o
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2018
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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OR
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o
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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GOLAR LNG PARTNERS LP
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(Exact name of Registrant as specified in its charter)
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Republic of the Marshall Islands
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(Jurisdiction of incorporation or organization)
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2nd Floor, S.E. Pearman Building
9 Par-la-Ville Road
Hamilton, HM 11, Bermuda
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(Address of principal executive offices)
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Brian Tienzo
2nd Floor, S.E. Pearman Building
9 Par-la-Ville Road
Hamilton, HM 11, Bermuda
Telephone: +1 (441) 295-4705
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(Name, Telephone, Email and/or Facsimile Number and Address of the Company Contact Person)
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Title of each class
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Name of each exchange on which registered
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Common units representing limited partner interests
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Nasdaq Global Market
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8.75% Series A Cumulative Redeemable Preferred Units
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Nasdaq Global Market
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70,891,755 Common Units representing limited partner interests
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5,520,000 8.75% Series A Cumulative Redeemable Preferred Units
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Large accelerated filer
x
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Accelerated filer
o
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Non-accelerated filer
o
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Emerging growth company
o
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U.S. GAAP
x
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International Financial Reporting Standards as issued
by the International Accounting Standards Board
o
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Other
o
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Item 1.
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Item 2.
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Item 3.
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A.
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B.
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C.
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D.
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Item 4.
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A.
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B.
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C.
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D.
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Item 4A.
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Item 5.
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A.
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B.
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C.
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D.
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E.
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F.
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G.
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Item 6.
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A.
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B.
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C.
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D.
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E.
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Item 7.
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A.
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B.
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C.
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Item 8.
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A.
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B.
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Item 9.
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C.
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Item 10.
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A.
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B.
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C.
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D.
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E.
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F.
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G.
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H.
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I.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Item 16A.
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Item 16B.
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Item 16C.
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Item 16D.
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Item 16E.
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Item 16F.
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Item 16G.
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Item 16H.
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Item 17.
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Item 18.
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Item 19.
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•
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our continued ability to enter into long-term time charters, including our ability to re-charter FSRUs and carriers following the termination or expiration of their time charters;
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•
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our ability to maximize the use of our vessels, including the re-deployment or disposition of vessels no longer under long-term time charter;
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•
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our ability to maintain cash distributions on our units and the amount of any such distributions;
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•
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market trends in the floating storage and regasification unit (“FSRU”), liquefied natural gas (“LNG”) carrier and floating liquefied natural gas vessel (“FLNG”) industries, including charter rates, factors affecting supply and demand, and opportunities for the profitable operations of FSRUs, LNG carriers and FLNGs;
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•
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the ability of Golar Partners and Golar LNG to retrofit vessels as FSRUs or FLNGs and the timing of the delivery and acceptance of any such retrofitted vessels by their respective charterers;
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•
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our ability to realize the expected benefits from the Jamaica FSRU project;
|
•
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our ability to consummate the potential acquisition of additional common units in Golar Hilli LLC ("Hilli LLC"), which owns Hilli Corporation ("Hilli Corp"), the disponent owner of the
Hilli Episeyo
(“
Hilli
”);
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•
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our ability to integrate and realize the expected benefits from acquisitions and potential acquisitions;
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•
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the future share of earnings relating to the
Hilli
, which we currently account for under the equity method;
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•
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our anticipated growth strategies;
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•
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the effect of a worldwide economic slowdown;
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•
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turmoil in the global financial markets;
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•
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fluctuations in currencies and interest rates;
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•
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general market conditions, including fluctuations in charter hire rates and vessel values;
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•
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changes in commodity prices;
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•
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the liquidity and creditworthiness of our customers;
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•
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changes in our operating expenses, including drydocking and insurance costs and bunker prices;
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•
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our future financial condition or results of operations and our future revenues and expenses;
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•
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the repayment of debt and settling of interest rate swaps;
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•
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our ability and Golar's ability to make additional borrowings and to access debt and equity markets;
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•
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planned capital expenditures and availability of capital resources to fund capital expenditures;
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•
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the exercise of purchase options by our charterers;
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•
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our ability to maintain long-term relationships with major LNG traders;
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•
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our ability to leverage the relationships and reputation of Golar and Golar Power in the LNG industry;
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•
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our ability to purchase vessels from Golar and Golar Power Limited in the future;
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•
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timely purchases and deliveries of newbuilding vessels;
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•
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future purchase prices of newbuilding and secondhand vessels;
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•
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our ability to compete successfully for future chartering and newbuilding opportunities;
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•
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acceptance of a vessel by its charterer;
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•
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termination dates and extensions of charters;
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•
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the expected cost of, and our ability to comply with, governmental regulations, maritime self-regulatory organization standards, as well as standard regulations imposed by our charterers applicable to our business;
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•
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availability of skilled labor, vessel crews and management;
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•
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our general and administrative expenses and our fees and expenses payable under the fleet management agreements and the management and administrative services agreement;
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•
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the anticipated taxation of our partnership and distributions to our unitholders;
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•
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challenges by authorities to the tax benefits we previously obtained;
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•
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estimated future maintenance and replacement capital expenditures;
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•
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our and Golar's ability to retain key employees;
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•
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customers’ increasing emphasis on environmental and safety concerns;
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•
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potential liability from any pending or future litigation;
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•
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potential disruption of shipping routes due to accidents, political events, piracy or acts by terrorists;
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•
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our business strategy and other plans and objectives for future operations; and
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•
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other factors listed from time to time in the reports and other documents that we file with the U.S. Securities and Exchange Commission (the “SEC”).
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Year Ended December 31,
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||||||||||||||||||
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2018
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2017
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2016
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2015
|
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2014
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||||||||||
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(in thousands except for unit data)
|
||||||||||||||||||
Statement of Operations Data:
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|||||
Total operating revenues
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$
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346,650
|
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$
|
433,102
|
|
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$
|
441,598
|
|
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$
|
434,687
|
|
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$
|
396,026
|
|
Vessel operating expenses
(1)
|
(65,247
|
)
|
|
(68,278
|
)
|
|
(59,886
|
)
|
|
(65,244
|
)
|
|
(59,191
|
)
|
|||||
Voyage and commission expenses
(2)
|
(11,222
|
)
|
|
(9,694
|
)
|
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(5,974
|
)
|
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(7,724
|
)
|
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(6,048
|
)
|
|||||
Administrative expenses
|
(14,809
|
)
|
|
(15,210
|
)
|
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(8,600
|
)
|
|
(6,643
|
)
|
|
(5,757
|
)
|
|||||
Interest income
|
8,950
|
|
|
7,804
|
|
|
4,295
|
|
|
1,315
|
|
|
1,131
|
|
|||||
Interest expense
|
(80,650
|
)
|
|
(75,425
|
)
|
|
(66,938
|
)
|
|
(61,632
|
)
|
|
(47,335
|
)
|
|||||
Gains/(losses) on derivative instruments
|
8,106
|
|
|
7,796
|
|
|
(931
|
)
|
|
(13,730
|
)
|
|
(18,564
|
)
|
|||||
Equity in net earnings of affiliate
(3)
|
1,190
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Net income
|
76,548
|
|
|
144,848
|
|
|
185,742
|
|
|
172,683
|
|
|
184,735
|
|
|||||
|
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|
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|
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|
||||||||||
Segment Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
FSRUs EBITDA
|
235,631
|
|
|
250,235
|
|
|
267,667
|
|
|
252,863
|
|
|
212,858
|
|
|||||
LNG carriers EBITDA
|
19,741
|
|
|
89,685
|
|
|
99,471
|
|
|
102,213
|
|
|
112,173
|
|
|||||
FLNG EBITDA
(3)
|
38,180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings Per Unit
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic - Common units
|
$
|
0.86
|
|
|
$
|
1.82
|
|
|
$
|
2.44
|
|
|
$
|
2.38
|
|
|
$
|
2.47
|
|
Diluted - Common units
|
$
|
0.86
|
|
|
$
|
1.80
|
|
|
$
|
2.43
|
|
|
$
|
2.38
|
|
|
$
|
2.47
|
|
Cash distributions declared and paid per common unit in the year
|
1.96
|
|
|
2.31
|
|
|
2.31
|
|
|
2.30
|
|
|
2.14
|
|
|
Year Ended December 31,
|
||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(in thousands except for fleet and other financial data)
|
||||||||||||||||||
Balance Sheet Data (at end of period):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Cash and cash equivalents
|
$
|
96,648
|
|
|
$
|
246,954
|
|
|
$
|
65,710
|
|
|
$
|
40,686
|
|
|
$
|
98,998
|
|
Restricted cash and short-term deposits
(4)
|
31,330
|
|
|
27,306
|
|
|
44,927
|
|
|
56,714
|
|
|
25,831
|
|
|||||
Non-current restricted cash
(4)
|
141,114
|
|
|
155,627
|
|
|
117,488
|
|
|
136,559
|
|
|
146,552
|
|
|||||
Investment in affiliate
(5)
|
206,180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Vessels and equipment, net
|
1,535,757
|
|
|
1,588,923
|
|
|
1,652,710
|
|
|
1,730,676
|
|
|
1,501,170
|
|
|||||
Vessel under capital lease, net
|
114,711
|
|
|
105,945
|
|
|
111,186
|
|
|
116,727
|
|
|
122,253
|
|
|||||
Total assets
|
2,240,817
|
|
|
2,427,371
|
|
|
2,252,708
|
|
|
2,231,662
|
|
|
1,942,846
|
|
|||||
Current portion of long-term debt
|
75,451
|
|
|
118,850
|
|
|
78,101
|
|
|
118,693
|
|
|
121,562
|
|
|||||
Current portion of obligation under capital lease
|
1,564
|
|
|
1,276
|
|
|
787
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
1,196,899
|
|
|
1,252,184
|
|
|
1,296,609
|
|
|
1,212,419
|
|
|
897,614
|
|
|||||
Non-current obligation under capital lease
|
118,119
|
|
|
126,805
|
|
|
116,964
|
|
|
143,112
|
|
|
150,997
|
|
|||||
Partner’s capital
|
679,615
|
|
|
771,031
|
|
|
541,506
|
|
|
539,475
|
|
|
536,207
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Number of units issued and outstanding:
|
|
|
|
|
|
|
|
|
|
||||||||||
Series A Preferred units
|
5,520,000
|
|
|
5,520,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Common units
|
69,455,364
|
|
|
69,768,261
|
|
|
64,073,291
|
|
|
45,167,096
|
|
|
45,663,096
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash Flow Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net cash provided by operating activities
(6)
|
$
|
137,166
|
|
|
$
|
270,430
|
|
|
$
|
259,687
|
|
|
$
|
219,144
|
|
|
$
|
275,991
|
|
Net cash used in investing activities
(6)
|
(19,632
|
)
|
|
(70,426
|
)
|
|
(107,247
|
)
|
|
(9,638
|
)
|
|
(156,612
|
)
|
|||||
Net cash used in financing activities
(6)
|
(272,211
|
)
|
|
(8,730
|
)
|
|
(136,308
|
)
|
|
(239,256
|
)
|
|
(112,514
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Fleet Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Number of FSRUs at end of period
|
6
|
|
|
6
|
|
|
6
|
|
|
6
|
|
|
5
|
|
|||||
Number of LNG carriers at end of period
(7)
|
4
|
|
|
4
|
|
|
4
|
|
|
4
|
|
|
4
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Average FSRUs daily time charter equivalent earnings (
“
TCE
”
)
(8)
|
$
|
171,689
|
|
|
$
|
159,950
|
|
|
$
|
144,501
|
|
|
$
|
144,592
|
|
|
$
|
145,744
|
|
Average LNG carriers daily time charter equivalent earnings (
“
TCE
”
)
(8)
|
$
|
33,575
|
|
|
$
|
80,268
|
|
|
$
|
82,267
|
|
|
$
|
85,753
|
|
|
$
|
93,514
|
|
(1)
|
Vessel operating expenses are the direct costs associated with operating a vessel, including crew wages, vessel supplies, routine repairs, maintenance, insurance, lubricating oils and management fees.
|
(2)
|
Majority of the vessels have all operated under time charters during the periods presented. Under a time charter, the charterer pays substantially all of the voyage expenses, which are primarily fuel and port expenses.
|
(3)
|
Represents our net earnings of the
50.0%
of the common units of Hilli LLC which is equity accounted for within our consolidated statement of operations. However, our equity in net earnings of affiliate is presented in our segment information under the effective share of interest consolidation method. Please see Note 6 "Segment Information" and Note 10 “Investment in Affiliate” in our consolidated financial statements included herein for additional information.
|
(4)
|
Restricted cash and short-term deposits consists of bank deposits which i) may only be used to settle certain pre-arranged loans, facilities or lease payments; ii) are variation margins posted for a decline in fair values of certain swaps; iii) represent cash held by our lessor variable interest entity (
“
VIE
”
); and iv) are made in accordance with our contractual obligations under bid or performance guarantees for projects we may enter into.
|
(5)
|
Represents our investment in
50.0%
of the common units of Hilli LLC, see “Item 5. Operating and Financial Review and Prospects—Significant Developments in
2018
and Early
2019
—Hilli Acquisition” and “Item 5—Operating and Financial Review and Prospects—A. Operating Results”.
|
(6)
|
In 2018, we adopted ASU 2016-18 “
Statement of Cash Flows (Topic 230): Restricted Cash
” under a retrospective approach, which requires that restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts presented on the statement of cash flows. Net cash provided by operating activities, net cash (used in)/provided by investing activities and net cash used in financing activities
for the years ended December 31, 2017, 2016, 2015 and 2014 have been restated on the above table.
|
(7)
|
In each of the periods presented, we held a 60% ownership interest in the
Golar Mazo
and a 100% interest in the other vessels.
|
(8)
|
Non-GAAP Financial Measure
|
|
Year Ended December 31,
|
||||||||||||||
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
FSRUs Segment
|
(dollars in thousands, except TCE)
|
||||||||||||||
Total operating revenues
|
$
|
294,889
|
|
$
|
316,599
|
|
$
|
322,373
|
|
$
|
307,344
|
|
$
|
257,934
|
|
Voyage and commission expenses
|
(7,138
|
)
|
(8,375
|
)
|
(5,049
|
)
|
(5,581
|
)
|
(4,486
|
)
|
|||||
|
287,751
|
|
308,224
|
|
317,324
|
|
301,763
|
|
253,448
|
|
|||||
Calendar days less scheduled off-hire days
|
1,676
|
|
1,927
|
|
2,196
|
|
2,087
|
|
1,739
|
|
|||||
Average daily TCE
(2)
|
$
|
171,689
|
|
$
|
159,950
|
|
$
|
144,501
|
|
$
|
144,592
|
|
$
|
145,744
|
|
|
Year Ended December 31,
|
||||||||||||||
|
2018
|
2017
|
2016
|
2015
|
2014
|
||||||||||
LNG Carriers Segment
|
(dollars in thousands, except TCE)
|
||||||||||||||
Total operating revenues
|
$
|
51,761
|
|
$
|
116,503
|
|
$
|
119,225
|
|
$
|
127,343
|
|
$
|
138,092
|
|
Voyage and commission expenses
|
(4,084
|
)
|
(1,319
|
)
|
(925
|
)
|
(2,144
|
)
|
(1,561
|
)
|
|||||
|
47,677
|
|
115,184
|
|
118,300
|
|
125,199
|
|
136,531
|
|
|||||
Calendar days less scheduled off-hire days
|
1,420
|
|
1,435
|
|
1,438
|
|
1,460
|
|
1,460
|
|
|||||
Average daily TCE
(2)
|
$
|
33,575
|
|
$
|
80,268
|
|
$
|
82,267
|
|
$
|
85,753
|
|
$
|
93,514
|
|
•
|
We currently derive all of our revenue from a limited number of customers. The loss of any of our customers would result in a significant loss of revenues and cash flow, if for an extended period of time, we are not able to re-charter a vessel to another customer.
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•
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the customer fails to make charter payments because of its financial inability, disagreements with us or otherwise; or
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•
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the customer exercises its right to terminate the charter in certain circumstances, such as:
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•
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loss of the vessel or damage to it beyond repair;
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•
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defaults of our obligations under the charter, including prolonged periods of off-hire;
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•
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in the event of war or hostilities that would significantly disrupt the free trade of the vessel;
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•
|
requisition by any governmental authority;
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•
|
with respect to the
Golar Winter
, and
Golar Eskimo
, upon at least six months’ written notice at any time after the fifth or tenth anniversary of the commencement of the related charter upon payment of a termination fee; or
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•
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a prolonged force majeure event affecting the customer, including damage to or destruction of relevant production facilities, war or political unrest that prevents us from performing services for that customer.
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•
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Our growth depends on our ability to expand relationships with existing customers and obtain new customers, for which we will face substantial competition.
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•
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its FSRU and LNG shipping experience, technical ability and reputation for operation of highly specialized vessels;
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•
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its shipping industry relationships and reputation for customer service and safety;
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•
|
the quality and experience of its seafaring crew;
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•
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its financial stability and ability to finance FSRUs and LNG carriers at competitive rates;
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•
|
its relationships with shipyards and construction management experience; and
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•
|
its willingness to accept operational risks pursuant to the charter.
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•
|
Our future long-term charter revenue depends on our competitive position and future hire rates for FSRU and LNG carriers.
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•
|
Hire rates for FSRUs and LNG carriers may fluctuate substantially. If rates are lower when we are seeking a new charter, our earnings and ability to make distributions to our unitholders may decline.
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•
|
The charterers of two of our vessels have the option to extend the charter at a rate lower than the existing hire rate. The exercise of these options could have a material adverse effect on our cash flow and our ability to make distributions to our unitholders.
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•
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Our equity investment in Golar Hilli LLC may not result in anticipated profitability or generate cash flow sufficient to justify our investment. In addition, our investment exposes us to risks that may harm our business, financial condition and operating results.
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•
|
fail to realize anticipated benefits through cash distributions from Hilli LLC;
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•
|
fail to obtain the benefits of the LTA if the Customer exercises certain rights to terminate the charter upon the occurrence of specified events of default;
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•
|
fail to obtain the benefits of the LTA if the Customer fails to make payments under the LTA because of its financial inability, disagreements with us or otherwise;
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•
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incur or assume unanticipated liabilities, losses or costs;
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•
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be required to pay damages to the Customer or suffer a reduction in the tolling fee in the event that the
Hilli Episeyo
fails to perform to certain specifications;
|
•
|
incur other significant charges, such as asset devaluation or restructuring charges: or
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•
|
be unable to re-charter the FLNG on another long-term charter at the end of the LTA.
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•
|
Due to the new and sophisticated technology utilized by the Hilli, operations are subject to risks that could negatively affect our business and financial condition.
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•
|
We guarantee 50% of Hilli Corp’s indebtedness under the Hilli Facility.
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•
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If the letter of credit related to the LTA is not extended, the earnings and financial condition of Hilli Corp could suffer.
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•
|
We may be unable to make or realize expected benefits from acquisitions which could have an adverse effect on our expected plans for growth.
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•
|
fail to realize anticipated benefits, such as new customer relationships, cost-savings or cash flow enhancements;
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•
|
be unable to hire, train or retain qualified shore and seafaring personnel to manage and operate our growing business and fleet;
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•
|
decrease our liquidity by using a significant portion of our available cash or borrowing capacity to finance acquisitions;
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•
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significantly increase our interest expense or financial leverage if we incur additional debt to finance acquisitions;
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•
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incur or assume unanticipated liabilities, losses or costs associated with the business or vessels acquired; or
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•
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incur other significant charges, such as impairment of goodwill or other intangible assets, asset devaluation or restructuring charges.
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•
|
We may not have sufficient cash from operations following the establishment of cash reserves and payment of fees and expenses to enable us to pay distributions on our units.
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•
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We may not be able to obtain financing, to meet our obligations as they fall due or to fund our growth or our future capital expenditures, which could negatively impact our results of operations, financial condition and ability to pay distributions.
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•
|
Our ability to obtain additional debt financing for future vessel acquisitions or to refinance our existing debt largely depends on the creditworthiness of our charterers and the terms of our charters.
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•
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Our debt levels may limit our flexibility in obtaining additional financing, pursuing other business opportunities and paying distributions to unitholders.
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•
|
our ability to obtain additional financing, if necessary, for working capital, capital expenditures, acquisitions or other purposes may be limited or such financing may not be available on favorable terms;
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•
|
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 distributions to unitholders;
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•
|
our debt level will make us more vulnerable than our competitors with less debt to competitive pressures or a downturn in our business or the economy generally; and
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•
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our debt level may limit our flexibility in responding to changing business and economic conditions.
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•
|
Our financing arrangements, most of which are secured by our vessels, contain operating and financial restrictions and other covenants that may restrict our business and financing activities as well as our ability to make cash distributions to our unitholders.
|
•
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merge or consolidate with any other person;
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•
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make certain capital expenditures;
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•
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pay distributions to our unitholders;
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•
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terminate or materially amend certain of our charters;
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•
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enter into any other line of business;
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•
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make any acquisitions;
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•
|
incur additional indebtedness or grant any liens to secure any of our existing or future indebtedness;
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•
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enter into any sale-leaseback transactions; or
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•
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enter into any transactions with our affiliates.
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•
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We are exposed to volatility in the London Interbank Offered Rate, (“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.
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•
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Our consolidated variable interest entity, (“VIE”), may enter into different financing arrangements, which could affect our financial results.
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•
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Even though the Golar Tundra has been sold back to Golar, we are a deficiency guarantor of Tundra Corp’s obligations under the Tundra Lease and may be liable for hire payments thereunder.
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•
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One of our vessels is currently financed by a UK tax lease, and other vessels previously were financed by UK tax leases. In the event of any adverse tax changes or a successful challenge by the UK revenue authorities with regard to the initial tax basis of the transactions or in the event of an early termination of the leases, we may be required to make additional payments to the UK vessel lessor, which could adversely affect our earnings and financial condition.
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We can borrow money to pay distributions, which would reduce the amount of credit available to operate our business.
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•
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The operation of FSRUs, FLNGs and LNG carriers is inherently risky, and our vessels face a number of industry risks and events which could cause damage or loss of a vessel, loss of life or environmental consequences that could harm our reputation and ongoing business operations.
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•
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death or injury to persons, loss of property or damage to the environment or natural resources;
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•
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delays in the delivery of cargo;
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•
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loss of revenues from or termination of charter contracts;
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•
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governmental fines, penalties or restrictions on conducting business;
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•
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A government requisitioning for title or seizing our vessels (e.g. in a time of war or national emergency)
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•
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higher insurance rates; and
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•
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damage to our reputation and customer relationships generally.
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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.
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If piracy attacks or military action results 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.
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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.
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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.
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•
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If one of our vessels were involved in an accident with the potential risk of environmental damages, 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 distributions.
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•
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We may experience operational problems with our vessels that reduce revenue and increase costs.
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•
|
In years when estimated maintenance and replacement capital expenditures are higher than actual maintenance and replacement capital expenditures, the amount of cash available for distribution to unitholders will be lower and we may
|
•
|
the cost of labor and materials;
|
•
|
customer requirements;
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•
|
fleet size;
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•
|
the cost of replacement vessels;
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•
|
length of charters;
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•
|
governmental regulations and maritime self-regulatory organization standards relating to safety, security or the environment; and
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•
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competitive standards.
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•
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We may be unable to obtain, maintain, and/or renew permits necessary for our operations or experience delays in obtaining such permits, which could have a material effect on our operations.
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•
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A shortage of qualified officers and crew could have an adverse effect on our business and financial condition.
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•
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Due to the locations in which we operate, a number of our current and potential future projects are subject to higher political and security risks than operations in other areas of the world.
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We derive a substantial portion of our revenues from shipping LNG from politically unstable regions, particularly the Arabian Gulf, Brazil, Indonesia and West Africa. Past political conflicts in certain of these regions have included attacks on vessels, mining of waterways and other efforts to disrupt shipping in the area. In addition to acts of terrorism, vessels trading in these and other regions have also been subject, in limited instances, to piracy. Future hostilities or other political instability in the regions in which we operate or may operate could have a material adverse effect on the growth of our business, results of operations and financial condition and our ability to make cash distributions. In addition, tariffs, trade embargoes and other economic sanctions by the United States or other countries against countries in the Middle East, Southeast Asia, Africa or elsewhere as a result of terrorist attacks, hostilities or otherwise may limit trading activities with those countries, which could also harm our business and ability to make cash distributions
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•
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The operations of Hilli Corp in Cameroon under the LTA are subject to higher political and security risks than operations in other areas of the world. Recently, Cameroon has experienced instability in its socio-political environment. 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, could lead to economic disruptions and shutdowns in industrial activities. In addition, corruption and bribery are a serious concern in the region. The operations of Hilli Corp in Cameroon will be subject to these risks, which could materially adversely affect our revenues, our ability to perform under the LTA and our financial condition.
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In addition, Hilli Corp will maintain insurance coverage for only a portion of the risks incident to doing business in Cameroon. There also may be certain risks covered by insurance where the policy does not reimburse Hilli Corp for all of the costs related to a loss. For example, any claims covered by insurance will be subject to deductibles, which may be significant. In the event that Hilli Corp incurs business interruption losses with respect to one or more incidents, they could have a material adverse effect on our results of operations.
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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.
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|
A cyber-attack could materially disrupt our business.
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Changing corporate laws and reporting requirements could have an adverse impact on our business.
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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.
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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.
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the cost of 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.
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Exposure to currency exchange rate fluctuations will result in fluctuations in our cash flows and operating results.
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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.
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Our results of operations and financial condition depend on demand for LNG, LNG carriers, FSRUs and FLNGs.
|
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price and availability of natural gas, crude oil and petroleum products;
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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;
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negative global or regional economic or political conditions, particularly in LNG-consuming regions, which could reduce energy consumption or its growth;
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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; and
|
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availability of new, alternative energy sources, including compressed natural gas.
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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.
|
•
|
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
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•
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labor or political unrest affecting existing or proposed areas of LNG production, liquefaction and regasification.
|
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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.
|
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Maritime claimants could arrest our vessels, which could interrupt our cash flow.
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The results of the U.K.’s referendum on withdrawal from the European Union may have a negative effect on global economic conditions, financial markets and our business.
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Our operations are subject to various international, federal, state and local environmental, climate change and greenhouse gas emissions laws and regulations. Compliance with these obligations, and any future changes to environmental legislation or regulation applicable to international and national maritime trade, may have an adverse effect on our business.
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Climate change and greenhouse gas restrictions may adversely impact our operations and markets.
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Compliance with safety and other vessel requirements imposed by classification societies may be very costly and may adversely affect our business.
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Our officers face conflicts in the allocation of their time to our business.
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We depend on Golar and certain of its subsidiaries, including Golar Management, GMN, GMM and GMC, to assist us in operating and expanding our business.
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renew existing charters upon their expiration;
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obtain new charters;
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successfully interact with shipyards;
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obtain financing on commercially acceptable terms;
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•
|
recover amounts due to us; or
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•
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maintain satisfactory relationships with suppliers and other third parties.
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Fees and cost reimbursements, which Golar Management determines for services provided to us, are substantial, are payable regardless of our profitability and reduce our cash available for distribution to our unitholders.
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Golar and its affiliates may compete with us.
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The shareholders’ agreement with Chinese Petroleum Corporation with respect to the Golar Mazo contains provisions that may limit our ability to sell or transfer our interest in the Golar Mazo, which could have a material adverse effect on our cash flows and affect our ability to make distributions to our unitholders.
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PTNR has the right to purchase the NR Satu at any time at a price that must be agreed upon between us and PTNR. The exercise of this option could have a material adverse effect on our cash flow and our ability to make distributions to our unitholders.
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Our common units are subordinated to our existing and future indebtedness and our Series A Preferred Units.
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Increases in interest rates may cause the market price of our units to decline.
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•
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We have been organized as a limited partnership under the laws of the Republic of the Marshall Islands, which does not have a well-developed body of partnership law.
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•
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Because we are organized under the laws of the Marshall Islands, it may be difficult to serve us with legal process or enforce judgments against us, our directors or our management.
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Our general partner, as the holder of all of the IDRs, may elect to cause us to issue additional common units to it in connection with a resetting of the target distribution levels related to our general partner’s IDRs without the approval of the conflicts committee of our board of directors or holders of our common units. This may result in lower distributions to holders of our common units in certain situations.
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Our general partner and its other affiliates own a significant interest in us and have conflicts of interest and limited fiduciary and contractual duties, which may permit them to favor their own interests to the detriment of our unitholders.
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neither our partnership agreement nor any other agreement requires our general partner or Golar or its affiliates to pursue a business strategy that favors us or utilizes our assets, and Golar’s officers and directors have a fiduciary duty to make decisions in the best interests of the shareholders of Golar, which may be contrary to our interests;
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•
|
our partnership agreement permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner. Where our partnership agreement permits, our general partner may consider only the interests and factors that it desires, and in such cases it has no fiduciary duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or our unitholders. Decisions made by our general partner in its individual capacity will be made by its sole owner, Golar. Specifically, our general partner will be considered to be acting in its individual capacity if it exercises its call right, pre-emptive rights, registration rights or right to make a determination to receive common units in exchange for resetting the target distribution levels related to the incentive distribution rights (IDRs), consents or withholds consent to any merger or consolidation of the partnership, appoints any directors or votes for the election of any director, votes or refrains from voting on amendments to our partnership agreement that require a vote of the outstanding units, voluntarily withdraws from the partnership, transfers (to the extent permitted under our partnership agreement) or refrains from transferring its units, general partner interest or incentive distribution rights or votes upon the dissolution of the partnership;
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•
|
our general partner and our directors have limited their liabilities and reduced their fiduciary duties under the laws of the Marshall Islands, while also restricting the remedies available to our unitholders, and, as a result of purchasing common units, unitholders are treated as having agreed to the modified standard of fiduciary duties and to certain actions that may be taken by our general partner and our directors, all as set forth in the partnership agreement;
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•
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our general partner is entitled to reimbursement of all reasonable costs incurred by it and its affiliates for our benefit;
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•
|
our partnership agreement does not restrict us from paying our general partner or its affiliates for any services rendered to us on terms that are fair and reasonable or entering into additional contractual arrangements with any of these entities on our behalf;
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•
|
our general partner may exercise its right to call and purchase our common units if it and its affiliates own more than 80% of our common units; and our general partner is not obligated to obtain a fairness opinion regarding the value of the common units to be repurchased by it upon the exercise of its limited call right.
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Our partnership agreement limits our general partner’s and our directors’ fiduciary duties to our unitholders and restricts the remedies available to unitholders for actions taken by our general partner or our directors.
|
•
|
permits our general partner to make a number of decisions in its individual capacity, as opposed to in its capacity as our general partner. Where our partnership agreement permits, our general partner may consider only the interests and factors that it desires, and in such cases it has no fiduciary duty or obligation to give any consideration to any interest of, or factors affecting, us, our affiliates or our unitholders. Decisions made by our general partner in its individual capacity will be made by its sole owner, Golar. Specifically, pursuant to our partnership agreement, our general partner will be considered to be acting in its individual capacity if it exercises its right to make a determination to receive common units in exchange for resetting the target distribution levels related to the incentive distribution rights (“ IDRs”), call right, pre-emptive rights or registration rights, consents or withholds consent to any merger or consolidation of the partnership, appoints any directors or votes for the election of any director, votes or refrains from voting on amendments to our partnership agreement that require a vote of the outstanding units, voluntarily withdraws from the partnership, transfers (to the extent permitted under our partnership agreement) or refrains from transferring its units, general partner interest or IDRs or votes upon the dissolution of the partnership;
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•
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provides that our general partner and our directors are entitled to make other decisions in “good faith” if they reasonably believe that the decision is in our best interests;
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generally provides that affiliated transactions and resolutions of conflicts of interest not approved by the conflicts committee of our board of directors and not involving a vote of unitholders must be on terms no less favorable to us than those generally being provided to or available from unrelated third parties or be “fair and reasonable” to us and that, in determining whether a transaction or resolution is “fair and reasonable,” our board of directors may consider the totality of the relationships between the parties involved, including other transactions that may be particularly advantageous or beneficial to us; and
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provides that neither our general partner nor our officers or our directors will be liable for monetary damages to us, our limited partners or assignees for any acts or omissions unless there has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that our general partner or directors or its officers or directors or those other persons engaged in actual fraud or willful misconduct.
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Our partnership agreement contains provisions that may have the effect of discouraging a person or group from attempting to remove our current management or our general partner which could diminish the trading price of our common units.
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The vote of the holders of at least 66⅔% of all outstanding common units voting together as a single class is required to remove the general partner.
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Common unitholders are entitled to elect only four of the seven members of our board of directors. Our general partner in its sole discretion appoints the remaining three directors.
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Election of the four directors elected by unitholders is staggered, meaning that the member(s) of only one of three classes of our elected directors will be selected each year. In addition, the directors appointed by our general partner serve for terms determined by our general partner.
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•
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Our partnership agreement contains provisions limiting the ability of unitholders to call meetings of unitholders, to nominate directors and to acquire information about our operations as well as other provisions limiting the unitholders’ ability to influence the manner or direction of management.
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•
|
Unitholders’ voting rights are further restricted by the partnership agreement provision providing that if any person or group owns beneficially more than 4.9% of any class of units then outstanding, any such units owned by that person or group in excess of 4.9% may not be voted on any matter and will not be considered to be outstanding when sending notices of a meeting of unitholders, calculating required votes (except for purposes of nominating a person for election to our board), determining the presence of a quorum or for other similar purposes, unless required by law. The voting rights of any such unitholders in excess of 4.9% will effectively be redistributed pro rata among the other common unitholders holding less than 4.9% of the voting power of all classes of units entitled to vote. Our general partner, its affiliates and persons who acquired common units with the prior approval of our board of directors will not be subject to this 4.9% limitation except with respect to voting their common units in the election of the elected directors.
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There are no restrictions in our partnership agreement on our ability to issue additional common units.
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The control of our general partner may be transferred to a third party without unitholder consent.
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Unitholders have limited voting rights, and our partnership agreement restricts the voting rights of the unitholders owning more than 4.9% of our units.
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Substantial future sales of our common units in the public market could cause the price of our common units to fall.
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We may issue additional equity securities, including securities senior to the common units, without the approval of our unitholders, which would dilute our current unitholders’ ownership interests.
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our unitholders’ proportionate ownership interest in us will decrease;
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|
the amount of cash available for distribution on each unit may decrease;
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•
|
the relative voting strength of each previously outstanding unit may be diminished; and
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•
|
the market price of the common units may decline.
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•
|
Our Series A Preferred Units have rights, preferences and privileges that are not held by, and are preferential to the rights of, holders of our common units.
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•
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In establishing cash reserves, our board of directors may further reduce the amount of cash available for distribution to our unitholders.
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Our general partner has a limited call right that may require unitholders to sell their common units at an undesirable time or price.
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Unitholders may not have limited liability if a court finds that unitholder action constitutes control of our business.
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Unitholders may have liability to repay distributions.
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A change in tax laws in any country in which we operate could adversely affect us.
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|
U.S. tax authorities could treat us as a “passive foreign investment company,” which would have adverse U.S. federal income tax consequences to U.S. unitholders.
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|
We may have to pay tax on U.S. source income, which would reduce our cash flow.
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•
|
Unitholders may be subject to income tax in one or more non-U.S. jurisdictions, including the United Kingdom, as a result of owning our units if, under the laws of any such jurisdiction, we are considered to be carrying on business there. Such laws may require unitholders to file a tax return with, and pay taxes to, those jurisdictions.
|
•
|
We will be subject to taxes, which will reduce our cash available for distribution to you.
|
•
|
Pursue strategic and accretive acquisitions of FSRUs, FLNGs and LNG carriers.
We believe our affiliation with Golar and its affiliates positions us to pursue a broader array of growth opportunities, including strategic and accretive acquisitions from or with Golar, Golar Power or from third parties. Since our IPO, we have acquired six vessels and an interest in a FLNG from Golar.
|
•
|
Compete for long-term charter contracts for FSRUs, FLNGs and LNG carriers when attractive opportunities arise.
We intend to participate in competitive tender processes and engage in negotiated transactions with potential charterers for FSRUs, FLNGs and LNG carriers when attractive opportunities arise by leveraging the strength of the industry expertise of Golar, as well as our publicly traded partnership status.
|
•
|
Manage our fleet and our customer relationships to provide a stable base of cash flows and superior operating performance.
We intend to manage the stability of cash flows in our fleet by actively seeking the extension or renewal of existing charters, entering into new long-term charters with current customers and identifying potential business opportunities with new high-quality charterers.
|
•
|
FSRUs are vessels that are permanently located offshore to regasify LNG. Six of our vessels are FSRUs;
|
•
|
LNG carriers are vessels that transport LNG and are compatible with many LNG loading and receiving terminals globally. Four of our vessels are LNG carriers; and
|
•
|
FLNGs are vessels that are moored above an offshore natural gas field on a long-term basis. A FLNG receives, liquefies and stores LNG at sea and transfers it to LNG carriers that berth while offshore. On July 12, 2018, we purchased 50.0% of the Hilli Common Units from Golar, affiliates of Keppel Shipyard Limited (“Keppel”) and Black and Veatch (“B&V”) (together, the “Sellers”). Hilli LLC owns Golar Hilli Corporation (“Hilli Corp”), the disponent owner of the
Hilli
.
|
FSRU Vessel
|
Capacity
(cbm)
|
Base Offtake
Capacity
(Bcf/d)
|
Year of
Delivery
|
Containment System
|
Year Acquired
|
Year of FSRU Retrofitting
|
Charterer
|
Charter
Expiration
|
Charter
Extension
Option
Periods
|
|
Golar Spirit
|
129,000
|
|
0.25
|
1981
|
Moss
|
Upon formation
(1)(2)
|
2007
|
None
(3)
|
Not applicable
|
Not applicable
|
Golar Winter
|
138,000
|
|
0.50
|
2004
|
Membrane
|
At IPO
(2)
|
2008
|
Petrobras
|
September 2024
(4)
|
None
|
Golar Freeze
|
125,000
|
|
0.48
|
1977
|
Moss
|
October 2011
|
2010
|
(5)
|
(5)
|
(5)
|
NR Satu
(6)
|
125,000
|
|
0.50
|
1977
|
Moss
|
July 2012
|
2012
|
PTNR
|
December 2022
|
2025
|
Golar Igloo
|
170,000
|
|
0.50
|
2014
|
Membrane
|
March 2014
|
Not applicable
|
KNPC
|
December 2019
|
None
(7)
|
Golar Eskimo
|
160,000
|
|
0.50
|
2014
|
Membrane
|
January 2015
|
Not applicable
|
Jordan
|
June 2025
|
None
|
(1)
|
Upon our formation, Golar contributed to us a 100% interest in the subsidiary which leased the
Golar Spirit
.
|
(2)
|
In connection with our IPO, Golar transferred to us a 100% interest in the subsidiary which leased the
Golar Winter
and the legal title to the
Golar Spirit
.
|
(3)
|
As of
March 15, 2019
, the
Golar Spirit
is in lay-up awaiting new employment.
|
(4)
|
The charter initially had a term of 10 years, expiring in 2019. However, in return for certain vessel modifications made at the request of Petrobras the charter was extended by a further five years to 2024. These modifications were completed in August 2013.
|
(5)
|
In July 2018, the
Golar Freeze
was nominated to service the 15-year time charter with an energy and logistics company (the “New Freeze Charter”) offshore Jamaica. Subsequently in October 2018, the
Golar Freeze
underwent drydocking to satisfy certain technical specifications of the New Freeze Charter. (See “Item 5—Operating and Financial Review and Prospects—Significant Developments in
2018
and Early
2019
”).
|
(6)
|
We hold all of the voting stock and control all of the economic interests in PT Golar Indonesia (“PTGI”), the company that owns and operates the
NR Satu
, pursuant to a Shareholders’ Agreement with the other shareholder of PTGI, PT Pesona. PT Pesona holds the remaining 51% interest in the issued share capital of PTGI.
|
(7)
|
The charterer has exercised its option to extend the charter for a regasification season in January 2019.
|
Vessel
|
Capital cost component
|
Operating cost component
|
Other
|
Changes to hire rate in the extension period (if applicable)
|
Golar Winter
|
Increases on a bi-annual basis based on a cost of living index and as required for Owner to be kept whole for any changes in local tax law.
|
Fluctuates annually based on changes to a specified cost of living index and U.S. dollar foreign exchange index.
|
Drydocking costs are included as part of the capital cost component.
|
Not applicable
|
NR Satu
|
This also includes a mooring capital element.
|
Annual adjustment based on actual costs.
|
There is also a tax component.
