONS PRECEDENT

It is a condition precedent of the Parties' obligations to complete the Transaction that the following conditions are satisfied:

The transfer of the Initial Assets to the Company has been completed in accordance with the Asset Transfer Agreement.

The Seller has obtained a waiver of the requirement under Clause 7.8 of the shareholders agreement in respect of Golar Genpower Brasil Participacoes S.A. which requires LNG Power to procure that it is controlled by the Seller.

The Purchaser has received a certified true copy of the Bank Approval.

The Purchaser is satisfied that the information provided to it in respect of the Company and the Initial Assets is correct based on its due diligence review of the Disclosed Information, which due diligence review is to be completed no later than 29 June 2016.

The Bermuda Monetary Authority shall have given permission for the transfer of the Sale Shares to the Purchaser.

Page 4 of 3

Each Party shall use its reasonable efforts to procure that the closing conditions set out in above are satisfied as soon as practicable.

CLOSING CONDITIONS

The Purchaser’s obligation to buy the Sale Shares is subject to the satisfaction of each of the following conditions:


(i)	that the Warranties are correct in all material respects; and


(ii)	that the Seller is not in material breach of its obligations under this Agreement or the Subscription Agreement.

The Seller’s obligation to sell the Sale Shares is subject to the Purchaser not being in material breach of its obligations under this Agreement or the Subscription Agreement .

CLOSING

The Closing shall take place via the remote exchange of electronic documents and signatures on a date which is 3 Business Days following the satisfaction or valid waiver of all of the conditions set out in Clauses 3 and 4 unless another time or place is agreed to in writing by the Purchaser and the Seller.

At the Closing, the Purchaser shall:

transfer the Purchase Price to the Seller’s Bank Account (such transfer to be deemed to be complete when the Seller has evidence of receipt of the Purchase Price from its bank);

subscribe for the preference shares in the Company pursuant to the Subscription Agreement; and

deliver to Seller executed its executed counterpart of the Shareholders Agreement.

At the Closing, the Seller shall:

deliver evidence that the board of directors of the Company has passed an unconditional resolution to (i) approve the transfer of the Sale Shares from the Seller to the Purchaser and (ii) adopt the Amended & Restated Bye-Laws in the form attached hereto as Schedule 3 effective as of the Closing Date (the “ Bye-Laws ”);

deliver to Purchaser executed its executed counterpart of the Shareholders Agreement;

procure that the Company deliver to Purchaser executed its executed counterpart to the Shareholders Agreement;

procure that the Company deliver to Purchaser a copy of the Bye-Laws, certified as true, complete and correct by the secretary of the Company, evidencing the Bye-Laws have been duly adopted by the Company and are in effect as of the Closing Date; and

procure that the Company deliver to Purchaser a true, complete and correct copy of the register of members of the Company, certified as true by the secretary of the Company, showing that the Sale Shares are registered in the name of the Purchaser.

WARRANTIES

The Seller warrants to the Purchaser that as of the date of the Closing:

the execution, delivery and performance of this Agreement will not conflict with the organizational documents of the Seller or the Company;

the Company is a private limited liability company (duly organized and validly existing under the laws of Bermuda;

the Company's authorised share capital is divided into USD 1,100,000,000 comprising two classes being (i) 120,000,000 ordinary shares of par value USD 5.00 each and (ii) 100,000,000 preference shares of par value USD 5.00 each, none of which, other than the Ordinary Shares described in Recital D, have been issued;

the Sale Shares are owned beneficially and of record by the Seller;

the Shares represent all of the equity interests of the Seller in the Company;

save as anticipated by the Subscription Agreement and the Shareholders Agreement, no person has any preference shares, options, convertible securities or other rights which require or may require the Company, and the Company has not passed any resolution, to issue any new shares, equity interests or securities of any kind;

Page 5 of 3

the Company owns all of the issued shares in the Subsidiaries and all of the shares are free from Encumbrances other the security created in favour of the Security Agent (on behalf of the Banks) pursuant to the Share Security Agreements; and

the Company and its Subsidiaries (including any director, officer or employee thereof), agent, representative or any other person acting for or on behalf of the foregoing (individually and collectively, a “ Company Representative ”), have complied with all Anti-Corruption Laws .

Neither the Company (including any director, officer or employee) nor any of its Subsidiaries nor any Company Representative has offered, paid, promised to pay, or authorized the payment of any money or anything of value, to any Government Official or to any Person under circumstances where the Company, any of its Subsidiaries or Company Representative knew or ought to have known that all or a portion of such money or thing of value would be offered, given or promised, directly or indirectly, to a person:

for the purpose of: (i) influencing any act or decision of a Government Official in their official capacity; (ii) inducing a Government Official to act or omit to act in violation of lawful duties; (iii) securing any improper advantage; (iv) inducing a Government Official to influence or affect any act or decision of any Government Entity; or (v) assisting the Company, any of its Subsidiaries or any Company Representative in obtaining or retaining business for or with, or directing business to, the Company, any of its Subsidiaries or any Company Representative; or

in a manner that would constitute a breach of any Anti-Corruption Laws.

No Government Official or Government Entity presently owns an interest, whether direct or indirect, in the Company or any of its Subsidiaries or has any legal or beneficial interest in the Company or any of its Subsidiaries or to payments made or to be made to the Company by the Purchaser hereunder.

The Company and its Subsidiaries have maintained complete and accurate books and records and effective internal controls in accordance with the Anti-Corruption Laws and generally accepted accounting principles.

Neither the Company (including any director, officer or employee), nor its Subsidiaries nor any Company Representative, is the target of or is subject to (i) any economic sanction administered by the United States government (including, without limitation, the Office of Foreign Assets Control of the U.S. Treasury Department (“ OFAC ”), U.S. Department of State and U.S. Department of Commerce), the United Nations, the European Union, the United Kingdom or any other relevant governmental agency or authority (collectively, “ Sanctions ”); or (ii) any inquiries, investigation or charges regarding any violation of the Sanctions.

Neither the Company (including any director, officer or employee), nor any Subsidiary nor any Company Representative, has engaged in any transactions or dealings, directly or indirectly, that were (i) in, with, or related to the Crimea of Ukraine, Iran, Cuba, North Korea, Sudan or Syria or (ii) with or for the benefit of entities that are named as Specially Designated Nationals or Blocked Persons, Foreign Sanctions Evaders or appear on the Sectoral Sanctions Identifications List.

Other than the Warranties, the Seller does not make any representation or warranties to the Purchaser in connection with the Transaction.

The Warranties constitute an exhaustive regulation of the Purchaser’s requirements as to the Sale Shares and, subject to the terms of the Shareholders Agreement, the Subscription Agreement and the Bye-laws of the Company, no further requirements as to the quality, fitness for purpose or merchantability of the Sale Shares or the assets, liabilities and operations of the Group shall apply, whether by implication or by the application of any implied term, condition or warranty under applicable sale of goods legislation or other statutory provision or other legal principle.

The Purchaser shall not be entitled to bring any claim against the Seller for breach of Warranties in respect of any matter which is included in the Disclosed Information to the extent that it is readily apparent on the face of such disclosure that such information qualifies such Warranty.

COMPENSATION AND LIMITATIONS

Page 6 of 3

Subject to the provisions of Clause 7.3, the Seller shall compensate the Purchaser for any loss which it incurs as a result of any breach of any of the Warranties.

The Purchaser is not entitled to any consequential damages, exemplary and punitive damages. The Seller is not liable for loss of profits or loss of business or loss of goodwill whether arising as a direct, indirect or consequential loss. The Purchaser shall use reasonable efforts to mitigate any loss.

If the Purchaser claims compensation from the Seller, the loss shall be calculated net of the corresponding amount of any insurance proceeds or third party payments received by the Purchaser with respect to such claims, if any.

If the matter giving rise to a breach of any of the Warranties can be remedied, the breach shall not entitle the Purchaser to compensation unless written notice of the breach is given to the Seller, and, if such breach is curable, the breach is not cured within 30 calendar days of the date on which such written notice is delivered.

The Purchaser shall give written notice to the Seller of any claim under this Agreement within 30 calendar days after the point in time when the Purchaser first acquired knowledge of the matters on which the claim is based and appreciated the significance and relevance of such matters to its ability to make a claim under this Agreement. The Seller shall have no liability with respect to any claim which has not been notified within this deadline.

The Purchaser shall have no liability with respect to any claim under this Agreement unless the Purchaser has, on or before the date falling 60 days following the expiration of the applicable statute of limitations with respect to such claim, notified the Seller in writing of such claim.

The Seller's aggregate liability under this Agreement shall not exceed 100% of the Purchase Price; provided that the foregoing (and any other limitation set forth in this Clause 7) shall not limit any liability for fraud, wilful misconduct or gross negligence by the Seller or any of its Affiliates.

All payments required to be paid pursuant to this Clause 7 shall be treated as an adjustment to the Purchase Price for tax purposes, except as otherwise required by applicable law.

THIRD PARTY CLAIMS

If a claim is made by a third person against the Purchaser and the Purchaser intends to seek compensation for that claim under Clause 7.1 (a " Third Party Claim "), the Seller may, at its option, assume at its sole cost and expense, the full defence and control of such Third Party Claim if the Seller agrees in writing to compensate the Purchaser in full for any loss (subject to the limitation in Clause 7.7) which may be incurred by the Purchaser as a result of the Third Party Claim. If the Seller assumes the defence of any Third Party Claim, the Purchaser shall provide the Seller with reasonable assistance in the defence or settlement of the Third Party Claim.

The Seller shall be entitled to settle any Third Party Claim for which it has assumed the defence in accordance with this if the settlement includes a full and unconditional release of the Purchaser and all Group Companies from all liability in respect of the Third Party Claim.

The Purchaser shall not settle any Third Party without the prior written consent of the Seller, such consent not be unreasonably withheld or delayed.

REMEDIES EXHAUSTIVE

The remedies provided in Clauses 7 and 8 shall exclude any other claim for damages, reduction of the Purchase Price or any other remedy against the Seller which could otherwise be available by law in respect of any breach of any of the Warranties or the Seller’s obligations under this Agreement.

TERMINATION

This Agreement may be terminated at any time prior to the Closing:

by either Party if the other Party has committed a material breach of its obligations under this Agreement;

by either Party if the Closing has not occurred on or before 20 December 2016 (other than through the failure of the Party seeking to terminate the Agreement to comply with its obligations under this Agreement); or

by either party if either of Shareholders Agreement or the Subscription Agreement has been terminated pursuant to its terms.

After the Closing, subject to applicable law, neither Party has any right to terminate or otherwise require the reversal of the Transaction.

CONFIDENTIALITY

Except as otherwise stated in this Agreement, or as required by applicable law and regulation:

Page 7 of 3

each of the Parties shall treat as strictly confidential the existence and contents of this Agreement and all information regarding the discussions and negotiations between the Parties in connection with this Agreement and the Transaction;

The Seller shall treat as strictly confidential any information relating to the Purchaser which it has received from the Purchaser or any representative of the Purchaser in connection with this Agreement; and

The Purchaser shall treat as strictly confidential any information relating to the Seller which it has received from the Seller or any representative of the Seller in connection with this Agreement.

This Clause shall remain in force for a period of 1 year from the Signing Date and shall survive any termination of this Agreement.

Further assurance

Each Party shall (at its own cost) promptly execute and deliver such documents, perform such acts and do such things as may be required from time to time for the purpose of giving full effect to this Agreement. In addition, Seller shall, and shall cause its affiliates to, use commercially reasonable efforts to obtain as promptly as practicable following the date of this Agreement, the Bank Approval, and shall otherwise reasonably cooperate with the Purchaser and diligently respond to any requests for cooperation, information and/or assistance from the Purchaser, in connection with seeking and obtaining the Bank Approval.

Assignment

Neither party shall assign, transfer, mortgage, charge, declare a trust over, or deal in any other manner with any of its rights and obligations under this Agreement; provided that this Clause 13 shall not apply to any assignment by the Purchaser to any of its Affiliates.

Entire agreement

This Agreement constitutes the entire agreement between the parties and supersedes and extinguishes all previous discussions, correspondence, negotiations, drafts, agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter.

Costs and stamp duty

Each party shall pay its own costs in connection with the negotiation, preparation and execution of this Agreement. All stamp duty (including fines, penalties and interest) that may be payable on or in connection with this Agreement and any instrument executed under this Agreement shall be borne 50% by the Purchaser and 50% by the Seller.

Variation and waiver

No variation of this Agreement shall be effective unless it is in writing and signed by the parties (or their authorised representatives).

No failure or delay by a party to exercise any right or remedy provided under this Agreement or by law shall constitute a waiver of that or any other right or remedy, nor shall it prevent or restrict the further exercise of that or any other right or remedy. No single or partial exercise of such right or remedy shall prevent or restrict the further exercise of that or any other right or remedy. A waiver of any right or remedy under this Agreement or by law is only effective if it is in writing.

Notices

Any notice or other communication given to a party under or in connection with this Agreement shall be in writing and shall be delivered by hand or by pre-paid first-class post or other next working day delivery service at the address referred to in Clause 17.3.

Any notice or communication shall be deemed to have been received:

if delivered by hand, on signature of a delivery receipt or at the time the notice is left at the proper address ;

if sent by pre-paid first-class post or other next working day delivery service, at 9.00 am on the second Business Day after posting or at the time recorded by the delivery service.

The address for service of notices on a party is the address stated at the top of this Agreement.

This Clause does not apply to the service of any proceedings or other documents in any legal action or, where applicable, any arbitration or other method of dispute resolution.

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Counterparts

This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall constitute a duplicate original, but all the counterparts shall together constitute the one agreement.

Transmission of an executed counterpart of this Agreement (but for the avoidance of doubt not just a signature page) OR the executed signature page of a counterpart of this Agreement by (a) fax or (b) email (in PDF, JPEG or other agreed format) shall take effect as delivery of an executed counterpart of this Agreement. If either method of delivery is adopted, without prejudice to the validity of the agreement thus made, each party shall provide the others with the original of such counterpart as soon as reasonably possible thereafter.

Governing law and jurisdiction

This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.

Any dispute arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration under the London Court of International Arbitration (LCIA) Rules, which Rules are deemed to be incorporated by reference into this clause. The number of arbitrators shall be three. The seat, or legal place, of arbitration shall be London and the language to be used in the arbitral proceedings shall be English.

This Agreement has been entered into on the date stated at the beginning of it.

[ Signature Page Follows ]

Page 9 of 3

IN WITNESS WHEREOF the Parties have executed and delivered this Agreement on the date shown on the first page.



SIGNED for and on behalf of GOLAR POWER LIMITED by	) ) ) ) )	By: /s/ Haakon Reistad Fure Name: Haakon Reistad Fure Title: Director

Page 10 of 3



SIGNED for and on behalf of STONEPEAK INFRASTRUCTURE FUND II CAYMAN (G) LTD by	) ) ) ) ) )	By: /s/ Michael Dorrell Name: Michael Dorrell Title: Director

IN WITNESS WHEREOF the Parties have executed and delivered this Agreement on the date shown on the first page.

Page 11 of 3

SCHEDULE 1

FORM OF SHAREHOLDERS' AGREEMENT

Page 12 of 3

SCHEDULE 2

FORM OF SUBSCRIPTION AGREEMENT

SCHEDULE 3

BYE-LAWS

SCHEDULE 4

BANK ACCOUNT DETAILS

GOLAR LNG LIMITED – STANDARD SETTLEMENT INSTRUCTIONS

All bank accounts are held with Nordea Bank, London Branch , 5 Aldermanbury Square, London EC2V 7AZ



	GOLAR LNG Bank Details
USD
	Name: Golar LNG Ltd
	Acc: 51231102
	IBAN: GB97NDEA40487851231102
	Swift: NDEAGB2L

US correspondent, Bank of America, New York (SWIFT code BOFAUS3N)

Can you please send any correspondence to the following address:

c/o Golar Management Limited

13 ^th Floor One America Square, 17 Crosswall, London EC3N 2LB, United Kingdom

T: +44 207 063 7900 F: +44 207 063 7901

Page 13 of 3

AGREED FORM

INVESTMENT AND SHAREHOLDERS AGREEMENT

dated July 5, 2016

between

GOLAR LNG LIMITED

and

STONEPEAK INFRASTRUCTURE FUND II CAYMAN (G) LTD

and

GOLAR POWER LIMITED

relating to

GOLAR POWER LIMITED

CONTENTS

Clause Page

1. DEFINITIONS AND INTERPRETATION 3

2. THE BUSINESS OF THE COMPANY 10

3. THE BOARD OF THE COMPANY 12

4. THE MANAGEMENT OF THE COMPANY 12

5. RESERVED MATTERS AND DEADLOCK 14

6. CAPITALIZATION OF THE COMPANY AND PREFERENCE SHARES 14

7. INITIAL FUNDING 15

8. ADDITIONAL FUNDING 15

9. DISTRIBUTIONS AND WATERFALL 16

10. TRANSFER RESTRICTIONS 17

11. RIGHT OF FIRST OFFER 17

12. TAG ALONG RIGHTS 18

13. COMPULSORY TRANSFERS 19

14. PRE-EMPTION/ANTI-DILUTION 20

15. EXIT 20

16. DEFAULT 23

17. TERMINATION 24

18. FAIR MARKET VALUE 24

19. ANNOUNCEMENTS 26

20. CONFLICT 26

21. FURTHER ASSURANCE 26

22. ANTI-CORRUPTION AND BUSINESS PRINCIPLES 26

23. THIRD PARTY RIGHTS 27

24. CONFIDENTIALITY 27

25. LIABILITY AND INDEMNIFICATION 27

26. GENERAL 28

27. GOVERNING LAW AND DISPUTE RESOLUTION 28

28. CERTAIN TAX MATTERS 29

29. EXCLUSIVITY 31

30. OMNIBUS AGREEMENT 32

DATED July 5, 2016

PARTIES


(1)	GOLAR LNG LIMITED, a company organised and existing under the laws of Bermuda and having its registered office at 2nd floor S.E. Pearman Building, 9 Par-la-Ville Road Hamilton HM11, Bermuda (" GLNG ");


(2)	STONEPEAK INFRASTRUCTURE FUND II CAYMAN (G) LTD , an exempted company organised and existing under the laws of the Cayman Islands and having its registered office at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands (" Stonepeak "; Stonepeak and GLNG each a “ Shareholder ” and together the “ Shareholders ”); and


(3)	GOLAR POWER LIMITED , a company organised and existing under the laws of Bermuda and having its registered office at 2nd floor S.E. Pearman Building, 9 Par-la-Ville Road Hamilton HM11, Bermuda (the “ Company ”),

(each a " Party " and together the " Parties ").

WHEREAS


(A)	GLNG is a provider of liquefied natural gas services including shipping, floating liquefaction and floating storage and regasification.


(B)	Stonepeak is managed by an affiliate which is an independent investment firm with leading market positions in the energy, power & renewables and transport sectors.


(C)	GLNG and Stonepeak are owners of all of the ordinary shares in issue in the Company.


(D)	Stonepeak is the owner of 20,000,000 Preference Shares (as defined below) in the Company.


(E)	The Parties have agreed to use the Company as the vehicle for their joint venture partnership to construct, acquire, own and operate natural gas storage transportation vessels and regasification units and their associated energy infrastructure.


(F)	This Agreement sets out the rights and obligations of the Parties in connection with the formation, governance and management of the Company and is the Shareholders Agreement referred to in the share purchase agreement dated 17 June 2016 and entered into between GLNG as seller and Stonepeak as purchaser, pursuant to which Stonepeak acquired 50% of GLNG's shares in the Company (the " SPA ").

In consideration of the mutual covenants and undertakings herein contained, the Parties agree as follows:


1.	DEFINITIONS AND INTERPRETATION


1.1	In this Agreement terms defined in recitals have the meanings set out therein and the words below have the meanings next to them unless the context requires otherwise:

“ Affiliate ” means, when used with respect to a specified person, any person which (i) directly or indirectly Controls, is Controlled by or is under common Control with such specified person, (ii) is an executive officer, director, general partner, trustee or manager of such specified person, or of a person described in clause (i) or (iii) is a Relative of such specified person or of an individual described in clauses (i) or (ii).

" Applicable Anti-Bribery Laws " means all laws and regulations prohibiting the bribery of any government officials or individuals employed by other entities in the private sector, as such laws and regulations are in

force from time to time and insofar as such laws or regulations relate to the operation of the Business including, but not limited to, the UK Bribery Act 2010 and the US Foreign Corrupt Practices Act.

“ Approved Subsequent Opportunity ” is defined in Clause 29.5(a).

" Asset Transfer Agreement " means the asset transfer and subscription agreement dated 17 June 2016 between GLNG as seller and the Company as purchaser pursuant to which the Company has acquired its initial assets.

" Associated Person " means, a person (including a legal person) employed or engaged by, or who otherwise provide services on behalf of, the Company.

" Board " means the board of directors of the Company or a Company Subsidiary from time to time.

" Budget" means a detailed annual budget setting forth in detail and on an itemised basis the capital expenditure and operating expenditure amounts required to fund the Company's operations and capital projects for the following year.

" Business " means the activities set out in Clause 2 as the same may be amended from time to time.

" Business Day " means a day which is not a Saturday or Sunday or a bank or national holiday in London, New York or Bermuda.

" Bye-Laws" means the bye-laws of the Company from time to time and any Company Subsidiary and this term shall include articles of association or the equivalent in any jurisdiction other than Bermuda which govern a Company Subsidiary.

“ Code ” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

" Committed Investment " means, in relation to a Shareholder, its commitment to provide equity to the Company as set out in Clause 8.

" Companies Act " means the Bermuda Companies Act 1981.

" Company FSRUs " means the FSRUs from time to time (new buildings or conversions) owned or on order by the Company or a Company Subsidiary.

" Company Subsidiaries " means the Subsidiaries of the Company which are, at the date of this Agreement, the companies listed in Schedule 1.

" Contributed Shareholder Loans " means the shareholder loans acquired by the Company pursuant to the Asset Transfer Agreement.

“ Control ” means, including the correlative terms “ Controlling ”, “ Controlled by ” and “ Under Common Control with ”, possession, directly or indirectly (through one or more intermediaries), of the power to direct or cause the direction of management or policies (whether through ownership of securities or any other ownership interest, by contract or otherwise) of a person.

“ Conversion Value ” means an amount in USD equal to (i) the sum of all amounts paid by Stonepeak and its Affiliates to acquire any Ordinary Shares (including, for the avoidance of doubt, as contemplated by Clause 8), increased by a compounded annual rate of 8.5% (commencing on the date any such amount is paid and including through such date of determination), (ii) less any distributions in cash or in kind on the Ordinary Shares held by Stonepeak and its Affiliates, calculated on the basis of a 365 day year.

“ Declined Subsequent Opportunity ” is defined in clause 29.5(b).

“ Deed of Adherence ” is defined in Clause 10.1.

" Director " means a director of the Company from time to time.

" Director/Officer Eligibility Criteria " means, in respect of an individual, that none of the following events have happened in relation to that individual:


(a)	he/she becomes of unsound mind or a patient for any purpose of any statute or applicable law relating to mental health;


(b)	he/she becomes bankrupt or compounds with his/her creditors;


(c)	he/she is prohibited by law from being a member of the Board or an executive officer (as applicable) of the Company or a Company Subsidiary;


(d)	he/she becomes the subject of any criminal convictions relevant to the governance or affairs of any company or organisation, or otherwise of a serious nature; or


(e)	he/she has been removed from office pursuant to the Bye-Laws of the Company.

" Effective Date " means the Closing Date pursuant to the SPA.

" Encumbrance " means any and all encumbrances, including any claims, mortgages, charges, securities, liens, pledges, assignments, debentures, hypothecations, title retentions, rights of set off or other security interest however created and whether relating to existing or future assets or any other encumbrance of any sort.

“ Exclusivity Period ” means the period beginning on the date of this Agreement and ending on the later of (i) 5 years after the date of this Agreement and (ii) the date that the Golar Group ceases to beneficially own any interest in the Company.

" Exit " means an exit of one or both of the Shareholders from their investment in the Company as set out in Clause 15.

" Expert " is defined in Clause 27.2.

" Fair Market Value " is defined in Clause 18.

“ Financial Investor ” means any investment vehicle (irrespective of whether such investment vehicle is a current or future fund, vehicle, account or other investment arrangement) controlled or managed by any third party financial institution or any bank, savings institution, credit union, trust company, insurance company or separate account of an insurance company, pension or profit sharing trust, sovereign wealth fund, hedge fund, private equity fund or any other financial institution or institutional investor; provided that the term “ Financial Investor ” shall exclude any portfolio company controlled or managed by, or under common control or management of, any such person.

“ FSRU Competitor ” means any person who, as of such date of determination, both owns and operates FSRUs; provided that , and for the avoidance of doubt, no Financial Investor shall be deemed a FSRU Competitor hereunder.

" FSRU8 " means the Company FSRU on order by the Company's subsidiary Golar FSRU8 from Samsung Heavy Industries Co Ltd. pursuant to a newbuilding contract dated 17 July 2015 and having hull no. 2189, with anticipated delivery in November 2017.

"GG Power " means GG Power Brasil Participações S.A., a private limited company incorporated in Brazil, in respect of which LNG Power is the owner of 50% of the shares

" GG Power SHA " means the shareholders' agreement dated 4 November 2015 2016 between LNG Power and Genpower Participações S.A. in respect of their shareholding in GG Power.

" Golar Celcius " means the LNG Tanker registered in the name of Golar M2026.

“ Golar Power Entity ” has the meaning specified in the Omnibus Agreement.

" Golar FSRU8 " means the Marshall Islands registered corporation, Golar FSRU8 Corporation, having registration number 77599 whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.

“ Golar Group ” means GLNG, and any corporation, limited liability company, joint venture, partnership or other entity Controlled by GLNG.

“ Golar Omnibus Agreement Actions ” means the exercise of all rights and the performance of all obligations of the Company or any of its Subsidiaries as a Golar Power Entity arising under or in connection with the Omnibus Agreement.

" Golar Penguin " means the LNG Tanker registered in the name of Golar M2023.

" Initial Transaction Value " means $234,800,000.00 which constitutes the initial equity value of the Company as of the Effective Date.

" Internal Return " means such amount as is equal to interest at an annual rate of 8 per cent (compounded annually, the first time on 1 January 2017) on the daily amount of the Outstanding Investment of a Shareholder, calculated on the basis of a 365 day year.

" Invested Preferred Capital " means the initial investment of Stonepeak in Preference Shares pursuant to the Subscription Agreement, being UD100,000,000.

" IPO " means an initial public offering of Shares carried out in connection with a listing of the Shares on a Recognised Investment Exchange.

" LNG Power " means a private limited company incorporated under the laws of England and Wales and registered in England with company number 9740657.

“ Long Term Contracted Cash Flows ” means cash flows based on revenues derived from contracts which according to their respective term, shall not expire prior to the date which is 2 years following the Reference Date or otherwise be terminable early by the counterparty thereto for a period of at least 2 years following the Reference Date.

" Management Incentive Scheme" means the programme to be established by the Company pursuant to Clause 4.5

" Management Services Agreement " means the management services agreement to be entered into pursuant to Clause 4.3.

" Management Team " means the management team appointed pursuant to Clause 4 from time to time.

" Maturity Date " means the date of maturity of the Preference Shares, being the fifth anniversary of the Effective Date.

" MLP " means Golar LNG Partners LP, a Marshall Islands limited partnership.

" MLP Units " means the publicly traded equity interests of the MLP.

“Omnibus Agreement” means the Omnibus Agreement, dated as of June 19 2016 by and between the Company, GLNG, , the MLP, Golar GP LLC, a Marshall Islands limited liability company (including any permitted successors and assigns under the MLP Agreement (as defined in the Omnibus Agreement)), and Golar Partners Operating LLC, a Marshall Islands limited liability company.

“ Opportunity Notice ” is defined in Clause 29.5.

" Ordinary Shares " are defined in the Bye-Laws and have the rights set out therein.

" Outstanding Investment " means, in relation to a Shareholder, the amount of its initial funding investments as set out in Clause 7 and its Committed Investment which, at the relevant time, has been funded (or otherwise contributed) to the Company.

“ Permitted FSRU ” means the FSRUs set forth on Schedule 4.

“ Permitted Transferee ” means, with respect to a Shareholder, (i) the spouse of such Shareholder, (ii) a trust, or family partnership or family limited liability company, the sole beneficiary of which is the Shareholder, the spouse of, or any person related by blood or adoption to, such Shareholder, (iii) an Affiliate of such Shareholder, or (iv) additionally, in the context of a distribution of Shares (whether directly or indirectly) by a Shareholder that is a member of the Stonepeak Group to its direct or indirect equity owners, the partners, the limited partners, members or stockholders of such Shareholder, or the partners, limited partners members or stockholders of such Shareholder, members or stockholders.

“ PFIC ” is defined in Clause 28.6.

" Preference Shares " are defined in the Bye-Laws and have the rights set out therein.

“ QEF ” is defined in Clause 28.6.

" Recognised Investment Exchange " is defined in section 285 (1) (a) Financial Services and Markets Act 2000.

“ Reference Date ” means the date of the audited financial statements of the Company for the fiscal year 2020.

“ Relative ” means, with respect to any individual, (i) such individual’s spouse, (ii) any direct descendant, parent, grandparent, great grandparent or sibling (in each case whether by blood or adoption), and (iii) and spouse of an individual described in clause (ii).

“ Required Return Amount ” shall mean (i) at any date prior to the fourth anniversary of the Effective Date, 160% of Invested Preferred Capital, (ii) at any date beginning on the fourth anniversary of the Effective Date and prior to the fifth anniversary of the Effective Date, 180% of Invested Preferred Capital and (iii) at any date beginning on the fifth anniversary of the Effective Date, 200% of Invested Preferred Capital.

" Reserved Matters " means the matters listed in Schedule 2.

“ Sale Notice ” is defined in Clause 11.2.

“ Sale Shares ” is defined in Clause 11.2.

“ Schlumberger Co Fall-Away Event ” means the later of (i) 3 years after the date of this Agreement and (ii) the date that each of Golar Celsius , Golar Penguin and FSRU8 have been, and continue to be, placed under long term charter as Company FSRUs.

“ Schlumberger Co ” means a company to be incorporated in Luxembourg (or such other place as GLNG and Schlumberger agree) by GLNG (in respect of which as of such date of incorporation GLNG will initially

own 51% of the shares and Schlumberger BV will initially own 49% of the shares) under the name of OneLNG or such other name as GLNG and Schlumberger agree.

" Sergipe Power Station " means the 1,516 MW (gross capacity) gas‑fired power station to be constructed, owned, operated, maintained and managed by the Sergipe Project Company comprising, among others, the gas turbine generators, related civil works, the electricity transmission and distribution equipment and any breakwater and associated civil works, the regasification terminal and the gas pipeline connecting the regasification terminal to the gas turbine generators.

" Sergipe Project " means the design, construction, ownership, operation, maintenance, financing and management of the Sergipe Power Station, insurance of said activities and of assets and income associated thereto, the purchase of LNG as fuel for the Sergipe Power Station, the regasification of such LNG, the intake of water into the Sergipe Power Station and discharge of waste water from the Sergipe Power Station, the generation of electricity by the Sergipe Power Station, the sale and purchase (including export) of the dependable power generation capacity and electricity output of the Sergipe Power Station, the interconnection with the Brazilian transmission grid and with an FSRU, the supply of electricity, the rights and obligations under the Principal Agreements and the provision of incidental services and all related activities.

"Shareholder " and " Shareholders " means either GLNG or Stonepeak, or both of them, as the context requires, and any other person who holds Shares in the Company, from time to time.

" Shares " means all or any of the issued shares in the capital of the Company from time to time.

“ Stonepeak Group ” means Stonepeak and each transferee (including any subsequent transferee) of Shares originally owned by Stonepeak unless any such transferee is specifically designated to be excluded from the “Stonepeak Group” at the time of the related transfer.

" Strategic Business Plan " means the strategic business plan for the Company agreed by the Shareholders prior to the date hereof, as amended from time to time in accordance with Clause 2.

“ Subsequent Opportunity ” is defined in Clause 29.1.

" Subsidiary " has the meaning set out in section 86 of the Companies Act.

“ Tax Matters Person ” shall mean Stonepeak or such other person designated by the Board.

“ Transfer Price ” is defined in Clause 11.2.

“ U.S. Treasury Regulations ” shall mean the U.S. federal income tax regulations promulgated under the code, as such regulations may be amended from time to time).

" Year 5 EBITDA " means the earnings of the Company from Long Term Contracted Cash Flows before interest, taxes, depreciation and amortization and determined by reference to audited financial statements for the fiscal year 2020, and (without limitation) reflecting the Contributed Shareholder Loans and the Company's indirect participation in GG Power.


1.2	In this Agreement unless the context requires otherwise:


(a)	a reference to a document in the agreed form is to a document agreed by the Parties and initialled by them or on their behalf for identification purposes;


(b)	references to a Clause or Schedule are to a clause of, or schedule to this Agreement, references to this Agreement include its schedules, and references in a Schedule to a paragraph are to a paragraph of that Schedule;


(c)	references to this Agreement or any other document are to this Agreement or that document as amended from time to time;


(d)	words denoting the singular include the plural and vice versa;


(e)	words denoting any gender include every gender;


(f)	references to a person include any corporate or unincorporated body;


(g)	the table of contents and headings in this Agreement do not affect its interpretation;


(h)	writing or written does not include e-mail or any other form of electronic communication unless expressly permitted;


(i)	the terms including , include , in particular or any similar expression shall be construed as illustrative and shall not limit the sense of the words preceding those terms;


(j)	where this Agreement states that a Party will procure that it will, or will not, do any act or thing, that Party will ensure that:


(i)	it exercises its votes and powers as a Shareholder and as a Party to this Agreement in favour of or against (as the case may be) the doing of, or the omission to do, the act required by the Clause in question;


(ii)	where relevant, its appointed Director under this Agreement exercises his votes and powers as a Director in favour of or against (as the case may be) the doing of, or the omission to do, the act required by the Clause in question;


(k)	unless otherwise specified, a reference to a statutory provision is a reference to that provision as amended, consolidated, extended or re-enacted from time to time (whether before or after the date of this Agreement) and to any subordinate legislation made under it except to the extent that it would increase the liability of any Party under this Agreement; and


(l)	the definitions contained in the Interpretation Act 1978 apply (unless a specific definition has been included or the context otherwise requires) in interpreting words and phrases used in this Agreement.


2.	THE BUSINESS OF THE COMPANY


2.1	The Shareholders agree that the Business shall be as described in the Strategic Business Plan.


2.2	The Shareholders' initial investment in the Company is to be applied for the purposes set out in the Strategic Business Plan and in accordance with the applicable Budget, including (without limitation):


(a)	meeting GLNG's capital commitment to the Sergipe Project as set out in the GG Power SHA;


(b)	securing the delivery of FSRU8 to Golar FSRU8;


(c)	securing the long term charter of FSRU8 for the Sergipe Project;


(d)	the conversion of Golar Celcius and Golar Penguin to FSRUs and the marketing of these units as Company FSRUs for charter; and


(e)	potentially acquiring GG Power's ownership interest in the Sergipe Power Plant on terms which are acceptable to the Shareholders.


2.3	The Business may be changed from time to time to reflect the Strategic Business Plan and the Bye-Laws shall be construed accordingly; provided, however, that any modification of the Strategic Business Plan shall be approved by the Board.


2.4	The Shareholders agree that the Business shall be conducted, at all times, (i) in a commercially prudent manner designed to maximise the Company's value and achieve high levels of efficiency and profitability

and in accordance with the Strategic Business Plan and (ii) in accordance with the structure charts attached hereto as Schedule 6.


2.5	The Shareholders agree to exercise their votes as Shareholders in the Company and shall cause:


(a)	the Company to exercise its votes as shareholder in the relevant Company Subsidiary;


(b)	each member of the board of directors of the Company nominated by them (and any member of the board of directors of each Company Subsidiary caused to be nominated by them) to vote to pass board resolutions; and


(c)	any officer of the Company nominated by them (and any officer of each Company Subsidiary caused to be nominated by them) to exercise such officer's powers,

in order to implement the Business in accordance with the applicable Strategic Business Plan.


2.6	The Shareholders acknowledge and agree that, as between themselves:


(a)	to the extent of any inconsistency between this Agreement and those of the Bye-Laws, the provisions of this Agreement shall prevail; and


(b)	they shall exercise their votes as Shareholders in the Company and shall cause:


(i)	the Company to exercise its votes as shareholder in the relevant Company Subsidiary;


(ii)	the members of the board of directors of the Company nominated by them (and any member of the board of directors of each Company Subsidiary caused to be nominated by them) to vote to pass board resolutions; and


(iii)	any officer of the Company nominated by them (and any officer of each Company Subsidiary caused to be nominated by them) to exercise such officer's powers,

in order to give effect to this Agreement.


3.	THE BOARD OF THE COMPANY


3.1	The initial Board shall consist of six Directors. Each Shareholder shall have the right to nominate three Directors.


3.2	The Chairman of the Board shall be a Director nominated by each Shareholder on an alternating basis for one year terms and appointed by the Board. The first Chairman will be nominated by GLNG.


3.3	Each Shareholder agrees to vote its Shares to approve the appointment of the individuals nominated by the other Shareholder (as applicable) from time to time, provided that each such individual satisfies the Director/Officer Eligibility Criteria.


3.4	If at any time a Director ceases to satisfy the Director/Officer Eligibility Criteria, then the Shareholder that nominated such Director shall procure the immediate resignation of such Director and nominate a replacement Director who satisfies the Director/Officer Eligibility Criteria.


3.5	Each Shareholder shall cause the Directors it has nominated to discharge their duties in accordance with the best interests of the Company, in compliance with applicable law, the Bye-Laws and this Agreement. This obligation shall prevail in the event of any conflict between the interests of the Company and the Shareholder who nominated that Director.


3.6	Each Shareholder shall be entitled to appoint one alternate to each Director and the terms of the Bye-laws apply to such alternates; provided that the Shareholder appointing any such alternate shall cause such

alternate to abide by the provisions of this Agreement as if such Alternate were a Director appointed by such Shareholder.


3.7	The Shareholder who nominated a Director for appointment shall indemnify the other Shareholder and the Company against any liability arising as a result of that Director's removal from office.


4.	THE MANAGEMENT OF THE COMPANY


4.1	The initial Management Team shall comprise the key personnel set out in Schedule 3.


4.2	The business affairs, development of the Business and all other activities of the Company (other than those required by law to be carried out by the Company's members and those covered by the Management Services Agreement) shall be carried out by the Management Team acting at the direction of the Board.

4.3

The technical operations of the Company FSRUs and responsibility for the conversion of Golar Celcius and Golar Penguin to FSRUs will be managed by a management team nominated by GLNG and reasonably acceptable to Stonepeak, pursuant to the Management Services Agreement to be entered into between a company or companies nominated by GLNG (each such company to be reasonably acceptable to Stonepeak and initially being Golar Management AS and Golar Management Limited) and the Company.


4.4	The Company undertakes that it will, and each of the Shareholders will procure that the Company will:


(a)	carry on and conduct the business of the Company on a commercial basis in a proper, lawful and efficient manner for its own benefit;


(b)	transact all business on arms' length terms;


(c)	procure that all business of the Company is undertaken or supervised by the Board; and


(d)	procure that each Budget is not exceeded without the prior written consent of the Shareholders.

4.5

The Company shall establish a Management Incentive Scheme for the Management Team with the object of attracting, motivating and retaining the Management Team. The details of the Management Incentive Scheme shall be determined by the Board but it shall be designed so that the participants receive warrants up to a minimum aggregate amount of 2.5% of the Initial Transaction Value and a maximum aggregate amount of 5% of the total issued share capital of the Company at any time, with a hurdle set at an increase of 10% per annum on the Initial Transaction Value. The Board has full discretion to determine the other details of the Management Incentive Scheme provided that the interests of the Company and the Shareholders are taken into account.


4.6	The costs of the Management Incentive Team shall be funded by, and deducted from, solely the carried interest earned by GLNG pursuant to the cash flow waterfall provided for in Clause 9.3(c).


4.7	The Shareholders undertake to procure that the necessary corporate resolutions are made to ensure the Company's fulfilment of the established Management Incentive Scheme, including issuing the warrants.

4.8

Within seventy five (75) days after the end of each fiscal year, the Company shall prepare or cause to be prepared, and shall deliver to Stonepeak and GLNG, annual audited (in accordance with generally accepted accounting principles in the United States) consolidated financial statements of the Company and, if requested by any Shareholder, separate audited financial statements of each of the Company Subsidiaries, in each case prepared in accordance with generally accepted accounting principles in the United States.

4.9

If requested by either Shareholder, the Company will, at the same time as the consolidated financial statements are delivered pursuant to Clause 4.8, provide separate audited financial statements in respect of any other Subsidiary of the Company, it being agreed that the cost of each such separate audited financial statements are to be prepared and provided solely at the cost of the requesting Shareholder.


4.10	Within forty-five (45) days after the end of each fiscal quarter, the Company shall prepare or cause to be prepared, and shall deliver to Stonepeak and GLNG, consolidated financial statements as of such fiscal quarter of the Company and its Subsidiaries prepared in accordance with generally accepted accounting principles in the United States.


4.11	The Company will implement internal control procedures over financial reporting as are reasonably required for its own or Sarbanes Oxley Act audit purposes (which may include the provision of a SOC 1 report).


4.12	The Company will provide each Shareholder (and its representatives) access to the books and records of the Company and the Company Subsidiaries from time to time as such Shareholder may reasonably require.


5.	RESERVED MATTERS AND DEADLOCK


5.1	Resolutions on any of the matters set out in Schedule 2 shall, when relating to the Company or any Company Subsidiary, (a) when made by the general meeting require the votes or approval of both of the Shareholders, and (b) when made by the Board or any Company Subsidiary's Board require the approval of minimum of at least two of each Shareholders' nominated Directors.

5.2

If the Board of Directors should fail to reach an agreement on any matter submitted to vote by way of a resolution of the Board of Directors or the Shareholders fail to convene or reach agreement on any matter that requires the approval of the Shareholders and such inability or failure persists for a period of at least 30 days, then the Shareholders shall enter into good faith negotiations to resolve such matter for a period of 30 days. If after such 30 day period, the Shareholders have been unable to reach an agreement on such matter, then a Shareholder may submit such matter to the chief executive officers of each of the Shareholders, or their respective designees, for resolution. Such request shall be in writing and shall be accompanied by the requesting Shareholder's statement of the matter and its position with respect thereto. The other Shareholder shall have the right to submit to the chief executive officers of each Shareholder, or their respective designees, its own written statement of the matter and its position with respect thereto and shall do the same within 15 days of the date of such request.

If, after 30 days of the receipt of all submissions made in accordance with Clause 5.2, the chief executive officers of each Shareholder, or their respective designees, are unable to reach an agreement on how to resolve the deadlock then:


(i)	the Shareholders shall continue in good faith to attempt to resolve the deadlock; and


(ii)	pending the resolution of the deadlock, the Company shall continue to implement the Strategic Business Plan consistent with the applicable Budget.


5.3	The provisions of this Article 5 shall be subject to the provisions of Article 30.


6.	CAPITALIZATION OF THE COMPANY AND PREFERENCE SHARES


6.1	As at the Effective Date, the issued share capital of the Company is as follows:



Shareholder:	Number of Ordinary Shares	Number of Preference Shares
GLNG	23,475,077	0
Stonepeak	23,475,077	20,000,000


6.2	Golar agrees that the Company may not exercise its rights under Bye-Law 9 (Optional Redemption) or Bye-Law 10 (Mandatory Conversion) unless and until Stonepeak has received an amount equal to the Required Return Amount by way of Preferential Dividend and any special distributions required to achieve such Required Return Amount.

6.3

With the exception of the exercise of the redemption right of Stonepeak pursuant to Clause 15, the Shareholders agree that the Company shall not implement an Optional Redemption of the Preference Shares prior to the Maturity Date pursuant to Bye-Law 9 unless each Shareholder is satisfied that the Company has a binding offer of alternative finance on terms which include total finance costs which are lower than the cost of the Preferential Dividend payable on the Preference Shares in accordance with Bye-Law 7 (i)(a).

6.4

GLNG agrees that if the Preference Shares are not redeemed or converted to Ordinary Shares (in accordance with Bye-Laws 9 and 10) on or before the Maturity Date, the Preferential Dividend shall increase by an amount of 3% per annum to 11.5% per annum with effect from the day following the Maturity Date and Stonepeak shall be entitled to receive surplus distributable cash until it has received an amount equal to the Required Return Amount.


6.5	Stonepeak agrees that its nominated Directors are not entitled to vote on any resolution in respect of a proposal that Preference Shares are redeemed prior the Maturity Date.


7.	INITIAL FUNDING


7.1	GLNG has contributed the following assets to the Company:


(a)	assets in the form of shares, loans and guarantees as more particularly described in the Asset Transfer Agreement; and


(b)	USD10,000,000 in cash.


7.2	In addition to its acquisition of Shares pursuant to the SPA, Stonepeak has invested USD100,000,000 in return for Preference Shares pursuant to the Subscription Agreement.


8.	ADDITIONAL FUNDING


8.1	The Shareholders undertake to each other that they shall, pro rata their shareholding of Ordinary Shares, provide the Company with additional equity as follows:


(a)	up to USD150,000,000 anticipated to be required by the Company by the end of the first quarter of 2018, expected to be required in two tranches: USD75,000,000 in cash in the first quarter of 2017 and an additional USD75,000,000 in cash in the first quarter of 2018; and


(b)	subject to the approval of the Board, additional amounts as may be required consistent with the Strategic Business Plan.

Equity can be contributed in cash or in kind and the Ordinary Shares to be issued will be at par in the case of equity provided pursuant to Clause 8.1(a) and Fair Market Value at the date of subscription in the case of equity provided pursuant to Clause 8.1(b).

In addition, during the period beginning on the Effective Date and ending on the 18 month anniversary of the Effective Date, the Company shall have the right, but not the obligation, to permit GLNG to contribute up to 2 additional vessels from GLNG, subject to (i) GLNG’s agreement to the terms of such contribution and (ii) Stonepeak’s approval of the terms of such contribution (not to be unreasonably withheld or delayed). In connection with any such contribution, Ordinary Shares will be issued based on the fair market value of the vessel(s) at the time of their respective contribution and with reference to the Initial Transaction Value (at US200,000,000 per LNG carrier).


8.2	Save as expressly agreed above or to fund an Approved Subsequent Opportunity in accordance with Clause 29, neither Shareholder has any obligation to:


(a)	provide any additional funding, whether in the form of debt or equity, to the Company; or


(b)	to give any guarantee, indemnity or other assurance or security interest in respect of the liabilities or obligations of the Company or any Company Subsidiary.

8.3

If the Board resolves to seek any other financing from the Shareholders, whether by way of debt or equity, each of the Shareholders shall be offered the right to provide a portion of such financing pro rata to its shareholding in the Company at that time and to invest in cash or with payment in kind. To the extent a Shareholder declines the offer to provide its portion of such financing, the other Shareholder shall have the right (but not an obligation) to provide such financing.


8.4	With the exception of Shares issued in connection with the funding anticipated by Clause 8.1, if any new Shares or rights to acquire new Shares are not subscribed for on a pro rata basis by the Shareholders, the Shareholders shall discuss in good faith what, if any, consequences this should have for the Agreement.

8.5

Neither Shareholder shall be required to vote in favour of any resolution in respect of any financing referred to in Clause 8.3 from the Shareholders. However if such financing should be necessary in order to avoid that the Company (i) becomes unable to pay its debts as they fall due or (ii) otherwise defaults under any material agreement, no Shareholder will vote against permitting the Company to raise the required funding from a Shareholder willing to provide such funds in the form of subordinated shareholder loans or new equity.


9.	DISTRIBUTIONS AND WATERFALL


9.1	The Shareholders agree that the dividend and distribution policy for Ordinary and Preference Shares is as set out in the Bye-Laws.


9.2	Stonepeak agrees that its nominated directors are not entitled to vote on any resolution to determine whether dividends can be paid in Preference Shares issued at par instead of cash.


9.3	Distributions to the Shareholders on the Ordinary Shares shall be made in the following order of priority (as illustrated in Exhibit 1):


(a)	first, to the Shareholders in proportion to their respective holding of Ordinary Shares, until each Shareholder has been repaid its Outstanding Investment; and


(b)	second, to the Shareholders in proportion to their respective holding of Ordinary Shares until each Shareholder has been paid an amount equal to the Internal Return.


(c)	thereafter, GLNG shall earn a carried interest on Stonepeak's Outstanding Investment as follows:


(i)	distributions which would otherwise be paid to Stonepeak shall be shared in the proportion 90% to Stonepeak and 10% to GLNG until each Shareholder has received an amount equal to 200% of its respective Outstanding Investment; and thereafter


(ii)	distributions which would otherwise be paid to Stonepeak shall be shared in the proportion 80% to Stonepeak and 20% to GLNG.

For the avoidance of doubt, the costs of the Management Incentive Team referenced in Clause 4.6 shall be funded solely by the carried interested earned by GLNG pursuant to this Clause 9.3(c).


9.4	Distributions shall not be made pursuant to this Clause 9 (i) unless legally permitted; (ii) unless all accrued dividends on the Preference Shares have been paid in full, (iii) if such distribution would render the Company insolvent or illiquid; or (iii) if the Board deems it necessary to establish reserves to meet contingent or future costs, expenses or liabilities of the Company.


10.	TRANSFER RESTRICTIONS


10.1	A Shareholder may, subject to its obligations to comply with the terms of Clauses 11-14 with respect to Ordinary Shares and subject to any new shareholder delivering a deed of adherence to this Agreement in

the form set forth in Schedule 5 (a “ Deed of Adherence ”) or, if reasonably required by the other Shareholder, entering into a new shareholders' agreement:


(a)	create any Encumbrance over its Ordinary Shares or Preference Shares; or


(b)	sell, transfer or otherwise dispose of all or any of its Ordinary Shares or Preference Shares or any legal or beneficial interests in its Ordinary Shares or Preference Shares or assign or otherwise purport to deal with its Ordinary Shares or Preference Shares or any interest in them.


10.2	The restrictions in this Clause 10 do not apply to the sale of Ordinary Shares as part of an Exit or the sale, transfer or disposition of any Shares to a Permitted Transferee of such Shareholder.


10.3	Notwithstanding the foregoing, without the prior written consent of GLNG, Stonepeak will not sell, transfer or otherwise dispose of all or any of its Preference Shares to a FSRU Competitor.


11.	RIGHT OF FIRST OFFER


11.1	Any transfer of Ordinary Shares by Stonepeak (other than to a Permitted Transferee) shall be subject to compliance with the provisions of this Clause.


11.2	If Stonepeak wishes to transfer any of its Ordinary Shares (the " Sale Shares "), Stonepeak must first give notice to the Company and, at the same time, offer the Sale Shares to GLNG by giving notice in writing (the " Sale Notice ") setting out details of the proposed transfer including:


(a)	the number of Sale Shares;


(b)	the price (in cash) at which it wishes to sell the Sale Shares (the " Transfer Price ");


(c)	any other terms and conditions of the proposed sale,

and inviting GLNG to apply in writing within a period of not less than 20 Business Days for the maximum number of Sale Shares GLNG wishes to buy on the terms and conditions set forth in the Sale Notice.


11.3	If GLNG declares its intention to purchase the Sale Shares, Stonepeak shall be obliged to sell and GLNG shall be obliged to purchase the Sale Shares in the amount and on the terms set out in the Sale Notice. On the date specified for completion in the acceptance from GLNG, Stonepeak shall execute and deliver a transfer of the Sale Shares to GLNG in consideration for the Transfer Price.

11.4

If GLNG does not accept within the time limit set out in the Sale Notice, Stonepeak shall be free, except as provided in Clause 11.6 and subject to such transferee executing and delivering to the Company a Deed of Adherence, to enter into negotiations to sell and otherwise consummate the Sale Shares to third parties. Any sale of the Sale Shares resulting from such negotiations must be concluded within six (6) months from the date of the Sale Notice and the Sale Shares cannot be sold during such period at a lower price than the Transfer Price and/or on other terms that are materially more favourable to such a third party unless Stonepeak has sent a second Sale Notice offering GLNG the Sale Shares on the new terms and otherwise complying with the provisions of Clause 11.2.


11.5	If Stonepeak fails to comply with Clause 11.3:


(a)	the Chairman of the Company (or, failing him, one of the other directors, or some other person nominated by a resolution of the Board) may, as agent on behalf of Stonepeak:


(i)	complete, execute and deliver in its name all documents necessary to give effect to the transfer of the relevant Sale Shares;


(ii)	receive the Transfer Price and give a good discharge for it; and


(iii)	(subject to the transfers being duly stamped) update the register of members.

(b)

the Company shall pay the Transfer Price into a separate bank account in the Company's name on trust (but without interest) for Stonepeak until it has delivered its certificate(s) for the relevant Sale Shares or an indemnity, in a form reasonably satisfactory to the Board, in respect of any lost certificate, together, in either case, with such other evidence (if any) as the Board may reasonably require to prove good title to those Sale Shares, to the Company.


11.6	Stonepeak's right to transfer Sale Shares to a third party under this Clause 11 does not apply if the transferee is a FSRU Competitor.


12.	TAG ALONG RIGHTS

12.1

Except in the case of transfers to a Permitted Transferee, pursuant to Clause 13 (Compulsory Transfers) or otherwise after going through the procedure set out in Clause 11 (Right of First Offer), the provisions of this Clause 12 shall apply if, in one or a series of related transactions, a Shareholder proposes to transfer any of the Shares (" Proposed Transfer ") which would, if carried out, result in any person (" Buyer ") acquiring 50% or more of the Ordinary Shares in the Company.

12.2

Before making a Proposed Transfer, a Shareholder shall procure that the Buyer makes an offer (" Offer ") to the other Shareholder(s) to purchase all of its Ordinary Shares for a consideration in cash per Share that is at least equal to the highest price per Share offered or paid by the Buyer, or any person acting in concert with the Buyer, in the Proposed Transfer or in any related previous transaction in the 3 months preceding the date of the Proposed Transfer (" Specified Price ").


12.3	The Offer shall be made by written notice (" Offer Notice "), at least 7 Business Days before the proposed sale date (" Sale Date "). To the extent not described in any accompanying documents, the Offer Notice shall set out:


(a)	the identity of the Buyer;


(b)	the Specified Price and other terms and conditions of payment;


(c)	the Sale Date; and


(d)	the number of Ordinary Shares proposed to be purchased by the Buyer ( "Offer Shares ").


12.4	If the Buyer fails to make the Offer to the other Shareholder(s) in accordance with Clauses 12.2 and 12.3, the Seller shall not be entitled to complete the Proposed Transfer and the Company shall not register any transfer of Ordinary Shares effected in accordance with the Proposed Transfer.


12.5	If the Offer is accepted by the other Shareholder(s) (" Accepting Shareholders ") in writing within 20 Business Days of receipt of the Offer Notice, the completion of the Proposed Transfer shall be conditional on completion of the purchase of all the Offer Shares held by the Accepting Shareholders.


13.	COMPULSORY TRANSFERS


13.1	A Shareholder is deemed to have served a Sale Notice under Clause 11.2 (which, for the purposes of this Clause 13, shall apply to GLNG as if references to Stonepeak were to GLNG and references to GLNG were to Stonepeak) immediately before any of the following events:


(a)	a petition being presented, or an order being made, for the Shareholder's bankruptcy; or


(b)	an application to the court being made under section 99 of the Companies Act where the Shareholder intends to make a proposal to its creditors for a voluntary arrangement; or


(c)	a receiver or manager is appointed by or on behalf of any creditor of the Shareholder with respect to the Shareholder or any of the Shareholder’s assets; or


(d)	the Shareholder convening a meeting of its creditors or taking any other steps with a view to making an arrangement or composition in satisfaction of its creditors generally; or


(e)	the Shareholder being unable to pay its debts as they fall due within the meaning of section 162 of the Companies Act; or


(f)	the happening in relation to a Shareholder of any event analogous to any of the above in any jurisdiction in which it is resident, carries on business or has assets; or


(g)	the Shareholder committing an Event of Default.


13.2	The deemed Sale Notice takes effect on the basis the Transfer Price for the Sale Shares shall be the aggregate Fair Market Value of the Sale Shares.


14.	PRE-EMPTION/ANTI-DILUTION

14.1

The Shareholders agree that in the event that the Company resolves to increase the share capital pursuant to Bye-Law 52 (other than for the purposes of issuing warrants or shares pursuant to the Management Incentive Scheme as permitted by this Agreement), each of the Shareholders shall have pre-emption rights to subscribe for its respective pro rata share in such increase and this right shall also apply to any or issuance of rights, options, or warrants to purchase new Shares, or instruments of any type whatsoever that are, or may become, convertible into or exchangeable into or exercisable for new Shares.


14.2	The Shareholders shall procure that the Company shall pass the appropriate Resolution as required by Bye-Law 53 in order to give effect to this Clause 14.


15.	EXIT


15.1	An Exit may take the form of:


(a)	an IPO pursuant to Clause 15.2; or


(b)	an exit of Stonepeak only pursuant to Clause 15.3;


(c)	a sale of all of the Shares in the Company on terms acceptable to both Shareholders;


(d)	a sale of all of the assets of the Company in one transaction or a series of transactions on terms acceptable to both Shareholders, followed by a distribution of the net proceeds of such sale(s) to the Shareholders; or


(e)	a winding up or other dissolution of the Company.


15.2	If a request is made for an Exit by way of IPO by either Shareholder:

(a)

as of the date of a request by a Shareholder, such Shareholder shall have obtained, and shall have delivered to the other Shareholder, a written opinion of an independent investment bank stating that such other Shareholder will receive, through a combination of an IPO and any then-received distributions in respect of its Ordinary Shares, a return on its Ordinary Shares of at least equal to 150% of its respective Outstanding Investment, and, in the event the other Shareholder is Stonepeak, either (i) Stonepeak’s Preference Shares shall have been previously redeemed or (ii) Stonepeak shall have received distributions in respect of its Preference Shares at least equal to 150% of its Invested Preferred Capital (the “ Minimum Return ”).


(b)	the Shareholders shall, for a period of up to 3 months, negotiate the terms of the proposed IPO and the IPO shall be carried out in accordance with the provisions of this Clause 15 and completed as soon as practicable.


(c)	If no agreement has been reached by the end of the 3 month period referred to in Clause 15.2(b) then either Shareholder shall have the right to demand by written notice to the other Shareholder that the Company carries out an IPO (an " IPO Notice ");.

(d)

In an IPO, each Shareholder shall have an obligation to sell a number of Shares representing 20% of the total number of Shares in the Company (or such other percentage as the Company's brokers advise with a view to ensuring the success of the IPO or as adjusted to comply with any requirements of the applicable listing rules as to the minimum number of Shares to be retained) (the " Minimum Sale Requirement ").

(e)

Each Shareholder shall within four weeks of an IPO Notice confirm in writing whether it is willing to sell all of its Shares in an IPO. Any such confirmation shall be binding and irrevocable. If one, but not the other, Shareholder confirms its willingness to sell all its Shares in the IPO then that Shareholder shall have a preferential right to sell Shares in excess of the Minimum Sale Requirement in connection with the IPO. If both Shareholders confirm willingness to sell all their Shares in the IPO, the sale of Shares in the IPO shall be made on a pro rata basis.


(f)	The IPO shall be carried out with the objective of achieving the best possible value for the Shareholders. The following matters shall be decided on the basis of this principle:


(i)	the engagement of financial advisers in relation to the IPO;


(ii)	the choice of the stock exchange on which the Shares will be listed;


(iii)	the capital structure of the Company, including any distributions to the Shareholders prior to the IPO and in respect any conversion of Preference Shares and any shareholder loans to Ordinary Shares;


(iv)	the number of Shares which will be offered for sale in the IPO (subject to the Minimum Sale Requirement), it being agreed that the maximum number of Shares to be sold in the IPO shall be limited to a level not having a material negative effect on the pricing of the IPO;


(v)	any issuance of new Shares in connection with the IPO;


(vi)	the pricing structure in the IPO; and


(vii)	the final offer price in the IPO.

(g)

If one, but not the other, Shareholder has confirmed its willingness to sell all its Shares in the IPO then such Shareholder shall, in case of disagreement, have the right to make decisions in the matters listed in Clause 15.2(f). If this is not the case, such decisions shall be made by the Shareholders jointly. In the absence of agreement such decisions shall be based on the advice of the lead financial adviser.


(h)	Following an IPO Notice, each of the Shareholders shall use its best efforts to ensure that the IPO is carried out in a successful and efficient manner, including, but not limited to, by:


(i)	voting its Shares in favour of any shareholder resolutions which are necessary or reasonably desirable in connection with the IPO, including such amendments to the Bye-Laws as may be necessary or appropriate, and the election a new Board which satisfies applicable listing requirements;


(ii)	using its best efforts to cause its nominated representatives on the Board to pass such resolutions and take such actions as shall be required to carry out an IPO in accordance with the provisions of this Clause 15;


(iii)	assisting the Company in the preparation of such financial statements, prospectuses and other documents as may be required or reasonably desirable to effect the IPO and the sale of the Shares sold pursuant thereto;


(iv)	facilitating a customary due diligence review of the Company;


(v)	agreeing to customary terms and conditions in any engagement letters, underwriting agreement and other agreements or instruments which may be necessary or reasonably desirable in connection with the IPO; and


(vi)	agreeing to customary lock-up undertakings based on prevailing market practice.


(i)	If an IPO process is terminated for any reason, each Shareholders shall have the right to demand a new IPO process at any time after the termination of the previous IPO process. Any such new IPO process shall be subject to the provisions of this Clause 15.


15.3	Unless an IPO has been completed, in which case this Clause 15.3 does not apply, at any time after the 5 ^th anniversary of the Effective Date, Stonepeak may require an Exit on the terms of this Clause 15.3 as follows:

(a)

In the event that the Year 5 EBITDA of the Company is less than USD 65,000,000, then at any point thereafter Stonepeak has the right, but not the obligation, to serve notice on GLNG and the Company requiring that all of the Ordinary Shares held by Stonepeak and/or any of its Affiliates as of such time be converted to Preference Shares. The Ordinary Shares shall be converted into a number of Preference Shares such that the aggregate value of all such Preference Shares issued in connection with such conversion shall be equal to the Conversion Value.


(b)	If a request is made by Stonepeak for a share conversion pursuant to Clause 15.3(a), GLNG will immediately vote in favour of the relevant resolutions and do all other things reasonably necessary to procure that the conversion is effected as soon as reasonably practicable.


(c)	Golar shall not, and Golar shall procure that any transferee of its Ordinary Shares (excluding Stonepeak and its transferees) shall not, at any point in time, exercise the conversion right set forth under bye-law 4(e) of the Bye-Laws.


15.4	Within 6 months of the conversion pursuant to Clause 15.3, GLNG shall procure that the Company redeems the Preference Shares so converted on the terms of Bye-Law 9.


15.5	If GLNG does not procure that the Preference Shares are redeemed pursuant to Clause 15.4, Stonepeak may at any time require GLNG to vote in favour of a sale of the Company or its assets to a third party or third parties.


16.	DEFAULT


16.1	An " Event of Default " means in relation to a Shareholder (the " Defaulting Party "), the occurrence of any of the following:


(a)	a material breach by that Shareholder of its obligations under this Agreement; or


(b)	a court of competent jurisdiction making an order for the dissolution or the opening of bankruptcy proceedings in respect of that Shareholder;

but if any breach referred to above is capable of being remedied, an Event of Default shall be deemed to have occurred only if the breach has not been remedied within 30 days of written notice of such breach from the other Shareholder (the " Non-Defaulting Party ").


16.2	Notwithstanding Clause 16.1, if there is a bona fide dispute between the Shareholders as to whether a material breach has occurred and (A) the Defaulting Party has made a written request for the initiation of arbitration proceedings within 30 days of written notice of the breach from the Non-Defaulting Party and (B) the

Defaulting Party is contributing in good faith to an expeditious completion of the arbitration proceedings, the deadline for remedying the breach shall be within 30 days of final resolution of such dispute.


16.3	Upon the occurrence of an Event of Default, the Non-Defaulting Party shall have the right (but not an obligation) (a " Default Option ") to either:


(a)	require the Defaulting Party to sell all (but not only some) of its Shares to the Non‑Defaulting Party at a price in cash equal to their Fair Market Value as of the date of the Default Option Notice plus interest at a rate of 3% per annum from the date of the Default Option Notice to the completion of the transfer of the Shares; or


(b)	require that the Defaulting Party acquires all of the Non-Defaulting Party’s Shares at a price in cash equal to their Fair Market Value as of the date of the Default Option Notice plus interest at a rate of 3% per annum from the date of the Default Option Notice to the completion of the transfer of the Shares.

16.4

The Default Option may be exercised by the Non‑Defaulting Party by giving notice in writing to the Defaulting Party (the " Default Option Notice " ) at any time during a period commencing on the later date of (i) the date when the Non‑Defaulting Party becomes aware of the occurrence of an Event of Default and (ii) where Clause 16.2 would apply, the date where such dispute was finally resolved, and in each case expiring 90 days after such date.


16.5	Completion of the sale and purchase Shares pursuant to an exercise of the Default Option shall take place not later than 90 days after the agreement on or determination of the Fair Market Value of the relevant Shareholder Interests.


16.6	Any transfer of Shares pursuant to this Clause 16 shall be on the following terms:


(a)	the Shares shall be sold free from all Encumbrances of any nature attaching to them, and shall include all rights to any dividends or other distributions declared, paid or made after the date of Default Option Notice;


(b)	save in the event of a breach of Clause 16.6 (a) the transferring Shareholder shall have no liability towards the other Shareholder relation to the transfer of the Shares;


(c)	the transfer of the Shares shall take place against simultaneous payment of the purchase price; and


(d)	each Shareholder shall do all such other things and execute all other documents as the other Shareholder may reasonably require to give effect to the sale and purchase of the Shareholder Interests pursuant to the Default Option.


17.	TERMINATION


17.1	This Agreement terminates immediately upon the occurrence of any of the following events:


(a)	the passing of a resolution for the winding up of the Company; or


(b)	the appointment of a receiver, administrator or administrative receiver over the whole or any part of the assets of the Company or the making of any arrangement with the creditors of the Company for the affairs, business and property of the Company to be managed by a supervisor; or


(c)	all of the Shares are owned by one Shareholder and its affiliates; or


(d)	shares of the Company are admitted to trading on any national securities exchange following an agreement to proceed with an IPO pursuant to Clause 15.


17.2	Termination of this Agreement shall be without prejudice to the rights or obligations of any Shareholder accrued prior to such termination, or under any provision which is expressly stated not to be affected by such termination including in respect of any prior breach of this Agreement.


18.	FAIR MARKET VALUE

The " Fair Market Value " to be applied under this Agreement shall, unless otherwise agreed between the Shareholders, be determined according to the following principles and procedures:

18.1

The Fair Market Value of the Shareholder Interests shall be determined on a stand-alone basis by using and combining generally accepted valuation methods, including discounted cash flow valuation and peer group comparisons without applying any discount for lack of liquidity, lack of control, size, the existence of this Agreement or similar circumstances nor any premium for potential synergies from a combination with another business.


18.2	In the absence of an agreement with respect to the determination of the Fair Market Value within 15 Business Days of the event which triggers the need for a determination of the Fair Market Value, an Expert shall be appointed to determine the Fair Market Value.

18.3

If the Shareholders have not reached agreement on the appointment of the Expert within 10 Business Days of the last day of the period set out in sub-clause 18.2 then either Shareholder shall within a further 5 Business Days nominate in writing two candidates for the role of Expert. The proposed candidates shall not have had any business relationship with either of the Shareholders or any of their affiliates for the last three years. If any candidate is proposed by both Shareholders that candidate shall be appointed as the Expert. Otherwise, the Expert shall be selected by drawing lots among the proposed candidates. If it for any reason proves impossible to appoint an Expert, the Fair Market Value shall be settled by arbitration in accordance with Clause 27.3.


18.4	Each Shareholder shall be entitled to make one written submission to the Expert with a copy to the other Shareholder, following which an oral hearing shall be held before the Expert where both Shareholders shall be given the opportunity to present their views on the Fair Market Value.


18.5	For the purpose of enabling each of the Shareholders to make submissions under sub-Clause 18.4, the Shareholders shall provide each other with reasonable information concerning the affairs of the Company, and each of the Shareholders shall be given reasonable access to the management of the Company without the presence of representatives of the other Shareholder.

18.6

Each of the Shareholders shall provide, and shall procure that the Company shall provide, such information as the Expert may reasonably request for the above purpose. The Expert shall have full access to the management of the Company without the presence of either of the Shareholders, and he shall have the right to engage such advisers as he may consider necessary or advisable to form his opinion of the Fair Market Value.


18.7	The Fair Market Value shall be the price per share determined in writing by the Expert on the following bases and assumptions:


(a)	valuing each of the Sale Shares as a proportion of the total value of all the issued shares in the capital of the company without any premium or discount being attributable to the percentage of the issued share capital of the Company which they represent or for the rights or restrictions applying to the Sale Shares;


(b)	if the Company is then carrying on business as a going concern, on the assumption that it will continue to do so;


(c)	the sale is to be on arms' length terms between a willing seller and a willing buyer;


(d)	the Sale Shares are sold free of all Encumbrances;


(e)	the sale is taking place on the date the Expert was requested to determine the Fair Market Value; and


(f)	to take account of any other factors that the Expert reasonably believe should be taken into account.


18.8	The Expert shall be required to submit his written opinion regarding the Fair Market Value (the " Expert Statement ") to the Shareholders as soon as reasonable practicable, however no later than 45 Business Days from the date of its appointment.


18.9	In the absence of manifest error the Expert Statement shall be final and binding on the Shareholders and shall not be subject to review or appeal by any court or by the arbitration panel provided for in Clause 27.3. The Expert shall act as an expert and not as an arbitrator, and the referral to the Expert shall not be deemed as arbitration.

18.10

The cost of any reference to the Expert shall be borne by the Shareholders in relation to their proportionate shareholdings unless the Expert in its absolute discretion determines another allocation of the costs. If the Expert requires an advance payment to initiate its work, each Shareholder shall provide a portion of such amount pro rata to its shareholding in the Company. Any such advance payment shall be without prejudice to the Expert’s right to determine the final allocation of the costs.


19.	ANNOUNCEMENTS

With the exception of any announcements required by law, a Recognised Investment Exchange or by any relevant regulatory, governmental or quasi governmental authority, no announcements may be made nor any circular or other publicity material issued by the Company or the Shareholders relating to the existence or the subject matter of this Agreement or any agreed form document without the prior written approval of the Shareholders as to its content, form and manner of publication or issue.


20.	CONFLICT

If any conflict between the terms of this Agreement and the Articles arises then, as between the Shareholders, the provisions of this Agreement will prevail. In these circumstances the Shareholders agree to procure the necessary amendments to the Articles so as to remove the conflict and to procure that the terms of this Agreement and the Articles are consistent with each other.


21.	FURTHER ASSURANCE

Each Shareholder will at any time do or procure to be done by a third party, so far as may be reasonably within its power and as may be reasonably requested of it, all acts or things and/or execute or procure the execution of all documents in a form satisfactory to the other Shareholder as is or are required to give full effect to the provisions of this Agreement.


22.	ANTI-CORRUPTION AND BUSINESS PRINCIPLES

22.1

Each Shareholder undertakes to the other Shareholder that it will not, and will procure that no Group Company, in the course of the operation of the Business (a) engages in any activity, practice or conduct which would constitute an offence under an Applicable Anti-Bribery Laws or (b) does, or omits to do, any act that will cause or lead the Company to be in breach of any Applicable Anti-Bribery Laws.


22.2	Each Shareholder undertakes to the other Shareholder that it has and will continue to implement adequate procedures in relation to the Business and the Company designed to prevent any Associated Person from engaging in any activity, practice or conduct that would violate any of the Applicable Anti-Bribery laws when performing services for or on behalf of the Company or any Company Subsidiary.


22.3	A breach of either of the undertaking set out above shall be deemed a material breach of this Agreement and the defaulting Shareholder agrees to compensate the other Shareholder for any loss it suffers as a result of such breach.


23.	THIRD PARTY RIGHTS

A person who is not a Party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 and the Shareholders do not intend that any third party rights are created by this Agreement.


24.	CONFIDENTIALITY


24.1	Each Shareholder undertakes with the other Shareholders that it will at all times keep confidential and will not use (other than for the benefit of the Company and its Subsidiaries) any confidential information which it may have or acquire in relation to the customers, business, finances, assets or affairs of any other Shareholder, except for any information:


(a)	which is publicly available or becomes publicly available through no act of that Shareholder;


(b)	which is disclosed to that Shareholder by a third party which did not acquire the information under an obligation of confidentiality; or


(c)	which is required to be disclosed by any law (including any order of a court of competent jurisdiction) or regulatory body or Recognised Investment Exchange.


24.2	The Shareholders will use their best endeavours to procure that the Company and its officers, employees and agents observe the obligation of confidentiality imposed by Clause 24.1.


24.3	The obligations of each of the Shareholders in Clause 24.1 will continue without limit in time and notwithstanding termination of this Agreement.


25.	LIABILITY AND INDEMNIFICATION


25.1	Each of the Shareholders acknowledge that in entering into this Agreement, it does not rely on, and will have no remedy in respect of, any statement, representation, assurance, warranty or understanding (whether negligently or innocently made) of any person (whether Party to this Agreement or not) other than as expressly set out in this Agreement.


25.2	Nothing in Clause 25.1 will operate to limit or exclude any liability for fraud or fraudulent concealment.


25.3	No Shareholder shall be liable for the return of all or any portion of a Shareholder's Outstanding Investment or Invested Preferred Capital, or for the payment of any amounts allocated to it. Any such return or payment shall be made solely from, and to the extent of, the Company's assets pursuant to the terms of this Agreement.


25.4	The Company shall not be liable to its Shareholders, and no Shareholder shall be liable to any other Shareholder or any Group Company, for any loss of profit, indirect or consequential losses howsoever caused and whether or not foreseeable at the date hereof.


26.	GENERAL

26.1

Nothing in this Agreement will make either Shareholder the agent or employee of the other nor will it create a relationship of employment, association, partnership between the Shareholders or impose any partnership obligation or liability upon either Shareholder. Neither Shareholder shall have any right, power or authority to enter into any agreement or undertaking for, to act on behalf of, to act as or be an agent or representative of, or to otherwise bind the other Shareholder.


26.2	This Agreement is binding upon and will enure for the benefit of the personal representatives of the Shareholder or the successors in title to or transferees of the Shareholders.


26.3	No purported alteration of this Agreement or of any of the documents referred to in this Agreement shall be effective unless it is in writing, refers specifically to this Agreement and is duly executed by each Shareholder.

26.4

Each provision of this Agreement is severable and distinct from the others. If any provision of this Agreement is or at any time becomes to any extent invalid, illegal or unenforceable under any enactment or rule of law in any jurisdiction, it will to that extent be deemed not to form part of this Agreement but (except to that extent in the case of that provision) it and all other provisions of this Agreement will continue in full force and effect and their validity, legality and enforceability will not be affected or impaired.


26.5	If any provision of this Agreement is so found to be invalid, illegal or unenforceable, but would be valid, legal or enforceable if some part of the provision were deleted or amended, that provision will apply with whatever modification(s) as are necessary to make it valid, legal and enforceable.


26.6	Any notice served by a Shareholder under this Agreement may be delivered by hand or sent by first class, prepaid recorded delivery post marked for the attention of the relevant Shareholder to the address of the addressee as set out in this Agreement or to any other address that the addressee may notify the other Shareholder of in writing from time to time.


26.7	All notices under Clause 26.6 will be deemed duly served:


(a)	in the case of a notice delivered by hand, at the time of delivery;


(b)	in the case of a notice sent inland by first class, prepaid recorded delivery, two clear Business Days after the date of despatch;


(c)	in the case of a notice sent overseas by recorded delivery airmail, seven Business Days (being Business Days in the place to which the notice is despatched) after the date of despatch.


26.8	Notices may be sent by email, provided they are also delivered by hand or sent by post in accordance with Clause 26.6. Notice is not validly served if sent only by email.


27.	GOVERNING LAW AND DISPUTE RESOLUTION


27.1	This Agreement and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) is governed by and construed in accordance with the law of England and Wales.

27.2

Any dispute expressly referred to an Expert under this Agreement shall be referred to an appropriately qualified independent expert nominated by the Shareholders (the " Expert "). If the Shareholders cannot agree upon an appropriately qualified independent expert, then the dispute shall be governed by Clause 27.3. Subject to execution of appropriate confidentiality undertakings, the Expert shall be afforded such access to books, records, accounts and documents in the possession of the Shareholders as the Expert may reasonably request, and he shall act as expert not as arbitrator. The Expert's determination shall, in the absence of fraud or manifest error or bias, be final and binding on the Shareholders, its fees and disbursements shall be borne by the Shareholder which is determined by the Expert to be incorrect (and if both Shareholders were incorrect, the Shareholder which was the most incorrect in the Shareholder's opinion) and each of the Shareholders shall bear their own costs in respect of such reference.

27.3

All disputes arising under or in connection with this Agreement shall be referred to and finally resolved by arbitration under the London Court of International Arbitration (LCIA) Rules, which Rules are deemed to be incorporated by reference into this Clause. The number of arbitrators shall be three. The seat, or legal place, of arbitration shall be London and the language to be used in the arbitral proceedings shall be English.


28.	CERTAIN TAX MATTERS

28.1

Stonepeak shall be the initial Tax Matters Person. The Tax Matters Person shall receive no compensation for its services. All third party costs and expenses incurred by the Tax Matters Person in performing its duties as such (including legal and accounting fees and any out-of-pocket expenses) shall be borne by the Company. Nothing herein shall be construed to restrict the Company from engaging an accounting firm

or other experts or consultants to assist the Tax Matters Person in discharging its duties hereunder, so long as the compensation paid by the Company for such services is reasonable.

28.2

The Tax Matters Person is hereby authorized and empowered on behalf of the Company and its Subsidiaries to make, in its reasonable discretion, any and all elections for U.S. federal, state and local tax matters, including any election pursuant to U.S. Treasury Regulations section 301.7701-3. The Tax Matters Person shall be authorized to file any such elections on behalf of the Company and/or its Subsidiaries. If required, the Shareholders will cooperate with the Tax Matters Person and the Company in making any such elections, and shall not take any action to revoke such elections except as permitted by the terms of this Agreement. In the event the Company is classified as a partnership for U.S. federal income tax purposes, the Tax Matters Partner shall establish and maintain a separate capital account for each Shareholder in accordance with U.S. federal income tax purposes. Any non-U.S. tax elections which would cause either Shareholder to incur additional tax will require the consent of both Shareholders.

With respect to any election other than a “check-the-box” election pursuant to U.S. Treasury Regulations section 301.7701-3 for an entity which has no U.S. source income, the Tax Matters Person shall, in the event that the contemplated election could have an adverse effect upon a Shareholder's own tax liability, consult with the other Shareholders prior to making such election. If GLNG, within five Business Days after being duly informed about the potential election, acting in good faith, notifies the Tax Matters Person that it has reason to believe that such an election could result in an adverse tax effect for GLNG, GLNG shall be entitled to investigate the matter further for another ten Business Days. To the extent GLNG, after such investigation, obtains third party advice from a recognised US law firm with tax competence or one of the Big Four accounting firms, stating that GLNG has a tax exposure related to the contemplated election, the Tax Matters Person shall require GLNG approval, such approval not being unreasonably withheld, prior to making such an election.

28.3

Each Shareholder shall, upon request, provide to the Company or the Tax Matters Person such documentation and any other information on it and its direct or indirect owners as is required in order for the Company or the Tax Matters Person to satisfy any applicable tax reporting or compliance requirements, including sections 1471 through 1474 of the Code and any U.S. Treasury Regulations, forms, instructions or other guidance issued pursuant thereto, any agreements entered into pursuant to section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with such sections of the Code, any law implementing any such intergovernmental agreement and any legislation or regime which implements, or implements rules similar to, any of the agreements between the Government of the United Kingdom of Great Britain and Northern Ireland and its Crown Dependencies and Overseas Territories to improve international tax compliance or the Organisation for Economic Co-operation and Development’s Common Reporting Standard.


28.4	The Shareholders hereby agree and will procure that the Company shall share freely all information reasonably necessary for each Shareholder to make accurate and timely reporting of its’ tax positions, liabilities, assets, taxes payable and losses to be carried forward from time to time as may be required.


28.5	The Shareholders shall use all reasonable efforts to comply with relevant tax residency and tax substance requirements to ensure that the Company will be recognised as being a resident of Bermuda for tax purposes (and, for the avoidance of doubt, will not be tax resident in any other jurisdiction).

28.6

The Company and its Subsidiaries shall provide to any Shareholder such information as any such Shareholder may reasonably request at any time or from time to time in order to permit such Shareholder (i) to determine whether the Company or any of its Subsidiaries has been or may become a "passive foreign investment company" (a “ PFIC ”) or a "controlled foreign corporation" (or a corporation having a similar status) for purposes of the Code, (ii) to determine the consequences to such Shareholder or any of its direct or indirect investors of such status, and (iii) all such other information that is reasonably requested or necessary for such Shareholder, or any direct or indirect investor in such Shareholder, to duly complete and file its income tax returns and, if the Company or any of its Subsidiaries is determined to be a PFIC, the Company shall provide to the Shareholders such information reasonably necessary to make or maintain any election available under the Code related to PFIC status, including a “qualified electing fund” (“ QEF ”) election. Information necessary to permit the Shareholders (or their direct or indirect shareholders) to make a QEF election with respect to the Company or its Subsidiaries shall be provided to the Shareholders

as soon as reasonably practicable after the end of each fiscal year and in no event later than the next March 1st following the end of each fiscal year of the Company or the relevant Subsidiary for which it is determined that such an election may be made.

28.7

Each Shareholder shall cooperate with the other Shareholders and the Company to determine if the Company or any Subsidiary is entitled to the benefits of any income tax treaty in effect at such time between the country of which such Company or Subsidiary is tax resident and the United States; provided that no Shareholder shall be obligated to provide any information pursuant to this Section 28.7 that such Shareholder reasonably considers to be confidential, unless the Company and the other Shareholders agree to take such measures reasonably acceptable to such Shareholder to ensure the continued confidentiality of such information.


29.	EXCLUSIVITY

29.1

During the Exclusivity Period, no member of the Golar Group shall, and the Seller shall cause each member of the Golar Group not to, other than through the Company and its Subsidiaries, whether directly or indirectly, develop, operate or own any FSRU (and any such opportunity or offer to, whether directly or indirectly, develop, operate or own any FSRU a “ Subsequent Opportunity ”); provided that , the foregoing shall not prevent any member of the Golar Group from (i) developing, operating, recontracting or owning a Permitted FSRU or (ii) engaging in a Declined Subsequent Opportunity.