(1)
|
The capital element will decrease 12% in 2023, then by a further 7% in 2024 and 2025.
|
Golar Igloo
(2)
|
The hire rate is an all-inclusive daily fixed rate.
|
Not applicable
|
Not applicable
|
Not applicable
|
Golar Eskimo
|
Fixed for first five years of hire. Decreases by 6.4% after the first five years of hire.
|
Increases by a fixed percentage per annum.
|
Not applicable
|
Not applicable
|
(1)
|
The tax element shall be adjusted only when there is any change in Indonesian tax laws (including any changes in interpretation or implementation thereof) or any treaty to which Indonesia is party or the invalidity of any tax assumptions used in determining the tax element.
|
(2)
|
The
Golar Igloo
provides floating storage and regasification services to KNPC for a nine-month period each year (or the Regasification Season) until the termination of the charter. The Regasification Season commences, at KNPC’s election, between March 1 and March 31 of each year (or the Start Date) and ends nine months later (or the End Date). During the period between the End Date with respect to one Regasification Season and the Start Date of the next succeeding Regasification Season (or the Regasification Off-Season), we may charter the
Golar Igloo
to other customers under short-term charters.
|
(1)
|
Upon our formation, Golar contributed to us a 100% interest in certain subsidiaries which owned a 60% interest in the Golar Mazo and which leased the Golar Spirit and the Methane Princess. We currently own a 60% interest in the Golar Mazo, and Chinese Petroleum Corporation holds the remaining 40% interest.
|
(2)
|
The charter initially had a term of two years. In February 2019, the charter was extended for a year. The charterer has options to extend the charter by two one year periods and two further periods of up to two years each.
|
Vessel
|
Capital cost component
|
Operating cost component
|
Changes to hire rate in the extension period (if applicable)
|
Methane Princess
|
Fixed.
|
Increases by a fixed percentage per annum.
|
Reduces by approximately 37%.
|
Golar Grand
|
The hire rate is an all-inclusive daily fixed rate.
|
The hire rate will increase from the initial hire rate during the extension periods by approximately 50%.
|
•
|
Capital cost component - primarily relates to the cost of the vessel and is structured to meet that cost and provide a return on investor capital. The capital cost component is constant for the duration of the entire charter except for the
Golar Winter
and
Golar Eskimo.
|
•
|
Operating cost component - intended to compensate us for vessel operating expenses including management fees. This component is generally established at the beginning of the charter and typically escalates annually on a fixed percentage or fluctuates annually based on changes in a specified consumer price index.
|
•
|
injury to, destruction or loss of, or loss of use of, natural resource 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; and
|
•
|
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.
|
•
|
be organized in a jurisdiction outside the United States that grants an equivalent exemption from tax to corporations organized in the United States with respect to the types of U.S. Source International Transportation Income that we earn (or an Equivalent Exemption);
|
•
|
satisfy the Publicly Traded Test (as described below) or the Qualified Shareholder Stock Ownership Test (as described below); and
|
•
|
meet certain substantiation, reporting and other requirements.
|
•
|
individual residents of jurisdictions that grant an Equivalent Exemption;
|
•
|
non-U.S. corporations organized in jurisdictions that grant an Equivalent Exemption and that meet the Publicly Traded Test; or
|
•
|
certain other qualified persons described in the Section 883 Regulations (which we refer to collectively as Qualified Shareholders).
|
•
|
Vessels may be re-contracted at lower rates.
We currently derive all of our revenue from a limited number of customers on charters. Hire rates for FSRUs and LNG carriers fluctuate over time as a result of changes in the supply-demand balance relating to current and future FSRU and LNG carrier capacity. Hire rates at a time when we may be seeking a new charter may be lower than the hire rates at which our vessels are currently chartered. The
Golar Maria
and
Golar Mazo
are currently on spot charters and the
Golar Igloo’s
charter is due to expire in 2019. We cannot guarantee that KNPC will employ the
Golar Igloo
beyond the 2019 regasification season. In addition, certain of our time charters provide for significant reductions in hire rates payable during extension periods if the charterer extends the applicable charter beyond its initial term. If rates are lower, our earnings and ability to make distributions to our unitholders may decline.
|
•
|
The amount and timing of drydocking and the number of drydocking days of our vessels can significantly affect our revenues between periods.
Our vessels are off-hire at various points of time due to scheduled and unscheduled maintenance. During the years ended December 31, 2018, 2017 and 2016, we had 134, 123 and 88 off-hire days, respectively, relating to drydocking of our vessels. Material differences in the number of off-hire days from period to period could cause financial results to differ materially.
|
•
|
Our investment in Hilli LLC may not result in anticipated profitability or generate cash flow sufficient to justify our investment.
The
Hilli
is the world’s first converted FLNG vessel. FLNG vessels are complex and their operations are technically challenging and subject to mechanical risks. Accordingly, the operations of the
Hilli
are subject to risks that could negatively impact affect our earnings and financial condition. In addition, we provided the Partnership Guarantee and the LOC Guarantee in connection with the Hilli Acquisition. We could be liable if Hilli Corp fails to service its debt or comply with its debt covenants under the Hilli Facility or fails to perform under the LTA. This could also affect our ability to gain future credit from certain lenders. Furthermore, upon the closing of the Hilli Acquisition, we accounted for our investment in Hilli LLC under the equity method. Accordingly, our anticipated benefits from Hilli LLC is through cash distributions from our share of earnings from Hilli LLC.
|
•
|
Our results may be affected by fluctuations in our vessel operating costs.
Factors such as shortage of qualified and experienced seafaring crew, changes in regulatory requirements and pressure on raw material prices could increase our operating expenditures. Although we continue to take measures to improve operational efficiencies and mitigate the impact of inflation and price escalations, future increases to operational cost may occur. In addition, the
Golar Spirit
has been in lay-up since August 2017. 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 intend to increase the size of our fleet by making other acquisitions.
Our growth strategy focuses on expanding our fleet through the acquisition of FSRUs, LNG carriers and FLNGs under long-term time charters from Golar or third parties. We may need to issue additional equity or incur additional indebtedness to fund additional vessels that we purchase.
|
•
|
We may enter into different financing arrangements.
Our financing arrangements currently in place 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 new financing arrangements. For descriptions of our current financing arrangements, please read “—B. Liquidity and Capital Resources—Borrowing Activities.”
|
•
|
Our results are affected by fluctuations in the fair value of our derivative instruments.
The change in fair value of our derivative instruments is included in our net income as most of our derivative instruments are not designated as hedges for accounting purposes. These changes may fluctuate significantly as interest rates fluctuate. Please read note 23 “Financial Instruments” in our Consolidated Financial Statements.
|
•
|
Our results may be affected by tax exposure.
Tax accounting and reporting judgments that we make may not be entirely free from doubt. It is possible that applicable tax authorities will disagree with our positions, possibly resulting in additional taxes being owed in future years. For instance, the Indonesian tax authorities have revoked a previously granted waiver of VAT importation for one of our subsidiaries, PTGI, in the approximate amount of $24.0 million for the NR Satu. In February 2018, PTGI filed a Judicial Review with the Supreme Court of Indonesia, but in December 2018, the Supreme Court of Indonesia ruled against PTGI with regards the validity of wavier cancellation. However, we do not believe it probable that a liability exists as a result of this ruling, as no Tax Underpayment Assessment Notice has been received within the statute of limitations period. In the event that the revocation of the waiver is upheld by the Supreme Court an
|
•
|
The
Methane Princess
’s and the
Golar Eskimo
’s charters provide that the operating cost component of the charter hire rate, established at the beginning of the charter, will increase by a fixed percentage per annum (except for insurance in the case of the
Methane Princess
, which is covered at cost).
|
•
|
Under the OSA for the
Golar Winter
, the charter hire rates are payable in Brazilian Reais. The charter hire rates payable under the OSA covers all vessel operating expenses, other than drydocking and insurance. The charter hire rate payable under the OSA was established between the parties at the time the charter was entered into and will be increased based on a specified mix of consumer price and U.S. Dollar foreign exchange rate indices on an annual basis.
|
•
|
The
NR Satu
time charter provides for annual adjustment to the operating expense component of the charter hire rate as necessary to take into account cost movements.
|
|
December 31, 2018
|
December 31, 2017
|
||||||||||||||||||||||||||
(dollars in thousands)
|
FSRU
|
LNG Carrier
|
FLNG
|
Elimination
(1)
|
Consolidated Reporting
|
FSRU
|
LNG Carrier
|
FLNG
|
Elimination
(1)
|
Consolidated Reporting
|
||||||||||||||||||
Total operating revenues
|
$
|
294,889
|
|
$
|
51,761
|
|
$
|
49,754
|
|
$
|
(49,754
|
)
|
$
|
346,650
|
|
$
|
316,599
|
|
$
|
116,503
|
|
—
|
|
—
|
|
$
|
433,102
|
|
Vessel operating expenses
|
(42,736
|
)
|
(22,511
|
)
|
(9,834
|
)
|
9,834
|
|
(65,247
|
)
|
(47,960
|
)
|
(20,318
|
)
|
—
|
|
—
|
|
(68,278
|
)
|
||||||||
Voyage and commission expenses
|
(7,138
|
)
|
(4,084
|
)
|
(434
|
)
|
434
|
|
(11,222
|
)
|
(8,375
|
)
|
(1,319
|
)
|
—
|
|
—
|
|
(9,694
|
)
|
||||||||
Administrative expenses
(2)
|
(9,384
|
)
|
(5,425
|
)
|
(1,306
|
)
|
1,306
|
|
(14,809
|
)
|
(10,029
|
)
|
(5,181
|
)
|
—
|
|
—
|
|
(15,210
|
)
|
||||||||
Segment EBITDA
|
$
|
235,631
|
|
$
|
19,741
|
|
$
|
38,180
|
|
$
|
(38,180
|
)
|
$
|
255,372
|
|
$
|
250,235
|
|
$
|
89,685
|
|
—
|
|
—
|
|
$
|
339,920
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Statement of Operations Data:
|
(dollars in thousands, except TCE)
|
|||||||||||||
Total operating revenues
|
$
|
294,889
|
|
|
$
|
316,599
|
|
|
$
|
(21,710
|
)
|
|
(7
|
)%
|
Vessel operating expenses
|
(42,736
|
)
|
|
(47,960
|
)
|
|
5,224
|
|
|
(11
|
)%
|
|||
Voyage and commission expenses
|
(7,138
|
)
|
|
(8,375
|
)
|
|
1,237
|
|
|
(15
|
)%
|
|||
Administrative expenses
(1)
|
(9,384
|
)
|
|
(10,029
|
)
|
|
645
|
|
|
(6
|
)%
|
|||
FSRU Segment EBITDA
|
235,631
|
|
|
250,235
|
|
|
(14,604
|
)
|
|
(6
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|||||||
Average daily TCE
(2)
|
$
|
171,689
|
|
|
$
|
159,950
|
|
|
$
|
11,739
|
|
|
7
|
%
|
•
|
a $12.1 million increase due to recognition of all of
Golar Freeze
's revenue until the end of her previous charter in the year ended
December 31, 2018
. In July 2018,
Golar Freeze
was nominated to service the New Freeze Charter and subsequently underwent drydocking to satisfy certain technical specifications of the charter. Accordingly, we recognized all of the revenue due to be paid under the current
Golar Freeze
charter which had an original expiration date of April 2019 as the vessel will no longer be available under the current charter; and
|
•
|
a $13.0 million increase in revenue from the
Golar Winter
in the year ended
December 31, 2018
following her scheduled drydocking in 2017.
|
•
|
a $4.1 million decrease in repairs and maintenance costs for the
NR Satu
during the year ended December 31, 2018 following her scheduled maintenance in 2017; and
|
•
|
a $3.8 million reduction in the operating costs associated with the
Golar Spirit
due to the vessel being placed in lay-up in August 2017 following the termination of her charter.
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
Statement of Operations Data:
|
(dollars in thousands, except TCE)
|
|||||||||||||
Total operating revenues
|
$
|
51,761
|
|
|
$
|
116,503
|
|
|
(64,742
|
)
|
|
(56
|
)%
|
|
Vessel operating expenses
|
(22,511
|
)
|
|
(20,318
|
)
|
|
(2,193
|
)
|
|
11
|
%
|
|||
Voyage and commission expenses
|
(4,084
|
)
|
|
(1,319
|
)
|
|
(2,765
|
)
|
|
210
|
%
|
|||
Administrative expenses
(1)
|
(5,425
|
)
|
|
(5,181
|
)
|
|
(244
|
)
|
|
5
|
%
|
|||
LNG carrier Segment EBITDA
|
19,741
|
|
|
89,685
|
|
|
(69,944
|
)
|
|
(78
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|||||||
Average daily TCE
(2)
|
$
|
33,575
|
|
|
$
|
80,268
|
|
|
$
|
(46,693
|
)
|
|
(58
|
)%
|
•
|
a $31.5 million reduction in revenue from the
Golar Mazo
as a result of the expiration of her charter in December 2017;
|
•
|
a $29.2 million reduction in revenue from the
Golar Grand
and the
Golar Maria
following the expiration of the charter back to Golar and her charter, respectively, in November 2017. The hire rates under the
Golar Grand's
and the
Golar Maria's
time charters with the new charterers are lower than the previous hire rates; and
|
•
|
a $4.0 million reduction in revenue from the
Methane Princess
resulting from her scheduled drydocking in 2018.
|
•
|
$1.3 million in operating cost for the
Golar Mazo
in 2018 following the expiration of her charter in December 2017; and
|
•
|
$1.2 million in operating cost for the
Golar Grand
in 2018 as she was taken out of lay-up and completed drydock in 2017.
|
|
Year Ended December 31,
|
|
|
|
|
||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
||||||
Statement of Operations Data:
|
(dollars in thousands)
|
||||||||||||
Total operating revenues
|
$
|
49,754
|
|
|
$
|
—
|
|
|
49,754
|
|
|
100
|
%
|
Vessel operating expenses
|
(9,834
|
)
|
|
—
|
|
|
(9,834
|
)
|
|
100
|
%
|
||
Voyage and commission expenses
|
(434
|
)
|
|
—
|
|
|
(434
|
)
|
|
100
|
%
|
||
Administrative expenses
|
(1,306
|
)
|
|
—
|
|
|
(1,306
|
)
|
|
100
|
%
|
||
FLNG Segment EBITDA
|
38,180
|
|
|
—
|
|
|
38,180
|
|
|
100
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Other non-operating income
|
$
|
449
|
|
|
$
|
922
|
|
|
$
|
(473
|
)
|
|
(51
|
)%
|
Depreciation and amortization
|
(98,812
|
)
|
|
(103,810
|
)
|
|
4,998
|
|
|
(5
|
)%
|
|||
Administrative expenses
|
(14,809
|
)
|
|
(15,210
|
)
|
|
401
|
|
|
(3
|
)%
|
|||
Interest income
|
8,950
|
|
|
7,804
|
|
|
1,146
|
|
|
15
|
%
|
|||
Interest expense
|
(80,650
|
)
|
|
(75,425
|
)
|
|
(5,225
|
)
|
|
7
|
%
|
|||
Gains on derivative instruments
|
8,106
|
|
|
7,796
|
|
|
310
|
|
|
4
|
%
|
|||
Other financial items, net
|
(592
|
)
|
|
(15,363
|
)
|
|
14,771
|
|
|
(96
|
)%
|
|||
Taxes
|
(17,465
|
)
|
|
(16,996
|
)
|
|
(469
|
)
|
|
3
|
%
|
|||
Non-controlling interest
|
(3,358
|
)
|
|
(15,568
|
)
|
|
12,210
|
|
|
(78
|
)%
|
•
|
$2.0 million in additional interest due to a full year of interest expense arising on our $250 million of senior unsecured non-amortizing 2017 Norwegian Bonds, issued in February 2017;
|
•
|
$2.1 million incremental interest on the $800 million facility, due to higher LIBOR and additional interest as a result of the balance drawn under the revolving facility during 2018; and
|
•
|
$0.7 million incremental interest and amortization of deferred financing costs as a result of refinancing of the NR Satu facility in early 2018.
|
|
Year ended December 31,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
$ Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Mark-to-market adjustment for interest rate swaps
|
$
|
(1,455
|
)
|
|
$
|
12,073
|
|
|
$
|
(13,528
|
)
|
|
(112
|
)%
|
Net interest income/(expense) on un-designated interest rate swaps
|
2,161
|
|
|
(7,554
|
)
|
|
9,715
|
|
|
(129
|
)%
|
|||
Net unrealized and realized gains on interest rate swaps
|
706
|
|
|
4,519
|
|
|
(3,813
|
)
|
|
(84
|
)%
|
|||
Mark-to-market gains/(losses) on Earn-Out Units
|
7,400
|
|
|
(441
|
)
|
|
7,841
|
|
|
(1,778
|
)%
|
|||
Gains on repurchase of cross-currency interest rate swap
|
—
|
|
|
3,718
|
|
|
(3,718
|
)
|
|
(100
|
)%
|
|||
Total
|
$
|
8,106
|
|
|
$
|
7,796
|
|
|
$
|
310
|
|
|
4
|
%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2018
|
|
2017
|
|
Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Losses on repurchase of 2012 High-Yield Bonds
|
—
|
|
|
(7,876
|
)
|
|
7,876
|
|
|
100
|
%
|
|||
Foreign exchange losses on 2012 High-Yield Bonds
|
—
|
|
|
(3,103
|
)
|
|
3,103
|
|
|
100
|
%
|
|||
Premium paid on repurchase of 2012 High-Yield Bonds
|
—
|
|
|
(2,820
|
)
|
|
2,820
|
|
|
100
|
%
|
|||
Other items
|
(592
|
)
|
|
(1,564
|
)
|
|
972
|
|
|
(62
|
)%
|
|||
Other financial items, net
|
$
|
(592
|
)
|
|
$
|
(15,363
|
)
|
|
$
|
14,771
|
|
|
(96
|
)%
|
|
December 31, 2017
|
December 31, 2016
|
||||||||||||||||||||||||
(dollars in thousands)
|
FSRU
|
LNG Carrier
|
FLNG
|
Elimination
|
Consolidated Reporting
|
FSRU
|
LNG Carrier
|
FLNG
|
Elimination
|
Consolidated Reporting
|
||||||||||||||||
Total operating revenues
|
$
|
316,599
|
|
$
|
116,503
|
|
—
|
|
—
|
|
$
|
433,102
|
|
$
|
322,373
|
|
$
|
119,225
|
|
—
|
|
—
|
|
$
|
441,598
|
|
Vessel operating expenses
|
(47,960
|
)
|
(20,318
|
)
|
—
|
|
—
|
|
(68,278
|
)
|
(43,884
|
)
|
(16,002
|
)
|
—
|
|
—
|
|
(59,886
|
)
|
||||||
Voyage and commission expenses
|
(8,375
|
)
|
(1,319
|
)
|
—
|
|
—
|
|
(9,694
|
)
|
(5,049
|
)
|
(925
|
)
|
—
|
|
—
|
|
(5,974
|
)
|
||||||
Administrative expenses
(1)
|
(10,029
|
)
|
(5,181
|
)
|
—
|
|
—
|
|
(15,210
|
)
|
(5,773
|
)
|
(2,827
|
)
|
—
|
|
—
|
|
(8,600
|
)
|
||||||
Segment EBITDA
|
$
|
250,235
|
|
$
|
89,685
|
|
—
|
|
—
|
|
$
|
339,920
|
|
$
|
267,667
|
|
$
|
99,471
|
|
—
|
|
—
|
|
$
|
367,138
|
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Statement of Operations Data:
|
(dollars in thousands, except TCE)
|
|||||||||||||
Total operating revenues
|
$
|
316,599
|
|
|
$
|
322,373
|
|
|
$
|
(5,774
|
)
|
|
(2
|
)%
|
Vessel operating expenses
|
(47,960
|
)
|
|
(43,884
|
)
|
|
(4,076
|
)
|
|
9
|
%
|
|||
Voyage and commission expenses
|
(8,375
|
)
|
|
(5,049
|
)
|
|
(3,326
|
)
|
|
66
|
%
|
|||
Administrative expenses
(1)
|
(10,029
|
)
|
|
(5,773
|
)
|
|
(4,256
|
)
|
|
74
|
%
|
|||
FSRU Segment EBITDA
|
250,235
|
|
|
267,667
|
|
|
(17,432
|
)
|
|
(7
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|||||||
Average daily TCE
(2)
|
$
|
159,950
|
|
|
$
|
144,501
|
|
|
$
|
15,449
|
|
|
11
|
%
|
•
|
$9.2 million reduction in revenue from the
Golar Winter
following her scheduled drydocking in 2017; and
|
•
|
a $1.7 million reduction in revenue from the
Golar Freeze
due to the reduction of the daily time charter rate under the amended
Golar Freeze
time charter, which was effective as of July 2017.
|
•
|
$4.5 million of incremental repairs and maintenance costs for the
NR Satu
following her scheduled maintenance window during the year ended
December 31, 2017
; and
|
•
|
$1.2 million in additional costs for
Golar Winter
, due to higher upstoring and repairs and maintenance cost during her scheduled drydocking in September 2017. There were no comparable costs in the year ended December 31, 2016.
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
Statement of Operations Data:
|
(dollars in thousands, except TCE)
|
|||||||||||||
Total operating revenues
|
$
|
116,503
|
|
|
$
|
119,225
|
|
|
$
|
(2,722
|
)
|
|
(2
|
)%
|
Vessel operating expenses
|
(20,318
|
)
|
|
(16,002
|
)
|
|
(4,316
|
)
|
|
27
|
%
|
|||
Voyage and commission expenses
|
(1,319
|
)
|
|
(925
|
)
|
|
(394
|
)
|
|
43
|
%
|
|||
Administrative expenses
(1)
|
(5,181
|
)
|
|
(2,827
|
)
|
|
(2,354
|
)
|
|
83
|
%
|
|||
LNG carrier Segment EBITDA
|
89,685
|
|
|
99,471
|
|
|
(9,786
|
)
|
|
(10
|
)%
|
|||
|
|
|
|
|
|
|
|
|||||||
Other Financial Data:
|
|
|
|
|
|
|
|
|||||||
Total operating revenues
|
$
|
116,503
|
|
|
$
|
119,225
|
|
|
$
|
(2,722
|
)
|
|
(2
|
)%
|
Voyage and commission expenses
|
(1,319
|
)
|
|
(925
|
)
|
|
(394
|
)
|
|
43
|
%
|
|||
|
115,184
|
|
|
118,300
|
|
|
(3,116
|
)
|
|
(3
|
)%
|
|||
Calendar days less scheduled off-hire days
|
1,435
|
|
|
1,438
|
|
|
(3
|
)
|
|
—
|
%
|
|||
Average daily TCE
(2)
|
$
|
80,268
|
|
|
$
|
82,267
|
|
|
$
|
(1,999
|
)
|
|
(2
|
)%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Other non-operating income
|
$
|
922
|
|
|
$
|
1,318
|
|
|
$
|
(396
|
)
|
|
(30
|
)%
|
Depreciation and amortization
|
(103,810
|
)
|
|
(100,468
|
)
|
|
(3,342
|
)
|
|
3
|
%
|
|||
Administrative expense
|
(15,210
|
)
|
|
(8,600
|
)
|
|
(6,610
|
)
|
|
77
|
%
|
|||
Interest income
|
7,804
|
|
|
4,295
|
|
|
3,509
|
|
|
82
|
%
|
|||
Interest expense
|
(75,425
|
)
|
|
(66,938
|
)
|
|
(8,487
|
)
|
|
13
|
%
|
|||
Gains/(losses) on derivative instruments
|
7,796
|
|
|
(931
|
)
|
|
8,727
|
|
|
(937
|
)%
|
|||
Other financial items, net
|
(15,363
|
)
|
|
(1,814
|
)
|
|
(13,549
|
)
|
|
747
|
%
|
|||
Taxes
|
(16,996
|
)
|
|
(16,858
|
)
|
|
(138
|
)
|
|
1
|
%
|
|||
Non-controlling interest
|
(15,568
|
)
|
|
(13,571
|
)
|
|
(1,997
|
)
|
|
15
|
%
|
•
|
$6.4 million in additional interest relating to our issuance of $250 million of senior unsecured non-amortizing 2017 Norwegian Bonds in February 2017 to replace our 2012 High Yield Bonds, which matured in October 2017; and
|
•
|
$1.7 million increase in interest expense arising on the Methane Princess lease for the year ended December 31, 2017 compared to the same period in 2016. This was due to the effect of a reduction in corporation tax rates recognized in 2016.
|
|
Year ended December 31,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
$ Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Mark-to-market adjustment for interest rate swaps
|
$
|
12,073
|
|
|
$
|
9,893
|
|
|
$
|
2,180
|
|
|
22
|
%
|
Net interest expense on un-designated interest rate swaps
|
(7,554
|
)
|
|
(10,824
|
)
|
|
3,270
|
|
|
(30
|
)%
|
|||
Net unrealized and realized gains/(losses) on interest rate swaps
|
4,519
|
|
|
(931
|
)
|
|
5,450
|
|
|
(585
|
)%
|
|||
Mark-to-market losses on Earn-Out Units
|
(441
|
)
|
|
—
|
|
|
(441
|
)
|
|
(100
|
)%
|
|||
Gains on repurchase of cross-currency interest rate swap
|
3,718
|
|
|
—
|
|
|
3,718
|
|
|
100
|
%
|
|||
Total
|
$
|
7,796
|
|
|
$
|
(931
|
)
|
|
$
|
8,727
|
|
|
(937
|
)%
|
|
Year Ended December 31,
|
|
|
|
|
|||||||||
|
2017
|
|
2016
|
|
Change
|
|
% Change
|
|||||||
|
(dollars in thousands)
|
|||||||||||||
Losses on repurchase of 2012 High-Yield Bonds
|
(7,876
|
)
|
|
—
|
|
|
(7,876
|
)
|
|
100
|
%
|
|||
Foreign exchange losses on 2012 High-Yield Bonds
|
(3,103
|
)
|
|
—
|
|
|
(3,103
|
)
|
|
100
|
%
|
|||
Premium paid on repurchase of 2012 High-Yield Bonds
|
(2,820
|
)
|
|
—
|
|
|
(2,820
|
)
|
|
100
|
%
|
|||
Other items
|
(1,564
|
)
|
|
(1,814
|
)
|
|
250
|
|
|
(14
|
)%
|
|||
Other financial items, net
|
$
|
(15,363
|
)
|
|
$
|
(1,814
|
)
|
|
$
|
(13,549
|
)
|
|
747
|
%
|
•
|
we paid a cash distribution of $0.4042 per unit ($28.7 million in the aggregate) to all common and general partner unitholders with respect to the quarter ended
December 31, 2018
in February 2019;
|
•
|
we paid a cash distribution of $0.546875 per Series A Preferred Unit ($3.0 million in the aggregate) for the period from November 15, 2018 through February 14, 2019, in February 2019;
|
•
|
drawdown of $25 million of the revolving credit facility under the $800 million credit facility, during February 2019; and
|
•
|
we made $16.7 million of scheduled debt repayments.
|
|
Year Ended December 31,
|
||||||||||
(in thousands)
|
2018
|
|
2017
(1)
|
|
2016
(1)
|
||||||
Net cash provided by operating activities
|
$
|
137,166
|
|
|
$
|
270,430
|
|
|
$
|
259,687
|
|
Net cash used in investing activities
|
(19,632
|
)
|
|
(70,426
|
)
|
|
(107,247
|
)
|
|||
Net cash used in financing activities
|
(272,211
|
)
|
|
(8,729
|
)
|
|
(136,308
|
)
|
|||
Net (decrease)/increase in cash, cash equivalents and restricted cash
|
(160,795
|
)
|
|
201,762
|
|
|
(5,834
|
)
|
|||
Cash, cash equivalents and restricted cash at beginning of year
|
429,887
|
|
|
228,125
|
|
|
233,959
|
|
|||
Cash, cash equivalents and restricted cash at end of year
|
269,092
|
|
|
429,887
|
|
|
228,125
|
|
•
|
a significant decrease in revenue from charterers following the expiration of a number of long-term charters and lower charter hire rates in 2018;
|
•
|
an increase in drydocking expenditure of $4.9 million due to higher cost for the scheduled drydocking of the
Golar Freeze
and
Methane Princess
in 2018, compared with the drydocking of the
Golar Grand
,
Golar Mazo
and
Golar Winter
in 2017; and
|
•
|
a general increase in working capital for the year ended
December 31, 2018
, compared to the same period in 2017.
|
•
|
$10.7 million of payments for vessel modifications for the
Golar Freeze
and
Golar Igloo,
and BWTS installation for the
Methane Princess
; and
|
•
|
$9.7 million of cash consideration paid in connection with the Hilli Acquisition, which closed in July 2018.
|
•
|
repayment of debt and lease obligations of $157.2 million;
|
•
|
payment of cash distributions during the year of $165.3 million;
|
•
|
payment of $14.0 million in connection with our common unit repurchase program; and
|
•
|
payment of $1.7 million of financing costs related to the refinancing of the NR Satu Facility.
|
•
|
repayment of debt and lease obligations of $463.8 million. Of this amount, $234.2 million relates to the redemption of our High-Yield Bonds and termination of the related cross currency interest rate swap;
|
•
|
payment of cash distributions during the year of $168.1 million (of which $7.0 million was distributions to non-controlling interests); and
|
•
|
financing and debt settlement costs of $5.4 million mainly in connection with issuance of the 2017 Norwegian Bonds.
|
•
|
payment of cash distributions during the year of $167.0 million ($12.4 million of which was distributions to non-controlling interests);
|
•
|
repayment of debt (including debt due to related party) and lease obligations of $771.0 million. Of this amount, $681.4 million relates to repayment of the Maria and Freeze Facility, the Golar LNG Partners Credit Facility, the Golar Partners Operating Credit Facility and the Golar Igloo Debt in connection with their refinancing in May 2016 into the $800.0 million credit facility;
|
•
|
financing and debt settlement costs of $13.5 million mainly in connection with the $800.0 million credit facility; and
|
•
|
payment of $0.5 million in connection with our common unit repurchase program.
|
|
Total
Obligation
|
|
Due in
2019
|
|
Due in
2020 — 2021
|
|
Due in
2022—2023
|
|
Due
Thereafter
|
||||||||||
|
(in millions)
|
||||||||||||||||||
Long-term debt
(1)
|
$
|
1,283.1
|
|
|
$
|
78.6
|
|
|
$
|
998.2
|
|
|
$
|
70.2
|
|
|
$
|
136.1
|
|
Interest commitments on long-term debt - floating and other interest rate swaps
(2)
|
180.2
|
|
|
65.4
|
|
|
89.3
|
|
|
14.9
|
|
|
10.6
|
|
|||||
Capital lease obligations, net
(2)(3)
|
119.7
|
|
|
1.5
|
|
|
4.3
|
|
|
6.0
|
|
|
107.9
|
|
|||||
Purchase obligations
(4)
|
10.3
|
|
|
10.3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
1,593.3
|
|
|
$
|
155.8
|
|
|
$
|
1,091.8
|
|
|
$
|
91.1
|
|
|
$
|
254.6
|
|
(1)
|
Amounts shown gross of deferred financing costs of
$10.8 million
.
|
(2)
|
Our interest commitment on our long-term debt is calculated based on assumed USD LIBOR rates of between 2.41% and 2.81% respectively, taking into account our various margin rates and interest rate swaps associated with our debt. Our interest commitment on our capital lease obligations is calculated on an assumed average Pound Sterling LIBOR of 5.2%.
|
(3)
|
In the event of any adverse tax rate changes or rulings our lease obligation with regard to the
Methane Princess
could increase significantly (please refer to note 21 "Capital Lease" to our Consolidated Financial Statements included herein). However, Golar has agreed to indemnify us against any such increase.
|
(4)
|
As at December 31, 2018, we had a remaining net purchase price less working capital adjustments commitment of $10.3 million due to be paid in connection with the Hilli Acquisition.
|
Name
|
|
Age
|
|
Position
|
Tor Olav Trøim
|
|
56
|
|
Chairman
|
Paul Leand Jr.
|
|
52
|
|
Director and Conflicts Committee Member
|
Lori Wheeler Naess
|
|
48
|
|
Director and Audit Committee Chairperson
|
Carl Steen
|
|
68
|
|
Director and Audit Committee Member
|
Alf Thorkildsen
|
|
62
|
|
Director, Conflicts and Audit Committee Member
|
Michael Ashford
|
|
72
|
|
Director and Company Secretary
|
Jeremy Kramer
|
|
57
|
|
Director and Conflicts Committee Member
|
Name
|
|
Age
|
|
Position
|
Brian Tienzo
|
|
45
|
|
Principal Executive, Financial and Accounting Officer
|
Øistein Dahl
|
|
58
|
|
Chief Operating Officer
|
|
|
Common Units
Beneficially Owned
|
|||
Name of Beneficial Owner
|
|
Number
|
Percent
|
||
Golar LNG Limited
|
|
21,226,586
|
|
30.6
|
%
|
FMR LLC
(1)
|
|
6,976,826
|
|
10.0
|
%
|
Oppenheimer Funds, Inc.
(2)
|
|
6,258,695
|
|
9.0
|
%
|
All directors and executive officers as a group (9 persons)
|
|
*
|
|
*
|
|
(1)
|
Based solely on information contained in a Schedule 13G filed on February 13, 2019 by FMR LLC.
|
(2)
|
Based solely on information contained in a Schedule 13G filed on January 24, 2019 by Oppenheimer Funds, Inc.
|
(1)
|
acquiring, owning, operating or chartering Non-Five-Year Vessels;
|
(2)
|
acquiring one or more Five-Year Vessels if Golar promptly offers to sell the vessel to us for the acquisition price plus any administrative costs (including re-flagging and reasonable legal costs) associated with the transfer to us at the time of the acquisition;
|
(3)
|
putting a Non-Five-Year Vessel under charter for five or more years if Golar offers to sell the vessel to us for fair market value (x) promptly after the time it becomes a Five-Year Vessel and (y) at each renewal or extension of that charter for five or more years;
|
(4)
|
acquiring one or more Five-Year Vessels as part of the acquisition of a controlling interest in a business or package of assets and owning, operating or chartering those vessels; provided, however, that:
|
(a)
|
if less than a majority of the value of the business or assets acquired is attributable to Five-Year Vessels, as determined in good faith by Golar’s board of directors, Golar must offer to sell such vessels to us for their fair market value plus any additional tax or other similar costs that Golar incurs in connection with the acquisition and the transfer of such vessels to us separate from the acquired business; and
|
(b)
|
if a majority or more of the value of the business or assets acquired is attributable to Five-Year Vessels, as determined in good faith by Golar’s board of directors, Golar must notify us of the proposed acquisition in advance. Not later than 10 days following receipt of such notice, we will notify Golar if we wish to acquire such vessels in cooperation and simultaneously with Golar acquiring the Non-Five-Year Vessels. If we do not notify Golar of our intent to pursue the acquisition within 10 days, Golar may proceed with the acquisition and then offer to sell such vessels to us as provided in (a) above;
|
(5)
|
acquiring a non-controlling interest in any company, business or pool of assets;
|
(6)
|
acquiring, owning, operating or chartering any Five-Year Vessel if we do not fulfill our obligation to purchase such vessel in accordance with the terms of any existing or future agreement;
|
(7)
|
acquiring, owning, operating or chartering a Five-Year Vessel subject to the offers to us described in paragraphs (2), (3) and (4) above pending our determination whether to accept such offers and pending the closing of any offers we accept;
|
(8)
|
providing ship management services relating to any vessel; or
|
(9)
|
acquiring, owning, operating or chartering a Five-Year Vessel if we have previously advised Golar that we consent to such acquisition, operation or charter.
|
(1)
|
prevent us from owning, operating or chartering any Non-Five-Year Vessel that was previously a Five-Year Vessel while owned by us;
|
(2)
|
prevent us or any of our subsidiaries from acquiring Non-Five-Year Vessels as part of the acquisition of a controlling interest in a business or package of assets and owning, operating or chartering those vessels; provided, however, that:
|
(a)
|
if less than a majority of the value of the business or assets acquired is attributable to Non-Five-Year Vessels, as determined in good faith by us, we must offer to sell such vessels to Golar for their fair market value plus any additional tax or other similar costs that we incur in connection with the acquisition and the transfer of such vessels to Golar separate from the acquired business; and
|
(b)
|
if a majority or more of the value of the business or assets acquired is attributable to Non-Five-Year Vessels, as determined in good faith by us, we must notify Golar of the proposed acquisition in advance. Not later than 10 days following receipt of such notice, Golar must notify us if it wishes to acquire the Non-Five-Year Vessels in cooperation and simultaneously with us acquiring the Five-Year Vessels. If Golar does not notify us of its intent to pursue the acquisition within 10 days, we may proceed with the acquisition and then offer to sell such vessels to Golar as provided in (a) above;
|
(3)
|
prevent us or any of our subsidiaries from acquiring, owning, operating or chartering any Non-Five-Year Vessels subject to the offer to Golar described in paragraph (2) above, pending its determination whether to accept such offer and pending the closing of any offer it accepts; or
|
(4)
|
prevent us or any of our subsidiaries from acquiring, owning, operating or chartering Non-Five-Year Vessels if Golar has previously advised us that it consents to such acquisition, ownership, operation or charter.
|
•
|
certain income tax liabilities attributable to the operation of the assets contributed or sold to us prior to the time they were contributed or sold; and
|
•
|
any liabilities in excess of our scheduled payments under the UK tax lease used to finance the
Methane Princess
, including liabilities in connection with termination of such lease.
|
•
|
Our unitholders have no contractual or other legal right to receive distributions other than the obligation under our partnership agreement to distribute available cash on a quarterly basis, which is subject to the broad discretion of our board of directors to establish reserves and other limitations.
|
•
|
We will be subject to restrictions on distributions under our financing arrangements. Our financing arrangements contain material financial tests and covenants that must be satisfied in order to pay distributions. If we are unable to satisfy the restrictions included in any of our financing arrangements or are otherwise in default under any of those agreements, it could have a material adverse effect on our ability to make cash distributions to our unitholders, notwithstanding our stated cash distribution policy.
|
•
|
We are required to make substantial capital expenditures to maintain and replace our fleet. These expenditures may fluctuate significantly over time, particularly as our vessels near the end of their useful lives. In order to minimize these fluctuations, our partnership agreement requires us to deduct estimated, as opposed to actual, maintenance and replacement capital expenditures from the amount of cash that we would otherwise have available for distribution to our unitholders. In years when estimated maintenance and replacement capital expenditures are higher than actual maintenance and replacement capital expenditures, the amount of cash available for distribution to unitholders will be lower than if actual maintenance and replacement capital expenditures were deducted.
|
•
|
Although our partnership agreement requires us to distribute all of our available cash, our partnership agreement, including provisions contained therein requiring us to make cash distributions, may be amended. Our partnership agreement can be amended with the approval of a majority of the outstanding common units. As of March 15, 2019, Golar owned our general partner and
30.6%
of our common units.
|
•
|
Even if our cash distribution policy is not modified or revoked, the amount of distributions we pay under our cash distribution policy and the decision to make any distribution is determined by our board of directors, taking into consideration the terms of our partnership agreement.
|
•
|
Under Section 51 of the Marshall Islands Act, we may not make a distribution to unitholders if the distribution would cause our liabilities to exceed the fair value of our assets.
|
•
|
PTGI is subject to restrictions on distributions under Indonesian laws due to its formation under the laws of Indonesia. Under Article 71.3 of the Indonesian Company Law (Law No. 40 of 2007), dividend distributions may be made only if PTGI has positive retained earnings. For the year ended
December 31, 2018
, PTGI paid $
nil
of dividends to PT Pesona.
|
•
|
We may lack sufficient cash to pay distributions to our unitholders due to decreases in total operating revenues, decreases in hire rates, the loss of a vessel (including, without limitation, through a customer’s exercise of its purchase option) or increases in operating or general and administrative expenses, principal and interest payments on outstanding debt, taxes, working capital requirements, maintenance and replacement capital expenditures or anticipated cash needs. Please read “Item 3. Key Information—D. Risk Factors” for a discussion of these factors.
|
|
Total Quarterly Distribution Target Amount
|
Marginal Percentage Interest in Distributions
|
||
|
Common Unitholders
|
General Partner
|
IDR Holders
|
|
Minimum Quarterly Distribution
|
$0.5775
|
98%
|
2%
|
0%
|
First Target Distribution
|
Up to $0.6641
|
98%
|
2%
|
0%
|
Second Target Distribution
|
Above $0.6641 up to $0.7219
|
85%
|
2%
|
13%
|
Third Target Distribution
|
Above $0.7219 up to $0.8663
|
75%
|
2%
|
23%
|
Thereafter
|
Above $0.8663
|
50%
|
2%
|
48%
|
1.
|
Omnibus Agreement dated April 13, 2011, by and among Golar LNG Ltd., Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited. See “Item 7—Major Unitholders and Related Party Transactions—B. Related Party Transactions” for a summary of certain contract terms.
|
2.
|
Amendment No. 1 to Omnibus Agreement, dated October 5, 2011 by and among Golar LNG Ltd., Golar LNG Partners LP, Golar GP LLC and Golar Energy Limited. See “Item 7—Major Unitholders and Related Party Transactions—B. Related Party Transactions” for a summary of certain contract terms.
|
3.
|
Purchase, Sale and Contribution Agreement, dated November 1, 2012, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd, providing for, among other things, the acquisition of the
Golar Grand
for a purchase price of $265.0 million for the vessel plus working capital adjustments of $2.6 million less the assumed capital lease obligations of $90.8 million.
|
4.
|
$175 million Facility Agreement, dated December 14, 2012, by and among a group of banks as the lender and PT Golar Indonesia as the borrower. The total facility amount is $175 million and is split into two tranches, a $155 million term loan facility and a $20 million revolving facility. The facility is with a syndicate of banks and bears interest at LIBOR plus a margin of 3.5%. See note 20 “Debt—NR Satu Facility” to our Consolidated Financial Statements for a summary of certain terms.
|
5.
|
Supplemental Agreement to $175 million Facility Agreement, dated March 29, 2018, by and PT Bank Sumitomo Mitsui as the lender, Sumitomo Mitsui Banking Corporation Singapore Branch as the agent, PT Golar Indonesia as the borrower and guaranteed by Golar LNG Partners LP. See note 20 “Debt—NR Satu Facility” to our Consolidated Financial Statements for a summary of certain terms.
|
6.
|
Bond Agreement dated October 11, 2012 between Golar LNG Partners LP and Norsk Tillitsmann ASA as bond trustee. The bonds bore interest at a rate equal to 3 months NIBOR plus a margin of 5.20% payable quarterly.
|
7.
|
Purchase, Sale and Contribution Agreement, dated December 5, 2013, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for the acquisition of the
Golar Igloo
for a purchase price of approximately $310.0 million less assumed debt of $161.3 million plus the fair value of the interest rate swap asset of $3.6 million and net working capital adjustments.
|
8.
|
The Purchase, Sale and Contribution Agreement dated December 15, 2014, by and between Golar LNG Partners LP, Golar Partners Operating LLC and Golar LNG Ltd., providing for, among other things, the acquisition of the
Golar Eskimo
for a purchase price of $330.0 million for the vessel plus $9.0 million of working capital adjustments less assumed bank debt of $108.0 million.
|
9.
|
Time charter party agreement by and between Golar Grand Corporation and Golar Trading Corporation, with respect to the
Golar Grand
, dated as of May 27, 2015. See note 24 “Related Party Transactions” to our Consolidated Financial Statements for a summary of certain terms.
|
10.
|
Bond Agreement dated May 20, 2015 between Golar LNG Partners LP and Nordic Trustee ASA as bond trustee. See note 20 “Debt—2015 Norwegian Bonds” to our Consolidated Financial Statements for a summary of certain terms.
|
11.
|
Purchase and Sale Agreement made by and between Golar LNG Limited and Golar Partners Operating LLC, dated February 10, 2016 with respect to the acquisition of the
Golar Tundra
. See “Item 7—Major Unitholders and Related Party Transactions-B. Related Party Transactions” for information about the Tundra Acquisition.
|
12.
|
Bareboat charter, Memorandum of Agreement and Common Terms Agreements, by and among Golar Eskimo Corp, and a subsidiary of China Merchants Bank Limited (Eskimo SPV), dated November 4, 2015, providing for the sale and leaseback of the
Golar Eskimo
. See note 5 “Variable Interest Entities—Eskimo Corp” to our Consolidated Financial Statements for a summary of certain terms.
|
13.
|
Bareboat charter, Memorandum of Agreement and Common Terms Agreements, by and among Golar LNG NB13 Corporation, and a subsidiary of China Merchants Bank Limited (Tundra SPV), dated November 19, 2015, providing for the sale and leaseback of the
Golar Tundra
. See “Item 7—Major Unitholders and Related Party Transactions-B. Related Party Transactions” for information about the Tundra Acquisition.
|
14.
|
Supplemental Agreement by and among Golar LNG NB13 Corporation, Golar LNG Limited, Golar LNG Partners LP and a subsidiary of China Merchants Bank Limited (Tundra SPV), dated April 28, 2016, as supplement to the Bareboat charter, Memorandum of Agreement and Common Terms Agreements dated November 19, 2015. See “Item 7—Major Unitholders and Related Party Transactions-B. Related Party Transactions” for information about the Tundra Acquisition.
|
15.
|
Letter Agreement dated May 17, 2016, the Second Letter Amendment dated September 26, 2016 and the Third Letter Agreement dated May 30, 2017, by and between Golar Partners Operating LLC and Golar LNG Limited. See note 24 “Related Party Transactions” to our Consolidated Financial Statements.
|
16.
|
Facilities Agreement for an $800 million senior secured amortizing term loan and revolving credit facility, dated April 27, 2016, the First Supplemental Letter to Facilities Agreement, dated April 27, 2016, the Second Supplemental Letter to Facilities Agreement, dated May 22, 2017, the Third Supplemental Letter to Facilities Agreement, dated June 29, 2017, Fourth Supplemental Letter to Facilities Agreement, dated January 16, 2018, Fifth Supplemental Letter to Facilities Agreement, dated 5 November, 2018, and the Sixth Supplemental Letter to Facilities Agreement, dated 5 November, 2018, by and among Golar Partners Operating LLC, Citigroup Global Markets Limited, DNB (UK) Limited, Nordea Bank Norge ASA, as agent and security agent and the other parties thereto. See note 20 “Debt—$800 million credit facility” to our Consolidated Financial Statements for a summary of certain terms.
|
17.
|
Omnibus Agreement dated June 19, 2016, by and among Golar LNG Ltd., Golar Power Limited, Golar LNG Partners LP, Golar GP LLC and Golar Partners Operating LLC. See “Item 7—Major Unitholders and Related Party Transactions—B. Related Party Transactions” for a summary of certain contract terms.
|
18.
|
Management and Administrative Services Agreement between Golar LNG Partners LP and Golar Management Limited, dated April 1, 2016, as amended. See “Item 7—Major Unitholders and Related Party Transactions—B. Related Party Transactions” for a summary of certain contract terms.
|
19.
|
Exchange Agreement by and among Golar LNG Partners LP, Golar GP LLC and Golar LNG Limited, dated October 13, 2016. See note 27 “Equity—Exchange of Incentive Distribution Rights” to our Consolidated Financial Statements for a summary of certain terms.
|
20.
|
Bond Agreement dated February 10, 2017 between Golar LNG Partners LP and Nordic Trustee ASA as bond trustee. See See note 20 “Debt—2017 Norwegian Bonds” to our Consolidated Financial Statements for a summary of certain terms.
|
21.
|
Purchase and Sale Agreement by and among Golar LNG Limited, KS Investments Pte. Ltd., Black & Veatch International Company and Golar Partners Operating LLC, dated August 15, 2017, as amended relating to acquisition of interest in Hilli LLC. See “Item 7—Major Unitholders and Related Party Transactions—B. Related Party Transactions” for a summary of certain contract terms.
|
22.
|
Deed of Guarantee by Golar LNG Partners LP in favor of Sea 24 Leasing Co. Limited in respect of the obligations of Golar LNG NB13 Corporation, dated as of November 19, 2015. See “Item 7-Major Unitholders and Related Party Transactions-B. Related Party Transactions.”
|
23.
|
Indemnity Letter, dated as of October 17, 2017, by and between Golar LNG Partners LP and Golar LNG Limited, pursuant to which Golar LNG Limited agreed to indemnify Golar LNG Partners LP for any liabilities that may arise in connection with its deficiency guarantee of the obligations of Golar Tundra Corp to Golar LNG NB13 Corporation under the sale leaseback arrangement relating to the Golar Tundra. See note 24 “Related Party Transactions” to our Consolidated Financial Statements for a summary of certain terms.
|
24.
|
Liquefaction Tolling Agreement, dated November 29, 2017, between Societe Nationale de Hydrocarbures, Perenco Cameroon SA, Golar Hilli Corporation and Golar Cameroon SASU. See Item 5 “Operating and Financial Review and Prospects—Significant Developments in 2018 and Early 2019—Liquefaction Tolling Agreement”.
|
25.
|
Amended and Restated Limited Liability Company Agreement of Golar Hilli LLC, Golar LNG Limited, by and among Golar LNG Limited, KS Investments Pte. Ltd., Black & Veatch International Company and Golar Partners Operating LLC, dated as of July 12, 2018. See Item 5 “Operating and Financial Review and Prospects—Significant Developments in 2018 and Early 2019—Hilli LLC Limited Liability Company Agreement”.
|
26.
|
Bareboat charter by and between Golar Hilli Corp. and Fortune Lianjiang Shipping S.A., dated September 9, 2015, providing for the sale and leaseback of the
Hilli
. See Item 5 “Operating and Financial Review and Prospects—Significant Developments in 2018 and Early 2019—Hilli Facility and the Partnership Guarantee”.
|
27.
|
Additional Clauses to the Bareboat Charter Party dated September 9, 2015 between Golar Hilli Corp. and Fortune Lianjiang Shipping S.A., as additional clauses to Bareboat charter by and between Golar Hilli Corp. and Fortune Lianjiang Shipping S.A., dated September 9, 2015. See Item 5 “Operating and Financial Review and Prospects—Significant Developments in 2018 and Early 2019—Hilli Facility and the Partnership Guarantee”.
|
28.
|
Memorandum of Agreement by and between Golar Hilli Corp. and Fortune Lianjiang Shipping S.A., dated September 9, 2015 providing for, among other things, the sale and leaseback of the
Hilli
. See Item 5 “Operating and Financial Review and Prospects—Significant Developments in 2018 and Early 2019—Hilli Facility and the Partnership Guarantee”.
|
29.
|
Common Terms Agreements, by and between Golar Hilli Corp. and Fortune Lianjiang Shipping S.A., dated September 9, 2015. See Item 5 “Operating and Financial Review and Prospects—Significant Developments in 2018 and Early 2019—Hilli Facility and the Partnership Guarantee”.
|
30.
|
Deed of Amendment, restatement and accession relating to a guarantee between Golar LNG Limited, Golar LNG Partners LP and Fortune Lianjiang Shipping S.A., dated as of July 12, 2018, as an amendment to the guarantee under the Common Terms Agreements, by and between Golar Hilli Corp. and Fortune Lianjiang Shipping S.A., dated September 9, 2015. See Item 5 “Operating and Financial Review and Prospects—Significant Developments in 2018 and Early 2019—Hilli Facility and the Partnership Guarantee” for a summary of certain contract terms.
|
31.
|
Guarantee Agreement by and between Golar LNG Partners LP and Standard Chartered Bank, dated as of November 28, 2018. See Item 5 “Operating and Financial Review and Prospects—Significant Developments in 2018 and Early 2019—Hilli Letter of Credit Guarantee” for a summary of certain contract terms.
|
E.
|
Taxation
|
•
|
an individual U.S. citizen or resident (as determined for U.S. federal income tax purposes),
|
•
|
a corporation (or other entity that is classified as a corporation for U.S. federal income tax purposes) organized under the laws of the United States or any of its political subdivisions,
|
•
|
an estate the income of which is subject to U.S. federal income taxation regardless of its source, or
|
•
|
a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect to be treated as a U.S. person for U.S. federal income tax purposes.
|
•
|
at least 75.0% of our gross income (including the gross income of our vessel-owning subsidiaries) for such taxable year consists of passive income (
e.g.
, dividends, interest, capital gains from the sale or exchange of investment property, and rents derived other than in the active conduct of a rental business); or
|
•
|
at least 50.0% of the average value of the assets held by us (including the assets of our vessel-owning subsidiaries) during such taxable year produce, or are held for the production of, passive income.
|
•
|
the excess distribution or gain would be allocated ratably over the Non-Electing Holder’s aggregate holding period for the common units or Series A Preferred Units;
|
•
|
the amount allocated to the current taxable year and any taxable year prior to the taxable year we were first treated as a PFIC with respect to the Non-Electing Holder would be taxed as ordinary income; and
|
•
|
the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax in effect for the applicable class of taxpayers for that year, and an interest charge for the deemed deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.
|
•
|
fails to provide an accurate taxpayer identification number;
|
•
|
is notified by the IRS that it has failed to report all interest or corporate distributions required to be reported on its U.S. federal income tax returns; or
|
•
|
in certain circumstances, fails to comply with applicable certification requirements.
|
•
|
we are not treated as carrying on a trade, profession or vocation in the United Kingdom;
|
•
|
such holders do not have a branch or agency or permanent establishment in the United Kingdom to which such units pertain; and
|
•
|
such holders do not use or hold and are not deemed or considered to use or hold their units in the course of carrying on a trade, profession or vocation in the United Kingdom.
|
•
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Partnership;
|
•
|
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 Partnership are being made only in accordance with authorizations of management and directors of the Partnership; and
|
•
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Partnership’s assets that could have a material effect on the financial statements.
|
|
2018
|
|
2017
|
||||
Audit Fees
|
$
|
1,404,179
|
|
|
$
|
1,010,092
|
|
Tax Fees
|
66,789
|
|
|
271,295
|
|
||
All Other Fees
|
133,736
|
|
|
391,873
|
|
||
|
$
|
1,604,704
|
|
|
$
|
1,673,260
|
|
Month of repurchase
|
Total number of common units purchased
|
|
Average price paid per common unit
|
|
Total number of common units purchased as part of publicly announced plans or program
|
|
Maximum value of common units that may be purchased under the plans or program
|
||||||
March 2018
|
439,672
|
|
|
$
|
18.18
|
|
|
439,672
|
|
|
$
|
42,008,085
|
|
June 2018
|
96,100
|
|
|
$
|
15.31
|
|
|
535,772
|
|
|
$
|
40,536,547
|
|
December 2018
|
395,094
|
|
|
$
|
11.39
|
|
|
930,866
|
|
|
$
|
36,037,726
|
|
Total
|
930,866
|
|
|
|
|
930,866
|
|
|
$
|
36,037,726
|
|
Exhibit
Number
|
|
Description
|
1.1**
|
|
|
1.2**
|
|
|
2.1**
|
|
|
2.2**
|
|
|
4.1**
|
|
|
4.1(a)**
|
|
|
4.2**
|
|
|
4.3**
|
|
|
4.4**
|
|
|
4.5**
|
|
|
4.6**
|
|
|
4.7**
|
|
|
4.8**
|
|
4.9**
|
|
|
4.10**
|
|
|
4.11**
|
|
|
4.12**
|
|
|
4.13**
|
|
Letter Agreement dated May 17, 2016, and Letter Agreement Amendment dated September 26, 2016, by and between Golar Partners Operating LLC and Golar LNG Limited (incorporated by reference to
Exhibit 4.8
and
Exhibit 4.9
, respectively, to the registrant’s Report of Foreign Issuer on Form 6-K filed on October 3, 2016)
|
4.14**
|
|
|
4.15**
|
|
|
4.16**
|
|
|
4.17**
|
|
|
4.18**
|
|
|
4.19**
|
|
|
4.20**
|
|
|
4.21**
|
|
|
4.22**
|
|
|
4.23**
|
|
|
4.24**
|
|
4.25**
|
|
|
4.26**
|
|
|
4.27**
|
|
|
4.28**
|
|
|
4.29**
|
|
|
4.30**
|
|
|
4.31**
|
|
|
4.32**
|
|
|
4.33*/+
|
|
|
4.34*
|
|
|
4.35*
|
|
|
4.36*
|
|
|
4.37*
|
|
|
4.38*
|
|
|
4.39*
|
|
|
4.40*
|
|
|
8.1*
|
|
|
12.1*
|
|
|
13.1*
|
|
|
15.1*
|
|
|
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
|
|
|
GOLAR LNG PARTNERS LP
|
||
|
|
|
|
|
|
|
By:
|
/s/ Brian Tienzo
|
|
|
|
|
Name:
|
Brian Tienzo
|
|
|
|
Title:
|
Principal Executive, Financial and Accounting Officer
|
Date:
|
March 29, 2019
|
|
|
|
|
Page
|
GOLAR LNG PARTNERS LP
|
|
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
|
|
/s/ Ernst & Young LLP
|
|
We have served as the Partnership’s auditor since 2014.
|
|
London, United Kingdom
|
|
March 29, 2019
|
|
/s/ Ernst & Young LLP
|
|
London, United Kingdom
|
|
March 29, 2019
|
|
|
Notes
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
Operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
Time charter revenues
|
6
|
|
|
346,650
|
|
|
415,679
|
|
|
413,230
|
|
Time charter revenues from related parties
|
24
|
|
|
—
|
|
|
17,423
|
|
|
28,368
|
|
Total operating revenues
|
|
|
|
346,650
|
|
|
433,102
|
|
|
441,598
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
Vessel operating expenses
|
24
|
|
|
(65,247
|
)
|
|
(68,278
|
)
|
|
(59,886
|
)
|
Voyage and commission expenses
|
24
|
|
|
(11,222
|
)
|
|
(9,694
|
)
|
|
(5,974
|
)
|
Administrative expenses
|
24
|
|
|
(14,809
|
)
|
|
(15,210
|
)
|
|
(8,600
|
)
|
Depreciation and amortization
|
|
|
|
(98,812
|
)
|
|
(103,810
|
)
|
|
(100,468
|
)
|
Total operating expenses
|
|
|
|
(190,090
|
)
|
|
(196,992
|
)
|
|
(174,928
|
)
|
Operating income
|
|
|
|
156,560
|
|
|
236,110
|
|
|
266,670
|
|
Other non-operating income
|
|
|
449
|
|
|
922
|
|
|
1,318
|
|
|
Financial income/(expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
24
|
|
|
8,950
|
|
|
7,804
|
|
|
4,295
|
|
Interest expense
|
|
|
(80,650
|
)
|
|
(75,425
|
)
|
|
(66,938
|
)
|
|
Gains/(losses) on derivative instruments
|
2, 7
|
|
|
8,106
|
|
|
7,796
|
|
|
(931
|
)
|
Other financial items, net
|
2, 7
|
|
|
(592
|
)
|
|
(15,363
|
)
|
|
(1,814
|
)
|
Net financial expenses
|
|
|
|
(64,186
|
)
|
|
(75,188
|
)
|
|
(65,388
|
)
|
Income before tax, equity in net earnings of affiliate and non-controlling interests
|
|
|
|
92,823
|
|
|
161,844
|
|
|
202,600
|
|
Income taxes
|
8
|
|
|
(17,465
|
)
|
|
(16,996
|
)
|
|
(16,858
|
)
|
Equity in net earnings of affiliate
|
10
|
|
|
1,190
|
|
|
—
|
|
|
—
|
|
Net income
|
|
|
|
76,548
|
|
|
144,848
|
|
|
185,742
|
|
Net income attributable to non-controlling interests
|
|
|
|
(3,358
|
)
|
|
(15,568
|
)
|
|
(13,571
|
)
|
Net income attributable to Golar LNG Partners LP Owners
|
|
|
73,190
|
|
|
129,280
|
|
|
172,171
|
|
|
|
|
|
|
|
|
|
|
||||
General partners’ interest in net income
(1)
|
|
|
|
1,223
|
|
|
2,544
|
|
|
23,135
|
|
Preferred unitholders’ interest in net income
|
|
|
12,042
|
|
|
2,080
|
|
|
—
|
|
|
Common unitholders’ interest in net income
|
|
|
|
59,925
|
|
|
124,656
|
|
|
139,948
|
|
Subordinated unitholders’ interest in net income
|
|
|
—
|
|
|
—
|
|
|
9,088
|
|
|
|
|
|
|
|
|
|
|
||||
Earnings per unit - Common Units:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
28
|
|
|
0.86
|
|
|
1.82
|
|
|
2.44
|
|
Diluted
|
28
|
|
|
0.86
|
|
|
1.80
|
|
|
2.43
|
|
|
|
|
|
|
|
|
|
||||
Cash distributions declared and paid per Common unit in the year
|
|
|
1.96
|
|
|
2.31
|
|
|
2.31
|
|
(1)
|
This includes net income attributable to IDR holders of
$nil
,
$nil
, and
$19.7 million
for the years ended
December 31, 2018
,
2017
and
2016
, respectively.
|
|
Notes
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
Net income
|
|
|
76,548
|
|
|
144,848
|
|
|
185,742
|
|
Unrealized net gain/(loss) on qualifying cash flow hedging instruments:
|
|
|
|
|
|
|
|
|||
Other comprehensive income before reclassification
(1)
|
|
|
—
|
|
|
94
|
|
|
4,263
|
|
Amounts reclassified from accumulated other comprehensive (loss)/income to the statement of operations
|
|
|
(26
|
)
|
|
4,985
|
|
|
409
|
|
Net other comprehensive (loss)/income
|
|
|
(26
|
)
|
|
5,079
|
|
|
4,672
|
|
Comprehensive income
|
|
|
76,522
|
|
|
149,927
|
|
|
190,414
|
|
Comprehensive income attributable to:
|
|
|
|
|
|
|
|
|
|
|
Golar LNG Partners LP Owners
|
|
|
73,164
|
|
|
134,359
|
|
|
176,843
|
|
Non-controlling interests
|
|
|
3,358
|
|
|
15,568
|
|
|
13,571
|
|
|
|
|
76,522
|
|
|
149,927
|
|
|
190,414
|
|
|
Notes
|
|
2018
|
|
|
2017
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
96,648
|
|
|
246,954
|
|
Restricted cash and short-term deposits
|
16
|
|
|
31,330
|
|
|
27,306
|
|
Trade accounts receivable
|
11
|
|
|
27,986
|
|
|
18,255
|
|
Amounts due from related parties
|
24
|
|
|
—
|
|
|
7,625
|
|
Inventories
|
|
|
|
2,031
|
|
|
3,506
|
|
Other current assets
|
12
|
|
|
6,534
|
|
|
7,850
|
|
Total current assets
|
|
|
|
164,529
|
|
|
311,496
|
|
Non-current assets
|
|
|
|
|
|
|
|
|
Restricted cash
|
16
|
|
|
141,114
|
|
|
155,627
|
|
Investment in affiliate
|
10
|
|
|
206,180
|
|
|
—
|
|
Vessels and equipment, net
|
13
|
|
|
1,535,757
|
|
|
1,588,923
|
|
Vessel under capital lease, net
|
14
|
|
|
114,711
|
|
|
105,945
|
|
Intangible assets, net
|
15
|
|
|
60,369
|
|
|
73,206
|
|
Amounts due from related parties
|
24
|
|
|
—
|
|
|
177,247
|
|
Other non-current assets
|
17
|
|
|
18,157
|
|
|
14,927
|
|
Total assets
|
|
|
|
2,240,817
|
|
|
2,427,371
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
Current portion of long-term debt
|
20
|
|
|
75,451
|
|
|
118,850
|
|
Current portion of obligation under capital lease
|
21
|
|
|
1,564
|
|
|
1,276
|
|
Trade accounts payable
|
|
|
|
5,593
|
|
|
4,780
|
|
Accrued expenses
|
18
|
|
|
27,229
|
|
|
32,240
|
|
Amounts due to related parties
|
24
|
|
|
1,237
|
|
|
—
|
|
Other current liabilities
|
19
|
|
|
25,033
|
|
|
22,941
|
|
Total current liabilities
|
|
|
|
136,107
|
|
|
180,087
|
|
Non-current liabilities
|
|
|
|
|
|
|
|
|
Long-term debt
|
20
|
|
|
1,196,899
|
|
|
1,252,184
|
|
Obligation under capital lease
|
21
|
|
|
118,119
|
|
|
126,805
|
|
Other non-current liabilities
|
22
|
|
|
30,175
|
|
|
20,694
|
|
Total liabilities
|
|
|
|
1,481,300
|
|
|
1,579,770
|
|
Commitments and contingencies
|
25
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Partners’ capital:
|
|
|
|
|
|
|
|
|
Common unitholders: 69,455,364 units issued and outstanding at December 31, 2018 (2017: 69,768,261)
|
27
|
|
|
495,576
|
|
|
585,440
|
|
Preferred unitholders: 5,520,000 preferred units issued and outstanding at December 31, 2018 (2017: 5,520,000)
|
27
|
|
|
132,991
|
|
|
132,991
|
|
General partner interest: 1,436,391 units issued and outstanding at December 31, 2018 (2017: 1,423,843)
|
27
|
|
|
51,048
|
|
|
52,600
|
|
Total partners’ capital
|
|
|
|
679,615
|
|
|
771,031
|
|
Accumulated other comprehensive income
|
|
|
|
—
|
|
|
26
|
|
Total before non-controlling interests
|
|
|
|
679,615
|
|
|
771,057
|
|
Non-controlling interests
|
|
|
|
79,902
|
|
|
76,544
|
|
Total equity
|
|
|
|
759,517
|
|
|
847,601
|
|
Total liabilities and equity
|
|
|
|
2,240,817
|
|
|
2,427,371
|
|
|
Notes
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
|
76,548
|
|
|
144,848
|
|
|
185,742
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expenses
|
|
|
|
98,812
|
|
|
103,810
|
|
|
100,468
|
|
Equity in net earnings of affiliate
|
|
|
(1,190
|
)
|
|
—
|
|
|
—
|
|
|
Deferred tax expense
|
|
|
1,728
|
|
|
7,171
|
|
|
7,372
|
|
|
Amortization of deferred charges and debt guarantee
|
24
|
|
|
7,154
|
|
|
5,969
|
|
|
8,412
|
|
Unrealized foreign exchange (gains)/losses
|
3
|
|
|
(995
|
)
|
|
3,657
|
|
|
(945
|
)
|
Unit options expense
|
26
|
|
|
234
|
|
|
238
|
|
|
23
|
|
Drydocking expenditure
|
|
|
|
(25,522
|
)
|
|
(20,660
|
)
|
|
(4,060
|
)
|
Dividends received from affiliates
|
|
|
1,191
|
|
|
—
|
|
|
—
|
|
|
Realized loss on bond repurchase
|
|
|
—
|
|
|
6,327
|
|
|
—
|
|
|
Interest element included in obligation under capital lease
|
3
|
|
|
(55
|
)
|
|
(44
|
)
|
|
(1,882
|
)
|
Change in market value of derivatives
|
2
|
|
|
(5,921
|
)
|
|
(15,894
|
)
|
|
(710
|
)
|
Change in assets and liabilities, net of effects from purchase of subsidiaries:
|
|
|
|
|
|
|
|
||||
Trade accounts receivable
|
|
|
|
(9,730
|
)
|
|
2,189
|
|
|
1,126
|
|
Inventories
|
|
|
|
1,475
|
|
|
458
|
|
|
230
|
|
Other current assets and non-current assets
|
2
|
|
|
3,906
|
|
|
1,529
|
|
|
1,149
|
|
Amounts due (from)/to related parties
|
3
|
|
|
(319
|
)
|
|
17,856
|
|
|
(18,237
|
)
|
Trade accounts payable
|
|
|
|
(3,610
|
)
|
|
1,417
|
|
|
(1,700
|
)
|
Accrued expenses
|
|
|
|
(6,566
|
)
|
|
9,889
|
|
|
(4,746
|
)
|
Other current liabilities
|
2
|
|
|
26
|
|
|
1,670
|
|
|
(12,555
|
)
|
Net cash provided by operating activities
|
|
|
|
137,166
|
|
|
270,430
|
|
|
259,687
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
Additions to vessels and equipment
|
|
|
|
(10,735
|
)
|
|
(426
|
)
|
|
—
|
|
Dividends received from affiliates
|
|
|
755
|
|
|
—
|
|
|
—
|
|
|
Acquisition of investment in affiliate from Golar
|
10
|
|
|
(9,652
|
)
|
|
(70,000
|
)
|
|
(107,247
|
)
|
Net cash used in investing activities
|
|
|
|
(19,632
|
)
|
|
(70,426
|
)
|
|
(107,247
|
)
|
Financing activities
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from long-term debt
|
20
|
|
|
51,419
|
|
|
375,000
|
|
|
815,000
|
|
Repayments of long-term debt (including related parties)
|
|
|
|
(155,902
|
)
|
|
(228,816
|
)
|
|
(770,422
|
)
|
Repurchase of high yield bonds and related swaps
|
|
|
—
|
|
|
(234,197
|
)
|
|
—
|
|
|
Repayments of obligation under capital lease
|
3
|
|
|
(1,286
|
)
|
|
(821
|
)
|
|
(567
|
)
|
Financing arrangement fees and other costs
|
|
|
|
(1,699
|
)
|
|
(5,377
|
)
|
|
(13,521
|
)
|
Proceeds from issuances of equity, net of issue costs
|
27
|
|
|
13,854
|
|
|
255,040
|
|
|
—
|
|
Common units repurchased and canceled
|
27
|
|
|
(13,980
|
)
|
|
—
|
|
|
(495
|
)
|
Advances from/(releases to) related party for Methane Princess lease security deposit
|
3
|
|
|
633
|
|
|
(1,498
|
)
|
|
725
|
|
Cash distributions paid
|
|
|
|
(165,250
|
)
|
|
(161,060
|
)
|
|
(154,668
|
)
|
Dividends paid to non-controlling interests
|
|
|
|
—
|
|
|
(7,000
|
)
|
|
(12,360
|
)
|
Net cash used in financing activities
|
|
|
|
(272,211
|
)
|
|
(8,729
|
)
|
|
(136,308
|
)
|
Effect of exchange rate changes on cash
|
3
|
|
|
(6,118
|
)
|
|
10,487
|
|
|
(21,966
|
)
|
Net (decrease)/increase in cash, cash equivalents and restricted cash
|
2
|
|
|
(160,795
|
)
|
|
201,762
|
|
|
(5,834
|
)
|
Cash, cash equivalents and restricted cash at beginning of year
(1)
|
2
|
|
|
429,887
|
|
|
228,125
|
|
|
233,959
|
|
Cash, cash equivalents and restricted cash at end of year
(1)
|
2
|
|
|
269,092
|
|
|
429,887
|
|
|
228,125
|
|
|
Notes
|
|
2018
|
|
|
2017
|
|
|
2016
|
|
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
|
|
|||
Cash paid during the year for:
|
|
|
|
|
|
|
|
|||
Interest paid
|
|
|
81,962
|
|
|
62,670
|
|
|
58,005
|
|
Income taxes paid
|
|
|
5,929
|
|
|
4,470
|
|
|
5,278
|
|
|
December 31,
|
|||||||
(in thousands of $)
|
2018
|
2017
|
2016
|
2015
|
||||
Cash and cash equivalents
|
96,648
|
|
246,954
|
|
65,710
|
|
40,686
|
|
Restricted cash and short-term deposits - current
|
31,330
|
|
27,306
|
|
44,927
|
|
56,714
|
|
Restricted cash - non-current
|
141,114
|
|
155,627
|
|
117,488
|
|
136,559
|
|
|
269,092
|
|
429,887
|
|
228,125
|
|
233,959
|
|
|
|
Partners’ Capital
|
Accumulated
Other
Comprehensive
Income/
(loss)
(3)
|
|
Total
before
Non-
controlling
interest
|
|
Non-
controlling
Interest
|
|
Total
Owner’s
Equity
|
|||||||||||||||||||||
|
Notes
|
Preferred
Units |
|
Common
Units
|
|
Subordinated
Units
|
|
General
Partner Units and IDRs
(2)
|
|
|
|
|||||||||||||||||||
Consolidated balance at December 31, 2015
|
|
—
|
|
|
486,533
|
|
|
12,649
|
|
|
40,293
|
|
(9,725
|
)
|
|
529,750
|
|
|
66,765
|
|
|
596,515
|
|
|||||||
Net income
|
|
—
|
|
|
139,948
|
|
|
9,088
|
|
|
23,135
|
|
—
|
|
|
172,171
|
|
|
13,571
|
|
|
185,742
|
|
|||||||
Cash distributions
(1)
|
|
—
|
|
|
(124,400
|
)
|
|
(18,422
|
)
|
|
(11,846
|
)
|
—
|
|
|
(154,668
|
)
|
|
—
|
|
|
(154,668
|
)
|
|||||||
Non-controlling interest dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(12,360
|
)
|
|
(12,360
|
)
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
4,672
|
|
|
4,672
|
|
|
—
|
|
|
4,672
|
|
|||||||
Common units repurchased and canceled
|
|
—
|
|
|
(495
|
)
|
|
—
|
|
|
—
|
|
—
|
|
|
(495
|
)
|
|
—
|
|
|
(495
|
)
|
|||||||
Conversion of subordinated units
|
27
|
|
—
|
|
|
3,315
|
|
|
(3,315
|
)
|
|
—
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Grant of unit options
|
|
—
|
|
|
23
|
|
|
—
|
|
|
—
|
|
—
|
|
|
23
|
|
|
—
|
|
|
23
|
|
|||||||
Exchange of IDRs
|
27
|
|
—
|
|
|
(14,360
|
)
|
|
—
|
|
|
(640
|
)
|
—
|
|
|
(15,000
|
)
|
|
—
|
|
|
(15,000
|
)
|
||||||
Consolidated balance at December 31, 2016
|
|
—
|
|
|
490,564
|
|
|
—
|
|
|
50,942
|
|
(5,053
|
)
|
|
536,453
|
|
|
67,976
|
|
|
604,429
|
|
|||||||
Net income
|
|
2,080
|
|
|
124,656
|
|
|
—
|
|
|
2,544
|
|
—
|
|
|
129,280
|
|
|
15,568
|
|
|
144,848
|
|
|||||||
Cash distributions
(1)
|
|
(2,080
|
)
|
|
(157,840
|
)
|
|
—
|
|
|
(3,221
|
)
|
—
|
|
|
(163,141
|
)
|
|
—
|
|
|
(163,141
|
)
|
|||||||
Non-controlling interest dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
—
|
|
|
(7,000
|
)
|
|
(7,000
|
)
|
|||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
5,079
|
|
|
5,079
|
|
|
—
|
|
|
5,079
|
|
|||||||
Net proceeds from issuance of common units
|
|
—
|
|
|
119,902
|
|
|
—
|
|
|
2,214
|
|
—
|
|
|
122,116
|
|
|
—
|
|
|
122,116
|
|
|||||||
Conversion of earn-out units
|
|
—
|
|
|
7,920
|
|
|
—
|
|
|
121
|
|
—
|
|
|
8,041
|
|
|
—
|
|
|
8,041
|
|
|||||||
Net proceeds from issuance of preferred units
|
27
|
|
132,991
|
|
|
—
|
|
|
—
|
|
|
—
|
|
—
|
|
|
132,991
|
|
|
—
|
|
|
132,991
|
|
||||||
Grant of unit options
|
|
—
|
|
|
238
|
|
|
—
|
|
|
—
|
|
—
|
|
|
238
|
|
|
—
|
|
|
238
|
|
|||||||
Consolidated balance at December 31, 2017
|
|
132,991
|
|
|
585,440
|
|
|
—
|
|
|
52,600
|
|
26
|
|
|
771,057
|
|
|
76,544
|
|
|
847,601
|
|
|||||||
Net income
|
|
12,042
|
|
|
59,925
|
|
|
—
|
|
|
1,223
|
|
—
|
|
|
73,190
|
|
|
3,358
|
|
|
76,548
|
|
|||||||
Cash distributions
(1)
|
|
(12,042
|
)
|
|
(149,606
|
)
|
|
—
|
|
|
(3,066
|
)
|
—
|
|
|
(164,714
|
)
|
|
—
|
|
|
(164,714
|
)
|
|||||||
Other comprehensive loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
(26
|
)
|
|
(26
|
)
|
|
—
|
|
|
(26
|
)
|
|||||||
Net proceeds from issuance of common units
|
|
—
|
|
|
13,563
|
|
|
—
|
|
|
291
|
|
—
|
|
|
13,854
|
|
|
—
|
|
|
13,854
|
|
|||||||
Common unit repurchase and cancellation program
|
|
—
|
|
|
(13,980
|
)
|
|
—
|
|
|
—
|
|
—
|
|
|
(13,980
|
)
|
|
—
|
|
|
(13,980
|
)
|
|||||||
Grant of unit options
|
|
—
|
|
|
234
|
|
|
—
|
|
|
—
|
|
—
|
|
|
234
|
|
|
—
|
|
|
234
|
|
|||||||
Consolidated balance at December 31, 2018
|
|
132,991
|
|
—
|
|
495,576
|
|
—
|
|
—
|
|
—
|
|
51,048
|
|
—
|
|
—
|
|
679,615
|
|
—
|
|
79,902
|
|
—
|
|
759,517
|
|
(1)
|
This includes cash distributions to IDR holders for the years ended
December 31, 2018
,
2017
and
2016
of
$nil
,
$nil
and
$8.8 million
, respectively. In addition, it includes accrued distributions to Series A Preferred Unitholders for the period from November 15, 2018 to December 31, 2018.
|
(2)
|
As of December 31, 2018 and 2017, the carrying value of the equity attributable to the IDR holders was
$32.5 million
.
|
(3)
|
Relates to unrealized net losses/(income) on qualifying cash flow hedges.
|
Vessels (excluding converted FSRUs)
|
40 years
|
Vessels - converted FSRUs
|
20 years from conversion date
|
Drydocking expenditure
|
5 years
|
Mooring equipment
|
11 years
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||
(in thousands of $)
|
|
As previously reported
|
Adjustment Increase/
(Decrease)
|
As adjusted
|
|
As previously reported
|
Adjustment Increase/
(Decrease)
|
As adjusted
|
||||||
Gains/(losses) on derivative instruments
|
|
—
|
|
7,796
|
|
7,796
|
|
|
—
|
|
(931
|
)
|
(931
|
)
|
Other financial items, net
|
|
(7,567
|
)
|
(7,796
|
)
|
(15,363
|
)
|
|
(2,745
|
)
|
931
|
|
(1,814
|
)
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||
(in thousands of $)
|
|
As previously reported
|
Adjustment Increase/
(Decrease)
|
As adjusted
|
|
As previously reported
|
Adjustment Increase/
(Decrease)
|
As adjusted
|
||||||
Change in market value of derivatives
|
|
—
|
|
(15,894
|
)
|
(15,894
|
)
|
|
—
|
|
(710
|
)
|
(710
|
)
|
Change in assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
||||
Other current assets and other non-current assets
|
|
(2,240
|
)
|
3,769
|
|
1,529
|
|
|
(5,305
|
)
|
6,454
|
|
1,149
|
|
Other current liabilities
|
|
(10,455
|
)
|
12,125
|
|
1,670
|
|
|
(6,952
|
)
|
(5,603
|
)
|
(12,555
|
)
|
|
|
|
December 31, 2017
|
|
December 31, 2016
|
||||||||||
(in thousands of $)
|
Cash Flow Line Items
|
|
Balance Prior to Adoption
|
Adjustment Increase/
(Decrease)
|
As Adjusted
|
|
Balance Prior to Adoption
|
Adjustment Increase/
(Decrease) |
As Adjusted
|
||||||
OPERATING ACTIVITIES
|
Unrealized foreign exchange losses/(gains)
|
|
3,657
|
|
—
|
|
3,657
|
|
|
(532
|
)
|
(413
|
)
|
(945
|
)
|
Interest element included in obligation under capital lease
|
|
534
|
|
(578
|
)
|
(44
|
)
|
|
(1,205
|
)
|
(677
|
)
|
(1,882
|
)
|
|
Amounts due to/(from) related parties
|
|
17,856
|
|
—
|
|
17,856
|
|
|
(17,512
|
)
|
(725
|
)
|
(18,237
|
)
|
|
Restricted cash
|
|
(5
|
)
|
5
|
|
—
|
|
|
(129
|
)
|
129
|
|
—
|
|
|
FINANCING ACTIVITIES
|
Repayments of obligations under capital lease
|
|
(821
|
)
|
—
|
|
(821
|
)
|
|
(122
|
)
|
(445
|
)
|
(567
|
)
|
Restricted cash and short-term investments
|
|
(12,102
|
)
|
12,102
|
|
—
|
|
|
7,627
|
|
(7,627
|
)
|
—
|
|
|
Advances from/(releases to) related party for Methane Princess lease security deposit
|
|
—
|
|
(1,498
|
)
|
(1,498
|
)
|
|
—
|
|
725
|
|
725
|
|
|
Effect of exchange rate changes on cash
|
|
—
|
|
10,487
|
|
10,487
|
|
|
—
|
|
(21,966
|
)
|
(21,966
|
)
|
|
As a result of the above changes, the following subtotals as retrospectively restated are as follows:
|
|
|
|
|
|||||||||||
Net increase in cash, cash equivalents and restricted cash
|
|
181,244
|
|
20,518
|
|
201,762
|
|
|
25,024
|
|
(30,858
|
)
|
(5,834
|
)
|
|
Cash, cash equivalents and restricted cash at beginning of period
|
|
65,710
|
|
162,415
|
|
228,125
|
|
|
40,686
|
|
193,273
|
|
233,959
|
|
|
Cash, cash equivalents and restricted cash at end of period
|
|
246,954
|
|
182,933
|
|
429,887
|
|
|
65,710
|
|
162,415
|
|
228,125
|
|
Name
|
|
Jurisdiction of
Incorporation
|
|
Purpose
|
Golar Partners Operating LLC
|
|
Marshall Islands
|
|
Holding Company
|
Golar LNG Holding Corporation
|
|
Marshall Islands
|
|
Holding Company
|
Golar Maritime (Asia) Inc.
|
|
Republic of Liberia
|
|
Holding Company
|
Golar Servicos de Operacao de Embaracaoes Limited
|
|
Brazil
|
|
Management Company
|
Golar Winter Corporation
|
|
Marshall Islands
|
|
Owns
Golar Winter
|
Golar Winter UK Ltd
|
|
United Kingdom
|
|
Operates
Golar Winter
|
Golar Spirit Corporation
|
|
Marshall Islands
|
|
Owns
Golar Spirit
|
Faraway Maritime Shipping Company (60% ownership)
|
|
Republic of Liberia
|
|
Owns and operates
Golar Mazo
|
Golar LNG 2215 Corporation
|
|
Marshall Islands
|
|
Leases
Methane Princess
|
Golar 2215 UK Ltd
|
|
United Kingdom
|
|
Operates
Methane Princess
|
Golar Freeze Holding Corporation
|
|
Marshall Islands
|
|
Owns
Golar Freeze
|
Golar Freeze UK Ltd
|
|
United Kingdom
|
|
Operates
Golar Freeze
|
Golar Khannur Corporation
|
|
Marshall Islands
|
|
Holding Company
|
Golar LNG (Singapore) Pte. Ltd.
|
|
Singapore
|
|
Holding Company
|
PT Golar Indonesia*
|
|
Indonesia
|
|
Owns and operates
NR Satu
|
Golar Grand Corporation
|
|
Marshall Islands
|
|
Owns and operates
Golar Grand
|
Golar LNG 2234 LLC
|
|
Republic of Liberia
|
|
Owns and operates
Golar Maria
|
Golar Hull M2031 Corporation
|
|
Marshall Islands
|
|
Owns and operates
Golar Igloo
|
Golar Eskimo Corporation**
|
|
Marshall Islands
|
|
Leases and operates
Golar Eskimo
|
(in $ thousands)
|
2019
|
2020
|
2021
|
2022
|
2023
|
After 2023
|
||||||
Golar Eskimo*
|
25,907
|
|
24,449
|
|
23,205
|
|
22,256
|
|
21,343
|
|
36,823
|
|
(in $ thousands)
|
2018
|
|
2017
|
||
Liabilities
|
|
|
|
||
Short-term debt (refer to note 20)
|
11,836
|
|
|
—
|
|
Long-term debt (refer to note 20)
|
187,401
|
|
|
212,084
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
ASSETS
|
|
|
|
|
||
Cash
|
|
19,599
|
|
|
16,016
|
|
Restricted cash (see note 16)
|
|
10,209
|
|
|
10,270
|
|
Vessels and equipment, net*
|
|
248,526
|
|
|
269,624
|
|
Other assets
|
|
2,699
|
|
|
4,348
|
|
Total assets
|
|
281,033
|
|
|
300,258
|
|
|
|
|
|
|
||
LIABILITIES AND EQUITY
|
|
|
|
|
||
Accrued liabilities
|
|
6,474
|
|
|
11,675
|
|
Current portion of long-term debt
|
|
14,303
|
|
|
19,759
|
|
Amounts due to related parties
|
|
83,334
|
|
|
107,838
|
|
Non-current debt
|
|
73,247
|
|
|
82,741
|
|
Other liabilities
|
|
638
|
|
|
515
|
|
Total liabilities
|
|
177,996
|
|
|
222,528
|
|
Total equity
|
|
103,037
|
|
|
77,730
|
|
Total liabilities and equity
|
|
281,033
|
|
|
300,258
|
|
•
|
LNG carriers are vessels that transport LNG and are compatible with many LNG loading and receiving terminals globally.