29.2	Notwithstanding the foregoing, following the occurrence of a Schlumberger Co Fall-Away Event, nothing contained in Clause 29.1 shall restrict the business and operations (and solely the business and operations) of the Schlumberger Co.


29.3	Each party hereto agrees, and GLNG on behalf of each other member of the Golar Group agrees that, the restrictions contained in this Clause 29 contain reasonable limitations as to time, geographical area, and scope of activity to be restrained.

29.4

If all or any portion of a covenant in Clause 29.1 or Clause 29.2 is held unreasonable or unenforceable by a court, arbitrator or agency having valid jurisdiction in an unappealed final decision to which Stonepeak is a party, (i) the members of the Golar Group (and/or the Schlumberger Co, as applicable) shall be bound by any lesser covenant (including any lesser time period) subsumed within the terms of such covenant that imposes the maximum duty permitted by applicable law, as if the resulting covenant were separately stated and made a part of this Agreement and (ii) such decision shall not affect the application of such covenants in any jurisdiction to which such decision does not expressly apply.

29.5

With respect to any Subsequent Opportunity which a member of the Golar Group proposes to pursue during the Exclusivity Period (or, if applicable, the Schlumberger Co prior to the occurrence of a Schlumberger Co Fall-Away Event), such member of the Golar Group shall, and GLNG shall cause the applicable member of the Golar Group to, as soon as possible and no later than 15 days prior to entering into any binding commitment to or understanding in connection with such Subsequent Opportunity, offer the Company the opportunity to pursue such Subsequent Opportunity by providing (i) a written notice to the Company setting for all of the material terms and conditions (including any relevant pricing terms) on which the applicable member of the Golar Group proposes to consummate such Subsequent Opportunity (an “ Opportunity Notice ”), (ii) any other information reasonably requested by Stonepeak and any other information prepared for the board and/or senior officers of the applicable member of the Golar Group (including, if applicable, substantially final draft primary transaction documents, the management presentation, financial projections, due diligence reports and information memoranda relating to such Subsequent Opportunity) and (iii) to the extent additional or updated information becomes available with respect to any of the aforementioned information, such updated information as soon as reasonably practicable, but in any event within two (2) Business Days after it becomes available. Each member of the Golar Group shall, and GLNG shall cause each member of the Golar Group to, ensure that the Company is not prohibited from receiving any information referenced in this Clause 29.5 or otherwise required to enter into any non-compete or other limitation (whether binding on the Company or any of its Shareholders) in connection with receiving such information.

(a)

In the event Stonepeak desires for the Company to pursue such Subsequent Opportunity, then Stonepeak shall notify the Board of such fact in writing (an “ Approved Subsequent Opportunity ”) within thirty days of receipt by the Board of all information to be delivered in respect of such Subsequent Opportunity pursuant to Section 29.5 and the Board shall cause the Company to negotiate in good-faith and otherwise consummate the Approved Subsequent Opportunity on terms and conditions substantially similar to those set forth in the Opportunity Notice, with such changes as the Board may agree. In connection with pursuing any Approved Subsequent Opportunity which is approved by the Board (i) each Shareholder shall commit to provide additional capital contributions with respect to such Approved Subsequent Opportunity in accordance with Section 8.1(b), and (ii) take, or cause any Director on the Board appointed by it to take, any actions which may be reasonably necessary in connection with consummating such Approved Subsequent Opportunity.

(b)

In the event that Stonepeak elects for the Company to decline to pursue a Subsequent Opportunity (a “ Declined Subsequent Opportunity ”) within thirty days of receipt by the Board of all information to be delivered in respect of such Subsequent Opportunity pursuant to Section 29.5, then the applicable member of the Golar Group may pursue such Declined Subsequent Opportunity on terms not more favourable to such member of the Golar Group, in any respect, than those set forth in the Opportunity Notice; provided if such member of the Golar Group does not enter into definitive documentation with respect to a Declined Subsequent Opportunity within one hundred and eighty (180) days of receipt by the Board of all information to be delivered in respect of such Declined Subsequent Opportunity pursuant to Section 29.5, such member of the Golar Group shall, and GLNG shall cause such member of the Golar Group to, provide a new Opportunity Notice to the Company and comply with the terms of this Clause 29.5 prior to pursuing such Declined Subsequent Opportunity. If the Declined Subsequent Opportunity then later becomes an Approved Subsequent Opportunity in accordance with the terms and conditions of Clause 29.5(a) and the terms of such Approved Subsequent Opportunity are substantially similar to those set forth in the original Opportunity Notice (pursuant to which such Subsequent Opportunity originally became a Declined Subsequent Opportunity), the Company shall be liable under the Management Services Agreement, or in accordance with its principles, for the costs related to the Subsequent Opportunity incurred between the date of the original Opportunity Notice and the second Opportunity Notice. For the avoidance of doubt, GLNG shall not, and GLNG shall cause each member of the Golar Group not to, pursue any Subsequent Opportunity which is an Approved Subsequent Opportunity other than through the Company.


30.	OMNIBUS AGREEMENT

30.1

Anything in this Agreement to the contrary notwithstanding, all Golar Omnibus Agreement Actions (including with respect to rights under the Omnibus Agreement that inure to the benefit of the Company by virtue of the provisions of Section 29 of this Agreement) will be taken at the exclusive direction of the Board acting at the exclusive direction of Stonepeak. GLNG shall take all actions, and shall cause its directors and Affiliates to take all actions, in furtherance of the foregoing at the direction of Stonepeak. Stonepeak shall also have the right to direct the Board to (i) cause the consideration to be received by the Company or any of its Subsidiaries in any transaction arising under the Ominbus Agreement to be in the form of cash or the market value equivalent of of MLP Units or (ii) cause any cash consideration received in any such transaction to be immediately invested in MLP Units. In addition to Stonepeak directing the Board with respect to any Golar Omnibus Agreement Action, Stonepeak shall be permitted to authorize, in lieu of the Management Team, its employees, agents or reprentatives to act directly on behalf of the Company or the applicable Subsidiary to administer and implement such Golar Omnibus Agreement Action.

[ Signature Pages Follow ]

This Agreement has been executed as a deed and delivered on the date stated at the beginning of it.



Executed as a deed and delivered by GOLAR POWER LIMITED acting by Pernille Noraas in the presence of : /s/ Abigail Baltar ____________________________ Name Address Occupation Accountant		/s/ Pernille Noraas ____________________________ Attorney–in-fact
Executed as a deed and delivered by STONEPEAK INFRASTRUCTURE FUND II CAYMAN (G) LTD acting by Michael Dorrell a director in the presence of: /s/ Nari Grause ____________________________ Name Nari Grause Address Occupation: Executive Assistant		/s/ Michael Dorrell ____________________________ Director

Executed as a deed and delivered by Golar LNG Limited acting by Pernille Noraas in the presence of: /s/ Abigail Baltar _____________________ Name Abigail Baltar Address Occupation Accountant		/s/ Pernille Noraas __________________________ Attorney-in-fact

SCHEDULE 1

COMPANY SUBSIDIARIES



Name	Jurisdiction	Company Number	Registered Office
LNG Power Limited	England & Wales	9740657
Golar FSRU8 Corporation	Marshall Islands		Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.
Golar Hull M2023 Corporation	Marshall Islands	46820	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.
Golar Hull M2026 Corporation	Marshall Islands	46890	Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH 96960.

Schedule 2

Reserved Matters


(a)	Any change in the objectives or general nature of

(i) the Business of the Company; or


(ii)	the business of any Company Subsidiary

from that described in its relevant bye-laws or articles of association;


(b)	Approval of the terms of the Management Incentive Scheme and any material amendments thereto;


(c)	Changes to the Management Team;


(d)	Approval of, and any material revision of, the Strategic Business Plan, Budgets and any customer contract;


(e)	The approval of budgets for the conversion of Golar Celcius and Golar Penguin, anticipated to be in the region of USD65M;


(f)	The sale of material assets, including (but not limited) shares in the Company Subsidiaries;


(g)	Investment in the construction or acquisition of new assets;


(h)	Any change in the share capital of the Company or any Company Subsidiary or, or the issuance of any additional shares in the Company or any Company Subsidiary or of any option or right to subscribe for additional shares in the Company;


(i)	Any amendment of the Bye-Laws of the Company or any Company Subsidiary;


(j)	Any resolution for the voluntary winding‑up of the Company or a Company Subsidiary, dissolution, extinction or termination of the winding‑up status;

(k)

Any stock split, reverse stock split, amalgamation, merger (including merger or shares), consolidation or spin‑off of the Company or any Company, as well as the merger of another person, or of shares or quotas of another person, into the Company or any Company Subsidiary, or any other corporate reorganisation or absorption by the Company or any Company Subsidiary of assets from any other person;


(l)	Save as expressly provided in this Agreement, approval of an IPO;


(m)	The voting procedure for any ordinary or extraordinary meeting of the Company or any Company Subsidiary;


(n)	Entry into, or authorization to enter into, by the Company or any Company Subsidiary, any instrument, contract, agreement or amendment to any such instrument, contract or agreement granting to a third party any right over the profits of the Company or any Company;


(o)	Creating, incurring or assuming any indebtedness by the Company or any Company Subsidiary in an aggregate amount exceeding USD10,000,000;


(p)	Approving any agreement or settlement in an arbitral proceeding, judicial or administrative proceedings involving the Company or a Company Subsidiary and, in relation to any other agreement, which correspond to an amount, individually or in aggregate, equal to or greater than USD25,000,000.


(q)	Approval of any budget provided by Golar Management Ltd. (or any other person) in connection with the Management Services Agreement, or any payment to any third party in connection therewith.

(r)

SCHEDULE 3

MANAGEMENT TEAM



Name	Position
Eduardo Antonello Celso Silva CCO	CEO
Eduardo Maranhao	CFO
Celso Silva	CCO

AGREED FORM

SCHEDULE 4

PERMITTED FSRUs



NAME Golar Spirit	CALL SIGN V7HA4	FLAG Marshall Islands
Golar Winter	V7RE2	Marshall Islands
Golar Freeze	V7TH4	Marshall Islands
Nusantara Regas Satu	POIN	Indonesia
Golar Igloo	V7AE6	Marshall Islands
Golar Eskimo	V7AD9	Marshall Islands
Golar Tundra	V7AF3	Marshall Islands

AGREED FORM

Schedule 5

Deed of Adherence to Shareholders Agreement

This DEED is made on [●] by [●] of [●] (the “ new Interest Holder ”).

R E C I T A L S:

The new Interest Holder is to purchase/subscribe for Interests in Golar Power Limited, a a company organised and existing under the laws of Bermuda and having its registered office at 2nd floor S.E. Pearman Building, 9 Par-la-Ville Road Hamilton HM11, Bermuda (the “ Company ”) from [●].

This Deed is made by the new Interest Holder in compliance with Clause 10.1, of a Shareholders’ Agreement dated [●] made between inter alia [•] (the “ Agreement ”).

THIS DEED WITNESSES as follows:

The new Interest Holder confirms that it has been supplied with a copy of the Agreement.

The new Interest Holder undertakes to be bound by the Agreement in all respects as if the new Interest Holder was a party to the Agreement and named in it as an Interest Holder and to observe and perform all the provisions and obligations of the Agreement applicable to or binding on an Interest Holder under the Agreement insofar as they fall to be observed or performed on or after the date of this Deed.

This Deed is made for the benefit of (a) the parties to the Agreement and (b) every other person who after the date of the Agreement (and whether before or after the execution of this Deed) assumes any rights or obligations under the Agreement or adheres to it.

The address and email address of the new Interest Holder for the purposes of Clause 26 (Notices) of the Agreement is as follows:

[●]
[Email: l ]
(attention of l )

This Deed is governed by and shall be construed in accordance with English law. Any matter, claim or dispute arising out of or in connection with this Deed, whether contractual or non-contractual shall be governed by and determined in accordance with English law.

[ Signature Page Follows ]

AGREED FORM

Schedule 6

Structure Charts

AGREED FORM

Exhibit 1

Assumptions

AGREED FORM

Private and Confidential

Dated July 25, 2016

(1) Golar GLS UK Limited

(2) Schlumberger B.V.

JOINT VENTURE
AND
SHAREHOLDERS’ AGREEMENT

CONTENTS

1. Definitions 2

2. Interpretation 10

3. Creation of the Joint Venture 12

4. Incorporation of the Company 12

5. Closing 13

6. Financing 15

7. Business 19

8. Directors and Board Meetings; Approvals 25

9. Business Plan, Budgets, Financial Information and Audits 32

10. Operation of the Company 35

11. Profits Distributions 36

12. Transfer of Shares and Related Matters 36

13. Non Compete 38

14. Term and Termination 39

15. Confidentiality 39

16. Costs 40

17. Assignment 40

18. Notices 40

19. General 41

20. Governing Law and Arbitration 42

21. Business Ethics 42

EXECUTION PAGE 46

Schedule 1 Transfer Provisions 47

Schedule 2 Determination of Fair Market Value 51

Schedule 4.1 Articles 55

Schedule 4.5 Initial Board 64

Schedule 4.8 Supplemental Deed 65

Schedule 5.2.1(c) Form of minutes of extraordinary shareholders’ meeting 66

Schedule 5.2.3(a) Form of minutes of Board meeting 69

Schedule 5.2.2(e) Form of parent company guarantee 74

Schedule 7.3 Target Project in Mauritania and Senegal 76

Schedule 8.4.2(d) Human Resources Appendix 77

Schedule 9.1 Initial Business Plan 78

Schedule 9.3 Initial Budget 84

JOINT VENTURE
AND
SHAREHOLDERS’ AGREEMENT

DATE: July 25, 2016

PARTIES:


(1)	Golar GLS UK Limited , a company organized under the laws of England and Wales, whose registered office is at 13 ^th Floor, 1 America Square, Crosswall, London UK EC3N 2LB (Company Number 10234146) (“ Golar ”); and


(2)	Schlumberger B.V. , a company incorporated under the laws of the Netherlands with its registered address at Parkstraat 83-89, 2514 JG, The Hague, Zuid-Holland, Netherlands (“ Schlumberger ”).

Golar and Schlumberger, and any person or entity adhering to this Agreement after the date hereof in accordance and pursuant to the terms of this Agreement, are hereafter referred to collectively as the “ Parties ” and individually as a “ Party ”.

WHEREAS:

(A) Golar is one of the world’s largest independent owners and operators of LNG carriers and is developing FLNG and FSRU technologies, and has a strategy of developing both its midstream and upstream operations;

(B) Schlumberger’s Group is the world’s leading supplier of technology, project management and information solutions to the oil & gas industry;

(C) Schlumberger Production Management (“ SPM ”) is a business segment of the Schlumberger Group working with upstream customers to develop and manage oil and gas assets through the deployment of world class technology and processes. The SPM offering may include field development planning, operational planning, technical and administrative support services, subsurface interpretation and characterization, reservoir modelling, as well as the management of field operations (including drilling, completions and recompletions, workovers and well interventions, construction and operation of production facilities and infrastructure) (“ SPM Capabilities ”);

(D) The Parties have discussed opportunities to primarily develop projects for the conversion of natural gas reserves to LNG and potentially other liquid products using processing and FLNG facilities, by combining Golar’s position in the LNG and FLNG business along with Schlumberger’s SPM Capabilities as described in Recital (C) above, and in certain cases to offer limited financing to ultimate resource owners and partners to enable the development of such assets;

(E) The Parties are therefore interested in a long-term cooperation to address brownfield and greenfield natural gas resources and other gas liquefaction and export opportunities, whereby Golar shall deliver maritime expertise and liquefaction facilities in the form of an FLNG vessel, and Schlumberger shall supply the SPM Capabilities to enable the production of gas reserves;

(F) Golar and Schlumberger plan to co-operate and become one of the leaders in the extraction of gas from gas resources and other gas liquefaction and export opportunities and the production and delivery of corresponding LNG by:

- Providing the market with a fully integrated offering for offshore stranded gas reservoirs on a worldwide basis;

- Marketing the capabilities of this Joint Venture that best fit such an objective whilst maintaining material profitability and efficiency; and

- Providing flexible business models to the partners/clients involved, thereby enabling them to optimise upfront capital investments in return for appropriate remuneration to the Joint Venture during production operations;

(G) Golar and Schlumberger have agreed to establish a joint venture (the “ Joint Venture ”) through the medium of the Company to achieve the purpose set out above;

(H) Golar and Schlumberger have agreed to enter into this Agreement to (i) set out the terms and conditions on which they have agreed to establish their Joint Venture through the Company, (ii) make provision for the management and administration of the affairs of the Company and (iii) set out their rights and obligations as Shareholders of the Company.

IT IS AGREED AS FOLLOWS:


PART I	Definitions and Interpretation


1.	Definitions

In this Agreement and in the Recitals, the following words and expressions have the following meanings:

Accounting Firm has the meaning ascribed to it in Clause 6.6.3 ;

Accounting Policies means Company accounts under US GAAP;

Additional Drawdown Date has the meaning ascribed to it in Clause 6.4.1 ;

Additional Drawdown Notice has the meaning ascribed to it in Clause 6.4.1 ;

Affiliate means with respect to any person, any other person that Controls, is Controlled by, or is under common Control with such first person;

Agreement means this agreement and its Schedules, Exhibits and Annexes, as may be amended from time to time by the Parties in accordance with the terms of this agreement;

Annual Budget has the meaning set forth in Clause 9.4.1 ;

Appraisal Deadline has the meaning ascribed to it in Schedule 2 ;

Articles means the articles of association of the Company in the agreed form attached in Schedule 4.1 , as may be amended from time to time;

Asset means any asset, field or block owned, to be owned or acquired in connection with a Committed Project, or assets, fields or blocks in which rights for exploration, development and production of hydrocarbons may be the subject of a Committed Project;

Auditors means Ernst & Young S.A. 35E avenue John F. Kennedy L-1855 Luxembourg or any auditor appointed in accordance with the Articles and subject to the terms of this Agreement;

Available Assets means, as of any date, the excess of (i) the cash and cash equivalent items held by the Company over (ii) the sum of the amount of such items as the Board determines to be necessary or appropriate for the payment of the

Company’s Operating Expenses, debt requirements, liabilities and other obligations (whether fixed or contingent, current or future), or for the establishment of appropriate reserves for such expenses, liabilities and obligations as may arise, including the maintenance of adequate working capital for the continued conduct of the Company’s investment activities and operations, all in accordance with the Initial Budget, the Annual Budget or the Revised Annual Budget;

Base Case has the meaning ascribed to it in Clause 7.2.3(c) ;

Board means the board of directors of the Company for the time being and from time to time;

Business has the meaning set forth in Clause 7.1.1 ;

Business Day means a day (other than a Saturday or Sunday) on which clearing banks are ordinarily open for business in the City of London;

Business Ethics Laws means all of the laws relating to bribery, corruption, money laundering, fraud, use of terrorist proceeds, sanctions, bid rigging, collusion or anti-trust, forced labour, human trafficking or similar activities: (i) of the country of incorporation of each Party and each Party's ultimate parent company and of the principal place of business of such ultimate parent company and all regulations applicable to any stock exchange in which the shares of the Company and/or Shareholders are traded and (ii) all of the provisions of the United Kingdom Bribery Act 2010, Modern Slavery Act 2015 and the United States Foreign Corrupt Practices Act and internationally-recognised ethical standards, including the World Bank’s “Summary of World Bank Group Integrity Guidelines” dated September 2010; and with respect to each of (i) and (ii), where there is a conflict, the most onerous provision will apply;

Business Plan shall mean either the Initial Business Plan or any business plan agreed pursuant to Clause 9.2, as the case may be;

Capital Commitment shall mean the total funds a Shareholder has agreed will be made available by such Shareholder for Share subscriptions or other debt or equity investments in the Company or any Project Company;

Capital Contribution means, with respect to any Shareholder, the capital contributed pursuant to a single Drawdown or the aggregate capital so contributed, as the context may require, by such Shareholder to the Company pursuant to this Agreement;

Chairman of the Board means the Chairman of the Board of the Company appointed in accordance with Clause 8.1(b) ;

Change of Control means in relation to an entity, a change in the identity of the person or persons acting together who Control that entity;

Closing has the meaning set forth in Clause 5.1.1 ;

Closing Date has the meaning set forth in Clause 5.1.1 ;

Committed Project has the meaning set forth in Clause 7.4.4(d) ;

Company means OneLNG SA, the company to be incorporated in Luxembourg in accordance with Clause 4.1 ;

Confidential Information has the meaning ascribed to it in Clause 15.1 ;

Control means when a person (i) holds directly or indirectly part of the share capital of an entity granting the majority of the voting rights in the general meeting of shareholders of such entity; (ii) holds directly or indirectly the majority of the voting rights in the general meeting of shareholders of an entity pursuant to an agreement or understanding with other shareholders of such entity; (iii) has the ability to determine de facto decisions at the general meeting of shareholders by using the voting rights it holds in such entity; (iv) exercises a dominant influence by virtue of particular relationships with an entity; or (v) has the power, whether through voting rights or pursuant to an agreement and, whether directly or indirectly, to appoint more than half of the members of the board (or similar corporate body) of an entity; For the purpose of this Agreement, GMLP will be deemed an Affiliate.

Defaulting Shareholder has the meaning ascribed to it in Clause 6.5.1 ;

Defined Competitor means (i) in respect of Golar, the following entities and their respective Affiliates: Exmar, Hoegh, SBM, Excelerate and (in relation to FLNG technology) Petronas; and (ii) in respect of Schlumberger, the following entities and their respective Affiliates: Halliburton, BakerHughes, Weatherford, General Electric, NOV, and FMC;

Directors means the Schlumberger Directors and the Golar Directors, each being a Director;

Distress means a financial state of affairs for the Company in which the Company is not able to meet its short term financial obligations after exhausting any currently available debt financing;

Distress Notice has the meaning ascribed to it in Clause 6.6.1 ;

Distress Report has the meaning ascribed to it in Clause 6.6.5 ;

Distress Response Notice has the meaning ascribed to it in Clause 6.6.2 ;

Distributable Cash means cash received by the Company from the sale or other disposition of, or dividends, interest or other income from or in respect of, an investment, or otherwise received by the Company from any source, including Capital Contributions, to the extent that such cash constitutes Available Assets;

Drawdowns shall mean the Capital Contributions made or to be made to the Company pursuant to the terms of this Agreement from time to time by the Shareholders pursuant to a Drawdown Notice.

Drawdown Date shall have the meaning set forth in Clause 6.3.2 ;

Drawdown Notice shall have the meaning set forth in Clause 6.3.2;

EBITDA has the meaning ascribed to it in Clause 7.2.3(e) ;

Encumbrance with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance or other adverse claim of any kind in respect of such property or asset under any applicable laws. For the purposes of this Agreement, a person shall be deemed to own subject to an Encumbrance any property or asset

that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset;

Event of Default has the meaning ascribed to it in Clause 6.5.1 ;

Excluded Project has the meaning ascribed to it in Clause 7.4.4(e) ;

Fair Market Value means the value of a security or asset determined as set forth in Schedule 2 or in Clause 6.6 as the case may be;

Fair Market Value Report has the meaning ascribed to it in Clause 6.6.8 ;

First Appraiser has the meaning ascribed to it in Schedule 2;

FLNG means floating LNG operations employing technologies designed to enable the development of hydrocarbon resources and produce LNG and potentially other liquid products;

FMV Notice has the meaning ascribed to it in Schedule 2 ;

FSRU means a floating storage regasification unit;

Funding Shareholder has the meaning ascribed to it in Clause 6.6.7 ;

GMLP means Golar LNG Partners LP;

Golar Call Option has the meaning ascribed to it in Schedule 1, Section 4.1 ;

Golar Commitment shall mean United States Dollars Two Hundred And Fifty Million (US$250,000,000) only;

Golar Directors means the members of the Board appointed by Golar in accordance with Clause 8.1 or Clause 8.2 , as the case may be;

Golar Drag-Along Right has the meaning ascribed to it in Schedule 1, Section 4.4(a) ;

Golar Option Shares has the meaning ascribed to it in Schedule 1, Section 4.1 ;

Golar Share means any Share held by Golar;

Group means, in relation to any particular entity, that entity, any Holding Company of that entity, any Subsidiary of that Holding Company, and any Subsidiary of that entity and “ Group Company ” shall mean any one or more of such entities (but, for the avoidance of doubt references to a Shareholder’s Group shall exclude the JV Group;

High Case has the meaning ascribed to it in Clause 7.2.3(b) ;

High Value has the meaning ascribed to it in Schedule 2 ;

Holding Company means, in relation to an entity, an entity which Controls that entity;

Initial Board has the meaning ascribed to it in Clause 4.5 ;

Initial Budget has the meaning ascribed to it in Clause 9.3 ;

Initial Business Plan has the meaning ascribed to it in Clause 9.1 ;

Initial Shareholding has the meaning ascribed to it in Clause 4.4 ;

Joint Venture has the meaning set forth in Recital (G) ;

JV Group means the Company and its Subsidiaries and JV Group Company means any one of them;

LCIA has the meaning ascribed to it in Clause 20.2 ;

Legal Requirements (i) all applicable laws and regulations (including any regulation or rule issued by any competent governmental authority), as enacted and amended from time to time and any law, ordinance, rule award, judgment or decree, whether foreign or domestic, and whether national, local or supranational, as enacted and amended from time to time; and (ii) all regulations applicable to any stock exchange in which the shares of the Company and/or the Shareholders are traded;

LNG means liquefied natural gas;

Lock-up Period shall be the period ending on the seventh anniversary of the Closing Date;

Low Case has the meaning ascribed to it in Clause 7.2.3(a) ;

Low Value has the meaning ascribed to it in Schedule 2 ;

Management Team has the meaning ascribed to it in Clause 8.4.2(a) ;

Mid-Range has the meaning ascribed to it in Schedule 2 ;

NIBD has the meaning ascribed to it in Clause 7.2.3(d) ;

Non-Defaulting Shareholder has the meaning ascribed to it in Clause 6.5.1(e) ;

Offered Shares has the meaning ascribed to it in Schedule 1, Section 2(a) ;

Offeree has the meaning ascribed to it in Schedule 1, Section 2(a) ;

Operating Expenses shall mean the costs, expenses and liabilities that are incurred by or arise out of the operation and activities of the Company, as determined by the Board in the Initial Budget, the Annual Budget or the Revised Annual Budget, including: (i) costs and expenses incurred in connection with the formation and organization of the Company, as determined in good faith by the Shareholders, including out-of-pocket legal, accounting, printing, travel and filing fees and expenses (ii) the fees and expenses relating to Target Projects, unconsummated investments, indebtedness (including interest thereon), including the evaluation, acquisition, holding and disposition thereof, to the extent that such fees and expenses are not reimbursed by an investment or other third Person; (iii) legal, custodial, auditing and accounting expenses, including expenses associated with the preparation of the Company’s financial statements and tax returns; (iv) banking, legal, accounting and consulting expenses; (v) appraisal and valuation expenses; (vi) expenses related to organizing entities through or in which investment Assets may be made; (vii) expenses for the remuneration, and reimbursement of expenses of the Management Team and reimbursement of expenses of the Board members; (viii) premiums for insurance protecting the Company, its representatives and employees

from liabilities to third Persons in connection with the Company’s investment and other activities;

Other Shareholder has the meaning ascribed to it in Schedule 2 ;

Ownership Interest all and any right, title and/or interest of a person (directly or indirectly) in, to or in respect of any person(s) or asset(s);

Permitted Transferee has the meaning ascribed to it in Schedule 1, Section 1(b) ;

Potential Purchaser has the meaning ascribed to it in Schedule 1, Section 2(a) ;

Project Business Plan has the meaning given to it in Clause 7.4.4 ;

Project Company means any entity established by the Company or the Shareholders for the purposes of developing or implementing any Committed Project;

RDS shall mean in respect of each Target Project a resource development solution jointly marketed by the Parties to implement the cooperation of the Parties as per the present Agreement;

Recognized Investment Banker has the meaning ascribed to it in Schedule 2 ;

Reserved Matter has the meaning ascribed to it in Clause 8.6.1 ;

Restricted Business has the meaning ascribed to it in Clause 13.1 ;

Revised Annual Budget has the meaning set forth in Clause 9.5.1 ;

Sales Documentation has the meaning ascribed to it in Schedule 1, Section 3(a) ;

Schlumberger Call Option has the meaning ascribed to it in Schedule 1, Section 4.2 ;

Schlumberger Commitment shall mean United States Dollars Two Hundred And Fifty Million (US$250,000,000) only;

Schlumberger Director means the members of the Board appointed by Schlumberger in accordance with Clause 8.1 or 8.2 as the case may be;

Schlumberger Drag-Along Right has the meaning ascribed to it in Schedule 1, Section 4.4(b) ;

Schlumberger Group means Schlumberger together with its Affiliates, excluding after the Closing the JV Group ;

Schlumberger Option Shares has the meaning ascribed to it in Schedule 1, Section 4.2 ;

Schlumberger Share means any Share held by Schlumberger;

Second Appraiser has the meaning ascribed to it in Schedule 2 ;

Selling Party has the meaning ascribed to it in Schedule 1, Section 2(a) ;

Share means any share in the capital of the Company of whatever class;

Shareholder means either of Golar or Schlumberger, and “ Shareholders ” means both of them;

Sponsor Vote means (i) when at the level of the Shareholders, a vote that includes the affirmative vote of both Golar and Schlumberger, and (ii) when at the level of the Board, a vote that includes the affirmative vote of at least one Golar Director and at least one Schlumberger Director;

Start Date has the meaning ascribed to it in Schedule 2 ;

Subsidiary means, with respect to an entity or person, any other entity or person in which it has, directly or indirectly through another entity or person, the Control of such entity or person; and for the purpose of this Agreement, GMLP shall be deemed to be a Subsidiary of Golar;

Target Project means an opportunity identified by either Shareholder, the Board or the Management Team for potential collaboration and cooperation between the Parties or their respective Affiliates (as the case may be) through the JV Group within the scope of the Business;

Territory means the worldwide market;

Third Appraiser has the meaning ascribed to it in Schedule 2 ;

Third Value has the meaning ascribed to it in Schedule 2 ;

Transfer means any transaction, in the form of a conveyance, sale, payment, pledge, lien, mortgage, gift, or otherwise concluded with or without consideration, absolutely or conditionally, voluntarily or involuntarily, with or without judicial proceedings, resulting in the transfer of the ownership of shares, assets, other ownership interest or rights or securities (and rights or obligations relating to shares or securities including but not limited to (i) all changes, transfers, sales or assignments of partial (e.g. beneficial interest, usufruct, or ownership without beneficial interest) or full title by any legal means, ii) any transfer with or without usufruct, loan, constitution of a guarantee as a result of a pledge of shares or other ownership interests or other type of security interest (in which case the transfer of the shares or other ownership interests resulting from the performance of such pledge shall not be considered as a Transfer);

Transfer Provisions has the meaning ascribed to it in Clause 12.3(a) ;

Trigger Party has the meaning ascribed to it in Schedule 2 ;

US GAAP means the generally accepted accounting principles adopted by the U.S. Securities and Exchange Commission (SEC); and

VAT means value added tax.


2.	Interpretation

In this Agreement, unless otherwise specified:

(a)

references to an “ entity ” or “ company ” shall be construed so as to include any company, corporation or other body corporate, wherever and however incorporated or established and references to a “ person ” include any individual, firm, body corporate, unincorporated association, government, state or agency of a state, local or municipal authority or government body or any joint venture, association or partnership (whether or not having separate legal personality);


(b)	references to “ Clauses ” are to Clauses of this Agreement;


(c)	a reference to an “ agreement ” or other document is a reference to that agreement or document as supplemented or amended from time to time;

(d)

the words “ include ” and “ including ” are to be construed without limitation, general words introduced by the word “ other ” are not to be given a restrictive meaning by reason of the fact that they are preceded by words indicating a particular class of acts, matters or things and general words are not to be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words;


(e)	unless the context otherwise requires, words importing the singular shall also include the plural and vice versa;


(f)	references to any English legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official, or any legal concept or thing shall in respect of any jurisdiction other than England be deemed to include what most nearly approximates in that jurisdiction to the English legal term;


(g)	a reference to a date which is not a Business Day shall be construed as a reference to the next succeeding Business Day;


(h)	headings are for convenience only and shall not affect this Agreement's interpretation;


(i)	in this Agreement, unless otherwise specified:


(i)	a reference to any statutory provision is to that provision as in force at the date of this Agreement, includes any order, instrument or regulation made or issued under it and shall be construed as a reference to any statutory provision of which it is a re-enactment or consolidation; and


(ii)	the expression “ in the agreed form ” in relation to a document means a document in a form approved and for the purposes of identification initialled by or on behalf of each of the parties.


PART II	Creation of the Joint Venture/Formation of the Company/Closing


3.	Creation of the Joint Venture


3.1	Schlumberger and Golar agree and undertake to form the Joint Venture through the medium of the Company for the purpose of undertaking the Business.


3.2	In relation to the Business and subject to the terms and conditions of this Agreement, Schlumberger and Golar undertake to invest funds in the Company, up to the Schlumberger Commitment and the Golar Commitment, respectively.


4.	Incorporation of the Company


4.1	Schlumberger and Golar acknowledge and agree that, as soon as practically possible from the date hereof and prior to Closing, Golar, in cooperation with Schlumberger, shall take all reasonable and necessary actions to set up the Company as a societe anonyme, and the Parties will procure that the Company adopts the Articles as its articles of association.


4.2	The Parties undertake to collaborate with each other to facilitate the incorporation of the Company including by taking any action and providing to each other all information and documents necessary for the incorporation of the Company and the opening of a bank account of the Company.


4.3	The name of the Company shall be OneLNG SA.

4.4

The Company shall have an initial share capital of United States Dollars One Hundred Thousand (US$100,000) and divided into ten thousand (10,000) ordinary shares, each of a nominal value of United States Dollars Ten (US$10), forty-nine percent (49%) of which will be held by Schlumberger and fifty-one percent (51%) of which will be held by Golar (the “ Initial Shareholding ”). At Closing, the Company shall have a share capital of United States Dollars Twenty Million (US$20,000,000) divided into two million (2,000,000) ordinary shares, each of a nominal value of United States Dollars Ten (US$10), forty-nine percent (49%) of which will be held by Schlumberger and fifty-one percent(51%) of which will be held by Golar.

4.5

The Parties (i) acknowledge that the Board of the Company shall be composed as provided under Clause 8 below, (ii) acknowledge that, in accordance with the principles of Clause 8.1 below, immediately following Closing, the Board will be composed of the persons identified in Schedule 4.5 (the “ Initial Board ”), (iii) acknowledge that the first Chairman of the Board will be the person identified in Schedule 4.5 and (iv) therefore undertake to vote at the general meeting of the shareholders of the Company to be held at Closing, in favour of the persons identified in Schedule 4.5 for their appointment as members of the Board and in favour of the person mentioned in Schedule 4.5 for his appointment as Chairman of the Board.


4.6	The Parties acknowledge that the Auditor will be appointed as Auditor of the Company and therefore undertake, at the general meeting of the shareholders of the Company to be held at Closing, to vote in favour of their appointment as Auditor of the Company.


4.7	The Parties acknowledge that a Golar nominee will be appointed as secretary at meetings of the Board and therefore undertake to cause their representative of the Board, at each

Board meeting of the Company, to vote in favour of its appointment as secretary of such meeting.


4.8	The Parties undertake to cause the Company to adhere to this Agreement at Closing by executing the adherence agreement attached in Schedule 4.8 .


5.	Closing


5.1	Date and Place of Closing

5.1.1

Unless this Agreement shall have been terminated and the transactions contemplated hereby shall have been abandoned pursuant to Clause 5.3 , the closing of the formation of the Joint Venture and the completion of this Agreement (the “ Closing ”) will take place at the offices of United International Management S.A., 5 Avenue Gaston Diderich, Luxembourg L-1420, five (5) Business Days after the execution of this Agreement or on such other date as may be agreed between the Parties (the “ Closing Date ”).


5.2	Obligations of the Shareholders on the Closing Date


5.2.1	Obligations of Schlumberger

On the Closing Date Schlumberger shall:

(a) pay an amount of United States Dollars Nine Million Seven Hundred And Fifty One Thousand (US$9,751,000) by wire transfer in immediately available funds to the bank account of the Company, to be contributed to the Company in consideration for the nine hundred seventy five thousand and one hundred (975,100) Shares issued and allotted at Closing to Schlumberger;

(b) deliver to Golar reasonably satisfactory evidence that the amount to be contributed to the Company in consideration for the subscription of the Schlumberger Shares has been duly paid by wire transfer in immediately available funds;

(c) undertake any action required for an extraordinary shareholders’ meeting (in respect of which an agreed form of minutes is attached in Schedule 5.2.1(c) ) to be held before a Luxembourg notary in order to increase the share capital of the Company.


5.2.2	Obligations of Golar

On the Closing Date Golar shall:

(a) deliver to Schlumberger a copy of the incorporation deed including the Articles of the Company;

(b) pay an amount of United States Dollars Ten Million One Hundred And Forty Nine Thousand (US$10,149,000) by wire transfer in immediately available funds to the bank account of the Company, to be contributed to the Company in consideration for the one million fourteen thousand and nine hundred (1,014,900) Shares issued and allotted at Closing to Golar;

(c) deliver to Schlumberger reasonably satisfactory evidence that the amount to be contributed to the Company in consideration for the subscription of the Golar Shares has been duly paid by wire transfer in immediately available funds;

(d) undertake any action required for an extraordinary shareholders’ meeting (in respect of which an agreed form of minutes is attached in Schedule 5.2.1(c) ) to be held before a Luxembourg notary in order to increase the share capital of the Company; and

(e) deliver to Schlumberger a parent company guarantee from Golar LNG Ltd (in the form attached in Schedule 5.2.2(e) ), which undertakes and guarantees that Golar shall perform all of its obligations under this Agreement.


5.2.3	Obligations of the Company

(a) On the Closing Date the Company shall:


(i)	deliver to the Shareholders (a) a copy of the minutes of the Company’s shareholders meeting (such meeting to be held immediately after the incorporation of the Company) evidencing (i) the appointment of the members of the Initial Board, and (ii) the appointment of Ernst & Young S.A. 35E avenue John F. Kennedy L-1855 Luxembourg as Auditors of the Company;

(ii)

deliver to the Shareholders a copy of the minutes of the Board meeting (attached in Schedule 5.2.3(a) ) evidencing (i) the appointment of the Chairman of the Board, (ii) the convening of an extraordinary Shareholders’ meeting to be held before the notary in order to increase the Company’s share capital through the contribution of funds in consideration for the nine hundred seventy five thousand and one hundred (975,100) Shares to be issued and allotted at Closing to Schlumberger and for the one million fourteen thousand and nine hundred (1,014,900) Shares to be issued and allotted at Closing to Golar, and (iii) the passing of a resolution approving this Agreement and authorising the execution on behalf of the Company of an adherence agreement on the terms attached in Schedule 4.8 ;


(iii)	deliver to the Shareholders a copy of the notary deed whereby the Company’s share capital will have been increased, the nine hundred seventy five thousand and one hundred (975,100) Shares issued to Schlumberger and the one million fourteen thousand and nine hundred (1,014,900) Shares issued to Golar, and an unblocked funds certificate issued by the notary;


(iii)	deliver to the Shareholders a copy of the up-to-date shareholders’ register of the Company pursuant to the issuance of the Schlumberger Shares and of the Golar Shares further to the Company’s share capital increase; and


(iv)	deliver to the Shareholders a copy of an adherence agreement on the terms attached in Schedule 4.8 , duly executed by the Company.


(b)	Further to Closing the Company shall update its statutory books to reflect the transactions referred to in Clause 4 and shall file any documents, forms and returns which require filing with the appropriate governmental authorities within the statutory time limits.


5.3	Right to terminate

5.3.1

If the provisions of Clauses 5.2.2 and/or 5.2.3 are not complied with by Golar and/or the Company, the Closing will be postponed by three (3) Business Days. If, following this three (3) Business Day period, the Closing has not been performed in compliance with Clauses 5.2.2 and/or 5.2.3 , the Closing will be postponed by a further three (3) Business Days. If the provisions of Clauses 5.2.2 and/or 5.2.3 are still not complied with following this additional three (3) Business Day period, Schlumberger shall be entitled to terminate this Agreement.

5.3.2

If the provisions of Clauses 5.2.1 and/or 5.2.3 are not complied with by Schlumberger and/or the Company, the Closing will be postponed by three (3) Business Days. If, following this three (3) Business Day period, the Closing has not been performed in compliance with Clauses 5.2.1 and/or 5.2.3 , the Closing will be postponed by a further three (3) Business Days. If the provisions of Clauses 5.2.1 and/or 5.2.3 are still not complied with following this additional three (3) Business Day period, Golar shall be entitled to terminate this Agreement.


5.3.3	In any event, Schlumberger, Golar and the Company agree that, for the purpose of this Clause 5 , the Parties are under a duty to act reasonably and in good faith to procure that the Closing occurs on the Closing Date.


5.3.4	The Shareholders acknowledge that should either Shareholder be in breach of its obligations under Clause 5.2 the other Shareholder (provided such other shareholder is not in breach of its obligations) shall have the right to terminate this agreement as provided under this Clause 5.3 , and termination pursuant to this Clause 5.3 shall be its sole and exclusive remedy in respect of such breach.


6.	Financing


6.1	Initial Funding

The Company shall be financed initially by the proceeds of the Share subscriptions referred to in Clauses 5.2.1(a) and 5.2.2(b) in accordance with the Initial Budget and in order to cover the Company’s Operating Expenses for its first financial year.


6.2	Capital Commitments


6.2.1	Except as otherwise provided in this Agreement, each Shareholder shall make Capital Contributions to the Company in accordance with the Initial Budget, the relevant Annual Budget or the relevant Revised Annual Budget and in accordance with Clause 6.3 , in an aggregate amount not to exceed their respective Capital Commitment.


6.2.2	The Shareholders acknowledge that they may, in accordance with and subject to Clause 6.4 below, decide to provide the Company with Capital Contributions above their respective Capital Commitments.


6.3	Capital Contributions


6.3.1	The Capital Contributions of the Shareholders shall be paid in separate Drawdowns in amounts determined in accordance with the Initial Budget, the relevant Annual Budget or the relevant Revised Annual Budget and pursuant to the terms of this Clause 6.3 .


6.3.2	For each Capital Contribution, whether to fund investment in a Committed Project through the Company or to fund the Company’s Operating Expenses, the Board shall provide each Shareholder with a notice of each Drawdown (a “ Drawdown Notice ”) at least twenty (20) Business Days prior to the date on which such Drawdown is due and payable (the “ Drawdown Date ”).

6.3.3

The relevant Drawdown Notice shall provide details and explanations as to the purpose of such Drawdown and, in the case where such Drawdown is meant to fund an investment by the Company in a Committed Project, shall give a satisfactory description of such investment to the Shareholders as prepared by the Management Team and by the Board. In addition, such Drawdown Notice shall specify, to the knowledge of the Board as of the date thereof, the amount of such Drawdown that will be used by the Company for the purposes of an investment in a Committed Project or pay Operating Expenses.

6.3.4

Notwithstanding Clause 6.3.3 , if the actual Capital Contribution to be paid by a Shareholder changes after delivery of a Drawdown Notice (due, for example, to a change in the amount or nature of the investment to be made in a Committed Project by the Company), the Board shall issue a revised Drawdown Notice to the Shareholders, provided that the new Drawdown Date shall be (i) no earlier than the prior Drawdown Date and (ii) at least three (3) Business Days after the date that such revised Drawdown Notice is given. Such Shareholders shall pay any additional Capital Contribution thereby required no later than the Drawdown Date specified in such revised Drawdown Notice.

6.3.5

Each Shareholder shall, subject to Clause 6.2 , pay the Capital Contributions determined in accordance with the provisions of this Clause 6.3 and specified in the relevant Drawdown Notice, as the same may be revised pursuant to Clause 6.3.4 , by wire transfer in immediately available funds to the Company’s account. The required Capital Contribution of each Shareholder shall be made no later than the Drawdown Date specified in such Drawdown Notice and shall be pro rata to each Shareholder’s share in the share capital of the Company at the time of the Drawdown Date.


6.4	Funding above Capital Commitment

6.4.1

Any Shareholder and/or any member of the Board may at any time call for additional Capital Contributions in connection with the acquisition or financing of an investment in a Committed Project by the Company which requires a funding of the Company above the total aggregate Capital Commitments. In such a case, the person calling for additional Capital Contributions shall send a written notice (an “ Additional Drawdown Notice ”) to the Shareholders and to the Board setting out details and explanations as to the purpose of such Capital Contribution and where such Capital Contribution is meant to fund an investment by the Company in a Committed Project, give a satisfactory description of such investment to the Shareholders and the Board prepared by the party serving the Additional Drawdown Notice. The Additional Drawdown Notice shall be served at least forty (40) Business Days prior to the date on which such Drawdown is due and payable (the “ Additional Drawdown Date ”). The Shareholders shall procure that the Company shall adhere to the following procedure in respect of an Additional Drawdown Notice:


(a)	The Board shall within ten (10) Business Days after receiving the Additional Drawdown Notice meet to discuss the terms of the Additional Drawdown Notice and the transaction contemplated thereby. If the Board approves the Additional Drawdown Notice it shall submit the proposed Capital Contribution to the vote of the Shareholders as a Sponsor Vote;


(b)	In the event the contemplated transaction is not approved by a Sponsor Vote, the Additional Drawdown Notice shall be considered null and void and the provisions of Clause 8.7 ( Deadlock ) shall apply; and

(c)

In the event the transaction contemplated by the Additional Drawdown Notice is approved by a Sponsor Vote of the Shareholders, each Shareholder shall pay the Capital Contributions determined in accordance with the provisions of this Clause 6.4 and specified in the Additional Drawdown Notice, by wire transfer in immediately available funds to the Company’s account. The required Capital Contribution of each Shareholder shall be made no later than the Additional Drawdown Date specified in such Additional Drawdown Notice and shall be pro rata to such Shareholder’s share in the share capital of the Company at the time of the Additional Drawdown Date.


6.5	Defaulting Shareholder


6.5.1	It is an Event of Default by a Shareholder (the “ Defaulting Shareholder ”) where any of the following events occurs:

(a)

the Defaulting Shareholder commits a breach of this Agreement which is material in the context of the Joint Venture taken as a whole and either (1) the breach is not capable of being remedied or (2) the Defaulting Shareholder does not remedy that breach within twenty Business Days (or, in the case of a default in payment of all or any portion of any Capital Contribution or any other amount required to be funded by such Shareholder, sixty (60)) Business Days of the Defaulting Shareholder receiving (or being deemed to receive) notice requiring it to remedy that breach; or


(b)	as per the legislation applicable to the Defaulting Shareholder, the Defaulting Shareholder is unable to pay its debts as they fall due or the Defaulting Shareholder enters into any composition or arrangement with its creditors generally; or


(c)	an encumbrancer lawfully takes possession, or an administrative receiver or the equivalent in any jurisdiction is validly appointed over, the whole or any material part of the undertaking, property or assets of the Defaulting Shareholder; or


(d)	an order is made or resolution is passed for the appointment of an administrator of or the insolvency of the Defaulting Shareholder; or


(e)	any voluntary dissolution (other than in connection with insolvency or bankruptcy) of the Defaulting Shareholder takes place other than with the prior written consent (not to be unreasonably withheld) or the other Shareholder (the “ Non-Defaulting Shareholder ”); or


(f)	a Change of Control occurs in relation to the Defaulting Shareholder.


6.5.2	If an Event of Default occurs, the Defaulting Shareholder will notify the Non-Defaulting Shareholder and the Company as soon as reasonably practicable.


6.6	Distress


6.6.1	In the event that Golar or Schlumberger determines in its reasonable discretion that the Company is in Distress, it should notify the other Shareholder of such Distress with all relevant supporting calculations and justifications (the “ Distress Notice ”).


6.6.2	Upon receipt of the Distress Notice, the recipient Shareholder, shall have five (5) Business Days to determine whether it considers that the Company is in Distress and notify it to the Shareholder that served the Distress Notice (the “ Distress Response Notice ”).

6.6.3

Promptly following receipt of the Distress Response Notice, Golar and Schlumberger shall meet to discuss their respective conclusions as to the situation of the Company. If Golar and Schlumberger are unable to agree as to whether the Company is in Distress, the Shareholder which sent the Distress Notice shall have the right to appoint, at the Company’s cost, an independent accounting firm of international reputation and to instruct it to assess whether the Company is in Distress (the “ Accounting Firm ”).

6.6.4

In such a case the Company shall and shall instruct the Auditor to: (i) cooperate fully and completely in responding to questions and requests for information submitted by the Accounting Firm and (ii) give access to the Accounting Firm to the books, records, documents and information of the Company, or any other information that is necessary for the Accounting Firm to determine whether the Company is in Distress, including working papers of the accountants of the Company and of the Company’s Auditor, and to any of the employees of the Company, during regular business hours.


6.6.5	The Accounting Firm shall within fifteen (15) Business Days from its date of appointment deliver to the Shareholders, and to the Board a detailed report including all relevant calculations and justifications as to whether the Company is in Distress (the “ Distress Report ”).


6.6.6	Should (i) Golar and Schlumberger both determine that the Company is in Distress or (ii) the Distress Report determine that the Company is in Distress, Golar and Schlumberger shall meet to decide what decision should be taken to resolve the Distress situation.

6.6.7

Golar and Schlumberger agree that should the Company be determined, either by mutual agreement or as per the Distress Report, to be in Distress, Golar and/or Schlumberger (the “ Funding Shareholder ”) shall have the right to subscribe for additional Shares of the Company for the Fair Market Value of such additional Shares as agreed among Golar and Schlumberger or, in the absence of agreement, in proportion to their then holding of Shares.

6.6.8

Should Golar and Schlumberger have agreed that the Company is in Distress without having recourse to the intervention of the Accounting Firm but be unable to agree upon the Fair Market Value of the Shares, the Shareholders shall mutually appoint, at the Company’s cost, an Accounting Firm to determine the Fair Market Value of the Shares. Such Accounting Firm shall provide a report as to the Fair Market Value of the Shares within fifteen (15) Business Days as from its appointment including all relevant calculations and justifications as to the Fair Market Value of the Shares to the Shareholders and to the Board (the “ Fair Market Value Report ”). Absent of manifest error, the conclusions of the Fair Market Value Report shall be binding upon the Shareholders and the Company.


6.6.9	The Company and the Shareholders hereby undertake to take all necessary actions for the Funding Shareholder or the Funding Shareholders, as the case may be, to be able to subscribe for new Shares at Fair Market Value as soon as possible as from the determination of the Fair Market Value.


PART III	Business of the Company


7.	Business


7.1	Nature of the Business/Geographical Scope/Timing


7.1.1	The Shareholders agree that the business of the Company (the “ Business ”) is to develop, finance, invest in and operate projects for the conversion of natural gas reserves to LNG, and potentially other liquid products using FLNG facilities, by combining SPM Capabilities and the knowledge and experience of Golar and its Affiliates particularly in maritime activities and floating liquefaction.

The Shareholders agree that the Business of the Company shall be limited to those projects which must include both SPM services to the upstream clients and FLNG deployment by Golar as a package. For the avoidance of doubt, the Business shall exclude:


(a)	SPM services without potential for FLNG deployment; and


(b)	FLNG deployment without the provision of SPM services; and


(c)	the provision of the first two (2) FSRUs to Golar Power Ltd, the joint venture company which offers integrated LNG-based downstream solutions, through the ownership and operation of FSRU and associated terminal and power generation infrastructure,

and each Shareholder shall be free to pursue such excluded projects or services for its own account and at its sole risk and outside the scope of the Joint Venture.


7.1.2	For the purpose of carrying on the Business, the Shareholders may procure that the Company shall:


(a)	Identify and evaluate Target Projects;


(b)	promote, develop and implement Committed Projects;


(c)	through Committed Projects, pursue, prioritise, monetise and maximise the value of natural gas reserves which may be commercialised through, among others, the use of processing technology and FLNG vessels and other production and storage technology;


(d)	pursue associated and non-associated gas exploration, appraisal, development and/or production opportunities including through acquiring interests in upstream concessions, licences, production sharing contracts or similar arrangements for the grant of rights to explore for and/or produce hydrocarbons in connection with Committed Projects;


(e)	take Ownership Interests, whether upstream, midstream and/or downstream in Committed Projects;


(f)	acquire, market and sell LNG produced from Committed Projects;


(g)	access and/or develop markets for natural gas and/or LNG with a view to maximising the value of natural gas and/or LNG produced from Committed Projects;


(h)	identify and define targets based on specific delivery time for Golar FLNG vessels;


(i)	purchase of LNG vessels from Golar and conversion of such vessels into FLNG vessels for the Business;


(j)	perform field operations with Golar/Schlumberger support; and/or


(k)	carry out such other activities as are agreed by the Shareholders from time to time.


7.1.3	Subject to Clauses 6.1-6.4 inclusive, all resources necessary for the execution of a Committed Project and related RDS shall be provided by the Parties (or their Affiliates), acting reasonably, and in accordance with the relevant Annual Budgets or Revised Annual Budgets, with:


(a)	Golar (or its Affiliates) primarily providing the services and materials associated with processing and liquefaction of the offshore stranded gas produced and delivery of the resulting LNG utilising one or more FLNG vessels including:


(i)	gas characterization and metocean analysis performed by Golar to assure FLNG suitability; and


(ii)	FLNG vessel design, engineering, procurement, construction, commissioning and operation by Golar, on a single source basis and on arm’s length terms;


(a)	Schlumberger (or its Affiliates) primarily providing the SPM Capabilities;

on a single source basis; on arm’s length terms; at prevailing international market rates for the same or equivalent goods or services in the relevant location; and on terms and conditions agreed by the Parties in advance.


7.1.4	The Shareholders acknowledge that the Company shall start to carry out its Business immediately after Closing.


7.2	Capital Investment/Returns Expected

7.2.1

The Shareholders agree that the Company intends, in line with the objectives of the Initial Business Plan, to carry out two (2) to five (5) Target Projects, each implying a potential equity investment of between United States Dollars Four Hundred Million (US$400,000,000) to United States Dollars Two Billion (US$2,000,000,000) each. The Shareholders acknowledge that the Board may however consider and assess potential investments in targets which do not fall within this equity investment range.


7.2.2	The Shareholders agree that their common objective, without being legally bound in this respect but in line with the targeted objectives of the Initial Business Plan, is that the Business shall be carried out with a view to target investments with expected cash distributions to the Shareholders yielding:


(a)	a 15% internal rate of return (unlevered post-tax, real) in the Low Case and a 20% internal rate of return (unlevered post-tax, real) in the Base Case;


(b)	NIBD/EBITDA of 3x in the Base Case and up to 4x in the Low Case; and


(c)	Interest coverage ratio of 2.25x in the Low Case and 4x in High Case.


7.2.3	For the purpose of Clause 7.2.2 :


(a)	“ Low Case ” means US$5 per MMBTU and US$50 Brent ICE Nasdaq quotation;


(b)	“ High Case ” means US$10 per MMBTU and US$90 Brent ICE Nasdaq quotation;


(c)	“ Base Case ” means US$7 per MMBTU and US$70 Brent ICE Nasdaq quotation;


(d)	“ NIBD ” means net interest-bearing debt; and


(e)	“ EBITDA ” means earnings before interest, tax, depreciation and amortization .


7.2.4	The Shareholders acknowledge that the Board may consider and assess potential target investments which do not meet the target investment criteria set out in Clause 7.2.2 .


7.3	Investment Structures

The Shareholders acknowledge, and the Company undertakes to ensure, that any investment in any Committed Project by the Company will be carried out through a JV Group Company incorporated as a wholly-owned Subsidiary of the Company unless otherwise provided herein or, in any particular case, the Shareholders otherwise agree. The Shareholders have identified a Target Project in Mauritania and Senegal and set out an initial proposed corporate and investment structure, together with related contractual arrangements in Schedule 7.3 .


7.4	Target Projects


7.4.1	High grading of Projects. The Board shall resolve what Target Projects are to be appraised by the Company, economically and technically, and what order of priority should be given to each Target Project which is to be appraised.

7.4.2

Pre-Feasibility Studies. In relation to such Target Projects as the Board resolves shall be appraised by the Company, the Company, through its Management Team and in consultation with the Shareholders, will prepare and submit to the Board within three (3) calendar months a pre-feasibility evaluation study covering technical scoping; site investigation and requirements; gas composition; cost estimates (including gas price, operating expenditure and capital expenditure); marketing implications; infrastructure/vessel requirements; vessel capacity; the fiscal and political environments; risk register; preliminary project economics; and a recommendation as to whether the Board should proceed to give authority to negotiate and proceed with a feasibility study. No expense shall be incurred by the Company for the purpose of the pre-feasibility study which would require a variation of the Initial Budget or (as applicable) the Annual Budget or Revised Annual Budget).

7.4.3

Authority to Negotiate and Feasibility Studies. If the Board in respect of a Target Project decides to give the Management Team authority to negotiate and to proceed with a feasibility study, the Company, through its Management Team and in consultation with the Shareholders, will prepare and submit to the Board and the Shareholders (within the limits of any variation as shall have been agreed by the Shareholders in respect of the Initial Budget, the Annual Budget or the Revised Annual Budget, as applicable) a feasibility study dealing with all the matters in the pre-feasibility study in a greater degree of detail (and/or such other matters as the Board and/or the Shareholders may direct) including details of:

(i)

any proposed acquisition (including by way of farm-in), on a direct or virtual basis, of any participating interest in any concession agreement, production sharing contract, risk service contract, buy back contract, participation agreement, licence agreement, lease, or similar arrangement relating to any oil and gas assets or operations and material agreements relating thereto or that grant the right to explore for, appraise, develop and/or produce oil or gas;


(ii)	the proposed terms and conditions of any direct or virtual acquisition under item (i) above;


(iii)	the proposed liquefaction services to be provided by the Project Company and the proposed terms and conditions relating to the provision of such services;


(iv)	any proposed shipping services to be provided by/to the Project Company and the proposed terms and conditions relating to the provision of such services;


(v)	whether it is intended that the Project Company will take title to gas or LNG at any point in the value chain of the relevant investment opportunity;


(vi)	what the proposed terms and conditions are for the sale and marketing of any LNG or gas in which the Project Company will hold title;


(vii)	whether it is intended that the Project Company or an Affiliate will participate in any shipping and/or regasification of LNG produced by the relevant Target Project;


(viii)	whether it is intended that the Project Company or an Affiliate will participate in any power generation or other downstream project for the consumption of regasified LNG relating to the relevant upstream/midstream project;


(ix)	the proposed financial model relating to the evaluation of the investment opportunity;


(x)	any requirement to provide a parent company guarantee or other credit support;


(xi)	any restriction on change of control or third party pre-emption rights or right of first offer;


(xii)	any departure from Golar’s or Schlumberger’s policies on health and safety, environment and/or anti-bribery and corruption is proposed;


(xiii)	the proposed project budget including any contingency;


(xiv)	the mechanism for funding (equity, shareholder loans, third party debt financing, capital markets) and the consequence of any failure to fund;


(xv)	whether the project company would be incorporated as a Subsidiary of the Company or as a separate company that is not a Subsidiary of the Company;


(xvi)	a tax report;


(xvii)	an insurance report;


(xviii)	an environmental report;


(xix)	a technical report; and


(xx)	a recommendation of whether or not the proposed Target Project should be continued including an evaluation of whether or not it meets the target investment criteria set out in Clause 7.2.2 .

The feasibility study and the recommendation referred to in paragraph (xx) above shall be delivered to the Board within three (3) calendar months of the Board’s decision to give the Management Team authority to negotiate and to proceed with a feasibility study.


7.4.4	Project Business Plan; Finance Memorandum; Committed Projects. Following completion and submission of a feasibility study to the Board, if a Sponsor Vote is passed by the Board that the relevant Target Project shall continue to be assessed, then:


(a)	the Company will prepare a project business plan (a “ Project Business Plan” ) in respect of such Target Project;


(b)	each Project Business Plan will (unless the Shareholders otherwise agree) adopt the commercial case set out in the feasibility study and set out, without limitation:


(i)	the contracting strategy for the Target Project and (where applicable) proposed contractual terms for the principal agreements to be entered into, including a comprehensive review of the risk and commitments the Company would be undertaking; and


(ii)	a detailed funding proposal (“ Finance Memorandum ”) for the Target Project which may include (without limitation or indication of priority):


(1)	equity;


(2)	loans or advances by the Shareholders;


(3)	borrowing by the Company, with or without support from the Shareholders;


(4)	limited recourse project financing with, if necessary, pre-completion guarantees and/or other forms of financial support to be provided by the Company; or


(5)	such other debt or equity funding or financing as the Company may recommend;


(c)	the Shareholders will co-operate with the Company and each other to develop the Finance Memorandum to meet their common business objectives;

(d)

the Project Business Plan will be submitted to the Shareholders for approval by a Sponsor Vote of the Shareholders. If a Sponsor Vote of the Shareholders approves the Project Business Plan and the entering into of legally binding documentation in respect thereof, such Target Project will be a “ Committed Project ” for the purposes of this Agreement and the Board shall appoint a project team specifically tasked with the development of the Committed Project;


(e)	if the Target Project does not become a Committed Project, such Target Project will be an “ Excluded Project ” for the purposes of this Agreement; and


(f)	if the Project Business Plan is not approved by the Shareholder(s) or, at the point of approval one Shareholder is unwilling or unable to proceed, the Project Business Plan may (if both Shareholders agree) be revised in accordance with the directions of the Shareholder(s) and resubmitted for approval by the Shareholders.


7.4.5	Except to the extent that the Shareholders may otherwise agree, no decision will be taken to authorise the Company to incur or commit to expenditure in respect of the procurement and/or construction of a FLNG vessel in relation to a Target Project before it is a Committed Project.


7.4.6	Notwithstanding the foregoing provisions of this Clause 7.4 :

(a)

each Shareholder shall have the right, following receipt of written notification from a sponsor that it does not wish to contract with the other Shareholder for the provision of services within the other Shareholder’s capabilities, to proceed with the corresponding project after a period of six (6) calendar months from the date of receipt of the sponsor’s notification, and after such period the provisions of Clause 13 ( Non-compete ) shall not apply to the activities of such Shareholder in relation to such project;


(b)	either Shareholder shall have the right in its discretion at any time, but prior to any Sponsor Vote converting a Target Project into a Committed Project, to notify the Board that it does not wish a Target Project to be converted into a Committed Project, in which case such Target Project shall be an Excluded Project.


PART IV	Management and Board of the Company


8.	Directors and Board Meetings; Approvals


8.1	Composition of the Board

The Parties agree that:


(a)	The Board of the Company shall be composed of:


(i)	Two (2) directors appointed by Schlumberger in accordance with the Articles and this Clause 8.1 ; and


(ii)	Two (2) directors appointed by Golar in accordance with the Articles and this Clause 8.1.


(b)	Golar and Schlumberger agree that one (1) of the two (2) Golar Directors shall be appointed the Chairman of the Board by the members of the Board.


(c)	The Shareholders undertake that any Director whose position as a Director is terminated for whatever reason(s) (including resignation, death, retirement, dismissal or permanent incapacity) shall be replaced by an individual, to be designated pursuant to the Articles and this Clause 8.1 , for the remaining term of his mandate.


(d)	At the time of the completion of any sale, assignment, transfer or other disposition of all of the Shares held by a Shareholder, such Shareholder shall procure the resignation of each Director appointed by it, unless the parties otherwise agree in writing.


8.2	Organizational Rules of the Board

8.2.1

Meetings of the Board (normally convened by the Chairman of the Board) shall be properly convened by any of the Directors and held regularly at the Company’s principal place of business at least once every three months, or at any other place as the Board may from time to time determine. Provided it is agreed in writing by each Director, meetings may occasionally be held through telephone conferences. Meetings shall be conducted in English, and materials used for such meetings will be in English.


8.2.2	Not less than seven (7) days’ notice of each meeting of the Board, together with the agenda for such meeting and relevant Board papers and documents necessary to assess the matters referred to in the agenda shall be given to each Director, unless otherwise agreed in writing by each Director.


8.2.3	The Company shall make available to the Directors copies of (and supporting papers relating to) minutes of meetings of the Board in the English language (at the request of any of the Directors), such minutes to be provided within ten (10) days of any such meetings.

8.2.4

The quorum for any meeting of the Board held pursuant to the first convening notice shall be two (2) Schlumberger Directors and two (2) Golar Directors present or represented. In the event that no quorum is present for the meetings held pursuant to the first convening notice, the meeting shall be adjourned and a second convening notice shall be issued for a meeting at the same time and place the following week. The quorum for a meeting held pursuant to the second convening notice is met when at least one (1) Schlumberger Director and one (1) Golar Director are present or represented. If the quorum is not met pursuant to the second convening notice, then a third convening notice shall be sent and the quorum of the Board meeting held pursuant to the third convening notice will be met when a minimum of two Directors, comprising of at least one (1) Director from Golar and one (1) Director from Schlumberger respectively, are present or represented.


8.2.5	The decisions of the Board will, at all times, subject to Clause 8.6.1 , be adopted by a vote of the members of the Board by a simple majority. If there is an equal number votes for and against a resolution then the Chairman of the Board will have a casting vote except in relation to Reserved Matters.

8.2.6

Any Schlumberger Director or Golar Director may give another Director appointed upon the binding nomination of the same nominating Shareholder a written power of attorney to act on such Director's behalf at a meeting of the Board. When a Director holding a written power of attorney attends any meeting of the Board, it shall provide the other Directors in attendance with a copy of any such written power of attorney.


8.3	Remuneration of the Directors

The Directors shall not receive any remuneration from the Company in their capacity as members of the Board. They shall be reimbursed by the Company for their reasonable and justified expenses incurred in their capacity as Directors.


8.4	Power of the Board


8.4.1	Powers of the Board in relation to the Company

The Board shall be responsible for setting policy and overall direction for operation of the Company and its activities, and shall have full and absolute authority to take action on behalf of the Company, except as set forth below in Clause 8.6.1 .


8.4.2	Appointment of Management Team


(a)	(I) The Board shall be responsible for appointing a team of operational managers (“ Management Team ”) for the Company composed of:


(A)	a managing director (“ Managing Director ”), selected among candidates proposed by Golar;


(B)	a finance director (“ Finance Director ”), selected among candidates proposed by Schlumberger;


(C)	an asset director (“ Asset Director ”), selected among candidates proposed by Schlumberger;


(D)	a business development director (“ Business Development Director” ), selected among candidates proposed by Golar.


(II)	Where the shareholding of a Shareholder falls below forty percent (40%) but remains above or equal to twenty percent (20%), of the Company:


(A)	that Shareholder shall nominate only one (1) Director and the other Shareholder shall nominate three (3) Directors of the available four (4) Directors;


(B)	that Shareholder (if Golar) shall lose the right to select the Managing Director; and


(C)	that Shareholder (if Schlumberger) shall lose the right to select the Finance Director.


(III)	Where the shareholding of a Shareholder falls below twenty percent (20%) but remains above or equal to ten percent (10%), of the Company:


(A)	that Shareholder shall nominate only one (1) Director and the other Shareholder shall nominate three (3) Directors of the available four (4) Directors; and


(B)	that Shareholder (if Schlumberger) shall lose the right to select the Asset Director;


(C )	that Shareholder (if Golar) shall lose the right to select the Business Development Director.


(b)	The Board shall also be responsible for dismissing any member of the Management Team.


(c)	The Shareholders undertake that any member of the Management Team whose position as member of the Management Team is terminated for whatever reasons (including resignation, death, retirement, dismissal or permanent incapacity) shall be replaced by an individual, to be designated pursuant to the provisions of this Clause 8.4.2 .


(d)	The Parties acknowledge that the Management Team may include seconded employees from the Parties and external recruits as necessary and a mix of operational and financial expertise, on the basis of the Human Resources appendix in attached at Schedule 8.4.2(d) .


(e)	The Management Team will be responsible for the day-to-day management and oversight of the Company and will in particular identify and evaluate investment opportunities and submit evaluations for consideration by the Board in accordance with Clause 7.4 . The Management Team will report on a regular basis to the Board.

(f)

The Shareholders acknowledge that, and shall ensure that, save where it is agreed otherwise, each member of the Management Team through its employment or secondment agreement undertakes to be fully dedicated to the Business Project(s) and not to in any case develop, promote, have an interest in directly or indirectly, or be involved in any manner whatsoever, in any activity in relation to the Business outside the Company.


8.4.3	Powers of the Board in relation to the JV Group

The Board shall be responsible for a coordination and orientation role for each JV Group Company with respect to the strategy and management policy of each JV Group Company and with respect to the supervision and overview of the strategy and the management of the affairs of each JV Group Company by determining recommendations concerning the major strategic developments of each JV Group Company.


8.5	Operational management of the JV Group

The Shareholders acknowledge that Golar shall, at all times except as provided under Clause 8.4.2(a)(II)(B) , have the right to appoint and dismiss the Managing Director and Chairman (or any equivalent form of corporate representative depending on the legal form of the relevant JV Group Company and the operational managers of each JV Group Company (other than the Company), provided that Golar shall, prior to appointing or dismissing any Managing Director or chairman of such JV Group Company, consult and obtain the advice of Schlumberger.


8.6	Reserved Matters

8.6.1

The Shareholders with respect to the Shareholder Reserved Matters (as outlined below) and the Directors with respect to the Board Reserved Matters (as outlined below) shall procure that the Company does not, and the Company undertakes not to (whether through its Board, legal representative, collective body, employee, officer and/or general meeting), take any action with respect to the following matters (the “ Reserved Matters ”) without a Sponsor Vote. In exceptional circumstances, any Golar Director or any Schlumberger Director may request that the Shareholders decide a Board Reserved Matter, in which case there shall be a Sponsor Vote of the Shareholders on such Board Reserved Matter. This Clause 8.6.1 shall apply to each JV Group Company as if references to “the Company” were to the relevant JV Group Company.

Shareholder Reserved Matters:


(a)	any amendment to the memorandum or articles of association of the Company or the adoption of new articles of association of the Company (or equivalent constitutional documents);


(b)	the creation, allotment or issue of any shares or the grant or agreement to grant any option or interest (in the form of obligations convertible into shares or otherwise) over any shares or any uncalled capital of the Company;


(c)	the consolidation, sub-division, conversion or cancellation of any share capital of the Company;


(d)	the capitalisation, repayment or other form of distribution of any amount standing to the credit of any reserve of the Company or the redemption or purchase of any of its own shares or any other reorganisation or reduction of its share capital (excluding for these purposes the payment of any dividend);


(e)	the repayment of capital or assets to members of the Company;


(f)	the admission after Closing of any person as a member of the Company other than pursuant to a transfer in accordance with this Agreement;


(g)	the passing of any resolution whereby the classification or status of the Company may change;


(h)	the making of any petition or passing of any resolution for winding-up the Company;


(i)	the making of or any arrangement with creditors generally or any application for an administration order or for the appointment of a receiver or administrator;


(j)	any decision involving the Company in relation to any business outside the scope of the Business or any material change in the nature or scope of the Business;


(k)	the amalgamation or merger of the Company with any other company or legal entity.

Board Reserved Matters:


(l)	amendment of the Initial Business Plan and approval of any Project Business Plan or Business Plan, or any amendment of any Project Business Plan or Business Plan;


(m)	amendment of the Initial Budget and a pproval of any Annual Budget or any Revised Annual Budget, or any amendment of any Annual Budget or any Revised Annual Budget;


(n)	making or entering into commitments to make any capital expenditure in excess of United States Dollars One Million (US$1,000,000) at the level of the Company other than as approved in the Initial Budget, an Annual Budget, a Revised Annual Budget, the Initial Business Plan or a Business Plan;


(o)	the incorporation of any Subsidiary of the Company other than as required for the purpose of a Committed Project;


(p)	any acquisition by the Company, of entities or assets, or any Transfer of a material asset or entity of the Company, other than as required for the purpose of a Committed Project;


(q)	the closing down of any business operation or the disposal or dilution of its interest in any of its Subsidiaries for the time being other than as required in the ordinary course;


(r)	any borrowing, issuance or repayment of debt securities or other indebtedness of the Company other than any such borrowing, issuance or repayment contemplated by an approved Business Plan and Annual Budget;


(s)	the granting of any Encumbrance over the assets of the Company or of a material asset of any JV Group Company in favour of a third party other than any such Encumbrance contemplated by and approved in the relevant Business Plan and Annual Budget or for the purpose of a Committed Project;


(t)	the issuance of a guarantee or other security by the Company in favour of a third party or third parties in respect of any borrowing or issuance of debt securities or any other undertaking, other than for the purpose of a Committed Project or approved in the Initial Budget, an Annual Budget, a Revised Annual Budget, the Initial Business Plan or a Business Plan;


(u)	any material change in the tax election of the Company and tax structure of any Committed Project or any material change in the Accounting Policies;


(v)	the making of any payment to, or the incurring or entering into or varying of, any agreement, liability or commitment whatsoever or renewing or entering into any agreement, in each case between the Company on the one hand and any Shareholder or any of its Affiliates on the other hand other than as approved in the Initial Business Plan or the Project Business Plan;


(w)	the entry into any partnership, joint venture or cooperation agreement with a third party with respect to all or part of the Business, other than as approved in a Project Business Plan;


(x)	commencing, defending or settling any arbitration, litigation or regulatory investigation which is outside the ordinary course of business or involves a disputed amount in excess of United States Dollars Five Hundred Thousand (US$500,000);


(y)	any change of the Auditors;


(z)	any material decision relating to compliance with Business Ethics Laws as referred to in Clause 21.8.


8.7	Deadlock


8.7.1	If the board of any JV Group Company (other than the Company) cannot reach agreement on any resolution before it within twenty one (21) days of such resolution first being tabled at a board meeting, the subject of any such resolution before it may be referred to the Board by any director of such company.

8.7.2

If the Board cannot reach agreement on any resolution before it (including any matter referred to it pursuant to Clause 8.7.1 ) within twenty one (21) days of such resolution first being tabled at a Board meeting, or two or more consecutive Board meetings have been dissolved because a quorum is not present, the subject of any such resolution before them may be referred to the Shareholders by any Schlumberger Director or Golar Director.

8.7.3

If the Shareholders cannot reach agreement on any resolution before them at any Shareholders’ meeting (including any matter referred to them pursuant to Clause 8.7.2 ), or two or more consecutive Shareholders’ meetings have been dissolved because a quorum is not present, the subject of any such resolution before them may be referred to the chairman of Schlumberger Limited and the chairman of Golar LNG Limited by Schlumberger or Golar to resolve the matter at the level of the respective board of the relevant parent company.


8.7.4	Nothing in this clause is intended as a waiver or variation of the requirement that any decision on behalf of a relevant entity should be formally approved in a properly convened and held meeting of the shareholders and/or directors of such entity.


8.7.5	Either chairman may nominate an independent third party acceptable to the other chairman to act as mediator to assist them to resolve the matter.

8.7.6

If any matter remains unresolved by the chairmen pursuant to Clause 8.7.3 for a period of twenty eight (28) days after it is referred to them pursuant to Clause 8.7.3 , the matter in dispute shall not proceed and the status quo shall continue. During the process set out in this Clause 8.7 the Shareholders will continue to fulfil their obligations under this Agreement and to fund the Business in accordance with the then current Business Plan or Budget.


8.7.7	To the extent unaffected by the dispute the Business will continue to be managed and carried on in all respects as it was before the dispute arose, and the provisions of this Agreement and the obligations of the Shareholders and their Affiliates thereunder will remain in full force and effect.


8.7.8	The arbitration provisions in Clause 20.2 do not apply to any matter which is the subject of disagreement and to which this Clause 8.7 applies except to the extent that it relates to the interpretation of this Agreement or the respective rights and obligations of the Shareholders pursuant to this Agreement.


PART V	Budgets/Profit Distributions/Financial Information/Operation of the Company


9.	Business Plan, Budgets, Financial Information and Audits


9.1	Initial Business Plan

Schlumberger and Golar have agreed upon the terms of the initial business plan of the Company including, without limitations, financial projections, cash flows, capital expenditure, financing request, borrowings, dividends and forecasts for a five-year period as from the Closing Date prepared in accordance with the Accounting Policies and a copy of which is attached in Schedule 9.1 (the “ Initial Business Plan ”).


9.2	Business Plan

9.2.1

Schlumberger and Golar shall procure that the Board shall prepare and submit to the Shareholders a draft business plan for the Company and its Subsidiaries which shall include, without limitations, financial projections, cash flows, capital expenditure, financing request, borrowings, dividends and forecasts for the following five-year period at the latest thirty (30) Business Days before the end of the third financial year of each three-year period as from the Closing Date and a draft of a modified Business Plan (if modified) together with a draft Annual Budget, at the latest forty five (45) Business Days before the end of each financial year and, as the case may be, a modified Business Plan (if modified) together with any Revised Annual Budget.

9.2.2

Following receipt by the Shareholders of any draft business plan for any given period (including any proposed modification of a Business Plan as a result of the adoption of Annual Budgets or Revised Annual Budgets), Golar and Schlumberger shall consult with each other upon the content of such business plan and shall each use all reasonable endeavours to reach agreement as to its contents and to adopt such business plan as the agreed Business Plan of the Company for the relevant period. In the event a business plan is not agreed upon, the Company shall adhere to the Business Plan for the prior period until a new Business Plan is agreed.


9.2.3	The Business Plan shall be prepared in accordance with the Accounting Policies.


9.3	Initial Budget

Schlumberger and Golar have prepared and agreed upon a budget for the first financial year of the Company including, without limitation, financial projections, cash flows, capital expenditure, financing request, borrowings, dividends, forecasts and Operating Expenses for the first financial year of the Company, prepared in accordance with the Accounting Policies and a copy of which is attached as Schedule 9.3 (the “ Initial Budget ”).


9.4	Annual Budget

9.4.1

Golar and Schlumberger shall procure that not later than thirty (30) Business Days before the beginning of each financial year the Board prepares and delivers to them a draft annual budget (including, without limitation, financial projections, cash flows, capital expenditure, financing request, borrowings, dividends, forecasts and Operating Expenses) for the next financial year and such other information relating to the financial position and affairs of the Company as each Shareholder may from time to time reasonably require, generally in a form mutually agreed by Golar and Schlumberger (the “ Annual Budget ”).

9.4.2

Within fifteen (15) Business Days following receipt by the Shareholders of the draft Annual Budget for any year, either Shareholder shall be entitled to request such further information as may reasonably be necessary to enable it to reach an informed view as to the content, reasonableness and prudence of the draft in question. The Company shall comply with any such request within seven (7) Business Days of its receipt and shall copy its response to the other Shareholder.

9.4.3

Following receipt by the Shareholders of the draft Annual Budget for any financial year and any further information supplied in accordance with Clause 9.4.2 , Golar and Schlumberger shall consult with each other upon the content of such Annual Budget and shall each use all reasonable endeavours to reach agreement as to its contents and to adopt such Annual Budget as the agreed Annual Budget of the Company for the relevant year. In the event the Annual Budget for any financial year has not been agreed upon, until a new Annual Budget is agreed the Company shall only incur operating expenses to the extent required in order to maintain the Company as a going concern (but shall not incur any capital expenditure).


9.5	Revised Annual Budget


9.5.1	The Shareholders shall procure that the Board will regularly review the agreed Annual Budget during the course of the relevant financial year of the Company. The Board may propose Annual Budget amendments and the adoption of a revised annual budget (the “ Revised Annual Budget ”) to the Shareholders pursuant to the following procedure:


(a)	the Board shall require that the Management Team of the Company prepare a memorandum in a form mutually agreeable to Golar and Schlumberger, describing the desired budget amendments in reasonable detail;


(b)	the memorandum including the proposed Revised Annual Budget shall be delivered in final form to the Board (with a copy to each of Golar and Schlumberger);


(c)	in the event the amendments contemplated by the proposed Revised Annual Budget are approved by a Sponsor Vote of the Board (or by a Sponsor Vote of Shareholders, if elected by a Director as set forth in Clause 8.6.1 above), the Company shall be bound by such Revised Annual Budget; and


(d)	in the event the amendments contemplated by the proposed Revised Budget are rejected by a Sponsor Vote of the Board (or by a Sponsor Vote of Shareholders), the Company shall adhere to the Annual Budget adopted for the current financial year until a new Annual Budget is agreed.


9.6	Information of Shareholders and Financial Statements


9.6.1	The Shareholders shall procure that, and the Company undertakes to take all necessary actions so that:


(a)	each JV Group Company shall keep, at all times, each Shareholder fully and promptly informed of all material matters of which the relevant JV Group Company is aware relating to the progress of the Business and provide the Shareholders with access at all reasonable times to all documents and information required by the Shareholders;

(b)

audited accounts for each JV Group Company and audited consolidated accounts for the Company complying with the relevant laws and regulations shall be prepared and reported on by the auditors of the relevant JV Group Company and by the Auditors within three months from the end of the financial year in question (the first such accounts to be for the period ending 31 December 2016) and shall be forthwith thereafter delivered to each Shareholder;


(c)	the audited statutory accounts of each JV Group Company and the audited consolidated accounts of the Company for each financial year shall comply with the Accounting Policies;


(d)	the accounts referred to in Clause 9.6.1(b) above shall be laid before the relevant company in a general meeting within a period of four months following the end of the financial year in question;

(e)

so far as they are able, the auditors of each JV Group Company, and the Auditors of the Company from time to time shall, (as appropriate) at the expense of the Company, certify the profits of each JV Group Company as disclosed in the audited accounts which are available for distribution for each financial year at the same time as they sign their report on the audited statutory accounts of each JV Group Company and on the audited consolidated accounts of the Company for that financial year and so far as they are able shall generally prepare such certificates and calculations as may be reasonably required by the Shareholders from time to time and the auditors shall be given such assistance and information by each JV Group Company in connection with the performance of any duties imposed upon them hereunder or by the relevant Articles; and

(f)

the Board shall prepare for each JV Group Company quarterly management accounts commencing with the first day of the calendar quarter following Closing, such accounts to include (in addition to any further information or details which the Shareholders may reasonably require), a profit and loss account for each JV Group Company and a consolidated profit and loss account for the Company, or, where relevant, the income statement and balance sheet. Such management accounts shall refer to any known matter occurring in or relating to the period in question, including a statement of any material variation from the Annual Budget or Revised Annual Budget then relevant, comparing the results shown in such management accounts with the results for the corresponding period in the previous year. Such management accounts shall then be submitted to the Shareholders within thirty (30) Business Days from the end of the relevant calendar quarter end to which they relate and considered at the first Board meeting following such submission.