Four
of our vessels are LNG carriers;
|
•
|
FSRUs are vessels that are permanently located offshore to regasify LNG.
Six
of our vessels are FSRUs; and
|
•
|
FLNG is a vessel that is moored above an offshore natural gas field on a long-term basis. The vessel receives, liquefies and stores LNG at sea and transfers it to LNG carriers that berth while offshore.
|
|
December 31, 2018
|
|||||||||||||
(in thousands of $)
|
FSRU
|
LNG Carrier
|
FLNG
(1)
|
Unallocated
(2)
|
Total Segment Reporting
|
Elimination
(3)
|
Consolidated Reporting
|
|||||||
Statement of operations:
|
|
|
|
|
|
|
|
|||||||
Total operating revenues
|
294,889
|
|
51,761
|
|
49,754
|
|
—
|
|
396,404
|
|
(49,754
|
)
|
346,650
|
|
Vessel operating expenses
|
(42,736
|
)
|
(22,511
|
)
|
(9,834
|
)
|
—
|
|
(75,081
|
)
|
9,834
|
|
(65,247
|
)
|
Voyage and commission expenses
|
(7,138
|
)
|
(4,084
|
)
|
(434
|
)
|
—
|
|
(11,656
|
)
|
434
|
|
(11,222
|
)
|
Administrative expenses
(4)
|
(9,384
|
)
|
(5,425
|
)
|
(1,306
|
)
|
—
|
|
(16,115
|
)
|
1,306
|
|
(14,809
|
)
|
Segment EBITDA
|
235,631
|
|
19,741
|
|
38,180
|
|
—
|
|
293,552
|
|
(38,180
|
)
|
255,372
|
|
Balance sheet:
|
|
|
|
|
|
|
|
|||||||
Total assets
(5)
|
1,115,663
|
|
534,805
|
|
—
|
|
590,349
|
|
2,240,817
|
|
|
2,240,817
|
|
|
Investment in affiliate
|
—
|
|
—
|
|
206,180
|
|
—
|
|
206,180
|
|
—
|
|
206,180
|
|
|
|
|
|
|
|
|
|
|||||||
Other segmental financial information:
|
|
|
|
|
|
|
||||||||
Capital expenditure
(5)
|
(28,307
|
)
|
(13,894
|
)
|
—
|
|
—
|
|
(42,201
|
)
|
—
|
|
(42,201
|
)
|
|
December 31, 2017
|
|||||||||
(in thousands of $)
|
FSRU
|
LNG Carrier
|
FLNG
(1)
|
Unallocated
(2)
|
Total Segment and Consolidated Reporting
|
|||||
Statement of operations:
|
|
|
|
|
|
|||||
Total operating revenues
|
316,599
|
|
116,503
|
|
—
|
|
—
|
|
433,102
|
|
Vessel operating expenses
|
(47,960
|
)
|
(20,318
|
)
|
—
|
|
—
|
|
(68,278
|
)
|
Voyage and commission expenses
|
(8,375
|
)
|
(1,319
|
)
|
—
|
|
—
|
|
(9,694
|
)
|
Administrative expenses
(4)
|
(10,029
|
)
|
(5,181
|
)
|
—
|
|
—
|
|
(15,210
|
)
|
Segment EBITDA
|
250,235
|
|
89,685
|
|
—
|
|
—
|
|
339,920
|
|
|
|
|
|
|
|
|||||
Balance sheet:
|
|
|
|
|
|
|||||
Total assets
(5)
|
1,149,595
|
|
545,225
|
|
—
|
|
732,551
|
|
2,427,371
|
|
|
|
|
|
|
|
|||||
Other segmental financial information:
|
|
|
|
|
|
|||||
Capital expenditure
(5)
|
(11,226
|
)
|
(11,215
|
)
|
—
|
|
—
|
|
(22,441
|
)
|
|
December 31, 2016
|
|||||||||
(in thousands of $)
|
FSRU
|
LNG Carrier
|
FLNG
(1)
|
Unallocated
(2)
|
Total Segment and Consolidated Reporting
|
|||||
Statement of operations:
|
|
|
|
|
|
|||||
Total operating revenues
|
322,373
|
|
119,225
|
|
—
|
|
—
|
|
441,598
|
|
Vessel operating expenses
|
(43,884
|
)
|
(16,002
|
)
|
—
|
|
—
|
|
(59,886
|
)
|
Voyage and commission expenses
|
(5,049
|
)
|
(925
|
)
|
—
|
|
—
|
|
(5,974
|
)
|
Administrative expenses
(4)
|
(5,773
|
)
|
(2,827
|
)
|
—
|
|
—
|
|
(8,600
|
)
|
Segment EBITDA
|
267,667
|
|
99,471
|
|
—
|
|
—
|
|
367,138
|
|
|
|
|
|
|
|
|||||
Balance sheet:
|
|
|
|
|
|
|||||
Total assets
(5)
|
1,206,186
|
|
557,682
|
|
—
|
|
488,840
|
|
2,252,708
|
|
|
|
|
|
|
|
|||||
Other segmental financial information:
|
|
|
|
|
|
|||||
Capital expenditure
(5)
|
(344
|
)
|
(5,026
|
)
|
—
|
|
—
|
|
(5,370
|
)
|
(in thousands of $)
|
Segment
|
|
2018
|
|
2017
|
|
2016
|
||||||||||||
PTNR
|
FSRU
|
|
68,474
|
|
|
17
|
%
|
|
72,495
|
|
|
17
|
%
|
|
67,774
|
|
|
15
|
%
|
Petrobras
|
FSRU
|
|
63,098
|
|
|
16
|
%
|
|
94,588
|
|
|
22
|
%
|
|
103,368
|
|
|
23
|
%
|
Jordan
|
FSRU
|
|
57,337
|
|
|
14
|
%
|
|
57,144
|
|
|
13
|
%
|
|
57,112
|
|
|
13
|
%
|
DUSUP
|
FSRU
|
|
56,823
|
|
|
14
|
%
|
|
44,726
|
|
|
10
|
%
|
|
46,465
|
|
|
11
|
%
|
KNPC
|
FSRU
|
|
48,093
|
|
|
12
|
%
|
|
47,646
|
|
|
11
|
%
|
|
47,654
|
|
|
11
|
%
|
Revenues (in thousands of $)
|
|
2018
|
|
2017
|
|
2016
|
|||
Indonesia
|
|
68,474
|
|
|
72,495
|
|
|
67,774
|
|
Brazil
|
|
63,098
|
|
|
94,588
|
|
|
103,368
|
|
Jordan
|
|
57,337
|
|
|
57,144
|
|
|
57,112
|
|
United Arab Emirates
|
|
56,823
|
|
|
44,726
|
|
|
46,465
|
|
Kuwait
|
|
48,093
|
|
|
47,645
|
|
|
47,654
|
|
Fixed assets (in thousands of $)
|
|
2018
|
|
2017
|
||
Jordan
|
|
261,163
|
|
|
269,846
|
|
Kuwait
|
|
258,942
|
|
|
259,310
|
|
Brazil
|
|
214,018
|
|
|
223,900
|
|
Indonesia
|
|
163,230
|
|
|
177,205
|
|
United Arab Emirates
|
|
—
|
|
|
108,776
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
|
2016
|
|||
Mark-to-market adjustment on Earn-Out Units
(1)
|
|
7,400
|
|
|
(441
|
)
|
|
—
|
|
Interest income/(expense) on un-designated interest rate swaps
|
|
2,161
|
|
|
(7,554
|
)
|
|
(10,824
|
)
|
Mark-to-market adjustment for interest rate swap derivatives
|
|
(1,455
|
)
|
|
12,073
|
|
|
9,893
|
|
Gains on repurchase of cross currency interest rate swap
|
|
—
|
|
|
3,718
|
|
|
—
|
|
Gains/(losses) on derivative instruments
|
|
8,106
|
|
|
7,796
|
|
|
(931
|
)
|
|
|
|
|
|
|
|
|||
Foreign exchange gain/(loss) on capital lease obligations and related restricted cash
|
|
1,105
|
|
|
(659
|
)
|
|
945
|
|
Amortization of debt guarantee (see note 24)
|
|
503
|
|
|
—
|
|
|
—
|
|
Financing arrangement fees and other costs
|
|
(1,363
|
)
|
|
(527
|
)
|
|
(1,468
|
)
|
Foreign exchange loss on operations
|
|
(837
|
)
|
|
(378
|
)
|
|
(1,291
|
)
|
Losses on repurchase of 2012 High-Yield Bonds
(2)
|
|
—
|
|
|
(7,876
|
)
|
|
—
|
|
Foreign exchange losses on 2012 High-Yield Bonds
|
|
—
|
|
|
(3,103
|
)
|
|
—
|
|
Premium paid on repurchase of 2012 High Yield Bonds
|
|
—
|
|
|
(2,820
|
)
|
|
—
|
|
Other financial items, net
|
|
(592
|
)
|
|
(15,363
|
)
|
|
(1,814
|
)
|
|
|
|
|
|
|
|
|||
Gains/losses on derivatives and Other financial items, net
|
|
7,514
|
|
|
(7,567
|
)
|
|
(2,745
|
)
|
|
|
|
|
|
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
|
2016
|
|||
Current tax expense
|
|
15,737
|
|
|
9,825
|
|
|
9,486
|
|
Deferred tax expense
|
|
1,728
|
|
|
7,171
|
|
|
7,372
|
|
Total income tax expense
|
|
17,465
|
|
|
16,996
|
|
|
16,858
|
|
(In thousands of $)
|
|
2018
|
|
2017
|
|
2016
|
|||
Effect of taxable income in various countries
|
|
16,342
|
|
|
16,311
|
|
|
16,725
|
|
Effect of change on uncertain tax positions relating to prior year
|
|
1,329
|
|
|
685
|
|
|
133
|
|
Effect of recognition of deferred tax asset and liabilities
|
|
(206
|
)
|
|
—
|
|
|
—
|
|
Total tax expense
|
|
17,465
|
|
|
16,996
|
|
|
16,858
|
|
(in thousands of $)
|
2018
|
2017
|
||
At January 1
|
|
|
||
Deferred tax assets
|
250
|
|
5,620
|
|
Deferred tax liabilities
|
(5,545
|
)
|
(3,744
|
)
|
|
(5,295
|
)
|
1,876
|
|
Recognized in the year
|
|
|
||
Adjustment in respect of prior year
|
331
|
|
(836
|
)
|
Utilization of tax losses
|
(271
|
)
|
(4,534
|
)
|
Recognition of deferred tax liability on fixed asset temporary differences
|
(1,788
|
)
|
(1,801
|
)
|
|
(1,728
|
)
|
(7,171
|
)
|
At December 31
|
|
|
|
|
Deferred tax assets
|
103
|
|
250
|
|
Deferred tax liabilities
|
(7,126
|
)
|
(5,545
|
)
|
|
(7,023
|
)
|
(5,295
|
)
|
Year ending December 31,
(in thousands of $)
|
|
Total
|
|
2019
|
|
211,098
|
|
2020
|
|
196,390
|
|
2021
|
|
193,333
|
|
2022
|
|
193,333
|
|
2023 and thereafter
|
|
235,554
|
|
Total
|
|
1,029,708
|
|
(in thousands of $)
|
|
|
|
Equity in net assets of affiliate at January 1, 2018
|
|
—
|
|
Net purchase price on July 12, 2018
|
|
199,728
|
|
Dividend
|
|
(5,581
|
)
|
Equity in net earnings of affiliate
(1)
|
|
1,190
|
|
Initial fair value of debt guarantee (see note 24)
|
|
10,843
|
|
Equity in net assets of affiliate at December 31, 2018
|
|
206,180
|
|
•
|
50.0%
of the Hilli Common Units, with the remaining Hilli Common Units owned by Golar, Keppel and B&V (
44.6%
,
5.0%
and
0.4%
, respectively).
|
•
|
any cash received by Hilli Corp from revenue invoiced to the extent such revenue invoiced are based on tolling fees under the LTA relating to an increase in the Brent Crude price above
$60
per barrel; less
|
•
|
any incremental tax expense arising from or related to any cash receipts referred to in the bullet point above; less
|
•
|
the pro-rata portion of any costs that may arise as a result of the underperformance of the
Hilli
(“Underperformance Costs”) incurred by Hilli Corp during such quarter.
|
•
|
the cash receipts from revenues invoiced by Hilli Corp as a direct result of the employment of more than the first
50%
of LNG production capacity for the
Hilli
, before deducting any Underperformance Costs (unless the incremental capacity above the first
50%
is supplied under the terms of the LTA and the term of the LTA is not expanded beyond 500 billion cubic feet of feed gas), excluding, for the avoidance of doubt, any Incremental Perenco Revenues; less
|
•
|
any incremental costs whatsoever, including but not limited to operating expenses, capital costs, financing costs and tax costs, arising as a result of employing and making available more than the first
50%
of LNG production capacity for the
Hilli
; less
|
•
|
any reduction in revenue attributable to the first
50%
of LNG production capacity availability as a result of making more than
50%
of capacity available under the LTA (including, but not limited to, for example, as a result of a tolling fee rate reduction as contemplated in the LTA); less
|
•
|
the pro-rata share of Underperformance Costs incurred by Hilli Corp during such quarter.
|
(in thousands of $)
|
|
2018
|
|
Balance sheet
|
|
|
|
Current assets
|
|
124,642
|
|
Non-current assets
|
|
1,392,711
|
|
Current liabilities
|
|
(109,773
|
)
|
Non-current liabilities
|
|
(1,004,184
|
)
|
|
|
|
|
Statement of operations
|
|
|
|
Liquefaction services revenue
|
|
127,625
|
|
Net income
|
|
77,842
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Prepaid expenses
|
|
2,386
|
|
|
5,137
|
|
Other receivables
|
|
2,346
|
|
|
2,713
|
|
Mark-to-market interest rate swaps valuation (see note 23)
|
|
1,802
|
|
|
—
|
|
|
|
6,534
|
|
|
7,850
|
|
(in thousands of $)
|
|
2018
|
|
|
2017
|
|
Cost
|
|
|
|
|
||
As of January 1
|
|
2,259,132
|
|
|
2,267,819
|
|
Additions
|
|
28,402
|
|
|
22,176
|
|
Write-off of fully depreciated and amortized asset
|
|
(41,232
|
)
|
|
(30,863
|
)
|
As of December 31
|
|
2,246,302
|
|
|
2,259,132
|
|
|
|
|
|
|
||
Depreciation and amortization
|
|
|
|
|
||
As of January 1
|
|
(670,209
|
)
|
|
(615,109
|
)
|
Charge for the year
|
|
(81,568
|
)
|
|
(85,963
|
)
|
Write-off of fully depreciated and amortized asset
|
|
41,232
|
|
|
30,863
|
|
As of December 31
|
|
(710,545
|
)
|
|
(670,209
|
)
|
|
|
|
|
|
||
Net book value as of December 31
|
|
1,535,757
|
|
|
1,588,923
|
|
Vessel
|
2018 Market value
(1)
|
2018 Carrying value
|
Deficit
|
(in millions of $)
|
|
|
|
Golar Winter
|
164.0
|
214.0
|
(50.0)
|
NR Satu
|
137.0
|
163.2
|
(26.2)
|
Methane Princess
(2)
|
69.8
|
114.7
|
(44.9)
|
Golar Maria
|
86.3
|
179.6
|
(93.3)
|
Golar Grand
|
86.3
|
107.4
|
(21.1)
|
Golar Mazo
|
66.0
|
133.1
|
(67.1)
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Cost
|
|
174,511
|
|
|
168,840
|
|
Accumulated depreciation and amortization
|
|
(59,800
|
)
|
|
(62,895
|
)
|
Net book value
|
|
114,711
|
|
|
105,945
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Cost
|
|
114,616
|
|
|
114,616
|
|
Accumulated amortization
|
|
(54,247
|
)
|
|
(41,410
|
)
|
Net book value
|
|
60,369
|
|
|
73,206
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Methane Princess lease security deposits (see note 21)
(1)
|
|
112,362
|
|
|
119,548
|
|
Restricted cash relating to the $800 million facility (see note 20)
(2)
|
|
30,845
|
|
|
41,656
|
|
Restricted cash relating to an
interest rate swap (see note 23)
(3)
|
|
6,480
|
|
|
—
|
|
Restricted cash relating to the NR Satu facility (see notes 5 and 20)
|
|
10,209
|
|
|
10,270
|
|
Restricted cash held by Eskimo SPV (see note 5)
(4)
|
|
—
|
|
|
3,764
|
|
Restricted cash relating to performance guarantees
(5)
|
|
12,548
|
|
|
7,695
|
|
Total restricted cash
|
|
172,444
|
|
|
182,933
|
|
Less: current portion of restricted cash
|
|
(31,330
|
)
|
|
(27,306
|
)
|
Non-current restricted cash
|
|
141,114
|
|
|
155,627
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Mark-to-market interest rate swaps valuation (see note 23)
|
|
15,815
|
|
|
11,937
|
|
Other non-current assets
|
|
2,342
|
|
|
2,990
|
|
|
|
18,157
|
|
|
14,927
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Current tax payable
|
|
12,155
|
|
|
7,903
|
|
Interest expense
|
|
7,887
|
|
|
16,858
|
|
Vessel operating and drydocking expenses
|
|
6,824
|
|
|
6,671
|
|
Administrative expenses
|
|
363
|
|
|
808
|
|
|
|
27,229
|
|
|
32,240
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Deferred revenue
|
|
10,636
|
|
|
9,733
|
|
Mark-to-market interest rate swaps valuation (see note 23)
|
|
8,753
|
|
|
1,618
|
|
Guarantee (see note 24)
|
|
2,066
|
|
|
—
|
|
Preferred units dividend payable (see note 27)
|
|
1,543
|
|
|
2,080
|
|
Other creditors
|
|
1,410
|
|
|
1,485
|
|
Deferred credits from capital lease transactions (see note 22)
|
|
625
|
|
|
625
|
|
Derivative - earn-out units (see notes 23 and 27)
|
|
—
|
|
|
7,400
|
|
|
|
25,033
|
|
|
22,941
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Total debt, net of deferred finance charges
|
|
1,272,350
|
|
|
1,371,034
|
|
Less: Current portion of long-term debt due to third parties, net of deferred finance charges
|
|
(75,451
|
)
|
|
(118,850
|
)
|
Long-term debt, net of deferred finance charges
|
|
1,196,899
|
|
|
1,252,184
|
|
Year Ending December 31,
(in thousands of $)
|
|
|
|
2019
|
|
78,585
|
|
2020
|
|
229,592
|
|
2021
|
|
768,568
|
|
2022
|
|
57,431
|
|
2023
|
|
12,816
|
|
2024 and thereafter
|
|
136,108
|
|
Total debt
|
|
1,283,100
|
|
Less: deferred finance charges
|
|
(10,750
|
)
|
Total debt, net deferred finance charges
|
|
1,272,350
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
|
Maturity date
|
||
$800 million credit facility
|
|
595,000
|
|
|
672,000
|
|
|
2021
|
2015 Norwegian Bonds
|
|
150,000
|
|
|
150,000
|
|
|
2020
|
2017 Norwegian Bonds
|
|
250,000
|
|
|
250,000
|
|
|
2021
|
NR Satu Facility
|
|
88,863
|
|
|
103,500
|
|
|
2022
|
Eskimo SPV Debt
|
|
199,237
|
|
|
212,084
|
|
|
2025
|
Total debt
|
|
1,283,100
|
|
|
1,387,584
|
|
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Total obligations under capital lease
|
|
119,683
|
|
|
128,081
|
|
Less: current portion of obligations under capital lease
|
|
(1,564
|
)
|
|
(1,276
|
)
|
Non-current portion of obligations under capital lease
|
|
118,119
|
|
|
126,805
|
|
Year ending December 31,
(in thousands of $)
|
|
Methane
Princess Lease
|
|
2019
|
|
7,740
|
|
2020
|
|
8,036
|
|
2021
|
|
8,349
|
|
2022
|
|
8,665
|
|
2023 and thereafter
|
|
158,360
|
|
Total minimum lease payments
|
|
191,150
|
|
Less: Imputed interest
|
|
(71,467
|
)
|
Present value of minimum lease payments
|
|
119,683
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Deferred tax liability (see note 8)
|
|
7,126
|
|
|
5,295
|
|
Guarantee (see note 24)
|
|
8,275
|
|
|
—
|
|
Deferred credits from capital lease transactions
|
|
14,774
|
|
|
15,399
|
|
|
|
30,175
|
|
|
20,694
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Deferred credits from capital lease transactions
|
|
24,691
|
|
|
24,691
|
|
Less: Accumulated amortization
|
|
(9,292
|
)
|
|
(8,667
|
)
|
|
|
15,399
|
|
|
16,024
|
|
Current
|
|
625
|
|
|
625
|
|
Non-current
|
|
14,774
|
|
|
15,399
|
|
|
|
15,399
|
|
|
16,024
|
|
Instrument
(in thousands of $)
|
|
Year Ended
|
|
Notional Amount
|
|
Maturity
Dates
|
|
Fixed Interest
Rate
|
||||||
Interest rate swaps:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Receiving floating, pay fixed
|
|
December 31, 2018
|
|
1,783,325
|
|
|
2019
|
to
|
2026
|
|
1.07
|
%
|
to
|
2.90%
|
Receiving floating, pay fixed
|
|
December 31, 2017
|
|
1,335,307
|
|
|
2018
|
to
|
2023
|
|
1.07
|
%
|
to
|
2.44%
|
Derivatives designated as
hedging instruments
|
|
|
|
Effective
portion gain/
(loss) reclassified from
Accumulated Other
Comprehensive Loss
|
|
Ineffective Portion
|
||||||||||||||
(in thousands of $)
|
|
Location
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|
2016
|
||||||
Interest rate swaps
|
|
Other financial items, net
|
|
(26
|
)
|
|
—
|
|
|
(409
|
)
|
|
—
|
|
|
(1
|
)
|
|
(639
|
)
|
Derivatives designated as hedging instruments
|
|
Amount of gain/
(loss) recognized in
OCI on derivative
(effective portion)
|
|||||||
(in thousands of $)
|
|
2018
|
|
2017
|
|
2016
|
|||
Interest rate swaps
|
|
—
|
|
|
94
|
|
|
147
|
|
(in thousands of $)
|
|
Fair Value
Hierarchy
|
|
2018 Carrying Value
|
|
2018 Fair Value
|
|
2017 Carrying Value
|
|
2017 Fair Value
|
||||
Non-Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
Level 1
|
|
96,648
|
|
|
96,648
|
|
|
246,954
|
|
|
246,954
|
|
Restricted cash and short-term deposits
|
|
Level 1
|
|
172,444
|
|
|
172,444
|
|
|
182,933
|
|
|
182,933
|
|
2015 and 2017 Norwegian Bonds
(1)
|
|
Level 1
|
|
400,000
|
|
|
396,843
|
|
|
400,000
|
|
|
392,445
|
|
Long-term debt—floating
(2)
|
|
Level 2
|
|
883,100
|
|
|
883,100
|
|
|
987,584
|
|
|
987,584
|
|
Obligation under capital lease
(2)
|
|
Level 2
|
|
119,683
|
|
|
119,683
|
|
|
128,081
|
|
|
128,081
|
|
Derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest rate swaps asset
(3)(4)
|
|
Level 2
|
|
17,617
|
|
|
17,617
|
|
|
11,962
|
|
|
11,962
|
|
Interest rate swaps liability
(3)(4)
|
|
Level 2
|
|
8,753
|
|
|
8,753
|
|
|
1,618
|
|
|
1,618
|
|
Earn-Out Units
(5)
|
|
Level 2
|
|
—
|
|
|
—
|
|
|
7,400
|
|
|
7,400
|
|
1.
|
This pertains to bonds with a combined carrying value of
$400.0 million
as of
December 31, 2018
(
2017
:
$400.0 million
) which is included under long-term debt on the balance sheet. The fair value of the bonds as of
December 31, 2018
was
$396.8 million
(
2017
:
$392.4 million
), which represents
99.2%
(
2017
:
98.1%
) of their face value.
|
2.
|
Our debt and capital lease obligation are recorded at amortized cost in the consolidated balance sheets. Debt is presented in the above table, gross of deferred financing cost of
$10.8 million
as of
December 31, 2018
(
2017
:
$16.6 million
).
|
3.
|
Derivative liabilities are captured within other current liabilities and derivative assets are captured within other current and non-current assets on the consolidated balance sheet.
|
4.
|
Since March 2018, we have ceased hedge accounting for any of our derivatives. The fair value/carrying value of interest rate swap agreements that qualified and were designated as cash flow hedges as of December 31,
2017
was
$0.1 million
(with a notional amount of
$72.5 million
).
|
5.
|
This relates to the Earn-Out Units issued in connection with the IDR reset transaction in October 2016. On October 24, 2018, we declared a reduced quarterly distribution of
$0.4042
per Common Unit. Consequently, the second tranche of Earn-Out Units were not issued. Accordingly, we have recognized a
$nil
valuation on the Earn-Out Units derivatives as of December 31, 2018, resulting in a mark-to-market gain related to the Earn-Out Units. See note 27 for further details.
|
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||||||
(in thousands of $)
|
|
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
|
||||||
Total asset derivatives
|
|
17,617
|
|
|
(3,281
|
)
|
|
14,336
|
|
|
11,962
|
|
|
(1,618
|
)
|
|
10,344
|
|
Total liability derivatives
|
|
8,753
|
|
|
(3,281
|
)
|
|
5,472
|
|
|
1,618
|
|
|
(1,618
|
)
|
|
—
|
|
(in thousands of $)
|
|
2018
|
|
2017
|
|
2016
|
|||
Transactions with Golar and affiliates:
|
|
|
|
|
|
|
|
|
|
Time charter revenues (a)
|
|
—
|
|
|
17,423
|
|
|
28,368
|
|
Management and administrative services fees (b)
|
|
(9,809
|
)
|
|
(7,762
|
)
|
|
(4,251
|
)
|
Ship management fees (c)
|
|
(5,200
|
)
|
|
(5,903
|
)
|
|
(6,466
|
)
|
Interest income on short-term loans (d)
|
|
—
|
|
|
—
|
|
|
122
|
|
Share options expense (e)
|
|
—
|
|
|
(228
|
)
|
|
(181
|
)
|
Income on deposits paid to Golar (f)
|
|
4,779
|
|
|
4,622
|
|
|
1,967
|
|
Distributions with Golar, net (g)
|
|
(42,842
|
)
|
|
(52,255
|
)
|
|
(54,688
|
)
|
Fees to Helm Energy Advisors Inc. (h)
|
|
—
|
|
|
—
|
|
|
(795
|
)
|
Transactions with others:
|
|
|
|
|
|
|
|||
Dividends to China Petroleum Corporation (i)
|
|
—
|
|
|
(7,000
|
)
|
|
(12,360
|
)
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Balances due (to)/from Golar and its affiliates (d)
|
|
(4,091
|
)
|
|
4,138
|
|
Methane Princess
lease security deposit movements (j)
|
|
2,854
|
|
|
3,487
|
|
Deposits paid to Golar (f)
|
|
—
|
|
|
177,247
|
|
|
|
(1,237
|
)
|
|
184,872
|
|
•
|
To what extent we and Golar may compete with each other;
|
•
|
Certain rights of first offer on certain FSRUs and LNG carriers operating under charters for
five
or more years; and
|
•
|
The provision of certain indemnities to us by Golar.
|
•
|
free liquid assets of at least
$30 million
throughout the Hilli Facility period;
|
•
|
a maximum net debt to EBITDA ratio for the previous 12 months of
6.5
:1; and
|
•
|
a consolidated tangible net worth of
$123.95 million
.
|
(in thousands of $)
|
|
2018
|
|
2017
|
||
Carrying value of vessels and equipment secured against long-term loans and capital leases
|
|
1,517,297
|
|
|
1,555,092
|
|
|
2017
|
|
2016
|
|
Risk free interest rate
|
1.5
|
%
|
1.5
|
%
|
Expected volatility of common units
(1)
|
44.8
|
%
|
44.8
|
%
|
Expected dividend yield
(2)
|
0.0
|
%
|
0.0
|
%
|
Expected life of options (in years)
|
5.0 years
|
|
5.0 years
|
|
(in thousands of $, except per unit data)
|
Units
(in '000s)
|
|
|
Weighted average exercise price
|
|
|
Weighted average remaining contractual term
(years)
|
|
Options outstanding at December 31, 2017
|
99
|
|
|
$
|
18.24
|
|
|
3.9
|
|
|
|
|
|
|
|
|
|
Options outstanding at December 31, 2018
|
99
|
|
|
$
|
16.10
|
|
|
2.9
|
|
Year ended December 31
|
|||||||
(in thousands of $)
|
2018
|
|
|
2017
|
|
|
2016
|
|
Fair value of unit options which fully vested in the year
|
233
|
|
|
233
|
|
|
—
|
|
|
|
|
|
|
|
|||
Compensation cost recognized in the consolidated statement of operations
|
234
|
|
|
238
|
|
|
23
|
|
•
|
Common units
. Common units represent limited partner interests in us. Each outstanding common unit is entitled to
one
vote on matters subject to a vote of common unitholders. However, if at any time, any person or group owns beneficially more than
4.9%
or more of any class of units outstanding, any such units owned by that person or group in excess of
4.9%
may not be voted (except for purposes of nominating a person for election to our Board). The voting rights of any such common unitholder in excess of
4.9%
will effectively be redistributed pro rata among the other common unitholders holding less than
4.9%
of the voting power of such class of units. The General Partner, its affiliates and persons who acquired common units with the prior approval of the Board will not be subject to this
4.9%
limit except with respect to voting their common units in the election of the
four
elected directors.
|
•
|
Subordinated units.
Subordinated units represented limited partner interests in us. Subordinated units had limited voting rights and most notably were excluded from voting in the election of the elected directors.
|
•
|
General partner units.
There is a limitation on the transferability of the general partner interest such that the General Partner may not transfer all or any part of its general partner interest to another person (except to an affiliate of the General Partner or another entity as part of the merger or consolidation of the General Partner with or into another entity or the transfer by the General Partner of all or substantially all of its assets to another entity) prior to March 31, 2021 without the approval of the holders of at least a majority of the outstanding common units, excluding common units held by the General Partner and its affiliates. The general partner units are not entitled to vote in the election of the
four
elected directors. However, subject to the rights of the holders of Series A Preferred Units in certain instances, the General Partner in its sole discretion appoints
three
of the
seven
members of the Board.
|
•
|
IDRs.
The IDRs are non-voting and represent rights to receive an increasing percentage of quarterly distributions of available cash from operating surplus after the minimum quarterly distribution and the target distribution levels have been achieved (see note 28). Pursuant to the Partnership Agreement, the IDRs are transferable without unitholder approval.
|
•
|
Series A Preferred Units
. The Series A Preferred Units represent perpetual equity interests in us and, unlike our indebtedness, will not give rise to a claim for payment of a principal amount at a particular date. Series A Preferred Units have the voting rights described below under “Series A Preferred Units”. The Series A Preferred Units have preferential distribution rights to our common units and rank junior to all of our indebtedness as set forth below.
|
(in units)
|
|
Preferred Units
|
|
Common Units
|
|
Subordinated Units
|
|
GP Units
|
||||
December 31, 2015
|
|
—
|
|
|
45,167,096
|
|
|
15,949,831
|
|
|
1,257,408
|
|
January 2016 common unit repurchase program
|
|
—
|
|
|
(38,000
|
)
|
|
—
|
|
|
—
|
|
June 2016 conversion of subordinated units
|
|
—
|
|
|
15,949,831
|
|
|
(15,949,831
|
)
|
|
—
|
|
October 2016 IDR reset
|
|
—
|
|
|
2,994,364
|
|
|
—
|
|
|
61,109
|
|
December 31, 2016
|
|
—
|
|
|
64,073,291
|
|
|
—
|
|
|
1,318,517
|
|
February 2017 common unit offering
|
|
—
|
|
|
5,175,000
|
|
|
—
|
|
|
94,714
|
|
October 2017 preferred units offering
|
|
5,520,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
November 2017 earn-out units conversion (1st tranche)
|
|
—
|
|
|
374,295
|
|
|
|
|
7,639
|
|
|
During 2017 common unit continuous offering program
|
|
—
|
|
|
145,675
|
|
|
—
|
|
|
2,973
|
|
December 31, 2017
|
|
5,520,000
|
|
|
69,768,261
|
|
|
—
|
|
|
1,423,843
|
|
January 2018 common unit continuous offering program
|
|
—
|
|
|
617,969
|
|
|
—
|
|
|
12,548
|
|
During 2018 unit repurchase program
|
|
—
|
|
|
(930,866
|
)
|
|
—
|
|
|
—
|
|
December 31, 2018
|
|
5,520,000
|
|
|
69,455,364
|
|
|
—
|
|
|
1,436,391
|
|
•
|
senior to our common units and to each other class or series of limited partner interests or other equity securities established after the original issue date of the Series A Preferred Units that is not expressly made senior to or on parity with the Series A Preferred Units as to the payment of distributions and amounts payable upon liquidation, dissolution or winding up, whether voluntary or involuntary (“Junior Securities”);
|
•
|
pari passu with any class or series of limited partner interests or other equity securities established after the original issue date of the Series A Preferred Units with terms expressly providing that such class or series ranks on a parity with the Series A Preferred Units as to the payment of distributions and amounts payable upon liquidation, dissolution or winding up, whether voluntary or involuntary (“Parity Securities”);
|
•
|
junior to all of our indebtedness and other liabilities with respect to assets available to satisfy claims against us; and
|
•
|
junior to each other class or series of limited partner interests or other equity securities expressly made senior to the Series A Preferred Units as to the payment of distributions and amounts payable upon liquidation, dissolution or winding up, whether voluntary or involuntary (“Senior Securities”). The Series A Preferred Units have no conversion or exchange rights and are not subject to any pre-emptive rights.
|
(in thousands of $ except unit and per unit data)
|
|
2018
|
|
2017
|
|
2016
|
||||||
Common unitholders’ interest in net income
|
|
59,925
|
|
|
124,656
|
|
|
139,948
|
|
|||
Less: distributions paid
(1)
|
|
(137,335
|
)
|
|
(160,069
|
)
|
|
(151,694
|
)
|
|||
Over distributed earnings
|
|
(77,410
|
)
|
|
(35,413
|
)
|
|
(11,746
|
)
|
|||
|
|
|
|
|
|
|
||||||
Basic:
|
|
|
|
|
|
|
|
|
|
|||
Weighted average common units outstanding (in thousands)
|
|
69,944
|
|
|
68,671
|
|
|
53,745
|
|
|||
Diluted:
|
|
|
|
|
|
|
||||||
Weighted average common units outstanding (in thousands)
|
|
69,944
|
|
|
68,671
|
|
|
53,745
|
|
|||
Earn-out units
|
|
—
|
|
|
654
|
|
|
189
|
|
|||
Common unit and common unit equivalents
|
|
69,944
|
|
|
69,325
|
|
|
53,934
|
|
|||
Earnings per unit - Common unitholders
:
|
|
|
|
|
|
|
|
|
|
|||
Basic
|
|
$
|
0.86
|
|
|
$
|
1.82
|
|
|
$
|
2.44
|
|
Diluted
|
|
0.86
|
|
|
1.80
|
|
|
2.43
|
|
|||
|
|
|
|
|
|
|
||||||
Cash distributions declared and paid in the period per common unit
(2)
|
|
1.96
|
|
|
2.31
|
|
|
2.31
|
|
|||
Subsequent event: Cash distributions declared and paid per common unit relating to the period
(3)
|
|
0.40
|
|
|
0.58
|
|
|
0.58
|
|
|
|
Marginal Percentage Interest in Distributions
|
|||||||
|
Quarterly Distribution Target Amount (per unit)
|
Common Unitholders
|
General Partner
|
Holders of IDRs
|
|||||
Minimum Quarterly Distribution
|
$
|
0.5775
|
|
98
|
%
|
2
|
%
|
—
|
|
First Target Distribution
|
up to $0.6641
|
|
98
|
%
|
2
|
%
|
—
|
|
|
Second Target Distribution
|
above $0.6641 up to $0.7219
|
|
85
|
%
|
2
|
%
|
13
|
%
|
|
Third Target Distribution
|
above $0.7219 up to $0.8663
|
|
75
|
%
|
2
|
%
|
23
|
%
|
|
Thereafter
|
above $0.8663
|
|
50
|
%
|
2
|
%
|
48
|
%
|
(1)
|
SOCIÉTÉ NATIONALE DES HYDROCARBURES
, a company established and duly incorporated under the laws of the Republic of Cameroon under company registration number RC Yaoundé J-58 with its registered office at P.O. Box 955, Yaoundé, Cameroon, represented for the purposes of this Agreement by [*****], duly authorised for the purposes hereof (“
SNH
”);
|
(2)
|
PERENCO CAMEROON SA
, a limited liability company with a board of directors, with a share capital of [*****], established and duly incorporated under the laws of the Republic of Cameroon under company registration number RC/DLA/1982/B/8367, with its registered office at P.O. Box 1225 Douala, Cameroon, represented for this purpose by [*****], duly authorised for the purposes hereof (“
Perenco
”);
|
(3)
|
GOLAR HILLI CORPORATION
, a company established and duly incorporated under the laws of the Marshall Islands, under company registration number 68975, with its registered office located at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960, represented for the purposes of this Agreement by Mr Iain Ross, duly authorised for the purposes hereof (“
Golar
”); and
|
(4)
|
GOLAR CAMEROON SASU
, a simplified limited company with a sole shareholder, with a share capital of CFA Francs ten million (XAF 10,000,000), established and duly incorporated under the laws of the Republic of Cameroon, under company registration number RC/DLA/2015/B/3350, with its registered office located at Avenue de Gaulle 600. Bonanjo, PO Box 1404, Douala, Cameroon, represented for the purposes of this Agreement by Mr John Johansen, duly authorised for the purposes hereof (“
Golar Cam
”).
|
(A)
|
Perenco and SNH (collectively the “
Customer
”), Golar and Golar Cam are committed to the development of a floating liquefied natural gas (“
FLNG
”) export project offshore Kribi, in Cameroon (the “
Project
”).
|
(B)
|
The Customer has, pursuant to the Sanaga Sud PSC (as defined below), secured the rights to produce and transport Gas and to export LNG from Cameroon, and, pursuant to the Sanaga Sud PSC, is authorised to provide Feed Gas for the Project.
|
(C)
|
The parties have entered into a Binding Term Sheet dated 15 October 2015, as amended and supplemented by Addendum No.1 dated 30 October 2015, pursuant to which the Parties set out the basis on which Golar and Golar Cam would make the Services available to the Customer in order to execute the Project.
|
(D)
|
The Parties and the Republic of Cameroon have entered into the Gas Agreement (the “
Convention Gaziere
”) dated 30 September 2015, in order to establish the technical, legal, financial, customs and economic framework between the Parties on the one hand, and the Republic of Cameroon on the other (including the rights for the Customer to liquefy Gas and export LNG from Cameroon).
|
(E)
|
Golar and Golar Cam now wish to make the Services available to the Customer, and the Customer desires to purchase and pay Golar for the Services and to Lift LNG from the FLNG Facility, in accordance with the provisions hereof.
|
1
|
DEFINITIONS, INTERPRETATION AND LANGUAGE
|
1.1
|
Definitions
|
(1)
|
1.2 MMTPA; or
|
(2)
|
the LNG liquefaction capacity notified by the Customer in the event that the option at Clause 5.1(b) is exercised by the Customer and the required notification has been provided by Golar
|
(a)
|
any Person (other than an Affiliate) becomes the beneficial owner directly or indirectly, of voting securities of a Party representing more than fifty per cent (50%) of the Party’s outstanding voting securities or rights to acquire such securities or acquires control of a majority of the Board or otherwise acquires de facto control;
|
(b)
|
any sale, lease, exchange or transfer (in one transaction or a series of transactions) by Golar of the FLNG Facility, other than in respect of specific finance arrangements where Golar retains control and use of the FLNG Facility; or
|
(c)
|
[*****].
|
(a)
|
the enactment of any new law;
|
(b)
|
the modification, repeal, or withdrawal of any existing law;
|
(c)
|
the commencement of any law which had not become effective on 15 October 2015; or
|
(d)
|
a change in the interpretation or application by any Governmental Authority having jurisdiction over any of the Parties or the subject matter of this Agreement of any law.
|
(a)
|
any indirect, incidental, consequential, exemplary or punitive loss or damages; and
|
(b)
|
any direct or indirect: loss of income or profits, loss of anticipated income or profits, loss of goodwill, loss of business, loss of bargain, loss of anticipated saving, loss of use (partial or total), loss and/or deferral of production, loss of contracts, loss of revenues, or loss of reputation.
|
(a)
|
the Customer and each of its Affiliates;
|
(b)
|
any Person selling, supplying or otherwise delivering Feed Gas for or on behalf of Customer to FLNG Facility;
|
(c)
|
any Person executing any agreement pursuant to which Customer or any of Customer’s Affiliates sells or agrees to sell LNG (unless such Person has signed the Conditions of Use Agreement);
|
(d)
|
any owner and operator of Transport Pipelines delivering Feed Gas for or on behalf of Customer;
|
(e)
|
any Transporter (unless such Transporter has signed the Conditions of Use Agreement);
|
(f)
|
contractors and subcontractors of any tier of any of the foregoing (including tugs, tug owners and operators, pilot vessels, pilot vessel owners and operators, and security vessels, security vessel owners and operators) in connection with the Customer’s Facilities; and
|
(g)
|
the Representatives of each of the foregoing,
|
(a)
|
a party suspends payment of its debts or is unable or admits its inability to pay its debts as they fall due;
|
(b)
|
a party passes a resolution, commences proceedings or has proceedings commenced against it (which proceedings commenced against it are not stayed within twenty-one (21) days of service thereof on that party) in the nature of bankruptcy or reorganization resulting from insolvency, or for its liquidation or for the appointment of a receiver, administrator, trustee in bankruptcy or liquidator of its undertakings or assets;
|
(c)
|
a party enters into any composition or scheme of arrangement with its creditors generally (or any class thereof) for the forgiveness or forbearance of debt (in whole or in part) save in the course of reconstructions or amalgamations previously approved in writing by the other party;
|
(d)
|
a petition is presented or an order is made by any competent court or other appropriate authority or a resolution is passed for bankruptcy, dissolution or winding up of a party;
|
(e)
|
a liquidator, manager, administrator, receiver or trustee is appointed or an encumbrancer takes possession of the undertaking or property of a party or any material part of the undertaking or property of a party and is not paid out or discharged within twenty-eight (28) days unless such appointment or possession is being contested by the party in good faith by appropriate proceedings and is paid out or discharged within forty-five (45) days; and
|
(f)
|
a party ceases to carry on its business except for the purposes of corporate restructuring in a way which will shall not affect or interfere with its duties and obligations under this Agreement.
|
1.2
|
Interpretation
|
(a)
|
The titles, headings, and numbering are included for convenience only and will have no effect on the construction or interpretation of this Agreement.
|
(b)
|
References to Clauses, sub-paragraphs and Annexes are to those of this Agreement unless otherwise indicated. References to this Agreement and to any other agreements, contractual instruments or relevant documents will be deemed to include all exhibits, schedules, appendices, annexes, and other attachments thereto and all subsequent amendments and other modifications to such instruments, to the extent such amendments and other modifications are not prohibited by the terms of this Agreement.
|
(c)
|
The word “
include
” or “
including
” will be deemed to be followed by “without limitation”.
|
(d)
|
The word “
will
” has the same meaning as
“shall”
and thus imposes an obligation.
|
(e)
|
Whenever the context so requires, the singular includes the plural and the plural includes the singular, and the gender of any pronoun includes the other gender.
|
(f)
|
Unless otherwise indicated, references to any statute, regulation or other law will be deemed to refer to such statute, regulation or other law as amended or modified, or any successor law.
|
(g)
|
All references to a Person shall include such Person’s successors and permitted assigns.
|
(h)
|
A “
Party
” to this Agreement includes its permitted assignees (if any) and/or the successors in title to that part of its undertaking which includes this Agreement.
|
(i)
|
The word “
writing
” includes any methods of representing words in a legible form (other than writing on an electronic or visual display screen) or other writing in non-transitory form.
|
(j)
|
Unless otherwise indicated, any reference to currency shall be to the lawful currency from time to time of the United States of America.
|
(k)
|
Unless otherwise indicated, any reference to a time of day shall be to West Africa Time Zone (UTC+01:00).
|
(l)
|
For the purpose of this Agreement, rounding shall be made to four (4) decimal places according to ISO-80000-1:2009(en), Annex B, related to rules for the rounding of numbers unless otherwise stated herein.
|
1.3
|
Contract Language
|
2
|
TERM AND EFFECTIVENESS
|
2.1
|
Term
|
(a)
|
the eighth (8
th
) anniversary of the Acceptance Date;
|
(b)
|
receipt and processing of five hundred (500) BCF of Feed Gas at the Gas Receipt Point and delivery of the resultant LNG at the LNG Delivery Point; or
|
(c)
|
termination pursuant to Clause 18.
|
2.2
|
Extension of Term
|
2.3
|
Conditions Precedent
|
(a)
|
provision by Golar to Perenco of the Golar Credit Support;
|
(b)
|
provision by the Customer to Golar of the Perenco Credit Support; and
|
(c)
|
provision by the Customer to Golar of the SNH Credit Support,
|
3
|
SCOPE OF SERVICES
|
3.1
|
Services to be Provided by Golar and Golar Cam
|
(a)
|
the receipt of Feed Gas at the Gas Receipt Point;
|
(b)
|
the treatment and liquefaction of Gas;
|
(c)
|
the temporary storage of Customer’s Inventory;
|
(d)
|
the purging and cool down or cool down only of LNG Vessels;
|
(e)
|
the delivery of LNG meeting the LNG Specification at the LNG Delivery Point, in accordance with Clause 12; and
|
(f)
|
other activities related to performance of the foregoing.
|
3.2
|
Activities Outside Scope of Services
|
(a)
|
the production, purchase or other acquisition of Feed Gas and related activities;
|
(b)
|
the delivery of Feed Gas to the Gas Receipt Point and related activities;
|
(c)
|
the construction, operation, ownership, maintenance, repair and removal of facilities upstream of the Gas Receipt Point;
|
(d)
|
overall security at the FLNG Site, including the provision of any security vessels and services;
|
(e)
|
harbour, mooring and escort services to LNG Vessels, including those relating to Pilots, tugs, service boats, fire boats and other escort vessels, provided that Golar and/or Golar Cam will use reasonable efforts to assist Customer in obtaining such services at Customer’s expense if requested by the Customer;
|
(f)
|
the construction, operation, ownership, maintenance, repair or servicing of Downstream Facilities;
|
(g)
|
the provision of LNG for the purposes of purging and/or cool down of LNG Vessels;
|
(h)
|
the provision of nitrogen to LNG Vessels;
|
(i)
|
the provision of, or assistance in securing, bunker fuel, vessel repairs or the delivery of ship’s stores or spare parts for LNG Vessels;
|
(j)
|
the disposal of waste in any form from an LNG Vessel, light dues, LNG Vessel ballast, bunkering services, fresh water supply, liberty launches for the crews of LNG Vessels, shore leave for LNG Vessels’ crews, port mooring personnel for line handling (if any), independent cargo surveyor services, except as provided in Clause 15.3 any vetting activities or condition assessments in relation to LNG Vessels, any maritime authority fees or any Port Charges in relation to any LNG Vessel; and
|
(k)
|
the marketing of Gas and/or LNG and all activities related thereto,
|
3.3
|
Performance of Services
|
4
|
OPERATION MANUALS AND MEASUREMENT
|
4.1
|
Marine Operations Manual
|
(a)
|
General.
Golar and Customer shall develop and maintain a marine operations manual for the FLNG Facility, which manual shall contain implementation procedures applicable to LNG Vessels and Transporters in accordance with Marine Operations Industry Practice and in line with the design parameters of the FLNG Facility (excluding matters governed by the Commercial Operations Manual and/or the Measurement and Testing Procedures) (the “
Marine Operations Manual
”). It is acknowledged that each Party shall be responsible for developing certain sections of the Marine Operations Manual.
|
(b)
|
Compliance.
The Parties shall comply, and Customer shall cause all LNG Vessels and Transporters utilising the FLNG Facility to comply, with the Marine Operations Manual in all material respects.
|
(c)
|
Development.
In developing such Marine Operations Manual, Golar shall provide the Customer with a preliminary draft of the same (the “
Preliminary Marine Operations Manual
”) no later than [*****] days in advance of the Scheduled Commissioning Start Date. If the Customer desires to consult with Golar regarding the contents of the Preliminary Marine Operations Manual, the Customer shall, no later than [*****] days from delivery of the Preliminary Marine Operations Manual by Golar, request to meet with Golar by providing notice thereof to Golar, and Golar shall, no later than [*****] days after receipt of such notice, meet with the Customer to discuss the Preliminary Marine Operations Manual. If the Parties are able during such meeting to arrive at a common approach to revising the draft, then such draft, as so revised (and as amended from time to time), shall constitute the Marine Operations Manual. If the Parties are unable during such meeting to arrive at a common approach upon revisions to the Preliminary Marine Operations Manual, then [*****].
|
(d)
|
Amendment.
Either Party may request amendments to the Marine Operations Manual and the Parties shall consult with each other in good faith about any such proposed amendments; provided that any amendments shall require the consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed). Golar shall deliver to the Customer a copy of the Marine Operations Manual and any amendments thereto promptly after they have been finalised or amended, as the case may be.
|
(e)
|
Priority.
In the event of a conflict between the provisions of this Agreement and the Marine Operations Manual, the provisions of this Agreement shall prevail.
|
4.2
|
Commercial Operations Manual
|
(a)
|
General.
Golar and Customer shall develop and maintain a commercial operations manual for the FLNG Facility, which manual shall contain commercial implementation procedures relating to provision of the Services (excluding matters governed by the Marine Operations Manual and/or the Measurement and Testing Procedures) (the “
Commercial Operations Manual
”).
|
(b)
|
Compliance.
The Parties shall comply with the Commercial Operations Manual in all material respects.
|
(c)
|
Development.
In developing such Commercial Operations Manual, Golar shall provide the Customer with a preliminary draft of the same (the “
Preliminary Commercial Operations Manual
”) no later than [*****] days in advance of the Scheduled Commissioning Start Date. If the Customer desires to consult with Golar regarding the contents of the Preliminary Commercial Operations Manual, the Customer shall, no later than [*****] days from delivery of the Preliminary Commercial Operations Manual by Golar, request to meet with Golar by providing notice thereof to Golar, and Golar shall, no later than [*****] days after receipt of such notice, meet with the Customer to discuss the Preliminary Commercial Operations Manual. If the Parties are able during such meeting to arrive at a common approach to revising the draft, then such draft, as so revised (and as amended from time to time), shall constitute the Commercial Operations Manual. If the Parties are unable during such meeting to arrive at a common approach upon revisions to the Preliminary Commercial Operations Manual, then [*****].
|
(d)
|
Amendment.
Either Party may request amendments to the Commercial Operations Manual and the Parties shall consult with each other in good faith about any such proposed amendments; provided that any amendments shall require the consent of the other Party (such consent not to be unreasonably withheld, conditioned or delayed). Golar shall deliver to the Customer a copy of the Commercial Operations Manual and any amendments thereto promptly after they have been finalised or amended, as the case may be.
|
(e)
|
Priority.
In the event of a conflict between the provisions of this Agreement and the Commercial Operations Manual, the provisions of this Agreement shall prevail. In the event of a conflict between the provisions of the Commercial Operations Manual and the Marine Operations Manual or the Measurement and Testing Procedures, the provisions of the Commercial Operations Manual shall prevail.
|
4.3
|
Measurement and Testing Procedures
|
(a)
|
General.
Any measurement and/or testing of Feed Gas delivered to Golar at the Gas Receipt Point and LNG delivered to the Customer at the LNG Delivery Point required in the performance of this Agreement, shall be carried out in accordance with the measurement and testing procedures developed by Golar and agreed between the Parties pursuant to this Clause 4.3 (the “
Measurement and Testing Procedures
”).
|
(b)
|
Development.
Golar shall provide the Customer with a preliminary draft set of Measurement and Testing Procedures by no later than [*****] days prior to the Scheduled Commissioning Start Date. Golar and the Customer shall agree on the Measurement and Testing Procedures within [*****] days thereafter; provided that if Golar and the Customer are unable to agree on the Measurement and Testing Procedures within such [*****] days, [*****]. The Measurement and Testing Procedures shall comply with applicable International LNG Terminal Standards and any legal requirement in Cameroon applicable in respect of metering.
|
(c)
|
Amendment.
Subject to the Customer’s consent (not to be unreasonably withheld or delayed), Golar may amend the Measurement and Testing Procedures from time to time. It shall be reasonable for the Customer to withhold or delay its consent where any amendments proposed by Golar are inconsistent, or would conflict, with the measurement and testing procedures agreed in any LNG SPA. Golar shall reasonably consider changes to the Measurement and Testing Procedures that are requested by the Customer and consult with Customer about such changes.
|
(d)
|
Priority.
In the event of a conflict between the provisions of this Agreement and the Measurement and Testing Procedures, the provisions of this Agreement shall prevail. In the event of a conflict between the provisions of the Measurement and Testing Procedures and the Marine Operations Manual, the provisions of the Measurement and Testing Procedures shall prevail.
|
5
|
COMPENSATION FOR SERVICES
|
5.1
|
Fees
|
(a)
|
A monthly fee (the “
Tolling Fee
”) payable in arrears in an amount equal to (1) the MMBTU Base Capacity for the applicable Contract Year divided by (2) the Monthly Component and multiplied by (3) the price per MMBTU (based on Gross Heating Value), which shall be calculated as follows:
|
(i)
|
Brent Crude Price
>
[*****].
|
(ii)
|
Brent Crude Price > USD60 but [*****].
|
(iii)
|
Brent Crude Price
<
USD60: [*****].
|
(b)
|
The Customer shall have [*****] to instruct Golar to increase the LNG liquefaction capacity of the FLNG Facility up to a maximum of [*****] MMTPA Golar shall comply with such instructions within such [*****] month period (or a shorter time period which can be reasonably accommodated given the operational limitations of the FLNG Facility) provided that it is reasonable to do so in accordance with International LNG Terminal Standards, the Gas Agreement and applicable law. Once Golar are able to achieve the LNG liquefaction capacity notified by the Customer, Golar shall notify the Customer in writing, following which the Tolling Fee shall be calculated as follows (commencing on the first day of the calendar month following such notification by Golar):
|
(i)
|
Brent Crude Price
>
[*****].
|
(ii)
|
Brent Crude Price >USD60 [*****].
|
(iii)
|
Brent Crude Price
<
USD60: [*****].
|
(c)
|
Purging and Cool Down Fee.
If the Customer receives purging and cool down pursuant to Clause 15.9(a) [*****] (“
Purging and Cool Down Fee
”). The Purging and Cool Down Fee shall be payable in arrears and invoiced pursuant to Clause 6.2. For the avoidance of doubt, [*****].
|
5.2
|
Retainage
|
(a)
|
Retainage during Commissioning Period.
Golar shall be entitled to retain, deduct from the Customer’s Inventory, and use without cost, Retainage up to the Commissioning Retainage Limit.
|
(b)
|
Retainage during Services Period
. Golar shall be entitled to retain, deduct from the Customer’s Inventory, and use without cost the Retainage in accordance with Annex 4 (the “
Operations Retainage Limit
”).
|
6
|
INVOICING AND PAYMENT
|
6.1
|
Monthly Invoices
|
6.2
|
Other Invoices
|
6.3
|
Payment Due Dates
|
(a)
|
Due Date for Monthly Invoice.
Each monthly invoice submitted by Golar pursuant to Clause 6.1 shall become due and payable [*****] days after delivery of such monthly invoice, provided that if such day is not a Business Day, it shall become due and payable on the next Business Day. If the amount of the monthly invoice calculated pursuant to Clause 6.1 is a negative amount, such negative amount shall be carried forward to the next monthly invoice until fully applied towards the fees and charges due from the Customer.
|
(b)
|
Due Date for Other Invoices.
Each invoice submitted pursuant to Clause 6.2 shall become due and payable on the [*****] day after the date on which it is received, provided that if such payment due date is not a Business Day, the due date for such payment shall be extended to the next Business Day.
|
(c)
|
Interest.
If the full amount of any invoice is not paid when due, the unpaid amount thereof shall bear interest at the rate of [*****] above LIBOR, compounded annually, from and including the day following the due date up to and including the date when payment is received.
|
6.4
|
Payment
|
(a)
|
Obligation.
Each Party shall pay, or cause to be paid, in USD, in immediately available funds, all amounts that become due and payable by such Party pursuant to any invoice issued hereunder, to a bank account or accounts designated by and in accordance with instructions issued by the invoicing Party.
|
(b)
|
Payment in Full.
Each payment of any amount owing under this Clause 6 shall be in the full amount due without reduction or offset for any reason (except as expressly allowed under this Agreement (including Clause 6.6) or in the case of manifest error, which error the paying Party shall report to the invoicing Party as soon as reasonably practicable), including Taxes, exchange charges, or bank transfer charges. In case of manifest error the incorrect invoice shall be deemed withdrawn and the invoicing Party shall issue a corrected invoice to the paying Party. The due date for payment of such corrected invoice shall be in accordance with Clause 6.3.
|
6.5
|
Non-payment
|
(a)
|
Right to Suspend Performance.
If any amount in excess of [*****] (United States Dollars [*****]) due by Customer under this Agreement remains outstanding for more than [*****] days after Golar notifies Customer of such payment default, Golar may immediately suspend performance of its obligations under this Agreement upon notice to the Customer until such undisputed amount, with interest in accordance with Clause 6.3(c), has been paid in full.
|
(b)
|
For the avoidance of doubt, if Golar suspends performance pursuant to Clause 6.5(a), the Customer shall continue to be liable for the Fee and all other amounts owing by the Customer under this Agreement.
|
(c)
|
Termination Right.
If any amount in excess of [*****] (United States Dollars [*****]) owed by Customer under this Agreement remains outstanding for more than [*****] days after Golar notifies Customer of such payment default, then Golar shall have the right to terminate this Agreement in accordance with Clause 18.1(b)(v).
|
6.6
|
Disputed Invoices
|
6.7
|
Final Settlement
|
7
|
TAXES
|
(a)
|
If either Party (for the purpose of this Clause 7, the “
indemnified Party
”) becomes aware of any circumstance which may result in the indemnified Party having a claim against the other Party (for the purpose of this Clause 7, the “
indemnifying Party
”) in respect of a Tax liability against which the indemnified Party is indemnified and held harmless under Clause 7(a) or 7(b), as applicable, then:
|
(i)
|
the indemnified Party shall promptly notify the indemnifying Party in writing and the indemnifying Party shall be entitled (A) to take and/or require the indemnified Party to take any action the indemnifying Party might reasonably request to resist such Tax liability, in the name of the indemnified Party but at the cost and expense of the indemnifying Party, and (B) to have conduct of any appeal, dispute, compromise of the matter and of any incidental negotiations for the aforesaid purposes; and
|
(ii)
|
the indemnified Party shall give the indemnifying Party all co-operation, access and assistance for the purpose of resisting such Tax liability as the indemnifying Party may reasonably require.
|
8
|
FLNG FACILITY
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8.1
|
Description
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8.2
|
Standard of Operation
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(a)
|
Approvals and Documentation.
The FLNG Facility shall comply with the regulations of, and obtain all Approvals required by, Governmental Authorities to carry out all operations at the FLNG Site. The FLNG Facility shall at all times have on board valid documentation evidencing all such Approvals. The FLNG Facility shall comply fully with the International Safety Management Code for the Safe Operation of Ships and Pollution Prevention effective 1 July 1998 (the “ISM Code”), and at all times be in possession of a valid safety management certificate issued in accordance with the ISM Code.
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(b)
|
Condition.
The FLNG Facility, including its manifold arrangement, shall be in compliance with the Marine Operations Manual and with International LNG Terminal Standards. The FLNG Facility shall be (i) fitted in every way with adequate facilities for the liquefaction of Feed Gas and the storage and unloading of LNG and (ii) otherwise seaworthy.
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(c)
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Classification Society.
The FLNG Vessel shall at all times be maintained in class with DNV-GL or any other member of the International Association of Classification Societies that is agreed in writing by the Parties.
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(d)
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Construction.
The FLNG Facility shall have been constructed to all applicable International LNG Terminal Standards.
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(e)
|
Operation and Maintenance.
The FLNG Facility shall comply with, and shall be fully equipped, supplied and maintained to comply with, all applicable International LNG Terminal Standards.
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(f)
|
ISPS Code.
The FLNG Vessel shall hold a valid International Ship Security Certificate. Golar shall comply with the guidelines contained in its Ship Security Plan as defined in the ISPS Code to ensure that the appropriate security level is maintained at all times on board the FLNG Vessel.
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8.3
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FLNG Vessel Personnel
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(a)
|
Training and Qualifications.
As of the Commercial Start Date and throughout the Term, and without prejudice to Article 11 of the Gas Agreement Golar shall ensure that the FLNG Vessel shall have a competent operational team onboard at all times with the ability, experience, licences and training commensurate with the performance of their duties in accordance with International LNG Terminal Standards and as required by Governmental Authorities having jurisdiction over the FLNG Vessel or her crew. Without in any way limiting the foregoing:
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(i)
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All marine personnel shall possess valid and current certificates of competence and/or documents issued or approved by the Flag State and in accordance with the requirements of any applicable Cameroon law;
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(ii)
|
the senior marine personnel shall be trained and certified to a standard customary for Reasonable and Prudent Operators of such floating liquefaction facilities and in compliance with the relevant provisions of the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1978 (as amended in 1995) or any additions, modifications or subsequent versions thereof and SIGTTO publication “Crew Safety Standards and Training for Large LNG Carriers”;
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(iii)
|
within the operational team there shall be a master mariner who shall have documented previous experience with side-by-side LNG operations (in the capacity of being the Master of an LNG vessel or an FSRU vessel);
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(iv)
|
the operational team onboard shall be fluent in written and oral English and shall maintain all records and provide all reports with respect to the FLNG Vessel in English; and there shall otherwise be on board sufficient personnel with a good working knowledge of the English language to enable, loading, and liquefaction of Gas and cargo handling and discharge of LNG, as well as bunkering operations, to be carried out efficiently and safely and to enable communications between the FLNG Vessel and those loading the LNG Vessel or accepting discharge therefrom to be carried out quickly and efficiently; and
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(v)
|
none of the FLNG Vessel’s Master, officers or crew shall, while serving on the FLNG Vessel, abuse the use of drugs or alcohol, and Golar shall maintain a written policy to such effect, such policy to meet or exceed the standards of the Oil Companies International Marine Forum’s Guidelines for the Control of Drugs and Alcohol Aboard Ship, 1995, as amended from time to time. If any Master, officer or crew member abuses the use of drugs or alcohol, such individual shall be dismissed from service on the FLNG Vessel.
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(b)
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Professional Histories.
Prior to the Commercial Start Date, Golar shall provide the Customer with professional histories of the key marine personnel onboard, who shall have a minimum of twelve (12) months’ seagoing experience.
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8.4
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Conversion Progress Reports
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8.5
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Modifications to FLNG Facility
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(a)
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Should modifications to the FLNG Facility be required following the Effective Date by the FLNG Vessel’s Classification Society or by the Flag State or as a result of implementation or application of any international convention or regulation by any Governmental Authority to whose rules the FLNG Vessel is or may become subject, the costs of or arising from such modifications shall be for the account of Golar. If such modifications occur after the Acceptance Date, the Fee shall not be payable for the period of time taken to implement such modifications and any resulting undelivered LNG quantities shall not count towards a Services Unavailability. If the modifications required pursuant to this Clause 8.5(a) can be accomplished during Scheduled or Unscheduled Downtime then Golar shall use reasonable endeavours to carry out the modifications at that time, failing which the Customer shall have the right to make changes to the Lifting Programme in accordance with Clause 12.4(c), to take into account the reasonable requirements of any LNG buyer under an LNG SPA.
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(b)
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If, following the Effective Date, modifications to the FLNG Facility are required as a result of local law or regulations of Cameroon (other than those which implement international conventions or regulations pursuant to Clause 8.5(a) above) Golar shall promptly notify [*****] If the modifications required pursuant to this Clause 8.5(b) can be accomplished during Scheduled or Unscheduled Downtime then Golar shall use reasonable endeavours to carry out the modifications at that time, failing which the Customer shall have the right to make changes to the Lifting Programme in accordance with Clause 12.4(c), to take into account the reasonable requirements of any LNG buyer under an LNG SPA.
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(c)
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If, following the Effective Date, modifications to the FLNG Facility are reasonably required by the Customer, Customer shall promptly notify Golar and the cost of such modifications shall be for the account of Customer. It is agreed by Golar that it shall be reasonable for Customer to require such modifications in consequence of a modification of an LNG Vessel pursuant to a change in International LNG Vessel Standards or applicable law with which an LNG Vessel is required to comply. [*****] the Fee shall continue to be payable for the period of any reasonable time taken to implement such modifications and any resulting undelivered LNG quantities shall not count towards a Services Unavailability, provided, however, that any modifications required under this Clause 8.5(c) shall only be undertaken if they do not jeopardise the FLNG Vessel’s compliance with the applicable requirements of its Classification Society and/or Flag State. If the modifications required pursuant to this Clause 8.5(c) can be accomplished during Scheduled or Unscheduled Downtime then, subject to Golar’s own maintenance requirements, Golar shall use reasonable endeavours to carry out the modifications at that time, failing which the Parties shall meet to discuss any modifications to the Lifting Programme to be agreed in accordance with Clause 12.4(a).
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(d)
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Notwithstanding the foregoing provisions of this Clause 8.5, Golar shall at any time after the Effective Date have the right, but not the obligation, from time to time to modify the FLNG Facility, including its specifications or the type or location of its facilities for any reason; provided that the costs of or arising from such modifications shall be for the account of Golar. Any such modifications shall be subject to (i) such modifications not rendering the FLNG Facility incompatible with an LNG Vessel that was previously compatible with the FLNG Facility, (ii) such modifications not reducing the Services except as allowed in Clause 13.1 and (iii) such modifications not resulting in the FLNG Facility failing to comply with Clause 8.1. Notwithstanding (i) but subject to (ii) and (iii) in the foregoing sentence, Golar may make such modifications in a manner that would render the FLNG Facility incompatible with an LNG Vessel that was previously compatible with the FLNG Facility, provided that:
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(i)
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such modification is made pursuant to a change in International LNG Terminal Standards; or
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(ii)
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the LNG Vessel is capable of being modified to maintain compatibility with both the FLNG Facility and the LNG receiving terminal in the LNG Vessel’s normal trade and, in connection with a modification (other than pursuant to sub-paragraph (i) above), Golar reimburses the Customer for the reasonable actual costs incurred by Customer in causing Transporter to modify the LNG Vessel to maintain compatibility with the FLNG Facility as so modified; provided, further, that the Customer shall use its reasonable efforts to cause its LNG buyer or the relevant Transporter to minimise costs to be borne by Golar hereunder, where so informed by its LNG buyer or the relevant Transporter, shall notify Golar as soon as reasonably practicable in advance of the nature and expected cost of all such LNG Vessel modifications by Transporter, and shall invoice Golar in accordance with Clause 6.2 for all costs incurred for which such reimbursement from Golar is requested.
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(e)
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Upon becoming aware of the need for any modifications under Clauses 8.5(a) to (d) above, the relevant Party requiring the modification shall promptly notify the other Party in writing of:
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(i)
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the nature and extent of the modification required;
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(ii)
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the latest date by which such modification is expected to be reasonably completed;
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(iii)
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in the case of any modification notified by Golar for which Customer is liable for the cost thereof, the estimated cost of such modification; and
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(iv)
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in the case of any modification required by either Party, Golar shall notify Customer of the estimated time required for completing such modification taking into account the date requested in sub-paragraph (ii) above.
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8.6
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Customer Inspection Rights
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8.7
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Removal of the Mooring
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9
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START-UP
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9.1
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Commissioning Start Date
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(a)
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The Commissioning Period will commence on the Scheduled Commissioning Start Date. The Parties shall use reasonable endeavours to agree a Scheduled Commissioning Start Date earlier than [*****].
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(b)
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Delay Caused by Force Majeure.
Should an event of Force Majeure occur that has the effect of delaying the acceptance of the FLNG Facility, then, upon notice of such effect from Golar, the Scheduled Commissioning Start Date shall be postponed or delayed to fully address the effects of such event. For greater certainty, Golar shall take all such actions required under Clause 16 to address any such event of Force Majeure delaying the Scheduled Commissioning Start Date, including notice of such event to be provided in accordance with Clause 16.3.
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9.2
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Commissioning Period
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(a)
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The Commissioning Period shall be limited to one hundred and eighty (180) days from the Scheduled Commissioning Start Date, subject to any extension of up to an additional [*****] days in accordance with Clause 9.2(k) below, and any extensions pursuant to Clause 9.4(a).
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(b)
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No later than [*****] days before the Scheduled Commissioning Start Date Golar shall deliver to the Customer (1) a draft programme for the site commissioning of the FLNG Facility, including the carrying out of the Commissioning Activities (other than the Acceptance Tests) during the Commissioning Period (the “
Commissioning Programme
”) and (2) a draft proposal regarding acceptance testing of the FLNG Facility in order to ascertain whether or not the FLNG Facility meets the Acceptance Minimum Requirements (the “
Acceptance Test Protocol
”).
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(c)
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The Commissioning Programme shall include, in reasonable detail, operational information relevant to the production and delivery of LNG during the Commissioning Period, including but not limited to:
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(d)
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Golar shall provide the Customer with an updated Commissioning Programme at least [*****] days before the Scheduled Commissioning Start Date (or such alternative date as the Parties otherwise agree). If the Customer desires to consult with Golar regarding the contents of the Commissioning Programme, the Customer shall, no later than [*****] days from delivery of the draft proposal by Golar, request to meet with Golar by providing notice thereof to Golar, and Golar shall, no later than [*****] days after receipt of such notice, meet with the Customer to discuss the Commissioning Programme. Subject to Clause 9.2(e), [*****].
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(e)
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The Parties shall co-operate to schedule lifting of commissioning cargoes and Golar shall use reasonable endeavours to provide Customer with at least [*****] days’ notice of each commissioning cargo (or otherwise as much advance notice as possible given the increased level of uncertainty regarding LNG production, loading rates and laytimes during the Commissioning Period). In each notice to Customer identifying an available commissioning cargo Golar shall specify:
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(f)
|
The Acceptance Test Protocol shall include, in reasonable detail, technical and operational information relevant to the Acceptance Tests and shall meet the principles detailed at Annex 5. The Parties shall use all reasonable endeavours to agree and conclude the Acceptance Test Protocol at least [*****] days before the Scheduled Commissioning Start Date (or such alternative date as the Parties otherwise agree) and shall comply with the Acceptance Test Protocol thereafter.
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(g)
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Any periods of delay primarily attributable to a Customer Delay Event or to an event of Force Majeure properly notified and reported in accordance with Clause 16 shall not count towards the Commissioning Period, and the Commissioning Period shall be suspended during such periods of delay.
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(h)
|
Golar shall tender a notice of readiness to Customer upon arrival and mooring of the FLNG Vessel at the FLNG Site and completion of the Hook-Up Activities (a “
Golar Notice of Readiness
”) and shall, after using all reasonable endeavours to make operational any equipment for flushing and leak testing in advance, ensure that the FLNG Facility is ready to commence Commissioning Activities by the later of (a) tender of Golar Notice of Readiness or (b) the Scheduled Commissioning Start Date. If Golar becomes aware that the FLNG Vessel is not going to reach the FLNG Site by the Scheduled Commissioning Start Date, Golar shall provide the Customer with a notice stating when it expects the FLNG Vessel to arrive at the site, the reasons for the delay and the steps which Golar is taking to minimise the delay.
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(i)
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Following installation of the Mooring (which shall include Golar’s connection pipe), Customer shall securely interconnect its hook-up spool with Golar’s connection pipe at the Gas Receipt Point.
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(j)
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Customer shall be responsible for ensuring that by the Scheduled Commissioning Start Date the Customer’s Facilities are of a specification envisaged by this Agreement and compatible for the safe operation of the FLNG Facility and the carrying out of the Services as envisaged by this Agreement.
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(k)
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If, except where due to Golar’s Gross Negligence or Wilful Misconduct, the production and offloading operations test specified in the Acceptance Test Protocol has not been successfully completed by the date that is [*****] days before the end of the Commissioning Period, then Golar shall have the right to notify the Customer of the extension of the Commissioning Period for an additional period as is necessary to complete such production and offloading operations test but not exceeding [*****] days and the Commercial Start Date shall be adjusted accordingly.
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(l)
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The Customer shall use reasonable endeavours to ensure that any relevant LNG Vessel loading commissioning cargoes arrives at the FLNG Facility with the temperature in its tanks sufficiently cold to permit the continuous loading of LNG at the rate required by the Customer. If any such LNG Vessel arrives at the FLNG Facility with sufficiently cold tanks Golar shall nonetheless provide cool down services where required by the Customer due to any delays occurring during the loading of the relevant commissioning cargo (without the Purging and Cool Down Fee or reduction in the Customer’s Inventory Account under Clause 15.9 in circumstances where such delays have been caused primarily by the negligence or fault of Golar).
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(m)
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Golar shall give the Customer reasonable notice of the scheduled time of the Acceptance Tests performed during the Commissioning Period. If, pursuant to any right granted to the Customer or the Customer’s Representative(s) under this Agreement to participate in or witness any testing contemplated by this Clause 9.2 or retesting contemplated by Clause 9.4(f), the Customer or the Customer’s Representative is unavailable to attend a test or retest at the scheduled time, Golar shall proceed with the testing or retesting without unreasonable delay and shall report the results of the testing or retesting promptly to the Customer.
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9.3
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Compensation During Commissioning Period
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(a)
|
The applicable calculation mechanism for the monthly compensation fee payable to Golar in arrears during the Commissioning Period, as further defined in Clauses 9.3(b) to 9.3(d) below, shall be (1) the MMBTU Base Capacity divided by (2) the Monthly Component and multiplied by (3) the price per MMBTU (based on Gross Heating Value), which shall be calculated as follows:
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(i)
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Brent Crude Price [*****];
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(ii)
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Brent Crude Price > USD60 but [*****];
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(iii)
|
Brent Crude Price
<
USD60: [*****]; or
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(iv)
|
as otherwise specified in Clause 9.3(c);
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(b)
|
Compensation shall be payable by the Customer to Golar for the [*****] of the Commissioning Period or, if Golar Notice of Readiness has not been tendered by the Scheduled Commissioning Start Date, for the [*****] from tender of Golar Notice of Readiness plus, in the event that Golar has exercised its option at clause 9.6(a)(ii), the time taken for transferring the LNG Cool Down Cargo, being the time taken from when the LNG carrier starts pumping LNG until the earlier of (x) the transfer of the LNG Cool Down Cargo is completed and it stops pumping or [*****] after the LNG carrier starts pumping LNG (the “
LNG Cool Down Cargo Transfer Time
”) (or up to Acceptance, if Acceptance occurs prior to the [*****] of the Commissioning Period from tender of Golar Notice of Readiness plus any LNG Cool Down Cargo Transfer Time), save for any period of delay primarily attributable to a Customer Delay Event, in respect of all LNG made available for delivery in an amount per MMBTU (based on Gross Heating Value) set out in Clause 9.3(a), payable in arrears. For the avoidance of doubt, if Golar has exercised its option at clause 9.6(a)(ii) and the transfer of the LNG Cool Down Cargo is not completed by the time which is [*****] after the LNG carrier starts pumping LNG Golar shall continue to carry out the Commissioning Activities in accordance with this Agreement but without completing the transfer of the LNG Cool Down Cargo, except as the Customer may otherwise agree in its sole discretion.
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(c)
|
Following expiry of the [*****] period referred to at Clause 9.3(b) above (together with any applicable LNG Cool Down Cargo Transfer Time), monthly compensation shall be payable by the Customer to Golar for the [*****] of the Commissioning Period, save only in respect of LNG Cool Down Cargo Transfer Time in the event that Golar transfers the LNG Cool Down Cargo in such [*****], (or up to Acceptance, if Acceptance occurs prior to the expiry of such [*****], save for any period of delay primarily attributable to the Customer, at a rate equivalent to [*****] of the amount calculated in accordance with Clause 9.3(a) based on an amount of [*****] (based on Gross Heating Value), together with compensation in respect of all LNG made available for delivery in excess of [*****] of the Base Capacity divided by twelve, in an amount per MMBTU (based on Gross Heating Value) set out in in Clause 9.3(a), payable monthly in arrears.
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(d)
|
Following expiry of the [*****] period referred to at Clause 9.3(c) above, monthly compensation shall be payable by the Customer to Golar in the remainder of the Commissioning Period (save for any period of delay primarily attributable to a Customer Delay Event) [*****].
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(e)
|
Provided that Golar has tendered Golar Notice of Readiness, where the Commissioning Period is suspended due to periods of delay primarily attributable to a Customer Delay Event, the Customer shall pay liquidated damages to Golar in accordance with the following schedule:
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Cumulative Days of Suspension
|
Liquidated Damages Payable (% of the Tolling Fee pro rata for each day (or part thereof) of suspension, based on a unit price of
[*****]
.)
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[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
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[*****]
|
[*****]
|
[*****]
|
9.4
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Commercial Start Date
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(a)
|
The date falling on the earlier of (a) one hundred and eighty (180) days after the Scheduled Commissioning Start Date, or (b) the Acceptance Date, shall be deemed the “
Commercial Start Date
”, provided that the Commercial Start Date shall be extended by any period of delay primarily attributable to a Customer Delay Event, an event of Force Majeure, or in accordance with Clause 9.2(k).
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(b)
|
The Parties shall use all reasonable endeavours to procure that as soon as reasonably practicable, and in any event no later than the Commercial Start Date, all Acceptance Tests are completed in accordance with the Acceptance Test Protocol.
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(c)
|
Where the FLNG Facility passes the Acceptance Tests on or before the Commercial Start Date, Customer shall accept that the FLNG Facility meets the Acceptance Minimum Requirements and the Parties shall execute and deliver a Certificate of Acceptance in accordance with Clause 9.4(h) below.
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(d)
|
Where the FLNG Facility has not passed the Acceptance Tests by the Commercial Start Date (including as a result of delay or failure in delivery), Daily LDs shall be payable as provided in Clause 9.4(e) below from the Commercial Start Date until and including the date on which the Parties have executed and delivered a Certificate of Acceptance in accordance with Clause 9.4(h) below (subject to the provisions of Clause 9.4(e)).