(g)	Each JV Group Company shall implement internal control procedures over financial reporting as are reasonably required for its own or Sarbanes Oxley Act audit purposes (which may include the provision of a SOC 1 report).

9.6.2

If the Board shall for whatever reason at any time fail in any material respect to perform, or shall be in material breach of its obligations under this Clause 9.6 then if such non-performance or breach has not been remedied by the Board within sixty (60) days after receipt of written notification from either Shareholder specifying the breach or non-performance to the reasonable satisfaction of the notifying Shareholder each Shareholder shall be entitled (without prejudice to any other remedies or rights which they may have in respect of any such non-performance or breach) to appoint an independent accountant or accountants of their own choosing (subject to appropriate undertakings as to confidentiality) to investigate the affairs of the relevant JV Group Company with a view to obtaining the information which was not supplied pursuant to this Clause 9.6 and in the event that such independent accountant or accountants shall be so appointed:

(a)

the relevant JV Group Company shall afford, or (so far as any of them is able to do so) shall procure that there shall be afforded by any necessary third party, to such independent accountant or accountants such assistance and co-operation (including without prejudice to the generality of the foregoing full and unrestricted access to the accounting books and records of the relevant JV Group Company) as he or they may from time to time request; and


(b)	the reasonable costs of and incidental to any such appointment shall be paid by the Company.


9.7	Right of Audit

Any Shareholder may from time to time reasonably require that (at its own cost) an audit or review of the Business and any other affairs of any JV Group Company is carried out, and shall in such case be entitled to designate a person to carry out such audit or review on its behalf. Such person (which may, without obligation be, such Shareholder itself, the Auditors or an adviser, consultant or contractor of such Shareholder) shall be entitled (provided it does not disrupt the normal course of business of such JV Group Company):


(a)	to visit and inspect any premises of any JV Group Company at normal business hours and to discuss the affairs, finances and accounts of the relevant JV Group Company with its officers and employees; and


(b)	to inspect and request and retain copies of any books, records or other documents relating to the Business or any other affairs of the relevant JV Group Company and such JV Group Company shall afford such access and co-operation as may be reasonable in the circumstances to facilitate the carrying out of such audit or review.


9.8	Financial Information/Reporting Obligations

The Board shall prepare the necessary financial and other relevant information to enable the Shareholders to meet their respective reporting obligations for quarterly, half yearly and yearly results to the extent that the Company is notified sufficiently in advance (and in any event not less than six (6) calendar months in advance) of the financial information necessary to enable its Shareholders to meet such reporting obligations.


10.	Operation of the Company


10.1	Except as provided in this Agreement and save as the Shareholders may otherwise agree, each of the Shareholders and Directors shall procure that:


(a)	the Company carries on no business or activity other than the Business;


(b)	each other JV Group Company carries on no business or activity other than the Committed Project for which it was established;


(c)	the Business is carried on and conducted in a proper and efficient manner and for the benefit of each JV Group Company and the Shareholders;


(d)	no JV Group Company shall enter into any agreement or arrangement restricting its competitive freedom to provide and receive goods and services by such means, and from and to such persons, as they may respectively think fit;


(e)	if any JV Group Company requires any approval, consent or licence for carrying on its business in the places and in the manner in which it is for the time being carried on or proposed to be carried on by it, the relevant JV Group Company will use its best endeavours to maintain the same in full force and effect;


(f)	all business of each JV Group Company is undertaken and transacted by the Board in accordance with the Initial Business Plan or the Business Plan (as may be modified) and the Initial Budget, the Annual Budget or the Revised Annual Budget, as the case may be;


(g)	each JV Group Company maintain with a well-established and reputable insurer adequate insurance against all risks usually insured against by companies carrying on the same or a similar business;


(h)	the JV Group is registered for VAT purposes as a company which is independent of each of the Shareholders and their respective groups.


11.	Profits Distributions


11.1	The Shareholders undertake to exercise their powers in relation to the Company, and the Company undertakes that (subject to any Legal Requirements and unless the Shareholders otherwise agree in writing):

(a)

insofar as the Company has Distributable Cash resulting from profits and subject to applicable Legal Requirements and to its Articles, the Company shall pay as dividends the entire Company’s Distributable Cash resulting from profits. Such dividends in respect of the Shares shall be paid strictly in accordance with the Articles and for the avoidance of doubt such dividends shall be paid to the Shareholders pro rata to their respective shareholding in the Company at the time of the payment of the distribution; and


(b)	the method and timing of distribution of Distributable Cash resulting from profits shall take into account the interests of the Shareholders in minimizing taxation liabilities.

11.2

The Shareholders undertake to exercise their powers in relation to the Company, and the Company undertakes to exercise its powers in relation to each other JV Group Company so that (subject to any Legal Requirements and unless the Shareholders otherwise agree in writing) each JV Group Company that has Distributable Cash declares and pays to the Company such dividends as is necessary to permit lawful and prompt payment by the Company of any dividends as provided by Clause 11.1 .


PART VI	Transfer of Company Shares


12.	Transfer of Shares and Related Matters


12.1	Notwithstanding any provision of the Articles, no Shareholder shall Transfer any Share or any interest in any Share except in compliance with Schedule 1 .


12.2	Following the Lock-up Period, either of Golar or Schlumberger may elect to procure that the Company pursue a listing of the Shares on an internationally recognised investment exchange, in which case:

(a) the Company and both of Golar and Schlumberger shall consider and pursue such listing reasonably and in good faith (including cooperating in good faith with any reorganization proposed by such electing Shareholder that would be prudent or advisable in order to prepare the Company for such listing);

(b) the party electing such listing, (unless both Parties are in agreement to pursue the listing), shall bear all of the out-of-pocket expenses of the other party associated with any such listing;

(c) in the event such listing is achieved during the Lock-up Period, nothing in this Agreement shall be deemed to require Schlumberger or Golar to Transfer any Shares in connection therewith; and

(d) in the event of such listing, the restrictions on Transfer contained herein shall no longer apply.

12.3

Without prejudice to the provisions of Schedule 1 , the Shareholders shall procure that before any person (other than a person who is already a Shareholder) is registered as a holder of any Share (whether on transfer or allotment), such person shall enter into a deed of adherence substantially in the form set out in Schedule 4.8 covenanting with the continuing Parties to observe, perform and be bound by all the terms of this Agreement which are capable of applying to such person and which have not been performed. Upon being so registered, that person shall be deemed to be a Party to this Agreement.


PART VII	Miscellaneous/General


13.	Non Compete


13.1	Golar Non Compete Undertakings

13.1.1

Save as provided in Clause 13.1.2 , Golar undertakes that all investments contemplated or carried out by any entity of the Golar Group within the scope of the Business in the Territory (the “ Restricted Business ”) shall be contemplated and carried out exclusively through the Company and Golar therefore undertakes not to (and shall procure that no entity or person part of the Golar Group shall), as from the date hereof and as long as it remains a Shareholder and for a period ending two (2) years thereafter:

(a) enter into competition with the JV Group on any projects within the scope of the Business;

(b) hold any security or have any interest, directly or indirectly, in any entity, other than the Company and/or its Subsidiaries, carrying on any activity within the scope of the Business; or

13.1.2

Clause 13.1.1 shall not apply in connection with any Excluded Project, provided that, unless Schlumberger otherwise agrees in writing, the Golar Group, in contemplating or carrying out such Excluded Project, is not involved in any incorporated or unincorporated joint venture with a Defined Competitor of Schlumberger. Schlumberger acknowledges that, notwithstanding the provisions of Clause 13.1.1 , Golar shall have the right to contemplate or carry out an investment in any entity or asset carrying out an activity competing with that of the JV Group provided that:

(a) the Restricted Business does not constitute more than twenty percent (20%) of the business of the going concern or the entity in which Golar is contemplating an investment; or

(b) Golar’s contemplated investment does not exceed twenty percent (20%) in a Restricted Business, and Golar has no ability to direct the management of such Restricted Business.


13.2	Schlumberger Non Compete Undertakings

13.2.1

Save as provided in Clause 13.2.2 , Schlumberger undertakes that all investments contemplated or carried out by any entity of the Schlumberger Group within the scope of the Restricted Business shall be contemplated and carried out exclusively through the Company and Schlumberger therefore undertakes not to (and shall procure that no entity or person part of the Schlumberger Group shall), as from the date hereof and as long as it remains a Shareholder and for a period ending two (2) years thereafter:

(a) enter into competition with the JV Group on any projects within the scope of the Business;

(b) hold any security or have any interest, directly or indirectly, in any entity, other than the Company and/or its Subsidiaries, carrying on any activity within the scope of the Business; or

13.2.2

Clause 13.2.1 shall not apply in connection with any Excluded Project, provided that, unless Golar otherwise agrees in writing, the Schlumberger Group, in contemplating or carrying out such Excluded Project, is not involved in any incorporated or unincorporated joint venture with a Defined Competitor of Golar. Golar acknowledges that, notwithstanding the provisions of Clause 13.2.1 , Schlumberger shall have the right to contemplate or carry out an investment in any entity or asset carrying out an activity competing with that of the JV Group provided that:

(a) the Restricted Business does not constitute more than twenty percent (20%) of the business of the going concern or the entity in which Schlumberger is contemplating an investment; or


(b)	Schlumberger’s contemplated investment does not exceed twenty percent (20%) in a Restricted Business, and Schlumberger has no ability to direct the management of such Restricted Business.


14.	Term and Termination

This Agreement shall, without prejudice to the continuing obligations of the Parties to this Agreement, subject to Clause 5.3 , and without prejudice to any obligations or rights of any of the Parties hereto which have accrued prior to such termination, terminate with regard to any Shareholder (in its capacity as shareholder) ceasing to be a shareholder in the Company, upon the date on which such Shareholder ceases to hold any Shares but shall remain in full force and effect with regard to the remaining Parties to this Agreement and with regard to such Shareholder (if appropriate) in any other capacity.


15.	Confidentiality

15.1

During the term of this Agreement and after termination or expiration of this Agreement for any reason, each Party shall keep and treat as strictly confidential and not at any time disclose or make known in any way to any person who is not a Party or use for a purpose other than the performance of its obligations under this Agreement any information (“ Confidential Information ”) which it now possesses or which may come within its knowledge during the term of this Agreement relating to or connected with or arising out of this Agreement or the matters contained in it or the business, activities or affairs of any other Party or, through any failure to exercise all due care, cause any unauthorised disclosure of any Confidential Information and shall make every effort to prevent the use or disclosure of such information except that these restrictions do not apply to the disclosure of Confidential Information if and to the extent:


(a)	Disclosure is required by law or for the purpose of any judicial proceedings, or by any regulatory authority, government body or securities exchange after consultation with the other Parties, where practicable;


(b)	The information is or becomes generally available to the public other than as a result of a breach of any undertaking or duty of confidentiality by any person;


(c)	The information is disclosed on a strictly confidential basis by a Party to its advisers, consultants, auditors and bankers for the purposes of its business;


(e)	Disclosure is by a Party to a member of its Group which accepts restrictions in the terms of this Clause 15 ;


(f)	Each of the other Parties has given its prior written consent to the contents and the manner of the disclosure; or


(g)	Disclosure is for the purpose of business development of the capabilities of the Company.


15.2	Forthwith after termination of this Agreement each Party shall return to the other Parties all copies of any documents containing Confidential Information of the other Parties. The restrictions contained in this Clause 15 shall continue to apply after termination of this Agreement without limit in time.


15.3	The Parties acknowledge that damages would not be an adequate remedy for any breach of this Clause 15 and each Party shall be entitled to the remedy of injunction, specific performance and other equitable relief for any threatened or actual breach of this Clause 15 and no proof of special damages shall be necessary for the enforcement of this Agreement.

15.4

No public announcement may be made, or circular issued, relating to this Agreement, the Joint Venture, the JV Group or any Target Project or any Committed Project without the prior written approval of both Shareholders. This does not affect any announcement or circular required by law or any regulatory body or the rules of any recognised stock exchange, but the Shareholder with an obligation to make such an announcement or issue such a circular will consult with the other Shareholder so far as is reasonably practicable before complying with such obligation and shall use reasonable efforts to comply with any reasonable requests from the other Shareholder as to the content of such announcement or circular. Any statements made or replies to questions given by either Shareholder or its Affiliates relating to this Agreement, the Joint Venture, the JV Group or any Target Project or any Committed Project will be consistent with any such public announcements or circulars.


16.	Costs

Except as otherwise expressly provided in this Agreement, each Party shall pay its own costs and expenses of and incidental to the negotiation, preparation, execution and implementation by it of this Agreement.


17.	Assignment

Except as otherwise provided as per Section 1(b) of Schedule 1 , no Party may assign its rights or delegate, transfer, sub-contract its obligations under this Agreement, except to a transferee of that Party's Shares made in accordance with the Articles and this Agreement, without the prior written consent of the other Parties.


18.	Notices

18.1

Any notice to be given under this Agreement shall be in writing in the English language signed by or on behalf of the Party giving it and may be delivered personally or sent by first class post or by a recognised international courier service, fees prepaid, or by fax or email, to the recipient at its address set out on the signature page hereto or such other address as it may have specified by giving not less than five (5) Business Days' notice to the others.

18.2

In the absence of evidence of earlier receipt, any notice or other communication is deemed given, if delivered personally, when left at the address of the relevant Party; if sent (fees prepaid) by a generally recognised international courier service, two (2) Business Days after delivery to the relevant international courier, and if sent by fax, on completion of its transmission or by email, as evidenced by a delivery receipt.


19.	General


19.1	The Company shall adopt policies with respect to business ethics (including anti-bribery and corruption and healthy, safety and environment) which shall be no less rigorous than the policies of the Shareholders. In the event of inconsistency between the requirements of such policies of the Shareholders, the Company shall adopt the more onerous requirement.

19.2

If during the continuance of this Agreement any ambiguity or conflict arises between the terms of this Agreement and those of the Company's memorandum of association or the Articles, the terms of this Agreement shall prevail as between the Shareholders and the Shareholders shall procure that the memorandum or the Articles are amended as soon as practicable to the extent necessary to permit the Company and its affairs to be administered as provided in this Agreement.


19.3	No variation of this Agreement shall be valid unless it is in writing and signed by or on behalf of each Party.


19.4	Except as expressly provided in this Agreement, the rights, powers and remedies contained in this Agreement are cumulative and not exclusive of any rights, powers or remedies provided by law.


19.5	Notwithstanding any indemnity given by any party under this Agreement, each Party shall mitigate any loss in respect which it is to be indemnified under this Agreement.


19.6	Each Party shall (at its own cost), and shall use their respective reasonable endeavours to procure that any third party shall, do, execute and perform all such further deeds, documents, assurances, acts and things as any of the other Parties may reasonably require by notice in writing to the others to carry the provisions of this Agreement and the Articles.

19.7

Nothing in this Agreement, and no action taken by the Parties pursuant to this Agreement, creates, or is to be construed as creating, a partnership between the Shareholders or as constituting either Shareholder as the agent of the other Shareholder for any purpose whatsoever. No Party has the authority or power to bind any other Party or to contract in the name of or create a liability against any other Party in any way.


19.8	This Agreement shall be binding on the Parties and their respective successors and permitted assigns.

19.9

No delay or failure on the part of any party in exercising a right, power or remedy provided by law or under this Agreement will impair that right, power or remedy or operate as a waiver of it or any other rights and remedies. The single or partial exercise of any right, power or remedy provided by law or under this Agreement will not preclude any other or further exercise or the exercise of any other rights power or remedy.


19.10	This Agreement contains the whole agreement between the Shareholders relating to the Joint Venture at the date hereof and supersedes any other agreements, warranties or representations, written or oral, between the Shareholders concerning such subject matter.

19.11

Without prejudice to any liability for fraudulent misrepresentation, each of the Parties acknowledges and agrees that, in entering into this Agreement and the documents referred to in it, it does not rely on, and that no Party is liable for, or is entitled to claim rescission or any other remedy in respect of, any statement, representation, warranty or assurance (whether negligently or innocently made) of any person which is not expressly set out in this Agreement and that no Party is liable for, or is entitled to any remedy in respect of, any misrepresentation or untrue statement unless and to the extent that a claim for breach of contract subsists in relation to this Agreement. This Agreement and the documents referred to in it constitute the entire agreement between the Parties and supersede and extinguishes all previous drafts, agreements, arrangements and understandings between them, whether written or oral, relating to its subject matter.


19.12	If a provision of this Agreement is or becomes or is found by a court or other competent authority to be illegal, invalid or unenforceable, in whole or in part, under any law, such provision shall to that extent only be deemed not to form part of this Agreement and the legality, validity and enforceability of the remainder of this Agreement shall not be affected or impaired.


19.13	This Agreement may be executed in any number of counterparts, and by the Parties on separate counterparts, but shall not be effective until each Party has executed at least one counterpart. Each counterpart, once executed, is deemed to form part of and will together constitute this Agreement.


19.14	A person who is not a Party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.


20.	Governing Law and Arbitration


20.1	This Agreement and any non-contractual obligations connected with it shall be governed by and construed in accordance with the laws of England and Wales.

20.2

All disputes, controversies or claims arising out of or in connection with this Agreement, including the breach, termination or invalidity thereof, and all disputes relating to non-contractual obligations, shall be referred to and finally resolved by arbitration under the London Court of International Arbitration (the “ LCIA ”) Rules, which Rules are deemed to be incorporated by reference into this Clause 20 . The number of arbitrators shall be three (3). The Shareholders shall each be entitled to nominate one arbitrator, the third arbitrator being appointed by the LCIA Court. The seat of arbitration shall be London, England. The language to be used in the arbitral proceedings shall be English. The Parties shall have the right to seek interim relief from a court of competent jurisdiction, at any time before and after the arbitrators have been appointed, up until the arbitrators have made their final award.


21.	Business Ethics

21.1

Each Shareholder represents, warrants and covenants to the other Shareholder, in connection with this Agreement, that it and its Affiliates and any officers, directors, employees, consultants and/or agents of it, its Affiliates or any person acting or performing services on its or its Affiliates’ behalf in respect of whose actions or inactions the Shareholders and/or their Affiliates may be liable under the Business Ethics Laws:


(a)	shall comply with Business Ethics Laws even if the provisions of the Business Ethics Law do not strictly apply to such Party or its representatives because of their jurisdictional status and references in this Clause 21 to Business Ethics Law shall be interpreted accordingly;

(b)

has not offered or given, directly or indirectly, and will not offer or give, directly or indirectly, any advantage, benefit or thing of value to any public official (including any officer, employee, director, officer, principal, consultant, agent, representative, candidate or official of any government, any state-owned agency, enterprise or joint venture interest, any public international organization or any political party) which would violate any Business Ethics Laws;


(c)	has not offered or given, directly or indirectly, and will not offer or give, directly or indirectly any advantage to any officer, director, employee, agent or representative of any other person or entity which would violate the Business Ethics Laws;


(d)	has not and will not, directly or through any other person or entity, request, agree to receive or accept any service, action or inaction by any other person or entity which would violate Business Ethics Laws;


(e)	has not and will not, directly or indirectly request, agree to receive or accept any advantage or benefit which would violate the Business Ethics Laws;


(f)	has given adequate training to its personnel and informed them of their obligations in relation to the Business Ethics Laws and that it shall have in place ongoing training, adequate policies and procedures in relation to business ethics and conduct and the reporting and investigating of suspected violations of Business Ethics Laws;


(g)	has not and will not violate any economic or trade sanctions, embargoes or restrictive measures administered, enacted or enforced by OFAC, the US Department of State, the United Nations Security Council, the European Union or its member states;


(h)	has not and will not hold another person in slavery or servitude, employ, engage or otherwise use forced or compulsory labour, trafficked labour or child labour; nor engage in or condone the use of corporal punishments or mentally, physically, sexually or verbally abusive or inhumane treatment of workers;


(i)	will promptly, to the extent permitted by law, notify the other Shareholder as soon as it become aware, or reasonably believes, that it or any other person in connection with this Agreement has breached any of the requirements in this Clause 21 ;

(j)

has and will maintain accurate and complete books and records and internal controls sufficient and of such quality, consistent with accounting principles and practices contained in US GAAP so as to permit an audit of the books and records by an internationally recognised firm of public or chartered accountants or their equivalent, and which would, following that audit, result in an unqualified audit opinion and will not maintain any off the book accounts or record any non-existent expenditure nor enter liabilities with incorrect identification of their object or use false documents;


(k)	will provide all reasonable assistance and access to permit the other Shareholder to conduct an audit of its documents, books and records (including providing copies of documentation when requested) during normal business hours for the purpose of confirming compliance with this Clause 21 ;


(l)	will use all reasonable endeavours to procure access to any third party, their properties, their employees and documents, where such access is reasonably necessary to perform such audit; for the avoidance of doubt access includes providing copies of the third party's documentation where requested;


(m)	will disclose to the other Shareholder any circumstances, past or present, which may reasonably be considered a material risk factor for violations of Business Ethics Laws; and


(n)	will promptly take all such steps as may be necessary and or requested by the other Shareholder to ensure that such risk factors referred to above do not give rise to any conflict of interest, or any breach of Business Ethics Laws.


21.2	Each Shareholder represents, warrants and covenants to the other Shareholder that to the best of its knowledge and belief neither it nor any of its Affiliates nor any officer, director, employee, consultant and/or agent of it or its Affiliates:


(a)	appears on any list of entities or individuals debarred from tendering or participating in any project funded by the World Bank, European Bank for Reconstruction and Development or any other multi-lateral or bi-lateral aid agency;


(b)	has at any time been found by a court in any jurisdiction to have breached the Business Ethics Laws other than as disclosed in writing to the other Parties.

21.3

Each Shareholder represents, warrants and covenants that it will, if requested in writing by the other Shareholder, promptly: provide any information which the other Shareholder may reasonably require in order to monitor its compliance with the warranties, covenants and/or representations contained in this Clause 21 ; and provide, where available, documentary support in respect of the information provided pursuant to this Clause 21 .


21.4	Each Shareholder shall defend, indemnify and hold the other Shareholder harmless from and against any and all claims, damages, liabilities, losses, penalties, costs and expenses arising from or related to, any breach by the indemnifying Shareholder of this Clause 21 or Business Ethics Laws.


21.5	The rights and obligations contained in Clause 21.4 above shall survive termination or expiry of this Agreement.


21.6	Each Shareholder shall require its Affiliates, contractors, consultants and agents involved in the project to act in accordance with the requirements of this Clause 21 and Business Ethics Laws.

21.7

Each Shareholder shall procure that the Company shall comply with this Clause 21 and that the Company shall implement and operate a compliance program including regular business ethics training and assessments of its activities and those of its contractors, consultants and agents involved in the project to verify that they are following their obligations in this Clause 21 and retain the right to have an independent auditor review and verify such compliance.


21.8	Any material decision related to compliance with Business Ethics Laws shall be treated as a Reserved Matter.

21.9

The Managing Director’s responsibilities shall be deemed to include the implementation and monitoring of policies, procedures and controls in relation to the recording of financial transactions and assessment and prevention of any risks associated with Business Ethics Laws. Such policies and procedures shall include all appropriate measures to assess, prevent and monitor such business risks including the training of personnel; whistle-blowing facilities; due diligence on third party engagements / contracts; gifts and hospitality, promotional expenditures, sponsorship and charitable donations; and audit functions. The Managing Director shall provide, or shall cause to be provided, regular business ethics updates to the Board on a not less than quarterly basis.

This Agreement is executed by each of the Shareholders on the date first stated on page 1.

EXECUTION PAGE



SIGNED by Pernille Noraas for and on behalf of GOLAR GLS UK LIMITED	) ) )	/s/ Pernille Noraas
in the presence of:
Signature /s/ Lee Sennett
Name Lee Sennet
Address

Occupation Solicitor
SIGNED by Azlina Jaafar for and on behalf of SCHLUMBERGER B.V.	) ) )	/s/ Azlina Jaafar
in the presence of:
Signature /s/ Robert Villard
Name Robert Villard
Address

Schedule 1
Transfer Provisions

1. Lock-up


(a)	During the Lock-up Period and unless permissible pursuant to Section 1(b) or Section 1(d) hereafter, any Transfer of Shares shall become effective only with the written consent of all Parties.

(b)

Any Party may at any time carry out a Transfer of all, but not part only, of its Shares to a wholly-owned Affiliate of such Party (a “ Permitted Transferee ”), provided, however, that (i) such Transfer of Shares shall become effective only if the Permitted Transferee, duly adheres to the provisions of this Agreement by the execution of a Supplemental Deed on terms substantially similar to those set out in Schedule 4.8 and (ii) if the transferee is to cease to be a wholly-owned Affiliate of the relevant Party, the transferring Party shall procure that the transferee (before it so ceases) shall transfer all of its Shares to the original Party or another wholly-owned Affiliate of such Party.

(c)

After the end of the Lock-up Period, every Party may carry out a Transfer of all but not part only of its Shares without the consent requirement set forth in Section 1(a) and accordingly the other Party shall provide any consents required under applicable laws or Articles of the Company to give effect to such Transfer provided that, however, the transferring Party adheres to the provisions set forth in Sections 2 and 3 .


(d)	The consent requirement set forth in Section 1(a) shall not apply to any Transfer of Shares in consummation of the Golar Call Option, the Schlumberger Call Option or the Drag-Along Right.

2. Right of First Refusal

(a)

If, after the expiry of the Lock-up Period, a Shareholder (the " Selling Party ") wishes to transfer any Shares other than to a Permitted Transferee, and has received a bona fide offer from an unaffiliated third party (the " Potential Purchaser ") to purchase such Shares (the " Offered Shares "), then the Selling Party shall first notify the other Shareholder (the " Offeree ") in writing of the proposed sale or transfer. Such notification (the " Notification ") shall contain all material terms of the proposed transfer, including, without limitation, a copy of the offer received, the name and address of the Potential Purchaser, the purchase price and terms of payment, the date and place of the proposed transfer, and the number and description of the Offered Shares. The Offeree shall have the option, for a period of sixty (60) days from the date the Notification is given, to elect to purchase all (but not part only) of the Offered Shares, at the same price and subject to the same material terms and conditions as described in the Notification (or terms and conditions as similar as reasonably possible). If the Offeree gives the Selling Party notice that it desires to purchase the Offered Shares, payment for the Offered Shares shall be made by wire transfer against delivery of the Offered Shares to be purchased at the time of the scheduled closing therefor, which shall be no later than the later of (i) sixty (60) days after the Notification is given or (ii) the date contemplated in the Notification for the closing with the Potential Purchaser.

(b)

If the Offeree does not elect to purchase the Offered Shares within the time period specified in Section 2(a), the Selling Party shall, subject to Section 3 , be free to sell all but not part only of the Offered Shares to the Potential Purchaser (other than to a Defined Competitor of the Offeree) on the same terms and conditions as outlined in the Notification, and provided that in the event such Shares are not sold within ninety (90) days of the date of the Notification, they shall once again be subject to the rights of first refusal provided herein.

(c)

If the Potential Purchaser acquires the Offered Shares from the Selling Party then the Selling Party shall procure as a condition to such Transfer that the Potential Purchaser agrees to be bound by all of the provisions hereof by execution of the Supplemental Deed in the form set out in Schedule 4.8 . The Parties shall cooperate with each other to reasonably amend the terms of this Agreement for incorporating such changes as may be necessary as a result of the sale and transfer of the Offered Shares to the Potential Purchaser.

3. Co-Sale Right (Tag-Along)

(a)

If the Offeree notifies the Selling Party that it does not wish to acquire the Offered Shares, the Selling Party shall, prior to completing such Transfer to the Potential Purchaser provide the Offeree with a final draft of the documentation agreed with the Potential Purchaser in relation to the Transfer of the Offered Shares (the “ Sales Documentation ”). The Offeree may, within ten Business Days after receipt of the draft of the Sales Documentation, require that the Selling Party procures that the Potential Purchaser shall acquire all (but not less than all) of the Shares held by the Offeree in accordance with the terms and conditions set forth in the Sales Documentation. If the Offeree does so require, the completion of the sale of the Offered Shares shall be conditional on completion of the sale of the Shares held by the Offeree.


(b)	If the Potential Purchaser is not willing to purchase the Offeree's Shares in accordance with Section 3(a) , the Selling Party is not entitled to sell the Offered Shares to the Potential Purchaser, and the Company shall refuse to register any transfer of the Offered Shares.

4. Call Options and Drag-Along Right

4.1 Golar Call Option

Golar is entitled to require Schlumberger to sell and transfer all (but not less than all) of Schlumberger's Shares (the “ Golar Option Shares ”) to Golar (or any person nominated by Golar) at any time (including, for the avoidance of doubt, during the Lock-up Period) (the " Golar Call Option” ) within a period of up to sixty (60) Business Days from the occurrence of Schlumberger becoming a Defaulting Shareholder.

4.2 Schlumberger Call Option

Schlumberger is entitled to require Golar to sell and transfer all (but not less than all) of Golar's Shares in the Company (the “ Schlumberger Option Shares ”) to Schlumberger (or any person nominated by Schlumberger) at any time (including, for the avoidance of doubt, during the Lock-up Period) (the " Schlumberger Call Option ") within a period of up to sixty (60) Business Days from the occurrence of any of the following:


(a)	A Defined Competitor acquires directly more than twenty percent (20%) of the shares or voting rights in Golar;


(b)	Golar becomes a Defaulting Shareholder;

4.3 Purchase Price

If Golar exercises the Golar Call Option or if Schlumberger exercises the Schlumberger Call Option, the purchase price payable for the Golar Option Shares or the Schlumberger Option Shares, as the case may be, shall be based on the Fair Market Value, which shall be reduced by 20% in the following cases:


(a)	if the Golar Call Option is exercised based on Clause 6.5.1(a) , and


(b)	if the Schlumberger Call Option is exercised based on Clause 6.5.1(a) .

4.4 Drag-Along Right

(a) Golar Drag-Along Right

(i)

Alternatively to the exercise of the Golar Call Option, if any of the events listed in Clause 6.5.1 has occurred in relation to Schlumberger, Golar may initiate the sale of one hundred percent (100%) of the Shares of the Company to a third-party and require that Schlumberger sells all of its Shares in the Company to such third-party, at the same price and under the same terms and conditions as those applicable to Golar's shares in the Company (the " Golar Drag-Along Right ").


(ii)	Golar may exercise the Golar Drag-Along Right only if the transaction is a bona fide arm’s length sale to an unaffiliated third party.


(b)	Schlumberger Drag-Along Right

(i)

Alternatively to the exercise of the Schlumberger Call Option, if any of the events listed in Clause 6.5.1 has occurred in relation to Golar, Schlumberger may initiate the sale of one hundred percent (100%) of the Shares to a third-party and require that Golar sells all of its Shares to such third-party, at the same price and under the same terms and conditions as those applicable to Schlumberger's Shares (the " Schlumberger Drag-Along Right” ).


(ii)	Schlumberger may exercise the Schlumberger Drag-Along Right only if the transaction is a bona fide arm’s length sale to an unaffiliated third party.

4.5. Shareholder Loans

If a Shareholder exercises its rights under any of paragraphs 4.1- 4.4. inclusive above, and the other Shareholder has made any shareholder loans, the exercising Shareholder shall have the right (but not the obligation) to purchase the other Shareholder’s loans or to require that a buyer of one hundred percent (100%) of the Shares shall purchase all Shareholder loans subject to the terms and conditions of the corresponding shareholder loan agreements for such Shareholder’s loans.

4.6. Exit Costs


(a)	If only one Party carries out a Transfer of Shares, all transaction costs regarding such Transfer of Shares shall be borne solely by such Party.


(b)	If more than one Party carries out a Transfer of Shares together with other Parties in a joint transaction (also in case a Drag-Along Right or Tag-Along Right has been exercised), all transaction costs regarding such Transfer of Shares shall be borne by the exiting Parties pro rata to their participation in such Transfer of Shares.

Schedule 2
Determination of Fair Market Value

For purposes of determining Fair Market Value as of any applicable date (excluding in relation to Clause 6.6 ), the following definition and procedures shall apply:

(a)

“ Fair Market Value ” of the Shares means the cash price that a willing buyer would pay to a willing seller in an arm's-length transaction, assuming that the Shares are being sold in an auction or otherwise in a manner reasonably designed to solicit all possible participants and permit all interested persons an opportunity to participate and to achieve the best value reasonably available to the seller at the time, taking into account all existing circumstances, including, without limitation, (a) the terms and conditions of all agreements to which the Company is then a party or by which it is otherwise benefited or affected (including any financing arrangements), (b) the existence of any third party offers for such Shares or for comparable assets, and (c) any projections of future cash flow from such Shares that have been agreed upon by the Board and the Party for whom such valuation is relevant. No discounts for minority interest or illiquidity shall be applied, and the value shall be computed on a fully diluted basis after giving effect to the exercise of any and all outstanding conversion rights, exchange rights, warrants and options.


(b)	The Party seeking to take affirmative action under this Agreement where a determination of Fair Market Value is required (the “ Trigger Party ”) shall promptly notify the Company and the other Shareholder of its proposed determination of Fair Market Value (as defined herein) (the “ FMV Notice ”).

(c)

Within ten (10) days following receipt of the FMV Notice, the other Party (the “Other Shareholder ”) shall notify the Trigger Party of any disagreement with the determination of Fair Market Value. In the absence of such notification, the determination of Fair Market Value by the Trigger Party shall be binding on the Company and all of the Parties. If the Other Shareholder determines there is a disagreement, the determination of Fair Market Value shall be made by internationally recognized investment bankers, with experience in the industries and countries in which the Company is located and the JV Group does business, and may not be an Affiliate of any Party or have performed any significant work for any Party or any Affiliate of any Party within the prior year (each a “ Recognized Investment Banker ”).

(d)

Within ten (10) days following receipt by the Trigger Party of notification of disagreement with the determination of Fair Market Value, the Trigger Party will select and identify to the Other Shareholder in writing a Recognized Investment Banker (the “ First Appraiser ”) and the Other Shareholder will select and identify to the Trigger Party in writing a Recognized Investment Banker (the “ Second Appraiser ”). The date when both the First Appraiser and the Second Appraiser have been selected and identified is referred to herein as the “ Start Date ”. If either the Trigger Party, on the one hand, or the Other Shareholders, on the other hand, fail to select a Recognized Investment Banker within the 10-day period, the Recognized Investment Banker that is selected within the 10-day period shall be the appraiser and shall conduct an appraisal of the Fair Market Value within thirty (30) days of the expiration of such 10-day period, which appraisal shall then be deemed to be the final appraisal of the Fair Market Value.

(e)

Within three (3) days after the Start Date, the First Appraiser and the Second Appraiser will together designate another Recognized Investment Banker (the “ Third Appraiser ”), who shall at no time be informed of the values determined by the First Appraiser and the Second Appraiser, to render its appraisal of the Fair Market Value. If the First Appraiser and the Second Appraiser are unable to agree on a Third Appraiser prior to the expiration of such 3-day period, then, on the Business Day following the expiration of such period, each of the First Appraiser and the Second Appraiser shall be entitled to eliminate any one of the Recognized Investment Bankers set forth on Exhibit A from consideration, and the Third Appraiser shall be the remaining Recognized Investment Banker set forth on Exhibit A . The Third Appraiser will make an independent determination of the Fair Market Value (the “ Third Value ”).

(f)

Within thirty (30) days after the Start Date (the “ Appraisal Deadline ”), the First Appraiser and the Second Appraiser will each provide to the Trigger Party and the Other Shareholder its written appraisal and report of the Fair Market Value as of the applicable date, and the Third Appraiser shall be prepared to provide its appraisal of the Fair Market Value as of the applicable date, which appraisal shall be completed by the Appraisal Deadline but shall only be delivered to the Trigger Party and the Other Shareholder, if at all, in accordance with paragraph (g) of this Schedule 2 . The Shareholders will, and will procure that the Company and its Subsidiaries will, cooperate with each of the appraisers appointed to determine the Fair Market Value and will deliver, or make available, all information reasonably required by such appraisers that is relevant to the determination of the Fair Market Value. If (i) either the First Appraiser or the Second Appraiser fails to deliver its appraisal on or before the Appraisal Deadline, the appraisal that is delivered on or before the Appraisal Deadline shall be deemed to be the final appraisal of the Fair Market Value or (ii) neither the First Appraiser nor the Second Appraiser delivers its appraisal on or before the Appraisal Deadline, then the Third Appraiser shall deliver its appraisal and the Third Value shall be deemed to be the final appraisal of the Fair Market Value.

(g)

If (i) the higher Fair Market Value (the “ High Value ”) set forth in a written report by one of the First and Second Appraisers is not more than one hundred and ten percent (110%) of the Fair Market Value (the “ Low Value ”) determined by the other of the First and Second Appraisers, then the Fair Market Value will be the average of the High Value and the Low Value and (ii) if the High Value is more than one hundred and ten percent (110%) of the Low Value, then, the Third Appraiser (who shall not be informed of the values determined by the First Appraiser and the Second Appraiser) shall immediately provide its written report to the Parties and the Company setting forth its determination of the Fair Market Value. If the Third Value is within the middle one-third (the “ Mid-Range ”) of the range of values between the High Value and Low Value, then the final and binding Fair Market Value shall equal the Third Value. If the Third Value is not within the Mid-Range, the final and binding Fair Market Value will be the average of (i) the Third Value and (ii) either (x) the High Value or (y) the Low Value, whichever is closer to the Third Value; provided , that the final and binding Fair Market Value shall not be determined to be less than the Low Value or greater than the High Value.

(h)

Each Recognized Investment Banker engaged for the purposes set forth in this Schedule 2 shall be engaged on customary terms, and the First Appraiser and the Second Appraiser shall be engaged on the same financial basis and on substantially the same terms. No Party to this Agreement nor any of their Affiliates or anyone acting on behalf of any of them shall provide to the Third Appraiser (i) any information regarding the appraisals of either the First Appraiser or the Second Appraiser (including the results of the first two appraisals) or (ii) any work product of the First Appraiser or Second Appraiser (including any information derived from information provided by the Company). The Parties will procure that each of the Recognized Investment Bankers selected by them agrees to be bound by the preceding sentence to the same extent as the parties hereto.


(i)	To the extent any applicable deadline under this Agreement would occur during the pendency of the procedures described in this Schedule 2 , such deadline shall be deemed extended to the extent reasonably necessary to accommodate the procedures set forth herein.

Exhibit A
to Schedule 2

Morgan Stanley

Societe Generale

Barclays

Royal Bank of Scotland

Goldman Sachs

Rothschild

Deutsche Bank

Merrill Lynch Bank of America

Schedule 4.1
Articles

OneLNG
Société anonyme
Luxembourg



CONSTITUTION D'UNE SOCIETE ANONYME du [ date ]

In the year [ year ], on the [ day ] day of [ month ].

Before Maître [ name of the notary ], notary public residing at [Luxembourg], Grand-Duchy of Luxembourg, undersigned.

Appears:

Golar GLS UK Limited, a company incorporated under the laws of England and Wales with number 10234146, having its registered office at One America Square, 17 Crosswall, London EC3N 2LB, England, here duly represented by [ name of the proxy-holder ], residing at [ private address of the proxy-holder ] by virtue of a proxy given under private seal; and

Schlumberger B.V., a company incorporated under the laws of The Netherlands, having its registered office at Parkstraat 83-89, 2514 JG, The Hague, Zuid-Holland, Netherlands, here duly represented by [ name of the proxy-holder ], residing at [ private address of the proxy-holder ] by virtue of a proxy given under private seal.

The before said proxy, being initialled " ne varietur " by the appearing party and the undersigned notary, shall remain annexed to this present deed to be filed at the same time with the registration authorities.

Such appearing party in the capacity of which it acts has requested the notary to draw up the following articles of incorporation (the “ Articles ”) of a " société anonyme " which such party declares to incorporate.

NAME – PURPOSE – REGISTERED OFFICE – DURATION

Article one.- There is hereby formed a “ société anonyme ”, public company limited by shares (the “ Company ”) governed by the Articles and by the current Luxembourg laws (the “ Law ”), in particular the law of 10 August 1915 on commercial companies, as amended.

Article two .- The Company’s name is “OneLNG”.

Article three .- The Company’s purpose is to take participations and interests, in any form whatsoever, in any commercial, industrial, financial or other, Luxembourg or foreign companies or enterprises and to acquire through participations, contributions, underwriting, purchases or options, negotiation or in any other way any securities, rights, patents and licences, and other property, rights and interest in property as the Company shall deem fit, and generally to hold, manage, develop, sell or dispose of the same, in whole or in part, for such consideration as the Company may think fit, and in particular for shares or securities of any company purchasing the same; to enter into, assist or participate in financial, commercial and other transactions, and to grant to any holding company, subsidiary, or fellow subsidiary, or any other company which belong to the same group of companies than the Company any assistance, loans, advances or guarantees; to borrow and raise money in any manner and to secure the repayment of any money borrowed.

The Company may also develop, finance, invest in and operate projects for the conversion of hydrocarbon reserves to liquefied natural gas, natural gas and potentially other liquid products using processing and floating liquefied natural gas facilities.The Company can perform all commercial, technical and financial operations, connected directly or indirectly in all areas as described above in order to facilitate the accomplishment of its purpose.

Article four .- The Company has its registered office in the City of Luxembourg, Grand Duchy of Luxembourg.

The registered office may be transferred within the municipality of Luxembourg by decision of the board of directors.

The registered office of the Company may be transferred to any other place in the Grand Duchy of Luxembourg by means of a resolution of an extraordinary general meeting of shareholders adopted under the conditions required for amendment of the Articles.

The Company may have offices and branches (whether or not within a permanent establishment), both in Luxembourg and abroad.

In the event that the board of directors should determine that extraordinary political, economic or social developments have occurred or are imminent that would interfere with the normal activities of the Company at its registered office, or with the ease of communication between such office and persons abroad, the registered office may be temporarily transferred abroad until the complete cessation of these abnormal circumstances; such temporary measures shall have no effect on the nationality of the Company which, notwithstanding the temporary transfer of its registered office, will remain a Luxembourg company. Such temporary measures will be taken and notified to any interested parties by the board of directors of the Company.

Article five .- The Company is constituted for an unlimited duration.

Article six .- The creditors, representatives, rightful owner or heirs of any shareholder are not allowed, in any circumstances, to require the sealing of the assets and documents of the Company, nor to interfere in any manner in the administration of the Company. They must for the exercise of their rights refer to financial statements and to the decisions of the meetings of shareholders.

CAPITAL – SHARES

Article seven .- The Company's issued share capital is set at US$100,000 (one hundred thousand US dollars), represented by 10,000 (ten thousand) shares with a nominal value of US$10 (ten US dollars) each.

The amount of the issued share capital of the Company may be increased or reduced by a resolution of the general meeting of shareholders adopted under the conditions required for amendment of the Articles.

Article eight .- Each share confers an identical voting right and each shareholder has voting rights commensurate to his shareholding.

Article nine .- Except in the case of a permitted transfer as set out in any shareholders’ agreement entered into from time to time, the shares shall not be transferred for a period of 7 (seven) years from the date of the holding of the first extraordinary shareholders’ meeting before a notary deciding to increase the share capital of the Company (the “ Closing Date ”), unless with the prior unanimous consent of the shareholders‎ (the “ Lock-Up Period ”). After expiry of the Lock-Up Period, the shares may be freely transferred, subject to the provisions of any shareholders agreement entered into from time to time.

The shares shall be in registered form only. A register of shareholders shall be kept by the Company and shall contain, at least, the precise identification of each shareholder, the number of its shares and, if applicable, their transfer and the date of transfer.

The shares are indivisible with regard to the Company, which admits only one owner per share.

Article ten . – The Company shall have power to redeem its own shares under the conditions stated in the Law.

MANAGEMENT – SUPERVISION

Article eleven . – The Company will be managed by a board of directors composed of four (4) members represented by two (2) class A directors and two (2) class B directors. However, when all the shares of the Company are held by a sole shareholder, the board of directors may be formed with a single director under the conditions stated in the Law. The director(s) need not be shareholders of the Company.

If a corporate entity is appointed as a member of the board of directors, such a corporate entity shall inform the Company of the name of the individual that it has appointed to serve as its permanent representative in the exercise of its mandate of director of the Company.

The class A directors and the class B directors shall be appointed, and their remuneration determined or modified, in accordance with the terms of any shareholders’ agreement entered into from time to time, by a unanimous resolution of the general meeting of shareholders. The directors are re-eligible.

The general meeting of shareholders may, at any time and ad nutum , remove and replace any director.

In case of vacancy in the office of director by reason of death or resignation of a director or otherwise, the remaining directors shall appoint another director to fill such vacancy in accordance with the provisions of any shareholders’ agreement entered into from time to time.

The term of the office of the director(s) shall not exceed two years, unless determined otherwise by the general meeting of the shareholders.

The board of directors is vested with the broadest powers to perform all acts necessary or useful for accomplishing the Company’s purpose. All powers not expressly reserved by the Law or the Articles to the general meeting of shareholders fall within the competence of the board of directors.

In dealing with third parties, the board of directors will have all powers to act in the name of the Company in all circumstances and to carry out and approve all acts and operations consistent with the Company’s purpose and provided the terms of these Articles shall have been complied with.

The day-to-day management of the business of the Company and the power to represent the Company with respect thereto may, subject to the provisions of any shareholders’ agreement entered into from time to time, be delegated to one or more directors, officers, managers, and/or agents, who need not be shareholders of the Company. The delegation in favour of a member of the board of directors is subject to the prior authorization of the general meeting of shareholders.

The Company will be bound by the joint signatures of a class A director and a class B director. With respect to matters which relate to the daily management of the business of the Company, the Company will also be bound by the signature of any person to whom the daily management of the business of the Company has been delegated, in accordance with the provisions of any shareholders’ agreement entered into from time to time.

The board of directors may from time to time sub-delegate its/his powers for specific tasks to one or several ad hoc agent(s) who need not be shareholder(s) or director(s) of the Company.

The board of directors will determine the powers, duties and remuneration (if any) of its agent(s), the duration of the period of representation and any other relevant conditions of his/their agency, in accordance with the provisions of any shareholders’ agreement entered into from time to time.

Article twelve .- The chairman of the board of directors shall be appointed by the board of directors out of the class A directors , which in case of tie vote, shall have a casting vote, except in case of reserved matters as defined by any shareholders’ agreement entered into from time to time. The chairman shall preside at all meetings of the board of directors. In case of absence of the chairman, the board of directors shall be chaired by a class A director present and appointed for that purpose.

The board of directors may also appoint a secretary, who need not be a director, who shall be responsible for keeping the minutes of the meetings of the board of directors or for other matters as may be specified by the board of directors.

The board of directors shall meet when convened by one director.

Notice of any meeting of the board of directors shall be given to all directors at least 7 (seven) days in advance of the time set for such meeting except in the event of emergency where all directors have previously consented to the meeting being convened at short notice, the nature of which is to be set forth in the minutes of the meeting.

Any convening notice shall specify the time and place of the meeting and the nature of the business to be transacted.

Convening notices can be given to each director, in writing by ordinary mail, or by fax and/or email (and the receipt of such mail, fax or email shall be acknowledged by the recipient).

The notice may be waived by the consent of each director in writing by ordinary mail, or by fax and/or email (and the receipt of such mail, fax or email shall be acknowledged by the recipient).

The meeting will be duly held without prior notice if all the directors are present or duly represented.

No separate notice is required for meetings held at times and places specified in a schedule previously adopted by a resolution of the board of directors.

Any director may act at any meeting of directors by appointing in writing by way of a power of attorney another director as his proxy.

A director may represent more than one director.

Any meeting of the board of directors shall take place in the Grand-Duchy of Luxembourg and shall require at least the presence of all the directors, either present in person or by representative, which shall form a quorum. In the event that such a quorum is not met, the meeting shall be adjourned and a second convening notice shall be given for a meeting at the same time and place the following week, in which the presence of at least a class A director and a class B director, either present in person or by representative, shall form a quorum.

According to article 64bis (3) of the Law, the directors may participate in a meeting of the board of directors by phone, videoconference, or any other suitable telecommunication means allowing for their identification.

Such participation in a meeting is deemed equivalent to participation in person at a meeting of the directors.

Decisions of the board of directors are taken by the majority of directors participating to the meeting or duly represented thereat.

The deliberations of the board of directors shall be recorded in the minutes, which have to be signed by the chairman or, if applicable, by his substitute, or by all directors present at the meeting. The proxies will remain attached to the board minutes. Any transcript of or excerpt from these minutes shall be signed by the chairman or all directors.

A resolution in writing approved and signed by all directors shall have the same effect as a resolution passed at a meeting of the board of directors.

In such cases, written resolutions can either be documented in a single document or in several separate documents having the same content.

Written resolutions may be transmitted by ordinary mail, or by fax and/or email (and the receipt of such mail, fax or email shall be acknowledged by the recipient).

When the board of directors is composed of a single director, resolutions are taken by the single director at such time and place determined upon its sole discretion and shall be recorded in a written document signed by it.

GENERAL MEETINGS OF SHAREHOLDER(S)

Article thirteen .- In case of plurality of shareholders, decisions of the shareholders are taken by a general meeting of the shareholders. One general meeting shall be held annually at the registered office of the Company on the last Monday in May at 10am. If such a day is a public holiday, the general meeting shall be held the following business day at the same time. Other general meetings of shareholders shall be held in the place, on the day and at the time specified in the notice of the meeting.

Article fourteen .- General meetings of shareholders are convened by the board of directors, or by shareholders representing one tenth or more of the share capital of the Company.

Written notices convening a general meeting and setting forth the agenda shall be made pursuant to the Law and shall be sent by registered letters to each shareholder at least 8 (eight) days before the meeting, except for the annual general meeting for which the notice shall be sent by registered letter at least 21 (twenty-one) days prior to the date of the meeting.

All notices must specify the time and place of the meeting.

If all shareholders are present or represented at the general meeting and state that they have been duly informed on the agenda of the meeting, the general meeting may be held without prior notice.

Any shareholder may act at any general meeting by appointing in writing by way of a power of attorney another person as its proxy who needs not be shareholder.

The directors may attend and speak in general meetings of shareholders.

Unless otherwise required by the Law, general meetings of shareholders shall require the presence of all shareholders, either present in person or by representative, which shall form a quorum.

Decisions of the general meetings of shareholders are taken at the majority vote determined by the Law, except in case of reserved matters as defined by any shareholders’ agreement entered into from time to time, for which a unanimous vote shall be required.Minutes shall be signed by the bureau of the meeting and by the shareholders who request to do so.

A sole shareholder exercises alone the powers devolved to the meeting of shareholders by the Law.

FINANCIAL YEAR – BALANCE SHEET

Article fifteen .- The Company's financial year begins on 1 January and closes on 31 December.

Article sixteen .- Each year, the board of directors will draw up the balance sheet, a profit and loss account, a report on the operations of the Company and any other documentation required by the Law and by the law of 19 December 2002 on the trade and companies register and the accounting and annual accounts of undertakings, as amended.

Any such relevant documentation shall be transmitted by the board, at least one month before the date of the annual general meeting of shareholders, to the statutory auditor(s) that shall draft a report.

SUPERVISION OF THE COMPANY

Article seventeen . - The supervision of the Company shall be entrusted to one or more statutory auditor(s) ( commissaire(s) aux comptes ), who may not be shareholder(s). Each statutory auditor shall be appointed for a period not exceeding two (2) years by the general meeting of shareholders or by the sole shareholder, which may remove them at any time.

The term of the office of the statutory auditor(s) and his/their remuneration, if any, are fixed by the general meeting of the shareholders or by the sole shareholder. At the end of this period, the statutory auditor(s) may be renewed in his/their function by a new resolution of the general meeting of shareholders or by the sole shareholder.

DIVIDEND – RESERVES

Article eighteen .- The credit balance of the profit and loss account, after deduction of the expenses, costs, amortizations, charges and provisions represents the net profit of the Company.

Every year five percent of the net profit will be transferred to the statutory reserve.

This deduction ceases to be compulsory when the statutory reserve amounts to one tenth of the issued share capital, as decreased or increased from time to time, but shall again become compulsory if the statutory reserve falls below such one tenth.

The general meeting of shareholders shall decide on the allocation of the annual profit in accordance with any shareholders’ agreement entered into from time to time.

INTERIM DIVIDEND

Article nineteen .- The board of directors may decide to pay interim dividends before the end of the current financial year, in accordance with the Law.

DISSOLUTION – LIQUIDATION

Article twenty .- The general meeting of shareholders may resolve the dissolution of the Company with the unanimous consent of the shareholders.

Article twenty-one .- The liquidation will be carried out by one or more liquidators, physical person or corporate entity, appointed by the general meeting of shareholders or by the sole shareholder which will specify their powers and fix their remuneration.

When the liquidation of the Company is closed, the assets of the Company will be allocated to the shareholders in accordance with any shareholders’ agreement entered into from time to time.

APPLICABLE LAW

Article twenty-two .-Reference is made to the provisions of the Law for which no specific provision is made in these Articles.

TRANSITIONAL MEASURES

Exceptionally the first financial year shall begin today and end on 31 December 2016.

PAYMENT – CONTRIBUTIONS

- 5,100 (five thousand one hundred) shares have been subscribed by Golar GLS UK Limited, named above, and fully paid up in cash, proof of which has been duly given to the undersigned notary.

- 4,900 (four thousand nine hundred) shares have been subscribed by Schlumberger B.V., named above, and fully paid up in cash, proof of which has been duly given to the undersigned notary.

ESTIMATE OF COSTS

The costs, expenses, fees and charges, in whatsoever form, which are to be borne by the Company or which shall be charged to it in connection with its incorporation, are estimated at about EUR [...] ([...] Euro).

RESOLUTIONS OF THE SHAREHOLDERS

Immediately after the incorporation of the Company, the above-named persons, representing the entirety of the subscribed capital, held a general meeting of shareholders, and acknowledging being validly convened, passed the following resolutions:


1)	The number of directors is set at 4 (four) and that of the statutory auditor ( commissaire aux comptes ) at 1 (one).


2)	Are appointed as directors:


-	Tor Olav Trøim, [residing/with professional address] at [ address ] as a class A director;


-	Oscar Spieler, [residing/with professional address] at [ address ] as a class A director;


-	[Patrick Schorn], [residing/with professional address] at [address] as a class B director; and


-	[Simon Ayat], [residing/with professional address] at [address] as a class B director.

In accordance with article 11 of its articles of association, the Company shall be bound by the joint signatures of a class A director and a class B director.

The directors shall serve for a term of two (2) years, and shall be re-eligible.


3)	Is elected as statutory auditor ( commissaire aux comptes ) [ Ernst & Young ], a company having its registered office at [ registered office of the statutory auditor ].

In accordance with article 19 of the Articles, the statutory auditor shall serve for a term ending on the date of the annual general meeting of shareholders which will be held in [ month and year ].


4)	The Company shall have its registered office at [ Luxembourg address ].

DECLARATION

The undersigned notary who understands and speaks English, hereby states that on request of the above appearing persons, the present incorporation deed is worded in English, followed by a French version. On request of the same persons and in case of discrepancies between the English and the French text, the English version will prevail.

In faith of which we, the undersigned notary have set hand and seal in [...], on the day named at the beginning of this document.

The document having been read to the proxies holders, said persons signed with us, the Notary, the present original deed.

In faith of which we, the undersigned notary have set hand and seal in Mersch, on the day named at the beginning of this document.

The document having been read to the proxies holders, said persons signed with us, the Notary, the present original deed.

Schedule 4.5
Initial Board

Golar Director and Chairman Tor Olav Trøim

Golar Director Oscar Spieler

Schlumberger Director Simon Ayat

Schlumberger Director Patrick Schorn

Schedule 4.8
Supplemental Deed

DEED OF ADHERENCE

THIS DEED OF ADHERENCE is made on [ ] 2016 by [ ] of [ ] (the “ Covenantor ”)

SUPPLEMENTAL to a joint venture and shareholders’ agreement dated [ ] 2016 [ insert the details of the joint venture and shareholders’ agreement and any instrument modifying the original agreement, if any ] (the “ JV Master Agreement ”)

NOW THIS DEED WITNESSES AS FOLLOWS:

The Covenantor hereby confirms that it has been supplied with a copy of the JV Master Agreement and hereby covenants with each of the persons named in appendix 1 hereto to observe perform and be bound by all the terms of the JV Master Agreement applicable to the Covenantor and which have not been performed at the date hereof to the intent and effect that the Covenantor shall be deemed with effect from the date on which the Covenantor is registered as a Shareholder of the Company to be a party to the JV Master Agreement.


2.	The parties hereby agree and confirm that the Covenantor shall have the benefit of all of the provisions of the JV Master Agreement as if the Covenantor were named therein as a Shareholder and as if the Covenantor had been a party thereto from the date on which the Covenantor is registered as a Shareholder of the Company.


3.	The governing law of and jurisdiction Clause of the JV Master Agreement shall apply mutatis mutandis to this agreement (and any dispute, controversy, proceedings or claim of whatever nature arising out of or in any way relating to this agreement or its formation).

This agreement has been executed as a deed on the date first above written.

[ insert of execution clauses for parties ]

…………………………………………………………………………………………

APPENDIX 1

Golar GLS UK Limited
Schlumberger B.V.

Schedule 5.2.1(c)
Form of minutes of extraordinary shareholders’ meeting

OneLNG

Société anonyme

Registered office: […]

L-[...] Luxembourg

R.C.S. Luxembourg B [...]



ASSEMBLEE GENERALE EXTRAORDINAIRE du […] 2016

In the year two thousand and sixteen, on the […] day of […].

Before Maître […], notary public residing at […], Grand-Duchy of Luxembourg, undersigned.

Is held an extraordinary general meeting of the shareholders of "OneLNG" (the “ Company ”), a Luxembourg “ societe anonyme ”, having its registered office at […], L-[…] Luxembourg, registered with the Luxembourg Trade and Companies Register under number B […], which was incorporated by a deed of Maitre […], notary residing in […], Grand-Duchy of Luxembourg on […] 2016, published in Recueil Electronique des Sociétés et Associations (“ Official Gazette ”), number […] of […] 2016.

The meeting is presided by […], with professional address at […].

The chairman appoints as secretary […], residing at […] and the meeting elects as scrutineer […], residing in Luxembourg.

The chairman requests the notary to act that:

I.- The shareholders of the Company (the “ Shareholders ”) are duly represented at the present meeting by virtue of proxies given under private seal, and the number of shares held by them are shown on an attendance list. That list and proxies, signed by the appearing persons and the notary, shall remain here annexed to be registered with this deed.

II.- As it appears from the attendance list, the 10,000 (ten thousand) shares of USD 10 (ten United States Dollars) each, representing the whole share capital of the Company, are represented so that the meeting can validly decide on all the items of the agenda, of which the Shareholders expressly state having been duly informed beforehand.

III.- The agenda of the meeting is the following:

AGENDA


1.	Waiving of notice right;

Increase of the share capital of the Company by an amount of USD 19,900,000 (nineteen million nine hundred thousand United States Dollars), so as to raise it from its current amount of USD 100,000 (one hundred thousand United States Dollars) to USD 20,000,000 (twenty million United States Dollars) by the issuance of 1,990,000 (one million nine hundred ninety thousand) new shares with a nominal value of USD 10 (ten United States Dollars);


3.	Subscription, intervention of the subscribers and payment of the new shares of the Company by way of contributions in cash;


4.	Composition of the shareholding of the Company;


5.	Subsequent amendment of article 7 paragraph 1 of the articles of association of the Company in order to reflect the new share capital of the Company pursuant to resolutions 2. and 3. above; and


6.	Miscellaneous.

After the foregoing was approved by the Shareholders, the following resolutions have been taken:

FIRST RESOLUTION : It is unanimously resolved that the Shareholders waive their right to the prior notice of the current meeting; the Shareholders acknowledge being sufficiently informed of the agenda and consider being validly convened and therefore agree to deliberate and vote upon all the items of the agenda. It is further resolved that all the relevant documentation has been put at the disposal of the Shareholders within a sufficient period of time in order to allow them to examine carefully each document.

SECOND RESOLUTION : It is unanimously resolved to increase the share capital of the Company by an amount of USD 19,900,000 (nineteen million nine hundred thousand United States Dollars) so as to raise it from its current amount of USD 100,000 (one hundred thousand United States Dollars) to USD 20,000,000 (twenty million United States Dollars) by the issuance of 1,990,000 (one million nine hundred ninety thousand) new shares with a nominal value of USD 10 (ten United States Dollars) each, the whole to be fully paid up through contributions in cash in the total amount of USD 19,900,000 (nineteen million nine hundred thousand United States Dollars) (the “ Contribution ”);

THIRD RESOLUTION: Pursuant to the above second resolution, it is unanimously resolved to accept the subscription and payment by the Shareholders.

Subscribers’ Intervention - Subscription - Payment

Thereupon intervene the Shareholders here represented as aforementioned.

(i)

Golar GLS UK Limited , a company organized under the laws of England and Wales, having its registered office at 13th Floor, 1 America Square, Crosswall, London UK EC3N 2LB (“ Golar ”), declares to subscribe to 1,014,900 (one million fourteen thousand nine hundred) new shares with a nominal value of USD 10 (ten United States Dollars) each by way of contribution in cash amounting to USD 10,149,000 (ten million one hundred forty nine thousand United States Dollars); and

(ii)

Schlumberger B.V. , a company incorporated under the laws of the Netherlands, having its registered address at Parkstraat 83-89, 2514 JG, The Hague, Zuid-Holland, Netherlands (“ Schlumberger ”), declares to subscribe to 975,100 (nine hundred seventy five thousand one hundred) new shares with a nominal value of USD 10 (ten United States Dollars) each by way of contribution in cash amounting to USD 9,751,000 (nine million seven hundred fifty one thousand United States Dollars ).

Evidence of the Contribution

Proof of the Contribution has been given to the undersigned notary, so that the total amount of USD 19,900,000 (nineteen million nine hundred thousand United States Dollars) is from now on at the free disposal of the Company.

FOURTH RESOLUTION: As a consequence of the foregoing resolutions, the shareholding of the Company is now composed of:



(i) Golar GLS UK Limited	1,020,000 (one million twenty thousand) shares with a nominal value of USD 10 (ten United States Dollars) each
(ii) Schlumberger B.V.	980,000 (nine hundred eighty thousand) shares with a nominal value of USD 10 (ten United States Dollars) each

FIFTH RESOLUTION: As a consequence of the foregoing statements and resolutions and the Contribution having been fully carried out, it resolved to amend the first paragraph of article 7 of the Company’s articles of association to read as follows:

“ Article 7. – “The Company's issued share capital is set at USD 20,000,000 (twenty million United States Dollars), represented by 2,000,000 (two million) shares with a nominal value of USD 10 (ten United States Dollars) each.”

There being no further business before the meeting, the same was thereupon adjourned.

ESTIMATE OF COSTS

The costs, expenses, fees and charges, in whatsoever form, which shall be charged to the Company or to be paid by it in connection with this increase of capital have been estimated at about EUR […] ([…] Euro).

There being no further business before the meeting, the same was thereupon adjourned.

Whereof the present notarial deed was drawn up in Luxembourg on the day named at the beginning of this document.

The document having been read to the persons appearing, he signed together with us, the notary, the present original deed.

The undersigned notary who understands and speaks English states herewith that on request of the above appearing persons, the present deed is worded in English followed by a French translation. On request of the same appearing persons and in case of discrepancies between the English and the French text, the English version will prevail.

SUIT LA VERSION FRANCAISE DU TEXTE QUI PRECEDE

Schedule 5.2.3(a)
Form of minutes of Board meeting

OneLNG

Société anonyme

Registered office: […], L-[…] Luxembourg

R.C.S. Luxembourg : B […]

(the “Company”)

Minutes of the board of directors’ meeting of the Company held in Luxembourg on […] at […] [am/pm]

PRESENT/ […]

REPRESENTED:

EXCUSED: […]

All the directors being present or represented and stating to have been duly informed of all the items on the following agenda (the “ Agenda ”) and to waive, to the extent necessary, any and all procedures of convening or others, the board of directors was validly constituted and could decide on all items on the Agenda, as follows:


1.	Ratification of the setting-up of a Luxembourg bank account for the Company;


2.	Ratification of a domiciliation agreement entered into on behalf of the Company;


3.	Appointment of Mr. […] as chairman of the board of directors of the Company;


4.	Proposal to recommend to the shareholders of the Company the increase of the share capital of the Company through contributions in cash;


5.	Convening of an extraordinary general meeting of the shareholders of the Company relating to resolution 4 above;


6.	Approval of the adherence by the Company to the joint-venture and shareholders’ agreement entered into by and between the shareholders of the Company; and


7.	Miscellaneous.

THE DIRECTORS THEN DELIBERATED:


1.	Ratification of the setting-up of a Luxembourg bank account for the Company

It was reported that, in anticipation of the incorporation of the Company, a bank account (the “ Bank Account ”) had been set-up with [ name of the bank ] having its address at […], […], Grand-Duchy of Luxembourg (the “ Bank Institution ”) on behalf of the Company in accordance with the documentation carefully considered for such purpose (the “ Documentation ”).

After due and careful consideration, IT WAS UNANIMOUSLY RESOLVED that:


•	the setting up of the Bank Account and the Documentation be and are hereby approved and ratified to the extent necessary;

•

any directors of the Company be and are hereby authorized on behalf of the Company, with full power of sub-delegation, to do all such acts and execute all such documents, certificates and notices as he may consider expedient in connection with the setting up of the Bank Account, the execution or performance by the Company of the Documentation or which might otherwise be desirable in connection therewith.


2.	Ratification of a domiciliation agreement entered into on behalf of the Company

It was reported that, in anticipation of the incorporation of the Company, a domiciliation agreement had been executed by […], in the name and on behalf of the Company with [United Management International S.A., a Luxembourg public limited company (“ société anonyme ”) having its registered address at [5, Avenue Gaston Diderich, L-1420 Luxembourg], Grand Duchy of Luxembourg (“ United Management ”)] so that the Company may have its address at 5, avenue Gaston Diderich, L-1420 Luxembourg, Grand Duchy of Luxembourg.

A copy of the domiciliation agreement was carefully considered by the directors (the “ Domiciliation Agreement ”).

After due and careful consideration, IT WAS UNANIMOUSLY RESOLVED that:


•	the Domiciliation Agreement is in the best interest of the Company;


•	the Domiciliation Agreement be and hereby is approved and ratified to the extent necessary;


•	any directors of the Company be and are hereby authorized on behalf of the Company, with full power of sub-delegation, to do all such acts and execute all such documents, certificates and notices as he may consider expedient in connection with the execution or performance by the Company of the Domiciliation Agreement or which might otherwise be desirable in connection therewith.


3.	Appointment of Mr. […] as chairman of the board of directors of the Company

It was first reminded that, in accordance with the provisions of article 12 of the articles of association of the Company, the chairman of the board of directors shall be appointed by the board of directors out of the class A directors.

It was therefore proposed to appoint as chairman of the board of directors of the Company Mr. […], who had been appointed as class A director, with effect as of the date of the present meeting (the “ Appointment ”).

After due and careful consideration, IT WAS UNANIMOUSLY RESOLVED that:


•	the Appointment is in the best interest of the Company;


•	the Appointment be and hereby is approved; and


•	any director of the Company be and are hereby individually authorised on behalf of the Company, with full power of sub-delegation, to do all such acts and execute all such documents, certificates and notices in the name and on behalf of the Company, as he/she may consider expedient in connection with the Appointment or which might otherwise be considerable in connection therewith.


4.	Proposal to recommend to the shareholders of the Company the increase of the share capital of the Company through contributions in cash

It was reported that it was proposed to the shareholders of the Company, being (i) Golar GLS UK Limited, a company organized under the laws of England and Wales, having its registered office at 13th Floor, 1 America Square, Crosswall, London UK EC3N 2LB (“ Golar ”) and (ii) Schlumberger B.V., a company incorporated under the laws of the Netherlands, having its registered address at Parkstraat 83-89, 2514 JG, The Hague, Zuid-Holland, Netherlands (“ Schlumberger ” together with Golar, the “ Shareholders ”) to increase the share capital of the Company, on or around […] 2016, by an amount of USD 19,900,000 so as to raise it from its current amount of USD 100,000 to USD 20,000,000 (the “ Share Capital Increase ”).

It was noted that (i) 975,100 new shares with a nominal value of USD 10 each shall be issued and subscribed by Schlumberger and (ii) 1,014,900 new shares with a nominal value of USD 10 each shall be subscribed by Golar (the “ New Shares ”), the whole to be fully paid up through (a) a contribution in cash in the amount of USD 9,751,000 to be made by Schlumberger and (b) a contribution in cash in the amount of USD 10,149,000 to be made by Golar (the “ Contribution ”).

It was further noted that, following the Share Capital Increase, it is contemplated to update the shareholder’s register of the Company to reflect the issuance of the New Shares (the “ Update ”).

After due and careful consideration, IT WAS UNANIMOUSLY RESOLVED that:


•	the Share Capital Increase, the New Shares, the Contribution and the Update are in the best interest of the Company;


•	the Share Capital Increase, the New Shares, the Contribution and the Update be and are hereby approved;

•

any directors of the Company be and are hereby individually authorized in the name and on behalf of the Company, with full power of sub-delegation to do all such acts and execute all such documents, certificates and notices in the name and on behalf of the Company, as he/she may consider expedient in connection with the Contribution, the Share Capital Increase, the New Shares, the Contribution and the Update or which might otherwise be desirable in connection therewith.


5.	Convening of an extraordinary general meeting of the shareholders of the Company relating to resolution 4 above

Further to resolution 4 above, it was proposed to convene an extraordinary general meeting of the Shareholders (the “ Convening ”) to be held in Luxembourg before a public notary on or around […] 2016 or at any later date thereafter (the “ EGM ”), with the following agenda (the “ EGM Agenda ”):

“Agenda


1.	Waiving of notice right;


3.	Subscription, intervention of the subscribers and payment of the new shares of the Company by way of contributions in cash;


4.	Composition of the shareholding of the Company;


5.	Subsequent amendment of article 7 paragraph 1 of the articles of association of the Company in order to reflect the new share capital of the Company pursuant to resolutions 2. and 3. above; and


6.	Miscellaneous.”

A draft of the EGM was produced to the meeting and carefully examined by all the directors of the Company.

After due and careful consideration, IT WAS UNANIMOUSLY RESOLVED that:


•	the Convening and the EGM Agenda are in the best interest of the Company;


•	the Convening and the EGM Agenda be and hereby approved; and

•

any directors of the Company be and hereby individually authorized in the name and on behalf of the Company, with full power of sub-delegation to do all such acts and execute all such documents, certificates and notices in the name and on behalf of the Company, as he/she may consider expedient in connection with the Convening and the EGM Agenda, or which might otherwise be desirable in connection herewith.


6.	Approval of the adherence by the Company to the joint-venture and shareholders’ agreement entered into by and between the shareholders of the Company

It was reported that Golar and Schlumberger had entered as Shareholders, on […] 2016, into a joint-venture and shareholders’ agreement in order to set out the terms and conditions on which they have agreed to establish their joint venture through the Company (the “ JV Agreement ”).

A signed copy of the JV Agreement was produced to the meeting to be carefully considered by the directors of the Company.

It was noted that, on the Closing Date (such term as defined in the JV Agreement) and in accordance with the provisions of section 5.2.3 of the JV Agreement, the Company shall adhere to the JV Agreement by the signature of an adherence agreement (the “ Deed Of Adherence ”).

A draft of the Deed Of Adherence was produced to the meeting to be carefully considered by the directors of the Company.

After due and careful consideration, IT WAS UNANIMOUSLY RESOLVED that:


•	the JV Agreement and the Deed of Adherence and more specifically the assumption of the duties and rights by the Company thereunder are in the best interest of the Company;


•	the entering into the JV Agreement by the Company and the Deed Of Adherence be and hereby approved;

•

any directors of the Company be and hereby individually authorized in the name and on behalf of the Company, with full power of sub-delegation to execute the Deed Of Adherence (with any such amendments, modifications or revisions that he or she in his or her absolute discretion may think fit) and to do all such acts and execute all such documents, certificates and notices in the name and on behalf of the Company, as he/she may consider expedient in connection with the JV Agreement and the Deed Of Adherence or which might otherwise be desirable in connection therewith.


7.	Miscellaneous

There being no further business, the meeting was closed at […] [am/pm].

Signed in Luxembourg.

_______________________

Mr. [...]

Chairman

Schedule 5.2.2(e)
Form of parent company guarantee

[ON GOLAR LNG LIMITED LETTERHEAD]

PARENT COMPANY GUARANTEE

To:

Beneficiary: Schlumberger B.V. , Parkstraat 83-89, 2514 JG, The Hague, Zuid-Holland, Netherlands

Re: Joint Venture and Shareholders’ Agreement Between Golar GSL Limited and Schlumberger B.V. dated [●] (“Agreement”)

Dear Sirs

With regard to the referenced Agreement executed between Schlumberger B.V. and Golar GLS UK Limited (the “ Golar Joint Venture Partner ”) and as further consideration for your entry into the Agreement, Golar LNG Limited (“ we ” or “ Guarantor ”) as primary obligor, and not merely as a surety, hereby unconditionally and irrevocably provide this guaranty (the “ Guaranty ”) undertaking and guaranteeing that:


(a)	The Golar Joint Venture Partner shall duly perform all of its obligations under the Agreement; and

(b)

In the event the Golar Joint Venture Partner fails to perform its obligations under the Agreement or commits a breach thereunder, Schlumberger B.V. shall, within 30 days after its determination that such a failure or breach has occurred, deliver to us a written notice that such failure or breach has occurred, stating the reasons for such determination. Upon receipt of such notice from Schlumberger B.V., Guarantor agrees as follows:


(i)	In the event the Golar Joint Venture Partner fails to perform its obligations under the Agreement, we shall perform or take whatever steps may be necessary to achieve performance of said obligations under the Agreement.


(ii)	In the event the Golar Joint Venture Partner breaches the Agreement, we shall indemnify and hold Schlumberger B.V harmless from or against any loss, damages, claims, costs and expenses (including but not limited to reasonable legal expenses) howsoever caused which may be incurred by Schlumberger B.V. by reason of any such breach on the part of Golar Joint Venture Partner.

Notwithstanding any other term of this Guaranty, with the exception of reasonable legal expenses incurred by Schlumberger B.V. in connection with any enforcement of its rights under this Guaranty, Schlumberger B.V. may not recover any more under this Guaranty in respect of any matter than Schlumberger B.V. would be entitled to recover from the Golar Joint Venture Partner in respect of such matter.

This Guaranty and our undertakings are unconditional and irrevocable and shall continue in force notwithstanding (i) any mutually agreed amendments to the Agreement unless otherwise specified therein; and (ii) any change in the shareholding relationship between ourselves and the Golar Joint Venture Partner, until the Golar Joint Venture Partner’s obligations have been fully discharged upon which the Golar Joint Venture Partner shall be relieved of its obligations and responsibilities to the extent that same are performed or caused to be performed by us in our capacity as Guarantor.

We represent and warrant that we have full power and authority to execute, deliver and perform this Guaranty and to perform and observe the terms and conditions hereof.

This Guaranty shall take effect from the date of the Agreement and shall continue to be valid until complete fulfillment and performance of the contractual obligations by the Golar Joint Venture Partner as provided for under the Agreement or the complete fulfillment and performance of such obligations by Guarantor.

English law shall govern the construction, validity and performance of this Guaranty and any non-contractual rights and obligations which may arise out of or in connection with it. All disputes, controversies or claims arising out of or in connection with this Guaranty, including the breach, termination or invalidity thereof, and all disputes relating to non-contractual obligations, shall be referred to and finally resolved by arbitration under the London Court of International Arbitration (the “ LCIA ”) Rules, which Rules are deemed to be incorporated by reference into this Guaranty. The number of arbitrators shall be three (3). The Guarantor and Schlumberger B.V. shall each be entitled to nominate one arbitrator, the third arbitrator being appointed by the LCIA Court. The seat of arbitration shall be London, England. The language to be used in the arbitral proceedings shall be English. The parties shall have the right to seek interim relief from a court of competent jurisdiction, at any time before and after the arbitrators have been appointed, up until the arbitrators have made their final award.

IN WITNESS WHEREOF, we, the undersigned, have executed this Guaranty this ___day of ____, 2016.

Executed for and on behalf of Golar LNG Limited

Guarantor: _______________________

By: _______________________

Name: _______________________

Title: _______________________

Schedule 7.3
Target Project in Mauritania and Senegal

Schedule 8.4.2(d)
Human Resources Appendix

The JVCo policy for human resources shall be split into 3 phases.

Phase 1: Initial Screening of Target Projects

(The period from the date of the Joint Venture and Shareholders’ Agreement to the first Term Sheet being signed with the end Customer/Upstream Owner). The staff from both Parties will work on a pure secondment basis for OneLNG SA (the “JVCo”) from Parties or Affiliates. Staff will be identified in advance and agreed between the Parties, and their contribution on a percentage of time basis will be defined and high level timesheets describing their activity will be submitted on a monthly basis to both Parties. Costs will not be charged to the JVCo but absorbed by the Parties. All benefits including bonuses will be awarded and accrued by the Parties during this phase in line with each secondee’s existing employment contract (neither Party shall award increments in reward to secondees without mutual agreement of the Parties). This situation will include members of the Board, the Management team and any other staff levels required within the phase. Each secondee will sign a confidentiality document towards the JVCo and will sign up to, and acknowledge, both Parties ABC documentation, HSE policies, Business Ethics policies and Travel & Entertaining policies. Board members shall sign a director’s service contract acknowledging their obligations as Directors of JVCo. During this phase, the JVCo will pay for only contractors, consultants, accountants, auditors, bankers or lawyers if the Parties mutually agree to sign engagement letters. Failure to mutually agree means that either Party may hire such advisors on behalf of the JVCo but must fund the engagement to their own account, outside of the JVCo. In the event that costs are recharged, by mutual agreement, to the JVCo, they shall be recharged at cost plus 5% only. For key secondees (members of the Board, the Management Team, Directorships or other posts of public interest held by them (such as Governors or Trusteeships) should be declared in writing to the Chairman of JVCo, and the Chairman and Board of JVCo may, in their absolute discretion, request that the secondee resign that position or no longer be seconded to JVCo.

Phase 2: Committed Project

(This is defined as the period from signing of a Term sheet to execution of definitive documents, whether or not these are effective.) This would involve additional seconded staff and potentially the hire by JVCo of temporary staff for the project and consultants. Conditions remain as in Phase 1 above except that new hires directly authorised by the Board or Management team of JVCo, or consultants or contractors engaged by JVCo under the same procedure shall be employed/engaged directly by and paid by JVCo (with no recharge to the Parties). At this point, the JVCo should have developed it’s own set of employment policies covering the policies noted in Phase1 above. For Phase 2, costs will be recharged for transfer pricing purposes at cost plus 5% for secondees.

Phase 3: Committed Execution

( This covers the period from the execution of definitive documents to first gas and beyond, or other key milestone ). This would involve the Joint Venture hiring new staff. The principles for secondment would remain as in Phase 1 and Phase 2 but costs shall be charged to JVCo, including at cost plus 5%. Bonuses would be paid by JVCo in the form of equity, options or LTIP

subject to performance metrics to be defined by the Board of JVCo and approved by the Parties (such as first gas, EBITDA, profit margins).

References in this Schedule to costs shall be interpreted as references to gross salary plus any such bonuses and/or benefits and/or other incentives as shall be approved by the Board.

Schedule 9.1
Initial Business Plan

Rapid Field Development (RFD) OneLNG Business Plan

Executive Summary

This document aims to describe the development of the Joint Venture between Schlumberger and Golar, the purpose of which is to bring together the technology of both companies: Schlumberger’s upstream experience together with Golar’s FLNG and FSRU technology and Power projects. Development projects undertaken by the JV will strive towards completion at the fastest pace and the lowest cost in the gas industry.

Vision

Our vision is to create and market a comprehensive package that enables fast and cost‑effective development of gas reserves.

Objective

The objective is to provide a one-stop solution for our partners and clients that enables the development of gas fields, the liquefaction and transportation of the gas produced, linked to the development of new fastest growing and highest value markets for LNG ( e.g. , power generation and transportation).

Aim

By 2025, we will have 6 major developments in operation, utilising 10 vessels to deliver 20 million tonnes of gas and marketing 12 million tonnes, with additional projects in various stages of execution.

Sources of Value

The main source of value is the uniqueness of the offer. The FLNG solution, for many fields, will be the only way that gas can be produced creating value. The current market prices favour lower cost solutions such as FLNG, and will further improve profitability as market prices rise over the next years.

The first mover for FLNG will be able to secure a number of field developments several years ahead of other competitors (see the Competitors section below). As the solution is proven, there shall be other entrants to the market, but this will take time and demand levels of capital investment and technical integration that few companies can match today. It is vital, therefore, to act decisively in the current environment and leverage the head start which Golar has on the market. We envisage that Capex outlay using FLNG technology may be driven down to $350/t of annual production, which compares very favourably against the $850/t that has been the average for US LNG terminals.

In addition to the capital investments and integration capabilities, the combination of Schlumberger together with Golar will enable a level of expertise in assessing reservoirs and development that cannot be surpassed even by majors. Schlumberger’s ability to secure development contracts will give investors a high degree of assurance that the project will be delivered in a professional and timely fashion. The expertise in analysing reservoirs will enable the joint venture to choose the best projects with the certainty of success.

Market

We believe there is a unique opportunity to take a leading position in the FLNG market by taking advantage of the poor sentiment–and lack of investment–in the oil & gas industry at this moment. With the current slump in prices, the market for LNG has become very challenging over the last 18 months, and this situation is expected to continue for several years due to a combination of factors:


•	The US becoming an exporter of gas;


•	Japan decreasing their imports of LNG;


•	Gas prices substantially dropping (in line with crude);


•	Pricing moving away from pure oil indexing;


•	Too many projects having started several years ago coming on-stream (20 trains being developed and coming on stream 1 every 8 weeks);


•	Market sentiment moving away from LNG projects due to track-record for cost overruns; and


•	Gas industry being grouped with coal and oil, and seen as part of environmental problem rather than part of the solution.

However, this situation offers an exciting opportunity as the market underinvests in gas developments while rapid growth is expected in the development of LNG power generation and transportation fuel (truck, train and marine). Using LNG as an alternative to Heavy Fuel Oil for shipping would double LNG consumption worldwide.

Exploration work done by the majors and mid-caps has successfully discovered hundreds of gas fields in the world. (According to Rystad research, there are 684 fields each containing 0.5-5.0 tcf of stranded offshore gas in Africa, Oceania and the Middle-East.) Under current scenarios, there is little chance for the development of these fields, with companies and governments that own the identified resources having few options open to them: they can wait for better times; or seek a radically new way of developing these assets.

Funding for gas projects will be dependent on the recovery of gas prices. Building classical onshore LNG facilities would require prices returning to the range $10-15/mmbtu, which may not happen for a decade or more. Viable solutions must be economic at prices in the $6‑8/mmbtu range, at which the Rapid Field Development via FLNG is an ideal candidate. This solution provides a single party for our clients to deal with regarding field development, offtake, transportation and sales. The negotiation time alone between various parties, that would normally be required to begin such a project, could be over a year. The RFD solution would mean faster negotiations, financing and a guaranteed standard of work that only a major could have delivered in the past.

We envisage that there will be many mid-sized assets that are owned by companies that cannot find the finances to develop the fields and at the same time governments who see this as a vital part of their countries’ future.

A further objective will be to open new markets for the use of LNG and deliver the gas at extremely competitive prices ($4.5/btu). Fixed-price LNG, secured against an electricity contract, could be a way forward to meet the user’s requirement for price stability and at the same time enable the financing of new developments. A fixed price for LNG, in the range $6-8/mmbtu, will enable easier access to financing and good economics for the project.

Securing contracts for power enables the Joint Venture to create value through the deployment of FSRUs (Floating Storage and Regasification Units) which would be used to regasify the LNG for the use of power generation. However, the normal utilisation of the units is 50% and this gives

a unique opportunity to earn high margins distributing small parcels using vessels along the coast by using the remaining capacity.

Competitors

Other than Golar, only a few companies have attempted to build large FLNG vessels: Shell and Petronas. Both companies have developed very advanced ships, but the cost of the developments have been very high (Shell rumoured at over $12bn and Petronas at over $6bn) with neither of the 2 being economic in the current climate and both still awaiting commissioning (the comparison is complicated as the Shell concept ( Prelude ) has a very sophisticated technical and operational specification). The cost of the first Golar vessel ( Hilli ) will be around $1.1bn and operational at the end of 2017.

Excelerate and SBM have both announced their intention to build FLNG vessels but they have not started the process and we have not seen much evidence of design. Exmar are designing a small barge. However, we should be alert that once the Hilli starts operating, we will attract a lot of attention. We are several years ahead but there will be companies attempting to duplicate this technology as it is proven in operation (similar to the FSRU experience). We aim to stay ahead by constantly driving down costs and demonstrating a track-record in developing gas fields.

As above, the combination of Schlumberger and Golar will be difficult to match. Firstly because of the size of Schlumberger and the fact that other service companies will be unwilling to take the step of entering into upstream space.

Business Model and Strategy

The JV will have 2 functions: to select projects; and to act as a holding company. The first objective will be the selection of targets for the company to pursue. The JV will select opportunities identified by consultants, the parent companies and third parties. The aim will be to pursue projects that have both SPM and FLNG combined content. Unless otherwise agreed by both parties, the pure FLNG development with no SPM content will remain in Golar.

The process to be followed in selecting projects, is broadly outlined as follows:


1.	High-level identification and screening of potential assets/partners worldwide;


2.	Ranked list with light DD on higher potential opportunities—create “The Hopper”;


3.	Board agreement of top 3 opportunities—Authority To Negotiate (ATN)


4.	Commence Negotiations; 3 Month update to Board;


5.	Term Sheet & Finance Memo Approved;


6.	Contract signed & Team assigned.

As potential targets are identified, the JV will perform light due diligence on: the reservoir; the sub-surface; the quality of the gas; required engineering; construction work, infrastructure requirements and sea conditions. Concurrently, there will be work undertaken to examine the PSA and tax terms, the political stability of the region and other government requirements. The budget allocated to the company will cover these costs. A list of potential targets will be maintained up to date, and high-graded for the Board to support. The aim will be to put together a 2-page document (the “Hopper”) for key opportunities that will be submitted to the JV Board for review.

In turn, the top 3 projects will go through further screening processes. Fields deemed suitable will be submitted for support to the Board in the form of a detailed Authority to Negotiate (ATN) document. Agreement to proceed will then lead to negotiations with the stakeholders. Any further budget requirements for more detailed due diligence work, legal costs and other consultancy will be requested in the documentation.

Three months after the ATN, a further presentation on progress will be made to the Board. A decision on whether to support the continuation of the project will be made.

If the project receives approval to continue, there will be negotiations that should lead to a Term Sheet being agreed. A Finance Memo will be submitted to the Board for support before any final legally binding documents can be signed. The Board will support the formation of a project team to proceed with the development. A project manager will be allocated together with budget to start running a full development process.

Schlumberger will be offered possible options in Golar Power, giving access to FSRUs (Floating Storage and Regasification Units) and Power station projects. Financing will also be individually tailored to each project and equity contribution between partners.

The primary targets would be offshore assets, with proved reserves and PSA terms already defined. Onshore targets could be considered but only in close proximity to shore. The main criteria for selection would be:


•	The quality of the reservoir;


•	Quality of the gas;


•	The PSA terms;


•	Sea conditions;


•	The cost of development;


•	Complexity of the construction;


•	The ownership structure of the field;


•	Alignment with owners and government;


•	Speed of development; and


•	Political risk.

The first project undertaken by the JV will require the gas supplied to be dry and clean (Mark I design). An improved version that will be able to strip out condensate, handle some contamination and have the ability to withstand rougher sea conditions will be developed in the future. The quality of the gas can be more complex but would then the development would require the ability to process gas on the platform, an island or onshore.

Structure

The holding will be 49% Schlumberger and 51% Golar. The JV will be consolidated in the Golar structure.

Milestones

Major milestones:


•	Creation of the Joint Venture June/July 2016;


•	Identification of first 3 targets July 2016;


•	Identification of 5 further targets December 2016;


•	FID on first target Q1 2017;


•	2 further FIDs End 2017;


•	First production of gas 2019;


•	2nd and 3 ^rd projects operational 2021;


•	10 vessels operational 2025.

Organisation

We envisage phase 1 organisation being:


•	1 GM Golar, 1 CFO Schlumberger;


•	1 Business Developer (1 Golar);


•	1 Asset manager (1 Schlumberger).

Staff will be expected to start work in July 2016 to begin the studies required to pursue targets identified. The aim will be to use the parent companies for as much of the negotiation and due diligence work as possible (which will be charged to the Joint Venture). The organisation will expand but only after securing a legally binding Term Sheet. Once this occurs then the total number would eventually double over 3 years. We will attempt to use seconded staff where possible but direct hires will be required.

Staff, seconded into the JV in July 2016, will have their costs covered by their parent companies until the first legally binding Term Sheet is agreed and after that all costs will be equally shared. The secondments, charged at cost plus 5%, will continue. Bonuses and incentives approved by the Board will be paid by the JV. There will not be a requirement for an office until mid-2017.

Staff involved in projects will be allocated for the duration of the development. Some will remain as part of the operation team that will be required to maintain the production, but the majority of the operational work in the upstream will be contracted to Schlumberger and to Golar for the FLNG vessel.

Finance

The JV could generate an EBITDA of close to $1.5 billion by 2022. This is based on the following assumptions:


•	4 vessels are operational by 2022;


•	1 each year starting in late 2019;


•	the cost of each vessel is between $1.0-1.2 billion;


•	the cost of the upstream development is $0.2-0.6 billion;


•	the equity/debt split is 30/70%; and


•	the earnings are based on a fee of $3/mmbtu for the vessel and $0.9/mmbtu for the upstream part (base case assuming gas prices of $7/mmbtu and Brent at $70/bbl).

Risks

The risks can be summarised as follows:


•	Failure of the JV to identify projects. We are already in the process of identifying the first potential projects. The current list is already fairly extensive but will grow once the first FLNG vessel is functioning and companies turn to the JV for help;


•	Failure of the upstream projects. This will be covered by the extensive due diligence that will take place before any decisions are taken to proceed;


•	Political problems. Again covered by the due diligence. In the worst case, it may be possible to remove the vessel;


•	Low gas prices. In the low case ($5/mmbtu and $50/bbl) there will still be a potential for an EBITDA of around $1bn annually;

•

Problems between the two cultures of the JV partners. There are differences in the cultures of Golar and Schlumberger which can be summed up by comparing the respective sizes of the 2 companies (one being small but creative, while the other is more process-driven but powerful). It will be important to safeguard the 2 cultures by allowing Golar to develop the vessels as they currently do but at the same time upstream project must follow standard Schlumberger processes and procedures.

Delivery of Services

Service level agreements will be charged at market rates by both parent companies. This will include due diligence services from Schlumberger, technical consultancy from Golar, development services from both and ongoing operational services. Whether a mark-up is charged

for the vessel or this is covered by some form of financing will be reviewed on a project-by-project basis.

Governance

There will be a 2+2 Board of Directors that will support the choice of projects to be undertaken by the Joint Venture. Separate subcommittees will be formed to cover HSSE, Audit, HR and compliance as necessary. Processes as described above for the support of projects will developed in detail in the first months after the formation of the JV.

HSSE

Projects will require the highest quality and HSSE standards. A subcommittee will be formed to review all activities in the JV. Safety procedures will be developed for operations and for the running of the vessel or adopted from the parent company standards.

Environmentally, gas offers over 50% reduction in CO ₂ and a 90% reduction in NOX over coal. Substituting coal, diesel and fuel oil with gas will enable the production of cheap electricity and drastically reduce emissions. (According to the BP statistical review, the only way that the Paris Agreement could be achieved is through a combination of Gas and Renewables.) There is a need and opportunity to implement a Social and Environmental communications program to address education in this area and how LNG and renewable energy is compatible.

First targets

A joint marketing document has been produced and published and we have independently approached Kosmos to develop the Totue field. Other projects being considered are Twinza in PNG, and Amni in Nigeria.

The joint team will be in place by July, 2016. Their aim will be to pursue at least 3 targets that will be developed into FIDs within 18 months. It will be vital to agree at least 1 project that can be accelerated and to find 10 further targets to feed the pipeline.

Budgets

The costs of running the Joint Venture for the first 6 months of operation will be $8 million (roughly second half 2016). The total can be broken down into 50% staff costs (mostly secondment), consultancy (20% parent cost), 20% third party (legal and technical) and 10% overheads. As the charging of staff will not occur until the first legally binding document is signed, the secondment costs will be absorbed by the parent companies therefore bringing down the costs for the JV.

The 2017 costs are forecast to be $14 million, overhead will increase due to starting to locate staff in one office. 2018 costs are estimated to increase to $21 million in line with having to service several projects. 2019 are forecast to rise to the plateau of $21 million as the first project goes live and 2 further projects will be in the construction phase.

A detailed budget will be agreed with the Board, as described in the JV document, once the staff are identified and overhead costs clearly defined and submitted to the Board within 3 months of the start of the JV.

Conclusion

We request that each parent commits to contributing $250 million once the first project is underway and a drawdown of $10 million for the formation and operation of the Joint Venture while it selects targets and concludes legally binding agreements.

Schedule 9.3
Initial Budget

AMENDED AND RESTATED

ENGINEERING, PROCUREMENT & CONSTRUCTION CONTRACT

BETWEEN

KEPPEL SHIPYARD LIMITED

AND

GOLAR GIMI CORPORATION

(“GIMI Main Building Contract”)

FOR THE REPAIR, MODIFICATION & CONVERSION

OF THE GIMI INTO A FLNG VESSEL

TABLE OF CONTENTS

1. DEFINITIONS 6

2. EFFECTIVE DATE 16

3. EARLY WORKS 18

4. OWNER’S NOTICE TO PROCEED 19

5. DELIVERY OF THE VESSEL 20

6. PERFORMANCE OF THE WORKS 21

7. DESIGN RESPONSIBILITY 22

8. CLASSIFICATION, CERTIFICATION AND DOCUMENTATION 22

9. FACILITIES FOR THE OWNER AT THE YARD 23

10. SUB-CONTRACTING 23

11. SUPERVISION, DRAWINGS, APPROVAL & INSPECTION & TESTS 24

12. PROGRESS REPORTING 26

13. VARIATIONS AND MODIFICATIONS 27

14. ERRORS AND CHANGES 29

15. CONTRACT PRICE AND TERMS OF PAYMENT 30

16. ADJUSTMENT OF CONTRACT PRICE 33

17. MECHANICAL COMPLETION 35

18. PRE-COMMISSIONING OF SUB-CONTRACT WORKS 35

19. COMMISSIONING OF THE WORKS 36

20. VESSEL LEAVING THE YARD 36

21. COMMISSIONING AT ANCHORAGE 36

22. REDELIVERY 37

23. SAILAWAY 38

24. PROJECT SITE WORKS 38

25. CONDITIONS PRECEDENT FOR PROJECT SITE COMMISSIONING 41

26. PROJECT SITE COMMISSIONING 42

27. START UP AND PERFORMANCE TESTS 43

28. FINAL ACCEPTANCE 46

29. DELAYS AND PERFORMANCE DEFICIENCIES – SUB-CONTRACT WORKS 47

30. DELAYS & EXTENSION OF TIME FOR REDELIVERY 48

31. SUSPENSION 50

32. TERMINATION FOR CAUSE 51

33. TERMINATION FOR CONVENIENCE 56

34. WARRANTY 57

35. LIABILITIES & INDEMNITIES 59

36. INSURANCE 61

37. PATENTS, TRADEMARKS, COPYRIGHTS ETC. 62

38. OWNER FURNISHED EQUIPMENT 63

39. CONFIDENTIALITY 64

40. INTELLECTUAL PROPERTY RIGHTS IN RELATION TO THE CONTRACTOR’S SCOPE 65

41. NOTICES 68

42. HEALTH, SAFETY, ENVIRONMENT & QUALITY ASSURANCE 68

43. GENERAL 70

44. TAXES & DUTIES 71

45. INTERPRETATION 71

46. DISPUTE RESOLUTION 71

47. SECURITIES 72

48. COMPLIANCE WITH ANTI-BRIBERY LAWS AND SANCTIONS 73

APPENDIX 1A: OWNER’S BASIS OF DESIGN 77

APPENDIX 1B: OUTLINE SPECIFICATION OF CONVERSION, SPECIFICATION OF DRY-DOCKING AND REPAIR WORK 78

APPENDIX 1C: OWNER RELY-UPON INFORMATION 79

APPENDIX 1D: PRELIMINARY PROJECT SCHEDULE 80

APPENDIX 2: TOPSIDES AGREEMENT 81

APPENDIX 3: PRICE SCHEDULE 82

APPENDIX 4: OFE AND OWNER ENGINEERING DELIVERABLES ROS DATES 83

APPENDIX 5: PRELIMINARY PROJECT EXECUTION PLAN 84

APPENDIX 6: PRELIMINARY SITE HEALTH, SAFETY AND ENVIRONMENTAL MANAGEMENT PLAN 85

APPENDIX 7: PRELIMINARY PROJECT QUALITY PLAN 86

APPENDIX 8: APPROVED VENDOR AND SUBCONTRACTOR LIST 87

APPENDIX 9: ADMINISTRATION PROCEDURE 88

APPENDIX 10: FORMS 89

DELIVERY CERTIFICATE 90

PROTOCOL OF MECHANICAL COMPLETION 91

PROTOCOL OF REDELIVERY AND ACCEPTANCE 92

FORM OF CORPORATE GUARANTEE 93

CERTIFICATE OF VESSEL LEAVING THE YARD 94

MECHANICAL COMPLETION CERTIFICATE / PROTOCOL OF MECHANICAL COMPLETION 95

READY FOR STARTUP CERTIFICATE 96

READY FOR FIRST GAS CERTIFICATE 97

FORM OF VESSEL MORTGAGE 98

FORM OF BANK GUARANTEE 99

AMENDED AND RESTATED

ENGINEERING, PROCUREMENT & CONSTRUCTION CONTRACT

This amended and restated Engineering, Procurement & Construction Contract (“ Agreement ” or “ GIMI Main Building Contract ”) is made this 27 ^th day of December 2016 (the “ Date of Agreement ”), by and between GOLAR GIMI CORPORATION, a company incorporated and organised under the laws of the Republic of the Marshall Islands, having its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH 96960 (hereinafter referred to as the “ Owner ”) of the first part and KEPPEL SHIPYARD LIMITED, a company incorporated and organised under the laws of the Republic of Singapore, having its principal place of business at 51 Pioneer Sector 1, Singapore 628437 (hereinafter referred to as the “ Contractor ”) of the second part, each a “ Party ” and collectively the “ Parties ”.

WHEREAS

By an Engineering, Procurement & Construction Contract dated 27 October 2014 entered into between the Owner and the Contractor (“O riginal Contract ”), the Owner, being the proposed registered owner of the vessel the GIMI (the “ Vessel ”), wished to have the Vessel converted to a floating liquefied natural gas (“ FLNG ”) vessel, as specified in this Agreement, by the Contractor and has appointed the Sub-Contractor nominated by the Owner as the Contractor’s sub-contractor to carry out the Sub-Contract Works.


B)	The Parties had entered into a series of amendment agreements to amend the Original Contract, namely:-


(i)	The First Amendment Agreement dated 4 December 2014;


(ii)	The Second Amendment Agreement dated 29 December 2014;


(iii)	The Third Amendment Agreement dated 28 February 2015;


(iv)	The Fourth Amendment Agreement dated 30 April 2015;


(v)	The Fifth Amendment Agreement dated 4 December 2015;


(vi)	The Sixth Amendment Agreement dated 22 January 2016; and


(vii)	The Seventh Amendment Agreement dated 29 February 2016.

The Parties desire to further amend the Original Contract and thereafter restate such amended Original Contract to the form of this Agreement on and from the Date of Agreement.

The Contractor shall carry out and be responsible for the Contractor’s Scope on the terms and conditions set forth in this Agreement. The Sub-Contractor shall carry out and be responsible for the Topsides Scope as the Contractor’s sub-contractor. The Contractor shall perform its own obligations under the GIMI Topsides Agreement and use reasonably practicable endeavours (in accordance with the Contractor’s Scope) for the Sub-Contractor to perform its obligations under the GIMI Topsides Agreement.


D)	The Owner has provided the Contractor and the Sub-Contractor with the Basis of Design and the Owner Rely-Upon Information for the purpose of the front-end engineering design (“ FEED ”) of the Contractor’s Scope and the Topsides Scope.


E)	Relying on the Basis of Design and Owner Rely-Upon Information the Contractor carried out the FEED for the Contractor’s Scope and engaged the Sub-Contractor to carry out the FEED for the Sub-Contract Works (collectively the “ FEED Studies ”).

The Owner has reviewed the FEED Studies and has endorsed the FEED Studies. It shall be the Contractor and Sub-Contractor’s obligation to ensure that the portion of the FEED Studies performed by it is in accordance with the Basis of Design. The Contractor has adopted the FEED Studies for the design and engineering of the Contractor’s Scope, and the Sub-Contractor has adopted the FEED Studies for the Topsides Scope.


G)	The Owner recognises that the Contractor is reliant on the Sub-Contractor for the performance of the Topsides Scope.


H)	The Owner has had the opportunity to review and is aware of the terms of the GIMI Topsides Agreement, which has been amended and restated, or shall be amended and restated, on or about the Date of Agreement.

IT IS HEREBY AGREED BETWEEN THE PARTIES AS FOLLOWS: -

LL Ref: A17244245

Owner: ______

Contractor: ______


1.	DEFINITIONS


1.1	In this Agreement, the following expressions shall have the following meanings except where the context requires otherwise:

1.1.1

“ Affiliate ” means, with respect to a company or legal entity, any other company or legal entity that, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with such company or legal entity. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a company or legal entity, whether through the ownership of voting securities, by contract or otherwise;


1.1.2	“ Agreement ” means this Agreement comprising all of the Articles hereof and the Appendices referred to herein;

1.1.3

“ Anti-Bribery Laws ” shall mean the United States Foreign Corrupt Practices Act of 1977 and the United Kingdom Bribery Act of 2010 (as amended from time to time), and all other applicable national, regional, provincial, state, municipal or local laws and regulations that prohibit the bribery of, or the providing of unlawful gratuities, facilitation payments or other benefits to, any Government Official or any other person;

1.1.4

“ Applicable Laws ” means all national, municipal or state statutes, laws, ordinances, certifications, orders, decrees, licences, regulatory approvals, agreements, judgments, rules, and regulations, or other legislative or administrative action or official requirement of any Authority having jurisdiction over all or any part of the Works including Authorisations, with the exception of those at the Project Site;


1.1.5	“ Approved Vendor ” means any person listed in Appendix 8;


1.1.6	“ Article ” means an article of this Agreement. “ Articles ” shall accordingly refer to articles of this Agreement;


1.1.7	“ Authorisation ” means any permit, consent, approval, authorisation, agreement, no objection certificate, waiver or licence which must be obtained from any Authority by the Owner or the Contractor in connection with the Works or in order for the Works to be performed and for any portion of the Works to be transported, imported or exported;


1.1.8	“ Authority ” means any national, federal, regional, state, municipal or local government, and any division, body, ministry, department, instrumentality, agency, authority or other emanation of any of the same, including any court, commission, board, branch or similar

Owner: ______

authority of such government and any body empowered to grant, withdraw or determine the terms and conditions of any Authorisation;


1.1.9	“ Basis of Design ” means the basic engineering set out in Appendix 1A;


1.1.10	“ Business Day ” means a day on which banks are open for business in Singapore;


1.1.11	“ Certification Body ” means DNV while performing the function referred to in Article 8;


1.1.12	“ Certificate of Vessel Leaving The Yard ” means the document referred to in Article 20.1;


1.1.13	“ Change in Law” means any change in Applicable Laws including any new or change in interpretation of any Applicable Laws by any Authority (excluding only any Applicable Laws with respect to taxes on or measured by the Contractor’s net income or its employees’ income or similar measurements or withholding) that is enacted after the Date of Agreement;


1.1.14	“ Classification Society ” or “ DNV ” means Det Norske Veritas Germanischer Lloyd ;


1.1.15	“ Commissioning ” means inspections and testing to verify and document functionality and operability;


1.1.16	“ Commissioning Certificate ” means a certificate following successful Commissioning of the Works as referred to in Article 19.2;


1.1.17	“ Commissioning Spares ” means those replacement parts that may be required for Startup and Commissioning. For the avoidance of doubt, Commissioning Spares do not include operational or capital spares, which are to be provided by the Owner as Owner’s Spares;


1.1.18	“ Confidential Information ” shall have the meaning given to it in Article 39;


1.1.19	“ Contract Price ” means the total price for the performance of the Works and Sub-Contract Works, pursuant to Article 15 of this Agreement, and as the same may be adjusted in accordance with the provisions of this Agreement, including the Price Review;

1.1.20

" Contractor Background Intellectual Property " means the pre-existing Intellectual Property Rights of the Contractor and original drawings, specifications, reports and other Project Information which the Contractor prepares and delivers pursuant to this Agreement and/or the GIMI Topsides Agreement and any intellectual property of the Contractor developed, used or modified by the Contractor in the performance of the Works;


1.1.21	“ Contractor Guarantor ” means Keppel Offshore & Marine Ltd;

Owner: ______

1.1.22

“ Contractor’s Group ” means, collectively, the group of entities and persons comprising of the Contractor, its Affiliates, its contractors and subcontractors at all tiers (excluding any member of the Sub-Contractor’s Group) and the representatives, agents, officers, directors, employees and personnel of each and every one of the foregoing entities but excluding any member of the Sub-Contractor’s Group;


1.1.23	“ Contractor’s Notice to Proceed ” shall have the same meaning as in the Topsides Agreement;


1.1.24	“ Contractor’s Scope ” means the scope of work set out in Appendix 1;


1.1.25	“ Conversion Price ” shall have the meaning given to it in Article 15.3 and as the same may be adjusted in accordance with the provisions of this Agreement, including the Price Review;


1.1.26	“ Date of Agreement ” shall have the meaning given to it in the recitals;


1.1.27	“ Day ” means a calendar day;


1.1.28	“ Default Interest Rate ” means eight per cent (8%) per annum;


1.1.29	“ Delivery ” means when the Vessel is delivered by the Owner to the Contractor in accordance with Article 5;


1.1.30	“ Delivery Certificate ” means a certificate in the form of Appendix 10;


1.1.31	“ Delivery Date ” shall be the date on or the period during which the Vessel is required under Article 5.2(a) of this Agreement to be delivered by the Owner to the Contractor;

1.1.32

“ Derivative Works ” means any minor or major change, elaboration, annotation, modification, new functions or features, new capability and improvement, update, upgrade, whether it is software, or copyrightable, patentable or not, made to the Owner Background Intellectual Property in whole or in part, by or on behalf of the Contractor or the Sub-Contractor, as the case may be, using, incorporating, based on, derived from or in relation to the Owner Background Intellectual Property. For the avoidance of doubt, Derivative Works do not include any improvement, invention, know-how, Intellectual Property Rights, software, work product or result of services, or any of the other items in the immediately preceding sentence, provided by the Contractor or the Sub-Contractor to the Contractor Background Intellectual Property or the Sub-Contractor Background Intellectual Property, as applicable, and the Intellectual Property Rights therein shall be retained by the Contractor and the Sub-Contractor respectively.

Owner: ______


1.1.33	“ Directed Change ” shall have the meaning given to it in Article 13.3;


1.1.34	“ Disputed Difference ” shall have the meaning given to it in Article 13.3;


1.1.35	“ Early Works ” has the meaning given to it in Article 3.1;


1.1.36	“ Effective Date ” means the date on which all the conditions in Article 2 have been fulfilled;

1.1.37

“ Equipment ” means the system to be supplied by the Sub-Contractor for the liquefaction of natural gas, including front-end gas treatment and conditioning, that complies with the requirement(s) of the FEED Study Report and with other terms and conditions of this Agreement. A reference to Equipment includes all the individual component equipment of the Equipment, as well as all the materials and equipment to be procured by the Sub-Contractor, for permanent installation on the Vessel;


1.1.38	“ Extended Warranty Period ” means the period stated in Article 34.5;


1.1.39	“ FEED Studies ” shall have the meaning given to it in recital E;


1.1.40	“ FEED Study Report ” means the front end engineering design report prepared by the Sub-Contractor for the Contractor which is in Appendix C of the GIMI Topsides Agreement;


1.1.41	“ Final Acceptance ” means the successful completion of all Performance Tests at the Project Site and completion of the Topsides Scope as set out in Appendix O of the GIMI Topsides Agreement;


1.1.42	“ First Gas ” means the date when feed gas is first introduced to the Equipment after arrival of the Vessel at the Project Site;


1.1.43	“ Price Review ” shall have the meaning given to it in Article 15.14.1;


1.1.44	“ Fixed Price ” shall have the meaning given to it in Article 15.1;


1.1.45	“ Flag State Registry ” means the Marshall Islands Registry;


1.1.46	“ Force Majeure Event ” has the meaning given in Article 30.2;


1.1.47	“ GIMI Direct Agreement ” means the direct agreement between the Owner, the Contractor and the Sub-Contractor dated on or about the date of this Agreement;

Owner: ______


1.1.48	“ GIMI Topsides Agreement ” means the agreement between the Contractor and the Sub-Contractor, a copy of which is Appendix 2;


1.1.49	" Government Official " shall have the meaning ascribed to it in Article 48.1;


1.1.50	“ Guaranteed LNG Output ” shall have the meaning given in the GIMI Topsides Agreement;


1.1.51	“ Guaranteed Performance Certificate ” means the document referred to in Article 27.9;


1.1.52	“ HAZOP ” has the meaning given to it in Article 14.4;


1.1.53	“ Initial Payment ” shall have the same meaning as in the Topsides Agreement;

1.1.54

“Intellectual Property Rights ” means any and all rights of, in and to, wherever and whenever existing in: (a) any invention (whether or not patentable); (b) any and all patents, patent applications, together with all provisionals, reissuances, continuations, or divisionals thereof, any invention therein, and any related invention disclosures; (c) trademarks, service marks, trade dress, trade names, corporate names, other names, logos, brands, symbols, indicia of origin and/or design of any kind, in any language and/or any script, domain names and URLs; (d) copyright, mask works, any works (whether copyrightable or not), all copies therefrom, and including all applications, registrations, and renewals in connection therewith, whether based on statute or common law; (e) trade secrets, confidential information and other proprietary business information; (f) any translation, transliteration, copy, reproduction, manifestation, derivation or version of any of the foregoing, in any form or format whatsoever; and (g) all goodwill and reputation associated therewith; and all applications, registrations and renewals in connection therewith and thereto.


1.1.55	“ ITP Plan ” means the schedule of testing provided by the Contractor to the Owner in accordance with Article 11.10;


1.1.56	“ Limited Notice to Proceed ” has the meaning given in Article 3.1.3;


1.1.57	“ Mechanical Completion ” means that the Works and the Sub-Contract Works are mechanically, electrically and functionally complete, and ready for Pre-Commissioning;


1.1.58	“ Mechanical Completion Certificate ” means a certificate in the form in Appendix 10;


1.1.59	“ Milestone Achievement Certificate ” shall have the meaning prescribed in the GIMI Topsides Agreement;

Owner: ______


1.1.60	“ Minimum Performance ” means when the liquefaction plant has achieved, in the aggregate, an average LNG output of at least 80 per cent of the Guaranteed LNG Output over a period of 72 consecutive hours.


1.1.61	“ Minimum Performance Certificate ” means the document referred to in Article 27.8;


1.1.62	“ OFE ” means all the equipment and other supplies specified in Appendix 4 to be furnished by the Owner to the Contractor in accordance with this Agreement;


1.1.63	“ Outstanding Works ” shall have the meaning ascribed to it in Article 17.2;


1.1.64	“ Owner Background Intellectual Property ” means the pre-existing Intellectual Property Rights of the Owner and original drawings, specifications, reports, and other engineering documents which the Owner prepares and delivers pursuant to this Agreement and any intellectual property of the Owner developed, used or modified by the Owner in the performance of its obligations in this Agreement;


1.1.65	“ Owner Rely-Upon Information” means all the information contained in the documents listed in Appendix 1C;

1.1.66

“ Owner’s Group ” means, collectively, the group of entities and persons comprising of the Owner, its immediate customer(s) in respect of the Vessel, such customer’s or customers’ intermediate and ultimate clients (who can benefit from the use of or employment of the Vessel whether as a charterer of the Vessel or from the exploration or production of hydrocarbons or otherwise), the Affiliates of each and every one of the foregoing entities at all tiers, each and every one of the contractors and subcontractors, excluding any member of the Contractor’s Group or the Sub-Contractor’s Group, at all tiers of the foregoing entities, invitees or guests of the Owner, the registered (or beneficial) owner, manager and crew of the Vessel and the representatives, agents, officers, directors, employees and personnel of each and every one of the foregoing entities, but excluding any member of the Contractor’s Group or of the Sub-Contractor’s Group;


1.1.67	“ Owner’s Notice to Proceed ” means the written notice from the Owner to the Contractor authorising the Contractor to commence full performance of the Works, and directing the Contractor to authorise the Sub-Contractor to perform the full scope of the Sub-Contract Works via a Contractor’s Notice to Proceed;


1.1.68	“ Owner’s Representative ” shall be the representative of the Owner appointed pursuant to Article 11.1;

Owner: ______


1.1.69	“ Owner’s Spares ” means the two-year operational and capital spares in respect of the Equipment that are OFE;


1.1.70	“ Parent Company Guarantee ” means the guarantee in the form set out in Appendix 10;


1.1.71	“ Parties ” means both the Contractor and the Owner. A “ Party ” means either the Contractor or the Owner;


1.1.72	“ Performance Guarantees ” means those guarantees by the Sub-Contractor specified in Appendix N of the GIMI Topsides Agreement;


1.1.73	“ Performance Tests ” means the tests set out in the Specifications to be carried out by the Owner with the assistance of the Sub-Contractor at the Project Site;


1.1.74	“ Permitted Delay Event ” means any one of the following:


(a)	any default or act of prevention of the Owner or act or omission of the Owner or any contractor engaged by the Owner; or


(b)	a Variation awarded in accordance with this Agreement; or


(c)	a technical dispute in respect of which the Classification Society upholds the Contractor’s views; or


(d)	defects that could not be detected by the Contractor using reasonable care and diligence; or


(e)	a Force Majeure Event; or


(f)	a delay to the Contractor’s Scope arising out of or in relation to the performance of the GIMI Topsides Agreement, except to the extent such delay is caused by the Contractor;


(g)	any error, defect, omission, ambiguity or discrepancy in the Basis of Design or the Owner Rely-Upon Information; or

Owner: ______


(h)	a delay to the Contractor’s Scope resulting from events within the control of the Owner and/or any third party;


1.1.75	“ Plans ” mean drawings, documents and specifications which are required under this Agreement and the Specifications to be submitted to the Owner for approval;


1.1.76	“ Pre-Commissioning ” means those activities set out in Appendices J, K and Z of the GIMI Topsides Agreement as will be detailed in the pre-commissioning procedures to be developed by the Contractor based on the operations manual to be developed by the Sub-Contractor;


1.1.77	“ Pre-Commissioning Certificate ” means a certificate in the form of Appendix X of the GIMI Topsides Agreement;


1.1.78	“ PRICO ^® Licence Agreement ” means the agreement between the Owner and Black and Veatch Corporation pursuant to which Black and Veatch Corporation shall licence to the Owner certain PRICO ^® technology on the terms and conditions set forth therein;

1.1.79

“ Project Information ” shall mean all technical reports, data, designs, drawings, bill of materials, estimates, instructions, weight information, specifications, recommendations, certificates or other documents or information developed, provided by or on behalf of one party to another party (whether the Owner, the Contractor, or the Sub-Contractor) from time to time showing dimensions, work methods and any other details whatsoever of a technical nature for the purposes of the this Agreement, the GIMI Topsides Agreement, and the FEED Study Report;


1.1.80	“ Project Schedule ” means the schedule for the execution of the Works, as detailed in Appendix 1D, as may be amended from time to time in accordance with this Agreement;


1.1.81	“ Project Site ” means the location where the Project Site Works are to be carried out;


1.1.82	“ Project Site Commissioning ” means those activities set out in Appendices D, K and Z of the GIMI Topsides Agreement as will be detailed in the Project Site Commissioning procedures developed by the Sub-Contractor;


1.1.83	“ Project Site Personnel ” means all personnel provided by the Owner for the Project Site Works, to include, officers and crew, mechanics, labourers, skilled craftsmen, technicians, operators trained by the Sub-Contractor and all other personnel in sufficient quantity and quality to undertake in good time all activities required at or near the Project Site;

Owner: ______

1.1.84

“ Project Site Works ” means the works and services to be performed by the Contractor and/or the Sub-Contractor after the Vessel has arrived at the Project Site and up to and including Final Acceptance (the Contractor’s role as specified in and forming part of the Contractor’s Scope and the Sub-Contractor’s role as specified in and forming part of the Sub-Contract Works), and the works and services to be performed at the Project Site by the Project Site Personnel, as more particularly described in Appendices D, K and Z of the GIMI Topsides Agreement;


1.1.85	“ Protocol of Mechanical Completion ” means the document in the form of Appendix 10;


1.1.86	“ Protocol of Redelivery and Acceptance ” means the document in the form of Appendix 10;


1.1.87	“ Provisional Conversion Price ” shall have the meaning given to it in Article 15.3;


1.1.88	“ Prudent Engineering and Construction Practice ” means a thorough, efficient and workmanlike manner with due diligence and care by qualified and competent personnel, exercising that degree of skill and diligence which would ordinarily be expected from a skilled and experienced international contractor engaged in a similar undertaking to the Contractor’s Scope;


1.1.89	“ Ready for First Gas ” shall occur when the conditions set forth in Article 23.2 have been achieved;


1.1.90	“ Ready for First Gas Certificate ” means the certificate in the form of Appendix 10 issued in accordance with Article 23.2;


1.1.91	“ Ready for Startup Certificate ” means the certificate in the form of Appendix 10;


1.1.92	“ Redelivery ” means the final acceptance by the Owner of the Works in accordance with Article 20;


1.1.93	“ Redelivery Date ” shall be the date on which Redelivery is required to take place as established in accordance with Article 22 of this Agreement and Clause 27 of the GIMI Topsides Agreement;

1.1.94

“ Restricted Party ” means a person that is: (i) listed on, or owned or controlled by a person listed on, or acting on behalf of a person listed on, any Sanctions List; (ii) located in, incorporated under the laws of, or owned or (directly or indirectly) controlled by, or acting on behalf of, a person located in or organized under the laws of a country or territory that is the target of country-wide or territory-wide Sanctions; or (iii) otherwise a target of

Owner: ______

Sanctions (“target of Sanctions” signifying a person with whom a US person or other national of a Sanctions Authority would be prohibited or restricted by law from engaging in trade, business or other activities);


1.1.95	“ Sailaway ” means the departure of the Vessel from the anchorage or location referred to in Article 23;

1.1.96

“ Sanctions ” means the economic sanctions, laws, regulations, embargoes or restrictive measures administered, enacted or enforced by: (i) the United States government; (ii) the United Nations; (iii) the European Union; (iv) the United Kingdom; or (v) the respective governmental institutions and agencies of any of the foregoing, including, without limitation, the Office of Foreign Assets Control of the US Department of Treasury (“ OFAC ”), the United States Department of State, and Her Majesty’s Treasury (“ HMT ”) (together the “ Sanctions Authorities ”);


1.1.97	" Sanctions List " means the "Specially Designated Nationals and Blocked Persons" list maintained by OFAC, the Consolidated List of Financial Sanctions Targets and the Investment Ban List maintained by HMT, or any similar list maintained by, or public announcement of Sanctions designation made by, any of the Sanctions Authorities;


1.1.98	[NOT USED]


1.1.99	“ Specifications ” means, collectively, the specifications and general drawing arrangements as contained in Appendix 1B, including any amendments thereto pursuant to the terms of this Agreement;


1.1.100	“ Startup ” means, for each train, that period of time beginning with the initial operation of the Equipment for the production of LNG and ending at achievement of Final Acceptance;


1.1.101	“ Sub-Contract Works ” means the product of work by the Sub-Contractor in the performance of the Topsides Scope;

1.1.102

“ Sub-Contractor Background Intellectual Property ” means the pre-existing Intellectual Property Rights of the Sub-Contractor and the original drawings, specifications, reports and other Project Information which the Contractor prepares and delivers pursuant to the GIMI Topsides Agreement and any intellectual property of the Sub-Contractor developed, used or modified by the Sub-Contractor in the performance of the Sub-Contract Works;


1.1.103	“ Subjective Error ” shall have the meaning given to it in Article 14.2;

Owner: ______


1.1.104	“ Substantial Performance ” means when the liquefaction plant has achieved, in the aggregate, an average LNG output of at least 70 per cent of the Guaranteed LNG Output over a period of 72 consecutive hours;


1.1.105	“ Substantial Performance Certificate ” means the document referred to in Article 27.7;


1.1.106	“ Sub-Contractor ” means a consortium consisting each of Black and Veatch Corporation, Black and Veatch International Company, Black and Veatch Singapore Pte. Ltd., Black and Veatch (Beijing) Engineering Design Co. Ltd. and any other entity designated as the Sub-Contractor under the GIMI Topsides Agreement from time to time;


1.1.107	“ Sub-Contractor’s Group” means, collectively, the group of entities and persons comprising of the Sub-Contractor, its Affiliates, its contractors and sub-contractors at all tiers and the representatives, agents, officers, directors, employees and personnel of each and every one of the foregoing entities;


1.1.108	“ Topsides Price ” means the price payable by the Owner to the Contractor under this Agreement in respect of the Sub-Contract Works;


1.1.109	“ Topsides Scope ” means the scope of work of the Sub-Contractor as stated in Appendix 2 ;


1.1.110	“ Third Party ” means a person who is not within the Contractor’s Group, the Owner’s Group or the Sub-Contractor’s Group;


1.1.111	“ Variation ” means a variation to the Contractor’s Scope or the Topsides Scope pursuant to Article 13;


1.1.112	“ Variation Order ” means a document referred to in Articles 13.1 and 13.2 in respect of a Variation;


1.1.113	“ Vessel ” means the GIMI , an ex-Kvaerner Moss Type B LNG tanker owned on the Date of Agreement by Golar GIMI Limited and which shall be owned by the Owner, or such other vessel as the Parties may agree by a Variation Order in accordance with Article 13;


1.1.114	“ Vessel Leaving The Yard ” shall have the meaning given to it in Article 20.


1.1.115	“ Warranty Period ” means the period stated in Article 34.1;


1.1.116	“ Working Day ” means a day on which Works are being or are scheduled to be carried out by the Contractor, between Monday to Friday and excluding public holidays in the place where such Works are being or are scheduled to be carried out;

Owner: ______


1.1.117	“ Works ” means the product of work by the Contractor in performance of the Contractor’s Scope; and


1.1.118	“ Yard ” means any of the shipyards occupied or operated by the Contractor or the Contractor’s Affiliates in Singapore.


1.2	For the avoidance of doubt, the reference to “contractors and sub-contractors at all tiers” shall be a reference to each and every person or entity: -


(a)	In the case of Contractor’s Group, who has been contracted by any person falling within the definition of the Contractor’s Group (including such person or entity) to perform any work and/or supply any materials, equipment or services in any way whatsoever related to the performance of the Contractor’s obligations or any part thereof under this Agreement; or

(b)

In the case of the Owner’s Group, who has been contracted by any person, falling within the definition of the Owner’s Group (including such person or entity) to perform any work and/or supply any materials, equipment or services in any way whatsoever related to or connected with the Vessel including, but not limited to, the supervision or inspection of the Vessel in its various stages of the Works or the supply and installation of equipment or machinery not within the scope of the Contractor’s obligations under this Agreement or the operation of the Vessel; or


(c)	In the case of the Sub-Contractor’s Group, who has been contracted by any person falling within the definition of the Sub-Contractor’s Group (including such person or entity) to perform any work and/or supply any materials, equipment or services in any way whatsoever related to the performance of the Sub-Contractor’s obligations or any part thereof under the GIMI Topsides Agreement.


1.3	Unless the context otherwise requires, the singular shall include the plural and the plural the singular, and words indicating persons shall include firms and corporations.


1.4	Article headings are inserted for convenience only and shall be ignored for the purposes of construction or interpretation.


1.5	The Appendices are:

Appendix 1A


•	Owner’s Basis of Design

Appendix 1B

Owner: ______


•	Outline specification of conversion


•	Specification of dry-docking and repair work

Appendix 1C


•	Owner Rely-Upon Information

Appendix 1D


•	Preliminary project schedule, including key milestone dates

Appendix 2 – the GIMI Topsides Agreement, including its appendices

Appendix 3 – Price schedule


•	Conversion scope


•	Annex 1: Re-measurable


•	Annex 2: Broken Down Repair Costs

Appendix 4 - OFE & owner engineering deliverables ROS dates

Appendix 5 – Preliminary project execution plan

Appendix 6 – Preliminary site health, safety and environmental management plan

Appendix 7 – Preliminary project quality plan

Appendix 8 – Approved vendor & subcontractor list

Appendix 9 – Administration procedure

Appendix 10 – Forms

Owner: ______


1.6	The following documents together forming this Agreement are to be taken as mutually explanatory of one another. For the purposes of interpretation, the priority of the documents shall be in accordance with the following sequence:


a)	Articles 1-48 of this Agreement (excluding the Appendices);


b)	Clauses 1 – 61 of the GIMI Topsides Agreement;


c)	The Basis of Design;


d)	The Appendices of this Agreement in the order set out in Article 1.5 above; and


e)	The appendices of the GIMI Topsides Agreement in the order set out therein.


2.	EFFECTIVE DATE


2.1	With the exception of Articles 37, 39, 41, 43, 44, 45, and 46 (which shall enter into full force and effect on the Date of Agreement) the provisions of this Agreement shall become effective on the satisfaction (or waiver in accordance with Article 2.3) of the following:


2.1.1	the Contractor shall have provided to the Owner a Parent Company Guarantee pursuant to Article 47;


2.1.2	the Contractor shall have received from the Owner the sum of US$10,000,000 on or before 30 December 2014;


2.1.3	the GIMI Topsides Agreement shall have become effective pursuant to Clause 2 therein;


2.1.4	the Contractor shall have received from the Owner the sum of US$20,000,000 (as defined in Clause 2.1.2 of the GIMI Topsides Agreement) on or before 29 December 2014 so as to enable the Contractor to pay that amount to the Sub-Contractor by 30 December 2014 and notify the Owner of the same;


2.1.5	the PRICO ^® Licence Agreement shall have been executed by the Owner and Black and Veatch Corporation and all payment obligations thereunder, if any, are current;


2.1.6	the Owner, the Contractor and the Sub-Contractor shall have entered into the GIMI Direct Agreement; and


2.1.7	any other payment obligations under this Agreement due before the Effective Date shall have been paid in full.


2.1.8	[NOT USED]

Owner: ______


2.2	Subject to Article 2.6, each Party undertakes, so far as is within its control, to use its reasonable endeavours to ensure the timely fulfilment of the conditions in Article 2.1. Each Party shall inform the other in writing promptly upon the fulfilment of all the above conditions that each Party is to fulfil.


2.3	The conditions in Article 2.1 may be waived only by agreement of both Parties in writing.


2.4	The Contractor and the Sub-Contractor shall only commence the Early Works and the Early Sub-Contract Works respectively from the Effective Date in accordance with Article 3.

2.5

If the conditions in Article 2.1 are not fulfilled or waived in accordance with Article 2.3 on or before 30 December 2014, either Party may terminate this Agreement by notice in writing given at any time before the Effective Date, whereupon this Agreement shall terminate and no Party shall have any claim against any other under it (including circumstances where this Agreement has been terminated pursuant to this Article 2.5 if the Owner has not satisfied the conditions in Articles 2.1.2 and 2.1.4).

2.6

Without prejudice to Article 2.3, the Parties acknowledge and agree that the conditions in Articles 2.1.2 and 2.1.4 are for the benefit of the Owner and that the Contractor shall not be entitled, and waives any claim or right in respect thereof howsoever arising, to compel or otherwise bind the Owner to make such payments in order to satisfy the conditions precedent set out in Article 2.1.2 and 2.1.4. For the avoidance of doubt but without limiting the preceding sentence or Article 2.5, the Owner shall not be entitled to waive the conditions in Article 2.1.2 or 2.1.4 unilaterally.


2.7	The Contractor shall have received from Owner: (i) the amount of US$95,000,000 on or before 30 December 2017, and (ii) the amount of US$5,000,000 on or before 27 December 2017 so as to enable the Contractor to pay such US$5,000,000 to the Sub-Contractor by 30 December 2017 and notify the Owner of the same.


2.8	Title to the shares in the Vessel shall be transferred from Golar GIMI Limited to the Owner by the earlier of: (i) 1 March 2015; or (ii) such time as is prescribed in Article 4.3.6.


3.	EARLY WORKS


3.1	After the Effective Date of this Agreement and the GIMI Topsides Agreement, but prior to the Contractor’s receipt of the Owner’s Notice to Proceed:

Owner: ______


3.1.1	the Contractor shall only perform Works with the written agreement of the Owner and the Contractor, which shall not be unreasonably delayed or withheld (such consented Works shall be known as “ Early Works ”);


3.1.2	the Contractor shall only authorise the Sub-Contractor to perform Sub-Contract Works with the written agreement of the Owner, the Contractor and the Sub-Contractor in accordance with Clause 3 of the Topsides Agreement, which agreement shall not be unreasonably delayed or withheld (such consented Sub-Contract Works shall be known as “ Early Sub-Contract Works ”);


3.1.3	the agreement of the Owner and the Contractor for the Contractor’s performance of such Early Works (“ Limited Notice to Proceed ”) shall be in the form attached hereto at Appendix 10; and


3.1.4	the agreement of the Owner, the Contractor and the Sub-Contractor for the Sub-Contractor’s performance of such Early Such-Contract Works shall be in the form attached in Appendix X of the GIMI Topsides Agreement.


3.2	Notwithstanding paragraph 3.1, above, the Owner acknowledges that the Sub-Contractor shall perform the following scope(s) of work from the Effective Date:

3.2.1

The Sub-Contractor has provided services necessary to place purchase order(s) to duplicate those of the HILLI for the cold box from Chart that is to become a part of the Sub-Contract Works. The cancellation cost for such order(s) has been obtained by the Sub-Contractor and approved by the Owner. If Chart is not fully released to perform the purchase order by 31 March 2017 it will be cancelled if it has not been extended, such extension subject to the mutual agreement of the Contractor, Sub-Contractor and Owner. If this purchase order is cancelled the price of any replacement order shall be subject to the mutual agreement of the Contractor, Sub-Contractor and Owner.

3.2.2

The Sub-Contractor has provided services necessary to place purchase order(s) to duplicate those of the HILLI for the mixed refrigerant compressors from General Electric that is to become a part of the Sub-Contract Works. The cancellation cost for such order(s) has been obtained by the Sub-Contractor and approved by the Owner. If General Electric is not fully released to perform the purchase order by 31 March 2017 it will be cancelled if it has not been extended, such extension subject to the mutual agreement of the Contractor, Sub-Contractor and Owner. If this purchase order is cancelled the price of any replacement order shall be subject to the mutual agreement of the Contractor, Sub-Contractor and Owner.


3.3	With respect to any other vendor cancellation costs, no such cancellation costs in respect of vendors will be payable in excess of the amount stated in the Limited Notice to Proceed duly agreed by the Owner and the Contractor in respect of such Early Works.

Owner: ______


3.4	In performing Early Works, the Contractor shall endeavour to obtain (and instruct the Sub-Contractor, in its performance of the Early Sub-Contract Works, to obtain):


3.4.1	reasonably favourable cancellation terms (taking into account technical specification requirements and vendor delivery dates) when placing orders for materials and/or Equipment; and


3.4.2	an option from their vendors (if necessary) to adjust the latter’s delivery schedules to enable the Contractor to meet the adjustment of the Redelivery Date.


4.	OWNER’S NOTICE TO PROCEED

4.1

Following the Effective Date in the GIMI Main Building Contract and the Effective Date of the GIMI Topsides Agreement, provided that the Owner has already received a revised Contract Price pursuant to a Price Review detailed in Article 15.14, the Owner may, in its sole discretion, issue the Owner’s Notice to Proceed to the Contractor on a date between 1 January 2015 and 30 December 2017, inclusive. Such Owner’s Notice to Proceed shall authorise the Contractor to perform the full scope of the Works, and direct the Contractor to authorise the Sub-Contractor to perform the full scope of the Sub-Contract Works (pursuant to Clause 4.1 of the GIMI Topsides Agreement).


4.2	Upon Contractor’s receipt of the Owner’s Notice to Proceed, the Contractor shall issue to the Sub-Contractor the Contractor’s Notice to Proceed (as defined in Clause 4.1 of the GIMI Topsides Agreement).


4.3	Within five Days following the Contractor's receipt of the Owner’s Notice to Proceed:

4.3.1

the Contractor shall have received documentary evidence satisfactory to it that a mortgage over the Vessel that is in the same form and substance as the Form of Vessel Mortgage set out in Appendix 10 hereto has been registered in its favour at the Office of the Deputy Commissioner of Maritime Affairs of the Republic of the Marshall Islands as a first preferred Marshall Islands ship mortgage which shall constitute a valid first preferred maritime lien on the Vessel under the laws of the Republic of the Marshall Islands in which the Vessel is registered;

Owner: ______


4.3.2	the Contractor shall have received from the Owner payment of a sum equivalent to the the First Instalment described in Article 15.4a), less any sums already paid pursuant to Articles 2.1.2 and/or 2.7(i), if any;


4.3.3	the Contractor shall have received from the Owner payment of the sum described in Clause 4.2.1 of the GIMI Topsides Agreement, so as to enable the Contractor to promptly pay that amount to the Sub-Contractor and notify the Owner of the same;


4.3.4	the Contractor shall have received written notices from both the Owner and the Sub-Contractor that all payment obligations under the PRICO® License Agreement are current;

4.3.5

in the event that the Owner’s Notice to Proceed is received by the Contractor after 1 May 2015, such Owner’s Notice to Proceed shall not constitute a valid Owner’s Notice to Proceed under this Agreement unless no earlier than five Days prior to the Contractor’s receipt of the Owner’s Notice to Proceed the Owner, the Contractor and the Sub-Contractor have agreed on a revised Redelivery Date in accordance with Article 22.4 of this Agreement and Clause 27.4 of the Topsides Agreement.


4.3.6	Title to the shares in the Vessel shall have been transferred from Golar GIMI Limited to the Owner.


4.4	The date upon which all of the conditions in Article 4.3 are fulfilled shall be the effective date of the Owner’s Notice to Proceed.


4.5	Upon the effective date of the Owner’s Notice to Proceed, the Contractor shall perform the Works in accordance with the terms and conditions set out in this Agreement.

4.6

In the event that the Contractor does not receive the Owner’s Notice to Proceed by 30 December 2017, this Agreement shall be automatically terminated for the Owner’s convenience on 31 December 2017 pursuant to Article 33, unless the Owner, the Contractor and the Sub-Contractor (pursuant to Clause 4.8 of the GIMI Topsides Agreement) agree otherwise in writing. However, the notice provisions of Article 33.1 shall not apply in such circumstance.

4.7

In the event that the Contractor receives the Owner’s Notice to Proceed between 1 January 2015 and 30 December 2017, but the Parties subsequently fail to fulfil any of the conditions in Article 4.3.1, 4.3.2, 4.3.4, 4.3.4 or 4.3.5 within the time stipulated, this Agreement shall be deemed to be automatically terminated for the Owner’s convenience on the following day (sixth day following the Contractor’s receipt of the Owner’s Notice to Proceed) pursuant to Article 33 unless the Owner, the Contractor and the Sub-Contractor all agree otherwise

Owner: ______

in writing. However, the notice provisions of Article 33.1 shall not apply in such circumstance.


5.	DELIVERY OF THE VESSEL


5.1	The Owner shall notify the Contractor in writing at least 60 Days, 30 Days and 15 Days in advance of the arrival of the Vessel at the Yard.


5.2	The Owner shall deliver the Vessel to the Contractor:

(a)

at the Yard and quayside (or in the vicinity thereof) notified in writing by the Contractor to the Owner at least 7 Days before the date and arrival of the Vessel, which shall be no earlier than 1 month after the effective date of the Owner’s Notice to Proceed (pursuant to Article 4.4) but no later than 5 months after the effective date of the Owner’s Notice to Proceed (pursuant to Article 4.4); and


(b)	with its tanks emptied, cleaned and gas-freed, as necessary in order for the Vessel to enter the Yard.


5.3	Upon Delivery of the Vessel by the Owner to the Contractor, the Owner shall execute a declaration that the Vessel is free and clear of all mortgages, liens, charges, encumbrances and other claims whatsoever (other than those in favour of the Contractor), and shall undertake, at its cost and expense, to maintain such status of the Vessel until Vessel Leaving The Yard.


5.4	Upon Delivery, the Parties shall execute the Delivery Certificate to evidence the delivery of the Vessel and the date thereof, whereupon Delivery shall have been accomplished.

5.5

Not later than Delivery, the Owner shall, at its own cost and expense, forthwith engage the Classification Society to determine and certify whether any repair and life extension works, additional to those set out in Appendix II will be required in respect of the Vessel. If additional work or repairs are required in respect of the Vessel, such additional work or repairs may if the Owner so requires be incorporated as part of the Works by a Variation Order in accordance with Article 13.


5.6	From Delivery to the time of Vessel Leaving The Yard in accordance with Article 20 the Vessel shall be in the possession of and at the risk of the Contractor, but title to the Vessel shall remain with the Owner.


5.7	For the avoidance of doubt, the Owner shall be responsible for all port dues incurred by the Vessel.

Owner: ______


6.	PERFORMANCE OF THE WORKS


6.1	The Contractor shall perform the Works in accordance with:


(a)	Prudent Engineering and Construction Practice;


(b)	within the rules of the Classification Society as modified by Appendix 1B;


(c)	the Specifications;


(d)	Applicable Laws as at the Date of Agreement;


(e)	the rules, regulations and requirements of the Flag State Registry as at the Date of Agreement; and


(f)	and any other requirements of this Agreement.

The Sub-Contractor shall perform the Sub-Contract Works. The Owner shall co-operate with the Contractor in the efficient and timely performance of this Agreement and the GIMI Topsides Agreement so as to avoid any unnecessary cost or expense to the Contractor and any unnecessary impact on the Works.

6.2

The Owner recognises and accepts that the Contractor is reliant on the Owner-nominated Sub-Contractor for the performance of the Sub-Contract Works and does not have the capability to perform the Sub-Contract Works itself. It is the intention of the Parties that the Contractor does not undertake any of the obligations of the Sub-Contractor under the GIMI Topsides Agreement, but that the Works shall include but not be limited to the management and co-ordination of the Sub-Contract Works, including expediting the Sub-Contractor and the assembly, installation and integration of the Equipment in accordance with Prudent Engineering and Construction Practice.

Owner: ______

6.3

All equipment and materials supplied by the Contractor in the performance of its obligations under this Agreement shall be new and unused (unless agreed otherwise), originally manufactured with certificates of quality and of the Classification Society where normally available. The Contractor shall obtain certificates of the Classification Society where normally available in respect of the Contractor’s Scope.


6.4	All old parts and equipment of the Vessel shall remain the property of the Owner and may be removed by the Owner if it wishes. All materials scrapped except the shaft and propeller shall become the property of the Contractor.


7.	DESIGN RESPONSIBILITY


7.1	The Owner shall at all times remain and be responsible for the Basis of Design and the Owner Rely-Upon Information. The Owner has reviewed the FEED Studies and has endorsed the FEED Studies. It shall be the Contractor’s and Sub-Contractor’s obligation to ensure that the portion of the FEED Studies performed by it is in accordance with the Basis of Design.


7.2	The Contractor shall at all times remain and be responsible for all design and engineering within the Contractor’s Scope, subject to Article 7.1.

7.3

It is acknowledged by the Parties that the Specifications in respect of the Contractor’s Scope set out in Appendix 1B have been developed by the Contractor pursuant to the FEED Studies based on and from the Basis of Design and Owner Rely-Upon Information provided by the Owner. The Contractor shall perform the detailed engineering for the Contractor’s Scope based on and from the Basis of Design, Owner Rely-Upon Information, FEED Studies and all other requirements in this Agreement. Notwithstanding the above, the Parties acknowledge that certain portions of the Contractor’s Scope have been developed in reliance by the Contractor on information provided to it by the Sub-Contractor.


7.4	It is acknowledged by the Parties that the Specifications in respect of the Topsides Scope set out in Appendix 2 have been developed by the Sub-Contractor pursuant to the FEED Study Report of November 2013 based on and from the Basis of Design and the Owner Rely-Upon Information.


7.5	It shall be the Contractor and Sub-Contractor’s obligation to ensure that the portion of the FEED Studies performed by it is in accordance with the Basis of Design.


8.	CLASSIFICATION, CERTIFICATION AND DOCUMENTATION


8.1	The Works shall so far as applicable be performed in accordance with the rules (the edition and amendments thereto being in force as of the Date of Agreement) of the Classification Society and the Vessel shall be converted to the notation:

“✠OI Ship-Shaped LNG Production and Storage Unit, POSMOOR”

For the avoidance of doubt, PROD notation is not required and the Topsides Scope shall not be classed.

8.2

The Vessel’s topside’s engineering, equipment and installations are to be certified to be in accordance with DNV-OS-E201 (as at December 2012). Where the Certification Body requires further certification of equipment beyond that listed in Appendix L and Appendix M of the GIMI Topsides Agreement in order for the topsides to achieve compliance with DNV-OS-E201, the Contractor shall be entitled to claim such costs from the Owner as the Sub-Contractor is entitled to claim from the Contractor under the GIMI Topsides Agreement.


8.3	Decisions of the Classification Society as to compliance or non-compliance of the Works with its requirements shall be final and binding upon both Parties.

8.4

The Works shall also comply with Applicable Laws and with the rules, regulations and the requirements of the Flag State Registry in each case as in force at the Date of Agreement. Machinery and/or equipment supplied by the Contractor as part of the Works shall be provided with such maintenance/operation manuals, drawings, standard maker’s tools and spare parts, and maker’s certificate of origin as the Contractor may receive at no extra cost to it from the vendor.


8.5	All fees and charges incidental to the classification and with respect to compliance with the above referred Applicable Laws, rules, regulations and requirements in respect of the Contractor’s Scope shall be for the account of the Contractor. The Owner shall be responsible for all fees and expenses of the Classification Society save in respect of equipment certification.


8.6	The Owner shall at its own cost and expense keep the Vessel registered under the laws of the Flag State Registry from Delivery until Redelivery.


8.7	The GIMI Topsides Agreement provides that the Sub-Contractor shall deliver where appropriate certification of the Certification Body of the compliance of the relevant Equipment with DNV-OS-E201.


9.	FACILITIES FOR THE OWNER AT THE YARD


9.1	Within 30 Days of the Date of Agreement and until Redelivery, the Contractor shall provide the following facilities at the Yard for use by the Owner: -


(a)	Office space for up to ten (10) persons;


(b)	Two (2) international telephone and facsimile lines each;


(c)	One (1) facsimile/scanner/photocopier machine; and


(d)	Electronic mail facilities, including internet broadband connection complete with two standalone computers.


9.2	The Owner shall pay for all international telephone, facsimile, electronic mail and internet charges incurred by it. The Contractor shall pay for all domestic telephone and facsimile charges incurred by the Owner.


10.	SUB-CONTRACTING


10.1	The Contractor may, at its sole discretion and responsibility, subcontract part of the Works except that the Contractor:


(a)	shall only subcontract the Sub-Contract Works and the Early Sub-Contract Works to the Owner-nominated Sub-Contractor;

(b)

shall nominate any subcontractor, supplier or vendor from the Approved Vendor list for equipment it intends to procure. The Owner may within 7 days require the Contractor to select a different subcontractor, supplier or vendor from the list, carrying, through a Variation Order, any cost difference and schedule impact, which is to be reasonably proven by the Contractor. If the Contractor wishes to procure any equipment that is not listed in Appendix III, the Contractor shall obtain the prior written approval from the Owner, which shall not be unreasonably withheld or delayed; and


(c)	may not in the performance of the Works use or procure any materials or equipment which has been produced in Bangladesh or is supplied by a Bangladeshi supplier, vendor or subcontractor.

10.2

Subcontracting of all or any part of its obligations under this Agreement shall not relieve the Contractor from any of its obligations under this Agreement and the Contractor shall be responsible, only in the performance of the Works, for the acts or defaults of any of its subcontractors (other than the Sub-Contractor), its agents or employees, as if they were the acts or defaults of the Contractor itself.


11.	SUPERVISION, DRAWINGS, APPROVAL & INSPECTION & TESTS

Supervision

11.1

The Owner shall within 30 Days after the Effective Date appoint at its own cost and expense, to the extent required by Prudent Engineering and Construction Practice, a properly qualified, competent and experienced representative who shall be duly authorized for and on behalf of the Owner (the “ Owner’s Representative ”) to supervise the Works . The Owner’s Representative shall have full authority to act for and on behalf of the Owner in all matters connected with this Agreement, to approve drawings, Plans, documentation, attend all tests and inspect all workmanship, equipment and materials during the course of the performance of the Works. The Owner’s Representative shall have full and free access at all reasonable times to inspect, check, request copies of calculations and samples of materials and make test of the Works as they are performed and shall inform the Contractor as soon as practicable if any particulars of the Works inspected do not comply with this Agreement. For all such purposes, the Owner’s Representative shall be given full and free access to the Yard and such other places of business of the Contractor (subject to compliance with safety rules and other work regulations applicable to such places) and its subcontractors, if any, and the Contractor shall ensure that such subcontractors are informed of the Owner’s Representative’s rights of access to their premises for such purposes. Failure of the Owner’s Representative to inspect or to call to the attention of the Contractor any particulars in which the Works do not comply with this Agreement shall in no way relieve the Contractor of its obligations under this Agreement. The Owner may by notice in writing inform the Contractor of any change in its appointment of the Owner’s Representative at any time at its own discretion.


11.2	The Owner’s Representative may delegate any of his powers to attend tests, inspect workmanship, equipment and materials to another properly qualified, competent and experienced person and to the extent that it elects to do so, the Contractor shall be entitled to rely on the actions of such person as if he were the Owner’s Representative for the purposes of the matters delegated to him.

11.3

The Contractor shall within thirty (30) Days of the Effective Date appoint and maintain at the Yard at its own cost and expense a properly qualified, competent and experienced representative (the “ Contractor’s Representative ”) to whom all enquiries of the Owner’s Representative shall be directed. The Contractor’s Representative shall have full authority to act for and on behalf of the Contractor in all matters connected with this Agreement. The Contractor’s Representative shall remain in this capacity and, so long as he remains in the Contractor’s employ, shall not be relieved until completion of the Works except upon prior written consent of the Owner, which shall not be unreasonably withheld or delayed.

Drawings & Approvals


11.4	All Plans required for the Works pursuant to this Agreement, shall be submitted to the Owner in one (1) hard copy and one (1) electronic copy.


11.5	The Owner shall within twelve (12) Days after receipt thereof return to the Contractor one (1) copy of such Plans with the Owner’s approval or with the Owner’s remarks and amendments (if any) written thereon. If no Owner comments are received within such period, the Contractor may continue on the basis that the Owner is deemed to have approved the submittal.

11.6

If the Owner makes any remarks or amendments in accordance with Article 11.5, the Contractor shall review and resubmit such Plans and resubmit a revised Plan as appropriate in one (1) copy for further review by the Owner within 5 Business Days. The scope of such second (and, if applicable, any subsequent) review of any resubmitted Plan shall be limited to the ambit of the Owner’s remarks and amendments of the previously submitted Plan and any subsequent review of the later Plan shall be subject to such limitation of the scope of review. The period for the second (and, if applicable, any subsequent) review shall not exceed six (6) Days after receipt of the resubmitted Plans from the Contractor. If no Owner comments are received within such period, the Contractor may continue on the basis that the Owner is deemed to have approved the submittal.

11.7

The Contractor shall take due note of the Owner’s remarks and amendments (if any) on the Plans submitted (or resubmitted) pursuant to this Article 11 and if such remarks or amendments are not of such a nature or extent as to constitute modifications to the Specifications, then the Contractor shall commence or continue the Works in accordance with the corrected or amended Plans. If such remarks or amendments are not clearly specified or detailed, the Contractor shall be entitled to seek clarification of the same from the Owner before implementing the same. The Owner’s acceptance or approval of such Plans shall not relieve the Contractor of its obligation to comply with the terms of this Agreement.

Inspections & Tests

11.8

The Contractor shall arrange for the inspections and tests referred to in the ITP Plan to be carried out and ensure that all inspection and testing are carried out as require by the Classification Society, and as may otherwise be required under this Agreement to discover any deviations from the Specifications, or any defects in the Works or the Sub-Contract Works. The Owner’s Representative shall have, during the repair, modification and conversion of the Vessel, the right to attend such tests and inspections of the Works and of the Sub-Contract Works to the extent provided in the GIMI Topsides Agreement.


11.9	The Owner’s Representative may inspect the Works and equipment and materials supplied as part of the Works wherever the Works are being performed or the equipment and materials are being stored (including the Yard’s workshops, stores and offices of the Contractor or its subcontractors) to determine whether the Works are being performed in accordance with this Agreement and the Specifications.


11.10	The Contractor shall provide to the Owner the ITP Plan by 6 months after the Effective Date. The ITP Plan shall specify the anticipated schedule for equipment testing.

11.11

The Contractor shall, in relation to the Works which take place solely in the Yard, give the Owner’s Representative at least one (1) Working Day’s prior written notice of each inspection or test to be conducted at the Yard, and three (3) Days prior written notice for any other inspection or test which the Owner’s Representative separately identifies sufficiently in advance in writing as requiring such notice. In relation to the Sub-Contract Works which take place solely in the Yard , the Contractor shall give notice to the Owner’s Representative within one (1) Working Day of the Contractor’s receipt of notification from the Sub-Contractor of each inspection or test to be conducted. Provided such notice is given, the Contractor may proceed with any inspection or test which the Owner’s Representative fails to attend. The Owner shall be bound in such circumstances to accept the result of any such inspection or test although such result will still have to satisfy the requirements of the Classification Society to the extent required under this Agreement. The Owner (or its representatives) shall have no right to instruct the Sub-Contractor with regards to any portion of the Sub-Contract Works.


11.12	In relation to any Works which take place outside the Yard, the Contractor shall give the Owner’s Representative at least fifteen (15) Days’ prior notice of the proposed date, and for those tests and inspections which the Owner’s Representative confirms that it wishes to attend, five (5) Days’ prior notice of the actual date of such Works.


12.	PROGRESS REPORTING


12.1	The Contractor shall submit detailed monthly progress reports for the Works to the Owner containing a description of:


(a)	the work performed during the month, including a comparison of the current progress as compared with scheduled progress, together with a narrative on each item of the work; and


(b)	any present or anticipated slippage or other problem and the steps being taken to overcome it.


12.2	Beginning 25 months from the Effective Date, the Contractor shall also submit to the Owner a weekly summary report based on the information produced by the Contractor for its internal purposes.


12.3	The Contractor shall submit to the Owner copies of the progress reports for the Sub-Contract Works received from the Sub-Contractor.


13.	VARIATIONS AND MODIFICATIONS

13.1

The Contractor’s Scope and/or the Specifications may be modified and/or changed by written agreement of the Parties (a Variation) provided that such modifications and/or changes or an accumulation thereof will not in the Contractor's judgement (acting reasonably), materially adversely affect the Contractor's planning or program in relation to the Contractor's other commitments, and provided, further, that the Owner shall first agree, before such modifications and/or changes are carried out, to a Variation Order in respect of alterations in the Contract Price, the Redelivery Date and such other terms and conditions of this Agreement and Specifications occasioned by or resulting from such modifications and/or changes.


13.2	Such Variation shall constitute an amendment to this Agreement and/or the Specifications. No change in the Contractor’s Scope shall be made and no additional work shall be performed by the Contractor until a Variation Order has been written, dated and signed for identification by the authorised representatives of both Parties.

13.3

Notwithstanding the foregoing, where a change and/or modification is to be made to the Contractor’s Scope (but not the Sub-Contract Works), the Owner shall, subject to the limitations expressed in this Article 13, have the right to instruct the Contractor to perform such change (a “ Directed Change ”). The difference between the Contractor’s and the Owner’s proposed adjustment to the Contract Price shall be known as the “ Disputed Difference ”. The Owner shall not be entitled to issue a Directed Change, nor shall the Contractor be obliged to perform a Directed Change, where the Disputed Difference in respect of all Directed Changes (including the proposed Directed Change) exceeds the aggregate sum of Five Million United States Dollars U.S.$5m. The Contractor’s obligation to adjust delivery dates under this Article 13 shall be conditioned upon the Contractor’s ability to obtain the corresponding adjustment from its suppliers. A Directed Change shall be paid for monthly by the Owner to the Contractor on a time and materials, cost plus basis in accordance with Appendix 3 pending resolution of the Disputed Difference.

13.4

The Owner may request changes to the Contractor’s Scope by altering, adding or deducting from it by giving a written request of such changes to the Contractor. Within seven (7) Days (provided always that the Owner’s request is clear and the details thereof are sufficient for the Contractor to work out the variation required) from delivery of the request, the Contractor will give notice to the Owner in writing of the alteration to the Specifications and (if any) to the Contract Price and/or the Redelivery Date. The Owner shall notify the Contractor in writing within three (3) Days of receipt of the Contractor’s notice whether or not it agrees to the change being carried out on such terms. A Variation shall be signed by the Parties if the Owner agrees to the change, otherwise the Contractor shall not make the change.

13.5

Further, if the Owner makes remarks or amendments on Plans or drawings submitted by the Contractor or requests the performance of specific work which in the Contractor’s reasonable opinion is not part of its obligations under this Agreement, then the Contractor may issue a notice in writing to the Owner setting out in sufficient detail the requested modification and any adjustment to the Contract Price and/or Redelivery Date and/or any other provision of this Agreement and/or the Specifications which the Contractor requires before performing the requested modification. The Owner shall notify the Contractor in writing within three (3) Days of receipt of the Contractor’s notice whether or not it agrees to the modification being carried out on such terms. A Variation Order shall be signed by the Parties if the Owner agrees to the change, otherwise the Contractor shall not make the change.


13.6	For modifications and/or changes agreed in a Variation Order to be performed on a lump-sum basis, payment shall be made by the Owner, unless otherwise agreed, in the following manner:


(i)	on the date of the Variation Order, payment of such percentage of the value of the Variation Order as is equivalent to the total percentage of the Conversion Price which has become due to the Contractor; and

(ii) thereafter, payment of the balance of the value of the Variation Order by instalments in the same percentage and on the same dates as the succeeding instalments of the Conversion Price.

For modifications and/or changes performed on a unit rate, time-and-materials, or cost-plus basis, payment shall be made by the Owner at the end of every calendar month in accordance with the work performed pursuant to such modification and/or change in that month.

13.7

In the event that any of the materials required by the Specifications or otherwise under this Agreement for the Contractor’s Scope cannot be procured in time or are in short supply to maintain the Redelivery Date, the Contractor may, provided that the Owner shall so agree in writing, supply other materials capable of meeting the requirements of the Classification Society and of the rules, regulations and requirements with which the repair, modification and conversion of the Vessel must comply. Any agreement as to such substitution of materials shall be effected in the manner provided in this Article 13 and shall likewise include alterations in the Contract Price and Redelivery Date and other terms and conditions of this Agreement occasioned by or resulting from such substitution.

13.8

Notwithstanding Articles 13.1 and 13.2, as regards the Sub-Contract Works, the Contractor shall have no obligation to instruct the Sub-Contractor to carry out such modifications and/or changes unless: (i) it is entitled to demand such modifications and/or changes from the Sub-Contractor; (ii) the Sub-Contractor and the Contractor agree a Variation Order in accordance with the GIMI Topsides Agreement; and (iii) a Variation Order is signed by the Owner and the Contractor as provided above. The Owner shall reimburse the Contractor for the cost to the Contractor of making such alterations and/or changes within 30 Days of the Contractor's invoice. In the event that the only disagreement between the Owner and the Contractor is the impact of a proposed modification and/or change to the Sub-Contract Works on the Topsides Price, the Owner may instruct the Contractor to instruct the Sub-Contractor to perform the modification and/or change in accordance with Clause 36.5 of the GIMI Topsides Agreement.


13.9	The Owner hereby undertakes not to request changes and/or modifications that increase or decrease the Contractor’s Scope or the Topsides Scope beyond the intent of the original scope.

13.10

If the Owner requests engineering services from the Contractor in the preparation of a Variation, and the Owner elects not to issue a Variation, the Owner shall compensate the Contractor for its costs incurred in the preparation and submittal of information and documents in response to the Owner’s request at the rates set out in Appendix 3. If requested by the Owner in writing, the Contractor shall provide a written cost estimate prior to responding to any of the Owner’s requests which may amount to a Variation.


13.11	For the avoidance of doubt, any changes to the Basis of Design or the Owner Rely-Upon Information shall constitute a modification and/or change to which this Article 13 applies.

13.12

The Contractor shall also be entitled to a Variation Order in respect of any additional work or delays caused by (a) any failure of the Owner to comply with its obligations under this Agreement resulting in an impact on the Contractor; (b) changes in applicable standards from those applicable at the Date of Agreement, (c) any Change in Law, after the Date of Agreement, (d) delays and extra costs after the Date of Agreement that are caused by a Force Majeure Event, (e) any changes in the results of the FEED Study Report, (f) any Variation Order to which the Sub-Contractor is entitled pursuant to the GIMI Topsides Agreement.


14.	ERRORS AND CHANGES


14.1	The Contractor shall be entitled to a Variation Order in respect of adjustment of the Contract Price (calculated in accordance with Appendix 3) and in respect of delays to the Contractor’s Scope resulting from an Objective Error as defined in the GIMI Topsides Agreement, to the extent not compensated for by the Sub-Contractor under the GIMI Topsides Agreement.


14.2	The Contractor shall be entitled to a Variation Order in respect of adjustment of the Contract Price calculated in accordance with Appendix 3 and in respect of delays to the Works resulting from a Subjective Error as defined in the GIMI Topsides Agreement, to the extent not compensated for by the Sub-Contractor under the GIMI Topsides Agreement.

14.3

Without prejudice to the exercise of rights under Clause 56 of the GIMI Topsides Agreement, in the event that (i) there is any disagreement as to the Certification Body’s decision on whether the Sub-Contractor’s interpretation of the discretionary elements of DNV-OS-E201 was in accordance with Prudent Engineering and Construction Practice; (ii) there is any disagreement as to whether changes to the Sub-Contract Works arising from HAZOP are due to the Sub-Contractor’s Objective Error(s) and/or Subjective Error(s); or (iii) the Certification Body fails to provide such opinion within 30 days of the Sub-Contractor’s written request (copied to the Contractor and Owner), such disagreement or decision shall be referred to an independent third party. The independent third party will be retained by the Sub-Contractor subject to the mutual agreement of the Owner, which shall not be unreasonably withheld. The costs of the independent third party shall be paid by whichever of the Owner or the Sub-Contractor, or such combination of the foregoing, as the independent third party decides. Either the Owner or the Sub-Contractor may seek to have the independent third party’s ruling adjudicated under Clause 56 of the GIMI Topsides Agreement. The Owner shall, pending the decision of such independent third party, have the right to instruct the Contractor to instruct the Sub-Contractor to comply with the decision of the Certification Body.


14.4	The Contractor shall be entitled to a Variation Order in respect of adjustment of the Contract Price calculated in accordance with Appendix 3 and in respect of delays to the Works arising from a Hazard & Operability Analysis study (“ HAZOP ”), to the extent not compensated for by the Sub-Contractor under the GIMI Topsides Agreement.


15.	CONTRACT PRICE AND TERMS OF PAYMENT

Contractor’s Scope


15.1	The price for the performance of the Works (excluding the Re-measurable Scope, as defined in Article 15.2 below) shall be the sum of US$281,119,390.00 net receivable by the Contractor, (the “ Fixed Price ”) which is exclusive of the OFE and shall be subject to adjustment, if any, as hereinafter set forth in this Agreement.

15.2

The provisional price (“ Provisional Re-measurable Price ”) for the performance by the Contractor of the erection, installation and integration of the Topsides Scope, and for the performance of repair and life extension works of the Vessel, as set out in Appendix 3 (“ Re-measurable Scope ”) shall be the sum of US$81,183,332.00. The actual price for the performance by the Contractor of the Re-measurable Scope shall be based on a re-measurement of the actual work, materials and equipment required to carry out the Re-measurable Scope at the rates set out in Appendix 3 (“ Final Re-measurable Price ”), which the Contractor shall determine no later than 14 Days before Vessel Leaving The Yard. The Fourth Instalment shall be adjusted to take into account the difference between the Provisional Re-measurable Price and the Final Re-measurable Price through a Variation Order.

15.3

The total price for the performance of the Works (“ Conversion Price ”) shall be the total of the Fixed Price and the Final Re-measurable Price, which is exclusive of the Topsides Price and shall be subject to adjustment, if any, as provided in this Agreement. Pending ascertainment of the Final Re-measurable Price, the total of the Fixed Price and the Provisional Re-measurable Price is referred to as the “ Provisional Conversion Price ”.

Works


15.4	The Owner shall pay the Contractor the Conversion Price in instalments as follows:


a)	the First Instalment of 40% of the Provisional Conversion Price shall be paid within five Days of the Contractor’s receipt of the Owner’s Notice to Proceed.


b)	the Second Instalment of 10% of the Provisional Conversion Price, together with payment for any Variations then due, shall be paid on completion of fabrication works for the sponsons by the Contractor.


c)	the Third Instalment of 10% of the Provisional Conversion Price, together with payment for any Variations then due, shall be paid on the earlier of: (i) the mechanical completion of the refrigerant compressor in the Works; or (ii) 25 months after the effective date of the Owner’s Notice to Proceed (in accordance with Article 4.4).

the Fourth Instalment of such amount as will result in the Contractor receiving a total of 93% of the Conversion Price taking into account payments already received by the Contractor in respect of the Provisional Conversion Price and the Topsides Credit referred to in Article 15.10 together with the aggregate of any increase or decrease of the Conversion Price arising from the provisions of this Agreement, and all other amounts then due to the Contractor from the Owner, or to the Owner from the Contractor pursuant to Article 29.3, shall be paid on Vessel Leaving The Yard.


e)	the Fifth Instalment of such amount as represents 2% of the Conversion Price, together with payment for any Variations then due, shall be paid on Redelivery.


f)	the Sixth Instalment of such amount as represents 2.5% of the Conversion Price, together with payment for any Variations then due, shall be paid on the earlier of: (i) Sailaway; or (ii) the expiry of 30 Days from Vessel Leaving The Yard.


g)	the Seventh Instalment of such amount as represents 1% of the Conversion Price, together with payment for any Variations then due, shall be paid on the earlier of: (i) First Gas; or (ii) the expiry of 120 Days from Vessel Leaving The Yard.


h)	the Eighth Instalment of such amount as represents 1.5% of the Conversion Price, together with payment for any Variations then due, shall be paid on the earlier of: (i) the date of achievement of Final Acceptance; or (ii) the expiry of 180 Days from Vessel Leaving The Yard.


15.5	The Contractor shall submit to the Owner an invoice for each payment referred to in Article 15.4 not later than 7 Business Days before the date when such payment is due.

Sub-Contract Works


15.6	The Owner shall pay to the Contractor such amounts as are due from the Contractor to the Sub-Contractor so as to enable the Contractor to pay such amounts to the Sub-Contractor in full when due. The Sub-Contractor shall submit an invoice to the Contractor each month for the milestones achieved and for progress pertaining to Variation Orders in the preceding month.


15.7	The Contractor shall deliver to the Owner copies of all Milestone Achievement Certificates received and approved by the Contractor from the Sub-Contractor. The Owner shall review and comment on each Milestone Achievement Certificate in good time to enable the Contractor to comply with Clause 7.8.1 of the GIMI Topsides Agreement.


15.8	The Contractor shall deliver to the Owner copies of all invoices received and approved by the Contractor by the Sub-Contractor together with an invoice in the same amount from the Contractor to the Owner. The Owner shall review and comment on each invoice in good time to enable the Contractor to comply with Clause 7.8 of the GIMI Topsides Agreement.


15.9	The Owner shall pay the amount invoiced by the Contractor and the Sub-Contractor in good time to enable the Contractor to comply with Clause 7.5 of the GIMI Topsides Agreement.

15.10

The Owner shall pay to the Contractor at the same time as payment of the First Instalment under Article 15.4 the additional sum of Five Million United States Dollars (U.S. $5,000,000) (the “ Topsides Credit ”). In the event that the Owner fails to make timely payment of any amount due to the Contractor in respect of the Sub-Contract Works, the Contractor shall make such payment from the Topsides Credit upon which the Owner shall forthwith pay to the Contractor by the last day of the same calendar month such amount as will restore the Topsides Credit to the aforementioned sum.