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(e)
|
In the event that Daily LDs are payable pursuant to Clause 9.4(d) above, Golar shall pay Customer Daily LDs at the following rates, up to a maximum aggregate total of [*****]:
|
Number of Days of delay in passing Acceptance Tests
|
Daily LDs amount and Termination Balloon Payment
|
[*****]
|
Daily LDs of [*****]
|
[*****]
|
Daily LDs of [*****]
|
[*****]
|
Daily LDs of [*****]
|
Termination Balloon Payment on termination pursuant to clause 18.1(c)(ii)
|
[*****]
|
(f)
|
In circumstances where the FLNG Facility fails any Acceptance Test, Golar shall correct any defect or nonconformity causing such failure (a “
Defect
”). Until each Defect has been remedied to a standard that permits the FLNG Facility to pass the relevant Acceptance Test, Customer shall have the right, in its Sole Opinion, to refuse to accept that the FLNG Facility meets the Acceptance Minimum Requirements under this Agreement. Any repairs, modifications or other work required to remedy any Defect pursuant to this Clause 9.4(f) shall be carried out at Golar’s cost. Golar shall keep Customer reasonably informed of the progress of the remediation of all Defects and notify Customer in writing when each Defect has been remedied to a standard that permits the FLNG Facility to pass the relevant Acceptance Test. Customer shall allow retesting immediately following notice that Golar has remedied all Defects to a standard that permits the FLNG Facility to pass the relevant Acceptance Test and is in a position to retest. Where the FLNG Facility passes the outstanding Acceptance Test(s) following retesting, as reported by Golar to Customer, Customer shall accept that the FLNG Facility meets the Acceptance Minimum Requirements and the Parties shall execute and deliver a Certificate of Acceptance in accordance with Clause 9.4(h).
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(g)
|
Notwithstanding 9.4(f) above, Customer retains the right to accept that the FLNG Facility meets the Acceptance Minimum Requirements when an Acceptance Test has been failed. If Customer exercises such right, the Parties shall execute and deliver a Certificate of Acceptance in accordance with Clause 9.4(h) (in which event any Daily LDs otherwise payable by Golar to Customer under this Agreement shall cease to be payable from the date on which the Parties have executed and delivered a Certificate of Acceptance in accordance with Clause 9.4(h)).
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(h)
|
The Parties shall record the date on which Customer accepts the FLNG Facility as meeting the Acceptance Minimum Requirements in a certificate of acceptance (the “
Certificate of Acceptance
”), which shall be in the form of Annex 6 and signed by or on behalf of the Customer promptly upon the FLNG Facility being accepted by Customer as meeting the Acceptance Minimum Requirements, or Customer being obliged to accept the FLNG Facility, pursuant to this Clause 9.4. A Certificate of Acceptance will be deemed executed if, notwithstanding the passing of the Acceptance Tests, the Customer fails to execute a Certificate of Acceptance.
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9.5
|
Termination for Extended Delay
|
9.6
|
Loading LNG Cool Down Cargo
|
(a)
|
Subject to giving notice to the Customer at least five (5) days prior to the FLNG Vessel’s arrival at the FLNG Site, Golar shall have the option either:
|
(i)
|
to load a cargo of LNG on the FLNG Vessel (the “
LNG Cool Down Cargo
”) so as to arrive cold at the FLNG Site; or
|
(ii)
|
to load the LNG Cool Down Cargo on the FLNG Vessel at the FLNG Site as soon as reasonably practicable within the Commissioning Period following tendering of Golar Notice of Readiness, provided that Golar must obtain in advance all Approvals required by Governmental Authorities to enable such operation to take place at the FLNG Site.
|
(i)
|
the expected LNG quality of the LNG Cool Down Cargo;
|
(ii)
|
a non-binding estimate of the quantity of the LNG Cool Down Cargo and the Heel LNG Quantity; and
|
(iii)
|
if applicable, the status of obtaining all required Approvals for the loading of the LNG Cool Down Cargo onto the FLNG Vessel at the FLNG Site (and Golar shall respond promptly to the Customer’s reasonable requests for information in connection therewith, including providing copies of any required Approvals).
|
(b)
|
The Parties shall cooperate in good faith to agree the terms on which a volume of the LNG Cool Down Cargo (the “
LNG Commissioning Heel
”), shall pass from Golar to the Customer, with the following principles to apply:-
|
(i)
|
Golar and the Customer to agree a date for transfer of title in the LNG Commissioning Heel (the “
LNG Heel Transfer Date
”).
|
(ii)
|
The quantity of LNG Commissioning Heel on board as at the LNG Heel Transfer Date (the “
Heel LNG Quantity
”) to be based on in tank measurements.
|
(iii)
|
At the end of the Term, a quantity of LNG equal to the Heel LNG Quantity shall be returned to Golar in accordance with Clause 2.1.
|
(c)
|
Any LNG delivered to the LNG Delivery Point in the Commissioning Period which contains LNG Commissioning Heel shall be subject to the provisions of Clause 11.4.
|
(d)
|
Notwithstanding any other provision of this Agreement, Golar shall be solely responsible for, and shall protect, defend, indemnify and hold harmless each Customer Indemnified Person from any and all Liabilities (save for any Consequential Loss of any Customer Indemnified Person) arising in connection with the loading, part loading or failure to load, of the LNG Cool Down Cargo on the FLNG Vessel at the FLNG Site.
|
10
|
RECEIPT OF GAS
|
10.1
|
Upstream Arrangements
|
(a)
|
The Customer shall design, build and operate production facilities (or cause the same to be done) to ensure the supply of Feed Gas to enable Golar to deliver the Base Capacity in accordance with this Agreement, no later than the Scheduled Commissioning Start Date, subject to any delay or postponement of such date in accordance with Clause 9.1(b).
|
(b)
|
The Customer shall exercise due diligence acting as a Reasonable and Prudent Operator to maintain, or procure the maintenance of, all facilities in connection with the Project which are upstream and downstream of the FLNG Facility at the FLNG Site.
|
10.2
|
Feed Gas Quality and Specification
|
10.3
|
Measurements and Testing
|
10.4
|
Off-Spec Feed Gas
|
(a)
|
General.
Any Feed Gas not conforming to the Feed Gas Specification shall be “
Off-Spec Feed Gas
”.
|
(b)
|
Notice.
Each Party shall provide notice to the other Parties as soon as reasonably practicable if it becomes aware of any existing or anticipated delivery of Off-Spec Feed Gas, such notice to include, to the extent known or ascertainable, details of the nature and expected magnitude of the variance, the cause of the non-compliance and the probable duration thereof. If notified by Customer, or if Golar otherwise becomes aware that Off-Spec Feed Gas is being or could be delivered at the Gas Receipt Point, Golar shall as soon as reasonably practicable but within forty-eight (48) hours (i) inform Customer whether it intends to reject any such Off-Spec Feed Gas (or any further delivery if Off-Spec Feed Gas has already been received at the Gas Receipt Point) (but shall if so requested by the Customer use its reasonable endeavours to accept such Off-Spec feed Gas) and (ii) if Golar intends to accept any such Off-Spec Feed Gas, Golar shall inform Customer of Golar’s good-faith estimate of the reasonable and actual incremental costs and other Liabilities that Golar or any of Golar’s Affiliates may incur in connection with receiving and treating Off-Spec Feed Gas by such means as are appropriate. As soon as practicable after receiving an estimate in accordance with (ii) above, Customer shall instruct Golar either (1) to proceed to accept such Off-Spec Feed Gas or (2) to reject such Off-Spec Feed Gas. Golar shall reject any Off-Spec Feed Gas which it is instructed to reject by Customer.
|
(c)
|
Effect.
Without prejudice to any other rights and remedies of Golar hereunder, subject to Clause 10.4(b), Golar shall have the right (but not the obligation) to reject delivery of any or all Off-Spec Feed Gas.
|
(d)
|
No Continuing Waiver.
Acceptance of Off-Spec Feed Gas shall not prevent Golar from refusing future receipts of Off-Spec Feed Gas. No waiver by Golar of any default by Customer of the Feed Gas Specification in this Clause 10 shall ever operate as a continuing waiver of such Feed Gas specification or as a waiver of any subsequent default, whether of a like or different character.
|
(e)
|
Delivery of Off-Spec Feed Gas.
If Golar receives delivery of Off-Spec Feed Gas for the Customer’s account which it would otherwise be entitled to reject, (including, for the avoidance of doubt, where Golar accepts Off-Spec Feed Gas at the request of the Customer) Customer shall bear the financial responsibility for all reasonable and actual incremental costs and other Liabilities incurred by Golar or any of Golar’s Affiliates in connection with receiving and treating such Off-Spec Feed Gas by such means as are appropriate, with Golar using reasonable efforts to minimise such costs and Liabilities.
|
(f)
|
Sole and Exclusive Remedy.
The remedy set out in Clause 10.4(e) shall be Golar’s Sole and Exclusive Remedy for delivery of Off-Spec Feed Gas for the Customer’s account.
|
11
|
DELIVERY OF LNG
|
11.1
|
LNG Delivery Point
|
11.2
|
LNG Quality and Specification
|
11.3
|
Measurements and Testing
|
11.4
|
Off-Spec LNG
|
(a)
|
General.
Any LNG delivered to the LNG Delivery Point in relation to the Services that does not conform to the LNG Specification shall be “
Off-Spec LNG
”.
|
(b)
|
Notice.
Each Party shall provide notice, as soon as reasonably practicable, to the other Parties if it has information reasonably indicating that any Off-Spec LNG is to be loaded, is being loaded, or has been loaded, onto an LNG Vessel; such notice to include, to the extent known or ascertainable, details of the nature and expected magnitude of the variance from the specifications, the cause of such non-compliance and the probable duration of such variance.
|
(c)
|
Effect.
Without prejudice to any other rights and remedies of Customer hereunder, subject to Clauses 11.4(d) and 11.4(f), Customer shall have the right (but not the obligation) to reject delivery of any or all Off-Spec LNG.
|
(d)
|
Reasonable Efforts to Accept.
The Customer shall use reasonable efforts to accept any Off-Spec LNG to be loaded onto an LNG Vessel where:
|
(e)
|
No Continuing Waiver.
Acceptance of Off-Spec LNG shall not prevent Customer from refusing future receipts of Off-Spec LNG. No waiver by Customer of any default by Golar of the LNG Specification in this Clause 11 shall ever operate as a continuing waiver of such LNG Specification or as a waiver of any subsequent default, whether of a like or different character.
|
(f)
|
Rejection; Suspension of Loading.
Without limitation to Clause 11.4(h):
|
(i)
|
if a notice under Clause 11.4(b) of Off-Spec LNG occurs before commencement of loading of the LNG Vessel, Customer shall notify Golar as soon as reasonably practicable (but in no event later than forty-eight (48) hours after receiving such notice, failing which Customer shall be deemed to have rejected delivery of the Off-Spec LNG) whether Customer will, after using its reasonable efforts in accordance with Clause 11.4(d)(i), either: (x) take delivery of the Off-Spec LNG; or (y) reject delivery of the Off-Spec LNG; and
|
(ii)
|
if a notice under Clause 11.4(b) of Off-Spec LNG occurs after commencement of LNG loading but before Completion of Loading, Golar shall immediately suspend loading after Golar becomes aware thereof or receives such notice from Customer, as the case may be, and Customer shall notify Golar as soon as reasonably practicable thereafter (but in no event later than forty-eight (48) hours after suspension of loading, failing which Customer shall be deemed to have rejected further delivery of the Off-Spec LNG, the loading of the Off-Spec LNG shall be discontinued and, if possible, the Off-Spec LNG shall be unloaded) whether Customer will, after using reasonable efforts in accordance with Clause 11.4(d)(ii), either: (x) take further delivery of the Off-Spec LNG and complete loading; or (y) not take further delivery of the Off-Spec LNG, discontinue loading the Off-Spec LNG and, if possible, unload the Off-Spec LNG.
|
(g)
|
Effect of Rejection of Off-Spec LNG.
|
(i)
|
If, despite using reasonable efforts to do so in accordance with Clause 11.4(d), Customer does not take delivery of Off-Spec LNG or otherwise rejects Off-Spec LNG in accordance with Clause 11.4(f), any undelivered quantities (including any quantities unloaded from the receiving LNG Vessel and returned to the FLNG Vessel) shall be considered as not made available due to Services Unavailability, and will not be deemed as a Failure to Lift. Title to and risk of loss in such undelivered quantities of Off-Spec LNG remaining onboard the FLNG Vessel shall pass to Golar on receipt of Customer’s notification of rejection (or on deemed notification of rejection) in accordance with Clause 11.4(f)(i). Title to, possession and control of and risk of loss in any quantities of Off-Spec LNG that are to be unloaded from an LNG Vessel shall pass to Golar on completion of such unloading. At its own cost Golar shall comply with any reasonable request from Customer or the Master of the receiving LNG Vessel to facilitate any such unloading from an LNG Vessel. For the avoidance of doubt, Golar shall be solely responsible for dealing with any Off-Spec LNG to which it takes title pursuant to this sub-clause (i), including any and all costs, expenses and other Liabilities incurred by Golar in connection with offloading, disposing and/or otherwise dealing with such Off-Spec LNG (including for the avoidance of doubt all costs and expenses in connection with additional unloading and storage arrangements for any quantities of Off-Spec LNG unloaded from the receiving LNG Vessel) and Golar shall hold Customer harmless in respect of any such costs, expenses and other Liabilities.
|
(ii)
|
Notwithstanding the foregoing, if such Off-Spec LNG is due to delivery of Off-Spec Feed Gas by or on behalf of Customer or due to ageing of the LNG on board the FLNG Vessel (where such ageing is primarily attributable to the fault or negligence of the Customer), then such quantities (including any unloaded Off-Spec LNG) shall not constitute a Services Unavailability and title shall not pass to Golar pursuant to sub-clause (i) above. In such circumstances, the Parties shall cooperate in good faith regarding arrangements for removal and/or disposal of such Off-Spec LNG quantities rejected by Customer, provided always that Customer shall be solely responsible for and shall hold Golar harmless in respect of any and all costs, expenses and other Liabilities in connection with offloading, disposing and/or otherwise dealing with such Off-Spec LNG following rejection of same by Customer, including for the avoidance of doubt all costs and expenses in connection with additional unloading and storage arrangements for any quantities of Off-Spec LNG unloaded from the receiving LNG Vessel. In the event of a shutdown, or any other event or circumstance, affecting the FLNG Facility which is not primarily attributable to the fault or negligence of the Customer, and such shutdown or other event or circumstance may result in the LNG on board the FLNG Vessel becoming Off-Spec LNG due to ageing, then, as soon as practicable after the cessation of such shutdown or other event or circumstance affecting the FLNG Facility, the Customer shall use reasonable endeavours to (a) Lift the LNG (even where such LNG is not an Expected Lifting Quantity and/or in connection with a Lifting), and Golar shall use reasonable endeavours to provide solutions to enable the Customer to Lift such LNG, including but not limited to the provision by Golar of LNG Vessels to Lift the LNG, and (b) supply Feed Gas of a quantity and specification to seek to avoid the LNG already on board the FLNG Facility becoming Off-Spec LNG.
|
(h)
|
Adjustments to Allowed Laytime.
Customer agrees that Golar will make an appropriate adjustment to the Allowed Laytime to accommodate the time taken by Customer to provide its response in accordance with Clause 11.4(f)(i) or 11.4(f)(ii).
|
(i)
|
Reimbursement of Costs for Off-Spec LNG.
|
(i)
|
If Customer receives Off-Spec LNG which it would otherwise be entitled to reject (including, for the avoidance of doubt, any Off-Spec LNG which cannot be offloaded from an LNG Vessel following Customer’s notification (or deemed notification) of rejection in accordance with Clause 11.4(f)(ii)), Golar shall bear the financial responsibility for all reasonable and actual incremental costs and other Liabilities incurred by Customer in connection with receiving and treating Off-Spec LNG by such means as are appropriate, with Customer using reasonable efforts to minimise such costs and Liabilities provided that Golar’s aggregate liability under this sub-paragraph (i) during the Term shall not exceed [*****] per MMBTU multiplied by the volume of the Off-Spec LNG, Regardless of Cause; and
|
(ii)
|
Notwithstanding sub-paragraph (i), no indemnity and/or reimbursement shall be due in respect of Off-Spec LNG that is due to delivery of Off-Spec Feed Gas by or on behalf of Customer or due to ageing of the LNG on board the FLNG Vessel, where such ageing is primarily attributable to the fault or negligence of Customer.
|
(j)
|
Sole and Exclusive Remedy.
[*****].
|
12
|
SCHEDULING
|
12.1
|
Scheduling Principles
|
(a)
|
the Expected Lifting Quantity for each Lifting shall be not more than [*****] Cubic Metres;
|
(b)
|
based upon the Customer’s Proposed Lifting Programme, and assuming Retainage of no greater than the Operations Retainage Limit for the Expected Lifting Quantity, the Annual Feed Gas Schedule or the relevant Firm Feed Gas Schedule, as applicable, shall be issued by Golar;
|
(c)
|
Scheduled Arrival Windows and Allowed Laytimes for the Customer will be scheduled on a reasonably rateable basis throughout the Contract Year (excluding any periods of Scheduled Downtime to or modification of the FLNG Facility as permitted under Clause 8.5), and with a period between the end of a Scheduled Arrival Window and the start of the following Scheduled Arrival Window of at least [*****] days);
|
(d)
|
sufficient Scheduled Arrival Windows will be made available to permit the Customer to Lift the Base Capacity for the Contract Year utilising the LNG Vessels proposed by the Customer, subject to rounding up or rounding down the Base Capacity so as to schedule the last Lifting of a Contract Year in a Full Cargo Lot;
|
(e)
|
the Parties’ issuance of the Lifting Programme shall be determined, inter alia, by the capacity of the FLNG Facility;
|
(f)
|
neither Party shall be obligated to accommodate a request which may violate any Approval or result in the shutdown of the FLNG Facility; and
|
(g)
|
such other principles as the Parties agree are appropriate, acting as a Reasonable and Prudent Operators and which are included in the Commercial Operations Manual pursuant to Clause 4.2(a).
|
12.2
|
Lifting Programme and Annual Feed Gas Schedule
|
(a)
|
Golar Forecast.
No later than [*****] days prior to the first day of each Contract Year, Golar shall issue to the Customer a non-binding written forecast of Scheduled Downtime for such Contract Year. Golar shall consult with Customer in scheduling downtime for maintenance and act as a Reasonable and Prudent Operator to accommodate the requests of Customer in respect thereto, including using reasonable endeavours not to plan maintenance during the months of January, February, June, July, August and December. No later than [*****] days prior to the first day of each Contract Year, Golar shall issue to the Customer a good faith written estimate of the available LNG production capacity of the FLNG Facility each day during such Contract Year (expressed in cubic metres of LNG and MMBtu), together with an updated non-binding written forecast of Scheduled Downtime for such Contract Year.
|
(b)
|
Customer’s Proposed Lifting Programme.
According to the Scheduling Principles and no later than [*****] days prior to the beginning of each Contract Year, the Customer shall submit in writing to Golar a proposal (“
Customer’s Proposed Lifting Programme
”) which includes the following:
|
(c)
|
Preliminary Lifting Programme and Preliminary Annual Feed Gas Schedule.
Golar shall take into consideration the Customer’s Proposed Lifting Programme and shall no later than [*****] days prior to the beginning of each Contract Year, issue to the Customer Golar’s preliminary Lifting Programme for such Contract Year (the “
Preliminary Lifting Programme
”) showing all Liftings for the Customer and any open lifting windows, along with a preliminary Feed Gas schedule for such Contract Year (the “
Preliminary Annual Feed Gas Schedule
”) determined in accordance with Clause 12.3(b) and taking into account Golar’s current forecast of when Scheduled Downtime will occur in the relevant Contract Year. In preparing the Preliminary Lifting Programme, Golar shall act as a Reasonable and Prudent Operator to accommodate the Customer’s Proposed Lifting Programme, including the Customer’s proposed Expected Lifting Quantity for each Lifting.
|
(d)
|
Issuance of Lifting Programme and Annual Feed Gas Schedule.
No later than [*****] days prior to the beginning of each Contract Year, the Parties shall issue the Lifting Programme and the Annual Feed Gas Schedule for such Contract Year, each of which shall incorporate any revisions to the Preliminary Lifting Programme and the Preliminary Annual Feed Gas Schedule made pursuant to Clause 12.2(c) and/or the Scheduling Principles.
|
(e)
|
Initial Contract Year.
For the initial Contract Year, development of the Lifting Programme shall be conducted pursuant to the provisions of this Clause 12.2, provided that:
|
(i)
|
Golar shall provide the information required by Clause 12.2(a), Customer shall provide the Customer’s Proposed Lifting Programme and the Parties shall use their reasonable endeavours to discuss in good faith the setting of a Preliminary Lifting Programme and Preliminary Feed Gas Schedule during the period which is reasonably anticipated by Golar to be not less than [*****] days prior to the expected Acceptance Date;
|
(ii)
|
where the Parties agree such Preliminary Lifting Programme pursuant to sub-paragraph (i) above, they shall use their reasonable endeavours to agree and determine the Lifting Programme for such first Contract year as soon as reasonably practicable after the Scheduling Time commences pursuant to sub-paragraph (iii) below;
|
(iii)
|
the Scheduling Time for such Lifting Programme shall begin on the day after the earlier of: (i) the day after the Acceptance Date and (ii) [*****] and end no later than [*****] days thereafter;
|
(iv)
|
Golar shall update the information required by Clause 12.2(a) within [*****] Business Days following commencement of the Scheduling Time;
|
(v)
|
the Customer shall update the Customer’s Proposed Lifting Programme within [*****] Business Days following commencement of the Scheduling Time;
|
(vi)
|
Golar shall update the Preliminary Lifting Programme within [*****] Business Days following commencement of the Scheduling Time; and
|
(vii)
|
the Parties shall update the Lifting Programme within [*****] days following commencement of the Scheduling Time.
|
12.3
|
Rolling Schedule
|
(a)
|
Monthly Update.
No later than [*****] days prior to the first day of each month, the Parties shall issue an updated Lifting Programme (the “
Monthly Update
”) for the [*****] days beginning on the first day of such month (the “[*****]
-Day Period
”). The Monthly Update shall consist of:
|
(i)
|
a firm schedule of all Liftings in such [*****]-Day Period (the “[*****]
-Day Schedule
”), reflecting the Lifting Programme and any revisions made thereto pursuant to Clause 12.4 (which shall supersede the provisions of the applicable Lifting Programme and any previous [*****]-Day Schedule for the days specified in such [*****]-Day Schedule);
|
(ii)
|
any updates on the expected availability of Services (including Scheduled Downtime and Unscheduled Downtime) and any additional excess quantity projected to be available; and
|
(iii)
|
such additional information as the Parties may agree.
|
(b)
|
Firm Feed Gas Schedule.
Along with each Monthly Update, Golar shall issue to the Customer a firm schedule of the Feed Gas quantity to be delivered by or on behalf of the Customer to the Gas Receipt Point for each Day in the [*****]-Day Period (the “
Firm Feed Gas Schedule
”), of which:
|
(i)
|
the Feed Gas quantity for each Day in the first month of the [*****]-Day Period constitutes the quantity that the Customer shall deliver, or cause to be delivered, to Golar rateably over such Day (as may be further adjusted pursuant to Clause 12.6, the “
Daily Feed Gas Quantity
”); and
|
(ii)
|
the Feed Gas quantity specified in the Firm Feed Gas Schedule for each Day in the remainder of the [*****]-Day Period is provided for planning purposes only.
|
12.4
|
Modifications to the Lifting Programme
|
(a)
|
Modifications by Agreement.
Subject to Clause 12.5, the Customer may propose reasonable changes to the Lifting Programme, including revision of an Expected Lifting Quantity, rescheduling or cancellation of a Lifting, [*****], provided that Golar:
|
(i)
|
may condition its agreement to any change on appropriate adjustments to the Daily Feed Gas Quantity for one or more Days prior to the applicable Scheduled Arrival Window to fully accommodate such change, and shall not be obligated to approve any request for which corresponding adjustments to the Daily Feed Gas Quantity are not possible;
|
(ii)
|
shall not be obligated to accommodate a request which does not comply with the Scheduling Principles;
|
(iii)
|
shall not be obligated to accommodate a request which may violate any Approval;
|
(iv)
|
shall have the right to reject any request from Customer which may require Golar to shut down or reduce production at the FLNG Facility; and
|
(b)
|
Additional Rights of Golar.
Notwithstanding the foregoing provisions, Golar shall have the right at any time to modify the Lifting Programme pursuant to Clause 13.3(c) (but without prejudice to any liability that may arise with respect thereto pursuant to this Agreement).
|
(c)
|
Additional Rights of Customer.
Notwithstanding the foregoing provisions, Customer shall have the right at any time to modify the Lifting Programme pursuant to Clauses 8.5(a), 8.5(b) or 8.5(d) (but without prejudice to any liability that may arise with respect thereto pursuant to this Agreement).
|
12.5
|
Imbalances
|
(a)
|
Creation of an Imbalance.
If, as a result of (i) a request by the Customer pursuant to Clause 12.4(a) or (ii) a Failure to Lift, there is a modification to the Lifting Programme such that the Customer does not Lift the Expected Lifting Quantity as originally stated in the Monthly Update for a particular month, the difference between (1) the amount of LNG actually Lifted and (2) the Expected Lifting Quantity in the Monthly Update, shall be recorded as an imbalance (expressed in MMBTUs) in Customer’s Inventory Account (an “
Imbalance
”).
|
(b)
|
Elimination of Imbalance.
Upon the occurrence of an Imbalance, Golar shall send the Customer a notice informing the Customer of the amount of such Imbalance (the “
Notice of Imbalance
”). The Customer shall eliminate its Imbalance position as soon as reasonably practicable and in any event by the end of the [*****] month following the month in which the Notice of Imbalance is received. Subject to available LNG Storage Capacity and operational constraints, the Customer may request to eliminate the prior month’s Imbalance through a further modification to the Lifting Programme pursuant to Clause 12.4 or adjustments of the Daily Feed Gas Quantity pursuant to Clause 12.6, as applicable, for the following month.
|
12.6
|
Adjustments to Daily Feed Gas Quantity
|
(a)
|
a change in quantity requested by one Party and approved by the other Party, such approval not to be unreasonably withheld so long as such change will not require the other Party to incur any material additional costs; and
|
(b)
|
pursuant to Clauses 12.5(b) and 13.3(c).
|
12.7
|
Scheduling Representative
|
12.8
|
Communications
|
13
|
INTERRUPTION TO SERVICES
|
13.1
|
Scheduled Curtailment or Temporary Discontinuation of Services
|
13.2
|
Unscheduled Curtailment or Temporary Discontinuation of Services
|
13.3
|
Services Unavailability
|
(a)
|
Defined.
If Golar fails to make the Expected Lifting Quantity (or any part thereof) available for any Lifting in accordance with the Lifting Programme for any reason, and such failure is not primarily attributable to a Customer Delay Event, a request for purging and cool down operations or cool down only operations pursuant to Clause 15.9, or an event of Force Majeure, then such failure constitutes a “
Services Unavailability
” without regard to whether Golar gives Customer notice thereof, provided that no Services Unavailability shall be deemed to occur if the quantity of LNG actually delivered in a Lifting is at least [*****].
|
(b)
|
Notice.
Golar shall give Customer notice of a Services Unavailability, or an expected Services Unavailability as soon as reasonably practicable. If requested by Customer, Golar shall hold a meeting with Customer to sufficiently explain the cause of any Services Unavailability and discuss measures Golar is taking to mitigate such Services Unavailability. Such meeting shall be held in Douala or any alternative location that is mutually agreeable to the Parties.
|
(c)
|
Actions Available to Address Services Unavailability.
To address the expected effects of any Services Unavailability, Golar may, subject to the final paragraph of this Clause 13.3(c), take one or more of the following actions (not necessarily in the following priority of order):
|
(i)
|
require Customer to reduce deliveries of Feed Gas at the Gas Receipt Point or, in the absence of such reduction, reject deliveries of Feed Gas at the Gas Receipt Point; and/or
|
(ii)
|
any such other actions as a Reasonable and Prudent Operator would take under such circumstances, including actions which are aimed at maintaining operational integrity of the FLNG Facility.
|
(d)
|
Consequences of Services Unavailability.
|
(i)
|
If Golar delivers to the Customer, in a calendar month, less than [*****] of the lesser of (a) the Monthly Base Capacity or (b) the quantity of LNG actually required by Customer to be delivered (the lesser of the Monthly Base Capacity or actual required quantity in a calendar month being the “
RMQ
”), and such failure is primarily attributable to Services Unavailability, then, subject to Clauses 13.3(ii), (iii) and (iv) below, the Customer shall be entitled to make a deduction from the Tolling Fee for the applicable calendar month which is [*****].
|
(ii)
|
Within thirty (30) days of the end of each Contract Year, there shall be a reconciliation undertaken to calculate the extent to which Services Unavailability over the Contract Year resulted in a shortfall against the aggregated Customer’s RMQs over a Contract Year (the “
Contract Year Reconciliation
”), and a balancing amount shall be due from Golar to the Customer, or from the Customer to Golar, as the case may be, and shall be invoiced in accordance with Clause 6.2.
|
(iii)
|
If the aggregate delivered quantity of all Liftings (or part thereof) in a calendar month or over a Contract Year is equal to or greater than [*****] of the RMQ or ARQ for that calendar month or Contract Year respectively, no deduction shall be made against the Tolling Fee in respect of the relevant calendar month or the Contract Year, as the case may be.
|
(iv)
|
If the aggregate delivered quantity of all Liftings (or part thereof) in a calendar month or over a Contract Year is below [*****] of the RMQ or ARQ for that calendar month or Contract Year respectively, no Tolling Fee shall be paid by the Customer in respect of the relevant calendar month or the Contract Year, as the case may be.
|
(v)
|
[*****]
|
(vi)
|
[*****].
|
(vii)
|
A termination fee shall be payable by Golar to the Customer in the event of termination pursuant to Clause 18.1(c)(iv) below for substantial and prolonged Service Unavailability [*****], in accordance with Clause 18.2(a). For the avoidance of doubt, in the event that the Customer is entitled to terminate under both Clause 18.1(c)(iv)(a) and Clause 18.1(c)(iv)(b) only one termination fee is payable, pursuant to Clause 18.2(a).
|
(viii)
|
Save in respect of termination pursuant to Clause 18.1(c)(iv) and the termination fee payable by Golar to the Customer pursuant to Clause 18.2(a), the remedies set out in Clause 13.3(d)(i), Clause 13.3(d)(iii), Clause 13.3(d)(iv) and Clause 13.3(d)(v) shall be the Customer’s Sole and Exclusive Remedy for Services Unavailability
|
(ix)
|
For the avoidance of doubt, in the event that any Lifting scheduled in the Lifting Programme for a relevant calendar month occurs (wholly or partially) in the subsequent calendar month (a “
Late Lifting
”), and such Late Lifting is not primarily attributable to a Services Unavailability, then such Late Lifting shall count towards the quantity of LNG delivered to the Customer in the relevant calendar month, and shall not result in a deduction from the Tolling Fee for the relevant calendar month.
|
(e)
|
[*****]
|
13.4
|
Failure to Deliver Feed Gas
|
13.5
|
Failure to Lift
|
(a)
|
Defined.
If the Customer fails to Lift the Expected Lifting Quantity of any Lifting (or part thereof) in accordance with the Lifting Programme and such failure is not due to Services Unavailability or Force Majeure, then such failure constitutes a “
Failure to Lift
”. The Customer shall be deemed to have failed to Lift the Expected Lifting Quantity if (i) the Customer notifies Golar of a Failure to Lift or expected Failure to Lift pursuant to Clause 13.5(b) or (ii) Golar cancels or terminates a Lifting pursuant to Clause 13.5(d).
|
(b)
|
Notice.
The Customer shall give Golar notice as soon as reasonably practicable of a Failure to Lift or an expected Failure to Lift.
|
(c)
|
Effects.
In the event of a Failure to Lift the Customer shall pay the Tolling Fee for the relevant month as though the Failure to Lift had not occurred.
|
(d)
|
[*****]
|
14
|
INVENTORY MANAGEMENT
|
14.1
|
Inventory Management Principles
|
14.2
|
Customer’s Inventory Account
|
(a)
|
Golar shall maintain for the Customer a current inventory account (expressed in MMBTUs) (“
Inventory Account
”) for the purpose of balancing (i) the amount of Feed Gas delivered at the Gas Receipt Point for the account of the Customer; (ii) the amount of LNG Lifted at the LNG Delivery Point for the account of the Customer; (iii) Retainage; (iv) return Gas from an LNG Vessel to the FLNG Facility (with measurement to be supplied by the Customer), in each case without double counting; and (v) any quantities of rejected Off-Spec LNG to which Golar takes title pursuant to Clause 11.4(g); and
|
(b)
|
Golar shall provide the Customer with a daily report on aggregate LNG and Gas inventory levels at the FLNG Facility and on the Customer’s Inventory Account.
|
14.3
|
Title, Custody and Risk of Loss
|
(a)
|
Title to the Customer’s Inventory.
Save in respect of (i) the Heel LNG Quantity and any Customer’s Inventory (excluding the Heel LNG Quantity) remaining on board at expiry of the Term, which shall pass to Golar in accordance with Clause 2.1, and (ii) any quantities of rejected Off-Spec LNG to which Golar takes title pursuant to Clause 11.4(g), title to the Customer’s Inventory will not transfer to Golar or Golar Cam during periods when it is in the possession and control of Golar (including while held in storage at the FLNG Facility), and, subject to Clause 5.2, neither Golar nor Golar Cam shall at any time whatsoever suffer, permit or cause Golar, Golar Cam, any Lender or any other legal or natural person to create or acquire any rights, title or interest in, or Encumbrance or any other right or interest whatsoever, in or over the Customer’s Inventory or any part thereof.
|
(b)
|
Possession, Risk of Loss and Control.
Possession, risk of loss and control of the Customer’s Feed Gas shall pass from the Customer to Golar upon delivery of same at the Gas Receipt Point. Save in respect of any quantities of rejected Off-Spec LNG to which Golar takes title in accordance with Clause 11.4(g), possession, risk of loss and control of the Customer’s Inventory shall pass from Golar to the Customer upon proper delivery of same at the LNG Delivery Point.
|
14.4
|
No Encumbrance
|
(a)
|
Customer’s Covenants.
The Customer warrants to Golar that the Customer has title to all Feed Gas delivered to the Gas Receipt Point for Customer’s account. The Customer covenants that the Customer’s Inventory shall remain free of all encumbrances therefor, and that no circumstances will exist which could give rise to any encumbrances relating thereto other than those that may be caused by acts or omissions of any Golar Indemnified Person. The Customer agrees to fully defend, indemnify and hold Golar and its Affiliates harmless against all Encumbrances regarding the Customer’s Inventory, except to the extent that any Encumbrances are caused by acts or omissions of Golar.
|
(b)
|
Golar’s Covenants.
Golar and Golar Cam warrant to the Customer that they will deliver to the Customer, at the LNG Delivery Point, the Customer’s Inventory free from all Encumbrances relating thereto. Golar and Golar Cam covenant that the Customer’s Inventory, while in Golar’s possession or control, shall remain free of all Encumbrances, and that no circumstances will exist which could give rise to any Encumbrances relating thereto other than those that may be caused by the Customer’s acts or omissions. Golar and Golar Cam agree to fully defend, indemnify and hold the Customer and its Affiliates harmless from and against all Encumbrances regarding the Customer’s Inventory delivered to the Customer, except to the extent that any Encumbrances are caused by the acts or omissions of the Customer.
|
(c)
|
Each warranty and covenant in Clause 14.4(b) is subject to the provisions of Clause 5.2.
|
14.5
|
Annual Statement
|
(a)
|
the total quantity of Feed Gas received from the Customer during such Contract Year;
|
(b)
|
the total quantity of LNG Lifted by the Customer during such Contract Year;
|
(c)
|
Retainage during such Contract Year;
|
(d)
|
the total quantity of return Gas from LNG Vessels to the FLNG Facility during such Contract Year (with measurement to be supplied by the Customer);
|
(e)
|
the total quantity of Off-Spec LNG (if any) to which Golar has taken title pursuant to Clause 11.4(g); and
|
(f)
|
the end of Contract Year balance of the Customer’s Inventory Account.
|
15
|
LNG LOADING AND TRANSPORTATION
|
15.1
|
General
|
(a)
|
Downstream Arrangements.
Subject to the terms and conditions of this Agreement, the Customer shall be responsible for Lifting of all LNG made available for lifting by Golar hereunder in accordance with each Lifting Programme and shall cause LNG Vessels to be provided for the transportation of all such LNG. The Customer shall be responsible for the marketing or other disposition of all LNG hereunder and all contractual and other arrangements relating to the Lifting, marketing or other disposition of LNG lifted or to be lifted from the FLNG Facility.
|
(b)
|
LNG Vessel Capacity.
At the commencement of loading at the FLNG Facility, each LNG Vessel shall have sufficient empty LNG cargo containment capacity to Lift the Expected Lifting Quantity scheduled for such Lifting. Any inability to Lift the Expected Lifting Quantity as a result of insufficient LNG cargo containment capacity shall be deemed a Failure to Lift but shall not constitute grounds for rejection of the LNG Vessel by Golar. Regardless of the LNG cargo containment capacity of the LNG Vessel, in no event shall Golar have any obligation to permit the Lifting of more than the Expected Lifting Quantity.
|
(c)
|
Fireboats, Tugs, Escort Vessels, Security Vessels and Port Charges.
The Customer shall arrange for, or cause the appropriate Person to arrange for, such number and types of fireboats, tugs, escort vessels and security vessels as are required by Governmental Authorities in Cameroon and the Marine Operations Manual to attend the LNG Vessel so as to permit safe and efficient movement of the LNG Vessel within the maritime safety areas located in the approaches to and from the FLNG Facility and to permit safe and efficient berthing of the LNG Vessel at the FLNG Facility. The Customer shall pay, or cause to be paid, all Port Charges directly to the appropriate Person. If Customer or Transporter fails to pay Port Charges when properly due, and Golar makes payment of such Port Charges on behalf of the Customer, the Customer shall reimburse and hold harmless Golar for any such Port Charges and Golar shall invoice the Customer pursuant to Clause 6.1 or Clause 6.2 for any such payment by Golar.
|
(d)
|
[*****]
|
15.2
|
LNG Vessels
|
(a)
|
Customer to Cause LNG Vessels to Comply.
The Customer shall cause each LNG Vessel to comply with the requirements of this Clause 15 in all material respects. Golar acknowledges that the LNG Vessels listed in Annex 8 have been identified by the Customer as LNG Vessels intended for Customer’s use for the transportation of LNG under this Agreement.
|
(b)
|
Approvals and Documentation.
Each LNG Vessel shall comply with the regulations of, and obtain all Approvals required by, Governmental Authorities to enable such LNG Vessel to enter, leave and carry out all operations at the FLNG Facility. Each LNG Vessel shall at all times have on board valid documentation evidencing all such Approvals. Each LNG Vessel shall comply fully with the applicable provisions of the International Safety Management Code for the Safe Operation of Ships and Pollution Prevention effective 1 July 1998 (the “
ISM Code
”), and at all times be in possession of a valid safety management certificate issued in accordance with the ISM Code.
|
(c)
|
Compatibility with FLNG Facility.
|
(i)
|
Except as otherwise agreed in writing by the Parties, each LNG Vessel shall be compatible with the FLNG Facility in all material respects.
|
(ii)
|
In the event an LNG Vessel meets the requirements under sub-paragraph 15.2(c)(i) above, but a Governmental Authority or Pilot prohibits or otherwise hinders the utilisation of such LNG Vessel, the Customer’s obligations under this Agreement shall not be excused or suspended by reason of the Customer’s inability (pursuant to the foregoing) to use such a vessel as an LNG Vessel.
|
(d)
|
Condition of the LNG Vessel.
Each LNG Vessel, including its manifold arrangement, shall be in compliance with the Marine Operations Manual and International LNG Vessel Standards. The location of the loading manifold shall allow a safe margin for movement of the arms within the operating envelope. Each LNG Vessel shall be (i) fitted in every way for the loading, unloading, handling and carrying of LNG in bulk and (ii) tight, staunch, strong and otherwise seaworthy with cargo handling and storage systems (including instrumentation) necessary for the loading, unloading, handling, carrying and measuring of LNG in good order and condition.
|
(e)
|
Adequate Facilities.
Each LNG Vessel shall be equipped with adequate facilities for mooring, unmooring and handling cargo consistent with the recommendations of OCIMF and SIGTTO.
|
(f)
|
Compression of Boil-Off Gas.
Each LNG Vessel shall compress boil-off gas to the extent required to maintain the Gas pressure in its tanks as well as any vapour return lines within allowable operating limits during loading.
|
(g)
|
SIRE.
Unless otherwise agreed by Golar, each LNG Vessel shall have a valid and current (not older than twelve (12) months) Vessel Inspection Report (VIR) and an accurate updated Harmonised Vessel Particulars Questionnaire (HVPQ) on file and available for download from the OCIMF Ship Inspection Report Programme (SIRE) database. Such VIR shall demonstrate that there are no material deficiencies in the safety or operability of such LNG Vessel.
|
(h)
|
Classification Society.
Each LNG Vessel shall at all times be maintained in class with a classification society being a member of the International Association of Classification Societies.
|
(i)
|
Construction.
Each LNG Vessel shall have been constructed to all applicable International LNG Vessel Standards (including the International Code For the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk).
|
(j)
|
Operation and Maintenance.
Each LNG Vessel shall comply with, and shall be fully equipped, supplied and maintained to comply with, all applicable International LNG Vessel Standards. Unless approved by Golar in writing, an LNG Vessel shall be prohibited from engaging in any maintenance, repair or in-water surveys while berthed at the FLNG Facility.
|
(k)
|
ISPS Code.