15.11	Such amount, if any, of the Topsides Credit remaining at Vessel Leaving The Yard shall be dealt with in accordance with Article 15.4d).

General


15.12	Payment of sums due to the Contractor under this Agreement shall be made without any discount, set off, deduction or withholding of any nature whatsoever by wire transfer free of all transfer charges to the Contractor’s bank account as may from time to time be designated and notified in writing (or as may be detailed in any invoice) to the Owner for credit to the account of the Contractor.


15.13	Interest shall accrue on any delayed payment at the Default Interest Rate (before or after judgment or arbitration award) until full payment is made.

Adjustment for Owner’s Notice to Proceed

15.14

Without prejudice to any other provisions of this Agreement expressly permitting adjustment of the Contract Price, the Contract Price shall be adjusted in accordance with the following to obtain a revised Contract Price (consisting of a revised Conversion Price and a revised Topsides Price) that shall automatically apply in the event that the Owner has not issued the Owner’s Notice to Proceed on or before 15 May 2015:


13.

13.1.1

Upon receipt of such notice, the Contractor and the Sub-Contractor shall conduct a price review that shall include price adjustments and revisions to the Project Schedule (which may include a revision to the Redelivery Date) (“ Price Review ”), and a revised Contract Price shall be delivered to the Owner no later than four (4) weeks after the receipt of the Owner’s written notice described in Article 15.14.1. Such revised Contract Price shall automatically become the Contract Price.


13.1.2	For the avoidance of doubt, the Owner shall not issue an Owner’s Notice to Proceed at any time unless it has received a Price Review from the Contractor.


13.1.3	The Owner shall issue the Owner’s Notice to Proceed within seven (7) days of receiving the revised Contract Price pursuant to the Price Review. Should the Owner fail to do so, the process described in this Article 15.14 shall be repeated prior to issuing the Owner’s Notice to Proceed, unless the Contractor and the Sub-Contractor both waive such requirement in writing.


15.15	The revised Contract Price obtained pursuant to the Price Review shall take into account, but not be limited to, the following:


13.2	the revised Topsides Price automatically applicable pursuant to Clause 7.11 of the GIMI Topsides Agreement;


13.2.1	increase in the cost of the labour component required to perform the Works at the rate of 0.66% per month, compared against the price estimates used by the Contractor to determine the original Conversion Price ;


13.2.2	changes in the cost of bulk materials required for the Works;


13.2.3	changes in the cost of equipment and other materials required for the Works, as evidenced by good-faith revised price estimates provided by the Contractor’s suppliers of such equipment and materials compared against the price estimates for the same used by the Contractor to determine the original Conversion Price; and


13.2.4	other material changes in market conditions relevant to performance of the Works,


15.16	The Contractor shall make available, at the Owner’s request, such information to support the changes in Article 15.15.4 at its Singapore offices for the Owner’s review.


15.17	For the avoidance of doubt, any increase in the Topsides Price shall be borne solely by the Owner.

Owner: ______


16.	ADJUSTMENT OF CONTRACT PRICE

14.

The Contract Price shall be subject to adjustment, as set forth below, in the event of the following contingencies (it being understood by both Parties that any reduction of the Contract Price is by way of liquidated damages and not by way of penalty and that the remedies provided in this Article 16 shall constitute the Owner’s sole remedy for delay in the performance of the Contractor’s Scope and/or the Sub-Contract Works), provided that any reduction by way of liquidated damages shall only be made if the Owner has an arms length contract with a party unconnected with the Owner for the employment of the Vessel.

Contractor’s Scope

14.1


(a)	No adjustment shall be made and the Conversion Price shall remain unchanged for the first 15 Days of delay in Redelivery beyond the Redelivery Date (the “ Grace Period ”);

(b)

If Redelivery is delayed more than 15 Days beyond the Redelivery Date for reasons solely attributable to the Contractor, then in such event, beginning from the 16 ^th Day after the Redelivery Date (i.e. the end of the Grace Period) until the end of two (2) calendar months from the end of the Grace Period, the Conversion Price shall be reduced by deducting the sum of fifty thousand United States Dollars (U.S.$50,000) per Day for each Day of delay beyond the expiry of the Grace Period.

(c)

If Redelivery is delayed more than two (2) calendar months beyond the end of the Grace Period for reasons solely attributable to the Contractor, then in such event, beginning from the third calendar month after the end of the Grace Period until the end of four calendar months after the end of the Grace Period, the Conversion Price shall be reduced by deducting the sum of seventy-five thousand United States Dollars (U.S.$75,000) per Day for each Day of delay beyond the end of two (2) calendar months following the expiry of the Grace Period.

(d)

If Redelivery is delayed more than four (4) calendar months beyond the end of the Grace Period for reasons solely attributable to the Contractor, then in such event, beginning from the fifth calendar month after the end of the Grace Period until the end of six calendar months after the end of the Grace Period, the Conversion Price shall be reduced by deducting the sum of one hundred thousand United States Dollars (U.S.$100,000) per Day for each Day of delay beyond the end of four (4) calendar months following the expiry of the Grace Period.

Owner: ______

(e)

If Redelivery is delayed more than six (6) calendar months beyond the end of the Grace Period for reasons solely attributable to the Contractor, then, in such event, beginning from the seventh calendar month after the end of the Grace Period until the Contractor accrues the total limit for liquidated damages stated below in Article 16.3, the Conversion Price shall be reduced by deducting the sum of one hundred and forty five thousand United States Dollars (U.S.$145,000) per Day for each Day of delay beyond the end of six (6) calendar months following the expiry of the Grace Period.


14.2	However, the total reduction in the Conversion Price on account of such liquidated damages shall not be more than forty million United States Dollars (U.S.$40,000,000).


14.3	For the purposes of this Article 16, Redelivery shall be deemed to be delayed when and if the Vessel, after taking into full account all postponements of the Redelivery Date by reason of permissible delays and/or any other reasons under this Agreement, is not delivered by the date upon which Redelivery is required under the terms of this Agreement.


14.4	It is expressly understood and agreed by the Parties that in any case, if the Owner terminates this Agreement pursuant to Article 32.1 or Article 33, the Owner shall not be entitled to any damages or to liquidated damages as provided in this Article 16.

14.5

The Parties acknowledge and agree that the amount of liquidated damages payable for delay in Redelivery as provided in this Article 16 constitutes a genuine pre-estimate of the loss that would be suffered by the Owner as a result of the Contractor’s non-compliance with its obligations under this Agreement. In the event that such liquidated damages are determined to be unenforceable, the Owner shall be entitled to recover direct damages provided that such damages shall not exceed the maximum amount of liquidated damages which would have been recoverable under this Article 16 if the liquidated damages had been enforceable.

14.6

If Redelivery occurs earlier than the Redelivery Date, as may be adjusted in accordance with the terms of this Agreement, the Conversion Price shall be increased at the discretion of the Owner by a sum between one million to five million United States Dollars (U.S. $1,000,000 - $5,000,000), provided that the Conversion Price shall be increased only if the Owner has an arms-length contract with a party unconnected with the Owner for the employment of the Vessel. Such sum, if any, shall be paid by the Owner to the Contractor within 14 Days of the achievement of Substantial Performance.

Sub-Contract Works

14.7

As regards to the Sub-Contract Works the Contractor shall have no obligation to the Owner, whether by way of liquidated damages or otherwise, for delays to the Sub-Contractor’s performance of the Sub-Contract Works or for delays to the Works arising out of or in connection with the Sub-Contract Works, unless those delays are caused by the Contractor in breach of its obligations under the GIMI Topsides Agreement or this Agreement. Further,

Owner: ______

the Contractor shall have no obligation to the Owner in respect of the performance of the Topsides Scope in any Performance Tests or otherwise.


14.8	Where the Contractor’s performance of the Contractor’s Scope is delayed by causes which are the responsibility of the Sub-Contractor, such that Redelivery is delayed beyond the Redelivery Date, the Redelivery Date shall be postponed to the extent of the impact to the Contractor’s performance of the Contractor’s Scope.


14.9	Subject to Article 29, the Contractor shall endeavour to avoid or minimise the impact of any delays to the Contractor’s Scope caused by the Sub-Contractor.


17.	MECHANICAL COMPLETION


15.	The Contractor shall be responsible for achieving Mechanical Completion in respect of the Works.

15.1

Upon each stage of successful Mechanical Completion, the Owner’s Representative and the Contractor’s Representative shall sign Mechanical Completion Certificates in accordance with the procedure which the Contractor and the Owner shall agree before commencement of Mechanical Completion. In the event of minor works that are not completed but which do not affect the safe departure of the Vessel (“ Outstanding Works ”), the Mechanical Completion Certificate shall be signed with an agreed punch list of the Outstanding Works, which shall be subsequently completed by the Contractor within one month after Redelivery provided that the Owner grants the Contractor reasonable access and facilities.


15.2	Acceptance of Mechanical Completion as above provided shall be final and binding so far as conformity of the Works with this Agreement and the Specifications are concerned and shall preclude the Owner from refusing Redelivery.


18.	PRE-COMMISSIONING OF SUB-CONTRACT WORKS


16.	The Contractor shall be responsible for carrying out activities at the Yard for the Pre-Commissioning of the Sub-Contract Works, with the assistance of the Sub-Contractor, in accordance with the GIMI Topsides Agreement.


16.1	Upon each stage of successful Pre-Commissioning of the Sub-Contract Works, the Owner’s Representative and the Contractor’s Representative shall sign Pre-Commissioning Certificates of the Sub-Contract Works, in accordance with the procedure which the Contractor shall agree with the Sub-Contractor before commencement of Pre-Commissioning of the Sub-Contract Works.


19.	COMMISSIONING OF THE WORKS


17.	The Contractor shall perform Commissioning of the Works, as further detailed in Appendix 1B.


17.1	Upon each stage of successful Commissioning of the Works, the Owner’s Representative and the Contractor’s Representative shall sign a Commissioning Certificate in accordance with the procedure which the Contractor and the Owner shall agree before commencement of Commissioning of the Works.


17.2	The procedure set out in Article 17.2 in respect of Outstanding Works in relation to Mechanical Completion shall also apply to Commissioning of the Works.


20.	VESSEL LEAVING THE YARD

18.

Upon the completion of the Commissioning of the Works provided in Appendix 1B to be carried out in the Yard, the Owner’s Representative and the Contractor’s Representative shall sign the Certificate of Vessel Leaving The Yard in the form set out in Appendix 10, whereupon (subject to the payment of the Fourth Instalment in accordance with Article 15.4d)) the care, custody and control of the Vessel shall pass from the Contractor to the Owner (“ Vessel Leaving The Yard ”). The Owner shall concurrently deliver to the Contractor a bank guarantee in the form of Appendix 10 from a first-class Singapore bank acceptable to the Contractor, to be valid until the full discharge by the Owner of its obligations under this Agreement, whereupon the Contractor shall deliver to the Owner a discharge of the mortgage over the Vessel referred to in Article 47.

18.1

On and from the signing of the Certificate of Vessel Leaving The Yard and payment as set out in Article 20.1, the Vessel shall be at the sole risk of the Owner. The Owner shall be responsible for manning, security, watchmen and all other costs and liabilities relating to the Vessel after 7 days from such date of signing. The Contractor’s prevailing mooring/berthing rates will be payable by the Owner whilst the Vessel remains at the Yard beyond 7 Days after the signing of the Certificate of Vessel Leaving The Yard. During the 7 Days after the signing of the Certificate of Vessel Leaving The Yard that the Vessel remains in the Yard, the Contractor shall be fully entitled to move the Vessel to another part of the Yard at the Owner’s cost and risk of loss or damage arising from such movement.


18.2	Following the signing of the Certificate of Vessel Leaving The Yard in accordance with Article 20.1, and before it is required under this Agreement to cause the departure of the Vessel from the Yard, the Owner may, at its entire risk and cost, carry out Pre-Commissioning and Commissioning activities on and in respect of the Sub-Contract Works.


21.	COMMISSIONING AT ANCHORAGE


19.	Following the signing of the Certificate of Vessel Leaving The Yard and payment in accordance with Article 20.1, the Owner shall, at its own risk and cost, cause the Vessel to be moved within 7 Days from the Yard to an anchorage in Singapore.


19.1	The Contractor shall perform at such anchorage the remaining Commissioning of the Works in accordance with Appendix 1B, for which purpose the Owner shall provide to the Contractor reasonable and timely access and facilities. The procedure set out in Article 17.2 in respect of Outstanding Works in relation to Mechanical Completion shall also apply to Commissioning of the Works.


22.	REDELIVERY


20.	The Owner shall accept Redelivery immediately upon the completion of Commissioning at anchorage, and make payment of the Fifth Instalment and all other amounts then due to the Contractor from the Owner.

20.1

Subject to Articles 22.3 and 22.4, Redelivery shall take place on 16 February 2018, as such date may be adjusted in accordance with the terms of this Agreement, if the Owner’s Notice to Proceed is received by the Contractor on 1 May 2015. The aforementioned date or such later date to which the requirement of Redelivery is postponed pursuant to the terms of this Agreement, is herein called the “ Redelivery Date ”.


20.2	If the Owner’s Notice to Proceed is received by the Contractor before 1 May 2015 (but in any event no earlier than 1 January 2015), the Redelivery Date shall be brought forward by the number of days between the date of the Contractor’s receipt of the Owner’s Notice to Proceed and 1 May 2015, inclusive.

20.3

If the Owner’s Notice to Proceed is received by the Contractor after 1 May 2015 (but in any event no later than 30 December 2017), the Redelivery Date shall be postponed by a duration to be agreed among the Owner, the Contractor and the Sub-Contractor (pursuant to Clause 27.4 of the Topsides Agreement), such duration to be no less than the number of days between 1 May 2015 and the date of the Contractor’s receipt of the Owner’s Notice to Proceed.


20.3.1	For the avoidance of doubt, the revision of the Redelivery Date pursuant to this Article 22.4 shall be no earlier than the revision of the Redelivery Date pursuant to Clause 27.4 of the GIMI Topsides Agreement.


20.4	The Owner and the Contractor shall agree on adjustments to the schedules for the performance of the Works to meet adjustments in the Redelivery Date pursuant to this Article 22.

20.5

Provided that the Owner shall have made payment of the Fifth Instalment, Redelivery shall be effected by the concurrent delivery by each of the Parties to the other the Protocol of Redelivery and Acceptance acknowledging Redelivery of the Vessel by the Contractor and acceptance thereof by the Owner. Upon Redelivery, ownership, property and title to all goods, materials, spares, equipment (including, but not limited to, the Equipment and other items referred to in the GIMI Topsides Agreement), machineries, appurtenances, outfit, articles and items supplied to or installed on the Vessel whether pursuant to this Agreement, the GIMI Topsides Agreement or otherwise (hereinafter referred to collectively as the “ Contractor’s Equipment ”) shall, unless otherwise agreed, pass to the Owner but, until such time as the Vessel is redelivered to the Owner in accordance with this Article 22, ownership, property and title to all the Contractor’s Equipment as aforesaid shall remain vested solely and exclusively in the Contractor.


20.6	Upon Redelivery, the Contractor shall deliver to the Owner the following documents (if not already delivered): -


20.6.1	Protocol of Mechanical Completion;


20.6.2	Instruction books and operation manuals in the English language from the vendors or suppliers of the equipment procured by the Contractor under this Agreement including those received from the Sub-Contractor in respect of the Sub-Contract Works; and


20.6.3	Drawings and certificates as listed in the Specifications.


20.7	Concurrently with Redelivery, the Owner shall pay to the Contractor the Fifth Instalment (unless already paid in accordance with Article 15.4) and all other amounts then due to the Contractor from the Owner.


20.8	If the Owner fails to accept Redelivery according to this Agreement without any justifiable reason, the Contractor shall have the right to tender Redelivery after compliance of the procedural requirements as provided above.


20.9	The procedure set out in Article 17.2 in respect of Outstanding Works in relation to Mechanical Completion shall also apply to Redelivery. The Owner shall install the Commissioning Spares on the Vessel before Redelivery.


23.	SAILAWAY


21.	Following Redelivery, the Owner shall, at its own risk and cost, cause the Vessel to be moved promptly from Singapore anchorage to the Project Site (“ Sailaway ”).


21.1	Upon the earlier of Sailaway or 30 Days following Vessel Leaving The Yard, the Owner shall pay to the Contractor the Sixth Instalment and all other amounts then due to the Contractor from the Owner, if any.


24.	PROJECT SITE WORKS


22.	The Owner shall be responsible at its own costs, expense and risk for mobilising the Vessel to the Project Site, installing here there, hook up and all other activities required for the preparation for and carrying out of the Project Site Works.


22.1	The Owner shall provide Project Site Personnel to perform those Project Site Works to be carried out by the Owner with the assistance of the Contractor as provided in Appendix K and of the Sub-Contractor as provided in Clause 28 of the GIMI Topsides Agreement.

22.2

The Owner shall ensure that the Project Site is safe, accessible, compliant with Applicable Laws and not in breach of any term of this Agreement or of the GIMI Topsides Agreement. The Owner shall notify the Contractor in writing as soon as possible, but not less than 120 Days before the commencement of the Project Site Works, of the location of the Project Site, to enable the Contractor and the Sub-Contractor to prepare for mobilisation of the Contractor’s personnel and the Sub-Contractor Project Site Personnel (as defined in the GIMI Topsides Agreement) to the Project Site and to enable the Contractor and the Sub-Contractor to satisfy themselves as to the safety, regulatory, legal and operational environment at the Project Site.

22.3

The Owner shall provide the Contractor’s Representative and the Sub-Contractor with written notices at 90, 45, 21 and 5 Days prior to the date or dates when the Project Site Works are to commence. The 5-Day notice shall be accompanied by confirmation that the pre-conditions set out in Article 24.5 either have been fulfilled or will be fulfilled prior to the commencement of the Project Site Works.


22.4	Prior to the commencement of the Project Site Works and prior to the arrival of the Sub-Contractor Project Site Personnel at the Project Site (as defined in the GIMI Topsides Agreement), the Owner shall provide the following at the Project Site:


22.4.1	access to the Vessel from the date of commencement of the Project Site Works until Final Acceptance, to the extent necessary for the Contractor and the Sub-Contractor to perform their respective scopes of work in relation to the Contractor’s Scope and the Topsides Scope;


22.4.2	arrangements for transport of the Contractor’s and the Sub-Contractor’s personnel and materials between the nearest commercial international airport within the country in which the Project Site is located and the Project Site;


22.4.3	appropriate accommodation and catering for such personnel while they are required to be on the Vessel or on or near to the Project Site;


22.4.4	adequate Project Site office space;

22.4.5

adequate infrastructure support and Project Site Personnel for the Contractor’s and Sub-Contractor’s use at the Project Site for the purposes of the Project Site Works, adequate construction craft labour as may be required to support the activities of the Contractor and the Sub-Contractor at the Project Site including all supervision, labour and skilled mechanics with necessary small tools and consumables and all other material to ready the project for Project Site Works up through Final Acceptance, all to be provided in accordance with the Owner’s rate sheet containing labour rates on a non-profit basis, that shall be provided to the Contractor and Sub-Contractor no later than 30 Days prior to the scheduled Redelivery;


22.4.6	an adequate number of qualified and properly trained operators and maintenance personnel in a timely manner to support the Project Site Works;


22.4.7	reasonable assistance for the Contractor and the Sub-Contractor to obtain Authorisations as required by Applicable Laws at the Project Site for the Contractor and the Sub-Contractor to perform the Project Site Works;


22.4.8	sufficient feed stock and utilities (including fuel, air, power, water) and consumables (including reagents, chemicals, grease and lubricants complete with MSDS data) for the Project Site Works (providing however that the Sub-Contractor shall provide the Owner, with reasonable notice of its requirements at the Project Site);

22.4.9

first fills including but not limited to lubricants, refrigerants, catalyst, perlite insulation and chemicals following delivery of the Vessel to Project Site at the times and to the specification requested by the Sub-Contractor in order to complete the Project Site Works, provided that the Sub-Contractor has, six months prior to scheduled Sailaway or such shorter period of time as is reasonable under the circumstances, provided the Owner with a list identifying the foregoing items and quantities thereof;


22.4.10	sufficient storage for LNG product produced by the Vessel during the Project Site Works to support continuous, steady state operation necessary to achieve Final Acceptance in accordance with the Project Schedule;


22.4.11	cooled down LNG storage tanks on the Vessel ready to accept LNG production;


22.4.12	all required catalyst, chemicals, Owner’s Spares, fuels, lubricants, and the Commissioning Spares (which shall have been delivered by the Sub-Contractor in accordance with the GIMI Topsides Agreement) as listed in Appendix S of the GIMI Topsides Agreement. Such items shall be readily available either on the Vessel or adjacent to the Vessel;


22.4.13	LNG or liquefied nitrogen or other means to cool down the Vessel’s LNG storage tanks;


22.4.14	the safe, secure and stable mooring of the Vessel at the Project Site and the hooking up and commissioning of the relevant gas feed line;


22.4.15	the necessary Authorisations for the Project Site Works having been obtained; and


22.4.16	the availability of accommodation on the Vessel for the Contractor’s and Sub-Contractor’s personnel; and the Contractor's and the Sub-Contractor’s acceptance (acting reasonably) of the health, safety, security and other arrangements at the Project Site in accordance with Article 42 of this Agreement and Clause 14.5 of the GIMI Topsides Agreement.

Owner’s Spares


22.5	The Sub-Contractor shall deliver to the Owner a list of Owner’s Spares with itemised prices as provided for in Clause 21.3 of the GIMI Topsides Agreement.


22.6	The Owner shall procure at its own cost the Owner’s Spares, either from the Sub-Contractor or from others.


22.7	The Owner’s Spares shall be made available at or transported to the Project Site by the Owner at its own cost prior to the Sub-Contractor’s arrival at the Project Site.


22.8	The Owner’s Spares may be used by the Sub-Contractor during Startup, Project Site Commissioning and in support of warranty work pursuant to Clauses 21.5 to 21.6 of the GIMI Topsides Agreement.


25.	CONDITIONS PRECEDENT FOR PROJECT SITE COMMISSIONING


23.	Project Site Commissioning will commence when the Owner has issued the Ready for First Gas Certificate.


23.1	The Ready for First Gas Certificate shall be issued by the Owner to the Sub-Contractor when the Owner is satisfied that feed gas may be introduced into the liquefaction system, including the satisfaction by the Owner of all the following conditions precedent:


23.1.1	the hook up of the gas transmission line has been accomplished;


23.1.2	all necessary Authorisations have been obtained in order for Project Site Commissioning to commence;


23.1.3	the Vessel is free from any damage to equipment or systems that may have occurred in transit to the Project Site and which would affect the operation of the Sub-Contract Works;


23.1.4	the feed gas pipeline is fully operational;


23.1.5	all “dried” systems have maintained dryness during transit or have been dried at the Project Site;


23.1.6	all infrastructure required to support Project Site Commissioning, the warranty work and rectification efforts is available (e.g. crew vessels, craft labour, spare parts, etc.);


23.1.7	a pre-start-up safety review has been completed;


23.1.8	cool down of the Vessel LNG storage tanks is completed in sufficient time for the introduction of produced LNG;


23.1.9	operator training has been completed and a sufficient number of trained operation and maintenance personnel are on board to support Startup and Project Site Commissioning;


23.1.10	the provision of all safety management and issuance of any subsequent work permit and/or hot work permits which may be required to support the Commissioning schedule; and


23.1.11	the Owner formally assuming responsibility for all safety management and issuance of any subsequent work permits which may be required to support Project Site Commissioning.


23.2	The Owner shall demonstrate satisfaction of the above conditions precedent together with the Ready for First Gas Certificate.


23.3	The Sub-Contractor shall respond to the Ready for First Gas Certificate in writing either with its agreement or, if it disagrees, with full details of its reasons within three Days of receipt of the Ready for First Gas Certificate.

23.4

If any of the conditions precedent listed in Article 25.2 is not fulfilled, causing the Ready for First Gas Certificate not to be issued (and for Project Site Commissioning not to commence) (or any repetition thereof in the event of prior failure), the Owner shall, at its own cost, make all appropriate adjustments and modifications with all reasonable speed and at its own expense to enable the Ready for First Gas Certificate to be issued. If the Ready for First Gas Certificate has not been issued to the Sub-Contractor within 28 Days from the receipt by the Sub-Contractor of the final notice referred to in Article 24.4 for reasons which are not the Sub-Contractor’s responsibility, the Sub-Contractor shall be entitled to a Variation Order (from the Owner, through the GIMI Topsides Agreement and this Agreement) for its reasonable increased costs arising from such delay.


26.	PROJECT SITE COMMISSIONING


24.	The Owner shall perform the Project Site Commissioning with the assistance of the Contractor and of the Sub-Contractor.


24.1	The Owner, the Contractor or the Sub-Contractor shall be entitled to order the cessation of any aspect of Project Site Commissioning if damage to the Vessel or other property or personal injury is likely to result from continuation.


24.2	Project Site Commissioning activities of the Owner shall be presented in a written report(s) produced and delivered by the Owner to the Sub-Contractor within five (5) Days of the completion of the relevant aspect of Project Site Commissioning. The form and content of the report(s) will be agreed between the Owner and the Sub-Contractor prior to Sailaway.


24.3	The Sub-Contractor may, acting reasonably, within five (5) Days of receipt of a report produced by the Owner in accordance with Article 26.3, give the Owner a notice that it considers:


24.3.1	the report to be deficient in any way and that it requires the Owner to correct and resubmit the report, and the Owner must, at its own cost, resubmit the report;


24.3.2	that the Owner has failed to achieve Project Site Commissioning, such notice setting out the reasons for such failure; or


24.3.3	that Project Site Commissioning has been successfully performed.

24.4

If any part of the Project Site Commissioning fails (or any repetition thereof in the event of prior failure) or if Project Site Commissioning (or any part thereof) is stopped before completion, the Owner shall, at its own cost, make all appropriate adjustments and modifications with all reasonable speed and at its own expense and Project Site Commissioning (or the relevant part thereof) shall be repeated by the Owner as soon as practicable thereafter, and the Sub-Contractor shall be afforded schedule adjustments which may apply.


24.5	Where Project Site Commissioning has been achieved such that the Sub-Contractor has issued the requisite notice pursuant to Article 26.4.3, and all other Commissioning requirements have been satisfied, the Owner shall immediately issue the Ready for Startup Certificate in the form set out in Appendix 10 and proceed to Startup.


27.	START UP AND PERFORMANCE TESTS

25.

The Owner shall perform Startup and the Performance Tests with the assistance of the Sub-Contractor. The Sub-Contractor shall provide technical services in accordance with Appendices D, K and Z of the GIMI Topsides Agreement concerning Startup and the carrying out of the Performance Tests in accordance with the procedures and requirements for the Performance Tests set out in Clause 31, and Appendices N and O of the GIMI Topsides Agreement.


25.1	The GIMI Topsides Agreement provides as follows in relation to performance of the Equipment during the Performance Tests:


•	Substantial Performance


•	Minimum Performance


•	Guaranteed Performance


•	Guaranteed Fuel Usage


•	Guaranteed Electrical Power Consumption

as each of those terms is defined in the GIMI Topsides Agreement.


25.2	The Performance Tests shall demonstrate the achievement of Substantial Performance, Minimum Performance and Guaranteed Performance (together the “ Performance Tests ”), the latter to include Guaranteed Fuel Usage and Guaranteed Electrical Power Consumption.


25.2.1	Substantial performance (" Substantial Performance ") shall be achieved when the liquefaction plant has achieved, in the aggregate, an average LNG output of at least 70 per cent of the Guaranteed LNG Output over a period of 72 consecutive hours.


25.2.2	Minimum performance (" Minimum Performance ") shall be achieved when the liquefaction plant has achieved, in the aggregate, an average LNG output of at least 80 per cent of the Guaranteed LNG Output over a period of 72 consecutive hours.

25.3

Notwithstanding anything in Article 27.3 to the contrary, the Owner, the Contractor and the Sub-Contractor recognise that there may be circumstances during Commissioning, Startup and Performance Tests where there is enough feed gas to only operate one or more, but less than all, of the trains. The manner in which Substantial Performance, Minimum Performance and Guaranteed Performance under such circumstances will be determined shall be in accordance with Appendix N of the GIMI Topsides Agreement.


25.4	The Contractor, the Owner or the Sub-Contractor shall be entitled to order the cessation of any Performance Tests if damage to the Works or other property or personal injury is likely to result from continuation.


25.5	The results of the Performance Tests shall be collected and presented by the Owner in accordance with Appendix O ( Performance Tests Procedures ) of the GIMI Topsides Agreement.

25.6

Where all the requirements for Substantial Performance have been satisfied, the Sub-Contractor shall issue a notice (in the form of Appendix X of the GIMI Topsides Agreement) to the Owner that Substantial Performance has been achieved. Upon the Owner’s verification and signing off, such notice shall become the Substantial Performance Certificate, effective as of the date of notice by the Sub-Contractor. In the event that the Owner fails to sign off on or object to the Sub-Contractor’s notice within 2 Days, Substantial Performance shall be deemed to have been achieved on the date of the Sub-Contractor’s notice.

25.7

Where all the requirements for Minimum Performance have been satisfied, the Sub-Contractor shall issue a notice (in the form of Appendix X of the GIMI Topsides Agreement) to the Owner that Minimum Performance has been achieved. Upon the Owner’s verification and signing off, such notice shall become the Minimum Performance Certificate, effective as of the date of notice by the Sub-Contractor. In the event that the Owner fails to sign off on or object to the Sub-Contractor’s notice within 4 Days, Minimum Performance shall be deemed to have been achieved on the date of the Sub-Contractor’s notice.

25.8

Where all the requirements for Guaranteed Performance have been satisfied, the Sub-Contractor shall issue a notice (in the form of Appendix X of the GIMI Topsides Agreement) to the Owner that Guaranteed Performance has been achieved. Upon the Owner’s verification and signing off, such notice shall become the Guaranteed Performance Certificate, effective as of the date of notice by the Sub-Contractor. In the event that the Owner fails to sign off on or object to the Sub-Contractor’s notice within 4 Days, Guaranteed Performance shall be deemed to have been achieved on the date of the Sub-Contractor’s notice


25.9	If:


25.9.1	a notice of objection is given by the Owner stating the Sub-Contract Works have failed to achieve either Substantial Performance, Minimum Performance or Guaranteed Performance following a Performance Test (or any repetition thereof in the event of prior failure), the Sub-Contractor shall:

(a)

proceed with rectification efforts as soon as is practicable and thereafter continue to expeditiously (subject to having unimpeded access to the Sub-Contract Works) make all appropriate adjustments and modifications with all reasonable speed. The Owner shall provide, on a timely basis in support of the Sub-Contractor’s plan for rectification, all labour, tools, spare parts and all other resources for making such adjustments and modifications as required by the Sub-Contractor at the Sub-Contractor’s expense all in accordance with the Owner’s rate sheet containing labour rates on a non-profit basis, that shall be provided by the Owner to the Sub-Contractor no later than 30 Days prior to the scheduled Redelivery. The Sub-Contractor shall give the Owner one Day’s prior notice that the Sub-Contract Works is ready for the re-performance of the Performance Tests (or the relevant part thereof); or

(b)

if Minimum Performance has been achieved, within five (5) Days after the date of issue of the notice under Article 27.10.1, provide the Owner with a schedule detailing the work to be performed in accordance with Article 27.10.1(a). Within three (3) Days of receipt of such schedule, the Owner, acting reasonably, will approve the schedule or advise the Sub-Contractor of any reasonable amendments required (giving reasons for such amendments). The Sub-Contractor will continue to resubmit amendments to the schedule until approved by the Owner. If the Owner fails to advise under this Article 27.10.1(b) within three (3) Days then the schedule provided shall be deemed to be approved with no amendments. The Sub-Contractor will perform the work referred to in Article 27.10.1 (a) in accordance with the schedule approved by the Owner in accordance with this Article 27.10.1 (b) and


25.9.2	either (a) following a period of no less than 280 Days after the Ready for First Gas Certificate, the Sub-Contractor has failed to achieve Substantial Performance or (b) following a period of no less than 180 Days after the achievement of Substantial Performance, the Sub-Contractor has subsequently failed to achieve Guaranteed Performance, the Owner may:

(i) instruct the Sub-Contractor to perform such remedial or rectification works or services as may be necessary for the Sub-Contractor to achieve Substantial Performance or Guaranteed Performance, as the case may be. In such circumstances, any remedial or rectification works or services shall be performed by the Sub-Contractor on a cost-only basis and, without prejudice to the right to collect liquidated damages that may be payable by the Sub-Contractor subject to the overall limitation of liability, the Sub-Contractor’s overall limitation of liability set out under Clause 33.13 of the GIMI Topsides Agreement shall be reduced by such amount of costs incurred in the performance of any such remedial or rectification works or services; or

(ii) give the Sub-Contractor a notice that it is of the view that no further commercially reasonable efforts will improve the performance of the Sub-Contract Works, in which case the Owner may instruct the Contractor to terminate the GIMI Topsides Agreement pursuant to Clauses 40.1.11 and 40.1.12 of the GIMI Topsides Agreement and upon such termination carry out any remedial or rectification works or services itself or by others approved by the Sub-Contractor (acting reasonably). In such circumstances the cost and expense of any remedial or rectification works or services shall be borne by the Sub-Contractor (and, for the avoidance of doubt, such costs and expenses are included within the caps on the Sub-Contractor’s liability under Clause 33.13 of the GIMI Topsides Agreement). In such circumstances the Owner shall be entitled to recover liquidated damages from the Sub-Contractor subject to the provisions of Clause 31.12.2 of the GIMI Topsides Agreement and the caps on the Sub-Contractor’s liability under Clause 33.13 of the GIMI Topsides Agreement. The actual documented cost and expense as aforesaid properly incurred by the Owner in achieving Substantial Performance shall be paid by the Sub-Contractor to the Owner within 30 Business Days of receipt by the Sub-Contractor of a written demand (accompanied by relevant supporting documentation) from the Owner or, at the Owner’s election, may be deducted from any amounts held by the Owner (after providing the relevant supporting documentation);

25.9.3

the Sub-Contractor is, at any time, of the view that no further commercially reasonable efforts will improve the performance of the Sub-Contract Works, the Sub-Contractor shall give the Owner notice of such held view (provided that such notice shall not constitute an abandonment of this Agreement by the Sub-Contractor). Notwithstanding anything in this Agreement to the contrary, the actual costs of the Sub-Contractor’s rectification efforts to achieve Guaranteed Performance shall count towards the Sub-Contractor’s overall limit of liability in Clause 33.13 of the GIMI Topsides Agreement.

25.10

Under the GIMI Topsides Agreement Substantial Performance shall be achieved on or before 145 Days from First Gas (the “ Guaranteed Substantial Performance Date ”). If Substantial Performance is achieved on or before 71 Days after First Gas, and provided that both Guaranteed Performance and Final Acceptance are subsequently achieved, the Sub-Contractor shall be entitled, from the Owner, to an additional payment via the Contractor at the rate of U.S. $10,000 per diem for Days 67 through 71 and U.S. $25,000 for Days 66 and earlier. The Owner shall pay to the Contractor such amounts equal to the amount due to the Sub-Contractor in good time to enable the Contractor to discharge its obligation to the Sub-Contractor.

25.11

The Sub-Contractor’s guarantee regarding the Guaranteed Substantial Performance Date is conditioned upon no delay for any reason other than those solely attributable to the Sub-Contractor. If the Sub-Contractor becomes aware of a delay to the Project Schedule not solely attributable to the Sub-Contractor the Sub-Contractor shall provide written notice to the Owner and Contractor of the same and shall update the Project Schedule on a daily basis.

25.12

For the purposes of the Sub-Contractor carrying out the Project Site Works, any work to be done by the Sub-Contractor in order to achieve Substantial Performance, Minimum Performance, Guaranteed Performance and/or Final Acceptance, the Owner shall arrange for the Owner’s Spares to be readily available. Any spare parts used by the Sub-Contractor shall promptly (by a reasonable standard) and at its own cost and expense be replaced by it and delivered to such location as the Owner may direct in writing. To the extent the Owner’s Spares are not available for any of the activities listed in the first sentence of this Article 27, the Sub-Contractor and the Contractor shall be entitled to a Variation to the extent their respective costs or schedule are adversely impacted.


25.13	For the purposes set out in Article 27.13, the Owner shall provide the Sub-Contractor with the necessary access to the Vessel as set out in a reasonable plan and schedule to be delivered by the Sub-Contractor to the Owner sufficiently in advance.

25.14

If Minimum Performance is achieved but Guaranteed Performance is not achieved and the Sub-Contractor is not given access to the Vessel by the Owner pursuant to Article 27.10 for at least six periods each of access sufficient for the performance of rectification activities by the Sub-Contractor within a period of 180 Days from the date when Minimum Performance is achieved as provided for in the plan and schedule referred to in Article 27.10.1 (b) above, then the Sub-Contractor shall be deemed to have achieved Guaranteed Performance on the date which is 180 Days from the date when Minimum Performance is achieved.


28.	FINAL ACCEPTANCE


26.	When all Sub-Contract Works necessary to achieve Final Acceptance are completed including:


(a)	having obtained required certifications of the Sub-Contract Works from the Certification Body;


(b)	completion of all Sub-Contract Works, except for those obligations expressly provided to be completed after Final Acceptance; and


(c)	having successfully completed all Performance Tests, or such tests being deemed completed, or the Sub-Contractor having paid to the Owner any liquidated damages due for failure to achieve Guaranteed Performance as provided in Appendix P of the GIMI Topsides Agreement,

the Sub-Contractor shall give the Owner notice in writing in the form of Appendix X of the GIMI Topsides Agreement that it considers Final Acceptance to have been achieved.

26.1

The Owner shall, within five (5) Days after receipt of such notice from the Sub-Contractor either notify the Sub-Contractor in writing of its agreement that Final Acceptance has been achieved effective as of the date of the Sub-Contractor’s notice, or otherwise shall provide the Sub-Contractor with a formal notice that specifies those items that the Owner considers to be outstanding by reference to the terms of the GIMI Topsides Agreement.

26.2

The Sub-Contractor shall remedy all outstanding items notified by the Owner to the Sub-Contractor under Article 28.2, and shall carry out any appropriate tests to demonstrate that Final Acceptance has been achieved. The Sub-Contractor shall give the Owner notice in writing when it considers that Final Acceptance has been achieved, whereupon the Owner and the Sub-Contractor shall again follow the procedure set forth in Article 28.2, and, if necessary, shall repeat the process until the Sub-Contract Works achieve Final Acceptance, when the Owner shall notify its agreement by signing on the Final Acceptance Form in Appendix X of the GIMI Topsides Agreement.


26.3	Notwithstanding anything in this Agreement to the contrary, at any time after achieving Minimum Performance the Sub-Contractor shall have the right to pay performance liquidated damages based on the results of the last Performance Test in which case the Sub-Contractor shall be deemed to have achieved Guaranteed Performance.


29.	DELAYS AND PERFORMANCE DEFICIENCIES – SUB-CONTRACT WORKS

27.

The Contractor shall take reasonably practicable steps to avoid or minimise any delay to Redelivery which might otherwise result from the Sub-Contractor’s performance of the Topsides Scope, provided that the cost to the Contractor of doing so shall not exceed the amount received by the Contractor from the Sub-Contractor in respect of such delay by the Sub-Contractor pursuant to Clause 33.2 of the GIMI Topsides Agreement.


27.1	The Contractor shall be entitled to a Permitted Delay Event for any delay to Redelivery despite the Contractor’s taking of those steps.


27.2	Any payment received on or before Redelivery by the Contractor from the Sub-Contractor pursuant to Clauses 33.3 and/or 33.4 of the GIMI Topsides Agreement shall be credited by the Contractor against the Sixth Instalment of the Conversion Price.


27.3	Any other payment received by the Contractor from the Sub-Contractor pursuant to Clauses 33.3, 33.4, 33.7, 33.8 and/or 33.9 of the GIMI Topsides Agreement shall be credited by the Contractor against the Eighth Instalment of the Conversion Price.


27.4	In the event that after payment by the Owner to the Contractor of the Seventh Instalment, any payment is received by the Contractor from the Sub-Contractor pursuant to Clauses 33.3, 33.4, 33.7, 33.8 and/or 33.9 of the GIMI Topsides Agreement, the Contractor shall pass such amount received by it from the Sub-Contractor to the Owner after deducting any amount due to the Contractor from the Owner.


27.5	The Contractor shall have no responsibility for either the performance of the Sub-Contract Works in the Performance Tests nor for any defect, deficiency or suitability of the Sub-Contract Works.


30.	DELAYS & EXTENSION OF TIME FOR REDELIVERY

28.

The Contractor shall be entitled to a Variation Order in respect of any delay to the Works resulting from any Permitted Delay Event. In addition, the Contractor shall also be entitled to a Variation Order in respect of the delay, costs and expenses relating to the Works incurred by it as a consequence of any such delay exceeding 70 Days in the aggregate. The Contractor shall be entitled to a Variation Order in respect of the costs and expenses and delay to the Sub-Contract Works resulting from a Force Majeure Event and shall be entitled to monthly payment of such costs and expenses during the pendency of such event. For the avoidance of doubt, the Sub-Contractor’s labour costs shall be invoiced in accordance with the discounted rates set forth in Appendix B of the GIMI Topsides Agreement for the first 30 Days of delay, in the aggregate.

28.1

For the purposes of this Article 30, a “ Force Majeure Event ” is an unanticipated event beyond the reasonable control of, and without the fault or negligence of, the Party claiming such Force Majeure Event and may include, without limitation, acts of God; unusually severe actions of the elements such as droughts, storms, floods, hurricanes, tornadoes, lightning, earthquakes or landslides; epidemics; sabotage; terrorism; war (declared or undeclared); embargoes; fire; explosion; strikes or other labour disputes, excluding those specifically targeting any contractor at the Yard; civil unrest, riots, delays in transportation, car shortages, and actions or failure to act of any government authority (including expropriation, requisition, or injunction), preventing delaying or adversely affecting the performance of a Party to this Agreement. However, a Force Majeure Event does not include change in economic conditions or shortage of funds.

Notice of Permitted Delay Event

28.2

Within five (5) Days of becoming aware of a Permitted Delay Event the Contractor shall notify the Owner in writing of the date such Permitted Delay Event occurred. The Contractor shall also notify the Owner of the period by which the Redelivery Date and the dates scheduled for the achievement of Substantial Performance and Final Acceptance by the Sub-Contractor are postponed by reason of such cause of delay with all reasonable despatch after it has been determined.


28.3	An addendum to this Agreement specifying the reasons for and extent of such extension will be discussed, agreed and executed by the Parties. Furthermore, the Sub-Contractor shall be entitled to, and the Owner shall pay, for additional costs incurred by the Sub-Contractor in relation to Force Majeure Events affecting the Sub-Contractor.


28.4	In the event:

any Permitted Delay Event, or in case of the Sub-Contract Works any Force Majeure Event (“ Topsides Force Majeure ”) causes a prolonged delay in the progress in carrying out the Works or Sub-Contract Works such that an interruption in operations through the occurrence of the Permitted Delay Event and/or the Topsides Force Majeure continues for a period of one hundred and eighty (180) Days or more, or two hundred and seventy (270) Days in aggregate, the Owner, or


ii.	any such interruption in operations continues for a period of three hundred and sixty (360) Days or more in aggregate, the Contractor

may upon seven (7) Days’ notice in writing terminate this Agreement without giving rise to any claim for compensation from either Party to the other Party other than a claim for compensation from the Contractor for the Works completed up to the date of termination and for the unused materials and equipment ordered for the Works by the Contractor (any such unused material becoming the property of the Owner). The Owner shall also indemnify the Contractor for any amount which may become payable by the Contractor to the Sub-Contractor as a consequence of the termination by the Contractor of the GIMI Topsides Agreement following the termination by the Owner of this Agreement. Upon termination and payment by the Owner, the Contractor shall promptly make available to the Owner or the Owner’s Representative any such unused materials and/or equipment. Upon receipt by the Contractor of payment by the Owner under this Article 30.5, the Contractor shall deliver to the Owner a discharge of the mortgage over the Vessel referred to in Article 47, and the Owner shall take possession of the Vessel, all unused materials, equipment and documentation relating to the Works and Sub-Contract Works (including computer software and electronically stored information). Where the Owner or the Contractor does not elect to terminate this Agreement within seven (7) days after becoming entitled to do so, the Works and the Sub-Contract Works shall be deemed to be suspended in accordance with Article 31.

Duty to Minimise Delay


28.5	Each Party shall at all times use reasonable endeavours to overcome the effects of and minimise any impact to the performance of this Agreement as a result of a Permitted Delay Event and/or a Force Majeure Event.


28.5.1	The affected Party shall also provide notice to the other Party as soon as reasonably practicable of:


(a)	the cessation of the Permitted Delay Event; and


(b)	the cessation of the effects of the event of the Permitted Delay Event on the affected Party’s ability to recommence performance of its obligations under this Agreement.


28.6	Force Majeure Affecting a subcontractor

Any non-performance of the Contractor’s subcontractor (other than the Sub-Contractor) shall not excuse the Contractor from fulfilling its obligations under this Agreement, except to the extent that such non-performance is due to a Force Majeure Event affecting such subcontractor.


31.	SUSPENSION

29.

The Owner shall have the right, not before the expiry of 12 months from the effective date of the Owner’s Notice to Proceed (pursuant to Article 4.4), but no later than 6 months before the scheduled date of Vessel Leaving The Yard, by written notice to the Contractor, to suspend the Works and/or the Sub-Contract Works or any part thereof (the “ Suspended Works ”) from the date, for the period and to the extent detailed in the notice, for any of the following reasons:


(a)	in the event that suspension is necessary for the proper execution or safety of the Suspended Works, or safety of persons or property; or


(b)	to suit the convenience of the Owner.


29.1	The Owner shall have the right after Sailaway by written notice to the Contractor and Sub-Contractor, to suspend the Sub-Contract Works or any part thereof (the " Suspended Works ") from the date, for the period and to the extent detailed in the notice, for any of the following reasons:


29.1.1	the lack of availability of a Project Site;


29.1.2	the lack of employment opportunities for the Vessel;


29.1.3	the lack of gas available for liquefaction at the Project Site;


29.1.4	the lack of commercial shipping available for produced LNG; or


29.1.5	the Owner not being ready to commence the Project Site Works within 2 months of such planned date.

31.3 Upon receipt of any such notice, the Contractor shall, unless instructed in writing by the Owner otherwise:


(a)	discontinue the Suspended Works detailed in the notice, on the date, for the period and to the extent specified;


(b)	properly protect and secure the Works, including any action reasonably required by the Owner, and including taking necessary measures for the preservation of the Works already executed (if any) and of the Equipment (or part thereof);


(c)	take all reasonable measures to minimize the resulting costs, expenses and losses, including placing no further orders and making no further subcontracts with its suppliers with respect to the Suspended Works other than as specified in the notice;


(d)	promptly make reasonable effort to obtain suspension of all outstanding orders and subcontracts to the extent they relate to the execution of the portion of the Suspended Works; and


(e)	continue to perform all unsuspended parts of the Works and/or the Sub-Contract Works, as applicable.


29.2	As a result of any such suspension, the Conversion Price and Redelivery Date shall be adjusted as relevant in accordance with Article 13, except where the suspension for safety reasons is solely caused by the Contractor.

29.3

As a result of any such suspension, the Topsides Price and schedule for the Sub-Contract Works shall be adjusted as relevant in accordance with the GIMI Topsides Agreement, except where the suspension for safety reasons is solely caused by the Sub-Contractor. Where such suspension has been called by the Owner, the Owner shall be fully responsible for any resulting adjustments of the Topsides Price in accordance with the GIMI Topsides Agreement. This includes that where any period of suspension occurs for a continuous period of 30 days or more, the Owner shall pay for the Sub-Contractor’s entitlement to invoice for payment in accordance with the GIMI Topsides Agreement for Sub-Contract Works performed until suspension without regard to whether or not a milestone has been achieved (less any amounts previously paid for or in relation to the Sub-Contract Works).


29.4	The Owner may, by further notice, instruct the Contractor to resume the Suspended Works to the extent specified.


29.5	During the period of such suspension, the Vessel shall remain in the Yard.


29.6	In the event of any suspension, the Owner and the Contractor shall meet at not more than seven (7) Day intervals with a view to agreeing a mutually acceptable course of action during the suspension.

29.7

If the period of any suspension pursuant to Article 31 exceeds 30 Days per occurrence or 90 Days in the aggregate, the Contractor may serve a written notice on the Owner requesting written permission within seven (7) Days from the Owner's receipt of such notice to proceed with the Suspended Works. If the period of any suspension pursuant to Article 31.2 exceeds 270 Days in the aggregate, the Sub-Contractor may serve a written notice on the Owner requesting written permission within twenty one (21) Days from the Owner's receipt of such notice to proceed with the Suspended Works. If within such period the Owner does not grant such permission the Contractor or the Sub-Contractor, by a further notice, may at its option treat the suspension as either:


29.7.1	where it affects part only of the Works, and/or of the Sub-Contract Works a deletion of such part under Article 13; or


29.7.2	where it affects the whole of the Works, and/or the Sub-Contract Works, termination in accordance with Article 33.


29.8	As soon as possible after the Contractor and/or the Sub-Contractor re-commences performance of the Works and/or the Sub-Contract Works following suspension pursuant to Article 31 or 31.2 the parties shall discuss in good faith and use reasonable efforts to agree any extension of time to which the Contractor and/or the Sub-Contractor may be entitled pursuant to Article 31.3 and 31.4.


29.9	For the avoidance of doubt, a suspension under this Article 31 shall not affect the Owner’s payment obligations under Article 15.


32.	TERMINATION FOR CAUSE


30.	The Contractor shall be deemed to be in default of the performance of its obligations under this Agreement in the following cases: -


(a)	Redelivery is delayed for reasons which the Contractor is solely responsible beyond such time as would elapse if the maximum amount of liquidated damages payable by the Contractor for such delay pursuant to Article 16.3 is exceeded;


(b)	the Contractor is in breach of any of its other material obligations under this Agreement and fails within thirty (30) Days to take reasonable steps to commence the remedy of such breach and within a reasonable period cure such breach after written notice has been given to the Contractor by the Owner pursuant to this Article 32.1(b) with particulars of the breach that is required to be remedied;

(c)

an order or an effective resolution is passed for the winding up of the Contractor (other than for the purposes of a reconstruction or amalgamation) or if a receiver or an administrator or judicial manager or liquidator is appointed over the whole or any part of the undertaking or property of the Contractor or if winding up or other types of insolvency proceedings are commenced against the Contractor or if the Contractor becomes insolvent or suspends payment generally of its debts or ceases to carry on its business or makes any special arrangement or composition with its creditors or if a voluntary winding up resolution has been made in respect of the Contractor;


(d)	an event analogous to Article 32.1(c) above occurs in relation to the Contractor Guarantor;


(e)	a material adverse change occurs in the financial condition of the Contractor which would affect the Contractor’s ability to perform all its obligations under this Agreement;


(f)	the aggregate cap on the Contractor’s liability under this Agreement pursuant to Article 35.2 is reached; or


(g)	the Contractor is in material breach of its obligations under Article 48;

and the Owner may and may only in such cases have a right to terminate this Agreement and may do so by giving written notice to such effect to the Contractor.


30.1	The Owner shall be deemed to be in default of the performance of its obligations under this Agreement in the following cases:

(a)

The Owner fails to pay the Contractor any monies that have become due and payable under this Agreement after the Contractor has given the Owner 30 Days’ written notice of its failure to pay such monies; provided, however, that as an alternative to termination the Contractor and the Sub-Contractor shall be entitled to suspend the performance of the Works and/or Sub-Contract Works work after the Owner’s failure to pay any undisputed amount due under the provisions of this Agreement and/or the GIMI Topsides Agreement within thirty (30) Days’ written notice from the Contractor and/or Sub-Contractor of such failure by the Owner to pay on the due date;

(b)

The Owner fails to deliver the Vessel to the Contractor within 150 Days after the time prescribed for its Delivery under Article 5.2, unless within such period the Parties agree and sign a Variation Order pursuant to Article 13 and the Contractor and the Sub-Contractor agree and sign a Variation Order, pursuant to the terms of the GIMI Topsides Agreement providing for the terms (including price and schedule) for the substitution of the “Gimi” for the Vessel;


(c)	The Owner fails to take Redelivery and pay all amounts due to the Contractor within fourteen (14) Days after the Contractor having given written notice to the Owner of its failure to take Redelivery or tendered the Vessel for Redelivery and stating its intention to terminate this Agreement pursuant to this Article 32.2;

(d)

An order or an effective resolution is passed for the winding up of the Owner (other than for the purposes of a reconstruction or amalgamation) or if a receiver or an administrator or judicial manager or liquidator is appointed over the whole or any part of the undertaking or property of the Owner or if winding up or other types of insolvency proceedings are commenced against the Owner or if the Owner becomes insolvent or suspends payment generally of its debts or ceases to carry on its business or makes any special arrangement or composition with its creditors or if a voluntary winding up resolution has been made in respect of the Owner;


(e)	The Owner is in breach of any of its material obligations under this Agreement and fails to within thirty (30) Days to take reasonable steps to commence the remedy of such breach and within a reasonable period cure such breach after written notice has been given to the Owner by the Contractor pursuant to this Article 32.2(e) with particulars of the breach that is required to be remedied;


(f)	A material adverse change occurs in the financial condition of the Owner which would affect the Owner’s ability to perform all its obligations under this Agreement;


(g)	A change in control of the Owner (save where the control of the Owner passes to an Affiliate of the Owner) occurs without prior written consent of the Contractor, such consent not to be unreasonably withheld;

(h)

The Owner fails to make timely payment of any amount due to the Contractor in respect of the Sub-Contract Works and the Contractor, having applied all of the Topsides Credit towards any payment then outstanding of the Sub-Contractor, does not receive within 7 Days of written notice to the Owner, such amount as the Owner should have paid under the terms of this Agreement and the GIMI Topsides Agreement, in addition to restoring as the Topsides Credit to the level prescribed in Article 15.10;


(i)	At any time up to Vessel Leaving The Yard, the Contractor does not receive from the Owner, upon 14 Days of the Contractor’s written demand, such amount that will result in the Contractor having available to it the full Topsides Credit set out in Article 15.10; or

(j)

The Owner fails to obtain and/or procure, in the event of any detention, seizure, arrest, expropriation, attachment, sequestration, distress or execution of the Vessel (except where such detention, seizure, arrest, expropriation, attachment, sequestration, distress or execution of the Vessel is by the Contractor’s sub-contractors and caused solely by the Contractor’s non-payment of its sub-contractors), the release of the Vessel from the same within thirty (30) Days of such detention, seizure, arrest, expropriation, attachment, sequestration, distress or execution of the Vessel,

and the Contractor may and may only in such cases have a right to terminate this Agreement and may do so by giving written notice to such effect to the Owner provided however that with respect to Article 32.2 (a), the Contractor’s right to terminate shall not apply to monies validly disputed by the Owner provided that the Owner within seven (7) Days of such written notice from the Contractor delivers to the Contractor security for the amount in dispute in wording, amount and from a guarantor reasonably acceptable to the Contractor.


30.2	If this Agreement is terminated by the Contractor pursuant to Article 32.2, the Owner shall immediately pay the Contractor:


(a)	for the Works performed until termination (less any amounts previously paid to the Contractor for the Works);


(b)	the cost of any uninstalled equipment or materials, not already included in Article 32.3 (a);


(c)	any reasonable additional amount incurred by the Contractor as a result of termination of the part or parts of the Works including any unavoidable liability to subcontractors, suppliers and vendors directly related to termination of part(s) of the Works;


(d)	such amount as will indemnify the Contractor for any amount which may become payable by the Contractor to the Sub-Contractor as a consequence of the termination by the Contractor of the GIMI Topsides Agreement;


(e)	fifteen percent (15%) of the balance of the Conversion Price

and subject to the Owner paying Contractor as aforesaid, the Contractor shall redeliver to the Owner the Vessel in accordance with Article 20.3, together with any uninstalled equipment or materials and Plans, and the Owner shall remove the Vessel from the Yard within 14 Days of such redelivery.


30.3	If this Agreement is terminated by the Owner pursuant to Article 32.1, then the Owner shall immediately pay to the Contractor:


(a)	for the Works performed until termination (less any amounts previously paid to the Contractor for the Works);


(b)	the cost of any uninstalled equipment or materials, not already included in Article 32.4 (a);


(c)	for the Sub-Contract Works performed until termination; and


(d)	security for any amount in dispute in wording, amount and from a guarantor reasonably acceptable to the Contractor,

and subject to the Owner paying the Contractor as aforesaid, the Contractor shall redeliver to the Owner the Vessel, any uninstalled equipment or materials and Plans. The Contractor shall to the extent possible, if required assign to the Owner such of its major subcontracts and supply contracts as the Owner may request including the GIMI Topsides Agreement provided that all amounts due to the Contractor and the Sub-Contractor upon termination have been paid. The Owner shall take over the remaining obligations under such subcontracts and supply contracts by means of a novation agreement with the Contractor and such subcontractors and suppliers including the Sub-Contractor. The Contractor shall use reasonable endeavours to provide for such rights of assignment in all its major subcontracts or supply contracts with such subcontractors and suppliers. If the Owner engages another contractor to complete the Contractor’s Scope at another site, the Contractor shall pay the Owner any and all reasonable additional costs the Owner incurs to complete the Contractor’s Scope, such amount not to exceed 15% above what the Owner would have paid the Contractor for completing the Contractor’s Scope at the Contractor’s Yard.


30.4	In no circumstances shall the Contractor have any responsibility to the Owner in respect of the Sub-Contract Works, whether or not the Sub-Contract Works have been completed at the time of such termination.


30.5	For the avoidance of doubt, in no event shall the Owner be entitled to a refund of payments effected by the Owner to the Contractor for Works performed by the Contractor or the Sub-Contractor and the remedies set out herein shall be the Owner’s sole and exclusive remedy (whether at law, contract, equity or otherwise) in the event of termination of the Agreement by the Owner.


30.6	Without prejudice to any other rights or remedy which the Contractor may have, if the Owner does not within 14 days of the date of termination, make payment to the Contractor in accordance with either Article 32.3 or Article 32.4 or furnish security for such payment on terms satisfactory to the Contractor, the following provisions shall apply:

30.6.1

The Contractor shall have the full right and power either to complete or not to complete the Vessel as it deems fit, and to take, retain, keep possession, preserve or sell the Vessel, or any part thereof or any Equipment or OFE by way of a public or private sale by any means or process including but not limited to a court process in any jurisdiction at such price and on such terms and conditions as the Contractor in its sole discretion thinks fit or to dispose of the Vessel or any part thereof or the Equipment or OFE, without being answerable for any loss or damage.

30.6.2

In the event of the sale of the Vessel in its completed state, the proceeds of sale received by the Contractor shall be applied firstly to payment of all expenses attending such taking, retention, possession, preservation, sale or disposal and otherwise incurred by the Contractor as a result of the Owner's default, including but not limited to mooring, wharfage, berthing and dockage dues, costs of manning, security and watchmen, any movement, towage and then to payment of all unpaid instalments of the Conversion Price and interest on such instalments at the Default Interest Rate from the respective due dates thereof to the date of application.

30.6.3

In the event of sale of the Vessel in its incomplete state, or any part thereof or any Equipment or OFE, the proceeds of sale received by the Contractor shall be applied firstly to all expenses incurred by the Contractor as a result of the Owner's default, including but not limited to mooring, berthing, wharfage and dockage dues, costs of manning, security and watchmen, any movement, towage and then to payment of the amounts due under Articles 32.3 (a) to (e) and Articles 32.4 (a) to (c) .

30.6.4

In either of the above events of sale, if the proceeds of sale exceeds the total of amounts to which such proceeds are to be applied as aforesaid, the Contractor shall promptly pay the excess to the Owner without interest, provided however, that the amount of such payment to the Owner shall in no event exceed the total amount of instalments already paid by the Owner (without interest) and the cost of the OFE, if any.


30.6.5	If the proceeds of sale are insufficient to pay such total amounts payable as aforesaid, the Owner shall promptly pay the deficiency together with interest to the Contractor upon request.

30.6.6

The Owner hereby irrevocably and unconditionally grants to the Contractor full power and authority to sell the Vessel in accordance with the terms of this Article 32, to take all such steps as may be necessary to complete the sale, to receive the sale proceeds into its own account and to keep or retain the same or to apply the same in the manner set out in this Article 32 and for the purposes of such sale to confer legal and beneficial title and ownership in the Vessel to the buyer, deliver the Vessel to such buyer and do all acts and things as many be necessary for the purposes of giving effect to such sale including but not limited to the execution or signing of any contract, memorandum of agreement, bill of sale, certificate or document, or assignment of its right under the PRICO ^® License Agreement.


33.	TERMINATION FOR CONVENIENCE

31.

The Owner may in any event terminate this Agreement for any reason or for its own convenience at any time by: (i) giving not less than ten (10) Days’ notice in writing to the Contractor during the period of time commencing from the Effective Date and ending on the effective date of the Owner’s Notice to Proceed; or (ii) giving not less than sixty (60) Days’ notice in writing to the Contractor on and after the effective date of the Owner’s Notice to Proceed. In such event the Contractor shall be entitled to recover from the Owner, including but not limited to by way of set-off from the payment made pursuant to Article 2.1.2 (if the Owner’s Notice to Proceed is not yet effective) or the First Instalment (if the Owner’s Notice to Proceed has become effective), as the case may be, in full and final satisfaction of all claims: -


(a)	For the Works performed until termination (less any amounts previously paid to the Contractor for the Works);


(b)	The cost of any uninstalled equipment or materials, not already included in Article 33.1(a);

(c)

Any reasonable additional amount incurred by the Contractor as a result of termination of the part or parts of the Works including any unavoidable liability to subcontractors, suppliers and vendors directly related to termination of part(s) of the Works. In the event that: (i) the Agreement is terminated for the Owner’s convenience at any time between the Effective Date and 30 December 2017 (inclusive); AND (ii) the Owner has not issued the Owner’s Notice to Proceed; AND (iii) there has been no further agreement for the performance of Early Works and/or Early Sub-Contract Works other than those specified in Article 3.2 as of the Date of Agreement, such amount shall not exceed US$7,000,000;


(d)	Such amount as will indemnify the Contractor for any amount which may become payable by the Contractor to the Sub-Contractor as a consequence of the termination by the Contractor of the GIMI Topsides Agreement pursuant to Clause 42 therein; and


(e)	an additional payment determined as follows:


i.	if this Agreement is terminated pursuant to this Article 33 on or after the Effective Date, and provided that the Owner’s Notice to Proceed has not become effective pursuant to Article 4.4, the Owner shall pay the Contractor US$10,000,000.


ii.	[NOT USED]


iii.	for any termination for convenience by the Owner subsequent to the effectiveness of the Owner’s Notice to Proceed (pursuant to Article 4.4), the Owner shall pay to the Contractor Fifteen percent (15%) of the balance of the Conversion Price.

31.1

Any monies remaining after the set-off in Article 33.1 shall be retained by the Contractor and immediately applied as an interest-free pre-payment for sums due or to become due and payable under the Engineering, Procurement and Construction Contract in respect of the m.v. HILLI dated 22 May 2014. In the event that there are no further sums due or to become due under the aforementioned agreement, all such monies (if any) shall be returned to the Owner within 14 Days. If there is any sum that remains outstanding to the Contractor after the set-off in Article 33.1 then the Owner shall pay to the Contractor such sum within 14 Days.

31.2

Upon receipt of such payment, the Contractor shall redeliver to the Owner the Vessel, any uninstalled equipment or materials and Plans. Without prejudice to any other rights or remedy which the Contractor may have, if the Owner does not within 14 Days of the date of termination, make payment to the Contractor in accordance with this Article or furnish security for such payment on terms satisfactory to the Contractor, the provisions of Articles 32.5 to 32.7 shall apply.


34.	WARRANTY

32.

Subject to the provisions set forth herein, Contractor undertakes to remedy any defect(s) in the Works (but not in the Sub-Contract Works) which are due to defective design, defective material and/or bad workmanship on the part of Contractor and/or its subcontractors provided that the defect(s) is/are discovered within a period of either: (i) 18 months after the date of Redelivery; or (ii) the earlier of twelve (12) months after either the original planned date of First Gas as set forth in Appendix K of the GIMI Topsides Agreement or the actual date of First Gas, whichever is earlier, (“ Warranty Period ”) and a notice thereof is duly given to the Contractor as hereinafter provided.

32.1

The Contractor's sole obligation in respect of defects in the Sub-Contract Works shall be to assign to the Owner such rights as the Contractor may have in that respect against the Sub-Contractor which the Owner may pursue at its sole risk and expense, indemnifying the Contractor for any costs, expenses or liabilities including in respect of its or the Sub-Contractor's legal costs and the costs of any litigation.

32.2

The Owner shall notify the Contractor in writing of any defect(s) for which a claim is made under this Article 34 as promptly as possible after discovery thereof. Such notice shall contain a description of the nature and extent of the defect(s). The Contractor shall have no obligation for any defect(s) discovered prior to the expiry of the Warranty Period (or Extended Warranty Period, in a case where such period applies under this Article 34) unless notice of such defect(s) is received by the Contractor promptly after discovery of the defect and in any event no later than 30 Days after the expiration of the Warranty Period (or Extended Warranty Period, in a case where such period applies under this Article 34).

32.3

The extent of the Contractor’s obligation upon receipt of such notice is (1) to, at the Contractor’s cost and expense, repair or replace and thereby remedy such defect at the Contractor’s Yard or (2) to reimburse the Owner the costs of such repair or replacement in the event that such repair or replacement are not carried out at the Yard but at another location provided that the maximum reimbursement allowed or claimable hereunder shall not exceed 115% of the costs of carrying out such repair or replacement at Contractor’s Yard under this Article 34. If the Contractor advises the Owner in writing that such repair or replacement is to be made in the Yard, then the Owner will either return the Vessel (or the part or item affected where feasible to detach it from the Vessel) to the Yard at the Owner’s costs and risk, for such repair or replacement or if the Owner advises the Contractor in writing that it is not convenient for the Owner to so return the Vessel or component to the Yard, then in such event, the Contractor shall pay to the Owner the amount stated in (2) above, after prompt inspection and admission of the defect, in lieu of the Contractor making such repair or replacement.

32.4

In the event that any repair or replacements are provided by the Contractor and/or its subcontractors during the Warranty Period, the Warranty Period in respect of such repairs or replacements shall be extended for the remaining balance of the Warranty Period or a period of 6 months from the date upon which the same is carried out, whichever is the longer period, provided that the total accumulated period of warranty in respect thereof shall not under any circumstances exceed either: (i) a period of 24 months after the date of Redelivery; or (ii) the earlier of eighteen (18) months after either the original planned date of First Gas as set forth in Appendix I of the GIMI Topsides Agreement or the actual date of First Gas, whichever is earlier (“ Extended Warranty Period ”).

32.5

The Contractor shall have no responsibility for any other defects whatsoever in the Vessel than the defects specified in Article 34. Nor shall the Contractor in any circumstances be responsible or liable for the transportation of the Vessel to and from the Yard (or the costs thereof) or to any other location to carry out or perform the repair or replacement of any defect warranted herein, or for any loss of time, loss of profit or earning or demurrage directly or indirectly occasioned to the Owner by reason of the defects specified in Article 34.1 or due to repairs or other works done to the Vessel to remedy such defects, nor for any consequential or direct or indirect or special losses, damages or expenses.

32.6

The Contractor shall not be responsible for any defect in any part of the Vessel which may subsequent to Redelivery have been replaced or in any way repaired by any other contractor, or for any defects which have been caused or aggravated by omission or improper use and maintenance of the Vessel on the part of the Owner, its employees or agents or by ordinary wear and tear or by any other circumstance beyond the control of the Contractor. For the avoidance of doubt, this warranty shall also not extend to defects in any of the OFE for which the Owner shall seek recourse exclusively from the vendors of the relevant OFE.


32.7	The warranty contained in this Article 34 shall be in lieu of and shall replace any other liability, guarantee, warranty, remedy, condition and/or term imposed or implied by the law, customary or statutory or otherwise. The remedies contained in this Article 34 shall be the Owner’s sole and exclusive remedies in relation to any and all defects warranted under this Article 34.


35.	LIABILITIES & INDEMNITIES

33.

Except for liquidated damages expressly provided for in this Agreement, the Contractor and the Contractor’s Group shall not in any event nor under any circumstances, whether as a result of breach of contract, warranty, indemnity, tort (including negligence), strict liability or otherwise, be liable for any loss of profit or revenues, loss of use of any equipment, cost of capital, cost of substitute equipment, facilities, services or replacement power, downtime costs, claims of the Owner’s partners or customers for such damages, whether deemed to be direct or indirect and whether or not foreseeable or disclosed at the time of this Agreement, or for any special, consequential, incidental, indirect or exemplary or punitive damages suffered by the Owner , and the Owner shall release and hold harmless the Contractor’s Group from such claims.

33.1

Notwithstanding any provision in this Agreement, the GIMI Topsides Agreement or the GIMI Direct Agreement to the contrary or any inconsistency in or across them, it is agreed between the Parties that the Contractor’s total and entire liability under this Agreement (other than the Sub-Contract Works) and the GIMI Direct Agreement, including warranty and damages (liquidated or unliquidated), tort (including negligence and breach of statutory duty) or otherwise in relation to or in connection with this Agreement and/or the repair, modification or conversion of the Vessel and/or the Works and/or the performance by the Contractor of its obligations in the GIMI Topsides Agreement shall not exceed United States Dollars Forty Million U.S.$40m and the Owner releases the Contractor from any and all liability in excess thereof. This shall apply regardless of any act, default, omission or negligence, in whatever form or degree, and whether sole, partial, concurrent or contributory on the part of any person within the Contractor’s Group and regardless of any other breach of duty or liability, whether strict, statutory, contractual or otherwise, by any person within Contractor’s Group.


33.2	Notwithstanding any provision herein to the contrary or inconsistent herewith, it is agreed between the Parties that the Sub-Contractor’s total and entire liability shall be in accordance with the requirements stated in the GIMI Topsides Agreement.

33.3

Until the Owner has fully and completely performed and discharged all its duties, liabilities and obligations under this Agreement, the Owner shall remain the sole, legal and equitable owner of the whole of the Vessel and shall not transfer legal or equitable ownership of the Vessel to any third party or create or permit any lien, charge, debt, mortgage or any other claim whatsoever over or in relation to the Vessel, other than a lien and a mortgage in favour of the Contractor pursuant to the terms of this Agreement.


33.4	Without prejudice to any other rights or remedy which the Contractor may have, whether under this Agreement, under common law, statute, or otherwise and whether in rem or in personam:

33.4.1

The Vessel, all her equipment (whether installed on board or not) whenever the same may come into the Contractor's possession, custody or control, the OFE and all goods, materials, Plans, Project Information, documents (including but not limited to the Vessel's certificates), choses-in-action, monies (including but not limited to any insurance proceeds), items and properties in the possession, custody or control of the Contractor (collectively the "Lien Property") shall be subject to a particular and general lien and right of detention for:


33.4.1.1	all monies, sums, amounts and payments due in respect of the Lien Property, including but not limited to monies, sums, amounts and payments due and/or arising under this Agreement and the GIMI Direct Agreement; and

33.4.1.2

any particular or general balance or other sums, monies, amounts and payments due from the Owner to the Contractor, including but not limited to berthing, mooring, wharfage and dock charges or dues, storage fees costs of any equipment, goods or materials or manpower supplied to the Vessel, the costs of any movement of the Vessel, including the towage thereof, insurance premiums, legal fees and the cost of recovering all such charges, fees, costs and expenses, for the purpose of exercising or preserving or attempting or preparing to exercise and preserve such lien.

33.4.2

The Contractor, by itself or its servants or agents or otherwise shall be entitled to exercise a possessory lien upon the Lien Property in respect of any monies, sums, amounts and payments howsoever and whatsoever due to the Contractor (including but not limited to those referred to under Article 35.5.1 above) and shall for the purpose of exercising such possessory lien be entitled to take, retain and keep possession of the Lien Property at the sole risk and expense of the Owner.

33.5

The Owner shall be liable for and pay to the Contractor all costs and expenses howsoever and whatsoever incurred by or on behalf of the Contractor including but not limited to berthing, mooring, wharfage and dock charges or dues, storage fees costs of any equipment, goods or materials or manpower supplied to the Vessel, the costs of any movement of the Vessel including the towage thereof, insurance premiums, legal fees and the cost of recovering all such charges, fees, costs and expenses, for the purpose of exercising or preserving or attempting or preparing to exercise and preserve such lien.

33.6

Notwithstanding the Redelivery of the Vessel to the Owner or any delivery or re-delivery of any other Lien Property to the Owner, the Contractor shall be entitled to exercise its rights pursuant to Article 35.5 as long as the Lien Property is in the Yard or in the possession of the Contractor. Further, it is agreed that any agreement on the part of the Contractor to permit or allow any Lien Property to leave the Yard for any reason whatsoever (including but not limited to sea trials of the Vessel) whether pursuant to the terms of this Agreement or otherwise shall not prejudice nor be deemed as a waiver of the Contractor's lien (possessory or otherwise) over the Lien Property or of its rights hereunder. It is further expressly agreed that the Contractor's said lien shall re-attach and apply in the event the Lien Property returns to the Yard or to the possession of the Contractor.


36.	INSURANCE


34.	Builder’s All Risk (BAR) Insurance:

34.1.1

From the time of Delivery of the Vessel by the Owner to the Contractor until Vessel Leaving The Yard, the Contractor shall keep the Vessel, the Equipment, and all machinery, materials, equipment, appurtenances and outfit (including OFE which shall not exceed a delivered value of Four Million United States Dollars (U.S.$4m) delivered to the Yard or built into or installed in or upon the Vessel), insured against all risks under coverage corresponding to the Institute of London Underwriters’ Institute Clauses for Builders’ Risks (1/6/88) (hereafter referred to as the “ BAR ”). The amount of such insurance coverage shall, up to the date of Vessel Leaving The Yard, be an amount at least equal to the aggregate of (a) Forty Million United States Dollars (U.S.$40m) being the value of the Vessel on arrival at the Yard, (b) the aggregate of the payments made by the Owner to the Contractor, (c) the value of the OFE as and when any of them are delivered to the Contractor at the Yard up to the limit mentioned hereinbefore, and (d) Fifty Million United States Dollars (U.S.$50m) to cover the Owner’s execution costs. All losses under such policy shall be payable to the Contractor.

Notwithstanding the above, the Owner shall compensate the Contractor for the insurance costs and expense incurred in procuring the BAR insurance policy in accordance with the terms of this Agreement, as well as, the increased insurance cost and expense incurred by the Contractor, if any, due to an extension of the date of Vessel Leaving The Yard not arising out of the Contractor’s default as specified in Article 32.1 or where the delivered value of OFE exceeds the amount permitted under this Article 36.1.1.


34.1.2	In the event the Vessel is damaged by any insured cause whatsoever prior to Vessel Leaving The Yard and:

(a)

Such damage is not determined by the underwriters to be an actual or a constructive total loss of the Vessel, the Contractor and/or the Owner shall apply the amount recovered under the BAR policy referred to in Article 36.1.1 above to the repair of such damage reasonably satisfactory to the Owner and the Classification Society, and the Owner shall accept the Vessel if completed in accordance with this Agreement; or


(b)	Such damage is determined by the underwriters to be an actual or constructive total loss of the Vessel, the Contractor shall, with the mutual agreement between the Parties, either:

(i)

Proceed in accordance with the terms of this Agreement, in which case the amount recovered under the insurance policy shall be applied to the reconstruction of the Vessel, provided the Parties shall have first agreed in writing as to such reasonable postponement of the Redelivery Date and adjustment of other terms of this Agreement including the Contract Price as may be necessary for the completion of such reconstruction; or

(ii)

Pay the insurance proceeds under the BAR insurance policy to the Owner within sixty (60) days of receipt thereof less the value of the Works performed by the Contractor up to the date the damage occurred (less any amounts already paid by the Owner to the Contractor under this Agreement), whereupon this Agreement shall be deemed to be terminated and all rights, duties, liabilities and obligations of each of the Parties to the other shall terminate forthwith.

If the Parties fail to reach mutual agreement within two (2) months after the Vessel is determined to be an actual or constructive total loss, the provisions of sub-paragraph (b)(ii) above shall apply.


34.2	Hull & Machinery and P & I: From the time of Vessel Leaving The Yard, the Owner shall maintain comprehensive hull and machinery, protection and indemnity and any operational insurance policies over the Vessel covering at least the value of the Vessel.


34.3	Co-assurance & Waiver of Subrogation: The insurance required above to be taken out by the Parties shall name the other Party as co-assured and waive subrogation against the other Party’s group.


34.4	Other Insurance: The Parties shall, at their respective cost and expense, effect and maintain the following insurance:


34.4.1	In the case of the Contractor:


(a)	Workmen’s Compensation and Employer’s Liability Insurance as prescribed by applicable laws of Singapore;


(b)	Commercial General Liability Insurance with limits of not less than US$1,000,000 per occurrence and US$2,000,000 in aggregate.


34.4.2	In the case of the Owner:


(a)	Any Workmen’s Compensation and Employer’s Liability Insurance or the equivalent thereof covering its employees as prescribed by the states and/or countries of residence of such employees


(b)	Commercial General Liability Insurance with the same limits as that applicable for the Contractor.


37.	PATENTS, TRADEMARKS, COPYRIGHTS ETC.


35.	Machinery and equipment of the Vessel in respect of the Works may bear the patent number, trademarks or trade names of the manufacturers.


35.1	The Contractor shall defend, indemnify and save harmless the Owner from patent liability or claims of patent infringement of any nature or kind, including costs and expenses for, or on account of any patented or patentable invention made or used in the performance of the Works and also including costs and expenses of litigation, if any.


35.2	Nothing contained herein shall be construed as transferring any patent or trademark rights or copyright in equipment covered by this Agreement, and all such rights are hereby expressly reserved to the true and lawful owners thereof.

35.3

The Contractor’s warranty hereunder does not extend to the OFE. The Owner shall defend, indemnify and save harmless the Contractor from patent liability or claims of patent infringement of any nature or kind, including costs and expenses for, or on account of any patented or patentable invention in connection with or related to the OFE and also including costs and expenses of litigation, if any.

35.4

The Contractor retains all rights with respect to the Specifications and Plans and working drawings, technical descriptions, calculations, test results and other data, information and documents concerning the design and upgrading & conversion of the Vessel and the Owner undertakes not to disclose the same or divulge any information contained therein to any third party without the prior written consent of the Contractor, except where it is necessary for usual operation, repair and maintenance of the Vessel.


38.	OWNER FURNISHED EQUIPMENT


36.	The Owner shall at its own risk, cost and expense, supply and deliver to the Contractor all OFE at the warehouse or other storage of the Yard in proper condition ready for installation in or on the Vessel, in accordance with the time schedule stated in Appendix 4 hereto or such other time schedule as may be mutually agreed between the Parties.

36.1

In order to facilitate installation by the Contractor of the OFE in or on the Vessel, the Owner shall furnish the Contractor with necessary specifications, plans, drawings, instruction books, manuals, test reports and certificates required by the rules and regulations within the time schedule stated in Appendix 4 hereto. The Owner, if so requested by the Contractor, shall without any charge to the Contractor, cause the representatives of the manufacturers of the OFE to assist the Contractor in installation thereof in or on the Vessel and/or to carry out installation thereof by themselves or to make necessary adjustment thereof at the Yard.

36.2

The delivery dates mentioned in Appendix 4 are based on the Delivery of the Vessel to the Contractor by the Delivery Date. In the event of any delay in the Delivery of the Vessel to the Contractor, the delivery dates or delivery periods mentioned in Appendix 4 shall be extended by the period of delay in the Delivery of the Vessel to the Contractor or such dates or periods as the Parties may otherwise mutually agree in writing.


36.3	Any and all of the OFE shall be subject to the Contractor’s reasonable right of rejection, as and if they are found to be unsuitable or in improper condition for installation.

36.4

Should the Owner fail to deliver any of the OFE within the prescribed time, the Redelivery Date shall be extended for a period of such delay in delivery or such longer period caused to the performance of the Works if the Contractor is able to demonstrate the same . In such event, the Owner shall be responsible and pay to the Contractor for all losses and damages incurred by the Contractor by reason of such delay in delivery of the OFE and such payment shall be made upon Redelivery of the Vessel. If delay in delivery of any of the Owner’s OFE exceeds thirty (30) Days, then, the Contractor shall be entitled to proceed with the Works without installation thereof in or on the Vessel, without prejudice to the Contractor’s other rights as hereinabove provided, and the Owner shall accept and take Redelivery of the Vessel so upgraded and converted.

36.5

The Contractor shall be responsible for storing and handling with reasonable care the OFE after delivery thereof at the Yard and shall at its own cost and expense, install them in or on the Vessel, unless otherwise provided herein or agreed by the Parties provided always that the Contractor shall not be responsible for quality, efficiency and/or performance of any of the OFE. The Owner acknowledges and agrees that the Contractor shall also not be responsible for any failure to meet the requirements contained in the Specifications that are attributable to the quality, efficiency and/or performance of any of the OFE.


39.	CONFIDENTIALITY


37.	All information acquired or furnished by the Parties to each other that is:


(i)	designated in writing as “confidential” or “proprietary” at the time of written disclosure; or


(ii)	verbally designated as “confidential” or “proprietary” at the time of verbal disclosure and is confirmed to be “confidential” or “proprietary” in writing within 10 Days after the verbal disclosure

other than information that:


(a)	is or becomes generally available to the public other than from disclosure by the receiving Party;


(b)	is or becomes available to the receiving Party or its representatives or Affiliates on a non-confidential basis from a source other than the disclosing Party when the source is not, to the best of the receiving Party’s knowledge, subject to a confidentiality obligation to the disclosing Party;


(c)	is already known by the receiving Party at the time of disclosure;


(d)	is required to be disclosed by law, a valid legal process or a government agency (including the requirements of the relevant stock exchange);


(e)	is independently developed by the receiving Party, its representatives or Affiliates, without reference to Confidential Information; and


(f)	is approved for disclosure in writing by an authorized representative of the disclosing Party

shall be known as “ Confidential Information ”. Confidential Information is to be treated as confidential and each Party shall not disclose (except to its employees, agents, contractors advisors or financing parties who have a need to know) and shall ensure that such of its employees, agents and others who have a need to know do not disclose such Confidential Information received from the other Party without the prior written consent of the other Party, and shall use (and shall ensure that such employees, agents and others who have a need to know shall use) such Confidential Information only for the purposes of or in connection with the performance of the Works or this Agreement.


37.1	The confidentiality obligations under this Agreement shall survive for a period of five (5) years from the Date of Agreement.


37.2	Neither Party hereto shall issue any press release or provide any information to the media or any other Third Party without the prior written approval of the other Party, except where it is necessary to satisfy securities laws or regulations and stock exchange requirements.


40.	INTELLECTUAL PROPERTY RIGHTS IN RELATION TO THE CONTRACTOR’S SCOPE


38.	For the purposes of this Article 40 only, “ Party ” shall mean either the Owner, the Contractor or the Sub-Contractor, and “ Parties ” shall refer to the Owner, the Contractor and the Sub-Contractor collectively.

38.1

Each Party may at any time provide another Party with certain Project Information. Such Party shall retain the Intellectual Property Rights in the Project Information it provides. The Parties shall forthwith return all the Project Information to the Party it received such Project Information from upon the completion of both the Works and Sub-Contract Works, or upon the earlier termination of this Agreement or the GIMI Topsides Agreement; provided, however, that each Party may retain for its own use only one record copy of such Project Information for the sole purpose of this Agreement and shall not use it for any other purpose. Each Party shall save, indemnify, defend and hold harmless all other Parties from all claims, losses, damages, costs (including legal costs), expenses, and liabilities of every kind and nature for, or arising out of, any alleged infringement or infringement of Intellectual Property Rights of the Project Information by any member of such Party's Group in respect of Project Information provided by it.

38.2

All Derivative Works developed or created by the Contractor or the Sub-Contractor for the Project (as defined in the GIMI Direct Agreement) shall be deemed to be and considered as “ Commissioned Works ” under applicable laws and regulations except where such Derivative Works are (i) created or made by the Sub-Contractor and (ii) any other agreement (including but not limited to the PRICO® Licence Agreement) governs, controls, pertains to or otherwise deals with the same or substantially similar subject matter, in which case the Parties expressly agree that such Derivative Works shall not constitute, be deemed to be or be considered to be Commissioned Works and such other agreement or agreements shall prevail over this Agreement in respect of such Derivative Works. The Parties agree and acknowledge that the Owner is the commissioning party of the Commissioned Works and all Intellectual Property Rights in the Commissioned Works will solely vest ab initio in the Owner, provided that if for any reason, whether by the operation of law or otherwise, the Contractor and/or Sub-Contractor still retains any rights, title, interests or benefits in the Commissioned Works, each of the Contractor and the Sub-Contractor hereby agrees to assign, including by way of present assignment of future rights, to the Owner all rights that it may have in the Commissioned Works to the Owner. If, for whatever reason, any Commissioned Works does not vest in the Owner by virtue of this Article 40.3, then the Contractor and/or the Sub-Contractor, as applicable shall hold such Commissioned Works on trust for the Owner’s sole use and benefit and shall promptly assign such Commissioned Works to the Owner upon its request. If the Commissioned Works cannot be assigned to the Owner by operation of applicable laws or otherwise, the Contractor and Sub-Contractor shall grant to the Owner a world-wide, paid-up, royalty-free and irrevocable sole license to use, exploit, distribute, promote, sub-license third parties, and to create further derivative works of all Commissioned Works.


38.3	The Contractor may use the Commissioned Works as may be necessary for the purposes of this Agreement only. The Contractor shall not use, disclose to or procure a third party to use or disclose any of the Commissioned Works for any other purpose. For the avoidance of doubt, Articles 40.3 and 40.4 do not apply to the Contractor Background Intellectual Property.

38.4

The Owner hereby grants to the Contractor an irrevocable (except in the event of a breach of this license), non-transferable, nonexclusive, royalty-free license to utilise the Owner Background Intellectual Property, Commissioned Works only to the extent necessary for the construction, operation, maintenance, repair, or alteration of the Works. Notwithstanding any provision in this Agreement to the contrary, rights to intellectual property developed, utilized or modified in the performance of the Sub-Contract Works, excluding the Owner Background Intellectual Property, Derivative Works, and the Contractor Background Intellectual Property, shall remain the exclusive property of the Sub-Contractor. The Contractor hereby grants to the Owner an irrevocable (except in the event of a breach of this license), non-transferable, nonexclusive, royalty-free license to utilise the Contractor Background Intellectual Property only to the extent necessary for the operation, maintenance, rectification or repair of the Works.

38.5

Nothing contained in this Article 40 shall be construed as limiting or depriving the Contractor of its rights to use its Project Information, the Contractor Background Intellectual Property and other basic knowledge and skills (but for the avoidance of doubt this shall not include the Owner Background Intellectual Property, or the Commissioned Works) to design or carry out other projects or work for itself or others, whether or not such other projects or work are similar to the work to be performed pursuant to this Agreement. In circumstances where the Contractor is a party to a validly-created and existing contract with the Owner for the repair, modification and conversion of any Moss Type liquefied natural gas tanker into a floating liquefied natural gas production and storage unit using a two-tiered open lower deck sponson attached to the ship’s sides, then the Contractor shall notify the Owner before undertaking the same work for a party that is not a Party to the GIMI Direct Agreement. The Contractor shall have the right to retain and use copies of drawings, documents, and engineering and other data furnished or to be furnished by the Contractor and the information contained therein.


38.6	Rights to the Contractor Background Intellectual Property shall at all times remain the property of the Contractor. Rights to the Owner Background Intellectual Property shall at all times remain the property of the Owner.

38.7

The Contractor and the Owner shall not use or include any third party Intellectual Property Rights in the performance of this Agreement unless (i) it has all licences, consents and approvals as may be necessary to use or include such third party Intellectual Property Rights in the relevant manner and (ii) it procures any licences or consents as may be necessary to enable the Contractor to use the third party Intellectual Property Rights in accordance with the Agreement.


38.8	The Owner and the Contractor hereby warrant to each other that:


(a)	it is the owner of the Project Information provided by it and that it has the right to assign and grant the licences and rights to the other in accordance with this Article 40;


(b)	it has not granted and will not grant any rights to any third party which conflict with or may adversely affect the rights granted to the other under this Article 40;

(c)

the performance of their respective obligations in accordance with this Agreement and/or the GIMI Topsides Agreement and/or the GIMI Direct Agreement will not infringe any rights including, but not limited to Intellectual Property Rights, of any third party, the Owner Background Intellectual Property, the Contractor Background Intellectual Property, or the Sub-Contractor Background Intellectual Property (as the case may be), or the Project Information provided by any other Party to the Party giving this warranty; and


(d)	it has all necessary rights and licences for the performance of its obligations under this Agreement, the GIMI Topsides Agreement, and the GIMI Direct Agreement.

38.9

The Contractor shall defend, protect and indemnify and hold the Owner (including its assigns) harmless from and against any third party claims, demands, expenses, liabilities, losses, damages or proceedings (including legal costs on an indemnity basis) in connection with any infringement or alleged infringement of copyright, registered design, trademark rights or patent arising from, out of or in connection with:


(a)	the Contractor’s and/or the Owner’s, consistent with the intended purpose, use or possession of the Works of the Contractor under this Agreement or any component or element thereof;


(b)	the use, consistent with the intended purpose, of any materials or equipment by the Contractor in the performance of the Works by the Contractor under this Agreement or the manner in which the same is used; and/or


(c)	the use, consistent with the intended purpose, of designs, drawings and specifications furnished to the Owner by the Contractor.

38.10

The Owner shall defend, protect and indemnify and hold the Contractor (including its assigns) harmless from and against any third party claims, demands, expenses, liabilities, losses, damages or proceedings (including legal costs on an indemnity basis) in connection with any infringement or alleged infringement of copyright, registered design, trademark rights or patent arising from, out of or in connection with:


(a)	the Owner's and/or the Contractor's, consistent with the intended purpose, use or possession of the Owner Background Intellectual Property, the Works and the Sub-Contract Works or any component or element thereof; and/or


(b)	the use, consistent with the intended purpose, of Project Information, designs, drawings and specifications furnished to the Contractor and/or the Sub-Contractor by the Owner.


38.11	The Contractor’s obligations pursuant to this Article 40 are limited solely to the Contractor’s Scope.


41.	NOTICES


39.	Every notice demand or other communication under this Agreement shall be sent by email confirmed in writing. Such notice shall be sent to the respective addresses set out below or to such other address as may be notified in writing for such purpose: -

To the Contractor: - KEPPEL SHIPYARD LIMITED

51 Pioneer Sector 1

Singapore 628437

Attention: Jaya Kumar, General Manager

jaya.kumar@keppelshipyard.com

To the Owner: - GOLAR GIMI CORPORATION

c/o Golar Management Ltd.
One America Square
13th Floor, 17 Crosswall
London EC3N 2LB
United Kingdom

Attention: Pernille Noraas

Email: pernille.noraas@golar.com (with a copy to morten.daviknes@golar.com)


39.1	Every notice demand or other communication sent by email shall be deemed to have been received:


39.1.1	if received during working hours, at the time of receipt; or


39.1.2	otherwise at the start of working hours on the next Business Day.


42.	HEALTH, SAFETY, ENVIRONMENT & QUALITY ASSURANCE

Safety

40.

The Contractor will perform the Works in compliance with, and shall cause its employees and subcontractors to comply, in all respects, with the provisions of Appendix 6 and all applicable safety and health laws, rules and regulations of governmental agencies having jurisdiction in the country where any of the Works is being performed. The Contractor is also responsible for providing and maintaining a safe and healthy work environment on its premises. The Contractor shall provide, at no additional cost to the Owner, all necessary safety induction of the Owner’s personnel at the Yard. The Owner shall, and shall ensure that each member of the Owner’s personnel shall, at all times, comply with all the Contractor’s regulations and Applicable Laws relating to health, safety and the environment.


40.1	The Contractor shall provide and keep readily available in good working order all safety appliances as well as those reasonably necessary in accordance with good industry practices for safe operation and prescribed by proper bodies and competent authorities.


40.2	The Contractor shall inform the Owner of any injury/damage to its personnel and/or equipment and to the Owner’s personnel and/or materials. The Owner shall inform the Contractor during the performance of the Works, or Sub-Contract Works at the Yard or the Project Site immediately of any situation that is potentially hazardous to workers.


40.3	The Owner’s personnel must possess applicable safety training certificates, and prior to performing work at the Yard, shall be required to have completed a safety induction course (referred to at the Yard as a Shipyard Safety Instruction Course (General Trade)).


40.4	The Owner shall provide each member of the Owner’s personnel at the Yard and Project Site with, or require them to have, appropriate Personal Protective Equipment (PPE) and shall ensure that they use them correctly while working in the Yard’s premises or facilities or the Project Site.

40.5

The Owner shall ensure that its employees and each member of the Owner's personnel at the Yard and Project Site comply with the health, safety and environmental requirements in this Agreement. The Contractor shall be entitled to bar any employee of the Owner or any member of the Owner’s personnel who fails to comply with such health, safety and security regulations and Applicable Laws from entry to the Yard’s premises.

Health & Environment

40.6

The Contractor shall give all notices and otherwise fully comply with all laws, statutes, regulations, ordinances, rules, standards, orders or determinations of any governmental authority (including related determinations, interpretations, orders or opinions of any judicial or administrative authority) which has jurisdiction over the Contractor and the performance of this Agreement pertaining to the protection or conservation of the air, land, human health, industrial hygiene or other aspects of the environment which are directly applicable to the performance of this Agreement.

40.7

The Contractor represents and warrants to the Owner that in the performance of the Works, the operations will not contain or otherwise have incorporated into them any chemical, material or other substance defined as or included in the definition of “hazardous substance”, “hazardous material”, “hazardous chemical”, “hazardous chemical substance”, “hazardous waste” or “toxic substance” or words of similar meaning and regulatory effect, as such terms are defined under any environmental laws, any broader definition of such terms that are used by a state or locality that has jurisdiction over the performance of this Agreement or any interpretation by administrative or judicial authorities, or any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental authority or which may or could pose a hazard to human health and safety, such definitions, representations and warranties shall exclude however hydrocarbons, discharged water and production related chemicals.

Quality Assurance

40.8

This Agreement shall be carried out under “Quality Assurance” conditions and in accordance with the Specifications. The Quality Plan shall be submitted to the Owner. Without prejudice to the Contractor’s obligations hereunder, the Owner reserves the right to confirm to the Contractor in writing its agreement to the above documentation within thirty (30) Days of submission. If the Owner does not respond within the prescribed time, the documentation submitted shall be deemed accepted by the Owner.

Indemnity from consequences of Asbestos

40.9

The Owner shall indemnify in full, defend and hold the Contractor harmless from and against any and all claims, losses, liability, damages, costs, expenses, demands or proceedings whatsoever and howsoever arising due to and as a result or consequence of asbestos or radioactive or other hazardous waste (or the discharge thereof) from the Vessel and the legal costs in connection therewith (on an indemnity basis) including but not limited to illness, death or personal injury of any person (including, but not limited to, members of the Contractor’s Group).


43.	GENERAL

41.

Change in Control Any change in control in the Owner (save where the control of the Owner passes to an Affiliate of the Owner) shall be permitted only with the prior written consent of the Contractor, such consent not to be unreasonably withheld or delayed. A change in control in the Owner is deemed to occur when a person or persons acting in concert acquire(s) direct or indirect control of (i) over fifty percent (50%) of the total voting rights conferred by all the issued shares in the capital of the Owner which are exercisable in the general meeting of shareholders or (ii) the majority composition of the board of directors of the Owner.


41.1	Severability If any of the provisions of this Agreement is or becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions of this Agreement shall continue in force and shall not in any way be affected or impaired.


41.2	Headings Headings are used only for reference and for convenience and do not define, limit or describe the scope of intent of any Article and shall be ignored for purposes of interpretation of this Agreement.


41.3	Independent Contractor In the performance of this Agreement, the Contractor is and shall remain an independent contractor. Neither the Contractor nor any one employed by the Contractor shall be deemed for any purpose to be the employee, agent, servant, borrowed servant or representative of the Owner in the performance of the Works.


41.4	Assignment Neither Party shall assign this Agreement or any part thereof without the prior written consent of the other Party except that the Owner may assign the Agreement to:


(a)	Its Affiliate;


(b)	Its lender(s) or financier(s) for the project involving or involving, inter-alia, the Works;


(c)	Any other party with the prior written consent of the Contractor, not to be unreasonably withheld or delayed.


41.4.1	Third Party Rights Nothing in this Agreement is intended to confer any benefit on or intended to be enforceable by or against any person who is not a party to this Agreement. Accordingly, no person other than the Parties may enforce this Agreement by virtue of the Contracts (Rights of Third Parties) Act 1999.


41.5	Counterparts This Agreement may be signed in any number of counterparts, all of which taken together shall constitute one and the same instrument. Any Party may enter into this Agreement by signing any such counterpart and each counterpart may be signed and executed by facsimile and shall be as valid and effectual as if executed as all original.


44.	TAXES & DUTIES


42.	The Contractor shall bear and pay all taxes and duties imposed in Singapore in connection with the execution and/or performance of the Works, excluding any taxes and duties imposed in Singapore upon the OFE.


42.1	The Owner shall bear and pay all taxes and duties imposed outside Singapore in connection with the execution and/or performance of this Agreement, except taxes and duties imposed upon those items to be procured by the Contractor for the performance of the Works at the Contractor’s Yard.


45.	INTERPRETATION


43.	This Agreement and the rights and obligations of the Parties hereunder shall be governed by and construed in accordance with the laws of England.

43.1.1

This Agreement contains the entire agreement and understanding between the Parties and supersedes all prior negotiations, representations, letters of intent, term sheets, undertakings and agreements on any subject matter of this Agreement. Any and all previous agreements and/or arrangements between the Parties shall be superseded and become null and void unless incorporated into this Agreement either by specific reference there to or by attachment to this Agreement as an Appendix hereto.


43.2	All provisions or requirements contained in the Specifications and the Articles of this Agreement are intended to amplify, explain and complement each other. In the event of any conflict or inconsistency between these documents, the Articles shall take precedence over the Specifications.


46.	DISPUTE RESOLUTION


44.	In the event of any dispute arising out of or relating to this Agreement, or the breach, termination or invalidity thereof, the same shall be brought to the attention of each Party’s executive management who shall attempt to resolve such dispute.


44.1	If such dispute cannot be mutually resolved by the Parties, the Parties agree that legal proceedings may be brought in the courts of England to resolve such dispute and the Parties hereby irrevocably submit to the non-exclusive jurisdiction of such courts.


44.2	With regard to any dispute or difference related to technical matters affecting the Vessel, such may be resolved and determined by the Classification Society if so and to the extent agreed by the Parties in writing whereupon the Parties agree to be bound by the decision of the Classification Society and such decision shall be final and binding upon the Parties.


44.3	The Contractor irrevocably appoints as its agent for service of proceedings issued by the Owner in the courts of England: Nausch, Hogan & Murray (U.K.), 11-13 Crosswall London, EC3N 2JY, United Kingdom.


44.4	The Owner irrevocably appoints as its agent for service of proceedings issued by the Contractor in the courts of England: Golar Management, 13 ^th Floor, One America Square, 17 Crosswall, London EC3N 2LB.


44.5	The Owner irrevocably consents to be joined in any proceedings between the Contractor and the Sub-Contractor which may be relevant to, arise out of, or has or may have any consequence upon the rights or obligations of the Contractor under, pursuant to or in connection with this Agreement.


47.	SECURITIES

45.

Subject to Article 47.2 below and upon receipt of the Contractor’s notification pursuant to Article 4.1, as security for the performance of the Owner’s obligations under this Agreement the Owner shall execute and deliver to the Contractor within the time specified in Article 4.3, at the Owner’s own cost and expense, a first ranking ship mortgage on the Vessel in favour of the Contractor, in the form set out in Appendix 10 (Form of Vessel Mortgage) governed by the laws of the Marshall Islands, and which shall constitute a valid first preferred maritime lien on the Vessel under the laws of the Marshall Islands in which the Vessel is registered. Such mortgage shall remain effective, valid, unencumbered and existing until the date of Vessel Leaving The Yard, after which the provisions of Article 47.2 below shall apply.

45.1

Upon Vessel Leaving The Yard, the ship mortgage granted by the Owner to the Contractor under Article 47.1 above shall be released and discharged, and the Owner shall execute and deliver, at its own cost and expense, a bank guarantee in the form set out in Appendix 10 (Form of Bank Guarantee) from the Singapore branch of an international bank with a rating not less than AA based on Standard & Poor’s credit rating reasonably acceptable to the Contractor. Such bank guarantee shall be effective from the date of Vessel Leaving The Yard until the satisfaction of all of the Owner’s payment obligations under this Agreement. For the avoidance of doubt, the Contractor shall not be obliged to release or discharge the ship mortgage until it has received such bank guarantee.


45.2	As security for the performance of the Contractor’s obligations under this Agreement, the Contractor agrees and undertakes to deliver to the Owner a duly and validly executed Parent Company Guarantee in the form of Appendix 10 from Keppel Offshore & Marine Ltd within 14 Days from the Date of Agreement.


48.	COMPLIANCE WITH ANTI-BRIBERY LAWS AND SANCTIONS


46.	For purposes of this Article 48 the following term shall have the following meaning:

“ Government Official ” shall mean any official or employee of any government, or any agency, ministry, department of a government (at any level), person acting in an official capacity for a government regardless of rank or position, official or employee of a company wholly or partially controlled by a government (for example, a state owned oil company), political party and any official of a political party; candidate for political office, officer or employee of a public international organisation, such as the United Nations or the World Bank, or immediate family member (meaning a spouse, dependent child or household member) of any of the foregoing.


46.1	The Contractor represents and warrants that, in connection with this Agreement and the Works:


46.1.1	it is knowledgeable about Anti-Bribery Laws applicable to the performance of this Agreement and shall comply with all such Anti-Bribery Laws; and

46.1.2

neither it nor, to the best of its knowledge and belief, any other member of the Contractor’s Group have made, offered or authorised or will make, offer or authorise any payment, gift, promise or other advantage, whether directly or through any other person or entity, to or for the use or benefit of any Government Official or any person where such payment, gift, promise or other advantage would (i) compromise a facilitation payment; and/or (ii) violate the Anti-Bribery Laws.


46.2	The Contractor undertakes to immediately notify the Owner if, in connection with this Agreement or the Works, it receives or becomes aware of any request from a Government Official or any person for any payment, gift, promise or other advantage of the type mentioned in Article 48.2.2.


46.3	The Owner confirms that its appointment of the Contractor was expressly made on the basis that Anti-Bribery Laws would not be violated. The Contractor acknowledges that the contents of this Agreement may be disclosed by the Owner to governmental authorities (or their duly-authorised agents) for the purpose of demonstrating compliance with this Article 48.

46.4

The Contractor shall indemnify, defend and hold harmless the Owner’s Group from and against, any and all losses, damages, claims, expenses (including legal costs), fines and penalties incurred by the Owner’s Group arising out of the Contractor’s representations in this Article 48 being untrue or arising out of the Contractor’s breach of any of its representations, warranties and undertakings in this Article 48.


46.5	Failure to comply with any obligation under this Article 48 will be regarded as due cause for the Owner to give notice to terminate this Agreement in accordance with Article 32.1(g) (Contractor’s default).

46.6

The Contractor and all other members of the Contractor’s Group subject to the Anti-Bribery Laws shall maintain adequate internal controls and procedures to assure compliance with Anti-Bribery Laws, including procedures to ensure that all transactions in connection with the Works are accurately recorded and reported in its books and records to truly reflect the activities to which they pertain, such as the purpose of each transaction and to whom it was made or from whom it was received.


46.7	The Contractor shall maintain, either physically, by electronic media or on microfilm, all records and information related to this Agreement and/or any work statement in connection therewith for a period of five (5) years after the later of: (i) the end of the Warranty Period; or (ii) in the event of termination, the date of termination.

46.8

In the event an Authority undertakes a lawful investigation of the Owner’s violation of obligations under the Anti-Bribery Laws the Owner shall have the right to employ, at the Owner’s expense, an unaffiliated third party to audit all information, rates and costs and expenses related to this Agreement in connection therewith at any time during and within five (5) years after the later of: (i) the end of the Warranty Period; or (ii) in the event of termination, the date of termination. Subject to the consent of the relevant Authority or Authorities, the Contractor shall be provided with a complete copy of the audit upon its completion and prior to its submission to the Owner solely for the purpose of ensuring that none of the Contractor’s pricing, mark-up and profit margins are disclosed. The third party authorised by the Owner may have access at all reasonable times to any place where the records are being maintained and the Contractor shall afford every reasonable facility for this right of access. The third party authorised by the Owner shall have the right to reproduce and retain copies of any of the aforesaid records or information subject to an obligation of confidentiality consistent with the one in this Agreement, and subject further to the exclusion of any documents to the extent they show the Contractors pricing, mark-up and profit margins, except to the extent necessary to disclose alleged violations of the Anti-Bribery Laws, comply with Applicable Laws or the instructions of the Authorities. The Contractor shall implement all agreed recommendations arising from audits within a time mutually agreed with the Owner.


46.9	Upon the Owner’s request the Contractor will, as soon as reasonably practical, provide the person authorised by the Owner with all records relating to the Contractor and/or, to the extent reasonably available, any work statement in connection therewith which are created or kept by any other member of the Contractor’s Group.

46.10

The Contractor shall not, and shall not knowingly permit or authorise any member of the Contractor’s Group to, directly or indirectly, procure any equipment or any enter into any arrangement or do anything in connection with this Agreement or the Works with, or for the benefit of, any Restricted Party or undertake the Works in a manner, or do or omit to do anything, that would reasonably be expected to result in the Owner or any member of the Owner’s Group being in breach of any Sanctions or becoming a Restricted Party.

IN WITNESS WHEREOF, the Parties have by their respective duly authorized representatives below mentioned duly executed this Agreement on the day and year first above written:

Signed by the Owner, GOLAR GIMI CORPORATION, a company incorporated in the Republic of the Marshall Islands , by Oscar Spieler , being a person who, in accordance with the laws of that territory, is acting under the authority of the company

Signature

/s/ Oscar Spieler

………………………..

Oscar Spieler

Attorney-in-fact

Authorised Signatory

Signed by the Contractor, KEPPEL SHIPYARD LIMITED, a company incorporated in the Republic of Singapore , by Michael Chia Hock Chye , being a person who, in accordance with the laws of that territory, is acting under the authority of the company

Signature

/s/ Michael Chia Hock Chye

………………………..

Michael Chia Hock Chye

Director

Authorised Signatory

APPENDIX 1A: OWNER’S BASIS OF DESIGN

APPENDIX 1B: OUTLINE SPECIFICATION OF CONVERSION, SPECIFICATION OF DRY-DOCKING AND REPAIR WORK

APPENDIX 1C: OWNER RELY-UPON INFORMATION

APPENDIX 1D: PRELIMINARY PROJECT SCHEDULE

APPENDIX 2: TOPSIDES AGREEMENT

APPENDIX 3: PRICE SCHEDULE


•	Conversion Scope


•	Conversion scope


•	Annex 1: Re-measurable


•	Annex 2: Broken Down Repair Costs

APPENDIX 4: OFE AND OWNER ENGINEERING DELIVERABLES ROS DATES

APPENDIX 5: PRELIMINARY PROJECT EXECUTION PLAN

APPENDIX 6: PRELIMINARY SITE HEALTH, SAFETY AND ENVIRONMENTAL MANAGEMENT PLAN

APPENDIX 7: PRELIMINARY PROJECT QUALITY PLAN

APPENDIX 8: APPROVED VENDOR AND SUBCONTRACTOR LIST

APPENDIX 9: ADMINISTRATION PROCEDURE

APPENDIX 10: FORMS

DELIVERY CERTIFICATE

KNOW ALL MEN BY THESE PRESENTS:

That on this day, the ____ day of ________________, 20__, the vessel known as the _____________ (the “Vessel”) has been delivered by ____________________ (the “Owner”) to KEPPEL SHIPYARD LIMITED (the “Contractor”) of 51 Pioneer Sector 1, Singapore 628437 pursuant to the EPC Contract dated ________________, 20__ and all amendments thereto (“Agreement”) entered between the Owner and the Contractor.



Owner	Contractor
……………………………………	……………………………………
Name:	Name:
Title:	Title:

PROTOCOL OF MECHANICAL COMPLETION

KNOW ALL MEN BY THESE PRESENTS:

That on this day, the ____ day of ________________, 20__, the works on the vessel known as the _____________ (the “Vessel”) has achieved mechanical completion and has been successfully completed by KEPPEL SHIPYARD LIMITED (the “Contractor”) of 51 Pioneer Sector 1, Singapore 628437 and accepted by the ______________________ (the “Owner”) pursuant to the EPC Contract dated ________________, 20__ and all amendments thereto (“Agreement”) entered between the Owner and the Contractor.



Owner	Contractor
……………………………………	……………………………………
Name:	Name:
Title:	Title:

PROTOCOL OF REDELIVERY AND ACCEPTANCE

KNOW ALL MEN BY THESE PRESENTS:

That the vessel known as the __________ (the “Vessel”) has been repaired, modified and converted by KEPPEL SHIPYARD LIMITED (the “Contractor”) of 51 Pioneer Sector 1, Singapore 628437 in accordance with the terms of the EPC Contract dated ________________, 20__ and all amendments thereto (“Agreement”) entered between the Contractor and ____________________ (the “Owner”) and that the Contractor by these presents does hereby redeliver the Vessel to the Owner pursuant to the terms of the Agreement and the Owner, through its duly authorized representative, does hereby accept redelivery of the Vessel.

The Vessel located at _________________________ is hereby redelivered by the Contractor and accepted by the Owner as of ________ hours on the __________________, 20__.



Owner	Contractor
……………………………………	……………………………………
Name:	Name:
Title:	Title:

FORM OF CORPORATE GUARANTEE

CERTIFICATE OF VESSEL LEAVING THE YARD

Owner: ______

MECHANICAL COMPLETION CERTIFICATE / PROTOCOL OF MECHANICAL COMPLETION

Owner: ______

READY FOR STARTUP CERTIFICATE

Owner: ______

READY FOR FIRST GAS CERTIFICATE

Owner: ______

FORM OF VESSEL MORTGAGE

Owner: ______

FORM OF BANK GUARANTEE

Owner: ______

EXECUTION VERSION

LOAN AGREEMENT

dated as of March 3, 2017

among

GOLAR ML LLC

as Borrower ,

GOLAR LNG LIMITED

as Guarantor ,

and

CITIBANK, N.A.,
and the other Lenders, if any, which are or may become parties hereto ,

and

CITIBANK, N.A.,

as Administrative Agent, initial Collateral Agent and Calculation Agent

TABLE OF CONTENTS

Page


ARTICLE I DEFINITIONS AND ACCOUNTING TERMS	1


SECTION 1.01.	Certain Defined Terms 1


SECTION 1.02.	Times of Day 26


SECTION 1.03.	Accounting Terms 26


SECTION 1.04.	Principles of Construction 26


ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES	27


SECTION 2.01.	The Loans 27


SECTION 2.02.	Making the Loans 28


SECTION 2.03.	Repayment of Loans 28


SECTION 2.04.	Interest 28


SECTION 2.05.	Maximum Interest 29


SECTION 2.06.	Interest Rate Determinations 29


SECTION 2.07.	Termination of Commitments; Prepayments of Loans 29


SECTION 2.08.	LTV Breach; Collateral 31


SECTION 2.09.	Increased Costs 34


SECTION 2.10.	Taxes 35


SECTION 2.11.	Illegality 39


SECTION 2.12.	Compensation for Losses 39


SECTION 2.13.	Evidence of Debt 39


SECTION 2.14.	Payments and Computations 40


SECTION 2.15.	Administrative Agent’s Clawback 40


SECTION 2.16.	Sharing of Payments by Lenders 41


ARTICLE III CONDITIONS OF LENDING	42


SECTION 3.01.	Conditions Precedent Loan 42


ARTICLE IV REPRESENTATIONS AND WARRANTIES	46


SECTION 4.01.	Representations and Warranties of Borrower 46


ARTICLE V COVENANTS OF BORROWER	51


SECTION 5.01.	Affirmative Covenants 51


SECTION 5.02.	Negative Covenants 56


ARTICLE VI EVENTS OF DEFAULT	58


SECTION 6.01.	Events of Default 58


SECTION 6.02.	Certain Provisions Related to Pledged Shares 61


SECTION 6.03.	Application of Funds 62


SECTION 6.04.	Lenders’ Rights With Respect to Collateral 63


ARTICLE VII AGENTS	66


SECTION 7.01.	Appointment and Authority 66


SECTION 7.02.	Rights as a Lender 66


SECTION 7.03.	Exculpatory Provisions 66


SECTION 7.04.	Reliance by the Agents 67


SECTION 7.05.	Delegation of Duties 67


SECTION 7.06.	Resignation of Administrative Agent 67


SECTION 7.07.	Non-Reliance on Agents and Other Lenders 69


SECTION 7.08.	No Other Duties 69


SECTION 7.09.	Collateral 69


SECTION 7.10.	Administrative Agent May File Proofs of Claim 69


SECTION 7.11.	Right to Indemnity 70


ARTICLE VIII MISCELLANEOUS	70


SECTION 8.01.	Amendments, Etc 70


SECTION 8.02.	Notices; Effectiveness; Electronic Communications 72


SECTION 8.03.	No Waiver; Remedies; Securities Contracts 74


SECTION 8.04.	Costs and Expenses; Indemnification; Damage Waiver 75


SECTION 8.05.	Payments Set Aside 76


SECTION 8.06.	Assignments and Participations 77


SECTION 8.07.	Governing Law; Submission to Jurisdiction 80


SECTION 8.08.	Severability 82


SECTION 8.09.	Counterparts; Integration; Effectiveness; Electronic Execution 82


SECTION 8.10.	Survival of Representations 82


SECTION 8.11.	Confidentiality 82


SECTION 8.12.	No Advisory or Fiduciary Relationship 83


SECTION 8.13.	Right of Setoff 84


SECTION 8.14.	No Fiduciary Duty 84


SECTION 8.15.	USA PATRIOT Act Notice 85


SECTION 8.16.	Entire Agreement 85


SECTION 8.17.	Acknowledgment and Consent to Bail-In of EEA Financial Institutions 85

SCHEDULES

Schedule I Commitments

EXHIBITS

Exhibit A - Form of Notice of Borrowing

Exhibit B - Form of Pledge Agreement

Exhibit C - Form of Guaranty Agreement

Exhibit D - Form of Control Agreement

Exhibit E – Form of Assignment and Assumption Agreement

Exhibit F – Form of Issuer Acknowledgment

LOAN AGREEMENT

This LOAN AGREEMENT dated as of March 3, 2017, among GOLAR ML LLC, a Bermuda limited liability company (“ Borrower ”), GOLAR LNG LIMITED , a Bermuda company (“ Guarantor ”), CITIBANK, N.A. and each other lender from time to time party hereto (collectively, the “ Lenders ” and individually, a “ Lender ”), and CITIBANK, N.A., as Administrative Agent, initial Collateral Agent and Calculation Agent.

Borrower has requested that Lenders make loans to it, from time to time, and Lenders are prepared to make such loans upon the terms and subject to the conditions set forth in this Agreement.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS


SECTION 1.01.	Certain Defined Terms.

As used in this Agreement, the following terms shall have the following meanings:

“ Act ” has the meaning specified in Section 8.15 .

“ Adjustment Determination Date ” means, in respect of any Facility Adjustment Event or Potential Facility Adjustment Event, the date on which Calculation Agent has notified Borrower of (i) the adjustments that will be made to the terms of the Facility on account thereof or (ii) its determination that no such adjustments under Section 8.01 are necessary.

“ Adjustment Determination Period ” means the period beginning on, and including, the date on which a Facility Adjustment Event or Potential Facility Adjustment Event occurs and ending on, and including the related Adjustment Determination Date.

“ Adjustment Event Effective Time ” has the meaning specified in Section 8.01 .

“ Adjustment Notice ” has the meaning specified in Section 8.01 .

“ Administrative Agent ” means Citibank, N.A., in its capacity as administrative agent under any of the Facility Documents, or any successor administrative agent permitted in accordance with the applicable succession terms of the Facility Documents. Unless provided otherwise, determinations and actions under the Facility Documents shall be effected by Administrative Agent in its sole discretion exercised in good faith.

“ Administrative Agent’s Office ” means Administrative Agent’s address and, as appropriate, account as set forth in Section 8.02 , or such other address or account as Administrative Agent may from time to time notify to Borrower and Lenders.

“ Affiliate ” means, unless otherwise expressly specified, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, “controls” or is “controlled by” or is “under common control with” (all within the meaning of Rule 144) the Person specified.

“ Agents ” means, collectively, Administrative Agent, Collateral Agent, and Calculation Agent.

“ Aggregated Person ” means, with respect to Borrower, any Person with whom Borrower is required to aggregate Borrower’s sale of the Shares for purposes of sales made pursuant to Rule 144.

“ Agreement ” means this Loan Agreement.

“ Anti-Corruption Laws ” means all Laws of any jurisdiction applicable to the Borrower or any of its Controlled Affiliates from time to time concerning or relating to bribery or corruption, including without limitation the United States Foreign Corrupt Practices Act of 1977, as amended, the UK Bribery Act 2010 and other similar legislation in any other jurisdictions.

“ Anti-Terrorism Laws ” means all Laws of any jurisdiction applicable to Borrower or any of its Controlled Affiliates related to terrorism financing or money laundering, including Executive Order No. 13224, the Act, the laws comprising or implementing the Bank Secrecy Act, and the laws administered by the United States Treasury Department’s Office of Foreign Assets Control.

“ Applicable Exchange ” means the NASDAQ Global Market (or its successor), or another securities exchange (or its successor) that becomes the “Applicable Exchange” pursuant to the proviso to the definition of Issuer Delisting.

“ Applicable Lender ” has the meaning assigned to such term in the Pledge Agreement.

“ Applicable Percentage ” means, with respect to any Lender at any time, the percentage of the Facility represented by (i) on the Closing Date, such Lender’s Commitment at such time and (ii) thereafter, the principal amount of such Lender’s Loans at such time. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 , in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“ Applicable Rate ” means the rate specified in the Letter Agreement.

“ Approved Fund ” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender, (c) an entity or an Affiliate of an entity that administers or manages a Lender, (d) an Eligible Assignee, (e) an Affiliate of an Eligible Assignee or (f) an entity or an Affiliate of an entity that administers or manages an Eligible Assignee.

“ Asset Dropdown Event ” means a transaction or series of related transactions pursuant to which Issuer directly or indirectly acquires or otherwise obtains an interest in one or more assets or portions thereof or interests therein (including, for the avoidance of doubt, the Hilli and Gandria transactions and Equity Interests of any Subsidiary of Guarantor and/or its Affiliates, other than Borrower) from Guarantor and/or its Affiliates (excluding Borrower) that do not constitute all or substantially all of the assets of such Guarantor.

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 8.06 ), and accepted by Administrative Agent in good faith, in substantially the form of Exhibit E or any other form reasonably approved by Administrative Agent.

“ Attributable Debt ” means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.

“ Bail-In Action ” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“ Bail-In Legislation ” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“ Bankruptcy Action ” means any of the following, with respect to any Person: (a) to institute any proceedings to adjudicate such Person as bankrupt or insolvent; (b) to institute or consent to the institution of bankruptcy, reorganization, scheme of arrangement or insolvency proceedings against such Person or file a bankruptcy petition or any other petition seeking, or consenting to, reorganization, scheme of arrangement or similar relief with respect to such Person under any Debtor Relief Law; (c) to file or consent to a petition seeking liquidation, reorganization, scheme of arrangement, dissolution, winding up or similar relief with respect to such Person; (d) to consent to the appointment of a receiver, provisional liquidator, liquidator, assignee, trustee, sequestrator or conservator (or other similar official) of such Person or any part of its property; (e) to make any assignment for the benefit of such Person’s creditors; (f) to cause such Person to admit in writing its inability to pay its debts; or (g) to take any action in furtherance of any of the foregoing.

“ Bankruptcy Code ” means the Federal Bankruptcy Code of 1978, Title 11 of the United States Code, as amended from time to time.

“ Base Rate ” means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus one half percent (0.5%), (b) the rate of interest in effect for such day as publicly announced from time to time by Administrative Agent as its “prime rate,” and (c) the daily floating LIBOR, at approximately 11:00 a.m., London time determined two (2) Business Days prior to such date for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day plus one percent (1%). The “prime rate” is a rate set by Citibank, N.A. based upon various factors including Citibank, N.A.’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by Citibank, N.A. shall take effect at the opening of business on the day specified in the public announcement of such change.

“ Benefit Plan ” means: (a) an “employee benefit plan” within the meaning of Section 3(3) of ERISA; (b) a “Plan” within the meaning of Section 4975(e)(1) of the Code; or (c) an entity the underlying assets of which include assets of employee benefit plans or plans as a result of investments by such plans in the entity pursuant to Department of Labor Regulation Section 2510.3-101.

“ Borrower ” has the meaning specified in the preamble hereto.

“ Business Day ” means (i) any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close and (ii) with respect to all notices, determinations, fundings and payments in connection with LIBOR (excluding, for the avoidance of doubt, any determination, funding or payment pursuant to Section 2.08(a) ), the term “Business Day” shall mean any day which is a Business Day described in clause (i) and on which dealings in Dollar deposits are conducted by and between banks in the London interbank Eurodollar market.

“ Calculation Agent ” means Citibank, N.A. (or any Affiliate designated by Administrative Agent) or any successor calculation agent permitted in accordance with the applicable succession terms of the Facility Documents. Unless otherwise expressly specified, calculations and determinations hereunder or in connection with the transactions contemplated hereby or as otherwise provided herein shall be made by Calculation Agent in its sole discretion exercised in good faith and shall be conclusive absent manifest error.

“ Cash ” means all cash in Dollars at any time and from time to time deposited in the Collateral Account to the extent that is not subject to any Liens other than Liens permitted in Section 5.02(b) .

“ Cash Collateral ” means Cash and Cash Equivalents (other than Cash or Cash Equivalents then constituting Eligible Pledged Shares) required or permitted to be pledged as Collateral hereunder or under the Pledge Agreement.

“ Cash Dividend Collateral ” means, at any time, cash (in Dollars) dividends and distributions (whether ordinary dividends or otherwise) paid with respect to the Pledged Shares (other than any dividends or distributions then constituting Eligible Pledged Shares) and held in the Collateral Account subject to a valid and perfected First Priority Lien in favor of Agents and Lenders as of such time.

“ Cash Equivalents ” means negotiable, registered debt obligations issued by the United States Treasury Department having a maturity of not greater than one (1) year from the date of issuance thereof, but excluding principal-only Treasury strips.

“ Change in Law ” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty; (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority; or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith shall be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued, and (ii) all requests, rules, guidelines or directives promulgated by the Bank of International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law,” regardless of the date enacted, adopted or issued.

“ Change of Control ” means an event or series of events by which:

(a) Borrower ceases to be a wholly-owned subsidiary, directly or indirectly, of Guarantor; or

(b) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) (x) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of more than the percentage specified in the Letter Agreement of the issued and outstanding Guarantor Shares and/or (y) otherwise Controls the Guarantor.

“ Citibank Entities ” means Citibank, N.A. (including any and all branches) and any entity that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the foregoing entities, either collectively or individually, as the context requires (including any such entities that qualify under this definition after the date hereof).

“ Closing Date ” means the earliest Business Day on which the conditions precedent set forth in Section 3.01 shall have been satisfied or waived in accordance with Section 8.01 of this Agreement and the initial funding hereunder has occurred.

“ Closing Price ” means, as of any date, the closing sale price per share (or if no closing sale price is reported, the average of the last bid and ask prices or, if more than one in either case, the average of the average last bid and the average last ask prices) of the Shares on that date as reported in composite transactions for the Applicable Exchange. If the Shares are not listed for trading on a U.S. national or regional securities exchange on the relevant date, the ‘‘Closing Price’’ for the Shares will be the average of the last quoted bid and ask prices for the Shares in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or similar organization. If the Shares are not so quoted, the “Closing Price” will be the average of the mid-point of the last bid and ask prices for the Shares on the relevant date from each of at least three nationally recognized independent investment banking firms, which may include the Calculation Agent, any Lender or any of their respective Affiliates, selected by the Calculation Agent for this purpose. Any such determination will be conclusive absent manifest error. The “Closing Price” prior to 4:00 pm New York City time on any date of determination that is a Scheduled Trading Day in New York City or at any time on any date of determination that is not a Scheduled Trading Day in New York City will be the “Closing Price” determined on the immediately preceding Scheduled Trading Day in New York City. Notwithstanding the foregoing, if a Market Disruption Event exists on such date or such date is otherwise a Disrupted Day, the “Closing Price” shall be the price determined by Calculation Agent in its sole discretion exercised in good faith until such Market Disruption Event ceases to exist.

“ Code ” means the U.S. Internal Revenue Code of 1986, as amended (unless as specifically provided otherwise).

“ Collateral ” means, collectively, all of the personal property (including, without limitation, the Pledged Shares) in which Liens are purported to be granted as security for the Obligations.

“ Collateral Account ” means that certain custody account in the name of the Initial Lender as secured party of Borrower established and maintained by Custodian, and each other custody account established as contemplated under Section 6.04 , in each case, including any subaccount, substitute, successor or replacement account for purposes of holding all Cash, Cash Equivalents, Pledged Shares and other property required or permitted to be pledged as Collateral.

“ Collateral Agent ” means Citibank, N.A., in its capacity as collateral agent for Lenders, subject to Section 6.04 , or any successor collateral agent permitted in accordance with the applicable succession terms of the Facility Documents.

“ Collateral Documents ” means the Pledge Agreement, each Control Agreement and all other instruments, documents and agreements delivered by Borrower pursuant to this Agreement or any of the other Facility Documents in order to grant to Collateral Agent, for the benefit of the Agents and the Lenders, a Lien on any real, personal or mixed property of Borrower as security for the Obligations.

“ Collateral Requirement ” means, at any time, all steps required under applicable Law or reasonably requested by Administrative Agent or Collateral Agent to ensure that the Pledge Agreement creates a valid and perfected First Priority Lien on all the Collateral shall have been taken and, following any assignment by a Lender, held on a Pro Rata Basis as contemplated under Section 6.04 . In addition:

(a) with respect to the Existing Convertible Collateral Shares that do not satisfy the requirements of clause (b) of the definition of “Eligible Pledged Shares”, the Collateral Agent shall have received and maintain possession of at least three (3) undated stock powers per certificate, each of which stock powers is executed by the party in whose name such Shares are registered (including, for the avoidance of doubt, by a representative acting with power of attorney on its behalf) in blank and bearing a “Z-level” medallion guaranty; and

(b) with respect to the IDR Reset Shares that do not satisfy the requirements of clause (b) of the definition of “Eligible Pledged Shares”, such Shares shall be registered into the name of Citibank, N.A. in uncertificated, book-entry format on the books and records of the Transfer Agent (as defined in the Issuer Acknowledgment) and free of restrictive legends (other than a legend in the form set forth in Annex B attached to the Issuer Acknowledgment).

“ Commitment ” means the commitment of the Initial Lender, subject to the terms and conditions set forth herein, which aggregate commitment, as of the Closing Date, is equal to the Maximum Loan Amount; provided that the Commitment (i) shall be automatically and permanently reduced by the principal amount of any Loans made hereunder and (ii) to the extent not funded on the Closing Date, shall be terminated.

“ Commitment Date ” means November 4, 2016.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“ Control ” means, unless otherwise expressly specified, the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

“ Control Agreement ” means the control agreement dated as of or about the Closing Date among Borrower, the Custodian, and Administrative Agent, substantially in the form of Exhibit D , and each other control agreement entered into as contemplated under Section 6.04 , as from time to time amended, supplemented, waived or modified as permitted in accordance with the Facility Documents.

“ Corporate Event ” means, with respect to the Shares or the Issuer: (a) (i) an Issuer Delisting, an Issuer Dissolution, an Issuer Insolvency, an Issuer Insolvency Filing, an Issuer Merger Event, an Issuer Nationalization, an Issuer Tender Offer, an Issuer Trading Suspension and/or (ii) the announcement of any transaction or event that, if consummated, completed or effected, would constitute, or could reasonably be expected to result in, any of the foregoing; (b) the announcement of any transaction or event that could reasonably be expected to result in a Transfer Restriction on the Pledged Shares (other than Existing Transfer Restrictions); or (c) any Facility Adjustment Event occurs for which the Calculation Agent determines in good faith that no adjustment could be made to the terms of the Facility that would produce a commercially reasonable result; provided that an Asset Dropdown Event shall not be considered a Corporate Event.

“ Corporate Event Cure Sale ” has the meaning specific in Section 2.07(c) .

“ Cure Time ” means, with respect to an LTV breach, the meaning specified in the Letter Agreement.

“ Custodian ” means Citigroup Global Markets Inc. or, as elected by the Initial Lender, (a) another affiliate of the Initial Lender or (b) another financial institution that is reasonably acceptable to the Initial Lender and Borrower; and, with respect to any other Collateral Account subject to a Control Agreement, the applicable financial institution with respect thereto as contemplated under Section 6.04 .

“ Debt ” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP: (a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments; (b) all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments; (c) net obligations of such Person under any Swap Contract; (d) all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business and, in each case, not past due for more than sixty (60) days after the date on which such trade account payable was due); (e) indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; (f) capital leases and Synthetic Lease Obligations of such Person; (g) all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and (h) all Guarantees of such Person in respect of any of the foregoing. For all purposes hereof, the Debt of any Person shall include the Debt of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Debt is expressly made non-recourse to such Person. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Debt in respect thereof as of such date.

“ Debt Purchase Transaction ” means, in relation to a Person, a transaction where such Person:

(a) purchases by way of assignment or transfer any Commitment or Loan;

(b) enters into any sub-participation in respect of any Commitment or Loan; or

(c) enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of any Commitment or Loan.

“ Debtor Relief Laws ” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

“ Default ” means any event or condition that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.

“ Disqualified Persons ” has the meaning specified in the definition of “ Independent Director .”

“ Disrupted Day ” means any Scheduled Trading Day on which the Applicable Exchange fails to open for trading during its regular trading session or a Market Disruption Event has occurred.

“ Dollars ” and “ $ ” mean the lawful money of the United States.

“ EEA Financial Institution ” means: (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority; (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition; or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

“ EEA Member Country ” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“ EEA Resolution Authority ” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“ Eligible Assignee ” means any financial institution approved by the Administrative Agent that makes the Purchaser Representations; provided , that, such approval shall not be unreasonably withheld; provided , further , that none of (y) the Borrower, the Guarantor or any Affiliate thereof or (z) the Issuer or any Affiliate thereof, shall be an Eligible Assignee.

“ Eligible Equity Value ” means, on any date, the amount equal to the product of the number of Shares included in the Eligible Pledged Shares on such date (other than any such Pledged Shares that have been sold in Permitted Share Sales or a Corporate Event Cure Sale and remain in any Collateral Account pending settlement thereof) and the Closing Price for such Shares as of such date; provided , that if a Facility Adjustment Event and/or Potential Facility Adjustment Event occurs, the Calculation Agent may adjust the Eligible Equity Value corresponding to the relevant Shares in its reasonable discretion pursuant to Section 8.01 and/or the other applicable terms of this Agreement.

“ Eligible Non-Share Collateral ” means the following, to the extent held in the Collateral Account and over which the Collateral Agent, for the benefit of the Agents and the Lenders, has a valid and perfected First Priority Lien, created under the Collateral Documents:

(a) Cash and Cash Equivalents (other than Cash or Cash Equivalents then constituting Eligible Pledged Shares); and

(b) securities (other than Shares or any other securities or property then constituting Eligible Pledged Shares) or other assets acceptable to Administrative Agent in its sole discretion.

“ Eligible Pledged Shares ” means the Pledged Shares (a) over which the Collateral Agent, for the benefit of the Agents and the Lenders, has a valid and perfected First Priority Lien, created under the Collateral Documents, and that satisfy the applicable Collateral Requirements; (b) which are (x) registered in the name of The Depository Trust Company’s nominee, (y) maintained in the form of book entries on the books of The Depository Trust Company and (z) allowed to be settled through The Depository Trust Company’s regular book-entry settlement services; and (c) not subject to Transfer Restrictions (other than the Existing Transfer Restrictions); provided that, (i) in no event will the number of Eligible Pledged Shares exceed the number of Shares specified in the Letter Agreement, (ii) solely in the case of the Existing Convertible Collateral Shares constituting Pledged Shares, such Existing Convertible Collateral Shares will not be required to satisfy the requirements of clause (b) above prior to the date ten (10) Business Days immediately following the Closing Date and (iii) solely in the case of the IDR Reset Shares constituting Pledged Shares, such IDR Reset Shares will not be required to satisfy the requirements of clause (b) above prior to the date ten (10) Business Days immediately following April 19, 2017.

“ Environmental, Health or Safety Laws ” means any and all Laws, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to: (a) pollution, protection of natural resources or the environment; (b) the generation, use, handling, transportation, storage, treatment, disposal, presence, discharge or release of or exposure to any Hazardous Materials; or (c) human health or safety.

“ Environmental, Health or Safety Liability ” means any liability, contingent or otherwise (including any liability for damages, costs of investigation, remediation, monitoring or other response action, fines, penalties or indemnities), of Borrower directly or indirectly resulting from or based upon: (a) violation of any Environmental, Health or Safety Laws; (b) the generation, use, handling, transportation, storage, treatment, disposal, presence, discharge or release of or exposure to any Hazardous Materials, whether actual or threatened; or (c) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

“ Equity Interests ” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, whether economic or non-economic, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

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

“ EU Bail-In Legislation Schedule ” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

“ Events of Default ” has the meaning specified in Section 6.01 .

“ Excess Initial Pledged Shares ” means the excess of (A) the aggregate number of Eligible Pledged Shares as of the Closing Date over (B) the number of Eligible Pledged Shares with an Eligible Equity Value (determined based on the Closing Price as of the Closing Date) that would result in an LTV Ratio equal to or less than the Initial LTV Ratio as of the Closing Date.

“ Exchange Act ” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC thereunder.

“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes; and (b) any U.S. federal withholding Taxes imposed pursuant to FATCA.

“ Existing Convertible Collateral Shares ” means 13,000,000 Shares that are, as of the Closing Date, registered into the name of Guarantor and represented by three Share certificates bearing certificate numbers 0008, 0009 and 0010 and free of restrictive legends (other than a legend in the form set forth in Annex B attached to the Issuer Acknowledgment) and, after the Closing Date, held in any applicable successor format in accordance with the requirements therefor set forth in the Issuer Acknowledgment and the Facility Documents.

“ Existing Convertible Notes ” has the meaning specific in Section 5.01(c) .

“ Existing Transfer Restrictions ” means, with respect to the Shares or any dividends or distributions thereon pledged as Collateral, (i) any legal restrictions under the federal securities laws of the United States arising solely as a result of (a) Borrower’s status as an “affiliate” (within the meaning of Rule 144) of the Issuer or (b) any such securities being “restricted securities” under Rule 144(a)(3) with a “holding period” within the meaning of Rule 144(d) commencing at least one year prior to the Commitment Date or (ii) solely with respect to the Existing Convertible Collateral Shares and IDR Reset Shares, in either case, that do not satisfy the requirements of clause (b) of the definition of “Eligible Pledged Shares”, (x) solely in the hands of any Applicable Lender, the requirements for transfer thereof specified in the applicable provisions of Paragraphs 7 through 9 of the Issuer Acknowledgment (it being understood that, prior to such Applicable Lender’s satisfaction of such requirements, the restrictive legend set forth in Annex B attached to the Issuer Acknowledgment may continue to be placed on such Shares, and, in the circumstances contemplated in clauses (b)(i) and (b)(ii) of Paragraph 9 of the Issuer Acknowledgment, such restrictive legend may continue to be placed on such Shares in the hands of the applicable purchaser or transferee) and (y) solely in the hands of Borrower, the limitations on transfer described in the restrictive legend set forth in Annex B attached to the Issuer Acknowledgment; provided that, for purposes of clause (b) above, solely in the case of the IDR Reset Shares constituting Pledged Shares, the “holding period” for such IDR Reset Shares within the meaning of Rule 144 will have commenced on October 19, 2016.

“ Existing Trustee ” means Nordic Trustee ASA, as the bond trustee for the Existing Convertible Notes.

“ Facility ” means, at any time, (a) on or prior to the Closing Date, the aggregate amount of the Commitments at such time and (b) thereafter, the Loans.

“ Facility Adjustment Event ” means, as determined by the Calculation Agent:

(a) the occurrence or announcement of, with respect to the Shares or the Issuer, as applicable, any of the following:

(i) a subdivision, consolidation or reclassification of the Shares (unless resulting in an Issuer Merger Event), or a free distribution or dividend of the Shares to existing holders by way of bonus, capitalization or similar issue;

(ii) a distribution, issue or dividend to existing holders of the Shares of (w) such Shares, or (x) other share capital or securities granting the right to payment of dividends and/or the proceeds of liquidation of the Issuer of such Shares equally or proportionately with such payments to holders of such Shares, or (y) share capital or other securities of another issuer acquired or owned (directly or indirectly) by the Issuer of such Shares as a result of a spin-off or other similar transaction, or (z) any other type of securities, rights or warrants or other assets, in any case for payment (cash or other consideration) at less than the prevailing market price as determined by the Calculation Agent;

(iii) an extraordinary dividend;

(iv) a call by the Issuer in respect of Shares issued by the Issuer that are not fully paid;

(v) a repurchase by the Issuer or any of its Subsidiaries of Shares issued by the Issuer, whether out of profits or capital and whether the consideration for such repurchase is cash, securities or otherwise;

(vi) in respect of the Issuer, an event that results in any shareholder rights being distributed or becoming separated from Shares issued by the Issuer or other shares of the capital stock of the Issuer pursuant to a shareholder rights plan or arrangement directed against hostile takeovers that provides upon the occurrence of certain events for a distribution of preferred stock, warrants, debt instruments or stock rights at a price below their market value, as determined by the Calculation Agent; provided that any adjustment effected as a result of such an event shall be readjusted upon any redemption of such rights;

(vii) any other event with a dilutive or concentrative effect on the theoretical value of any Pledged Shares, as determined by the Calculation Agent taking into account as it deems applicable, the particular security, any distributions (or lack of, or change to, any distributions) thereon, the resale market for such security, any Transfer Restrictions relating to such security (whether in the hands of Borrower or in the hands of Lender exercising its rights and remedies under the Facility Documents), any limitations on the type or status, financial or otherwise, of any purchaser, pledgee, assignee or transferee of such securities and such other factors as Calculation Agent deems relevant; or

(viii) any Corporate Event;

(b) the occurrence or announcement of an Issuer Change of Control;

(d) as of any date the Free Float with respect to the Shares is less than or equal to the number of Shares specified in the Letter Agreement;

(e) the imposition of any withholding tax, as reasonably determined by the Calculation Agent, on a prospective sale of Pledged Shares upon an exercise of remedies by the Lender;

(f) one or more Asset Dropdown Events with a market value (as aggregated with value of previous Asset Dropdown Events in respect of which no Facility Adjustment Event has occurred hereunder, excluding the value of any Asset Dropdown Event solely with respect to the Gandria transaction and/or the Hilli transaction to the extent that, as determined by the Calculation Agent in good faith, the Gandria and/or Hilli, as applicable, is converted into a floating liquefaction natural gas vessel and sold to the Issuer in a manner consistent with the Calculation Agent’s reasonable expectations as of the Commitment Date based on information made available on the SEC’s EDGAR system by the Parent and/or Issuer) greater than the percentage specified in the Letter Agreement of the market capitalization of Issuer, as of either of the date on which the transaction is announced or the date on which it is consummated, as determined by the Calculation Agent in good faith; or

(g) Issuer, directly or indirectly, effects, enters into or otherwise consents to any material amendment, supplement or other modification of any of the terms or provisions of its Organization Documents with a material dilutive or concentrative effect on the theoretical value of any Pledged Shares, as determined by the Calculation Agent in good faith taking into account, as it deems reasonably applicable, any distributions (or lack of, or change to, any distributions) thereon, the resale market for such security, any Transfer Restrictions relating to such security (whether in the hands of Borrower or in the hands of Lender exercising its rights and remedies under the Facility Documents), any limitations on the type or status, financial or otherwise, of any purchaser, pledgee, assignee or transferee of such securities and such other factors as Calculation Agent deems reasonably relevant in good faith.

“ Facility Documents ” means, collectively, this Agreement, the Pledge Agreement, the Control Agreement, the Guaranty Agreement, the Issuer Acknowledgment, the Letter Agreement, each document delivered pursuant to the Collateral Requirement and each material other agreement or instrument executed or delivered in connection herewith or therewith.

“ FATCA ” means Sections 1471 through 1474 of the Code as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

“ Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of one-hundredth of one percent (0.01%)) charged to Citibank, N.A., on such day on such transactions as determined by Administrative Agent.

“ Fee Letter ” shall mean that certain Fee Letter, dated as of November 4, 2016, among Citibank, N.A. and Guarantor.

“ First Priority ” means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that such Lien is the only Lien (other than Permitted Liens) to which such Collateral is subject.

“ FRB ” means the Board of Governors of the Federal Reserve System of the United States.

“ Free Float ” means, as of any date of determination, the number of Shares equal to (a) the total number of Shares then issued and outstanding minus (b) the total number of Shares “beneficially owned” within the meaning of Section 13(d) under the Exchange Act or otherwise held, without duplication, by (i) any officer or director of Issuer or (ii) any “person” or “group” that “beneficially owns” (in each case within the meaning of Section 13(d) of the Exchange Act) more than ten percent (10%) of the total Shares issued and outstanding (other than a “person” or “group” that is a passive investor that has reported such beneficial ownership solely on Schedule 13G and/or Schedule 13F), as determined by the Calculation Agent in good faith by reference to any information issued by Issuer, any filings with, or order, decree, notice or other release or publication of, any Governmental Authority and/or any other information the Calculation Agent reasonably deems relevant. For purposes of clause (b) above, any Long Position relating to Shares held by any “person” or “group” (within the meaning of Section 13(d) of the Exchange Act) shall be deemed to be “beneficial ownership” of the full number of Shares underlying such Long Position.

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“ Gandria ” means the Gandria liquefied natural gas carrier vessel that the Guarantor has, as of the date hereof, contemplated to be converted into a floating liquefaction natural gas vessel.

“ General Partner ” means Golar GP LLC, a Marshall Islands limited liability company.

“ Governmental Authority ” means the government of the United States of America or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“ Guarantee ” means, as to any Person: (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Debt or other obligation payable or performable by another Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Debt or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Debt or other obligation of the payment or performance of such Debt or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Debt or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Debt or other obligation of the payment or performance thereof; provided that the term “Guaranty” shall not include any endorsement of an instrument for deposit or collection in the ordinary course of business or to protect such obligee against loss in respect thereof (in whole or in part); or (b) any Lien on any assets of such Person securing any Debt or other obligation of any other Person, whether or not such Debt or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Debt to obtain any such Lien). The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith. The term “ Guarantee ” as a verb has a corresponding meaning.

“ Guarantor ” has the meaning specified in the preamble hereto.

“ Guarantor Extraordinary Event ” means: (a) an Issuer Delisting, Issuer Dissolution, Issuer Insolvency, Issuer Insolvency Filing, Issuer Merger Event, Issuer Nationalization and/or Issuer Tender Offer (in each case, determined as if (i) references to “Issuer” in the relevant definitions were replaced with a reference to “Guarantor” and (ii) references to the “Shares” therein were replaced with a reference to the “Guarantor Shares”); and/or (b) announcement of any transaction or event that, if consummated, completed or effected, would constitute, or could reasonably be expected to result in, any of the foregoing, in each case, that the Calculation Agent commercially reasonably determines could reasonably be expected to result in an adverse effect (or, solely in the case of such event other than an event which constitutes an Issuer Delisting, Issuer Dissolution or Issuer Nationalization, or announcement thereof, a material adverse effect) on any of the rights and remedies of the Lenders and/or Agents under the Facility Documents and/or the transactions contemplated thereby.

“ Guarantor Shares ” means the common shares, par value $1.00 per share, of Guarantor.

“ Guaranty Agreement ” means that certain Guaranty Agreement, dated as of or about the Closing

Date, executed by Guarantor in favor of the Administrative Agent for the benefit of the Agents and Lenders, substantially in the form of Exhibit C as the same may be amended, supplemented, waived or modified from time to time as permitted in accordance with the Facility Documents.

“ Hazardous Materials ” means all hazardous or toxic substances, materials, wastes, agents or other pollutants, including petroleum or any fraction thereof, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, explosive or radioactive substance or wastes, infectious or medical substances or wastes and all other substances or wastes of any nature regulated pursuant to any Environmental, Health or Safety Laws.

“ Hilli ” means the Hilli liquefied natural gas carrier vessel that the Guarantor is, as of the date hereof, in the process of converting into a floating liquefaction natural gas vessel.

“ IDR Reset Shares ” means the 2,994,364 Shares that were issued to Guarantor on October 19, 2016 upon exercise of its right under the Issuer’s partnership agreement to reset the distribution amounts and related thresholds under the incentive distribution rights of the Issuer held by Guarantor. At all times, any IDR Reset Share constituting Pledged Shares shall satisfy the Share Segregation Condition.

“ Indemnified Taxes ” means: (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Facility Document; and (b) to the extent not otherwise described in (a), Other Taxes.

“ Indemnitee ” has the meaning specified in Section 8.04(b) .

“ Independent Director ” means an individual who has prior experience as an independent director, independent manager or independent member with at least three (3) years of employment experience (who may be provided by MJM Europe Limited or another nationally recognized company that is not an Affiliate of the Loan Parties or the Issuer and that provides independent managers and other corporate services in the ordinary course of its business) and which individual:

(a) is not, and has never been, and will not while serving as Independent Director be a Related Party of Borrower or the Issuer (a “ Disqualified Person ”) other than as an Independent Director;

(b) to the fullest extent permitted by Law shall consider only the interests of Borrower, including its respective creditors, in acting or otherwise voting on Independent Director Matters;

(d) has been disclosed to the Lenders (together with a brief description of such Person’s prior professional activities and other information as the Administrative Agent shall reasonably request) prior to the effectiveness of such Person’s appointment.

“ Independent Director Matters ” has the meaning specified in Borrower’s Organization Documents, as in effect on the date hereof.

“ Information ” has the meaning specified in Section 8.11 .

“ Initial Lender ” means Citibank, N.A.

“ Initial LTV Ratio ” means the percentage specified in the Letter Agreement.

“ Initial Share Price ” has the meaning specified in the Letter Agreement.

“ Interest Payment Date ” means each May 20, August 20, November 20, and February 20 of each year, commencing on May 20, 2017, and the Maturity Date; provided that if any such day is not a Business Day, the Interest Payment Date shall be the following Business Day.

“ Interest Period ” means, each of: (a) the period commencing on the Closing Date and ending on the last day of the calendar quarter in which the Closing Date occurs, and (b) each calendar quarter thereafter; provided that if any such period would extend beyond the Maturity Date, that Interest Period shall instead end on the Maturity Date.

“ Investment Company Act ” means the Investment Company Act of 1940, as amended, and the rules and regulations promulgated thereunder.

“ Issuer ” means Golar LNG Partners LP, a Republic of the Marshall Islands limited partnership.

“ Issuer Acknowledgment ” means an agreement substantially in the form of Exhibit F hereto.

“ Issuer ADTV ” means, in respect of any date of determination, the average daily trading volume of the Shares on the Applicable Exchange measured over a thirty (30) Scheduled Trading Day period ending on the immediately preceding Scheduled Trading Day (excluding elements of such average daily trading volume that may be attributed to any block trade that occurs on any such Scheduled Trading Day), as determined by the Calculation Agent in good faith.

“ Issuer Change of Control ” means, (a) for the Issuer, an event or series of events by which any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) (i) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, through a purchase, merger or other acquisition transaction or series of transactions, of more than (A) the percentage of the issued and outstanding Shares issued by the Issuer specified in the Letter Agreement, other than an acquisition of such Shares by the Guarantor, or (B) the percentage of the issued and outstanding Shares issued by the Issuer specified in the Letter Agreement, solely in the case of an acquisition by the Guarantor, and/or (ii) otherwise Controls the Issuer, other than Control of the Issuer by Guarantor; or (b) an event or series of event by which the General Partner ceases to (i) be a wholly-owned subsidiary of Guarantor, (ii) have veto or consent rights over material transactions of the Issuer and/or (iii) be the general partner of the Issuer.

“ Issuer Delisting ” means that the Applicable Exchange announces that pursuant to the rules of the Applicable Exchange, the Shares cease (or will cease) to be listed, traded or publicly quoted on the Applicable Exchange, for any reason and are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, The NASDAQ Global Market or The NASDAQ Global Select Market (or any of their respective successors); provided that, upon any such immediate re-listing, such securities exchange on which the Shares are so immediately relisted, re-traded, or re-quoted shall thereafter be the “Applicable Exchange” hereunder.

“ Issuer Dissolution ” means that: (a) the Issuer is liquidated or dissolved; or (b) holders of the Shares issued by the Issuer approve any plan or proposal for the Issuer’s liquidation or dissolution.

“ Issuer Insolvency ” means that, for the Issuer, by reason of the voluntary or involuntary liquidation, bankruptcy, insolvency, dissolution or winding-up of or any analogous proceeding affecting Issuer: (a) all the Shares issued by the Issuer are required to be transferred to a trustee, liquidator or other similar official; or (b) holders of Shares issued by the Issuer become legally prohibited from transferring them.

“ Issuer Insolvency Filing ” means that: (a) the Issuer institutes or has instituted against it by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organization or the jurisdiction of its head or home office, (b) the Issuer consents to a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or (c) a petition is presented for the Issuer’s winding-up or liquidation by it or such regulator, supervisor or similar official or the Issuer consents to such a petition; provided that proceedings instituted or petitions presented by creditors and not consented to by the Issuer shall not be deemed an Issuer Insolvency Filing for the Issuer.

“ Issuer Merger Event ” means any: (a)(i) reclassification or change of the Shares issued by the Issuer that results in a transfer of or an irrevocable commitment to transfer more than fifty percent (50%) of the outstanding Shares issued by the Issuer to another entity or person, (ii) consolidation, amalgamation, merger or binding share exchange of the Issuer with or into another entity or person (other than a consolidation, amalgamation, merger or binding share exchange in which the Issuer is the continuing entity and which does not result in a reclassification or change of more than fifty percent (50%) of the outstanding Shares issued by the Issuer), (iii) takeover offer, tender offer, exchange offer, solicitation, proposal or other event by any entity or person to purchase or otherwise obtain more than fifty percent (50%) of the outstanding Shares issued by the Issuer that results in a transfer of or an irrevocable commitment to transfer more than fifty percent (50%) of the outstanding Shares issued by the Issuer (other than Shares issued by the Issuer owned or controlled by such other entity or person), (iv) any acquisition by Issuer or any Subsidiary of Issuer whereby Issuer or such Subsidiary acquires a company or substantially all assets of a company (including such a transaction structured in a manner contemplated in clauses (i) , (ii) , and/or (iii) above as if reference to “Issuer” and the “Shares” were references to such other company and its securities and/or assets, as applicable), excluding with respect to this clause (iv) (x) any Asset Dropdown Event, (y) any transaction between Issuer and any of its wholly-owned Subsidiaries or among any such wholly-owned Subsidiaries and (z) any transaction for which (I) Issuer or such Subsidiary is the continuing Person and (II) the aggregate consideration to be delivered by Issuer or any of its Subsidiaries in connection therewith has a market value less than fifty percent (50%) of the market capitalization of Issuer, as of each of the date on which the transaction is announced and the date on which it is consummated, as determined by the Calculation Agent, or (v) consolidation, amalgamation, merger or binding share exchange of the Issuer or its Subsidiaries with or into another entity in which the Issuer is the continuing entity and which does not result in a reclassification or change of more than fifty percent (50%) of the outstanding Shares issued by the Issuer but results in the outstanding Shares issued by the Issuer (other than Shares issued by the Issuer owned or controlled by such other entity) immediately prior to such event collectively representing less than fifty percent (50%) of the outstanding Shares issued by the Issuer immediately following such event; or (b) the public announcement, including any public announcement as defined in Rule 165(f) under the Securities Act, by any entity at any time, of any intention to engage in a transaction (whether or not subsequently amended) that, if completed, would lead to any event set forth in the immediately preceding clause (a) .

“ Issuer Nationalization ” means that: (a) all or substantially all of the Shares issued by the Issuer or the assets of the Issuer are nationalized, expropriated or are otherwise required to be transferred to any Governmental Authority; or (b) the adoption, promulgation, enactment, order, decree, announcement or such other action or statement as the Calculation Agent reasonably deems relevant, by or with effect on any Governmental Authority at any time, of any event or circumstance (whether or not subsequently amended or appealed) that, if completed, would lead to any event set forth in the immediately preceding clause (a) .

“ Issuer Tender Offer ” means: (a) a takeover offer, tender offer, exchange offer, solicitation, proposal or other event by any entity or person that results in such entity or person purchasing, or otherwise obtaining or having the right to obtain, by conversion or other means, greater than the percentage specified in the Letter Agreement and less than one-hundred percent (100%) of the outstanding voting shares of the Issuer, as determined by the Calculation Agent in good faith, based upon the making of filings with governmental or self-regulatory agencies or such other information as the Calculation Agent reasonably deems relevant; or (b) the public announcement, including any public announcement as defined in Rule 165(f) of the Securities Act, by any entity at any time, of any intention to purchase or otherwise obtain the requisite number of voting shares of the Issuer (whether or not subsequently amended) that, if completed, would lead to any event set forth in the immediately preceding clause (a) .

“ Issuer Trading Suspension ” means that the Shares have been suspended from trading on the Applicable Exchange for the number of consecutive Scheduled Trading Days specified in the Letter Agreement, the Shares have not traded on the Applicable Exchange for any other reason for the number of consecutive Scheduled Trading Days specified in the Letter Agreement and/or the number of consecutive Scheduled Trading Days specified in the Letter Agreement are Disrupted Days.

“ Law ” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“ Lender ” means each Person listed on the signature pages of this Agreement, including, without limitation, the Initial Lender, and any other Person that becomes a Lender pursuant to an Assignment and Assumption, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption.

“ Lender Party ” means any Agent or Lender.

“ Lending Office ” means, with respect to any Lender, the office of such Lender specified as its “Lending Office” opposite its name on Schedule I hereto or in the Assignment and Assumption pursuant to which it became a Lender, or such other office of such Lender as such Lender may from time to time specify in writing to Administrative Agent.

“ Letter Agreement ” means that certain letter agreement, dated as of or about the date hereof, among the Lenders, Administrative Agent, Borrower and Guarantor, as from time to time amended, supplemented, waived or modified as permitted in accordance with the Facility Documents.

“ LIBOR ” means, with respect to each Interest Period, the London interbank offered rate administered by ICE Benchmark Administration (or any other Person that takes over administration of such rate) appearing on Bloomberg Page “US0003M Index <GO>” (or on any successor or substitute page designated by Administrative Agent from time to time) at approximately 11:00 a.m., London time, on the date two (2) Business Days prior to the first day of the relevant Interest Period, as the rate for Dollars for such Interest Period. For purposes of the preceding sentence, if such rate is not available at such time for any reason, then the “LIBOR” for such Interest Period shall be determined by the Administrative Agent in its discretion (including by using Base Rate in lieu of LIBOR). Notwithstanding the foregoing, if LIBOR with respect to any Interest Period is less than zero pursuant to this definition, then “LIBOR” shall be deemed to be zero for such Interest Period for the purposes of this Agreement.

“ Lien ” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

“ Loan ” means an extension of credit by a Lender to Borrower under Article II .

“ Loan Parties ” means, collectively, Borrower and Guarantor; and “ Loan Party ” means any one of them.

“ Long Position ” means, with respect to shares of any type, any option, warrant, convertible security, stock appreciation right, swap agreement or other security, contract right or derivative position, whether or not presently exercisable, in respect of such shares is (a) a “call equivalent position” within the meaning of Rule 16a-1(b) of the Exchange Act, including any of the foregoing that would have been a “call equivalent position” but for the exclusion in Rule 16a-1(c)(6) of the Exchange Act, or (b) otherwise constitutes an economic long position in respect of such shares.

“ LTV Breach ” means the actual LTV Ratio as of any date of determination exceeds the LTV Maximum Ratio.

“ LTV Maximum Ratio ” has the meaning specified in the Letter Agreement.

“ LTV Ratio ” has the meaning specified in the Letter Agreement.

“ LTV Release Ratio ” has the meaning specified in the Letter Agreement.

“ LTV Reset Ratio ” has the meaning specified in the Letter Agreement.

“ Margin Collateral ” means Collateral (other than Shares) deposited into the Collateral Account pursuant to Section 2.08(a) subject to a valid and perfected First Priority Lien in favor of Agents and Lenders as of such time.

“ Market Disruption Event ” means, with respect to the Shares, any of the following events:

(a) the occurrence or existence of any material suspension or limitation imposed on trading (by reason of movements in price exceeding limits permitted by the Applicable Exchange or otherwise) in such Shares or in any options, contracts or futures contracts relating to such Shares;

(b) any event (other than the closure on any Scheduled Trading Day prior to the scheduled closing time for such day) that disrupts or impairs the ability of market participants in general to effect transactions in, or obtain market values for, such Shares on the Applicable Exchange on any Scheduled Trading Day as determined by Calculation Agent in its reasonable discretion;

(c) the Applicable Exchange does not open for trading during its regular trading session and was previously scheduled to open for trading on such day; or

(d) the closure on any Scheduled Trading Day of the Applicable Exchange prior to its scheduled closing time for such day unless such earlier closing time is announced by the Applicable Exchange at least one hour prior to the actual closing time for the regular trading session on the Applicable Exchange on such Scheduled Trading Day.

“ Material Adverse Effect ” means: (a) a material impairment of the ability of any Loan Party or the Issuer to fully and timely perform any of its obligations under any of the Facility Documents; (b) a material adverse effect upon the legality, validity, binding effect or enforceability of any provision of this Agreement or any other Facility Document; (c) a material adverse change in, or a material adverse effect upon, the operations, business, properties, liabilities (actual or contingent), or condition (financial or otherwise) of any Loan Party or the Issuer; or (d) a material adverse change in, a material adverse effect upon, or a material impairment of, (i) the Collateral Agent’s valid and perfected First Priority Lien in the Collateral or (ii) the rights, remedies and benefits available to, or conferred upon, any Lender Party under any Facility Document or any Lender Party’s ability to foreclose on the Shares at the times and in the manner contemplated by the Pledge Agreement (including, but not limited to, trading or other restrictions imposed by the Issuer or changes in applicable Law), in each case with respect to the foregoing clauses (a) to (d) , as determined by Administrative Agent in its sole discretion.

“ Maturity Date ” means, the earliest of: (a) March 3, 2020; (b) the date on which such Facility is terminated pursuant to Section 2.07 ; and (c) the date on which the Obligations are accelerated pursuant to Section 6.01 .

“ Maximum Lawful Rate ” has the meaning specified in Section 2.05(b) .

“ Maximum Loan Amount ” means $150,000,000.00.

“ Non-public Information ” means information which has not been disseminated in a manner making it available to investors generally, within the meaning of Regulation FD.

“ Notice of Borrowing ” has the meaning specified in Section 2.02(a) .

“ Obligations ” means all Loans to, and all debts, liabilities, obligations, covenants, indemnifications, and duties of, Borrower arising at any time and from time to time, whether matured or unmatured, fixed or contingent, liquidated or unliquidated, under any Facility Document, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party of any proceeding under any Debtor Relief Laws naming any Loan Party as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“ Organization Documents ” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-US jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization, and the limited liability company agreement or operating agreement; and (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any material agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

“ Other Connection Taxes ” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Facility Document, or sold or assigned an interest in any Loan or Facility Document).

“ Other Taxes ” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Facility Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment.

“ Participant Register ” has the meaning specified in Section 8.06(d) .

“ Permitted Liens ” means (i) Liens created pursuant to the Facility Documents, (ii) Liens created in favor of a Custodian pursuant to the applicable Control Agreement or the relevant account opening documentation, in either case, subject to the conditions and limitations set forth in the applicable Control Agreement and (iii) any inchoate Liens for Taxes permitted under Section 5.01(e) .

“ Permitted Share Sale ” has the meaning specified in Section 2.08(e) .

“ Permitted Unpledged Share Sale ” means, a broadly distributed public offering, by a Loan Party, Affiliate thereof or other Aggregated Person, of Shares that do not constitute Pledged Shares that (i) is SEC-registered or effected in reliance on Rule 144, (ii) is effected either (x) through the Lenders (other than any Lender that has declined to participate in such public offering) or their designated affiliates, on a Pro Rata Basis, pursuant to mutually satisfactory documentation or (y) through another financial institution following each Lender receiving notice from Guarantor describing such proposed sale in reasonable detail (together with the proposed pricing terms, including any applicable commission or discount) and declining to exercise its right of first refusal to effect such transaction on the same terms (on a Pro Rata Basis), (iii) such sale complies in all respects with applicable securities laws and in all material respects with other applicable Law, all contractual restrictions binding on such Shares and/or the transactions with respect to such Shares and all other material contractual restrictions and Issuer’s Organizational Documents and (iv) results in net cash proceeds, or such portion thereof, as applicable, that will be applied to prepay the Loans on the relevant settlement date such that the LTV Ratio (determined for such purpose based on the lower of (x) the Closing Price as of the pricing date for such sale and (y) the Closing Price as of such settlement date) is no greater than the then-current LTV Release Ratio.

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“ Pledge Agreement ” means that certain Pledge Agreement, dated as of or about the Closing Date, executed by Borrower and Guarantor in favor of Administrative Agent for the benefit of the Agents and Lenders, substantially in the form of Exhibit B , as from time to time amended, supplemented, waived or modified as permitted in accordance with the Facility Documents.

“ Pledged Shares ” means (a) as of the Closing Date, 20,852,291 Shares and (b) after the Closing Date, all other Shares required to be pledged as Collateral hereunder or under the Pledge Agreement and any distribution or dividend in Shares distributed in respect of any Pledged Shares, in each case, to the extent such Shares, distribution or dividend constitutes Collateral under the Collateral Documents (it being understood that, subject to the other terms of the Facility Documents in certain circumstances certain Shares, distributions or dividends are not required to constitute Collateral).

“ Potential Facility Adjustment Event ” means the announcement by any Person of any transaction or event that, if consummated, completed or effected, would constitute, or could reasonably be expected to result in, a Facility Adjustment Event, or of any material change therein or the termination thereof or the announcement of any material change to or termination of any such pending transaction or event, all as determined by the Calculation Agent in its commercially reasonable discretion.

“ Pro Rata Basis ” means, for purposes of determining the allocation of Collateral of any type among the Collateral Accounts controlled by, any Lenders and/or Collateral Agents, in proportion to each Lender’s Applicable Percentage, subject to rounding to the nearest Share, USD 0.01 or item or unit of other securities or property, as applicable.

“ Process Agent ” shall have the meaning assigned to such term in Section 8.07(d) .

“ Purchaser Representations ” means the following representations, warranties and agreements made by an assignee or participant of any Lender or Agent, as applicable: (a) a representation and warranty that such assignee or participant is a QIB, a QP and an “accredited investor” as defined in Section 2(a)(15)(ii) of the Securities Act and is entering into such assignment or participation as principal and not for the benefit of any third party; (b) a representation that such assignee or participant is not the Borrower, the Guarantor or the Issuer or an “affiliate” (within the meaning of Rule 144) of the Borrower, the Guarantor or the Issuer; (c) an acknowledgment that such assignee or participant fully understands any restrictions on transfers, sales and other dispositions in the Facility Documents or relating to any Collateral consisting of the Pledged Shares; (d) an acknowledgment that such assignee or participant is able to bear the economic risk of its investment in the participation and is currently able to afford a complete loss of such investment; (e) a covenant that such assignee or participant will only assign its Loan or sell its participation or participations therein pursuant to documentation including such Purchaser Representations; (f) an acknowledgement by such assignee or participant that the Shares forming part of the Collateral cannot be sold without registration under the Securities Act or under an available exemption from the registration requirements under the Securities Act, including, if available, the exemption provided by Rule 144; (g) an acknowledgment that such assignee or participant is not entering into such assignment or participation on the basis of any material Non-public Information with respect to Borrower, Guarantor, the Issuer, their respective Subsidiaries or their securities, and, if applicable, it has implemented reasonable policies and procedures, taking into consideration the nature of its business, to ensure that individuals making investment decisions would not violate the laws prohibiting trading on the basis of material Non-public Information (it being understood that such assignee or participant may have material Non-public Information on the private side of its information wall, sometimes referred to as a “Chinese Wall,” at the time of such assignment or participation); provided that, for the avoidance of doubt, “material Non-public Information concerning the Borrower, Guarantor, the Issuer, their respective Subsidiaries or their securities” shall not include any information made available to both the assignee and the assignor or both the participant and the seller of a participation interest, as the case may be, and (h) an acknowledgment that it has made an independent decision to purchase its Loan or participation based on information available to it, which it has determined adequate for the purpose.