Each LNG Vessel shall hold a valid International Ship Security Certificate. The Customer shall ensure that each Transporter complies with the guidelines contained in its Ship Security Plan as defined in the ISPS Code to ensure that the appropriate security level is maintained at all times on board the LNG Vessel.
|
(l)
|
Crew.
The officers and crew of each LNG Vessel shall have the ability, experience, licences and training commensurate with the performance of their duties in accordance with internationally accepted standards as adopted on first-class LNG vessels and as required by Governmental Authorities and any labour organisation having jurisdiction over the LNG Vessel or her crew. Without in any way limiting the foregoing:
|
(i)
|
all shipboard personnel shall hold valid certificates of competence in accordance with the requirements of the law of the flag state of the LNG Vessel and any applicable requirements of Cameroon laws;
|
(ii)
|
the senior officers, including the Master, chief officer, chief engineer, chief mate and cargo engineer (and such other officers of the LNG Vessel having responsibilities associated with the preparation of the LNG Vessel for loading), shall be trained and certified to a standard customary for an operator of a first-class LNG vessel of the type and tonnage of the LNG Vessel and in compliance with the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers, 1995 and SIGTTO publication “
Crew Safety Standards and Training for Large LNG Carriers
”;
|
(iii)
|
the Master of each LNG Vessel shall have documented previous experience with side-by-side LNG operations (in the capacity of being the Master of an LNG vessel) and have undergone simulator training relevant for this FLNG Facility.
|
(iv)
|
the Master, chief officer, chief engineer, all cargo engineers, and all deck officers shall be fluent in written and oral English and shall maintain all records and provide all reports with respect to the LNG Vessel in English, and there shall otherwise be on board sufficient personnel with a good working knowledge of the English language to enable cargo handling and loading to be carried out efficiently and safely and to enable communications between the LNG Vessel and those Persons engaged in loading the LNG Vessel to be carried out quickly and efficiently; and
|
(v)
|
none of the LNG Vessel’s Master, officers or crew shall, while serving on the LNG Vessel, abuse the use of drugs or alcohol, and Transporter shall maintain a written policy to such effect, such policy to meet or exceed the standards of the Oil Companies International Marine Forum’s Guidelines for the Control of Drugs and Alcohol Aboard Ship, 1995, as amended from time to time. If any Master, officer or crew member abuses the use of drugs or alcohol, such individual shall be dismissed from service on the LNG Vessel.
|
(m)
|
Communications.
Each LNG Vessel shall have communication equipment complying with applicable regulations of Governmental Authorities and permitting such LNG Vessel to be in constant communication with the FLNG Facility and with other vessels in the area (including fireboats, tugs, escort vessels and other vessels employed in port operations), including an approved vessel automatic identification system.
|
(n)
|
Pumping Rate; Back Pressure.
Each LNG Vessel shall be designed, equipped and manned so as to safely and reliably accept loading of a full cargo at a steady pumping rate of not less than [*****] Cubic Metres per hour at a normal operating pressure as defined in the Marine Operations Manual, with three loading arms, subject to the FLNG Facility being capable of receiving all return vapour from an LNG Vessel that may be generated when loading the LNG Vessel at the minimum bulk transfer rate. Time for connecting, cooling, stripping and disconnecting, and cooling of liquid arms shall not be included in the computation of the pumping rate.
|
(o)
|
Capacity
: Each LNG Vessel shall have a minimum cargo capacity of [*****] Cubic Metres.
|
15.3
|
LNG Vessel Inspections; Right to Reject LNG Vessel
|
(a)
|
Inspections.
During the Term, on prior reasonable notice to the Customer, Golar and/or Golar Cam may, at its sole risk, send its representatives (including an independent internationally recognised maritime consultant) to inspect during normal working hours any LNG Vessel which the Customer has indicated it intends to or may use to Lift cargoes at the FLNG Facility as Golar may consider necessary to ascertain whether the LNG Vessel complies with the provisions of this Agreement. Golar or Golar Cam shall bear the costs and expenses in connection with any inspection conducted hereunder. Any such inspection may include, as far as is practicable having regard to the LNG Vessel’s operational schedule, examination of the LNG Vessel’s hull, cargo and ballast tanks, machinery, boilers, auxiliaries and equipment; examination of the LNG Vessel’s deck and engine fair copy/official log books; review of records of surveys by the LNG Vessel’s classification society and relevant Governmental Authorities; and review of the LNG Vessel’s operating procedures and performance of surveys, both in port and at sea. Any inspection carried out pursuant to this Clause 15.3(a): (i) shall not interfere with, or hinder, any LNG Vessel’s safe and efficient construction or operation; and (ii) shall not entitle Golar or Golar Cam or any of its representatives to make any request or recommendation directly to Transporter except through the Customer. No inspection (or lack thereof) of an LNG Vessel hereunder shall (x) modify or amend the Customer’s obligations, representations, warranties and covenants under this Agreement or under any agreement or instrument contemplated by this Agreement or (y) constitute an acceptance or waiver by Golar of the Customer’s obligations under this Agreement.
|
(b)
|
Right to Reject LNG Vessel.
Golar shall have the right to reject any LNG Vessel if such LNG Vessel does not comply materially with the provisions of Clause 15.2, provided that:
|
(i)
|
neither the exercise nor the non-exercise of such right shall reduce the responsibility of the Customer to Golar in respect of such vessel and her operation, nor increase Golar’s responsibilities to the Customer or third parties for the same; and
|
(ii)
|
the Customer’s obligations under this Agreement shall not be excused or suspended by reason of the Customer’s inability (pursuant to the foregoing provisions of this Clause 15.3(b)) to use a vessel as an LNG Vessel.
|
15.4
|
Advance Notices Regarding LNG Vessel and Cargoes
|
(a)
|
LNG Vessel Nomination.
As soon as practicable prior to arriving at the FLNG Facility, the Customer shall notify Golar, or cause its LNG buyer to notify Golar, of the name of the LNG Vessel that the Customer intends to use for a Lifting and to the extent not previously provided, in reasonable detail, the age, dimensions, specifications, operator, safety record and condition of such LNG Vessel. Customer shall use its reasonable endeavours to ensure that such notice is given within [*****] hours of the departure of the relevant LNG Vessel from its last port of call. In the event the Customer has a reason to foresee a change in the foregoing information, the Customer shall promptly provide notice thereof to Golar. However, if the vessel that the Customer proposes to use as an LNG Vessel has not, within the two Contract Years immediately preceding the Contract Year of the Scheduled Arrival Window, transported LNG to or from the FLNG Facility, the Customer shall endeavour to notify Golar thereof as soon as possible but in no event later than [*****] days prior to the first day of the applicable Scheduled Arrival Window.
|
(b)
|
LNG Vessel Movements.
With respect to each cargo of LNG to be Lifted hereunder, the Customer shall give, or cause the Master of the LNG Vessel to give, Golar notice upon the departure of the LNG Vessel from the unloading port, dry-dock, repair port or other point of departure en-route to the FLNG Facility and the following notices:
|
(i)
|
a first notice (“
First Notice
”), which shall be sent [*****] hours prior to the estimated time of arrival of the LNG Vessel at the Arrival Location (“
ETA
”). If, thereafter, such ETA changes by more than six (6) hours, the Customer shall give promptly, or cause the Master of the LNG Vessel to give promptly, to Golar, notice of the corrected ETA;
|
(ii)
|
a second notice (“
Second Notice
”), which shall be sent [*****] hours prior to the ETA set out in the First Notice (as corrected), confirming or amending such ETA. If, thereafter, such ETA changes by more than six (6) hours, the Customer shall give promptly, or cause the Master of the LNG Vessel to give promptly, to Golar, notice of the corrected ETA;
|
(iii)
|
a third notice (“
Third Notice
”), which shall be sent [*****] hours prior to the ETA set out in the Second Notice (as corrected), confirming or amending such ETA. If, thereafter, such ETA changes by more than one (1) hour, the Customer shall give promptly, or cause the Master of the LNG Vessel to give promptly, to Golar, notice of the corrected ETA;
|
(iv)
|
a final notice (“
Final Notice
”), which shall be sent by email [*****] hours prior to the LNG Vessel’s arrival at the Arrival Location; and
|
(v)
|
an NOR, which shall be given at the time prescribed in Clause 15.5 below.
|
(1)
|
a statement of tank condition, including the estimated Arrival Temperature, tank pressure and heel quantity;
|
(2)
|
any deficiencies in the LNG Vessel that may affect its operation at the FLNG Facility including any need for purging and/or cool down operations;
|
(3)
|
the arrival and expected departure draft of the LNG Vessel;
|
(4)
|
other relevant information reasonably required by Golar and specified in the Marine Operations Manual; and
|
(5)
|
the earliest possible ETA of the LNG Vessel.
|
15.5
|
Notice of Readiness
|
(a)
|
Issuance.
The Master of an LNG Vessel or its agent shall give to Golar its notice of readiness to load (berth or no berth) (“
Notice of Readiness
” or “
NOR
”) upon arrival of such LNG Vessel at Arrival Location and after all necessary clearances required for the LNG Vessel to proceed to berth have been obtained.
|
(b)
|
Effectiveness.
An NOR given under Clause 15.5(a) shall become effective as follows:
|
(i)
|
for an NOR given at any time before the start of the relevant Scheduled Arrival Window, the NOR shall be deemed effective at the earlier of [*****]; or [*****];
|
(ii)
|
for an NOR given at any time during the Scheduled Arrival Window, the NOR shall become effective [*****]; or
|
(iii)
|
without limitation to Clause 15.6(c), for an NOR given at any time after the expiration of the Scheduled Arrival Window, the NOR shall become effective [*****].
|
15.6
|
Berthing Assignment
|
(a)
|
General Rule.
Golar shall determine the berthing sequence of all LNG Vessels and other vessels at the FLNG Facility in order to ensure compliance with the Lifting Programme, with priority given to on-time LNG Vessels and other vessels and among (i) on-time LNG Vessels and other vessels in order of their respective Scheduled Arrival Windows, and (ii) LNG Vessels and other vessels that arrive after their respective Scheduled Arrival Windows on a first-come-first-served basis. Subject to Clause 15.9, if an LNG Vessel arrives not ready to load for any reason (including arriving with its tanks above the Arrival Temperature), Golar may refuse to allow it to berth.
|
(b)
|
Night-time Berthing Operations.
In no event shall Golar be obligated to allow night-time berthing operations at the FLNG Facility if Golar determines that such operations during night-time hours could pose safety or operational risks to the FLNG Facility, an LNG Vessel or another Person.
|
(c)
|
Late Arrival.
If an LNG Vessel arrives or is expected to arrive after its Scheduled Arrival Window, Golar shall act as a Reasonable and Prudent Operator to accommodate the late arrival of such LNG Vessel, including consideration of any reasonable request from the Customer to reschedule the Scheduled Arrival Window in accordance with Clause 12.4. If Golar (acting as a Reasonable and Prudent Operator) is unable to accommodate the arrival of such late LNG Vessel, Golar shall have the right to reject such LNG Vessel in accordance with Clause 13.5(d), and the late arrival shall constitute a Failure to Lift. If Golar does not exercise its right of rejection, Golar will berth the LNG Vessel at the first opportunity that Golar reasonably determines such LNG Vessel will not interfere with loading or unloading by any other scheduled vessel at the FLNG Facility, in accordance with normal shipping industry practice and priority arrangements as included in the Marine Operations Manual.
|
15.7
|
Laytime
|
(a)
|
Allowed Laytime.
The allowed laytime for each LNG Vessel (“
Allowed Laytime
”) shall be as stated in Annex 9, subject to extensions for:
|
(i)
|
reasons primarily attributable to the Customer, a Pilot, a Governmental Authority, Customer’s LNG buyer, the LNG Vessel or its Master, crew, owner or operator;
|
(ii)
|
an LNG Vessel that is directed to vacate the berth pursuant to Clause 15.11(a);
|
(iii)
|
Adverse Weather Conditions;
|
(iv)
|
Force Majeure;
|
(v)
|
night time berthing or transit restrictions in force at the FLNG Facility; and
|
(vi)
|
the time used to undertake and complete any purging and cool down operations or cool down only operations for such LNG Vessel pursuant to Clause 15.9 or for reasons primarily attributable to the Customer.
|
(b)
|
Actual Laytime.
The actual laytime for each LNG Vessel (“
Actual Laytime
”) shall commence:
|
(i)
|
if the LNG Vessel arrives at the Arrival Location and notifies NOR during the Scheduled Arrival Window, on the earlier of (1) [*****] hours after the NOR is issued; or (2) the time at which [*****];
|
(ii)
|
if the LNG Vessel arrives at the Arrival Location and tenders the NOR before the Scheduled Arrival Window, at such time as the [*****];
|
(iii)
|
if the LNG Vessel arrives at the Arrival Location and tenders the NOR after the Scheduled Arrival Window, at such time as the [*****],
|
(c)
|
Demurrage at the FLNG Facility.
|
(i)
|
In the event Actual Laytime exceeds Allowed Laytime (including any extension in accordance with Clause 15.7(a)) (“
Demurrage Event
”), Golar shall pay to the Customer, the lower of (A) demurrage per day as stated in Annex 9 (
pro rated
for any partial day) and (B) [*****], in each case solely in respect of the Demurrage Event, provided that, to the extent that demurrage is not payable to [*****] arising out of a Demurrage Event, no demurrage shall be payable hereunder.
|
(ii)
|
Subject to the proviso expressed in Clause 15.7(c)(i) above, if a Demurrage Event occurs, and provided that the Customer has provided Golar with documentary evidence that demurrage has been paid to [*****], the Customer shall invoice Golar for such demurrage pursuant to Clause 6.2 and, subject to Clause 15.7(d), such demurrage shall be the Customer’s Sole and Exclusive Remedy with respect to a Demurrage Event unless the provisions of Clause 13.3(e) apply.
|
(d)
|
Failure to Meet Arrival Temperature.
If an LNG Vessel arrives at the Arrival Location meeting the Arrival Temperature, but is delayed in berthing at the FLNG Facility or in commencement of loading due to an event occurring at the FLNG Facility and for a reason that would not result in an extension of Allowed Laytime under Clause 15.7(a), and if, as a result thereof, the LNG Vessel no longer meets the Arrival Temperature, then Golar shall act as a Reasonable and Prudent Operator to berth and provide cool down of such LNG Vessel [*****] as soon as is practicable.
|
15.8
|
Loading at the FLNG Facility
|
(a)
|
Efficiency.
Golar shall co-operate with Transporters (or their agents) and with the Master of each LNG Vessel to facilitate the continuous and efficient loading of LNG hereunder.
|
(b)
|
Vapour Return Line.
During loading or cool down operation of each cargo of LNG, Golar shall accept return Gas from the LNG Vessel to the FLNG Facility in such quantities as are necessary for the safe loading of the LNG at such rates, pressures and temperatures as may be required by the design of the LNG Vessel.
|
15.9
|
Purging and Cool Down Operations and Cool Down Only Operations
|
(a)
|
Purging and Cool Down; Cool Down Only.
The Customer may submit to Golar requests for purging and cool down operations or cool down only operations for any LNG Vessel that will be arriving at the FLNG Facility, any such requests to be submitted promptly after receiving notification from an LNG buyer that an LNG Vessel requires such operations. Golar and/or Golar Cam [*****].
|
(b)
|
LNG Quantities for Purging and Cool Down or Cool Down Only.
[*****]
|
15.10
|
Gas Onboard LNG Vessel
|
15.11
|
LNG Vessel Not Ready for Loading; Excess Berth Time
|
(a)
|
Vessel Not Ready for Loading.
If any LNG Vessel, previously believed to be ready for loading, is determined to be not ready after being berthed, and this would disrupt the operation of the FLNG Facility, Golar may direct the LNG Vessel’s Master to vacate the berth and proceed to anchorage, whether or not other LNG vessels are awaiting the berth, and the LNG Vessel shall promptly vacate the berth unless the Master determines that it would be unsafe to do so. When an unready LNG Vessel at anchorage becomes ready for loading, its Master shall so notify Golar. Such LNG Vessel may only re-berth with Golar’s consent, which consent shall not be unreasonably withheld subject to ability to load and berth availability. Upon the reberthing of any LNG Vessel previously required to vacate the berth pursuant to this Clause 15.11(a), the Customer shall be responsible for any reasonable actual incremental operating costs incurred by Golar as a result of such LNG Vessel not being ready for loading, with Golar using reasonable efforts to minimise such costs, and Golar shall invoice the Customer for such costs pursuant to Clause 6.2.
|
(b)
|
Berth Limitations.
|
(i)
|
An LNG Vessel shall complete loading and vacate the berth as soon as possible but not later than [*****] hours after completion of loading a parcel of Cargo (if not Completion of Loading) or Completion of Loading (in each case, the “
Allotted Berth Time
”), subject to extension for: (1) reasons attributable to any Golar Indemnified Person; (2) reasons attributable to a Pilot or to a Governmental Authority; (3) Adverse Weather Conditions; (4) Force Majeure; (5) night-time transit restrictions; (6) not used; and (7) the time used to undertake and complete any purging and/or cool-down operations pursuant to Clause 15.7(d) or Clause 15.9.
|
(ii)
|
For purposes of determining compliance with the Allotted Berth Time, the actual berthing time for each LNG Vessel shall commence when [*****] and shall end [*****].
|
(iii)
|
Subject to any extensions granted under Clause 15.11(b)(i), if an LNG Vessel fails to depart at the end of its Allotted Berth Time and such delay would disrupt the operation of the FLNG Facility, Golar may (subject to the safety of the LNG Vessel) direct the LNG Vessel to vacate the berth and proceed to sea at utmost dispatch.
|
(iv)
|
If an LNG Vessel fails to vacate the berth after expiration of its Allotted Berth Time after receipt of Golar’s notice to do so under this Clause 15.11, the Customer shall reimburse Golar, pursuant to Clause 6.2, for any and all reasonable costs incurred by Golar as a result thereof, and Golar shall not be liable for any excess Retainage caused by the failure of the LNG Vessel to vacate the berth.
|
16
|
FORCE MAJEURE
|
16.1
|
Definition
|
(a)
|
The term “
Force Majeure
” shall mean any event or circumstance or combination of events or circumstances that materially and adversely affects the performance by a Party (the “
Affected Party
”) of its obligations in accordance with the terms of this Agreement (including preventing, hindering or delaying such performance), but only if and to the extent that such events and circumstances are not within the Affected Party’s reasonable control and the effects of which the Affected Party could not have prevented by acting as a Reasonable and Prudent Operator.
|
(b)
|
Force Majeure circumstances and events shall include, but not be limited to, the following events to the extent that they or their consequences satisfy the requirements of Clause 16.1(a):
|
(i)
|
flood, lightning, named hurricane/tornado/cyclone, earthquake, tsunami or other natural physical disasters;
|
(ii)
|
wars, blockades (of countries, ports or airports), public international trade sanctions, embargoes, insurrections, riots, civil disturbances, terrorism, sabotage, or seizure of power by non-legal means;
|
(iii)
|
strike, lockout or industrial disturbance (unless only related to the crew of the FLNG Vessel or affecting only or caused solely by Golar or Golar Cam or their contractors (or their subcontractors of any tier and persons employed by the Customer for the purposes of the Project) at a port or other facility at which the FLNG Vessel is moored or to which or from which the FLNG Vessel transits;
|
(iv)
|
chemical or radioactive contamination or ionising radiation;
|
(v)
|
seizure of the FLNG Vessel or cargo under legal process where security is promptly furnished to release the FLNG Vessel or cargo, but the FLNG Vessel or cargo is not released;
|
(vi)
|
fire, accident, structural collapse or explosion;
|
(vii)
|
shipwreck, navigational and maritime perils;
|
(viii)
|
the nationalisation, confiscation, expropriation, compulsory acquisition, arrest or restraint of any assets by any Governmental Authority of Cameroon;
|
(ix)
|
any delay, modification, revocation, withdrawal, cancellation, termination, denial, or refusal to issue, renew or re-issue or amend, any Approval, unless such action by any Governmental Authority was due to the default of the Affected Party and such default could be expected by a Reasonable and Prudent Operator to result in the above action or inaction by a Governmental Authority;
|
(x)
|
epidemic, plague or quarantine;
|
(xi)
|
changes to, or changes to the interpretation or implementation of, any general or local statute, ordinance, decree, or other law, or any regulation or bye-law of any local or other duly constituted authority or the introduction of any such statute, ordinance, decree, law, regulation or bye-law; and
|
(xii)
|
evacuation of the FLNG Vessel.
|
(c)
|
Subject to Clauses 16.1(d) and 16.1(e), any event or circumstance which affects a Third Party, and which prevents, impedes or delays the performance by a Party of its obligations under this Agreement, shall constitute Force Majeure affecting such Party only to the extent that:
|
(i)
|
such event or circumstance is of a kind or character that, had it primarily affected such Party, would have come within the definition of Force Majeure under Clauses 16.1(a) and 16.1(b); and
|
(ii)
|
such Party is rendered unable by such event or circumstance from carrying out all or a material part of its obligations under this Agreement; and
|
(d)
|
Any Force Majeure affecting facilities or a Third Party in accordance with Clause 16.1(c) shall constitute Force Majeure affecting the Customer only if such event or circumstance affects the following facilities and Third Parties:
|
(i)
|
the FLNG Site; or
|
(ii)
|
any contractors or subcontractors involved in the engineering, procurement, and/or construction, or for the operation and/or maintenance, of Customer’s Facilities (including Pilots, tugs, service vessels, fire vessels, security vessels and escort vessels); or
|
(iii)
|
Customer’s Facilities.
|
(e)
|
Any event or circumstance affecting facilities or a Third Party in accordance with Clause 16.1(c) shall constitute Force Majeure affecting Golar or Golar Cam only if such event or circumstance affects the following facilities and Third Parties:
|
(i)
|
the FLNG Facility; or
|
(ii)
|
any contractors or subcontractors involved in the engineering, procurement, and/or conversion, or for the operation and/or maintenance, of the FLNG Facility.
|
16.2
|
Events not constituting Force Majeure
|
(a)
|
No Force Majeure relief shall be available in respect of:
|
(i)
|
a Party’s inability to finance its obligations or unavailability of funds;
|
(ii)
|
ability of either Party to obtain preferential economic terms for the Services;
|
(iii)
|
changes in either Party’s market factors or other commercial, financial or economic conditions;
|
(iv)
|
breakdown of the FLNG Facility or the Customer’s Facilities caused by a failure to properly maintain, operate or design the FLNG Facility or the Customer’s Facilities;
|
(v)
|
[*****].
|
16.3
|
Notice and Reporting Requirements
|
(a)
|
A Party intending to seek relief under this Clause 16 shall as soon as reasonably practicable after it becomes aware of the relevant Force Majeure event:
|
(i)
|
notify the other Party of the event and furnish reasonable full particulars thereof, if available;
|
(ii)
|
give a bona fide good faith estimate of when it will be able to resume full performance of its obligations;
|
(iii)
|
give the particulars of the programme to be implemented to resume full performance hereunder, and
|
(iv)
|
provide interim reports concerning the event for continued invocation of this Clause 16 and an estimate of the anticipated duration of the Force Majeure relief which it seeks.
|
(b)
|
The Affected Party shall, throughout the period during which it is prevented from performing its obligations under this Agreement, allow the other Party (at such other Party’s risk and cost) to have access to such information, facilities, sites and personnel in the possession, control or employment of the Affected Party as the other Party may reasonably request in connection with such Force Majeure event.
|
16.4
|
Consequences of Force Majeure
|
(a)
|
The obligations of the Parties under this Agreement to the extent performance thereof is prevented or impeded by the event of Force Majeure, shall be suspended and the Parties shall not be liable for the non-performance thereof for the duration of the period of Force Majeure. Notwithstanding the foregoing, during the [*****] Tolling Fee shall continue to be payable, without deduction, unless the FLNG Facility is otherwise unavailable due to an event of Services Unavailability.
|
(b)
|
Where a Force Majeure has been continuing for a [*****], either Party shall have the option to terminate this Agreement on written notice with immediate effect. In case of Force Majeure, the FLNG Vessel shall have liberty to comply with any directions or recommendations as to departure, arrival, routes, ports of call, stoppages, destinations, zones, waters, delivery or in any other way whatsoever given by a Governmental Authority of the Flag State or any other Governmental Authority having, under the terms of the war risks insurance on the FLNG Vessel, the right to give any such directions or recommendations.
|
16.5
|
Obligations Following Force Majeure
|
(a)
|
To the extent either Party is entitled to relief from its obligations under this Agreement on grounds that an event or circumstance constitutes Force Majeure, the Affected Party shall, as soon as reasonably possible, take the measures which a Reasonable and Prudent Operator would take to bring the Force Majeure event to an end and to overcome and/or minimise the effects and consequences thereof which prevent, impede or delay such Affected Party’s ability to resume performance hereunder. An Affected Party shall not be entitled to relief hereunder or, having become entitled, shall cease to be so entitled, and an event or circumstance originally constituting Force Majeure shall cease to be treated as Force Majeure, to the extent that the Affected Party claiming Force Majeure relief fails to comply with this Clause 16.5, unless such failure is itself caused by an event of Force Majeure.
|
(b)
|
As soon as an Affected Party ceases to be so affected by Force Majeure and is no longer prevented from complying with its obligations under this Agreement, such Affected Party shall:
|
(i)
|
notify the other Party accordingly; and
|
(ii)
|
use all reasonable endeavours to recommence performance of such obligations as soon as reasonably practicable.
|
17
|
CREDIT SUPPORT
|
17.1
|
Golar Credit Support
|
(a)
|
Golar shall provide a bank guarantee issued by an internationally recognised bank and acceptable to the Customer, guaranteeing the obligations of Golar to pay Daily LDs and the Termination Balloon Payment under Clause 9.4(e) above, [*****], and termination fees under Clause 18.2(a), capped at a maximum of USD300,000,000 (United States Dollars Three Hundred Million), and which reduces in accordance with the termination fees set out at Clauses 18.2(a)(ii) and 18.2(a)(iii) below (the “
Golar Credit Support
”).
|
17.2
|
Customer Credit Support
|
(a)
|
Perenco shall provide bank guarantees issued by three (3) or more internationally recognised banks acceptable to Golar (each a “
Bank Guarantee
” and together the “
Perenco Credit Support
”), guaranteeing (on a pro-rated basis) the obligations of Perenco to pay termination fees under Clause 18.2(b) below, capped at a maximum aggregate amount of [*****] (the “
Maximum Aggregate Amount
”). Both the Maximum Aggregate Amount and the maximum amount of each Bank Guarantee shall reduce (on a pro-rated basis) in accordance with the termination fees at Clause 18.2(b) below. Golar undertakes that it shall not make a demand for payment under some but not all of the Bank Guarantees, and that the amount of any demand pursuant to an individual Bank Guarantee will be calculated by Golar on a pro rata basis, meaning such amount shall bear the same proportion to the aggregate total amount demanded under the Perenco Credit Support in respect of the termination event or repudiatory breach in question, as the maximum amount of the relevant Bank Guarantee bears to the Maximum Aggregate Amount (each as amended from time to time).
|
(b)
|
SNH shall provide a guarantee guaranteeing SNH’s obligations to pay termination fees under Clause 18.2(b) below, [*****], and which reduces in accordance with the termination fees at Clause 18.2(b) below, or alternative security reasonably acceptable to Golar (the “
SNH Credit Support
”).
|
18
|
TERMINATION
|
18.1
|
Early Termination Events
|
(a)
|
Not Used.
|
(b)
|
Termination by Golar.
Golar may terminate this Agreement by notice to Customer for any of the following events and as further provided below:
|
(i)
|
(1) any of the Customer’s Credit Supports ceases to be in full force and effect or (2) if a bank which issued a bank guarantee forming part of the Perenco Credit Support gives notice of election not to extend the bank guarantee in question, unless replacement security acceptable to Golar, acting reasonably, is provided (x) within [*****] days of the relevant Perenco Credit Support ceasing to be in full force and effect or (y) no later than [*****] days prior to the expiry of notice period set out in the relevant bank’s notice of election not to extend the relevant bank guarantee, as the case may be;
|
(ii)
|
for Perenco or SNH, or Perenco’s or SNH’s guarantor’s, Insolvency;
|
(iii)
|
if Perenco or SNH is in breach of Clause 22 or Clause 23;
|
(iv)
|
if the State withdraws the Customer’s LNG Export Licence pursuant to the Gas Convention, or otherwise terminates the Gas Convention, for breach by the Customer, and the cause of the withdrawal of the LNG Export Licence and/or breach by the Customer of the Gas Convention is not primarily attributable to any member of Golar’s Group or Force Majeure;
|
(v)
|
as provided in Clause 6.5(c);
|
(vi)
|
the Commissioning Period is suspended for more than [*****] months due to periods of delay primarily attributable to the Customer or any member the Customer’s Group; or
|
(vii)
|
Force Majeure has been declared by either Party and has continued uninterrupted for [*****].
|
(c)
|
Termination by Customer.
The Customer may terminate this Agreement by notice to Golar for any of the following events and as further provided below:
|
(i)
|
if (1) the Golar Credit Support ceases to be in full force and effect, or (2) if the bank which issued the Golar Credit Support gives notice of election not to extend the Golar Credit Support, unless replacement security acceptable to the Customer, acting reasonably, is provided (x) within [*****] days of the Golar Credit Support ceasing to be in full force and effect or (y) no later than [*****] days prior to the expiry of notice period set out in the relevant bank’s notice of election not to extend the Golar Credit Support, as the case may be;
|
(ii)
|
if no Certificate of Acceptance is executed and delivered (or deemed executed) in accordance with Clause 9.4(h) within [*****] months beyond the Commercial Start Date, save that any period of delay due to Customer’s failure to fulfil its obligations under this Agreement (including as a result of a Customer Delay Event) or as a result of Force Majeure shall not count for the purposes of calculating the [*****] months beyond the Commercial Start Date;
|
(iii)
|
if Force Majeure has been declared by either Party and has continued uninterrupted for [*****];
|
(iv)
|
on [*****] days’ notice by the Customer to Golar after the Acceptance Date, if (a) a Services Unavailability has occurred and continued uninterrupted for [*****], and such Services Unavailability has resulted in Golar making available less than [*****] of the Expected Lifting Quantity on average throughout such period, or (b) [*****];
|
(v)
|
if Golar or Golar Cam is in breach of Clause 22 or Clause 23;
|
(vi)
|
if the State withdraws Golar Cam’s Liquefaction License pursuant to the Gas Convention or otherwise terminates the Gas Convention for breach by Golar or Golar Cam, and the cause of the withdrawal of the Liquefaction License and/or breach by Golar or Golar Cam of the Gas Convention is not primarily attributable to any member of the Customer’s Group or Force Majeure; or
|
(vii)
|
for Golar or Golar Cam or Golar’s guarantor’s Insolvency.
|
18.2
|
Consequences of Termination
|
(a)
|
Termination Fees for Golar’s and Golar Cam’s Liability for Default.
In the event that the Customer terminates this Agreement pursuant to Clause 18.1(c)(i), 18.1(c)(iv), 18.1(c)(v), 18.1(c)(vi), or 18.1(c)(vii) or at law in the event of Golar’s or Golar Cam’s repudiatory breach, a termination fee shall be payable by Golar to the Customer as follows:
|
(i)
|
Termination occurs before the FLNG Vessel has produced 1.2 million tonnes of LNG (including, for the avoidance of doubt, LNG produced during the Commissioning Period) —USD 400,000,000, less [*****] (including the Termination Balloon Payment);
|
(ii)
|
Termination occurs at a time when the FLNG Vessel has produced between 1.2 million tonnes and 3.6 million tonnes of LNG (including, for the avoidance of doubt, LNG produced during the Commissioning Period) —[*****]; or
|
(iii)
|
Termination occurs at a time when the FLNG Vessel has produced over 3.6 million tonnes of LNG (including, for the avoidance of doubt, LNG produced during the Commissioning Period) —[*****];
|
(b)
|
Termination fees for the Customer’s Liability for Default.
In the event that Golar terminates this Agreement pursuant to Clause 18.1(b) (but excluding Clause 18.1(b)(vii)) or at law in the event of the Customer’s repudiatory breach, a termination fee shall be payable by the Customer to Golar as follows:
|
(i)
|
Until the second (2nd) anniversary of the Acceptance Date: USD 400,000,000 payable by Perenco; and
|
(ii)
|
Until the second (2nd) anniversary of the Acceptance Date: 100,000,000 payable by SNH;
|
(iii)
|
As from the second (2nd) anniversary of the Acceptance Date: the amount specified in Clause 18.2(b)(i) will [*****] (as at the time of termination) payable for the remaining duration of this Agreement; and
|
(iv)
|
As from the second (2nd) anniversary of the Acceptance Date: the amount specified in Clause 18.2(b)(ii) will [*****] (as at the time of termination) payable for the remaining duration of this Agreement.
|
(c)
|
Previously Accrued Rights and Remedies.
All rights or remedies which may have accrued to the benefit of either Party pursuant to this Agreement (and any of this Agreement’s provisions necessary for the exercise of such accrued rights or remedies) prior to the termination or expiration of this Agreement shall survive such termination or expiration.
|
(d)
|
Survival Clauses.
The provisions of Clause 6 (Invoicing and Payment), Clause 7 (Taxes), this Clause 18 (Termination), Clause 19 (Liabilities and Indemnification), Clause 29 (Choice Law and Dispute Resolution), Clause 24 (Confidentiality), Clause 30 (Communications and Notices) and Clause 31 (Miscellaneous) shall survive the termination or expiration of this Agreement.
|
19
|
LIABILITIES AND INDEMNIFICATION
|
19.1
|
General
|
(a)
|
Save as otherwise expressly agreed in this Agreement, Golar shall be solely responsible for, and shall protect, defend, indemnify and hold harmless each Customer Indemnified Person for any Liabilities (save for any Consequential Loss of any Customer Indemnified Person) arising as a result of:
|
(i)
|
physical loss or damage to the FLNG Facility and any property owned, leased, chartered, hired or borrowed by any Golar Indemnified Person; and
|
(ii)
|
the sickness, death of, or personal injury suffered by, any Golar Indemnified Person as a result of an event in connection with the performance or non-performance of this Agreement,
|
(b)
|
Save as otherwise expressly agreed in this Agreement, the Customer shall be solely responsible for, and shall protect, defend, indemnify and hold harmless each Golar Indemnified Person for any Liabilities (save for any Consequential Loss of any Golar Indemnified Person) arising as a result of:
|
(i)
|
physical loss or damage to the Customer’s Facilities and any property owned, leased, chartered, hired or borrowed by any Customer Indemnified Person (except the FLNG Facility in whole or in part) and, in each case, used in connection with the performance of this Agreement; and
|
(ii)
|
the sickness, death of, or personal injury suffered by, any Customer Indemnified Person as a result of an event in connection with the performance or non-performance of this Agreement,
|
19.2
|
Exclusions of Liability
|
(a)
|
Except as otherwise expressly provided in this Agreement, neither Party (nor any member of its Group) shall be liable to the other Party (or any member of its Group), and shall be indemnified by the other Party in respect of any Consequential Loss suffered by the other Party or any member of its Group, whether or not foreseeable at the time of entering into this Agreement and Regardless of Cause.
|
(b)
|
The Parties intend that their respective rights, obligations and liabilities as provided for in this Agreement shall be exhaustive of the rights, obligations and liabilities between them arising out of or in connection with this Agreement. Accordingly, the remedies expressly stated in this Agreement shall be the Sole and Exclusive Remedies of the Parties for liabilities to one another arising out of or in connection with this Agreement, Regardless of Cause and notwithstanding any remedy otherwise available at law or in equity, other than termination at law for repudiatory breach.
|
(c)
|
Subject to Clause 19.1(b), Golar shall be responsible for the raising, removal, destruction or marking of the FLNG Facility, or any equipment, bunkers or cargo owned by or contracted to Golar or any Golar Indemnified Person and lost as a result of a casualty, insofar as the raising and other operations are compulsory by law or necessary to avoid or remove a hazard or obstruction to navigation.
|
(d)
|
Subject to Clause 19.1(b), Golar shall be solely responsible for, and shall protect, defend, indemnify and hold harmless all Customer Indemnified Persons from and against any and all Liabilities (excluding Consequential Losses of any Customer Indemnified Person), arising as a result of any pollution or contamination originating from the FLNG Facility in respect of this Agreement, Regardless of Cause, provided that the Golar’s aggregate liability for each accident or occurrence under this Clause 19.2(d) shall not exceed the Applicable Amount.
|
(e)
|
Subject to Clause 19.1(a), Customer shall be responsible for and shall protect, defend, indemnify and hold harmless all Golar Indemnified Persons from and against any and all Liabilities (excluding Consequential Loss of any Golar Indemnified Person), Regardless of Cause, arising as a result of any pollution or contamination created by or arising or emanating from or directly related to the operation of the Customer’s Facilities (excluding the FLNG Facility) or any LNG Vessel(s), and any pollution or contamination originating from the FLNG Facility over and above the Applicable Amount.
|
19.3
|
Mitigation of Loss
|
20
|
INSURANCE
|
20.1
|
Golar Insurance
|
(a)
|
Golar shall be responsible for obtaining and maintaining, directly or through its Affiliates:
|
(i)
|
insurance for the FLNG Facility to the extent required by applicable law and the Definitive Financing Agreements (but always to a level and extent not less than would generally be taken out by a Reasonable and Prudent Operator on vessels of its type, including hull and machinery protection and indemnity, pollution and such other coverage as is customary and usual in the LNG shipping industry); and
|
(ii)
|
additional insurance, as is reasonably necessary and available on reasonable commercial terms, against such other risks and at such levels as a Reasonable and Prudent Operator would obtain.
|
(b)
|
Evidence of Insurance.
Golar shall furnish to Customer evidence of all insurance required under Clause 20.1(a) for the FLNG Facility prior to the commencement of Lifting from the FLNG Facility and thereafter at least once each Contract Year. The receipt of such information shall not impose any obligation on Customer.
|
20.2
|
Customer’s Insurance
|
(a)
|
LNG Vessel Insurance.
The Customer shall ensure that each LNG Vessel procures and maintains insurance consistent with the standards which a shipowner operating reputable LNG vessels, as a Reasonable and Prudent Operator, should observe in insuring LNG vessels of similar type, size, age and trade as such LNG Vessel, and to include:
|
(i)
|
Hull and Machinery Insurance placed and maintained with reputable marine underwriters;
|
(ii)
|
Protection & Indemnity Insurance (“
P&I Insurance
”) placed and maintained as an unlimited entry, if such entry is available, with and subject to and on the basis of the rules of any of the reputable P&I insurance associations who are members of the International Group of P&I Clubs and experienced in providing P&I Insurance for LNG vessels (“
Approved Provider
”); and
|
(iii)
|
to the extent not provided under clause 20.2(a)(ii) above, coverage for pollution liability in the maximum coverage amount per incident made available by an Approved Provider.
|
(b)
|
Evidence of Insurance.
Customer shall furnish to Golar evidence of all insurance required under Clause 20.2(a) for each LNG Vessel prior to the commencement of Lifting from the FLNG Facility and thereafter at least once each Contract Year. The receipt of such information shall not impose any obligation on Golar.
|
20.3
|
Conditions of Use Agreement
|
(a)
|
Notwithstanding any other provision of this Agreement and any rights that a Transporter may have under applicable law in relation to Liabilities for incidents involving an LNG Vessel occurring at the FLNG Facility, the Customer:
|
(i)
|
shall, provided the Conditions of Use Agreement is acceptable to the International Group of P&I Clubs into which the LNG Vessel is entered, cause the Transporter to duly sign the Conditions of Use Agreement in the form set out at Annex 7; or
|
(ii)
|
in the event a Transporter fails to duly execute and deliver such Conditions of Use Agreement prior to the LNG Vessel’s arrival at the FLNG Facility, Golar shall not be obliged to deliver any LNG to such LNG Vessel until the Transporter has duly executed and delivered such Conditions of Use Agreement.
|
(b)
|
If Golar proposes to amend the Conditions of Use Agreement, Golar shall promptly give notice to the Customer and, as soon as reasonably practicable thereafter, Golar and the Customer shall discuss the effect of any such proposed change may have on the Customer. Golar agrees not to amend the Conditions of Use Agreement to the extent Customer demonstrates to Golar that an LNG Vessel’s Approved Provider will not accept such amendment (such acceptance not to be unreasonably withheld or delayed). Subject to the foregoing, Customer shall cause each Transporter to duly execute and deliver the amended Conditions of Use Agreement.
|
21
|
REPRESENTATIONS AND WARRANTIES
|
21.1
|
Representations and Warranties of Perenco and SNH
|
(a)
|
it is and shall remain duly organised and in good standing under the laws of the place of its incorporation and registration, duly qualified to do business in those jurisdictions where the nature of its activities or property requires such qualification and to perform its obligations under this Agreement;
|
(b)
|
it has taken all necessary action to authorise the execution, delivery and performance of its obligations hereunder; and
|
(c)
|
neither the execution, delivery nor performance of this Agreement, nor the consummation of any action contemplated herein, conflicts or will conflict with, results or will result in a breach of, or constitutes or will constitute a default under, any provision of its constitutive instruments or any law, judgment, order, decree, rule or regulation of any court, administrative agency or other instrumentality of any Governmental Authority (except to the extent as may have been agreed in the Gas Agreement) or of any other agreement or instrument to which it is a party.
|
21.2
|
Representations and Warranties of Golar and Golar Cam
|
(a)
|
it is and shall remain duly organised and in good standing under the laws of the place of its incorporation and registration, duly qualified to do business in those jurisdictions where the nature of its activities or property requires such qualification and to perform its obligations under this Agreement;
|
(b)
|
it has taken all necessary action to authorise the execution, delivery and performance of its obligations hereunder; and
|
(c)
|
neither the execution, delivery nor performance of this Agreement, nor the consummation of any action contemplated herein, conflicts or will conflict with, results or will result in a breach of, or constitutes or will constitute a default under, any provision of its constitutive instruments or any applicable law, judgment, order, decree, rule or regulation of any court, administrative agency or other instrumentality of any Governmental Authority (except to the extent as may have been agreed in the Gas Agreement) or of any other agreement or instrument to which it is a party.
|
22
|
ASSIGNMENT
|
22.1
|
Restrictions on Assignment and Novation
|
22.2
|
Permitted Assignments
|
(a)
|
Affiliates of Parties.