“ QIB ” means a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.

“ QP ” means a “qualified purchaser” within the meaning of Section 2(a)(51) of the Investment Company Act.

“ Recipient ” means (a) Administrative Agent, (b) any Lender and (c) any other Agent, as applicable.

“ Register ” has the meaning specified in Section 8.06(c) .

“ Regulation FD ” means Regulation FD as promulgated by the SEC under the Securities Act and Exchange Act as in effect from time to time.

“ Regulation T ” means Regulation T issued by the FRB.

“ Regulation U ” means Regulation U issued by the FRB.

“ Regulation X ” means Regulation X issued by the FRB.

“ Regulatory Event ” means (a) any formal investigation made by any Governmental Authority for violation or breach of Law by any Loan Party or by Issuer, provided that such investigation (i) is specific to such Loan Party or Issuer, (ii) is for the material violation or breach of any Law relating to any anti-fraud provisions or any fiduciary duty provisions of any state or Federal securities laws in the United States by a Loan Party or by Issuer, and (iii) could reasonably be expected to have a Material Adverse Effect, or (b) the revocation, suspension or termination of any license, permit or approval held by any Loan Party or by Issuer that, in the reasonable judgment of Administrative Agent, is necessary for the conduct of any such Person’s business.

“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.

“ Required Lenders ” means, as of any date of determination, Lenders holding more than fifty percent (50%) of the sum of the (a) the aggregate outstanding principal amount of all Loans and (b) the aggregate unused Commitments, if any.

“ Required LLC Provisions ” has the meaning specified in Section 5.01(k) .

“ Required Sales Proceeds Amount ” has the meaning specified in Section 2.08(e) .

“ Responsible Officer ” of a Person means its chief executive officer or its chief financial officer (whether or not the Person performing such duties is so designated) or any authorized designee thereof.

“ Restricted Transaction ” means, in respect of any Loan Party, any Affiliates of any Loan Party and/or any other Aggregated Person (in each case, other than Issuer or any of its Subsidiaries), (i) any hedging or financing transaction directly or indirectly secured by or referencing any Shares, (ii) any grant, occurrence or existence of any Lien or other encumbrance on the Shares or (iii) any sale, swap, hedge (including by means of a physically- or cash-settled derivative or otherwise) or other transfer of, or relating to, any Shares, in each case, whether or not such Shares constitute Pledged Shares and including any securities convertible into, or exchangeable or exercisable for, Shares, other securities representing, or represented by, the Shares and any derivatives transactions relating to any of the foregoing, whether physically- or cash-settled or otherwise; provided that a “Restricted Transaction” shall not include (v) such Loan Party’s entry into the Facility Documents, (w) any Permitted Share Sale or Corporate Event Cure Sale, in either case, that satisfies the applicable requirements therefor set forth herein, (x) a transaction that satisfies the requirements of Section 5.01(p) , (y) solely with respect to clause (iii) above, any Permitted Unpledged Share Sale or (z) the entry into (either prior to the date hereof or concurrently with the termination of a substantially similar transaction to reset the pricing terms thereof), exercise or settlement by Guarantor of any equity swaps to purchase from DNB Bank ASA (or its affiliate), in the aggregate, no more than 107,000 Shares pursuant to which Guarantor has obtained “long” exposure with respect to the Shares and that are not reasonably expected to directly or indirectly result in any sales of Shares (other than, for the avoidance of doubt, a sale of Shares from DNB Bank ASA (or its affiliate) to Guarantor thereunder).

“ Rule 144 ” means Rule 144 promulgated under the Securities Act.

“ Sanction(s) ” means any international economic sanction administered or enforced by the United States government (including without limitation, OFAC), the United Nations Security Council, the European Union, Her Majesty’s Treasury or other relevant sanctions authority.

“ Scheduled Trading Day ” means a day that is scheduled to be a trading day on the principal United States national or regional securities exchange or market on which the Shares are listed or admitted for trading. If such Shares are not so listed or admitted for trading, “Scheduled Trading Day” means a “Business Day.”

“ SEC ” means the U.S. Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“ Securities Act ” means the United States Securities Act of 1933, as amended, and the rules and regulations of the SEC thereunder.

“ Set-off Party ” has the meaning specified in Section 8.13 .

“ Share Price Threshold Level ” has the meaning specified in the Letter Agreement.

“ Share Price Trigger Event ” has the meaning specified in the Letter Agreement.

“ Share Sale Cash Collateral ” means cash in Dollars deposited into the Collateral Account pursuant to Section 2.08(c) subject to a valid and perfected First Priority Lien in favor of Agents and Lenders as of such time.

“ Share Segregation Condition ” means that, with respect to any Pledged Share, that such Pledged Share is, and at all times at or after the time at which such Pledged Share was transferred by or on behalf of Borrower or its Affiliates to a Collateral Account has been, held in a Collateral Account that (i) solely contains Pledged Shares that are subject to no Transfer Restrictions other than Transfer Restrictions to which such Pledged Share are subject, and (ii) bears a separate account number from the account number of, and the contents of which are otherwise segregated from, and not commingled with, the contents of, any other Collateral Account containing Pledged Shares that were transferred by or on behalf of Borrower or its Affiliates to a Collateral Account that are subject to any other Transfer Restrictions. For the avoidance of doubt, and without limitation of the foregoing, any Pledged Share constituting an IDR Reset Share shall at all times be held in one or more Collateral Accounts separate from any Collateral Accounts holding any Pledged Share that does not constitute an IDR Reset Share until such time, if any, as the IDR Reset Shares are no longer subject to any Transfer Restrictions different from those of any of the other Pledged Shares in such Collateral Account.

“ Shares ” means the common units representing limited partner interests of Issuer, traded on the NASDAQ Global Market under the symbol “GMLP.”

“ Special Purpose Entity ” means an entity that meets the criteria set out in Section 5.01(k) .

“ Stated Rate ” has the meaning specified in Section 2.05(b) .

“ Subsidiary ” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of Borrower.

“ Swap Contract ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, total return swaps, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options, or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement; and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “ Master Agreement ”), including any such obligations or liabilities under any Master Agreement.

“ Swap Termination Value ” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s); and (b) for any date prior to the date referenced in clause (a) , the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

“ Synthetic Lease Obligation ” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease; or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“ Threshold Amount ” has the meaning specified in the Letter Agreement.

“ Total Accrued Loan Amount ” means, at any time, the sum of: (a) the aggregate outstanding principal amount of all Loans; (b) all accrued and unpaid interest in respect all Loans; and (c) all accrued and unpaid fees payable by Borrower to any Lender and/or any Agent pursuant to the Facility Documents.

“ Total Net Outstandings ” means, at any time, the amount, if any, by which (a) the Total Accrued Loan Amount at such time exceeds (b) the aggregate Value of all Cash Collateral at such time.

“ Transfer Restrictions ” means, with respect to any property (including, in the case of securities, security entitlements in respect thereof), any condition to or restriction on the ability of the holder thereof to sell, assign or otherwise transfer such property or item of collateral or to enforce the provisions thereof or of any document related thereto whether set forth in such item of collateral itself or in any document related thereto, including, without limitation, (i) any requirement that any sale, assignment or transfer or enforcement of such property or item of collateral be subject to any volume limitations, limitations to address tax matters, or be consented to or approved by any person, including, without limitation, the issuer thereof or any other obligor thereon, (ii) any limitations on the type or status, financial or otherwise, of any purchaser, pledgee, assignee or transferee of such property or item of collateral, (iii) any requirement of the delivery of any certificate, consent, agreement, opinion of counsel, notice or any other document of any person to the issuer of, any other obligor on or any registrar or transfer agent for, such property or item of collateral, prior to the sale, pledge, assignment or other transfer or enforcement of such property or item of collateral, (iv) any registration or qualification requirement or prospectus delivery requirement for such property or item of collateral pursuant to any federal, state or foreign securities law (including, without limitation, any such requirement arising under the Securities Act of 1933), and (v) any legend or other notification appearing on any certificate representing such property to the effect that any such condition or restriction exists.

“ United States ” and “ U.S. ” mean the United States of America.

“ Value ” means, as of any date of determination, (a) with respect to Cash, the amount of such Cash; and (b) with respect to Cash Equivalents, the product of (i) the fair market value of such Collateral as reasonably determined by Calculation Agent and (ii) the percentage specified in the Letter Agreement; and (c) with respect to all other Collateral (other than Eligible Pledged Shares), the product of (x) the fair market value of such Collateral as reasonably determined by Calculation Agent and (y) a percentage (expressed as a fraction) with respect to such Collateral determined by the Lenders in good faith (taking into account the particular property constituting Collateral, the resale market for such property, any Transfer Restrictions relating to such property (whether in the hands of Borrower or in the hands of a Lender Party exercising its rights and remedies under the Facility Documents) and such other factors as any such Lender deems relevant) for purposes of determining the aggregate value of all Eligible Non-Share Collateral (other than Cash Collateral) for purposes of the LTV Ratio with respect to such Collateral.

“ Write-Down and Conversion Powers ” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.


SECTION 1.02.	Times of Day . Unless otherwise specified, all references herein to times of day shall be references to New York time (daylight or standard, as applicable).

SECTION 1.03.

Accounting Terms . All accounting terms not specifically defined herein shall be construed in accordance with GAAP and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP, applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the annual financial statements of the applicable Person, except as otherwise specifically prescribed herein. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Facility Document, and Borrower shall so request, the Required Lenders and Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP; provided that, until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.


SECTION 1.04.	Principles of Construction .

(a) The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Facility Document), (ii) except to the extent Administrative Agent’s, Lenders’ or the Borrower’s consent is required as provided herein, any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Facility Document, shall be construed to refer to such Facility Document in its entirety and not to any particular provision thereof, (iv) all references in a Facility Document to Articles, Sections, Preliminary Statements, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Preliminary Statements, Exhibits and Schedules to, the Facility Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b) In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c) Section headings herein and in the other Facility Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Facility Document.

(d) Any reference to a specific number of Shares or a specific price with respect to such Shares is a reference to that number of Shares or that price with respect to such Shares, as the case may be, as of the date of this Agreement and shall therefore after the date of this Agreement be a reference to that number of Shares or that price with respect to such Shares, as the case may be, as adjusted to reflect stock splits, reverse stock splits, stock combinations and stock dividends and Facility Adjustment Events and/or Potential Facility Adjustment Events, in each case, with respect to such Shares, as determined by the Calculation Agent, respectively.

ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES

SECTION 2.01.

The Loans . Subject to the terms and conditions set forth herein, each Lender severally agrees to make a single loan in Dollars (each such loan, a “ Loan ”) to Borrower on the Closing Date in an amount not to exceed such Lender’s Commitment; provided, however , that after giving effect to the borrowing under this Section 2.01 , the principal amount of the Loan of such Lender outstanding hereunder shall not exceed the principal amount of the Commitment of such Lender. The Loans shall be made available by Lenders based on their Applicable Percentages in respect of the Facility. Amounts borrowed under this Section 2.01 and repaid or prepaid may not be reborrowed.


SECTION 2.02.	Making the Loans.

(a) (%3) Each Loan shall be made on notice given no later than 5:00 p.m. on the Business Day immediately preceding the Closing Date by Borrower and Guarantor to Administrative Agent, who shall give to each applicable Lender prompt notice thereof.

(i) Such notice (a “ Notice of Borrowing ”) shall be irrevocable and shall be in writing in substantially the form of Exhibit A , signed by Borrower and Guarantor, specifying therein (x) the requested date of the Loans, (y) the amount of such Loans, and (z) the account to which such Loans shall be made.

(b) Each Lender shall, before 12:00 p.m. on the Closing Date, make available for the account of its Lending Office to Administrative Agent (to an account designated by Administrative Agent), in immediately available funds, such Lender’s Applicable Percentage for the Facility of such Loan. After Administrative Agent’s receipt of such funds and upon fulfillment of the applicable conditions set forth in Section 3.01 , Administrative Agent will make such funds as it has received available to Borrower by depositing such funds into the account specified in the applicable Notice of Borrowing prior to 2:00 p.m. on the Closing Date; provided, however , that Administrative Agent may net any Loan due to Borrower against any interest payment or other amount payable by Borrower hereunder to the extent that Borrower has received prior written notice (including as a result of a customary funds flow) of such amounts being set-off and has the ability to adjust the amount of Loans specified in the applicable Notice of Borrowing. The failure of any Lender to make its Applicable Percentage of such Loan shall not relieve any other Lender of its obligation to make its Applicable Percentage of such Loan on the date of such borrowing, provided that no Lender shall be responsible for the failure of any other Lender to make its Applicable Percentage of such Loan on the date of any Loan.


SECTION 2.03.	Repayment of Loans. Borrower shall repay to the Lenders on the Maturity Date the aggregate principal amount of all Loans outstanding on such date.


SECTION 2.04.	Interest.

(a) Ordinary Interest . Borrower shall pay interest on the unpaid principal amount of each Loan, from the date of such Loan until such principal amount shall be paid in full, at a rate per annum equal to the Applicable Rate, payable quarterly in arrears on each Interest Payment Date. The total amount of interest due on each Interest Payment Date shall be computed by Calculation Agent on the Business Day immediately preceding such Interest Payment Date. The Applicable Rate shall be computed by Calculation Agent based on a year of three-hundred sixty (360) days and actual days elapsed in the period for which interest is payable. Interest (including the default interest set forth below) shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

(b) Default Interest . Notwithstanding the foregoing, if any Event of Default shall have occurred, Borrower shall pay, on demand (and in any event in arrears on the date such amount shall be due and payable hereunder) interest on:

(i) the unpaid principal amount of each Loan, at a rate per annum equal at all times to two percent (2%) above the Applicable Rate; and

(ii) the amount of any interest, fee or other amount payable hereunder that is not paid when due without duplication, from the date such amount shall be due until such amount shall be paid in full, payable on demand (and in any event in arrears on the date such amount shall be paid in full) at a rate per annum equal at all times to two percent (2%) above the Applicable Rate.


SECTION 2.05.	Maximum Interest.

(a) In no event shall the interest charged with respect to any Loan or any other obligations of Borrower hereunder exceed the maximum amount permitted under the Laws of the State of New York or of any other applicable jurisdiction.

(b) Notwithstanding anything to the contrary herein or elsewhere, if at any time the rate of interest payable for the account of any Lender hereunder (the “ Stated Rate ”) would exceed the highest rate of interest permitted under any applicable Law to be charged by such Lender (the “ Maximum Lawful Rate ”), then for so long as the Maximum Lawful Rate would be so exceeded, the rate of interest payable for the account of such Lender shall be equal to the Maximum Lawful Rate; provided , that if at any time thereafter the Stated Rate is less than the Maximum Lawful Rate, Borrower shall, to the extent permitted by Law, continue to pay interest for the account of such Lender at the Maximum Lawful Rate until such time as the total interest received by such Lender is equal to the total interest which such Lender would have received had the Stated Rate been (but for the operation of this provision) the interest rate payable. Thereafter, the interest rate payable for the account of such Lender shall be the Stated Rate unless and until the Stated Rate again would exceed the Maximum Lawful Rate, in which event this provision shall again apply.

(c) Notwithstanding the foregoing, in no event shall the total interest received by any Lender exceed the amount which such Lender could lawfully have received had the interest been calculated for the full term hereof at the Maximum Lawful Rate.

(d) If any Lender has received interest hereunder in excess of the Maximum Lawful Rate, such excess amount shall be applied to the reduction of the principal balance of the Loans or to other amounts (other than interest) payable hereunder, and if no such principal or other amounts are then outstanding, such excess or part thereof remaining shall be paid to Borrower.

SECTION 2.06. Interest Rate Determinations. Upon receipt by Administrative Agent of a Notice of Borrowing and upon the request of Borrower, Administrative Agent shall give notice to Borrower of the applicable interest rates for the purposes of Section 2.04 .


SECTION 2.07.	Termination of Commitments; Prepayments of Loans.

(a) The aggregate Commitments shall be automatically and permanently reduced to zero on the Closing Date upon the borrowing on the Closing Date.

(b) Borrower may at any time prepay the outstanding principal amounts of the Loans, in whole or in part, together with accrued interest to the date of such prepayment on the principal amount prepaid and any additional amounts required pursuant to Section 2.12 , upon irrevocable notice thereof. Such notice shall be given to Administrative Agent by Borrower not later than 11:00 a.m. on the date three (3) Business Days prior to the date of any such prepayment; provided, however , that each partial prepayment of the Loans shall be in an aggregate principal amount of not less than $2,500,000 or a whole multiple of $1,000,000 in excess thereof. If such notice is given by Borrower, Borrower shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender’s Applicable Percentage of such prepayment. Each such prepayment shall be paid to the Lenders in accordance with their respective Applicable Percentages in respect of the Facility.

(c) If (i) any Corporate Event with respect to Issuer or the Shares occurs, (ii) any Guarantor Extraordinary Event occurs, or (iii) any Share Price Trigger Event with respect to the Shares occurs, in each case, Borrower shall, no later than 5:00 p.m. on the ordinal numbered Business Day specified in the Letter Agreement following the delivery by the Administrative Agent or any Lender of notice of the occurrence thereof, prepay to the Administrative Agent for the ratable benefit of the Lenders the Total Accrued Loan Amount together with any amount required pursuant to Section 2.12 ; provided that Borrower may elect by written notice to the Administrative Agent in which Borrower repeats as of such date the representation and warranty in Section 4.01(r) to satisfy such payment obligation using the net cash proceeds of a single sale of Pledged Shares that satisfies the following conditions unless waived or otherwise consented to in writing by each of the Lenders (a “ Corporate Event Cure Sale ”):

(i) such sale is effected after such notice of the occurrence of such Corporate Event, Guarantor Extraordinary Event or Share Price Trigger Event and on or prior to the second Business Day following such notice of the occurrence thereof;

(ii) no Default, Event of Default, LTV Breach or Adjustment Determination Period has occurred and is continuing or would result therefrom (other than, for the avoidance of doubt, the Corporate Event, Guarantor Extraordinary Event or Share Price Trigger Event that gave rise to such sale);

(iii) settlement of such sale will occur no later than one standard settlement cycle following execution thereof;

(iv) such sale is effected through the Lenders (other than any Lender that has declined to participate in such sale) or their respective designated affiliates, on a Pro Rata Basis, pursuant to mutually satisfactory documentation; provided that this clause (iv) will be deemed to be satisfied if each Lender declines to participate in such sale;

(v) such sale complies in all respects with applicable securities laws and in all material respects with other applicable Law, all contractual restrictions binding on such Shares and/or transactions with respect to such Shares and all other material contractual restrictions and Issuer’s Organizational Documents; and

(vi) One-hundred percent (100%) of the net cash proceeds will be applied first to pay the Total Accrued Loan Amount together with any amount required pursuant to Section 2.12 on a delivery-versus-payment basis against release of the Pledged Shares.

(d) If, after giving effect to any partial prepayment of the Loans pursuant to this Section 2.07 or Section 2.08 (but excluding any partial prepayment of the Loans pursuant to Section 2.08(c) ), the aggregate outstanding principal amount of the Loans would be less than an amount equal to 10% of the aggregate outstanding principal amount of the Loans as of the Closing Date (after giving effect to the making of the Loans on the Closing Date), Borrower shall, concurrently with such partial prepayment, prepay to the Administrative Agent for the ratable benefit of the Lenders in full the Total Accrued Loan Amount together with any amount required pursuant to Section 2.12 .


SECTION 2.08.	LTV Breach; Collateral .

(a) If an LTV Breach occurs, Borrower shall, prior to the Cure Time, either (a) prepay any outstanding Loans or (b) post additional Margin Collateral, in each case, in such amount necessary to, after giving effect to such payment or posting, cause the LTV Ratio (with the LTV Ratio determined for such purpose based on an Eligible Equity Value based on the Closing Prices as of the date as of which the relevant LTV Breach occurred) to be less than or equal to the LTV Reset Ratio (determined after giving effect to the step down thereto in respect of such LTV Breach for any LTV Breach following the initial LTV Breach). Any prepayment hereunder shall be applied as provided in Section 2.14 .

(b) Borrower may not withdraw any Collateral from the Collateral Accounts, except (i) in accordance with the immediately following clauses (c) , (d) or (e) ; (ii) as provided in Section 8.01 ; or (iii) in connection with a sale of the Shares held in the Collateral Account as permitted under Section 2.07(c) or otherwise as permitted pursuant to the terms of the Facility Documents or as otherwise consented to in writing by each of the Lenders.

(c) If the Collateral Account contains Cash Dividend Collateral as of the Business Day immediately preceding any Interest Payment Date, all of such Cash Dividend Collateral shall be released from the Liens created under the Collateral Documents (and each Applicable Lender shall so instruct the relevant Custodian as applicable) for purposes of paying the Total Accrued Loan Amount on such Interest Payment Date as follows: first to pay any accrued and unpaid interest, with any remaining Cash Dividend Collateral then applied towards prepayment of the Total Accrued Loan Amount.

(d) If the Collateral Account contains Cash Collateral (other than Cash Dividend Collateral covered under clause (c) above), all or a portion of such Cash Collateral may be released from the Liens created under the Collateral Documents (and each Applicable Lender shall so instruct the relevant Custodian as applicable) and applied (i) first towards payment of any accrued and unpaid interest and (ii) second, with the remainder of such released Cash Collateral paid to the Borrower to the extent all accrued and unpaid interest has been reduced to zero on such date, as follows:

(i) the Administrative Agent shall have received a written notice from the Borrower requesting a release of such Cash Collateral on the date specified therein (which date shall be after the Closing Date and shall be no earlier than three (3) Business Days immediately following the first Business Day on which the Administrative Agent has received such notice by 11:00 a.m.); and

(ii) as long as (A) no Default, Event of Default, Corporate Event, Share Price Trigger Event, LTV Breach or Adjustment Determination Period has occurred and is continuing or would result from such release and (B) the LTV Ratio for each of the ten (10) consecutive Scheduled Trading Days prior to the date of such release has been, and immediately following such release and any other release otherwise requested or effected pursuant to Section 2.07 or this Section 2.08 will be, no greater than the then-current LTV Release Ratio; and

(iii) on the date of such release the Borrower is not required to make any prepayment and/or post any Collateral under Section 2.07 or this Section 2.08 ;

any such notice delivered pursuant to the immediately preceding clause (i) shall represent and warrant to the items set forth in the immediately preceding clauses (ii) and (iii) . Upon satisfaction of the conditions set forth in the immediately preceding sentence, such Cash Collateral shall be released from the Lien created under the Collateral Documents (and each Applicable Lender shall so instruct the relevant Custodian as applicable) in an aggregate amount equal to the lowest of (x) the amount of Cash Collateral requested to be released by the Borrower in such written notice, (y) an amount of Cash Collateral with a value such that, after giving effect to such release and any other release otherwise requested or effected pursuant to Section 2.07 or this Section 2.08 , the LTV Ratio would be no greater than the LTV Release Ratio and (z) the aggregate amount of Cash Collateral held in the Collateral Account. Any such released amounts of Cash Collateral shall be applied first to pay any accrued and unpaid interest to zero, with any excess amounts released to Borrower only if there is no accrued and unpaid interest at such time.

(e) All or a portion of the Shares contained in the Collateral Account shall be released from the Liens created under the Collateral Documents and transferred out of the Collateral Account to the Borrower as follows:

(i) the Administrative Agent shall have received a written notice, signed by the Borrower and the Guarantor, from the Borrower requesting a release of the particular number of Shares specified therein on the date specified therein (which date shall be after the Closing Date and shall be no earlier than ten (10) (or, solely in the case of a release of Shares that satisfy the requirements of clause (b) of the definition of “Eligible Pledged Shares” for purposes of settling a Permitted Share Sale, five (5)) Business Days immediately following the first Business Day on which the Administrative Agent has received such notice by 12:00 noon and in which (A) the Borrower repeats, as of the date of such written notice, each of its representations and warranties under Section 4.01(b), (f), (n), (o), (bb) and, solely in the case of a release pursuant to clause (ii)(A) below), (r) and (B) the Guarantor repeats, as of the date of such written notice, each of its representations and warranties under Section 3.1(b), (f), (p), (u) and, solely in the case of a release pursuant to clause (ii)(A) below, (m) of the Guaranty Agreement;

(ii) any of the following conditions shall be satisfied:

(A) such release shall be effected for the purpose of settling a sale of Shares for cash in Dollars as long as (I) settlement of such sale will occur no later than one standard settlement cycle following execution thereof, (II) such sale is effected through the Lenders or their designated affiliates, on a Pro Rata Basis, pursuant to mutually satisfactory documentation, (III) Borrower represents that such sale complies in all respects with applicable securities laws and in all material respects with other applicable Law, all contractual restrictions binding on such Shares and/or transactions with respect to such Shares and all other material contractual restrictions and Issuer’s Organizational Documents, and (IV) one-hundred percent (100%) of the net cash proceeds will be applied first to pay the Total Accrued Loan Amount together with any amount required pursuant to Section 2.12 on a delivery-versus-payment basis against release of the Pledged Shares (any sale that satisfies the above conditions, a “ Permitted Share Sale ” and such amount, a “ Required Sales Proceeds Amount ”);

(B) the LTV Ratio for each of the ten (10) consecutive Scheduled Trading Days prior to the date of such release has been, and immediately following such release and any other release otherwise requested or effected pursuant to Section 2.07 or this Section 2.08 will be, no greater than the then-current LTV Release Ratio; or

(C) solely in the case of the release of any Excess Initial Pledged Shares, the Existing Convertible Collateral Shares satisfy the requirements of clause (b) of the definition of “Eligible Pledged Shares” and the notice referred to in clause (i) above is received by the Administrative Agent within three (3) Business Days of the first date on which the Existing Convertible Collateral Shares satisfy such requirements;

provided that, (x) in the case of clause (B) above, if any IDR Reset Shares are included in the Pledged Shares with a holding period under Rule 144 that has commenced less than one year prior to the date of such release, no Pledged Shares (other than such IDR Reset Shares) will be subject to release under this clause (ii) unless, after giving effect to such release, no IDR Reset Shares would be included in the Pledged Shares with a holding period under Rule 144 that has commenced less than one year prior to the date of such release and (y) in the case of clause (C) above, the IDR Reset Shares, if any, that constitute Pledged Shares will be subject to release prior to the release of any Pledged Shares that do not constitute IDR Reset Shares;

(iii) no Default, Event of Default, Corporate Event, Share Price Trigger Event, LTV Breach or Adjustment Determination Period has occurred and is continuing or would result from such release;

(iv) on the date of such release the Borrower is not required to make any prepayment and/or post any Collateral under Section 2.07 or this Section 2.08 ; and

(v) in the case of any Shares released to Borrower and/or Guarantor, Borrower and Guarantor shall have taken all actions required by Issuer and the Transfer Agent (as defined in the Issuer Acknowledgment), and/or reasonably requested by the relevant Applicable Lenders, for such Shares to be held in certificated format subject to the restrictive legend set forth in Annex B attached to the Issuer Acknowledgment;

any such notice delivered pursuant to the immediately preceding clause (i) shall represent and warrant to the items set forth in the immediately preceding clauses (ii) and (iii) . Upon satisfaction of the conditions set forth in the immediately preceding sentence, the Shares specified in such written notice shall be released from the Lien created under the Collateral Documents (and each Applicable Lender shall so instruct the relevant Custodian as applicable) and transferred out of the Collateral Account to the Borrower in an aggregate number equal to the lowest of (x) the number of such Shares requested to be released by the Borrower in such written notice, (y) if applicable, a number of such Shares satisfying the requirements of clause (ii) above and (z) the aggregate number of such Shares held in the Collateral Account and subject to a valid and perfected First Priority Lien in favor of Agents and Lenders as of such time; provided that, in the case of a Permitted Share Sale, each Applicable Lender shall release the Liens over the relevant number of Pledged Shares being sold promptly following receipt by the Administrative Agent on behalf of the Lenders of the related Required Sales Proceeds Amount.

(f) Each Applicable Lender agrees to use commercially reasonable efforts to comply with the reasonable requests of Borrower, Guarantor and Issuer in connection with the transfers and conversions contemplated to allow the Existing Convertible Collateral Shares and/or the IDR Reset Shares to satisfy the requirements of clause (b) of the definition of “Eligible Pledged Shares” and/or to satisfy the Share Segregation Condition.


SECTION 2.09.	Increased Costs.

(a) Increased Costs Generally . If any Change in Law shall:

(i) impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender;

(ii) subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clause (b) of the definition of “Excluded Taxes” and (C) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii) impose on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or any Loan made hereunder;

and the result of any of the foregoing shall be to increase the cost to such Lender, or to reduce the amount of any sum received or receivable by such Lender hereunder (whether of principal, interest or any other amount) then, upon request of such Lender, Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

(b) Capital Requirements . If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender or such Lender’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by such Lender, to a level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time Borrower will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.

(c) Certificates for Reimbursement . A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or its holding company, as the case may be, as specified in clause (a) or (b) of this Section and delivered to Borrower shall be conclusive absent manifest error. Borrower shall pay such Lender the amount shown as due on any such certificate within ten (10) days after receipt thereof.

(d) Delay in Requests . Failure or delay on the part of any Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s right to demand such compensation; provided that Borrower shall not be obligated to compensate any Lender under paragraphs (a) or (b) above with respect to increased costs or reductions with respect to any period prior to the date that is one-hundred and fifty (150) days prior to such request if such Lender knew or could reasonably have been expected to know of the circumstances giving rise to such increased costs or reductions and of the fact that such circumstances would result in a claim for increased compensation by reason of such increased costs or reductions; provided further that the foregoing limitation shall not apply to any increased costs or reductions arising out of the retroactive application of any Change in Law within such 150-day period.

(e) Reserves on LIBOR Based Loans . Borrower shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “ Eurocurrency liabilities ”), additional interest on the unpaid principal amount of each Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as commercially reasonably determined by such Lender in good faith, which determination shall be conclusive absent manifest error), which shall be due and payable on each date on which interest is payable on such Loan, provided Borrower shall have received at least ten (10) days’ prior notice (with a copy to Administrative Agent) of such additional interest from such Lender. If a Lender fails to give notice ten (10) days prior to the relevant Interest Payment Date, such additional interest shall be due and payable ten (10) days from receipt of such notice.

(f) Survival . All of Borrower’s obligations under this Section 2.09 shall survive termination of the Facilities, repayment of all other Obligations hereunder, and resignation of Administrative Agent.


SECTION 2.10.	Taxes.

(a) Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes . Any and all payments by or on account of any obligation of any Loan Party under any Facility Document shall be made without deduction or withholding for any Taxes, except as required by applicable Law. If any applicable Law (as determined in the good faith discretion of Administrative Agent) requires the deduction or withholding of any Tax from any such payment by Administrative Agent or a Loan Party, then Administrative Agent or such Loan Party shall be entitled to make such deduction or withholding and shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Law, and to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions (including withholdings or deductions applicable to additional sums payable under this Section 2.10 ) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(b) Payment of Other Taxes by Loan Parties . Without limiting the provisions of clause (a) above, the Loan Parties shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(i) Each of the Loan Parties shall, and does hereby, jointly and severally indemnify each Recipient, and shall make payment in respect thereof within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.10 ) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to Borrower by a Lender (with a copy to Administrative Agent), or by Administrative Agent on its own behalf or on behalf of a Lender shall be conclusive absent manifest error. Each of the Loan Parties shall, and does hereby, jointly and severally indemnify Administrative Agent, and shall make payment in respect thereof within ten (10) days after demand therefor, for any amount which a Lender for any reason fails to pay indefeasibly to Administrative Agent as required pursuant to Section 2.10(c)(ii) below.

(ii) Each Lender shall, and does hereby, severally indemnify, and shall make payment in respect thereof within ten (10) days after demand therefor, Administrative Agent for (x) any Indemnified Taxes attributable to such Lender (but only to the extent that any Loan Party has not already indemnified Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Loan Parties to do so), (y) any Taxes attributable to such Lender’s failure to comply with the provisions of Section 8.06(d) relating to the maintenance of a Participant Register and (z) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by Administrative Agent in connection with any Facility Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by Administrative Agent shall be conclusive absent manifest error. Each Lender hereby authorizes Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Facility Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to Administrative Agent under this clause (ii) .

(d) Evidence of Payments . As soon as practicable after any payment of Taxes by any Loan Party to a Governmental Authority as provided in this Section 2.10 , such Loan Party shall deliver to Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return reporting such payment or other evidence of such payment reasonably satisfactory to Administrative Agent .

(e) Status of Lenders; Tax Documentation .

(i) Each Lender shall deliver to the Borrower and to the Administrative Agent, at such time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation prescribed by applicable laws or by the taxing authorities of any jurisdiction and such other reasonably requested information as will permit the Borrower or the Administrative Agent, as the case may be, to determine (A) whether or not any payments made hereunder or under any other Facility Document are subject to Taxes, (B) if applicable, the required rate of withholding or deduction, and (C) such Lender’s entitlement to any available exemption from, or reduction of, applicable Taxes in respect of any payments to be made to such Lender by any Loan Party pursuant to any Facility Document or otherwise to establish such Lender’s status for withholding tax purposes in the applicable jurisdiction. Any documentation and information required to be delivered by a Lender pursuant to this Section 2.10(e)(i) shall be delivered by such Lender (x) from time to time as reasonably requested by the Borrower or the Administrative Agent, (y) on or before any date on which any previously delivered documentation expires or becomes obsolete or invalid, and (z) after the occurrence of any change in the Lender’s circumstances requiring a change in the most recent documentation previously delivered by it to the Borrower and the Administrative Agent. Each such Lender shall promptly notify in writing the Borrower and the Administrative Agent if such Lender is no longer legally eligible to provide any documentation previously provided. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in clauses (ii) and (iii) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii) Each Lender shall deliver to the Administrative Agent on or before it becomes a party to this Agreement and from time to time as may be necessary thereafter, duly completed copies of Internal Revenue Service Form W-8BEN, W-8BEN-E, W-8ECI, W-8IMY, W-EXP or W-9, as may be applicable, together with any required attachments, if required to establish that such Lender is exempt from United States backup withholding Taxes (unless such Lender is not subject to United States backup withholding requirements).

(iii) If a payment made to a Lender under any Facility Document would be subject to U.S. Federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to Borrower and Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by Borrower or Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by Borrower or Administrative Agent as may be necessary for Borrower or Administrative Agent to comply with its obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (iii) , “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(f) Treatment of Certain Refunds . Unless required by applicable Law, at no time shall Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld or deducted from funds paid for the account of such Lender. If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by any Loan Party or with respect to which any Loan Party has paid additional amounts pursuant to this Section 2.10 , it shall pay to such Loan Party an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by a Loan Party under this Section 2.10 with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that such Loan Party, upon the request of the Recipient, agrees to repay the amount paid over to such Loan Party (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this clause, in no event will the applicable Recipient be required to pay any amount to a Loan Party pursuant to this clause the payment of which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This clause shall not be construed to require any Recipient to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to any Loan Party or any other Person .

(g) Delivery of IRS Form W-8BEN-E . Each Loan Party shall deliver to the Administrative Agent, on or before the Closing Date (and thereafter promptly from time to time upon the reasonable request of the Administrative Agent) a duly executed original IRS Form W-8BEN-E indicating that it is compliant or deemed compliant with FATCA

(h) Survival . Each party’s obligations under this Section 2.10 shall survive the resignation or replacement of Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all Obligations under any Facility Document.

SECTION 2.11.

Illegality . Notwithstanding any other provision of this Agreement, if any Lender shall notify Administrative Agent and Borrower that (a) any Law makes it unlawful, or any central bank or other Governmental Authority asserts that it is unlawful, for any Lender to perform its obligations to make Loans hereunder, or (b) the LIBOR for any Interest Period with respect to a Loan does not adequately and fairly reflect the cost to such Lender of funding or maintaining such Loan, the obligation of such Lender to make its Applicable Percentage of the Loans shall be terminated and all Loans of such Lender, all interest thereon and all other amounts payable under this Agreement to such Lender shall become due and payable five (5) Business Days’ after such notice. Any Lender that becomes aware of circumstances that would permit such Lender to notify Administrative Agent of any illegality under this Section 2.11 shall use its reasonable efforts (consistent with its internal policy and legal and regulatory restrictions) to change the jurisdiction of its Lending Office if the making of such change would avoid or eliminate such illegality and would not, in the reasonable judgment of such Lender, be otherwise disadvantageous to such Lender.


SECTION 2.12.	Compensation for Losses . Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, Borrower shall promptly compensate such Lender for and hold such Lender harmless from any actual and documented loss, cost or expense incurred by it as a result of:

(a) any payment or prepayment of the Loan on a day other than the last day of the Interest Period for the Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise); or

(b) any failure by Borrower to prepay or borrow the Loan on the date or in the amount notified by such Borrower (for a reason other than the failure of such Lender to make a Loan in breach of its obligation hereunder);

including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain the Loans or from fees payable to terminate the deposits from which such funds were obtained. All of Borrower’s obligations under this Section 2.12 shall survive termination of the Facilities or repayment of all other Obligations hereunder. For purposes of calculating amounts payable by Borrower to a Lender under this Section 2.12 , each Lender shall be deemed to have funded the Loans by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not the Loans were in fact so funded.


SECTION 2.13.	Evidence of Debt.

(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of Borrower to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.

(b) Administrative Agent shall also maintain accounts in which it will record: (i) the amount of each Loan made hereunder; (ii) the amount of any principal or interest due and payable or to become due and payable from Borrower to each Lender hereunder; and (iii) the amount of any sum received by Administrative Agent hereunder from Borrower and each Lender’s share thereof.

(c) The entries maintained in the accounts maintained pursuant to clauses (a) and (b) above shall be prima facie evidence of the existence and amounts of the obligations therein recorded; provided, however , that the failure of Administrative Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of Borrower to repay such obligations in accordance with their terms. Borrower hereby designates Administrative Agent to serve as Borrower’s agent solely for purposes of maintaining the account maintained pursuant to clause (b) above, and Borrower hereby agrees that, to the extent Administrative Agent serves in such capacity, Administrative Agent and its officers, directors, employees, agents, sub-agents and affiliates shall constitute “Indemnitees.”

(d) No promissory note shall be required to evidence the Loans by Lenders to Borrower. Upon the request of a Lender, Borrower shall execute and deliver to such Lender a promissory note, which shall evidence the Loans to Borrower by such Lender in addition to such records.


SECTION 2.14.	Payments and Computations.

(a) All payments to be made by Borrower shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Borrower shall make each payment hereunder not later than 12:00 noon on the day when due in Dollars to Administrative Agent in immediately available funds. Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share as provided herein) of such payment in like funds as received by wire transfer to such Lender’s Lending Office. All payments received by Administrative Agent after 12:00 noon shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue.

(b) Whenever any payment hereunder would be due on a day other than a Business Day, such payment shall be extended to the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest or any fees, as the case may be.

(c) All payments (including prepayments and any other amounts received hereunder but excluding payments and amounts received in connection with the exercise of the Agents’ and Lenders’ rights after an Event of Default to the extent set forth in Section 6.01 ) made by Borrower to Administrative Agent under any Facility Document shall be applied to amounts then due and payable in the following order: (i) to any expenses and indemnities payable by Borrower to any Agent under any Facility Document; (ii) ratably to any expenses and indemnities payable by Borrower to any Lender under any Facility Document; (iii) to any accrued and unpaid interest and fees due under this Agreement; (iv) to principal payments on the outstanding Loans; and (v) to the extent of any excess, to the payment of all other Obligations under the Facility Documents.


SECTION 2.15.	Administrative Agent’s Clawback.

(a) Funding by Lenders; Presumption by Administrative Agent . Unless Administrative Agent shall have received notice from a Lender prior to the proposed date of any Loan that such Lender will not make available to Administrative Agent such Lender’s Applicable Percentage of such Loan, Administrative Agent may assume that such Lender has made such Applicable Percentage of such Loan available on such date in accordance with Section 2.02 and may, in reliance upon such assumption, make available to Borrower a corresponding amount. In such event, if a Lender has not in fact made its Applicable Percentage of such Loan available to Administrative Agent, then the applicable Lender and Borrower severally agree to pay to Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to Borrower to but excluding the date of payment to Administrative Agent, at (i) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation and (ii) in the case of a payment to be made by Borrower, the Applicable Rate. If Borrower and such Lender shall pay such interest to Administrative Agent for the same or an overlapping period, Administrative Agent shall promptly remit to Borrower the amount of such interest paid by Borrower for such period. If such Lender pays its Applicable Percentage of the applicable Loan to Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such borrowing. Any payment by Borrower shall be without prejudice to any claim Borrower may have against a Lender that shall have failed to make such payment to Administrative Agent.

(b) Payments by Borrower; Presumptions by Administrative Agent . Unless Administrative Agent shall have received notice from Borrower prior to the date on which any payment is due to Administrative Agent for the account of Lenders hereunder that Borrower will not make such payment, Administrative Agent may assume that Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to Lenders the amount due. In such event, if Borrower has not in fact made such payment, then each of Lenders severally agrees to repay to Administrative Agent forthwith on demand the amount so distributed to such Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by Administrative Agent in accordance with banking industry rules on interbank compensation.

(c) Obligations of Lenders Several . The obligations of Lenders hereunder to make Loans and to make payments pursuant to Section 8.04(c) are several and not joint. The failure of any Lender to make any Loan or to make any payment under Section 8.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Loan, to purchase its participation or to make its payment under Section 8.04(c) .

SECTION 2.16.

Sharing of Payments by Lenders . If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of the Loans made by it, resulting in such Lender’s receiving payment of a proportion of the aggregate amount of such Loans and accrued interest thereon greater than its pro rata share thereof as provided herein (other than pursuant to Section 6.03 ), then Lender receiving such greater proportion shall (a) notify Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them, provided that: (i) if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and (ii) the provisions of this Section shall not be construed to apply to (A) any payment made by or on behalf of Borrower pursuant to and in accordance with the express terms of this, or (B) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans to any assignee or participant, other than an assignment to Borrower or any Affiliate thereof (as to which the provisions of this Section shall apply). Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of Borrower in the amount of such participation.

ARTICLE III
CONDITIONS OF LENDING


SECTION 3.01.	Conditions Precedent Loan . The obligation of Lenders to make the Loans is subject to satisfaction of the following conditions precedent:

(a) Administrative Agent (or its counsel) shall have received each of the following documents, duly executed, each (unless otherwise specified below) dated as of or about the Closing Date and in form and substance satisfactory to Administrative Agent and each of the Lenders:

(i) duly executed counterparts of this Agreement, sufficient in number for distribution to Administrative Agent, each Lender and Borrower;

(ii) duly executed Pledge Agreement and all documents contemplated thereby, including, without limitation, one or more UCC-1 financing statements in form and substance satisfactory to the Lenders;

(iii) duly executed Guaranty Agreement and all documents contemplated thereby;

(iv) duly executed Control Agreement and all documents contemplated thereby;

(v) [Reserved]

(vi) certified copies of (A) the Organization Documents of each Loan Party, (B) the resolutions authorizing and approving the making and performance by each Loan Party of the Facility Documents to which such Loan Party is a party, the borrowing of Loans hereunder and the granting of Liens pursuant to the Pledge Agreement, and (C) the engagement letter(s) for, or other reasonably satisfactory evidence of the engagement of, and Independent Director for Borrower, and (D) documents evidencing all other necessary company action, governmental approvals and third-party consents, if any, with respect to this Agreement, the Pledge Agreement, and any other Facility Document;

(vii) a certificate of each Loan Party certifying the names and true signatures of the Responsible Officers of such Loan Party authorized to sign this Agreement, the Pledge Agreement and any other Facility Document to be delivered hereunder or thereunder;

(viii) certificates evidencing the good standing of each Loan Party in its jurisdiction of formation or incorporation (to the extent such jurisdiction makes such certificates or other evidence available) dated a date not earlier than ten (10) Business Days prior to the Closing Date as to the good standing of each Loan Party;

(ix) a due capacity, authority and enforceability legal opinion of counsel to the Loan Parties in form and substance reasonably satisfactory to Administrative Agent;

(x) (A) the results of appropriate Tax, judgment, and Lien searches on Borrower as of a recent date reflecting no Liens encumbering the assets of the Borrower, and (B) entries and filings shown in respect of the Borrower on the file of the Borrower maintained in the Register of Companies at the office of the Registrar of Companies in Hamilton, Bermuda, including the Register of Charges, together with entries and filings shown in respect of the Borrower in the Supreme Court Causes Book maintained at the Registry of the Supreme Court in Hamilton, Bermuda;

(xi) the duly executed Issuer Acknowledgment and all documents contemplated thereby;

(xii) a letter agreement or other form of evidence, in form and substance reasonably acceptable to the Administrative Agent, duly executed by the Process Agent with respect to the Process Agent’s agreement to act as “process agent” for each of the Loan Parties; and

(xiii) evidence satisfactory to the Administrative Agent that all amounts outstanding under the Existing Convertible Notes shall have been (or immediately upon the making of the Loans hereunder are being, pursuant to documentation satisfactory to each Lender) paid in full in cash, all commitments relating to the foregoing shall have been (or immediately upon the making of the Loans hereunder are being, pursuant to documentation satisfactory to each Lender) terminated and all Liens, control agreements and security interests related thereto with respect to the Existing Convertible Collateral Shares shall have been (or immediately upon the making of the Loans hereunder are being, pursuant to documentation satisfactory to each Lender) terminated or released, including, without limitation, a UCC-3 financing statement with respect to any UCC-1 financing statement relating to the Existing Convertible Notes. In addition, the Lenders and Agents shall have received, or shall be reasonably satisfied that immediately upon the making of the Loans hereunder they will receive, duly executed copies of each of the following in reasonably satisfactory form and substance:

(A) the (i) Release Statement relating to the Existing Convertible Notes, dated as of March 1, 2017, executed by the Existing Trustee and addressed to Citibank N.A., and (ii) Payment Notice NO0010637846 relating to the Existing Convertible Notes;

(B) the Agreement Regarding the Making of Payments and Assignment of Claims, dated as of March 1, 2017, among Guarantor, the Existing Trustee and Nordea Bank AB (publ) filial i Norge; and

(C) the Notice of Termination of Blocked Collateral Account Control Agreement, dated as of or about the Closing Date, executed by the Existing Trustee and addressed to The Bank of New York Mellon.

(b) The LTV Ratio as of the Closing Date, after giving effect to the Loans made on the Closing Date, shall be equal to or less than the Initial LTV Ratio (with the LTV Ratio determined for such purpose based on an Eligible Equity Value based on the lower of (i) the Closing Price as of the date of the applicable Notice of Borrowing and (ii) the Closing Price as of the Closing Date).

(c) The Collateral Accounts shall have been established by Borrower and Administrative Agent shall have received satisfactory evidence that the Collateral Requirement shall have been (or immediately following the making of the Loans hereunder is being, pursuant to documentation satisfactory to each Lender) satisfied in all respects. In addition, the Custodian shall hold the IDR Reset Shares in accordance with the Share Segregation Condition. In addition, and without limitation of the foregoing:

(i) 4,857,927 Eligible Pledged Shares (which Eligible Pledged Shares, for the avoidance of doubt, satisfy the requirements of clause (b) of the definition thereof) shall have been credited to the appropriate Collateral Account;

(ii) 2,994,364 IDR Reset Shares constituting Eligible Pledged Shares shall have been registered into the name of Citibank, N.A. in uncertificated, book-entry format on the books and records of the Transfer Agent (as defined in the Issuer Acknowledgment); and

(iii) the Lenders and Agents shall have received reasonably satisfactory evidence that the certificates representing the Existing Convertible Collateral Shares, immediately following the making of the Loans hereunder, (x) will be physically delivered to a representative of Citibank, N.A., in its capacity as Applicable Lender, by Bank of New York Mellon in its capacity as securities intermediary under the terminated control agreement for the benefit of the Existing Trustee with respect to the Existing Convertible Notes and (y) at and after such time, will constitute Eligible Pledged Shares.

(d) The Borrower shall have paid (i) all fees due and payable under the Fee Letter at the times specified therein and (ii) any other fees and expenses required to be paid to the Agents or the Lenders on or before the Closing Date. For the avoidance of doubt, any amounts payable to the Agents or the Lenders on or before the Closing Date (including in accordance with the Fee Letter) which have not been paid may, at the Administrative Agent’s discretion with prior written notice to Borrower (including pursuant to a customary funds flow), be netted against the Loan requested on the Closing Date and thereby deducted from such Loan to the extent that Borrower has had an opportunity to adjust the amount of such Loan as a result of such netting.

(e) Borrower shall have provided any form requested by Administrative Agent necessary to comply with Regulation T, U, or X, or any other provisions of the Regulations of the FRB, including Form U-1.

(f) Administrative Agent shall have completed its due diligence review with respect to the Loan Parties and Issuer and shall be reasonably satisfied with the result of its due diligence review.

(g) No Corporate Event shall have occurred and be continuing.

(h) No Facility Adjustment Event and/or Potential Facility Adjustment Event shall have occurred and be continuing for which the Adjustment Event Effective Time, if any, shall not have occurred.

(i) Since November 4, 2016, no circumstance, event or conditions shall have occurred which could reasonably be expected to give rise to a Material Adverse Effect, to the extent applicable.

(j) Borrower shall have delivered a Notice of Borrowing signed by Borrower and Guarantor in accordance with the requirements hereof.

(k) Each of the representations and warranties contained in Article IV and each of the representations and warranties contained in Section 3.1 of the Guaranty Agreement shall be true and correct on and as of the date of such Notice of Borrowing and as of the Closing Date as if made on such date.

(l) There shall not have been any Law applicable to the transactions contemplated herein, or the financing thereof, promulgated, enacted, entered or enforced by any Governmental Authority, that would prohibit, restrict, delay or otherwise materially affect the execution, delivery and performance of any of the Facility Documents or the making of the Loans.

(m) No event shall have occurred, or would result from such Loan or from the application of the proceeds therefrom, which would constitute a Default or an Event of Default.

(n) Administrative Agent shall have received such other assurances, certificates, consents, approvals, opinions and documents relating to this Agreement and the transactions contemplated hereby as it shall have reasonably requested (including control agreement(s) with financial or securities intermediaries).

(o) The Administrative Agent and each Lender shall have received all documentation and other information required by regulatory authorities or as may be required by the internal policies of the Administrative Agent or such Lender with respect to the Borrower, the Guarantor and the Issuer under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

The Notice of Borrowing shall be deemed to be a representation and warranty by Borrower that the conditions specified in Section 3.01 have been satisfied on and as of the Closing Date. For purposes of determining compliance with this Section 3.01 , each Agent and each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required hereunder to be consented to or approved by or acceptable or satisfactory to such Lender or the Administrative Agent, as the case may be, upon the funding of the Loans by the Lenders on the Closing Date.

ARTICLE IV
REPRESENTATIONS AND WARRANTIES


SECTION 4.01.	Representations and Warranties of Borrower . Borrower represents and warrants to Agents and Lenders that:

(a) Borrower (i) is duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization, (ii) is duly qualified and in good standing (to the extent that an entity may be in good standing in such jurisdiction) in each other jurisdiction in which the conduct of its business requires it to so qualify or be licensed and where, in each case, failure so to qualify and be in good standing could reasonably be expected to have a Material Adverse Effect, and (iii) has all requisite company power and authority to own or lease and operate its properties and to carry on its business as now conducted and as proposed to be conducted except to the extent such failure could not reasonably be expected to give rise to a Material Adverse Effect.

(b) The execution, delivery and performance by Borrower of this Agreement and the other Facility Documents to which Borrower is a party (when delivered), the grant of the security interest contemplated hereby with respect to the Collateral and the consummation of the transactions contemplated under the Facility Documents (including any exercise by the Collateral Agent, Agent or any Lender of its rights and remedies with respect to the Collateral) are within its company powers, have been duly authorized by all necessary company action, and do not, and Borrower reasonably believes as of the date of making of this representation and warranty will not, (i) contravene in any material respect Borrower’s Organization Documents; (ii) contravene any contractual restriction binding on it or require any consent (other than, for the avoidance of doubt, any consent of the Issuer obtained pursuant to the Issuer Acknowledgment) under any agreement or instrument to which it or any of its Affiliates is a party or by which any of its properties or assets is bound, except, in the case of this clause (ii) , for any contravention or violation which could not reasonably be expected to give rise to a material adverse effect on the Facility Documents or any transactions contemplated thereunder (including any exercise of remedies by any Lender or Agent) or any Material Adverse Effect; (iii) result in or require the creation or imposition of any Liens upon any property or assets of Borrower other than Permitted Liens; (iv) violate in any material respect any Law (including, but not limited to, the Securities Act and the Exchange Act and the regulations thereunder) or writ, judgment, injunction, determination or award; or (v) violate any trading policy of the Issuer applicable to Guarantor, Borrower or any Affiliate of Guarantor or Borrower , including , but not limited to , the Issuer’s window period policy.

(c) Except for any filings specifically provided for in the Pledge Agreement, no order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption or waiver by, any Governmental Authority or any other third party (except as have been obtained or made and are in full force and effect), is required to authorize, or is required in connection with, (i) the execution, delivery and performance by Borrower or Guarantor of any Facility Document or (ii) the legality, validity, binding effect or enforceability of any Facility Document, except for those approvals, consents, exemptions, authorizations or other actions, notices or filings, the failure of which to obtain or make would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(d) Borrower is in compliance with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its properties, except in such instances in which (i) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (ii) the failure to comply therewith, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

(e) This Agreement and the other Facility Documents that Borrower is party to are and will be legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their respective terms in all respects, except as enforceability may be limited by Debtor Relief Laws, or general principles of equity, whether such enforceability is considered in a proceeding in equity or at law.

(f) No Default or Event of Default has occurred and is continuing.

(g) Borrower has not incurred any Debt, other than Debt under the Facility Documents or otherwise permitted hereunder.

(h) No Change of Control or, to Borrower’s knowledge, Regulatory Event has occurred within the one-year period prior to the date on which this representation is made or deemed made.

(i) There are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of Borrower, after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against Borrower or against any of its properties or revenues that (i) are reasonably likely to have a Material Adverse Effect or (ii) purport to affect the legality, validity or enforceability of this Agreement, the Pledge Agreement, any other Facility Document, or that involves a substantial likelihood of prohibiting, restricting, delaying or otherwise materially affecting the performance of any of the Facility Documents or the making of the Loans.

(j) Borrower is not, and as a result of entering into the Facility Documents will not be, required to register as an “investment company” as such term is defined in the Investment Company Act.

(k) The Borrower is not a “United States Person” nor a foreign person controlled by or acting on behalf of or in conjunction with United States persons for purposes of Regulation X. The Facility Documents, including the Loans, do not contemplate any actions that would violate Regulation T, U, or X. Borrower has not taken any actions under the Facility Documents that would result in a violation of Regulation T, U, or X, and no part of the proceeds of any Loan will be used, whether directly or indirectly, and whether immediately, incidentally or ultimately, for any purpose that entails a violation of Regulation T, Regulation U, or Regulation X, as applicable.

(l) Borrower owns all of its properties, assets, income, businesses and franchises free and clear of Liens, other than Permitted Liens. Borrower has not made any registrations, filings or recordations in any jurisdiction evidencing a security interest in any of the foregoing including, but not limited to, the filing of or in a register of mortgages, charges and other encumbrances or filings of UCC-1 financing statements, other than with respect to Permitted Liens.

(m) All Tax returns and reports of the Borrower required to be filed have been timely filed (taking into account applicable extensions), and all Taxes shown on such Tax returns to be due and payable by the Borrower and all assessments, fees and other governmental charges upon the Borrower and upon its properties, assets, income, businesses and franchises which are due and payable by the Borrower have been paid when due and payable, except for any Tax that is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (a) adequate reserves or other appropriate provisions, as shall be required in conformity with GAAP, shall have been made or provided therefor, (b) in the case of a Tax or claim which has or may become a Lien against any of the Collateral, such contest proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax or claim and in any event any such lien is and will be junior in priority to the lien of the Collateral Agent, and (c) no Collateral would become subject to forfeiture or loss as a result of such contest. The Borrower has not received a written proposed Tax assessment, nor does the Borrower have knowledge of any Tax assessment, against the Borrower, or any Person with which either the Borrower files a consolidated, combined, unitary or similar group Tax return that would, if made, have a Material Adverse Effect. The Borrower is not party to any tax sharing agreement. The Borrower does not have, and has never had, a trade or business or a permanent establishment in any country other than the country of its organization. Issuer is not a “passive foreign investment company” within the meaning of the Code and it does not, to the knowledge of the Borrower, expect to become one in any subsequent taxable year.

(n) (i) The present fair value of Borrower’s assets exceeds the total amount of Borrower’s liabilities (including contingent liabilities); (ii) Borrower has capital and assets sufficient to carry on its businesses; (iii) Borrower is not engaged and is not about to engage in a business or a transaction for which its remaining assets are unreasonably small in relation to such business or transaction; and (iv) Borrower does not intend to incur or believe that it will incur debts beyond its ability to pay as they become due. Borrower will not be rendered insolvent by the execution, delivery and performance of documents relating to this Agreement or by the consummation of the transactions contemplated under this Agreement.

(o) Each Share held in the Collateral Accounts (i) qualifies as an Eligible Pledged Share; (ii) has been duly authorized and validly issued and is fully paid and non-assessable; (iii) is not subject to any Transfer Restrictions (other than the Existing Transfer Restrictions); (iv) is not certificated and does not require the removal of any legends or other similar types of restrictions on such Shares, any opinions from counsel to the Issuer of such Share, or the removal of any “stop transfer order” prior to the sale of such Share; and (v) is not subject to any shareholders agreement, investor rights agreements, lock up agreement, or any other similar agreements or any voting or other contractual restrictions. Borrower (through Guarantor, of which Borrower is a wholly-owned subsidiary) acquired the Shares from Issuer, and made a payment of the full purchase price (within the meaning of Rule 144(d)(1)(iii)) therefor and took full risk of economic loss thereon, at least one year prior to the date of this Agreement and the “holding period” for such Shares, determined in accordance with Rule 144, commenced no later than the date one year prior to the date of this Agreement (or, solely in the case of IDR Reset Shares, October 19, 2016).

(p) The Loans are made with full recourse to Borrower and constitute direct, general, unconditional and unsubordinated Debt of Borrower. Each Loan contemplated hereunder is entered into by Borrower in good faith and at arm’s length and is a bona fide loan. Such Loan is not entered into with an expectation that Borrower would default in its obligations thereunder. The Lien created under the Collateral Documents (including the pledge of the Pledged Shares) is a bona fide pledge to secure Borrower’s and Guarantor’s obligations under the Facility Documents, which obligations provide for full recourse to Guarantor under the Guaranty Agreement. Such Collateral Documents are not entered into by Borrower with the intent of facilitating a disposition of the Shares subject to the Collateral Documents.

(q) All written information provided with respect to Borrower and its Affiliates by or on behalf of Borrower to any Agent or Lender in connection with the negotiation, execution and delivery of this Agreement and the other Facility Documents or the transactions contemplated hereby and thereby including, but not limited to, any financial statements of Borrower provided to Administrative Agent was or will be, on or as of the applicable date of provision thereof, when taken as a whole, complete and correct in all material respects and did not (or will not) contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein not misleading in light of the time and circumstances under which such statements were made.

(r) As of the Closing Date, Borrower is not in possession of, and is not entering into the Facility Documents or the transactions contemplated thereby on the basis of, any material Non-public Information in respect of the Issuer or the Shares or the Guarantor or the Guarantor Shares, and no information provided by or on behalf of Borrower to Administrative Agent or Lender in connection with the Facility constitute material Non-public Information with respect to the Issuer or the Shares or the Guarantor or the Guarantor Shares, in each case, for purposes of United States Federal and state securities law.

(s) All licenses, permits, approvals, concessions or other authorizations necessary to the conduct of the business of Borrower have been duly obtained and are in full force and effect, except where the failure to obtain and maintain any of the foregoing could not reasonably be expected to result in a Material Adverse Effect. There are no restrictions or requirements which limit Borrower’s ability to lawfully conduct its business or perform its obligations under this Agreement or any other Facility Document.

(t) Borrower has no liability, including contingent or potential liability, with respect to any employee benefit plans subject to Title IV of ERISA which it or any entity with which it is treated as a single employer under Sections 414(b), (c), (m) or (o) of the Code maintains or sponsors or to which any of them contribute.

(u) All financial statements concerning Borrower which have been or will hereafter be furnished by Borrower to Administrative Agent pursuant to this Agreement have been or will be prepared in accordance with GAAP consistently applied (except as disclosed therein, to the extent Administrative Agent approves such disclosure) and do or will, in all material respects, present fairly the financial condition of the Persons covered thereby as at the dates thereof and the results of their operations for the periods then ended.

(v) Borrower has no Subsidiaries.

(w) Borrower is not a Benefit Plan.

(x) No Loan Party is an EEA Financial Institution.

(y) Neither Borrower, nor, to the knowledge of Borrower, any director, officer, employee, agent, Controlled Affiliate or representative thereof, is an individual or entity that is, or is owned or controlled by any individual or entity that is: (i) currently the subject or target of any Sanctions; (ii) included on OFAC’s List of Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority; or (iii) located, organized or resident in a Designated Jurisdiction.

(z) The Borrower and, to the knowledge of the Borrower, any director, officer, employee, agent, Controlled Affiliate or representative thereof, is in compliance in all material respects with applicable Anti-Terrorism Laws, Anti-Corruption Laws and Sanctions. None of the Borrower, any director, officer, employee, agent, Controlled Affiliate or representative thereof engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the material prohibitions set forth in any applicable Anti-Terrorism Laws, Anti-Corruption Laws and Sanctions. The Borrower and each of its Controlled Affiliates has implemented and maintains in effect policies and procedures designed to ensure compliance by the Borrower and its directors, officers, employees, agents, affiliates and representatives with applicable Anti-Terrorism Laws, Anti-Corruption Laws and Sanctions. No Loan, use of the proceeds of any Loan or other transactions contemplated hereby will violate any applicable Anti-Terrorism Laws, Anti-Corruption Laws or Sanctions.

(aa) Borrower understands that upon the occurrence of an Event of Default and the exercise of remedies pursuant to the Pledge Agreement, (i) the Pledged Shares may be sold without approval of any Governmental Authority which may result in substantially discounted realization value with respect to the Pledged Shares compared with the then market price and (ii)(x) a bulk sale of the Pledged Shares may occur which may result in a substantially discounted realization value with respect to the Pledged Shares compared to the then current market price and (y) a private sale of the Pledged Shares may occur which may result in less proceeds than a public sale. The Borrower acknowledges and agrees that (A) any such bulk sale or private sale or sale without such approvals shall be a commercially reasonable disposition under the Uniform Commercial Code notwithstanding any loss to it from a lower sale price and (B) neither the Collateral Agent nor the Lenders shall have any liability or responsibility for any such loss.

(bb) Borrower has complied in all material respects with its reporting obligations with respect to the Shares and the Facility Documents, in each case, under Section 13 of the Exchange Act and applicable securities laws of any other jurisdiction, including any required filings with the SEC.

(cc) No Loan Party, Affiliate thereof or any other Aggregated Person has entered into any Restricted Transaction, except as expressly permitted hereunder or with the prior written consent of each of the Lenders.

(dd) Other than the Facility Documents, the Borrower’s Organization Documents, the documents whereby Borrower acquired or acquires Shares from the Guarantor, and other documents notified in writing to the Administrative Agent prior to the date hereof, Borrower is not, nor has it been since its formation, a party to any contract or other agreement or arrangement.

(ee) Borrower does not engage in any business or conduct any activity, nor has it since its formation engaged in any business or conducted any activity other than the ownership of Shares, the performance of the transactions contemplated by the Facility Documents in accordance with the terms thereof, as otherwise set forth in its Organizational Documents, and performance of ministerial activities and payment of taxes and administrative fees necessary for compliance with this Agreement.

(ff) No broker’s or finder’s fee or commission will be payable with respect to the transactions contemplated by the Facility Documents, except as payable to the Agents and the Lenders and their respective Affiliates.

(gg) Borrower is in compliance with the Required LLC Provisions.

(hh) The Borrower has not been subject to any proceeding, claim, notice or complaint relating to Environmental, Health or Safety Liability which could reasonably be expected to give rise to a Material Adverse Effect. There is no past or present fact, status, condition, activity, occurrence, action or failure to act, including without limitation the presence or release of any Hazardous Materials (whether or not on the property of Borrower), that forms or reasonably could form the basis for the imposition of any Environmental, Health or Safety Liability on Borrower, which could reasonably be expected to give rise to a Material Adverse Effect.

(ii) The Issuer is a “foreign private issuer” (as such term is defined in the rules and regulations of the Exchange Act).

(jj) The Loan Parties have paid all costs and expenses of the Independent Director reasonably expected to be incurred through the Maturity Date.

(a) The Existing Convertible Notes shall have been paid in full as of the Closing Date, or immediately upon the making of the Loans hereunder, pursuant to documentation satisfactory to each Lender.

ARTICLE V
COVENANTS OF BORROWER


SECTION 5.01.	Affirmative Covenants . On and after the Closing Date and so long as any Lender has a commitment to make any Loans or any Obligations have not been indefeasibly paid in full:

(a) Existence . Borrower shall preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization, and take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or reasonably desirable in the normal conduct of its business.

(b) Reporting Requirements . Borrower will furnish to Administrative Agent or cause to be furnished to Administrative Agent:

(i) as soon as available and in any event within seventy (70) days after the end of each quarter of each fiscal year (and beginning with the quarter ending June 30, 2017) or ninety (90) days after the end of each fiscal year (and beginning with the year ending December 31, 2017), (A) its unaudited balance sheet as of the end of such fiscal quarter or fiscal year (which shall include appropriate footnote disclosure), (B) its unaudited statements of income and retained earnings and statement of cash flows for such fiscal quarter or fiscal year, all in reasonable detail and certified (subject to normal year-end adjustments) by one of its directors, managers or authorized officers;

(ii) as soon as possible and in any event within two (2) Business Days after Borrower obtains actual knowledge of the occurrence of (A) any Event of Default or Default, (B) each written notice or other material written correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any material investigation or possible material investigation or other material inquiry by such agency regarding financial or other operational results of Borrower or its Subsidiaries or (C) any actual or threatened litigation or other actions, suits, proceedings, claims or disputes which, if adversely determined to Borrower, could reasonably be determined to be likely to result in a Material Adverse Effect, a statement of a Responsible Officer of Borrower setting forth the details thereof and the action which Borrower has taken and proposes to take with respect thereto; and

(iii) promptly after request therefor, such other business and financial information respecting the condition or operations, financial or otherwise, of Borrower as Administrative Agent may from time to time reasonably request.

(c) Use of Proceeds . Borrower will use the proceeds of the Facility for: (i) first , the payment of the amounts due under Guarantor’s outstanding three and seventy-five hundredths percent (3.75%) convertible senior secured debt due March 2017 (the “ Existing Convertible Notes ”), or a portion thereof, in either case, such that the Existing Convertible Notes are repaid in full upon the Closing Date immediately upon the payment of such proceeds; (ii) second , the payment of interest and fees hereunder; and (iii) third , working capital and general corporate purposes.

(d) Payment of Obligations . Borrower shall pay and discharge as the same shall become due and payable, all its material obligations and liabilities, including: (i) all lawful claims which, if unpaid, would become a Lien on its property; and (ii) all Debt, as and when due and payable.

(e) Taxes . The Borrower will pay all Taxes imposed upon it and any Taxes payable by it imposed on any of its properties or assets or in respect of any of its income, businesses or franchises before any penalty or fine accrues thereon, and all claims (including claims for labor, services, materials and supplies) for sums that have become due and payable and that by law have or may become a Lien upon any of its properties or assets, prior to the time when any penalty or fine shall be incurred with respect thereto; provided , no such Tax or claim need be paid if it is being contested in good faith by appropriate proceedings promptly instituted and diligently conducted, so long as (a) adequate reserves or other appropriate provisions, as shall be required in conformity with GAAP, shall have been made or provided therefor, (b) in the case of a Tax or claim which has or may become a Lien against any of the Collateral, such contested proceedings conclusively operate to stay the sale of any portion of the Collateral to satisfy such Tax or claim and in any event any such lien is and will be junior in priority to the lien of the Collateral Agent, and (c) no Collateral would become subject to forfeiture or loss as a result of such contest. The Borrower will not file or consent to the filing of any consolidated, combined, unitary or similar group income or franchise tax return (other than with a group the parent of which is the Guarantor or any of the Guarantor’s Subsidiaries). The Borrower will take all necessary actions to prevent any payments it receives or is deemed to receive from becoming subject to taxes under FATCA. The Borrower shall indemnify and hold harmless the Lenders and the Administrative Agent for any transaction, stamp, capital, issuance, registration, transfer, withholding or other Taxes required to be paid by any Lender or Administrative Agent in connection with any transfer of the Shares to such Lender or Administrative Agent exercising its rights with respect thereto under the Facility Documents (including a foreclosure sale).

(f) Collateral Requirement . Borrower shall comply with the Collateral Requirement and Share Segregation Condition in all respects, and shall promptly notify Administrative Agent as soon as it has knowledge that the value of any Collateral has been or may be materially impaired and/or knowledge that any Lien under the Facility Documents with respect to any Collateral has been or may be or will become materially impaired.

(g) Keeping of Books . Borrower shall keep proper books of record and account as are necessary to prepare financial statements in accordance with GAAP.

(h) Inspection Rights . Borrower shall permit representatives and independent contractors of the Administrative Agent and each Lender to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Borrower and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Borrower; provided , however, that when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrower at any time during normal business hours and without advance notice.

(i) Reporting Obligations . Each Loan Party shall comply in all material respects with its reporting obligations with respect to each of the Shares and the Facility Documents under the Exchange Act and applicable securities laws of any other jurisdiction, including any required filings with the SEC. Each Loan Party shall give prior notice to each Lender and Agent of any public filing regarding the Facility Documents by such Loan Party and its Affiliates that discloses or describes any terms included in the Letter Agreement and/or files as an exhibit the Letter Agreement or any portion thereof and provide copies of any such filing to each Lender and Agent at least one (1) Business Day prior to the filing thereof, and (x) except in the case of filings by Issuer, shall comply (or cause its Affiliate to comply, as the case may be), or (y) in the case of filings by the Issuer that disclose or describe any terms included in the Letter Agreement or attach the Letter Agreement or any portion thereof as an exhibit thereto, shall use reasonable efforts to cause Issuer to comply, with any reasonable request of any Lender or Agent to seek confidential treatment of any information therein that such Lender or Agent reasonably considers to be proprietary or sensitive business information. For the avoidance of doubt, to the extent that, after seeking confidential treatment of such information pursuant to this Section 5.01(i) and in accordance with the provisions of Rule 406 of the Securities Act or Rule 25b-2 of the Exchange Act, the SEC’s staff determines that such information is required to be disclosed, the applicable Loan Party, Affiliate of a Loan Party, or Issuer shall be permitted to disclose such information in compliance with the SEC staff’s determination of such request.

(j) Compliance with Laws . Borrower shall comply with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which: (i) such requirement of Law or order, writ, injunction or decree is being contested in good faith by appropriate proceedings diligently conducted; or (ii) the failure to comply therewith could not reasonably be expected to result in a Material Adverse Effect.

(k) Special Purpose Entity . Borrower will comply with the following provisions (the “ Required LLC Provisions ”):

(i) maintain its own separate books and records and bank accounts;

(ii) at all times conduct its business solely in its own name in a manner not misleading to other Persons as to its identity (including through the use of separate stationary, signage and business cards);

(iii) file its own tax returns, if any, as may be required under applicable law, to the extent (1) not part of a consolidated group filing a consolidated return or returns other than with respect to the Guarantor and its Subsidiaries or (2) not treated as a division for tax purposes of another taxpayer, and pay any taxes so required to be paid under applicable law;

(iv) not commingle its assets with assets of any other Persons and hold all of its assets in its own name;

(v) strictly comply with all organizational formalities to maintain its separate existence;

(vi) maintain separate financial statements, showing its assets and liabilities separate and apart from those of any other Person, and not have its assets listed on any financial statement of any other Person; provided that the Borrower’s assets may be included in consolidated financial statements of one of its Affiliates, provided that for financial statements covering fiscal quarters ending on and after the first fiscal quarter ending after the Closing Date (A) appropriate disclosure within the consolidated financial statements or footnotes thereto shall be made to indicate the separateness of the Borrower from such Affiliate and to indicate that the Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (B) such assets shall also be listed on the Borrower’s own separate balance sheet;

(vii) pay its own liabilities (other than Tax liabilities) only out of its own funds;

(viii) maintain an arm’s-length relationship with its Affiliates and enter into transactions with Affiliates only on a commercially reasonable basis and on terms similar to those of an arm’s-length transaction (except to the extent it may enter into any contract or any other Affiliate transaction permitted under this Agreement);

(ix) correct any known misunderstanding regarding its separate identity and not identify itself as a division of any other Person;

(x) maintain adequate capital in light of its contemplated business purpose, transactions and liabilities; provided that the foregoing shall not require any parent to make any additional capital contributions to the Borrower; and

(xi) to the fullest extent permitted by Law, cause the directors, officers, agents and other representatives of the Borrower to act at all times with respect to the Borrower consistently and in furtherance of the foregoing and in the best interests of the Borrower.

(l) Further Assurances . Borrower agrees that upon the reasonable request of an Agent, it shall execute and/or deliver any additional agreements, documents and instruments, and take such further actions as may be reasonably requested by such Agent from time to time, to assure Collateral Agent has a valid and perfected First Priority Lien in the Collateral and as may be necessary to grant Collateral Agent a security interest in any property acquired by Borrower after the Closing Date which Administrative Agent elects to be subject of a Lien pursuant to this Agreement and the other Facility Documents, which agreements, documents or instruments shall be satisfactory to such Agent in its reasonable discretion.

(m) Investment Company . Borrower shall conduct its affairs in such a manner so as to ensure that the Borrower will not be required to register as an “investment company” under the Investment Company Act.

(n) Certification of Public Information . Borrower shall not provide any Lender or Agent with any Non-public Information with respect to Borrower, the Guarantor, the Issuer, any of their Subsidiaries or any of their securities. Concurrently with the delivery of any document, notice or other communication regarding the transaction by or on behalf of Borrower or Guarantor in connection with the Facility Documents (each, a “ Communication ”), Borrower shall be deemed to have represented that such document, notice or other communication does not contain any such Non-public Information. If any Communication is required to be delivered pursuant to this Section 5.01 or otherwise and is being distributed through IntraLinks/IntraAgency, SyndTrak or another relevant website or other information platform (the “ Platform ”), such Communication shall not contain any such Non-public Information. Any communication in written form shall be deemed to contain the following sentence at the beginning of such Communication.

[Sender] hereby represents, warrants and agrees that the following Communication contains no Non-public Information with respect to Borrower, the Guarantor, the Issuer, any of their Subsidiaries or any of their securities (each, as defined in the Loan Agreement dated [______], 20[__], among Borrower, Citibank, N.A., as administrative agent thereunder, and each lender from time to time party thereto, to which this Communication relates).

(o) Independent Director . Borrower shall ensure, at all times, that Borrower has an Independent Director, and Borrower shall pay the fees and expenses of such “Independent Director” as and when they become due.

(p) Permitted Transaction Requirements . If Guarantor or one of its Affiliates (other than Borrower and Issuer and its Subsidiaries) desires to enter into a transaction described in clauses (i), (ii) or (iii) of the definition of “Restricted Transaction” that will be secured by Shares (other than Pledged Shares), Guarantor shall give notice thereof to each Lender describing such proposed transaction in reasonable detail and (i) each Lender shall have a right of first refusal to either (x) enter into the transaction that would give rise to such obligation on the same terms as the proposed lender, dealer, or counterparty for such transaction (or affiliate thereof or other relevant party thereto) or (y) add such Shares constituting Eligible Pledged Shares to the Collateral and increase the Commitment by an amount equal to the product of the incremental Eligible Equity Value and the Initial LTV Ratio, in either case, in lieu of such proposed transaction, and (ii) if the Lenders do not exercise their right to take either such action, then (x) such transaction shall not contain any event of default, cancellation event, early termination event or other early unwind (each howsoever defined) or any collateral trigger or other provisions that could allow the lender, dealer, counterparty or other relevant secured party for such transaction (or affiliate or agent thereof or other relevant party thereto) to liquidate any such Shares prior to a time at which a Collateral Agent or Lender would have the right to liquidate the Collateral hereunder and (y) in addition to the Events of Default set forth herein, any default, event of default, cancellation event, early termination event or other early unwind (each howsoever defined) or any collateral trigger or other event or circumstance giving rise to a right on behalf of such lender, dealer, counterparty or other relevant secured party for such transaction (or affiliate or agent thereof or other relevant party thereto) to liquidate any such Shares, in each case, shall be an Event of Default hereunder.


SECTION 5.02.	Negative Covenants . So long as any Lender shall have any Commitment hereunder, or any Obligations have not been indefeasibly paid in full:

(a) Additional Debt . Borrower shall not, directly or indirectly, create, incur, assume or suffer to exist any Debt, other than Debt created under this Agreement and ministerial Debt in connection with its ordinary course of business in an aggregate amount not to exceed $100,000.

(b) Liens . Borrower shall not, directly or indirectly, create, incur, assume or suffer to exist any Lien upon any of its property, revenues or assets (including the Shares), whether now owned or hereafter acquired, except Permitted Liens.

(c) Restricted Transaction . Except as expressly permitted pursuant to Section 5.01(p) , Borrower shall not, and shall not permit Guarantor, any of Guarantor’s Affiliates (other than Issuer or any of its Subsidiaries) or any other Aggregated Person to, directly or indirectly enter into, or agree to enter into, any Restricted Transaction.

(d) Mergers, Etc . Without the prior consent of Administrative Agent, Borrower shall not, directly or indirectly, merge or consolidate with or into, or convey, transfer, lease or otherwise dispose of, whether in one transaction or in a series of transactions, all or substantially all of the property and assets (whether now owned or hereafter acquired) of Borrower to any Person.

(e) No New Business . Borrower shall not, directly or indirectly, engage in any business other than as described in its Organization Documents.

(f) No Amendment of Organization Documents, Etc . Borrower shall not, directly or indirectly, consent to any material amendment, supplement or other modification of any of the terms or provisions of its Organization Documents in a manner adverse to the Lender Parties.

(g) Distributions, Etc . Borrower will not, directly or indirectly, declare or make any dividend payment or other distribution of assets, property, cash, rights obligations or securities from the Collateral on account of any Equity Interests in Borrower, or purchase, redeem, retire or otherwise acquire for value any Equity Interests in Borrower, now or hereafter outstanding from any assets, property, cash, rights, obligations or securities constituting Collateral (excluding, in any event, any Cash Collateral that is released in accordance with Section 2.08(d) ) without the prior written consent of each of the Lenders, except following repayment in full of the Obligations and termination of the Commitments.

(h) Loans and Investments . Borrower will not, directly or indirectly, lend money or credit or make advances to any Person, or purchase or acquire any stock, obligations or securities of, or any other interest in, or make any capital contribution to, any other Person (other than the ability to purchase or acquire Shares and Cash Equivalents).

(i) Transactions with Affiliates . Without the prior written consent of each of the Lenders, Borrower shall not, directly or indirectly, enter into any transaction with or make any payment or transfer to any Affiliate of Borrower, except in the ordinary course of business and upon fair and reasonable terms no less favorable to such Person than would be obtained in a comparable arm’s-length transaction with a Person not an Affiliate of Borrower.

(j) Formation of Subsidiaries . Borrower shall not, directly or indirectly, form, create, organize, incorporate or acquire any Subsidiaries.

(k) Status as a Benefit Plan . Borrower shall not, directly or indirectly, be or become a Benefit Plan.

(l) Compliance with Margin Regulations . Borrower shall not, directly or indirectly, take any action with respect to the Facility Documents that would result in a violation of Regulation T, U, or X.

(m) No Short Sales . None of the Borrower, Guarantor or any Aggregated Persons shall directly or indirectly engage in any short sales (including, without limitation, through hedging or derivatives transactions) or enter into any Swap Contract (excluding the entry into (either prior to the date hereof or concurrently with the termination of a substantially similar transaction to reset the pricing terms thereof), exercise or settlement by Guarantor of any equity swaps to purchase, in the aggregate, from DNB Bank ASA (or its affiliate) no more than 107,000 Shares pursuant to which Guarantor has obtained “long” exposure with respect to the Shares and that are not reasonably expected to directly or indirectly result in any sales of Shares (other than, for the avoidance of doubt, a sale of Shares from DNB Bank ASA (or its affiliate) to Guarantor thereunder)) with respect to any Share without the prior written consent of Administrative Agent.

(n) Sanctions . The proceeds of any Loan shall not be used, directly or indirectly, and the Borrower shall not lend, contribute or otherwise make available such proceeds to any Affiliate, joint venture partner or other individual or entity, knowingly (i) in furtherance of an offer, payment, promise to pay, or authorization of the payment or giving of money, or anything else of value, to any Person in violation of any Anti-Corruption Laws, (ii) in violation of any Anti-Terrorism Laws, (iii) for the purpose of funding, financing or facilitating any activities, business or transaction of or with any individual or entity, or in any Designated Jurisdiction that at the time of such funding, is the subject of any Sanctions; or (iv) in any other manner that will result in a material violation by any individual or entity (including any individual or entity participating in the transaction, whether as a Lender or Agent or otherwise) of any Anti-Terrorism Laws, Anti-Corruption Laws or Sanctions.

(o) Status of Shares . Except as otherwise expressly permitted pursuant to this Agreement or otherwise consented to by each of the Lenders, the Borrower shall not transfer any Share to the Collateral Accounts unless such Share: (i) qualifies as an Eligible Pledged Share, (ii) has been duly authorized and validly issued and is fully paid and non-assessable, (iii) is not subject to any Transfer Restrictions (other than Existing Transfer Restrictions); (iv) is not certificated and does not require the removal of any legends or other similar types of restrictions on such Shares, any opinions from Issuer’s counsel, or the removal of any “stop transfer order” prior to the sale of such Share, (v) is not subject to any shareholders agreement, investor rights agreements, lock up agreement, or any other similar agreements or any voting or other contractual restrictions, and (vi) shall have been transferred to the Collateral Account on or prior to the Closing Date, except as expressly permitted in accordance with the Facility Documents (including, for the avoidance of doubt, a transfer of Existing Convertible Collateral Shares and/or IDR Reset Shares so as to comply with the requirements of clause (b) of the definition of “Eligible Pledged Shares” before the expiration of the applicable ten (10) Business Day period during which such transfer is required to occur) and in compliance with the Share Segregation Condition.

(p) Limitation on Borrower’s Activities . From and after the Closing Date, Borrower shall not, directly or indirectly, (i) except as expressly contemplated by this Agreement, engage in any business or conduct any activity other than its ownership of the Pledged Shares and other Collateral (and any Dividends or distributions thereon), except for (x) the performance of the transactions contemplated by the Facility Documents in accordance with the terms thereof, (y) the performance of ministerial activities and payment of taxes and administrative fees necessary for compliance with this Agreement and (z) the maintenance of its legal existence, including the ability to incur fees, costs and expenses relating to such maintenance, (ii) except as expressly contemplated by this Agreement, enter into any contractual obligation or any transaction or agreement between itself and any Person other than this Agreement or the other Facility Documents, (iii) have any Subsidiaries, or (iv) change its capital structure.

(q) Independent Director . Borrower shall not permit there to be, at any time, less than one Independent Director.

ARTICLE VI
EVENTS OF DEFAULT


SECTION 6.01.	Events of Default . If any of the following events (“ Events of Default ”) shall occur and are continuing:

(a) Any Loan Party shall fail to pay when due (i) any of the outstanding principal of any Loan, (ii) the amounts required to be prepaid or repaid pursuant to Section 2.07 or 2.08 , if any, or (iii) any accrued interest on any Loan or any other amounts or fees owing pursuant to any of the Facility Documents and such failure pursuant to this clause (iii) shall not be cured within five (5) Business Days after the Loan Parties’ knowledge or receipt of notice of such failure; or

(b) Any Loan Party shall fail to provide Administrative Agent and Calculation Agent, if applicable, with the reports required to be delivered under Section 5.01(b)(ii) on the date required for such delivery, and such failure shall not be cured within five (5) Business Days after notice from the Agent; provided , however , no such cure period shall apply to the extent that three (3) delivery failures have already occurred during the then current calendar quarter; or

(c) Any Loan Party shall fail to perform or observe any term, covenant, or agreement contained in Section 2.08(b) , (d) or (e) ; Section 5.01(a) , (c) , or (n) or Section 5.02 hereof , in Section 5(b) , (c) , or (e) of the Pledge Agreement ( provided , that in the case of a breach of clause (ii) of Section 5(e) of the Pledge Agreement where such breach is solely a result of an operational error where the withdrawal otherwise complies with Section 5(e) but for such failure, such breach shall continue for three (3) Business Days following Borrowerʼs knowledge or receipt of notice of such breach), Sections 2.8 or 3.2 of the Guaranty Agreement, or Article IV , Paragraphs 1(b) or 15 of the Control Agreement; or

(d) Any Loan Party shall fail to perform or observe any other term, covenant or agreement in this Agreement or any other Facility Document to which it is a party (not specified in clause (a) , (b) or (c) above or any other clause of this Section 6.01 ) and such failure pursuant to this clause (d) shall not be cured within thirty (30) days after the earlier of (x) the date on which such Loan Party becomes aware of any such failure, and (y) receipt by a Loan Party of written notice thereof from the Administrative Agent; or

(e) any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Loan Party herein, in any other Facility Document, or in any document delivered in connection herewith or therewith shall be incorrect or misleading in any material respect when made or deemed made; or

(f) (i) any Facility Document and/or any provision referenced in clauses (e) , (f) , (h) or (i) of the proviso to Section 8.01 , at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or as a result of the satisfaction in full of all the Obligations, ceases to be in full force and effect; (ii) any Loan Party contests in writing the validity or enforceability of any Facility Document and/or any provision referenced in clauses (e) , (f) , (h) or (i) of the proviso to Section 8.01 ; or (iii) any Loan Party denies in writing that it has any or further liability or obligation under any Facility Document, (other than as a result of repayment in full of the Obligations and termination of the Commitments), or purports in writing to revoke, terminate or rescind any Facility Document and/or any provision referenced in clauses (e) , (f) , (h) or (i) of the proviso to Section 8.01 ; or

(g) (i) any Loan Party (A) fails to make any payment beyond the applicable grace period, if any (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Debt (other than Debt hereunder and Debt under Swap Contracts) having an aggregate outstanding principal amount of more than the applicable Threshold Amount, or (B) fails to observe or perform any other material agreement or condition relating to any such Debt or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Debt or the beneficiary or beneficiaries of such Guarantee (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Debt to be demanded or to become due or to be repurchased, prepaid, defeased or redeemed (automatically or otherwise), or an offer to repurchase, prepay, defease or redeem such Debt to be made, prior to its stated maturity, or such Guarantee to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which any Loan Party, as applicable, is the Defaulting Party (as defined in such Swap Contract), or (B) any Termination Event (as so defined) under such Swap Contract as to which any Loan Party, as applicable, is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by any Loan Party, as applicable, under all such Swap Contracts as a result thereof is greater than the applicable Threshold Amount; or

(h) (i) Any Loan Party becomes unable or admits in writing its inability or fails generally to pay its debts as they become due; (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any Loan Party and is not released, vacated or fully bonded within sixty (60) days after its issue or levy; (iii) any Loan Party institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors, or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, provisional liquidator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; (iv) any receiver, trustee, custodian, conservator, provisional liquidator, liquidator, rehabilitator or similar officer is appointed without the application or consent of any Loan Party and the appointment continues undischarged or unstayed for sixty (60) calendar days; (v) any proceeding under any Debtor Relief Law relating to any Loan Party or to all or any material part of its property is instituted without the consent of any Loan Party and continues undismissed or unstayed for sixty (60) calendar days, or an order for relief is entered in any such proceeding; or (vi) any Loan Party shall take any action to authorize any Bankruptcy Action or any of the actions set forth above in this Section 6.01(h) ; or

(i) there is entered against any Loan Party (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments or orders) exceeding the Threshold Amount (to the extent not covered by insurance provided by an insurer that is not an Affiliate of the Guarantor), and (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of sixty (60) consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or

(j) [Reserved]

(k) the occurrence, or the announcement of any transaction or event that, if consummated, completed or effected, would constitute a Change of Control; or

(l) a Regulatory Event shall occur; or

(m) an LTV Breach shall occur and such breach is not cured within the time prescribed in, or the Borrower otherwise fails to comply with its obligations in respect of such LTV Breach under, Section 2.08(a) ; or

(n) the Collateral Requirement shall cease to be satisfied (and, solely in the case where the Collateral Requirement ceases to be satisfied as a result of a failure to transfer Collateral on a Pro Rata Basis solely as a result of an operational error where the aggregate amount of Collateral transferred otherwise would satisfy the Collateral Requirement but for such failure, such cessation shall continue for three (3) Business Days following any Loan Party’s knowledge or receipt of notice of such cessation) or Collateral Agent ceases to have a valid and perfected First Priority Lien in the Collateral; or

(o) Borrower or any of its Affiliates, Guarantor or any of its Affiliates or the Issuer or any of its Affiliates shall enter into any Debt Purchase Transaction; or

(p) Issuer breaches, terminates, repudiates or purports to terminate the Issuer Acknowledgment (excluding a breach of Paragraphs 1 or 4 thereof that is cured within ten (10) Business Days after the Loan Parties’ knowledge or receipt of notice of such breach);

then, and in any such event, Administrative Agent shall at the request of, or may with the consent of, any Lender declare the Loans of such Lender, all accrued interest thereon, all fees and all other accrued amounts payable under this Agreement and the other Facility Documents to be forthwith due and payable, whereupon such Loans, all such interest and fees and all such other amounts hereunder and under the Facility Documents shall become and be forthwith due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby expressly waived by Borrower; provided that the Administrative Agent shall provide prior written notice of such acceleration to the Borrower and the Guarantor; provided, further , that upon the occurrence of any event in Section 6.01(h) , the Loans, all accrued interest and all accrued other amounts payable, including fees, under this Agreement and under the other Facility Documents shall automatically become and be due and payable, without presentment, demand, protest or any notice of any kind, all of which are hereby expressly waived by Borrower. In addition to the foregoing, upon the occurrence of an Event of Default, Administrative Agent or Collateral Agent may, at its option, instruct the Custodian to transfer the whole or any part of the Collateral into the name of Administrative Agent or Collateral Agent or the name of its nominee, notify the obligors on any Collateral to make payment to Administrative Agent or Collateral Agent or its nominee of any amounts due thereon, take control or grant its nominee the right to take control of any proceeds of the Collateral, liquidate any or all of the Collateral, withdraw and/or sell any or all of the Collateral and apply any such Collateral as well as the proceeds of any such Collateral to all unpaid Obligations in such order as the applicable Agent determines in its sole discretion, and exercise any other rights and remedies under any Facility Document, at law or in equity.


SECTION 6.02.	Certain Provisions Related to Pledged Shares.

(a) At all times prior to the disposition of the Pledged Shares by a Lender Party pursuant to Section 6.01 herein, Borrower shall have the right to exercise all voting, consensual and other powers of ownership pertaining to the Pledged Shares for all purposes not inconsistent with the terms of this Agreement, any other Facility Document or any other instrument or agreement referred to herein; provided that Borrower agrees that Borrower will not vote the Pledged Shares in any manner that is inconsistent with the terms of this Agreement, any other Facility Document or any such other instrument or agreement or would reasonably be expected to have a material adverse effect on the value of the Pledged Shares or a Lender Party’s interest therein. For the avoidance of doubt, no Lender Party shall have any voting rights with respect to the Pledged Shares, except to the extent that such Lender Party buys the Pledged Shares in a sale or other disposition made pursuant to Section 6.01.

(b) Borrower hereby (i) acknowledges that selling or otherwise disposing of the Collateral in accordance with the restrictions set forth in Section 8(d) of the Pledge Agreement may result in prices and terms less favorable to a Lender Party than those that could be obtained by selling or otherwise disposing of the Pledged Shares in a single transaction to a single purchaser, and (ii) agrees and acknowledges that no method of sale or other disposition of Collateral set forth in Section 8(d) of the Pledge Agreement shall be deemed commercially unreasonable because of any action taken or not taken by a Lender Party to comply with such restrictions.


SECTION 6.03.	Application of Funds.

(a) Except as provided for in clause (b) below, after the Loans have become immediately due and payable pursuant to Section 6.01 (or if proceeds have been received by the Administrative Agent pursuant to clause (b) below), any amounts received by the Administrative Agent on account of the Obligations, be applied in the following order:

First , to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including reasonable and documented fees, charges and disbursements of counsel to the Agents and amounts payable under Sections 2.09 , 2.10 and 2.12 ) payable to each Agent in its capacity as such;

Second , to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders (including reasonable and documented fees and time charges for attorneys who may be employees of any Lender) arising under the Facility Documents and amounts payable under Sections 2.09 , 2.10 and 2.12 , ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third , to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans and other Obligations arising under the Facility Documents, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;

Fourth , to payment of that portion of the Obligations constituting unpaid principal of the Loans ratably among the Lenders in proportion to the respective amounts described in this clause Fourth held by them; and

Last , the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Law;

provided that, if any Lender referred to in clauses Second , Third or Fourth above (and/or such Lender’s Collateral Agent) is (whether at the time of such payment or at the time of the acceleration of the relevant Lender’s Loans), or has been at any time in the three months immediately preceding any such time, an “affiliate” (as defined in Rule 144 under the Securities Act) of the Issuer, then such Lender (i) shall notify the Administrative Agent thereof and (ii) notwithstanding anything to the contrary herein or in any other Facility Document, will not be entitled to any payment of the proceeds from the sale by any other Lender or Collateral Agent of the Pledged Shares (other than, for the avoidance of doubt, proceeds from a sale by such Lender or its Collateral Agent pursuant to Section 6.03(b) below). Each Lender acknowledges to and agrees with each other Lender and Agent that it will comply with its obligations under clause (i) of the immediately preceding proviso.

(a) Notwithstanding clause (a) of this Section 6.03 , all proceeds received by any Lender (and/or its Collateral Agent) in respect of any sale of, any collection from, or other realization upon all or any part of the Collateral subject to the control of such Lender (and/or its Collateral Agent) (other than control by virtue of another Lender and/or Collateral Agent acting as its agent for perfection) pursuant to the terms of the Collateral Documents, shall be applied by such Lender against the Obligations in the following order of priority:

First , to the payment of all costs and expenses of such sale, collection or other realization, including reasonable and documented compensation to the Administrative Agent, such Lender and/or such Lender’s Collateral Agent, and its affiliates, and their respective agents and counsel, and all other reasonable expenses, liabilities and advances made or incurred by the Administrative Agent, such Lender and/or its Collateral Agent, and its affiliates, in connection therewith, and all amounts for which the Administrative Agent, such Lender and/or Collateral Agent is entitled to indemnification hereunder (in each case, in its capacity as an Agent and not as a Lender) and to the payment of all reasonable costs and expenses paid or incurred by the Administrative Agent, such Lender and/or its Collateral Agent in connection with the exercise of any right or remedy under any Facility Document.

Second , to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to such Lender, such Lender’s Collateral Agent and/or the Administrative Agent arising under the Facility Documents and amounts payable under Sections 2.09 , 2.10 and 2.12 , ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third , to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans of such Lender and other Obligations owed to such Lender and/or its Collateral Agent arising under the Facility Documents;

Fourth , to payment of that portion of the Obligations constituting unpaid principal of the Loans of such Lender; and

Fifth , to the Administrative Agent to be applied in accordance with clause (a) above.


SECTION 6.01.	Lenders’ Rights With Respect to Collateral.

(a) For the avoidance of doubt, following the acceleration of any Lender’s Loans or following the occurrence, and during the continuance, of an Event of Default of the type set forth in Section 6.01(h) , each such lender (and/or its Collateral Agent on its behalf) may choose to exercise any remedies provided for herein or in any other Facility Documents, or refrain from exercising such remedies, in its sole discretion with respect to the Collateral subject to its control under a Control Agreement (including by virtue of an agency relationship with any Collateral Agent). No Collateral Agent or any Lender shall have any fiduciary or other duties to the other Collateral Agents or Lenders in connection with the exercise of remedies against the Collateral securing the Obligations owing to such Lender or otherwise and no Collateral Agent or Lender shall interfere with such exercise of remedies or claim (or support any claim by any third-party) that a sale or other disposition of any Collateral Agent or Lender’s Collateral by or on behalf of such Collateral Agent or Lender was not commercially reasonable.

(b) In connection with any assignment by a Lender, Borrower agrees to, as promptly as practicable, (i) establish a separate Collateral Account with the Custodian, (ii) enter into a Control Agreement (in a form substantially identical to the other relevant Control Agreements) in favor of the assignee (and/or its Collateral Agent on its behalf) with respect to such Collateral Account, (iii) enter into a joinder to the Pledge Agreement, (iv) if reasonably requested by the Custodian, enter into a customer account agreement or other similar agreement with the Custodian, and (v) make appropriate amendments to this Agreement and the other Facility Documents to reflect any administrative or technical changes as are reasonably requested by the assigning Lender, the assignee, the assignee’s Collateral Agent, if applicable, or Administrative Agent (including amendments to reflect the requirement that Collateral thereafter be held on a Pro Rata Basis by the relevant Lenders and/or their respective Collateral Agents, as applicable). In connection with any assignment by a Lender of all of its Loans hereunder, Borrower agrees that such Lender’s rights and obligations under the other Facility Documents (together with any rights of its Collateral Agent, as applicable) may be assigned to the assignee (and the assignee’s Collateral Agent, as applicable).

(c) Notwithstanding anything to the contrary contained in the Facility Documents, Borrower, Administrative Agent, each Collateral Agent and each Lender hereby agree that (i) during the continuance of an Event of Default and (except in the case of an Event of Default of the type set forth in Section 6.01(h) ) following the acceleration of any Lender’s Loans, such Lender (and/or its Collateral Agent on its behalf) shall have the right individually to require the Custodian (or the Collateral Agent acting as agent of such Lender for purposes of perfection, if applicable) to realize upon any of the Collateral subject to such Collateral Agent or Lender’s control and to apply the proceeds thereof as provided in the Facility Documents and (ii) in the event of a foreclosure or similar enforcement action by such Collateral Agent or Lender on its Collateral pursuant to a public or private sale or other disposition (including pursuant to Section 363(k), Section 1129(b)(2)(a)(ii) or otherwise of the Bankruptcy Code), such Collateral Agent or Lender may be the purchaser or licensor of any or all of such Collateral at any such sale or other disposition.

(d) Upon any Collateral Agent or Lender’s sale or other disposition of such Collateral Agent or Lender’s Collateral pursuant to Section 6.04(a) , the security interest of each other Collateral Agent and Lender therein shall automatically terminate; provided that each such other Collateral Agent and Lender’s security interest shall attach to the proceeds of such sale or other disposition remaining after payment of all amounts specified in Section 6.03(b) clauses First through Fourth . Each Collateral Agent and Lender will execute, deliver and file such documents (including UCC-3 financing statements), if any, reasonably requested by a Collateral Agent or Lender to evidence such Collateral Agent or Lender’s release of its security interest in the Collateral of the foreclosing Collateral Agent or Lender that has been sold or otherwise disposed of.

(e) Each Collateral Agent and Lender agrees that it will not challenge or question or support any other Person in challenging or questioning in any proceeding the validity, attachment, perfection or priority of any Lien of any Collateral Agent or Lender under the Pledge Agreement or any Control Agreement or the validity or enforceability of the priorities, rights or duties established by or other provisions of this Agreement.

(f) Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing the Obligations granted on the Collateral and notwithstanding any provision of the UCC, or any other applicable Law or the Pledge Agreement or any Control Agreement or any defect or deficiencies in, or failure to perfect or lapse in perfection of, or avoidance as a fraudulent conveyance or otherwise of, the Liens securing any of the Obligations, the subordination of such Liens to any other Liens, or any other circumstance whatsoever, whether or not any bankruptcy proceeding has been commenced by or against Borrower, each Collateral Agent and each Lender hereby agrees that any Lien on the Collateral securing any Obligations now or hereafter held by or on behalf of any Collateral Agent or Lender, shall be pari passu and secured equally and ratably.

(g) Each Collateral Agent and Lender agrees with, and solely for the benefit of, each other Collateral Agent and each other Lender that it will not take any Bankruptcy Action with respect to any Loan Party.

ARTICLE VII
AGENTS


SECTION 7.01.	Appointment and Authority .


SECTION 7.02.	Rights as a Lender .


SECTION 7.03.	Exculpatory Provisions.

(a) The Agents shall not have any duties or obligations except those expressly set forth herein and in the other Facility Documents. Without limiting the generality of the foregoing, each Agent:

(i) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred;

(ii) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Facility Documents that such Agent is required to exercise, provided that such Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose such Agent to liability or that is contrary to any Facility Document or applicable Law; or

(iii) shall not, except as expressly set forth herein and in the other Facility Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as such Agent or any of its Affiliates in any capacity.

No Agent shall be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of Lenders as shall be necessary, or as Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 6.01 and 8.01 ), or (ii) in the absence of its own gross negligence or willful misconduct. No Agent shall be deemed to have knowledge of any Default or Event of Default unless and until notice describing such Default is given to such Agent by Borrower or a Lender.

No Agent shall be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Facility Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms, conditions, or provisions set forth herein or in any of the other Facility Documents, or as to the use of the proceeds of the Loans, or as to the existence or possible existence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Facility Document or any other agreement, instrument or document, or (v) the satisfaction of any condition set forth in Article III or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to such Agent.


SECTION 7.04.	Reliance by the Agents .


SECTION 7.05.	Delegation of Duties .


SECTION 7.06.	Resignation of Administrative Agent .

Any resignation by Citibank, N.A. as Administrative Agent shall also constitute resignation by Citibank, N.A. as the Collateral Agent and Calculation Agent.


SECTION 7.07.	Non-Reliance on Agents and Other Lenders .


SECTION 7.08.	No Other Duties .


SECTION 7.09.	Collateral and Guaranty Matters .


SECTION 7.10.	Administrative Agent May File Proofs of Claim .

(a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Total Accrued Loan Amount and all other obligations that are owing and unpaid to the Agents or Lenders under the Facility Documents and to file such other documents as may be necessary or advisable in order to have the claims of Lenders and the Agents (including any claim for the reasonable compensation, expenses, disbursements and advances of Lenders and the Agents and their respective agents and counsel and all other amounts due Lenders and the Agents under the Facility Documents) allowed in such judicial proceeding; and

(b) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to Administrative Agent and, in the event that Administrative Agent shall consent to the making of such payments directly to Lenders, to pay to Administrative Agent any amount due Administrative Agent under the Facility Documents.

Nothing contained herein shall be deemed to authorize Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the obligations owed by any Loan Party hereunder or the rights of any Lender or to authorize Administrative Agent to vote in respect of the claim of any Lender in any such proceeding.


SECTION 7.11.	Right to Indemnity .

ARTICLE VIII
MISCELLANEOUS


SECTION 8.01.	Amendments, Etc.

(a) waive any condition set forth in Section 3.01 without the written consent of each Lender as of the Closing Date;

(b) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 6.01 ) without the written consent of such Lender;

(c) postpone any date fixed by this Agreement or any other Facility Document for any payment (excluding mandatory prepayment) of principal, interest, fees or other amounts due to Lenders (or any of them) hereunder or under any other Facility Document without the written consent of each Lender;

(d) reduce the principal of, or the rate of interest specified herein on, any Loan, or any fees or other amounts payable hereunder or under any other Facility Document without the written consent of each Lender adversely and directly affected thereby; provided, however , that only the consent of Required Lenders shall be necessary to adjust the default rate as set forth in Section 2.04(b) or to waive any obligation of Borrower to pay interest at such rate;

(e) change Section 2.16 or Section 6.03 in a manner that would alter the pro rata sharing required thereby without the written consent of each Lender;

(f) change any provision of this Section or the definition of “ Required Lenders ,” “ Applicable Percentage ” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

(g) release a substantial portion of the Collateral or Guarantor from the Guaranty without the written consent of each Lender, except to the extent the release is expressly required or permitted pursuant to the terms of the relevant Facility Document;

(h) change or waive any provisions relating to (including any provisions referred to for purposes of determining) any Adjustment Determination Date, Adjustment Determination Period, Adjustment Event Effective Time, Adjustment Notice, Aggregated Person, Applicable Exchange, Asset Dropdown Event, Cash Dividend Collateral, Cash Equivalents, Change of Control, Closing Price, Collateral Requirement, Corporate Event, Corporate Event Cure Sale, Cure Time, Debt Purchase Transaction, Eligible Assignee, Eligible Equity Value, Eligible Non-Share Collateral, Eligible Pledged Shares, Excess Initial Pledged Shares, Existing Convertible Collateral Shares, Existing Convertible Notes, Existing Transfer Restrictions, Facility Adjustment Event, Free Float, Guarantor Extraordinary Event, IDR Reset Shares, Independent Director, Initial LTV Ratio, Initial Share Price, Issuer ADTV, Issuer Change of Control, Issuer Delisting, Issuer Dissolution, Issuer Insolvency, Issuer Insolvency Filing, Issuer Merger Event, Issuer Nationalization, Issuer Tender Offer, Issuer Trading Suspension, Long Position, LTV Breach, LTV Maximum Ratio, LTV Ratio, LTV Release Ratio, LTV Reset Ratio, Margin Collateral, Market Disruption Event, Permitted Share Sale, Permitted Unpledged Share Sale, Potential Facility Adjustment Event, Pro Rata Basis, Purchaser Representations, Regulatory Event, Required LLC Provisions, Restricted Transaction, Scheduled Trading Day, Share Price Threshold Level, Share Price Trigger Event, Share Sale Cash Collateral, Share Segregation Condition, Threshold Amount, Total Accrued Loan Amount, Total Net Outstandings, Transfer Restrictions or any Value (including, in each case, any defined term referred to (x) in the definitions thereof or (y) in any such defined term referred to in the definitions thereof) without the written consent of each Lender, unless that change is explicitly provided for in the Loan Agreement; or

(i) change or waive any of Section 2.09 , Section 2.10 , Section 2.11 , Section 2.12 , Section 4.01 , Article V , Article VI or this Section 8.01 , in each case, without the written consent of each Lender;

and, provided further , that no amendment, waiver or consent shall, unless in writing and signed by the applicable Agent in addition to Lenders required above, affect the rights or duties of such Agent under this Agreement or any other Facility Document.

Notwithstanding anything to the contrary herein, upon the announcement of any Facility Adjustment Event or Potential Facility Adjustment Event and without duplication of any adjustment pursuant to Section 1.02 , the Calculation Agent may (i) make corresponding adjustments in a commercially reasonable manner to one or more of the material terms of this Agreement as the Calculation Agent commercially reasonably determines necessary to account for the economic effect on the Facility Documents and transactions contemplated thereby of the Facility Adjustment Event or Potential Facility Adjustment Event, and (ii) determine the effective time(s) of the adjustment(s) (the “ Adjustment Event Effective Time ”) (taking into account, among other factors, liquidity relative to the relevant Shares and Transfer Restrictions relative to the relevant Pledged Shares, in each case, prior to giving effect to the relevant event) by delivering notice (an “ Adjustment Notice ”) of such adjustments and the Adjustment Event Effective Time (which Adjustment Notice the Calculation Agent will provide at least five (5) Business Days prior to the Adjustment Event Effective Time, if it determines that it would be commercially reasonably practicable to do so). Following receipt of an Adjustment Notice, Borrower may repay the Total Accrued Loan Amount in full, together with any amount required pursuant to Section 2.12 , prior to the Adjustment Event Effective Time. If the Calculation Agent determines in a commercially reasonable manner that no adjustment that it could make will produce a commercially reasonable result such Facility Adjustment Event and/or Potential Facility Adjustment Event shall be deemed to give rise to a Material Adverse Effect. Any such adjustments pursuant to this paragraph shall be binding on all parties to the Facility Documents and all such parties shall enter into such documentation required to reflect such adjustments.


SECTION 8.02.	Notices; Effectiveness; Electronic Communications.

(b) Notices Generally . Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in clause (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i) if to Borrower, to Golar ML LLC, c/o Golar Management Limited, 13th Floor, 1 America Square, 17 Crosswall, London EC3n 2LB, United Kingdom, Attention: Brian Tienzo, Email: Brian.Tienzo@golar.com;

(i) if to Guarantor, to Golar LNG Limited, Attn: Michael Ashford, 2nd Floor, S.E. Pearman Building, 9 Par-la-Ville Road, Hamilton, Bermuda HM 11, with a copy to Golar LNG Limited, c/o Golar Management Limited, 13th Floor, 1 America Square, 17 Crosswall, London EC3n 2LB, United Kingdom, Attention: Brian Tienzo, Email: Brian.Tienzo@golar.com;

(ii) if to Administrative Agent or any other Agent, to Citibank, N.A., 390 Greenwich Street, New York, NY 10013, Email: james.heathcote@citi.com, eric.natelson@citi.com, joseph.stoots@citi.com, adrien.gotti@citi.com, dustin.c.sheppard@citi.com, eq.us.corporates.middle.office@citi.com; and

(iii) if to a Lender, to it at its address (or telecopier number) set forth in Schedule I hereto or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in clause (b) below, shall be effective as provided in such clause (b) .

(c) Electronic Communications . Notices and other communications to Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by Administrative Agent, provided that the foregoing shall not apply to notices to any Lender pursuant to Section 2.02 if such Lender has notified Administrative Agent that it is incapable of receiving notices under such Section by electronic communication. Administrative Agent or Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not sent during the normal business hours of the recipient, such notice or communication shall be deemed to have been sent at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.

(d) Change of Address, Etc. Each of Borrower and each Agent may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to Borrower and Administrative Agent. In addition, each Lender agrees to notify Administrative Agent from time to time to ensure that Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent, and (ii) accurate wire instructions for such Lender.

(e) Reliance by Agents and Lenders . Agents and Lenders shall be entitled to rely and act upon any notices purportedly given by or on behalf of Borrower even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. Borrower shall indemnify each Agent, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of Borrower. All telephonic notices to and other telephonic communications with any Agent may be recorded by such Agent, and each of the parties hereto hereby consents to such recording.


SECTION 8.03.	No Waiver; Remedies; Securities Contracts .

(a) No failure on the part of any Lender or Agent to exercise, and no delay in exercising, any right hereunder or under any other Facility Document shall operate as a waiver thereof nor shall the single or partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right. The remedies herein provided are cumulative and not exclusive of any remedies provided by Law. No notice to or demand on any Loan Party in any case shall entitle such Loan Party to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of any Agent or any Lender to any other or further action in any circumstances without notice or demand.

(b) Notwithstanding anything to the contrary contained herein or in any other Facility Document, the authority to enforce rights and remedies hereunder and under the other Facility Documents against any Loan Party shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, Administrative Agent in accordance with Section 6.01 for the benefit of all Lenders; provided , however, that the foregoing shall not prohibit (a) Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Facility Documents, (b) any Lender from exercising setoff rights in accordance with Section 8.13 (subject to the terms of Section 2.16 ), or (c) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to a Loan Party under any Debtor Relief Law.

(c) Borrower and Lender acknowledge that this Agreement and the other Facility Documents are a “securities contract” , “swap agreement” , “forward contract” , or “commodity contract” within the meaning of the Bankruptcy Code of the United States and that each delivery, transfer, payment and grant of a security interest made or required to be made hereunder or thereunder or contemplated hereby or thereby or made, required to be made or contemplated in connection herewith or therewith is a “transfer” and a “margin payment” or a “settlement payment” within the meaning of Sections 362(b)(6), (7), (17) and/or (27) and Sections 546(e), (f), (g) and/or (j) of the Bankruptcy Code of the United States. The parties further acknowledge that this Agreement and the other Facility Documents are a “master netting agreement” within the meaning of the Bankruptcy Code of the United States.


SECTION 8.04.	Costs and Expenses; Indemnification; Damage Waiver.

(a) Costs and Expenses . The Guarantor shall pay (i) all reasonable and documented out-of-pocket expenses incurred by Administrative Agent, any other Agent, and their Affiliates (including the reasonable and documented fees, charges and disbursements of New York and local counsel for the Administrative Agent), and any Lender, in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Facility Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), and (ii) all reasonable and documented out-of-pocket expenses incurred by Administrative Agent, any other Agent, or any Lender (including the fees, charges and disbursements of any counsel for any Agent and any Lender), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Facility Documents, including its rights under this Section, or (B) in connection with the Loans made hereunder, including all such reasonable and documented out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans.

(b) Indemnification by Loan Parties . The Loan Parties shall, jointly and severally, indemnify each Agent (and any sub-agent thereof), each Lender and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the reasonable and documented fees, charges and disbursements of any counsel for any Indemnitee) incurred by any Indemnitee or asserted against any Indemnitee by any third party or by any Loan Party or any Related Party of a Loan Party arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Facility Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, or, in the case of each Agent (and any sub-agent thereof) and its respective Related Parties only, the administration of this Agreement and the other Facility Documents, (ii) any Loan or the use or proposed use of the proceeds therefrom, any Indemnitee acting in reliance on any instruction given by Borrower pursuant to the terms of the Facility Documents or any Indemnitee failing to follow the unlawful or unreasonable instructions of Borrower pursuant to the terms of the Facility Documents, (iii) any joint or other instructions requested or required by Borrower and given to Custodian under the Control Agreement, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by a Loan Party or any other Related Party of a Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by a Loan Party or any Related Party of a Loan Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Facility Document, if such Loan Party or such Related Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

(c) Reimbursement by Lenders . To the extent that the Loan Parties for any reason fail to indefeasibly pay any amount required under clause (a) or (b) of this Section to be paid by it to any Agent (or any sub-agent thereof) or any Related Party of any of the foregoing, each Lender severally agrees to pay to such Agent (or any such sub-agent) or such Related Party, as the case may be, such Lender’s Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against such Agent (or any such sub-agent) in its capacity as such, or against any Related Party of any of the foregoing acting for such Agent (or any such sub-agent) in connection with such capacity. The obligations of Lenders under this clause (c) are subject to the provisions of Section 2.15(c) .

(d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable Law, no Loan Party shall assert, and each Loan Party hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Facility Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or the use of the proceeds thereof. No Indemnitee referred to in clause (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Facility Documents or the transactions contemplated hereby or thereby.

(e) [Reserved]

(f) Post Default Hedging Costs . After the occurrence of an Event of Default, Borrower shall pay, on demand, each Lender’s commercially reasonable and documented costs, charges, fees, expenses, Taxes or duties of any kind (including, for these purposes, a reduction in rebate received by such Lender in respect of its own borrowing of securities) in connection with its (i) Loans or (ii) acquisition, establishment, re-establishment, substitution, maintenance, unwinding or disposition of, or realization or recovery of the proceeds of, or any part thereof, any transaction(s), position(s) or asset(s) that such Lender deems commercially reasonably necessary to hedge the market risk of the Collateral, with respect to each hedge entered into after the occurrence of an Event of Default, in each case regardless of whether such funding is obtained from third parties, an Affiliate of Lender or Lender’s internal sources. Borrower’s obligation under this clause (e) shall survive termination of the Facilities and payment in full of all other Obligations.

(g) Payments . All amounts due under this Section shall be payable not later than ten (10) Business Days after demand therefor.

(h) Survival . The agreements in this Section shall survive the resignation of the Agents, the replacement of any Lender, the termination of the Facility and the repayment, satisfaction or discharge of all the other Obligations.

SECTION 8.05.

Payments Set Aside . To the extent that any payment by or on behalf of a Loan Party is made to any Agent or any Lender, or any Agent or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by such Agent or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender severally agrees to pay to Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the Federal Funds Rate from time to time in effect. The obligations of Lenders under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.


SECTION 8.06.	Assignments and Participations.

(a) The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that neither Borrower nor any other Loan Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of Administrative Agent and each Lender, and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of clause (b) of this Section, (ii) by way of participation in accordance with the provisions of clause (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of clause (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in clause (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Agents and Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b) Any Lender may at any time sell, assign or transfer to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the time owing to it); provided that (in each case with respect to any Facility) any such assignment shall be subject to the following conditions:

(i) Minimum Amounts .

(A) in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment under any Facility and/or the Loans at the time owing to it (in each case with respect to any Facility) or contemporaneous assignments to related Approved Funds that equal at least the amount specified in clause (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B) in any case not described in clause (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000 unless the Administrative Agent otherwise consents (such consent not to be unreasonably withheld or delayed).

(ii) Proportionate Amounts . Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned.

(iii) Required Consents . No consent shall be required for any assignment except to the extent required by clause (b)(i)(B) of this Section and, in addition:

(A) the consent of Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (w) an Event of Default has occurred and is continuing at the time of such assignment, (x) such assignment is to a Lender or an Affiliate of a Lender, (y) such assignment is to an Eligible Assignee or an Affiliate of an Eligible Assignee or (z) such assignment is to an Approved Fund; provided that Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to Administrative Agent within five (5) Business Days after having received notice thereof; and

(B) the consent of the Administrative Agent shall be required if such assignment is to a Person that is not a Lender, an Affiliate of a Lender or an Approved Fund.

(iv) Assignment and Assumption . The parties to each assignment shall execute and deliver to Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided , however , that Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment.

(v) No Assignment to Certain Persons . No such assignment shall be made (A) to Borrower or any of Borrower’s Affiliates, to Guarantor or any of Guarantor’s Affiliates or Subsidiaries or to Issuer or any of Issuer’s Affiliates or Subsidiaries, (B) to any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B) , or (C) to a natural Person.

(vi) Purchaser Representations . Any such assignee shall make the Purchaser Representations to each of the Collateral Agent, the Administrative Agent and each other Lender hereunder.

Subject to acceptance and recording thereof by Administrative Agent pursuant to clause (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 2.09, 2.10, 2.12, and 8.04 . Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this clause shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (d) of this Section.

(c) Register . Administrative Agent, acting solely for this purpose as a non-fiduciary agent of Borrower (and such agency being solely for tax purposes), shall maintain at Administrative Agent’s Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive absent manifest error, and Borrower, Agents and Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by Borrower and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d) Participations . Any Lender may at any time, without the consent of, or notice to, Borrower or Administrative Agent, sell participations to any Person (other than a natural Person, Borrower or any of Borrower’s Affiliates or Subsidiaries) (each, a “ Participant ”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) Borrower, Administrative Agent, and Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 8.04(c) without regard to the existence of any participation.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 8.01 that affects such Participant. Borrower agrees that each Participant shall be entitled to the benefits of Sections 2.09 , 2.10 , and 2.12 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section (it being understood that the documentation required under Section 2.10(e) shall be delivered to Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to clause (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 2.16 as if it were an assignee under clause (b) of this Section and (B) shall not be entitled to receive any greater payment under Section 2.09 or 2.10 , with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive, except to the extent (x) such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation or (y) the sale of the participation to such Participant is made with Borrower’s prior written consent. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 8.13 as though it were a Lender; provided that such Participant agrees to be subject to Section 2.16 as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as an agent of Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans or other obligations under the Facility Documents (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans or its other obligations under any Facility Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

Any such participant shall make the Purchaser Representations to each of the Collateral Agent, the Administrative Agent and each other Lender hereunder.

(e) Certain Pledges . Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.


SECTION 8.07.	Governing Law; Submission to Jurisdiction.

(a) Governing Law . This Agreement shall be governed by, and construed in accordance with, the law of the State of New York, without giving effect to its conflict of laws provisions other than Section 5-1401 of the New York General Obligations Law.

(b) Submission to Jurisdiction . Each Loan Party irrevocably and unconditionally submits, for itself and its property, to the exclusive jurisdiction of the United States District Court of the Southern District of the State of New York, and all appropriate appellate courts or, if jurisdiction in such court is lacking, any New York State court of competent jurisdiction sitting in City of New York, Borough of Manhattan (and all appropriate appellate courts), in any action or proceeding arising out of or relating to this Agreement or any other Facility Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by applicable Law, in such Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Facility Document shall affect any right that any Agent or any Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Facility Document against a Loan Party or the properties of such parties in the courts of any jurisdiction.

(c) Waiver of Venue . Each Loan Party irrevocably and unconditionally waives, to the fullest extent permitted by applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Facility Document in any court referred to in clause (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d) Service of Process . Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 8.02(a) ; provided that the Borrower agrees to appoint Corporation Service Company or another Person reasonably acceptable to the Administrative Agent (the “ Process Agent ”) with an office on the date hereof at 1180 Avenue of the Americas, Suite 210, New York, NY 10036, as its agent to receive on behalf of the Borrower and its property, service of copies of the summons and complaint and any other notice, document or process which may be served in such suit, action or proceeding. Such service may be made by mailing or delivering a copy of such process to the Borrower in care of the Process Agent, and the Borrower hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf. As an alternative method of service, the Borrower also irrevocably consents to the service of any and all process in any such action or proceeding by the mailing of copies of such process to the Borrower at its address specified in Section 8.02(a) . The Borrower hereby waives any immunity (sovereign or otherwise) from jurisdiction of any court or from any legal process or setoff to which each such Person or its properties or assets may be entitled. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by applicable Law.

(e) WAIVER OF JURY TRIAL . EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER FACILITY DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER FACILITY DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 8.07(e) .


SECTION 8.08.	Severability . In case any provision in this Agreement or any other Facility Document shall be held to be invalid, illegal or unenforceable, such provision shall be severable from the rest of this Agreement or such other Facility Document, as the case may be, and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.


SECTION 8.09.	Counterparts; Integration; Effectiveness; Electronic Execution.

(a) Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Facility Documents, and any separate letter agreements with respect to fees payable to Administrative Agent, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Article III , this Agreement shall become effective when it shall have been executed by Administrative Agent and when Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopier shall be effective as delivery of a manually executed counterpart of this Agreement.

(b) Electronic Execution of Assignments . The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

SECTION 8.10.

Survival of Representations . All representations and warranties made hereunder and in any other Facility Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by each Agent and each Lender, regardless of any investigation made by any Agent or any Lender or on their behalf and notwithstanding that any Agent or any Lender may have had notice or knowledge of any Default or Event of Default at the time of any Loan, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied.

SECTION 8.11.

Confidentiality . Each of the Agents and Lenders agrees to maintain the confidentiality of the Information (as defined below) pursuant to the requirements hereof in accordance with such Agent ’s and such Lender ’s customary procedures for handling confidential information of such nature, except that Information (together with any Non-public Information received by any Agent or any Lender relating to a Loan Party, the Guarantor Shares, the Issuer or the Shares) may be (a) used by any Lender, its affiliates, agents and/or hedging counterparties in connection with, or upon, the exercise of any remedies hereunder or under any other Facility Document or any action or proceeding relating to this Agreement or any other Facility Document or the enforcement of rights hereunder or thereunder and/or (b) disclosed (i) to such Agent’s or Lender’s Affiliates and to its and its Affiliates’ respective partners, directors, officers, employees, agents, trustees, advisors and representatives in accordance with such Agent ’s and such Lender ’s customary procedures for handling confidential information of such nature, (ii) to the extent requested by any regulatory authority purporting to have jurisdiction over it (including any self-regulatory authority), (iii) to the extent required by applicable Laws or regulations or by any subpoena or similar legal process, (iv) to any other party hereto, (v) in connection with the exercise of any remedies hereunder or under any other Facility Document or any action or proceeding relating to this Agreement or any other Facility Document or the enforcement of rights hereunder or thereunder, (vi) subject to an agreement containing provisions substantially similar to those of this Section 8.11 , to (A) any assignee or transferee of or Participant in, or any prospective assignee or transferee of or Participant in, any of its rights or obligations under this Agreement or the Facility Documents or (B) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the Loans, Borrower, Guarantor and/or their respective obligations under the Facility Documents, (vii) with the consent of Borrower, (viii) to any rating agency when required by it, provided that, prior to any disclosure, such rating agency shall undertake in writing to preserve the confidentiality of any confidential information relating to the Borrower or the Loans received by the rating agency from any Agent or any Lender or (ix) to the extent such Information (X) becomes publicly available other than as a result of a breach of this Section 8.11 or (Y) becomes available to any Agent, any Lender, or any of their respective Affiliates on a nonconfidential basis from a source other than Borrower, the Guarantor, or an Affiliate of the Guarantor.

For purposes of this Section , “ Information ” means all information received from any Loan Party hereof relating to a Loan Party or its business, other than any such information that is available to any Agent or any Lender on a nonconfidential basis prior to disclosure by such Loan Party, provided that, in the case of information received from a Loan Party after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section 8.11 shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. Each Lender and Agent will use good faith efforts in accordance with its applicable policies and procedures to not disclose and/or use information that it knows to be confidential obtained from either the Borrower or the Guarantor in connection with the Facility Documents (excluding, for the avoidance of doubt, any information that is available to any Agent or any Lender on a nonconfidential basis prior to disclosure by such Loan Party) except in connection with its services to, and its relationship with, the Borrower and the Guarantor and/or any of the other transactions contemplated under the Facility Documents, provided however , that each Lender and Agent will be free to disclose and/or use such information in any manner in the circumstances contemplated under clauses (a) and (b) above in this Section 8.11 (as if such “information” were “Information” for such purpose), as otherwise contemplated in the Facility Documents and as required by law, regulation, regulatory authority or other applicable judicial or government order.

SECTION 8.12.

No Advisory or Fiduciary Relationship . In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Facility Document), each Loan Party acknowledges and agrees that: (a)(i) the arranging and other services regarding this Agreement provided by Administrative Agent are arm’s-length commercial transactions between a Loan Party and its Affiliates, on the one hand, and Administrative Agent and its Affiliates, on the other hand, (ii) each Loan Party has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) each Loan Party is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Facility Documents; (b)(i) each Agent is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any Loan Party or any of its Affiliates, or any other Person and (ii) the Agents have no obligation to any Loan Party or any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Facility Documents; and (c) each Agent and its Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of a Loan Party and its Affiliates, and Administrative Agent has no obligations to disclose any of such interests to any Loan Party or any of its Affiliates. To the fullest extent permitted by law, each Loan Party hereby waives and releases any claims that it may have against Administrative Agent or its Affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby.

SECTION 8.13.

Right of Setoff. Upon the occurrence of an Event of Default, each Lender, Administrative Agent and their respective Affiliates (each, a “ Set-off Party ”) is hereby authorized at any time or from time to time, without presentment, demand, protest or other notice of any kind to any Loan Party or to any other Person, any such notice being hereby expressly waived, to set off and to appropriate and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) and any other indebtedness at any time held or owing by a Set-off Party (including, but not limited to, by any of their branches and agencies wherever located) to or for the credit or the account of a Loan Party or any of its Affiliates against and on account of the obligations and liabilities of a Loan Party or such Affiliate to the Set-off Party under this Agreement or under any of the other Facility Documents, including, but not limited to, all claims of any nature or description arising out of or connected with this Agreement or any other Facility Document, irrespective of whether or not the relevant Set-off Party shall have made any demand hereunder and although said obligations, liabilities or claims, or any of them, shall be contingent or unmatured or are owed to a branch or office of such Lender or Administrative Agent different from the branch or office holding such deposit or obligated on such indebtedness. The parties agree that the Collateral Account is a general and not special account. The rights of each Set-off Party under this Section 8.13 are in addition to other rights and remedies (including other rights of setoff) that such Lender or Administrative Agent, or their respective Affiliates may have. Each Lender agrees to notify to the applicable Loan Party and Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

SECTION 8.14.

No Fiduciary Duty . Each Administrative Agent, each Lender and their Affiliates (collectively, solely for purposes of this Section, the “Lenders”), may have economic interests that conflict with those of Borrower, its stockholders and/or its affiliates. Borrower agrees that nothing in the Facility Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or fiduciary or other implied duty between any Lender, on the one hand, and Borrower, its stockholders or its affiliates, on the other. Borrower acknowledges and agrees that: (a) the transactions contemplated by the Facility Documents (including the exercise of rights and remedies hereunder and thereunder) are arm’s length commercial transactions between the Lenders, on the one hand, and Borrower, on the other; and (b) in connection therewith and with the process leading thereto, (i) no Lender has assumed an advisory or fiduciary responsibility in favor of Borrower, its stockholders or its affiliates with respect to the transactions contemplated hereby (or the exercise of rights or remedies with respect thereto) or the process leading thereto (irrespective of whether any Lender has advised, is currently advising or will advise Borrower, its stockholders or its Affiliates on other matters) or any other obligation to Borrower except the obligations expressly set forth in the Facility Documents and (ii) each Lender is acting solely as principal and not as the agent or fiduciary of Borrower, its management, stockholders, creditors or any other Person. Borrower acknowledges and agrees that it has consulted its own legal and financial advisors to the extent it deemed appropriate and that it is responsible for making its own independent judgment with respect to such transactions and the process leading thereto. Borrower agrees that it will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to Borrower, in connection with such transaction or the process leading thereto.

SECTION 8.15.

USA PATRIOT Act Notice . Each Lender that is subject to the Act (as hereinafter defined) and Administrative Agent (for itself and not on behalf of any Lender) hereby notifies to each Loan Party that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “ Act ”), it is required to obtain, verify and record information that identifies to each Loan Party, which information includes the name and address of such Loan Party and other information that will allow such Lender or Administrative Agent, as applicable, to identify such Loan Party in accordance with the Act. Each Loan Party agrees to promptly provide any Lender or Administrative Agent with all of the information requested by such Person to the extent such Person deems such information reasonably necessary to identify such Loan Party in accordance with the Act.


SECTION 8.16.	Entire Agreement . This Agreement and the other Facility Documents constitute the entire agreement between the parties hereto relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, between the parties hereto relating to the subject matter hereof.

SECTION 8.17.

Acknowledgment and Consent to Bail-In of EEA Financial Institutions . Notwithstanding anything to the contrary in any Facility Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any EEA Financial Institution arising under any Facility Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-In Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Facility Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF , the parties hereto have caused this Agreement to be duly executed and delivered by their respective officers or representatives thereunto duly authorized, as of the date first above written.

BORROWER :

SIGNED by Pernille Noraas

as attorney-in-fact (pursuant to a resolution

of its Board of Directors) for and on behalf of

GOLAR ML LLC ,

as Borrower

/s/ Pernille Noraas

By:

GUARANTOR:

SIGNED by Pernille Noraas

as attorney-in-fact (pursuant to a resolution

of its Board of Directors) for and on behalf of

GOLAR LNG LIMITED ,

as Guarantor

/s/ Pernille Noraas

By:

[Additional signature pages follow]

LENDER :

CITIBANK, N.A. ,

as Lender

By: /s/ James Heathcote

Name: James Heathcote

Title: Authorized Signatory

[Additional signature pages follow]

AGENTS :

CITIBANK, N.A.,

as Administrative Agent

By: /s/ James Heathcote

Name: James Heathcote

Title: Authorized Signatory

CITIBANK, N.A., as Collateral Agent and Calculation Agent

By: /s/ James Heathcote

Name: James Heathcote

Title: Authorized Signatory

SCHEDULE I - COMMITMENTS

Commitment

EXHIBIT A - FORM OF NOTICE OF BORROWING

[ See attached ]

EXHIBIT B - FORM OF PLEDGE AGREEMENT

[ See attached ]

EXHIBIT C - FORM OF GUARANTY AGREEMENT

[ See attached ]

EXHIBIT D - FORM OF CONTROL AGREEMENT

[ See attached ]

EXHIBIT E – FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT

[ See attached ]

EXHIBIT F – FORM OF ISSUER ACKNOWLEDGMENT

[ See attached ]

US-DOCS\73287334.37

GENERAL MANAGEMENT AGREEMENT

between

GOLAR MANAGEMENT LTD.

and

GOLAR POWER LIMITED

THIS GENERAL MANAGEMENT AGREEMENT (the " Agreement ") is made on this 4 ^th day of April, 2017 between:


(1)	GOLAR MANAGEMENT LIMITED a private limited liability company incorporated and existing under the laws of England & Wales with company number 04396172 and having its registered office at 13th Floor, One America Square, 17 Crosswall, London EC3N 2LB (the " Manager "); and


(2)	GOLAR POWER LIMITED , a company organised and existing under the laws of the Commonwealth of Bermuda with company number 51481 and having its registered office at 2nd floor S.E. Pearman Building, 9 Par-la-Ville Road Hamilton HM11, Bermuda (the " Company ");

(hereinafter collectively referred to as the " Parties " and, individually, as a " Party ").

WHEREAS :


(A)	The Company is owned by Golar LNG Limited (" Golar LNG ") and Stonepeak Infrastructure Fund III Cayman (G) Ltd., a fund managed by Stonepeak Infrastructure Partners (" Stonepeak ") with equal shares.


(B)	The Company was incorporated on 18 May 2016.


(C)	The Company is, through a number of wholly and partly owned subsidiaries (together the " Golar Power Group "), engaged in the transportation of liquid natural gas (" LNG "), the conversion of LNG to natural gas and the generation of electric power based on using natural gas as feedstock.


(D)	One of the Company's wholly owned subsidiaries is Golar FSRU8 Corporation, a Marshall Island registered corporation (" Golar FSRU8 ") which has a floating regasification unit identified as "Golar Nanook" on order from Keppel FELS Limited in Singapore (the " Newbuilding ").


(E)	One of the Company's wholly owned subsidiaries is Golar Hull M2023 Corporation, a Marshall Islands registered corporation (" Golar M2023 ") which is the owner of the LNG tanker "Golar Penguin".


(F)	One of the Company's wholly owned subsidiaries is Golar Hull M2026 Corporation, a Marshall Islands registered corporation (" Golar M2026 ") which is the owner of the LNG tanker "Golar Celsius".


(G)	One of the Company's wholly owned subsidiaries is LNG Power Limited, a limited company incorporation and registered in England and Wales (" LNG Power ") which acts as holding vehicle for the Golar Power Group's activities in Brazil.


(H)	The Manager is a wholly owned subsidiary of Golar LNG and has, since the incorporation of the Company and the establishment of the Golar Power Group, provided management services to the Company and the other entities in the Golar Power Group on terms orally agreed between the Parties.


(I)	The Manager and Golar FSRU8 are parties to a management agreement of even date herewith pursuant to which the Manager is responsible for the day-to-day management of Golar FSRU8 and the supervision of the construction of the Newbuilding (the " FSRU8 Management Agreement ").


(J)	Golar M2023 and the Manager are parties to a management agreement dated 24 September 2013 pursuant to which the Manager is responsible for the day-to-day management of Golar M2023 and the technical and commercial operation of "Golar Penguin" (the " M2023 Management Agreement ").


(K)	Golar M2026 and the Manager are parties to a management agreement dated 24 September 2013 pursuant to which the Manager is responsible for the day-to-day management of Golar M2026 and the technical and commercial operation of "Golar Celsius" (the " M2026 Management Agreement ").

(L)

LNG Power and the Manager are parties to a management agreement dated 24 August 2015 pursuant to which the Manager is responsible for the day-to-day management of LNG Power (the " LNG Power Management Agreement " and, together with the FSRU8 Management Agreement, the M2023 Management Agreement and the M2026 Management Agreement, hereinafter referred to as the " Subsidiary Management Agreements ").


(M)	The Company is party to a corporate services agreement of even date herewith with Golar Management (Bermuda) Limited, a wholly owned subsidiary of Golar LNG (" Golar Bermuda ") pursuant to which Golar Bermuda provides general corporate secretarial services to the Company (the " Corporate Services Agreement ").


(N)	The Company is party to a secondment and consultancy agreement of even date herewith with Magni Partners (Bermuda) Limited (" Magni Partners ") pursuant to which Magni Partner has seconded Mr. Eduardo N. Antonello to the Company to act as the Company's chief executive officer and, further, will provide the Company with general consultancy services (the " Secondment and Consultancy Agreement ").


(O)	The entities in the Golar Group (including the Company's Brazilian subsidiaries) receive administrative services on a contractual basis from other third parties within defined areas (such service providers hereinafter referred to as " Third Party Service Providers ").


(P)	The Company and the Golar Group have settled all amounts due to the Manager for services provided in 2016.


(Q)	The Parties have now agreed to document the scope of the administrative services the Manager provides to the Company and the terms which shall apply thereto in writing.

NOW THEREFORE , the Parties have agreed as follows:


1.	CONFIRMATION OF ENGAGEMENT


1.1	The Company hereby confirms its continued engagement of the Manager as provider of the Services (as defined below) on the terms and conditions set forth herein.

The scope of the engagement shall include the coordination of all of the services provided by itself (whether hereunder or under the Subsidiary Management Agreements), Golar Bermuda under the Corporate Services Agreement, Magni Partners under the Secondment and Consultancy Agreement and any and all Third Party Service Providers to the Golar Power Group, cfr. Clause 3.2 below.


2.	THE COMPANY'S MANAGEMENT FUNCTIONS


2.1	Ultimate responsibility for the administration of the Company lies with its board of directors (the " Board "). This responsibility includes the setting of goals for the Company and the Golar Power Group, and the development and approval of plans to achieve such goals.


2.2	The Board has appointed Mr. Eduardo N. Antonello as the Company's chief executive officer (the " CEO "). He is, in this capacity, responsible to the Board for the overall management of the Company and the Golar Power Group.


2.3	The Company has, by engaging the Manager, retained the authority on all matters which are not expressly covered by the Services (as defined below) and which are not in the ordinary course of business of the Company.


2.4	It is understood and agreed between the Parties that the Services (as defined below) are of an administrative and execution nature, focused on the implementation and follow-up of the decisions taken by the Board and/or the CEO.


2.5	Further, the Parties acknowledge and agree that the Manager's authority pursuant to this Agreement is limited by the terms set out herein and that the Manager shall have no discretionary authority exceeding or supplementing this unless specifically granted by the Company.


2.6	The Manager shall perform the Services in accordance with the requirements of the Company and report to the CEO or to such other person(s) as may be designated by him from time to time.

2.7

The Company can authorise individual employees of the Manager to act on behalf of the Company in defined capacities on a general basis or, alternatively, in specific matters. The Company can also perform any part of the Services by utilising its own employees or individuals seconded to it and thereby suspend the Manager's obligation to provide parts of the Services, provided that due notice thereof is given to the Manager.


3.	THE SERVICES


3.1	The Manager shall, throughout the term of this Agreement, provide such services to the Company as the CEO may, from time to time, request.

Such services (the " Services ") shall cover (but shall not be limited to) the services set forth in Schedule 1 hereto.


3.2	The Manager shall, as an integrated part of the Services, be responsible for the coordination of all services provided to the Company and the Golar Power Group by:


•	itself hereunder and under the Subsidiary Management Agreement;


•	Golar Bermuda under the Corporate Services Agreement;


•	Magni Partners under the Secondment and Consultancy Agreement; and


•	all Third Party Service Providers under the terms agreed for their services.

The Manager's primary obligation in relation to the coordination of the management services to the Golar Group is to ensure that they are seamlessly provided with no duplicate work and that the services provided to each of FSRU8, Golar M2023, Golar M2026, LNG Power, the Company and the Golar Power Group's other subsidiaries are coordinated so as to meet the requirements of both the individual recipient of such Services and the Golar Power Group as a whole.


4.	GENERAL CONDITIONS


4.1	The Manager shall, in performing its duties hereunder, serve the Company effectively and in good faith.


4.2	In exercising the powers and authorities hereby conferred on it, the Manager shall:


(a)	always use its best endeavours to protect and promote the interests of the Company and the Golar Power Group;


(b)	comply with all applicable laws and environmental regulations relevant to the activities of the Company and the Golar Power Group; and


(c)	always act in accordance with good and professional management practice;


4.3	The Manager shall have the right to subcontract parts of the Services; provided that:


a.	all subcontracts shall be fair and reasonable and shall be negotiated on an arm’s length basis,


b.	all subcontracts shall reflect the terms of this Agreement as if such subcontractor was the Manager, and


c.	no such subcontract shall create any relationship between, on the one hand, the Company and, on the other hand, a subcontractor.

No subcontractor is intended to be or shall be deemed a third-party beneficiary of this Agreement. Notwithstanding anything contained herein to the contrary, the Manager shall not be entitled to any indemnification from the Company hereunder with respect to any Losses of the Manager caused by or arising from any Services performed by the subcontractors hereunder.

The Company acknowledges and accepts that the Manager will use its affiliates, Golar Management Norway AS, Golar Management D.o.o. (Croatia) and Golar Management Malaysia Pte. Ltd. as subcontractors.


4.4	The Company may, at any time, subject to notice to the Manager, engage other managers to perform specific management services to the Company. The division of responsibility between the Manager and such additional service provider in those instances is the responsibility of the CEO.


4.5	All discounts, commissions and other benefits received by the Manager and/or its subcontractors and/or its or their employees from third parties as a consequence of the provision of the Services shall be disclosed to the Company as soon as reasonably practicable and, unless otherwise agreed by the Company, placed at the Company's disposal without delay.


4.6	The Company shall, at all times, be allowed full access to those of the accounts and records of the Manager and its subcontractors which are relevant to the performance of the Services or otherwise in connection with the provision of the Services hereunder.

Representatives of the Company's auditors shall, in relation to the audit of the Company' accounts, always be considered authorised to access all such accounts and records and personnel.


4.7	The Manager shall, upon request, provide the Company with copies of all documents relevant to the Company and the Golar Power Group in its possession and otherwise compile such facts and records on the basis of such documents as shall, from time to time be requested by the Company.


4.8	The Parties acknowledge that the business relationship set forth herein is an affiliated relationship and that the overall intention is to organise the administrative and execution functions of the business in an effective manner.


5.	MANAGEMENT FEE – REIMBURSEMENT OF COSTS


5.1	The Company shall pay the Manager a fee (the " Management Fee ") as consideration for the Manager's provision of the Services.

The Management Fee shall equal the aggregate of the Operating Costs, the Margin and the Reimbursable Pass-Through Costs (all terms as defined below).


5.2	For the purpose of this Agreement, the term " Operating Costs " means all operating costs incurred by the Manager in rendering the Services, including:


a.	salary, pension and other costs attributable to the Manager's employees (all of whom are engaged in performing the Services);


b.	the Manager's actually incurred expenses for materials and supplies consumed in rendering the Services;


c.	the Manager's actually incurred office expenses;


d.	depreciations of the Manager's fixed assets; and


e.	all other direct and indirect operating costs actually incurred by the Manager attributable to the rendering of the Services, including other administrative costs related to the operation of the Manager's organisation.

The Operating Costs shall exclude non-operational costs, such as:


a.	financial expenses, including interest costs; and


b.	taxes on net profits.

The Operating Costs shall also exclude the fees and other costs paid by the Manager to the subcontractors as consideration for those of the Services they shall provide (the " Reimbursable Pass-Through-Costs ").

5.3

The Manager shall, no less than 45 calendar days prior to the end of each calendar year, prepare a complete budget for the Operating Costs and the Reimbursable Pass-Through Costs for the following year in a form to be agreed between the Parties (the “ Proposed Budget ”). The Proposed Budget shall be based on an activity level corresponding to the activity level in the third quarter of the year in which the Proposed Budget is made and reasonable assumptions as to the development of the Operating Costs and the Reimbursable Pass-Through Costs in the coming year.

The Company undertakes to provide the Manager with such information on its expected needs for the Services as shall be required by the Manager for the purpose of preparing the Proposed Budget.

Following receipt of the Proposed Budget, the Company and the Manager shall use commercially reasonable efforts to agree, at least 15 business days prior to the end of the applicable calendar year, on each applicable line item set forth in the Proposed Budget based on relevant factors and, consequentially, on a final budget for the Operating Costs and the Reimbursable Costs (such final budget, the “ Annual Budget ”).

A preliminary fee due from the Company to the Manager for the following year (the “ Preliminary Fee ”) shall then be calculated based on the Annual Budget for such year. The Preliminary Fee shall consist of the sum of:


(a)	the budgeted Operating Costs reflecting the Annual Budget plus a mark-up of 5% (the " Margin "); and


(b)	the budgeted Reimbursable Pass-Through Costs in the Annual Budget.


5.4	The Preliminary Fee shall be paid by the Company to the Manager in advance on a quarterly basis, on 1 January (or as soon as reasonably practicable thereafter), 1 April, 1 July and 1 October. Each of the quarterly amounts shall equal 25 % of the Preliminary Fee.


5.5	In the event the sum of the actual Operating Costs and/or Reimbursable Pass-Through Costs for any quarter deviates significantly from the budgeted Operating Costs and/or Reimbursable Pass-Through Costs for that quarter, the Parties may agree on a corresponding adjustment of the subsequent quarterly payments of the Preliminary Fee.


5.6	When the Manager’s annual accounts have been finalised and audited, the Management Fee shall be finally calculated, based on those accounts, being equal the sum of:


a.	the actual Operating Costs plus the Margin; and


b.	the actual Reimbursable Pass-Through Costs

in the relevant year.

If the final Management Fee exceeds the Preliminary Fee, the difference shall be paid as a “ Positive Settlement Payment ” by the Company to the Manager. If the final Management Fee is less than the Preliminary Fee, the difference shall be paid as a “ Negative Settlement Payment ” by the Manager to the Company.

The Positive Settlement Payment or Negative Settlement Payment, as applicable, shall take place no later than 15 days after the date when the Manager’s annual accounts have been finalized and audited and any difference between the Preliminary Fee and the Management Fee has been presented to the Company.

5.7

Each of the Parties has the right to demand an adjustment of the Management Fee, to the extent required in order for the Management Fee to satisfy the transfer pricing provisions applicable under the tax laws of either Party’s tax jurisdiction. The Party requiring such adjustment shall notify the other Party thereof in writing in advance of the date when the Manager's annual accounts for the relevant year have been finalized and audited. Any such adjustment shall be settled by the payment of the adjustment amount between the Parties no later than 15 days after agreement on the adjustment amount has been reached.


6.	AUTHORITY


6.1	The Manager is, subject to the limitations set forth below, authorised to act on the Company's behalf and shall, in so doing, bind the Company by its signature.

The general authority set forth above shall be limited as follows:


a.	The Manager shall not be authorised to act for the Company outside the scope of the Services unless specifically authorised in writing by the Company to do so; and


b.	The Manager's general authority shall always be limited by applicable Bermuda law, the Company's bye-laws and the specific limitations set forth herein and/or as set out in the shareholders' agreement between Golar LNG and Stonepeak setting out the governance rules for the Company.


6.2	The Manager's authority hereunder shall be documented by the provisions of this Agreement. The Company shall, if so requested by the Manager, provide the Manager with such further written power(s) of attorney documenting the delegation of authority set forth above, as from time to time is reasonably requested by the Manager to perform the Services.


6.3	The Company hereby ratifies, confirms and undertakes, when relevant, to allow, ratify and confirm, all actions the Manager, its subcontractors and/or its or their employees shall lawfully take or cause to be taken on the Company's behalf in the bona fide provision of the Services.


7.	INDEMNITY AND LIABILITY


7.1	The Manager shall not be under any responsibility or liability for any loss or damage, whether as a loss of profits or otherwise, to the Company arising out of any act or omission involving any error of judgment or any negligence on the part of the Manager, its subcontractors and any of its or their employees (the " Indemnified Persons ") in connection with the performance of the Services.

7.2

The Company agrees to indemnify and keep the Indemnified Persons indemnified against any and all liabilities, costs, claims, demands, proceedings, charges, actions, suits or expenses of whatsoever kind or character that may be incurred or suffered by any of them howsoever arising (other than by reason of fraud or dishonesty on their part) in connection with the provisions of the Services (“ Losses ”).


7.3	If the Company requires the Manager to take any action which, in the opinion of the Manager, might result in the Manager becoming liable for the payment of any money or liable in any other way, the Manager shall be kept indemnified by the Company in an amount and a form satisfactory to it as a prerequisite to taking such action.


7.4	The indemnities provided by the Company hereunder shall cover all reasonable costs and expenses payable by the Indemnified Persons in connection with any claims to which the indemnity obligation of the Company applies.


7.5	The indemnification provided by the Company pursuant to this Clause 7 shall not be deemed exclusive of any other rights to which the Indemnified Persons may be entitled under applicable law, any agreement, the bye-laws of the Company or otherwise, and shall continue after the termination of this Agreement.


7.6	Notwithstanding anything contained herein to the contrary, the Indemnified Persons shall not be entitled to any indemnification in connection with any Losses or other indemnities provided herein to the extent any Losses (or other indemnification obligation) arises from or is caused by any gross negligence, wilful misconduct, fraud or breach of this Agreement by the Indemnified Persons.

7.7

The Manager shall not be under any liability whatsoever to the Company for any loss, damage, delay or expense of whatsoever nature, whether direct or indirect (including but not limited to loss of profit arising out of or in connection with detention or delay of a vessel or unit) and howsoever arising in the course of performance of the Services UNLESS the same is proved to have resulted solely from the negligence, gross negligence or wilful misconduct of the Manager's, its subcontractors' or its or their employees or agents in connection with the provision of the Services, in which case (save where loss, damage, delay or expense has resulted from the Manager's, its subcontractors' or its or their employees' personal acts or omissions committed with the intent to cause same or recklessly, with the knowledge that such loss, damage, delay or expense would probably result) the Manager's aggregate liability to the Company for each incident or series of incidents giving rise to a claim or claim shall never exceed the amount equal to the Preliminary Fee payable in any calendar year.


8.	CONFIDENTIALITY


8.1	All Confidential Information furnished to the Manager, its subcontractors or any of its or their respective employees or directors pursuant to this Agreement, shall be and remain the property of the Company, and shall be kept confidential by the Manager and its subcontractors.


a.	For the purpose of this Clause " Confidential Information " shall mean information relating to the business of the Company or the Golar Power Group which the Manager or any of its subcontractors becomes aware of, or generates in the course of or in connection with the performance of the Services.


b.	The provisions of this Clause 8.1 shall not apply to Confidential Information which is:


(i)	public;

(ii)

required to be disclosed by the rules of a stock exchange on which the shares or other securities of the Company is listed, law or a court order (in which case the Manager may disclose such information only to the extent required by applicable law, and, if requested by the Company, shall cooperate with the Company in obtaining any protective order (or similar protection) with respect to such Confidential Information); or


(iii)	becomes public knowledge otherwise than as a result of the conduct of the Manager.


9.	TERMINATION


9.1	Each of the Parties may terminate this Agreement with no less than 6 months' prior written notice to the other.


9.2	Termination shall be without prejudice to any rights or liabilities of the Parties hereto arising prior to termination or in respect of any act or omission occurring prior to termination.


9.3	In the event of termination, the Management Fee shall be paid up to the date of termination.


9.4	In the event of termination of this Agreement, the Manager shall procure that all such acts are done as may be necessary to give effect to such termination. The Company shall secure and the Manager shall co-operate in the appointment of a substitute manager as circumstances may require.


9.5	Upon the termination of this Agreement, the Manager shall hand over to the Company all books of account, correspondence and records relating to the affairs of the Company and the Golar Power Group which are the property of the Company and which are in its or the Subcontractors' possession.


10.	DEFAULT


10.1	If the Manager shall, by any act or omission, be in material breach of any material obligation under this Agreement and such breach shall continue for a period of fourteen (14) days after written notice thereof has been given by the Company to the Manager, the Company shall have the right to terminate this Agreement with immediate effect by notice to the Manager.

The right to terminate this Agreement shall be in addition to and without prejudice to any other rights which the Company may have against the Manager hereunder.

10.2

The Manager may forthwith, by notice in writing to the Company, terminate this Agreement if an order is made or a resolution passed for the winding up of the Company or if a receiver be appointed of the business or property of the Company, or if the Company shall cease to carry on its business or makes any special arrangements or composition with its creditors or if any event analogous with any of the foregoing occurs under any applicable law with relevance to the Company.

10.3

The Company may forthwith, by notice in writing to the Manager, terminate this Agreement if (i) an order is made or a resolution passed for the winding up of the Manager, (ii) a receiver be appointed of the business or property of the Manager, (iii) the Manager ceases to carry on its business or makes any special arrangements or composition with its creditors or (iv) any event analogous with any of the foregoing occurs under any applicable law with relevance to the Manager.


10.4	Clauses 9.3 to 9.5 shall apply if this Agreement is terminated pursuant to Clauses 10.1, 10.2 or 10.3.


11.	FORCE MAJEURE

11.1

No Party shall incur liability of any kind or nature whatsoever in relation to the other Party in the event of a failure to perform any of its obligations hereunder if such failure is directly or indirectly caused by circumstances beyond its control such as war or war-like activities, government orders, riots, civil commotion, strike, lock-out or similar actions, an act of God, peril of the sea or any other similar cause (" Force Majeure ").

11.2

In the event that a situation gives rise to Force Majeure which prevents the Manager from performing the Services, whether in whole or in part, the Parties agree that the Manager may, in good faith, obtain substitute performance; provided, however, if such situation continues for a period longer than three (3) months, the Company shall be entitled to terminate this Agreement by giving one (1) month prior written notice in writing to the Manager.

The provisions of Clauses 9.3 to 9.5 shall, in such event, apply.


12.	ANTI-CORRUPTION

Without limitation of any other standard that may apply to a particular action as set forth herein, with respect to the conduct and performance of all duties and obligations (including the provision of Services) of the Manager hereunder, the Manager shall, and shall cause its subcontractors and theirs and its directors, employees and other representatives who provide any Service hereunder, to conduct itself, himself or herself with the degree of care, diligence and skill of a reasonable prudent operator consistent with industry-standard practices in the LNG industry and to the Company’s satisfaction.

The Manager shall, and shall cause its subcontractors and their and its directors, officers, employees and other representatives who provide any Service, to comply with all applicable laws in connection with the provision of the Services, including applicable provisions of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, as amended (the " US Patriot Act "), the United States Foreign Corrupt Practices Act of 1977, as amended (“ FCPA ”), the UK Bribery Act of 2010 (“ Bribery Act ”), the regulations or orders issued by the Office of Foreign Assets Control of the United States Department of the Treasury and the rules and regulations promulgated under each of the foregoing acts.

Without limiting the generality of the foregoing, the Manager, its subcontractors and its and their respective directors, employees and other representatives who provide any Services has not made or authorized or shall not make or authorize, directly or indirectly, any offer, gift, payment or transfer, or promise of, any money or anything else of value, or provide any benefit, to any government official, government entity, commercial entity or person that would result in a breach of the US Patriot Act, the FCPA, the Bribery Act, or any other applicable laws relating to anti-bribery or anti-corruption of any jurisdiction in which the Company conducts business.

The Manager shall maintain complete and accurate books and records in accordance with and as required by the US Patriot Act, the FCPA, the Bribery Act and generally accepted accounting principles.

Furthermore, the Manager shall, and shall cause its subcontractors and its and their respective directors and employees who provide any Services, to strictly comply at all times with anti-bribery, anti-corruption, anti-terrorism, sanctions and anti-money laundering laws and regulations in any jurisdiction in which the Company engages in any activity contemplated by this Agreement, and shall strictly comply with the Golar Power Group's policies and procedures. The Manager shall cause a duly authorized officer to certify the Manager’s compliance with the provisions of this Clause 12 if and when requested by the Company.


13.	FURTHER ASSURANCE

Each Party will, at any time, do or procure to be done by a third party, so far as may be reasonably within its power and as may be reasonably requested of it, all acts or things and/or execute or procure the execution of all documents in a form satisfactory to the other Party as is or are required to give full effect to the provisions of this Agreement and the transactions intended to be effected pursuant to it.


14.	NOTICES


14.1	Any notice served by a Party may be delivered by hand or sent by first class, prepaid recorded delivery post marked for the attention of the other Party to the address set out in this Agreement or to any other address that the addressee may notify the other Party of in writing from time to time.


14.2	All notices under Clause 14.1 will be deemed duly served:


14.2.1	in the case of a notice delivered by hand, at the time of delivery;


14.2.2	in the case of a notice sent inland by first class, prepaid recorded delivery, two clear London business days after the date of despatch;


14.2.3	in the case of a notice sent overseas by recorded delivery airmail, seven business days (being business days in the place to which the notice is despatched) after the date of despatch;


14.2.4	Notices may be sent by e-mail, provided they are also delivered by hand or sent by post in accordance with Clause 14.2.


15.	THIRD PARTY RIGHTS


15.1	A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 and the Parties do not intend that any third party rights are created by this Agreement.


16.	MISCELLANEOUS


16.1	Nothing in this Agreement create a partnership or joint venture relationship between the Parties.


16.2	This Agreement is binding upon and will enure for the benefit of the personal representatives of the Parties or the successors in title to or transferees of the Parties.


16.3	This Agreement sets out the entire agreement and understanding between the Parties and supersedes any previous agreements between them relating to the subject matter of this Agreement.


16.4	Each of the Parties acknowledge that in entering into this Agreement, it does not rely on, and will have no remedy in respect of, any statement, representation, assurance, warranty or understanding (whether negligently or innocently made) of any person (whether party to this Agreement or not) other than as expressly set out in this Agreement.


16.5	If this Agreement is prepared in several parts, each of the Parties may execute one or more parts and all the executed parts will constitute one agreement.


16.6	No purported alteration of this Agreement or of any of the documents referred to in this Agreement shall be effective unless it is in writing, refers specifically to this Agreement and is duly executed by each Party.

16.7

Each provision of this Agreement is severable and distinct from the others. If any provision of this Agreement is or at any time becomes, to any extent, invalid, illegal or unenforceable under any enactment or rule of law in any jurisdiction, it will, to that extent, be deemed not to form part of this Agreement but (except to that extent in the case of that provision) it and all other provisions of this Agreement will continue in full force and effect and their validity, legality and enforceability will not be affected or impaired.


16.8	If any provision of this Agreement is found to be invalid, illegal or unenforceable, but would be valid, legal or enforceable if some part of the provision were deleted or amended, that provision will apply with whatever modification(s) as are necessary to make it valid, legal and enforceable.


16.9	No Party is entitled to assign or otherwise transfer its rights or obligations under this Agreement.


17.	GOVERNING LAW AND ARBITRATION


17.1	This Agreement is governed by English law.


17.2	All disputes arising under or in connection with this Agreement shall be referred to arbitration in London. Arbitration shall be conducted in accordance with one of the following LMAA procedures applicable at the date of the commencement of the arbitration proceedings:-


(i)	where the amount claimed is less than USD 400,000, excluding interest, (or such other sum as the Parties may agree and subject to paragraph (ii) below), the reference shall be to a tribunal of three arbitrators and the arbitration shall be conducted in accordance with the LMAA Intermediate Claims Procedure;


(ii)	where the amount claimed is less than USD 100,000, excluding interest (or such other sum as the Parties may agree) the reference shall be to a sole arbitrator and the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure; and


(iii)	in any case where the LMAA procedures referred to above do not apply, the reference shall be to three arbitrators in accordance with the LMAA Terms current at the date of commencement of the arbitration proceedings .



For and on behalf of GOLAR MANAGEMENT LTD. /s/ Graham Robjohns Graham Robjohns Director	For and on behalf of GOLAR POWER LIMITED /s/Eduardo Antonello Eduardo Antonello CEO

Schedule 1

THE SERVICES


1.	BUDGETING - ACCOUNTING - REPORTING – AUDIT

The Manager shall be responsible for the preparation of such budgets, whether period or project based, as the Company shall require.

The Manager shall be responsible for the day-to-day accounting for the Company and shall, in this capacity, ensure that all accounting material is stored in line with such requirements as apply thereto.

The Manager shall prepare periodic and annual accounts and reports for the Company in such form as the Company shall require from time to time.

The Manager shall prepare and file all tax returns on behalf of the Company.

The Manager shall facilitate the annual and periodic audits of the accounts of the Company by the Company's auditor.

The Manager shall negotiate the terms subject to which the Company's auditors shall provide their services and present the same to the Company for approval.

In performing these services, the Manager shall also coordinate the budgeting, reporting, accounting and audit of the Golar Power Group as such and, in particular, consolidate all information within the Golar Power Group, whether in budgets, reports or accounts.


2.	FINANCING

The Manager shall assist the Company in all matters relevant to the financing of the Company's and the Golar Power Group's activities.

The Manager shall, within such general limits or pursuant to such authorities as the Company from time to time shall decide, obtain offers for loans and other financial credits required to finance the Company's and the Golar Group's activities, negotiate the same and present final terms to the Company for approval. The Company may issue general authorisations to the Manager to conclude credit transactions on the Company's behalf in which case all such transactions shall be immediately reported to the Company.

The Company shall, at the Manager's request, issue a specific power of attorney to the senior management of the Manager authorising them to obtain and negotiate loan offers on the Company's behalf.


3.	TREASURY FUNCTIONS

The Manager shall be authorised to operate the Company's bank accounts in accordance with such principles as the Company from time to time shall approve. The Manager shall, when specifically authorised to do so by the Company, open bank accounts in the Company's or such Subsidiary’s name and enter into account agreements and all such other contracts or agreements as shall be required for this purpose.

The Manager shall develop a cash management policy for the Golar Power Group, which shall be presented to and approved by the Company, and continuously review the same. The Manager shall furthermore ensure that such policy is implemented in accordance with its terms.

The Manager shall be authorised to collect all amounts due from third parties to the Company and shall be responsible for the establishment and implementation of efficient procedures for the purpose of collecting any overdue amounts.

The Manager shall settle the Company's debts to third parties as such fall due, always ensuring that amounts due as consideration for goods or services which do not meet required standards of quality or quantity are retained while pursuing a satisfactory solution to any dispute in relation thereto on the Company's behalf.

The Manager shall settle all inter-company accounts between the Company and other entities in the Golar Power Group and affiliated companies in accordance with such agreements and other basis for payments as shall be in existence from time to time.


4.	INTERNAL GUIDELINES AND POLICIES

The Manager shall develop and present to the Board such internal guidelines for the Company and the Golar Power Group as the Board shall require in relation to safety, environmental protection, ethical conduct, etc.

The Manager shall be responsible for the implementation of such guidelines as the Board shall approve and the continuous follow-up thereof.

M7534287/1/136287-001/EL 4

Exhibit 8.1

The following table lists the Company’s significant subsidiaries as at April 28, 2017. Unless otherwise indicated, the Company owns a 100% controlling interest in each of the following subsidiaries.





Name	Jurisdiction of Incorporation

Golar LNG 2216 Corporation	Marshall Islands
Golar Management Limited	United Kingdom
Golar Management Malaysia Sdn. Bhd.	Malaysia
Golar Management Norway AS	Norway
Golar GP LLC – Limited Liability Company	Marshall Islands
Golar LNG Energy Limited	Bermuda
Golar Gimi Corporation	Marshall Islands
Golar Hilli Corporation (89%)*	Marshall Islands
Golar Gandria N.V.	Netherlands
Golar Hull M2021 Corporation	Marshall Islands
Golar Hull M2022 Corporation	Marshall Islands
Golar Hull M2027 Corporation	Marshall Islands
Golar Hull M2047 Corporation	Marshall Islands
Golar Hull M2048 Corporation	Marshall Islands
Golar LNG NB10 Corporation	Marshall Islands
Golar LNG NB11 Corporation	Marshall Islands
Golar LNG NB12 Corporation	Marshall Islands
Golar Tundra Corporation	Marshall Islands
GVS Corporation	Marshall Islands
Golar LNG 2216 Corporation	Marshall Islands

*Golar has approximately 89% ownership of this company.

Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, Oscar Spieler, certify that:

1. I have reviewed this annual report on Form 20-F of Golar LNG Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and

5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: May 1, 2017





/s/ Oscar Spieler
Oscar Spieler
Principal Executive Officer

Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Brian Tienzo, certify that:

1. I have reviewed this annual report on Form 20-F of Golar LNG Limited;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.

Date: May 1, 2017





/s/ Brian Tienzo
Brian Tienzo
Principal Financial Officer

Exhibit 13.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of Golar LNG Limited (the "Company") on Form 20-F for the year ended December 31, 2016 as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Oscar Spieler, Principal Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

May 1, 2017

/s/ Oscar Spieler

_____________________________________________

Oscar Spieler

Principal Executive Officer

Exhibit 13.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of Golar LNG Limited (the "Company") on Form 20-F for the year ended December 31, 2016 as filed with the Securities and Exchange Commission (the "SEC") on or about the date hereof (the "Report"), I, Brian Tienzo, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

May 1, 2017

/s/ Brian Tienzo

_____________________________________________

Brian Tienzo

Principal Financial Officer

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form F-3 No. 333-196992) of Golar LNG Limited and in the related Prospectus of our reports dated May 1, 2017 with respect to the consolidated financial statements of Golar LNG Limited, and the effectiveness of internal control over financial reporting of Golar LNG Limited, included in this Annual Report (Form 20-F) for the year ended December 31, 2016.

/s/ Ernst & Young LLP

London, England

May 1, 2017

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form F-3 No. 333-196992) of Golar LNG Limited of our reports dated May 1, 2017, with respect to the consolidated financial statements and the effectiveness of internal control over financial reporting of Golar LNG Partners LP, included in the Annual Report (Form 20-F) of Golar LNG Partners LP for the year ended December 31, 2016, filed with the Securities and Exchange Commission, and incorporated by reference in this Annual Report (Form 20-F) for the year ended December 31, 2016.

/s/ Ernst & Young LLP

London, England

May 1, 2016