Notwithstanding the provisions of Clause 22.1, a Party may novate its rights and obligations under this Agreement in whole (but not in part) to one or more Affiliates (including, in the case of Golar and Golar Cam, one or more Affiliates of Golar LNG Limited) with the requisite financial and technical capacity to perform the obligations of the assigning Party under this Agreement (including the provision of Credit Support) upon notice to, but without requiring the consent of the other Parties.
|
(b)
|
Financing by Golar.
Notwithstanding the provisions of Clause 22.1, Golar may assign, mortgage, or pledge all or any of its rights, interests, and benefits under this Agreement to one or more Lenders to secure payment of any indebtedness or working capital incurred or to be incurred in connection with the conversion, procurement, financing, refinancing and operation of any portion of the FLNG Facility or any modifications thereto, provided that such an assignment to Lenders shall not relieve Golar of any Liabilities or obligations hereunder. In relation to the foregoing, Customer shall provide and/or enter into any reasonably required consent letters, acknowledgements and direct agreements, subject to their approval, not to be unreasonably withheld or delayed.
|
(c)
|
Financing by the Customer.
Notwithstanding the provisions of Clause 22.1, Customer may assign, mortgage, or pledge all or any of its rights, interests, and benefits under this Agreement to one or more Lenders to secure payment of any indebtedness or working capital incurred or to be incurred in connection with the Project, provided that such an assignment to Lenders shall not relieve Customer of any Liabilities or obligations hereunder. In relation to the foregoing, Golar and Golar Cam shall provide and/or enter into any reasonably required consent letters, acknowledgements and direct agreements, subject to their approval, not to be unreasonably withheld or delayed.
|
23
|
CHANGE IN CONTROL
|
(a)
|
following a proposed Change in Control, the Credit Support of the Party proposing the Change in Control would be prejudiced in any way, without such Party providing alternative and adequate replacement security at least equal to the relevant Credit Support in its place; or
|
(b)
|
following a proposed Change in Control, the Gas Convention may be terminated, cancelled, cease to be in full force and effect or would otherwise be prejudiced in any way.
|
24
|
CONFIDENTIALITY
|
24.1
|
Confidentiality Obligation
|
(a)
|
Confidential Information that comes into the possession of a Party (the “
Recipient
”) by means of, or on behalf of, the other Party (the “
Discloser
”) shall not be used by the Recipient except in connection with the performance of activities to be conducted pursuant to or for the purposes of this Agreement.
|
(b)
|
The Recipient agrees to keep Confidential Information strictly confidential and shall not sell, trade, publish or otherwise disclose to any Persons (other than the Parties) in any manner whatsoever, including by, but not limited to, means of photocopy or reproduction, without the prior consent written of the Discloser.
|
(c)
|
The provisions of this Clause 24 shall not apply to Confidential Information which:
|
(i)
|
is already in possession of the public or becomes available to the public other than through the act or omission of the Recipient in breach hereof;
|
(ii)
|
is developed independently by the Recipient without reliance on the Confidential Information disclosed by the Disclosing Party and such fact can be reasonably demonstrated by the Recipient; or
|
(iii)
|
is required to be disclosed in order to comply with the requirements of any law, rule or regulation of any Governmental Authority or regulatory body having jurisdiction over this Agreement or the parties hereto, or of any relevant stock exchange (provided that the Recipient shall give written notice to the Disclosing Party prior to such disclosure unless restricted from doing so by any applicable law or governmental decree, regulation or rule).
|
(d)
|
Notwithstanding the provisions of Clause 24.1(a) and Clause 24.1(b), and subject to Clause 24.1(e), either Party shall have the right to disclose Confidential Information without obtaining the other Party’s prior consent to the following Persons if and to the extent such Persons need to know such Confidential Information and provided that such Persons are informed of the confidential nature of the Confidential Information:
|
(i)
|
to accountants, auditors, advisers, legal counsel, other professional consultants, or underwriters, provided such disclosure is solely to assist the purpose for which the aforesaid were so engaged;
|
(ii)
|
to the Party’s employees, officers and directors provided they have a bona fide business need for such information;
|
(iii)
|
financial advisers, investment bankers, underwriters, brokers, lenders or other financial institutions advising on, providing or considering the provision of financing to a Party or its Affiliates;
|
(iv)
|
a Lender’s potential transferee of an interest in its financing arrangements to enable such potential transferee to conduct due diligence;
|
(v)
|
to bona fide prospective purchasers of all or a part of a Party’s or its Affiliate’s business and bona fide prospective assignees of all or part of a Party’s interest in this Agreement;
|
(vi)
|
to the operator of a Transport Pipeline, suppliers of Feed Gas, Transporters and LNG purchasers, in each case only in respect of such Confidential Information as necessary and to the extent required for the administration of the disclosing Party’s contracts with such Persons;
|
(vii)
|
to its Affiliates and their employees, officers and directors , provided that such Affiliate and, as applicable, their employees, officers and directors, has a bona fide business need for such information;
|
(viii)
|
to any Governmental Authorities to the extent such disclosure assists Golar and/or Golar Cam and/or Customer in obtaining Approvals;
|
(ix)
|
to an arbitration tribunal in connection with the resolution of a Dispute under Clause 29.2.
|
(e)
|
The Recipient shall be responsible for ensuring that any Person to whom Confidential Information is disclosed pursuant to Clause 24.1(d) shall keep such information confidential in accordance with the terms of this Agreement and shall not disclose, divulge or use such Confidential Information in violation of this Agreement, and the Recipient shall be liable to the Disclosing Party for any failure in this regard.
|
(f)
|
The Disclosing Party hereby represents and warrants that it has the right and authority to disclose the Confidential Information to the Recipient. The Disclosing Party, however, makes no representations or warranties, express or implied, as to the quality, accuracy and completeness of the Confidential Information disclosed hereunder unless expressly represented or warranted pursuant to any other agreement. The Disclosing Party, its Affiliates, and their officers, directors and employees shall have no liability whatsoever with respect to the use of or reliance upon the Confidential Information by the Recipient.
|
(g)
|
The obligations of this Clause 24 shall terminate three (3) years after the termination or expiration of this Agreement.
|
24.2
|
Public Announcements
|
(a)
|
General.
No Party may issue or make any public announcement, press release or statement regarding this Agreement unless, prior to the release of the public announcement, press release or statement, such Party furnishes the other Party with a copy of such announcement, press release or statement, and obtains the written approval of the other Party (such consent not to be unreasonably withheld or delayed), provided that, notwithstanding any failure to obtain such approval, no Party shall be prohibited from issuing or making any such public announcement, press release or statement if it is necessary to do so in order to comply with the applicable laws or legal proceedings of any Governmental Authority, legal proceedings or stock exchange having jurisdiction over such Party.
|
(b)
|
Promotional Materials.
Notwithstanding any provision in Clause 24.2(a) to the contrary, either Party may, provided the other Parties have given their prior written consent (such consent not to be unreasonably withheld or delayed) use the following in external announcements and publications: (i) information concerning the signing of this Agreement; (ii) the general nature of the Services; and (iii) the general nature of Customer’s involvement in the FLNG Facility project; provided, however, that the Party making such external announcement or publication shall not, in doing so, use the trademark, service mark and trade name of the another Party without such other Party’s prior written consent (such consent not to be unreasonably withheld or delayed).
|
24.3
|
Intellectual Property
|
25
|
BUSINESS PRINCIPLES
|
25.1
|
Compliance with Laws
|
25.2
|
Anti-Bribery and Anti-Corruption
|
(a)
|
No Party shall pay any fee, commission, rebate or anything of value to or for the benefit of any employee of any other Party, nor will any Party do business with any Persons knowing the results might directly benefit an employee of another Party. All Parties shall use their best efforts not to permit any of its employees, servants, agents or representatives to engage in any activities contrary or detrimental to the best interests of another Party.
|
(b)
|
The Parties mutually agree that, in connection with this Agreement and the activities contemplated herein, none of them nor any of their respective employees, servants, agents, representatives or Affiliates will take action, or omit to take any action, that would cause another Party to be in violation of any applicable anti-bribery laws related to the other Party’s business practices, including but not limited to the U.S Foreign Corrupt Practices Act, the UK Bribery Act 2010, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any similar laws of any Governmental Authority.
|
(c)
|
Each Party mutually warrants and undertakes to the other Parties that, in connection with this Agreement and the activities contemplated herein, it shall comply and cause its respective employees, servants, agents, representatives or Affiliates to comply with all applicable laws, regulations, rules and requirements of any country having jurisdiction over it relating to anti-bribery and anti-money laundering, including but not limited to the U.S Foreign Corrupt Practices Act, the UK Bribery Act 2010, the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any similar laws of any Governmental Authority, (together “
Anti-Bribery Laws
”) and that neither it nor its respective employees, servants, agents, representatives or Affiliates shall take any action, or omit to take any action, which would subject another Party to fines or penalties under Anti-Bribery Laws.
|
(d)
|
Notwithstanding the generality of the foregoing, each Party represents, warrants and undertakes to the other Parties that in connection with this Agreement neither it nor any officer, director, commissioner, shareholder, employee, servant, agent or representative thereof shall, directly or indirectly:
|
(i)
|
make or cause to be made any payment, loan, or gift of any monies or other things of value to:
|
(A)
|
any officials, officers or employees of a Government Authority or any department, agency or instrumentality of any Government Authority;
|
(B)
|
an officer or employee of a public international organisation;
|
(C)
|
any person acting in an official capacity for or on behalf of any government or department, agency, or instrumentality of such government or of any public international organisation;
|
(D)
|
any political party or official thereof, or any candidate for political office;
|
(E)
|
any director, officer, employee or agent/representative of any of its actual or prospective counterparty, supplier or customer; or
|
(F)
|
any other Person at the suggestion, request or direction or for the benefit of any of the above-described Persons; or
|
(ii)
|
engage in such other acts or transactions in violation of or inconsistent with Anti-Bribery Laws.
|
25.3
|
Compliance with Standards
|
26
|
HEALTH AND SAFETY
|
26.1
|
Compliance
|
26.2
|
HSSE Policy
|
(a)
|
Golar and Golar Cam shall establish a health, safety and environmental policy (the “
HSSE Policy
”) in respect of the FLNG Vessel’s operations, along with related standards on environmental management, pollution, health and safe working procedures.
|
(b)
|
Golar warrants that the HSSE Policy meets or exceeds the standards set out in the “
Guidelines for the Control of Drugs and Alcohol On Board Ship
” as published by the Oil Companies International Marine Forum (OCIMF) dated June 1995 (or any subsequent modification, version, or variation of these guidelines).
|
26.3
|
HSSE Management System
|
(a)
|
Throughout the Agreement Period, Golar and Golar Cam will operate a Health, Safety and Environment (HSSE) Management System (“
HSSE Systems
”) which is certified to comply with the ISM Code.
|
(b)
|
The HSSE System will address all phases of the contract including:
|
(i)
|
pre-mobilisation and mobilisation of crew;
|
(ii)
|
operation of the FLNG Vessel;
|
(iii)
|
re-positioning of the FLNG Vessel; and
|
(iv)
|
decommissioning.
|
(c)
|
The HSSE System will include and develop at a minimum the following topics:
|
(i)
|
leadership and commitment;
|
(ii)
|
policy and strategic objectives;
|
(iii)
|
organisation, responsibilities, resources, standards and documentation;
|
(iv)
|
evaluation and risk management;
|
(v)
|
planning and procedures;
|
(vi)
|
implementation and performance monitoring;
|
(vii)
|
auditing and review;
|
(viii)
|
compliance with local rules and regulations; and
|
(ix)
|
compliance with local rules and regulations.
|
(d)
|
The Customer may monitor compliance with the HSSE System and perform routine check up and audits to verify such compliance at any point in time.
|
(e)
|
Golar will submit quarterly HSSE reports to the Customer.
|
26.4
|
Audit Rights
|
(a)
|
Golar and Golar Cam shall maintain HSSE records sufficient to demonstrate compliance with the requirements of their HSSE System and this Agreement. The Customer reserves the right to confirm compliance with HSSE requirements specified in this Agreement by audit of Golar and Golar Cam.
|
(b)
|
During the course of the Agreement and for a period ending two (2) years thereafter, the Customer shall have the right to audit at all reasonable times and, upon reasonable request, take copies of all of Golar and Golar Cam’s records, books, accounts, correspondence, memoranda, receipts, vouchers and other papers of every kind relating to any provision of this Agreement under which Golar or Golar Cam has obligations, the performance of which is capable of being verified by audit. Notwithstanding this provision, Golar or Golar Cam shall not be obliged to comply with a request from the Customer pursuant to this Clause if to do so would breach any applicable data protection laws and/or regulations.
|
(c)
|
The Customer shall have the right following the Acceptance Date, at its own cost, to audit Golar’s and Golar Cam’s management system not more than two (2) times per annum on the provision of fourteen (14) Days’ notice. The vetting standards which the Customer shall apply shall be equivalent to those applied by a first class operator in the oil and gas industry, and the entity used by the Customer (the “
Vetting Entity
”) to conduct such vetting on its behalf shall be an internationally recognised member of the oil and gas industry. The Customer shall require such Vetting Entity to act solely in its capacity as a vetting entity without regard to the interests of any Affiliates of the Vetting Entity and shall use all reasonable endeavours to ensure that execution of the audit does not adversely affect the operations and/or management of the FLNG Vessel. Golar and Golar Cam shall provide all cooperation reasonably necessary to enable such audit to be carried out to the satisfaction of the Vetting Entity. Should the audit reveal any defects in the management system which prevents safe operation of the FLNG Vessel, the Customer (by itself or by the Vetting Entity) will serve a list of such defects (“
Audit Defects
”) on Golar and Golar and Golar Cam shall within a reasonable time period from receipt of such notice make such alterations to the management system as are required.
|
(d)
|
Emergency Response
|
(i)
|
Golar Contact Details
|
Address:
|
Fridtjof Nansens Plass 4, NO-0160 Oslo, Norway
|
(ii)
|
Customer Contact Details
|
Address:
|
[*****]
|
27
|
QUALITY ASSURANCE AND QUALITY CONTROL
|
28
|
ISPS CODE
|
(a)
|
This Clause makes reference to the International Code for the Security of Ships and of Port Facilities and the relevant amendments to Chapter XI of SOLAS (the “
ISPS Code
”), in relation to the FLNG Vessel only.
|
(b)
|
Golar shall procure that both the FLNG Vessel and “the Company” (as defined by the ISPS Code) shall comply with the requirements of the ISPS Code relating to the FLNG Vessel and “the Company”. Upon request, Golar shall provide documentary evidence of compliance with this Clause 28(b).
|
(c)
|
Except as otherwise provided in this Agreement, loss, damage, expense or delay, caused by failure on the part of Golar to comply with the requirements of the ISPS Code or this Clause shall be for Golar’s account.
|
(d)
|
Costs or expenses related to security regulations or measures required by the port facility or any relevant authority in accordance with the ISPS Code including, but not limited to, security guards, launch services, tug escorts, port security fees or taxes and inspections, shall be for the Customer’s account, unless such costs or expenses result solely from Golar’s negligence in which case such costs or expenses shall be for Golar’s account. All measures required by Golar to comply with the security plan required by the ISPS Code shall be for Golar’s account.
|
(e)
|
If either Party makes any payment, which is for the other Party’s account according to this Clause, the other Party shall reimburse the paying Party in accordance with Clause 6.2.
|
29
|
CHOICE OF LAW AND DISPUTE RESOLUTION
|
29.1
|
Choice of Law
|
29.2
|
Arbitration
|
29.3
|
Procedure for Arbitration.
|
(a)
|
The arbitral tribunal shall consist of three (3) arbitrators. The claimant shall nominate one arbitrator; the respondent shall nominate the second arbitrator; and a third arbitrator, who shall serve as chairman, shall be appointed by the LCIA Court within fifteen (15) days of the appointment of the second arbitrator.
|
(b)
|
For the avoidance of any doubt, SNH and Perenco shall only be entitled to collectively appoint one arbitrator, and Golar and Golar Cam shall only be entitled to collectively appoint one arbitrator. If SNH or Perenco commences arbitration otherwise than jointly with the other, the arbitrator appointed by it shall be deemed to have been appointed with the agreement of the other. If Golar or Golar Cam commences arbitration otherwise than jointly with the other, the arbitrator appointed by it shall be deemed to have been appointed with the agreement of the other.
|
(c)
|
In the event the claimant or the respondent shall fail to nominate an arbitrator within the time limits specified in the Rules, such arbitrator shall be appointed by the LCIA Court within fifteen (15) days of such failure. In the event that both the claimant and the respondent fail to nominate an arbitrator within the time limits specified in the Rules, all three arbitrators shall be appointed by the LCIA Court within fifteen (15) days of such failure who shall designate one of them as chairman.
|
(d)
|
If both parties so agree, there shall be a sole arbitrator appointed by the LCIA Court within fifteen (15) days of such agreement.
|
(e)
|
The seat of arbitration shall be Geneva, Switzerland, and the language of the arbitration shall be English.
|
30
|
COMMUNICATIONS AND NOTICES
|
30.1
|
Form of Notice
|
(a)
|
Except as otherwise specifically provided, any notice, invoice or other communication from one Party to another that is required or permitted to be made by the provisions of this Agreement shall be:
|
(i)
|
in the English language;
|
(ii)
|
made in writing;
|
(iii)
|
delivered by hand or sent by courier to the address of the other Party which is shown below, or to such other address as such other Party shall by notice require, or sent by facsimile or electronic mail to the facsimile number or email address of the other Party which is shown below; provided that any notice, invoice or communication sent by electronic mail shall also be delivered in hard copy or by facsimile; and
|
(iv)
|
marked for the attention of the Person(s) there referred to or to such other Person(s) as the other Party shall by notice require.
|
(b)
|
Oral communication does not constitute notice for purposes of this Agreement, and telephone numbers are listed below as a matter of convenience only. The foregoing notwithstanding, notices given from LNG Vessels at sea may be given by radio.
|
30.2
|
Address for Notices
|
30.3
|
Effective Date of Notice
|
(a)
|
if delivered by hand or by courier, on the day on which it is received at that Party’s address; or
|
(b)
|
if sent by facsimile or electronic mail, when actually received by the intended recipient in a readable form; or
|
(c)
|
in the event notice was given by radio from an LNG Vessel at sea, actual receipt of the communication by radio,
|
31
|
MISCELLANEOUS
|
31.1
|
Amendments and Modifications
|
31.2
|
Approvals
|
31.3
|
Exclusion of Waiver
|
31.4
|
No Third Party Beneficiaries
|
31.5
|
Rules of Construction
|
(a)
|
Drafting. Each provision of this Agreement shall be construed as though all Parties participated equally in the drafting of the same. Consequently, the Parties acknowledge and agree that any rule of construction that a document is to be construed against the drafting Party shall not be applicable to this Agreement.
|
(b)
|
Priority. In the event of a conflict between the provisions of this Agreement excluding all Annexes (after such exclusion, the “
Base Agreement
”) and the provisions of any Annex, all provisions of the Base Agreement shall take precedence over any Annex.
|
31.6
|
Rights and Remedies
|
31.7
|
Joint and Several Liability
|
31.8
|
Disclaimer of Agency
|
31.9
|
Severance of Invalid Provisions
|
31.10
|
Expenses
|
31.11
|
Genuine Pre-Estimate of Loss
|
31.12
|
Waiver of Immunity
|
(a)
|
agrees not to claim any immunity from proceedings brought against it by the other Party in relation to this Agreement, and to ensure that no such claim is made on its behalf;
|
(b)
|
waives all rights of immunity in respect of it and its assets; and
|
(c)
|
consents generally in respect of such proceedings to the giving of relief or the issue of any proceeds in connection with such proceedings.
|
31.13
|
Indemnity
|
31.14
|
Liquefaction Licence
|
31.15
|
Entire Agreement
|
(a)
|
Subject to Clause 31.18, each Party acknowledges and agrees with the other Party that:
|
(i)
|
this Agreement constitutes the entire agreement between the Parties and supersedes and extinguishes all previous agreements, promises, assurances, representations, warranties and understandings between them, whether written or oral, relating to the Project; and
|
(ii)
|
no Party has been induced to enter into this Agreement in reliance upon, nor have they been given, any warranty, representations, statement, assurance, covenant, agreement, undertaking, indemnity or commitment of any nature whatsoever other than as are expressly set out in this Agreement and, to the extent that any of them have been, it unconditionally and irrevocably waives any claims, rights or remedies which any of them might otherwise have had in relation thereto,
|
31.16
|
Counterpart Execution
|
31.17
|
Excess Capacity
|
31.18
|
Binding Term Sheet
|
Item
|
Detail
|
Ships name
|
Hilli Episeyo
|
Builder and Yard
|
Rosenberg Verft (original builder)
Keppel Shipyard (FLNG conversion)
|
Hull No.
|
198
|
Year Built
|
1975 (originally built)
2017 (conversion)
|
Port of Registry and Flag State
|
Marshall Islands
|
IMO Number
|
7382720
|
Call Sign
|
V7VR8
|
Classification Society
|
DNV-GL
|
|
|
PRINCIPAL PARTICULARS:
|
|
Length Overall
|
293.74 m
|
Length Between Perpendiculars
|
281.25 m
|
Breadth
|
62.60 m
|
Depth Moulded
|
25.00 m
|
Draught Scantling
|
11.7 m
|
|
|
Complement
|
Max. 118
|
|
|
GENERIC FLNG BASIC OF DESIGN:
|
|
Rules and Regulations
|
[*****]
|
Design Life/Operational Life
|
[*****]
|
Feed Gas Inlet Conditions (at the inlet of the pre-treatment facilities):
|
[*****]
|
Liquefaction
|
[*****]
|
Pre-Treatment Facilities
|
[*****]
|
Power Generation
|
[*****]
|
LNG Offloading
|
[*****]
|
Vapour Return
|
[*****]
|
Storage Tanks
|
[*****]
|
LNG Vessels
|
[*****]
|
Purging
|
[*****]
|
Communications
|
[*****]
|
Emergency Shutdown System
|
[*****]
|
Component,
Mol%
|
Minimum
|
Maximum
|
CO2
|
[*****]
|
[*****]
|
Nitrogen
|
[*****]
|
[*****]
|
Methane
|
[*****]
|
[*****]
|
Ethane
|
[*****]
|
[*****]
|
Propane
|
[*****]
|
[*****]
|
i-Butane
|
[*****]
|
[*****]
|
n-Butane
|
[*****]
|
[*****]
|
i-Pentane
|
[*****]
|
[*****]
|
n-Pentane
|
[*****]
|
[*****]
|
C6+
|
[*****]
|
[*****]
|
Benzene
|
[*****]
|
[*****]
|
Toluene
|
[*****]
|
[*****]
|
H20
|
[*****]
|
[*****]
|
Eglycol
|
[*****]
|
[*****]
|
m-Mstyrene
|
[*****]
|
[*****]
|
MW
|
[*****]
|
[*****]
|
FEED GAS INLET CONDITIONS (GAS RECEIPT POINT)
|
|
||
• Maximum Feed Gas inlet rate: [*****]
|
|
|
|
• Normal operating pressure: [*****]
|
|
||
[*****][*****][*****]
|
UTM Zone 32N, CM 9°E, Manoca
1962 Datum
|
X (m) 593 089
|
Y (m) 333 292
|
•
|
“Extreme wave conditions near Kribi (Cameroon)”, reference RP_A15123, revision 1, dated 4 June 2015
|
•
|
“Metocean conditions near Kribi (Cameroon)”, reference RP_A15143, revision 1, dated 1 September 2015.
|
Item
|
Unit
|
Range
|
|
|
|
Min
|
Max
|
Methane
|
[*****]
|
[*****]
|
[*****]
|
Ethane
|
[*****]
|
|
[*****]
|
Propane
|
[*****]
|
|
[*****]
|
Butane
|
[*****]
|
|
[*****]
|
C5+
|
[*****]
|
[*****]
|
[*****]
|
Nitrogen
|
[*****]
|
[*****]
|
[*****]
|
H2S
|
[*****]
|
[*****]
|
[*****]
|
Total sulphur
|
[*****]
|
[*****]
|
[*****]
|
Mercury
|
[*****]
|
[*****]
|
[*****]
|
Solid and impurities
|
[*****]
|
|
[*****]
|
HHV
|
[*****]
|
[*****]
|
[*****]
|
Wobbe index
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Feed Gas rate
(MMscfd)
|
Operations Retainage Limit
(% of Feed Gas rate (expressed in MMBTUs))
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
|
[*****]
|
[*****]
|
1.
|
The Master of a vessel shall at all times and in all circumstances remain solely responsible on behalf of the vessel's owners and operators for the safety and proper navigation and operation of his vessel and shall at all times comply with the Terminal regulations, all Applicable Laws and the Terminal Manual.
|
2.
|
Neither Sanaga Partners nor Golar make any warranty (whether express or implied) with respect to Terminal Facilities or to the rendering of Terminal Services and any use thereof shall be at the sole risk of the vessel Master and owners and operators. Neither Sanaga Partners nor Golar shall be responsible for any loss or damage to a vessel, actual or consequential, or any loss or damage to the vessel’s owners or operators or the vessel’s cargo or any part thereof, or any loss or injury suffered by the Master, officers or crew of the vessel, which is related to Terminal Facilities or to Terminal Services provided to a vessel regardless of any act, omission, fault or negligence of Sanaga Partners or Golar, or any fault or defect in the Terminal Facilities, save, in respect of loss or damage to the vessel’s cargo or any part thereof, where caused by the sole negligence of Sanaga Partners or Golar.
|
3.
|
Neither Sanaga Partners nor Golar shall be responsible to any vessel or to its owners or operators for any loss related to strikes or other labour disturbances, regardless of whether Sanaga Partners or Golar are parties thereto, and regardless of any act, omission, fault or negligence of Sanaga Partners or Golar.
|
4.
|
The vessel and its owners and operators shall in all circumstances hold harmless and indemnify Sanaga Partners and Golar as applicable against any and all losses, claims, damages, costs and expenses Sanaga Partners or Golar may incur or has incurred arising out of or in connection with:
|
4.1
|
any damage to the Terminal Facilities or injury to its personnel related to the vessel's use of the Terminal Facilities and involving the fault, wholly or partially, of the Master, officers or crew of the vessel, including negligent navigation;
|
4.2
|
any loss suffered by Third Parties with respect to damage to their property or injury to their personnel related to the vessel's use of the Terminal Facilities and involving the fault, wholly or partially, of the Master, officers or crew of the vessel, including negligent navigation;
|
4.3
|
any Hazard under condition 5 hereof and involving the fault, wholly or partially, of the Master, officers or crew of the vessel, including negligent navigation;
|
4.4
|
any loss or damage to the vessel while at the Terminal, including consequential losses and all claims, damages and costs arising therefrom regardless of any act, omission, fault or negligence by Sanaga Partners or Golar; and
|
4.5
|
any personnel injury or property loss suffered by the Master, officers or crew of the vessel while at the Terminal, including consequential losses and all claims, damages and costs arising therefrom regardless of any act, omission, fault or negligence by Sanaga Partners or Golar.
|
5.
|
If the vessel or any object on the vessel becomes or is likely to become an obstruction, threat, or danger to navigation, operations, safety, health, environment or security of the Terminal (a “
Hazard
”), the Master and the owners and operators shall, at the option of the Terminal, take immediate action to clear, remove or rectify the Hazard as the Terminal may direct, and if the Master and/or the owners and/or operators fail to take such action, the Terminal shall be entitled to take such measures as it may deem appropriate to clear, remove or rectify the Hazard, and the Master and owners and operators shall be responsible for all costs and expenses associated therewith.
|
6.
|
In the event of any escape or discharge of oil or oily mixture or contaminants from any vessel or from any hose or other discharging device connected to such vessel (from whatsoever cause such escape or discharge may arise and irrespective of whether or not such escape or discharge has been caused or contributed to by the negligence or default on the part of the vessel or her owners or operators), either of Sanaga Partners or Golar by itself or by its subcontractors or by any other person whatsoever shall have the right to take any measures it deems fit to clean up the pollution resulting from such escape or discharge and to recover the full cost thereof from such vessel, its owners and operators, for which cost the vessel, its owners and operators shall be jointly and severally liable to Sanaga Partners and Golar (as the case may be).
|
7.
|
Without prejudice to the limitation of liability of the Master and owners and operators under condition 11, each of the owners and operators of the vessel hereby waives any right it may have to limit its liability for liabilities arising under this contract whether in conformity with any international maritime or shipping convention or any other statutory provision now or hereinafter enacted affording ship owners a right to limit their liability. The waiver herein contained applies to all persons claiming through owners or operators.
|
8.
|
Any liability incurred by the Master or owners or operators by operation of these Conditions of Use shall be joint and several.
|
9.
|
Without prejudice to the limitation of liability of the Master and owners and operators at condition 11, the Master shall immediately report to Sanaga Partners and Golar any accident, incident, claim, damage, loss or unsafe condition or circumstance. Any such report shall be made in writing and signed by the Master. Sanaga Partners and Golar shall be entitled to inspect and investigate any such report but without prejudice to the foregoing.
|
10.
|
These Conditions of Use shall be construed, interpreted and applied in accordance with laws of England and, if so requested by Sanaga Partners and Golar, the vessel and her owners and operators shall submit to the exclusive jurisdiction of the courts of England and Wales.
|
11.
|
Subject to condition 12, any liability of the Master and owners and operators to Sanaga Partners and Golar by virtue of the operation of these Conditions of Use shall be limited to USD [*****] (the “
Limited Amount
”) in aggregate for all liabilities arising from any one accident or occurrence. In the event that any loss or damage in respect of which the vessel and her owners and operators are liable to indemnify Sanaga Partners and/or Golar exceeds the Limited Amount then the Master and owners and operators shall indemnify Sanaga Partners and/or Golar, in aggregate not exceeding the Limited Amount, by paying each a sum, which equates to the ratio of loss or damage suffered by each to the total loss or damage suffered by each.
|
12.
|
The limit of liability set out in condition 11 shall not limit, restrict or prejudice any claim or right that Sanaga Partners or Golar has or may have against the Master or owners or operators under general principles of law or equity. For the avoidance of doubt, said limit of liability shall only apply with respect to, and to the extent of, a claim by Sanaga Partners or Golar against the Master or owners or operators under these Conditions of Use.
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
[*****]
|
Scheduled Loading
Quantity (m3)
|
Allowed Laytime
(days)
|
115,000
|
[*****]
|
120,000
|
[*****]
|
125,000
|
[*****]
|
130,000
|
[*****]
|
135,000
|
[*****]
|
140,000
|
[*****]
|
145,000
|
[*****]
|
150,000
|
[*****]
|
155,000
|
[*****]
|
160,000
|
[*****]
|
165,000
|
[*****]
|
170,000
|
[*****]
|
LNG Vessel Cargo Capacity (Gross)
|
Demurrage Rate USD per Day
|
LNG Vessels less than 135,000m
3
(steam turbine)
|
[*****]
|
135,000m
3
and above (steam turbine)
|
[*****]
|
145,000 to 154,000m
3
(duel fuel diesel electric)
|
[*****]
|
LNG Vessels greater than 154,000m
3
(duel fuel diesel electric)
|
[*****]
|
1.
|
DEFINITIONS 1
|
1.1
|
Defined Terms. 1
|
1.2
|
Number and Gender.
6
|
2.
|
ORGANIZATION
6
|
2.1
|
Formation.
6
|
2.2
|
Name.
6
|
2.3
|
Purposes.
6
|
2.4
|
Registered Office; Registered Agent.
6
|
2.5
|
Principal Office.
6
|
2.6
|
Term.
6
|
2.7
|
Limited Liability of the Members.
7
|
2.8
|
LLC Certificate.
7
|
2.9
|
Tax Status.
7
|
2.10
|
Transfer of Membership Interest; Pledge of Membership Interest.
7
|
2.11
|
Right of First Refusal.
8
|
3.
|
OWNERSHIP AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS
9
|
3.1
|
Initial Capital Contributions.
9
|
3.2
|
Unit Issuances
9
|
3.3
|
Issuances of Additional Membership Interests
9
|
3.4
|
Additional Capital Contributions.
10
|
3.5
|
Liability Limited to Capital Contributions.
10
|
3.6
|
No Interest on Capital Contributions.
10
|
3.7
|
Capital Accounts.
10
|
3.8
|
Allocations.
11
|
4.
|
MANAGEMENT
11
|
4.1
|
Management.
11
|
4.2
|
Resignation of Managing Member.
11
|
4.3
|
Officers.
11
|
4.4
|
Compensation of Managing Member and Officers.
13
|
4.5
|
Indemnification.
13
|
4.6
|
Liability of Indemnitees.
15
|
4.7
|
Standards of Conduct and Modification of Duties.
15
|
4.8
|
Actions Required by Members.
16
|
5.
|
DISTRIBUTIONS
17
|
5.1
|
Reserves and Distributions.
17
|
5.2
|
Priority of Distributions.
17
|
6.
|
SERIES A SPECIAL UNITS
18
|
6.1
|
Designation.
18
|
6.2
|
Distributions.
18
|
6.3
|
Redemption.
19
|
6.4
|
Liquidation Rights.
19
|
6.5
|
Voting Rights.
19
|
6.6
|
Rank.
19
|
6.7
|
Insurance Proceeds
20
|
7.
|
SERIES B SPECIAL UNITS
20
|
7.1
|
Designation.
20
|
7.2
|
Distributions.
20
|
7.3
|
Redemption.
21
|
7.4
|
Liquidation Rights.
21
|
7.5
|
Voting Rights.
21
|
7.6
|
Rank.
22
|
7.7
|
Insurance Proceeds
22
|
8.
|
BOOKS AND RECORDS; FISCAL YEAR; BANK ACCOUNTS; ACCOUNTING PRINCIPLES; INFORMATION
22
|
8.1
|
Books and Records.
22
|
8.2
|
Fiscal Year.
22
|
8.3
|
Bank Accounts.
22
|
8.4
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Accounting Principles.
23
|
8.5
|
Information.
23
|
9.
|
DISSOLUTION AND LIQUIDATION
23
|
10.
|
MISCELLANEOUS
24
|
10.1
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Complete Agreement.
24
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10.2
|
Governing Law.
24
|
10.3
|
Headings.
24
|
10.4
|
Severability.
24
|
10.5
|
No Third Party Beneficiary.
24
|
10.6
|
Amendment.
24
|
10.7
|
Arbitration.
25
|
1.
|
DEFINITIONS
|
1.1
|
Defined Terms.
|
1.2
|
Number and Gender.
|
2.
|
ORGANIZATION
|
2.1
|
Formation.
|
2.2
|
Name.
|
2.3
|
Purposes.
|
2.4
|
Registered Office; Registered Agent.
|
2.5
|
Principal Office.
|
2.6
|
Term.
|
2.7
|
Limited Liability of the Members.
|
2.8
|
LLC Certificate.
|
2.9
|
Tax Status.
|
2.10
|
Transfer of Membership Interest; Pledge of Membership Interest.
|
2.11
|
Right of First Refusal.
|
3.
|
OWNERSHIP AND CAPITAL CONTRIBUTIONS; CAPITAL ACCOUNTS
|
3.1
|
Initial Capital Contributions.
|
3.2
|
Unit Issuances
|
3.3
|
Issuances of Additional Membership Interests
|
3.4
|
Additional Capital Contributions.
|
3.5
|
Liability Limited to Capital Contributions.
|
3.6
|
No Interest on Capital Contributions.
|
3.7
|
Capital Accounts.
|
3.8
|
Allocations.
|
4.
|
MANAGEMENT
|
4.1
|
Management.
|
4.2
|
Resignation of Managing Member.
|
4.3
|
Officers.
|
4.4
|
Compensation of Managing Member and Officers.
|
4.5
|
Indemnification.
|
4.6
|
Liability of Indemnitees.
|
4.7
|
Standards of Conduct and Modification of Duties.
|
4.8
|
Actions Required by Members.
|
5.
|
DISTRIBUTIONS
|
5.1
|
Reserves and Distributions.
|
5.2
|
Priority of Distributions.
|
6.
|
SERIES A SPECIAL UNITS
|
6.1
|
Designation.
|
6.2
|
Distributions.
|
6.3
|
Redemption.
|
6.4
|
Liquidation Rights.
|
6.5
|
Voting Rights.
|
6.6
|
Rank.
|
6.7
|
Insurance Proceeds
|
7.
|
SERIES B SPECIAL UNITS
|
7.1
|
Designation.
|
7.2
|
Distributions.
|
7.3
|
Redemption.
|
7.4
|
Liquidation Rights.
|
7.5
|
Voting Rights.
|
7.6
|
Rank.
|
7.7
|
Insurance Proceeds
|
8.
|
BOOKS AND RECORDS; FISCAL YEAR; BANK ACCOUNTS; ACCOUNTING PRINCIPLES; INFORMATION
|
8.1
|
Books and Records.
|
8.2
|
Fiscal Year.
|
8.3
|
Bank Accounts.
|
8.4
|
Accounting Principles.
|
8.5
|
Information.
|
9.
|
DISSOLUTION AND LIQUIDATION
|
10.
|
MISCELLANEOUS
|
10.1
|
Complete Agreement.
|
10.2
|
Governing Law.
|
10.3
|
Headings.
|
10.4
|
Severability.
|
10.5
|
No Third Party Beneficiary.
|
10.6
|
Amendment.
|
10.7
|
Arbitration.
|
(b)
|
Off-Spec LNG;
|
(d)
|
Demurrage Event;
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(e)
|
LNG shortfalls pursuant to the Perenco Contract;
|
(f)
|
Retainage in excess of the Operations Retainage Limit or during the Commissioning Period, Retainage in excess of the Commissioning Retainage Limit); or
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(g)
|
terms or provisions in any other tolling agreement (or other agreement related thereto) then in effect that are similar to those set forth in (a) through (f) above relating to any similar claims or conditions.
|
(a)
|
Incremental Perenco Cash
less
Incremental Tax Expense for such Series A Distribution Period;
divided by
the total cash received by Hilli Corp, before deducting any Underperformance Costs, during such Distribution Period;
multiplied
by
|
|
|
|
|
(a)
|
Incremental Cash
less
Incremental Costs
less
Revenue Reduction for such Distribution Period;
divided by
the total cash received by Hilli Corp, before deducting any Underperformance Costs, during such Distribution Period;
multiplied
by
|
|
Revenue
|
Pro-Rata Share of Underperformance Costs
|
Net revenue
|
Total cash received excluding Incremental Perenco Revenues related to Series A Special Units and Revenues Less Expenses related to Series B Special Units (in all cases, before Underperformance Costs)
|
600
|
(100)
|
500
|
Incremental Perenco Revenues due to Series A Holders before Underperformance Costs
|
300
|
(50)
|
250
|
Revenue Less Expenses due to Series B Holders before Underperformance Costs
|
300
|
(50)
|
250
|
Total Cash Received Before Underperformance Costs
|
1200
|
|
|
Underperformance Costs
|
(200)
|
|
|
Total Cash Received After Underperformance Costs
|
1000
|
(200)
|
1000
|
Signature (Owners)
/s/ Yang Li
|
Signature (Charterers)
/s/ Brian Tienzo
|
1.
|
Definitions (See also Additional Clause 32)
|
2.
|
Charter Period (Also see Additional Clauses 37,39 and 40)
|
3.
|
Delivery (Also see Additional Clauses 32 and 35)
|
(a)
|
The Owners shall before and at the time of delivery exercise due diligence to make the Vessel seaworthy and in every respect ready in hull, machinery and equipment for service under this Charter.
|
(b)
|
The Vessel shall be properly documented on delivery in accordance with the laws of the flag State indicated in Box 5 and the requirements of the classification society stated in Box 10. The Vessel upon delivery shall have her survey cycles up to date and trading and class certificates valid for at least the number of months agreed in Box 12.
|
(c)
|
The delivery of the Vessel by the Owners
and the taking over of the Vessel by the charterers
shall constitute a full performance by the Owners of all the Owners’ obligations under this Clause 3, and thereafter the Charterers shall not be entitled to make or assert any claim against the Owners on account of any conditions, representations or warranties expressed or implied with respect to the Vessel
but the Owners shall be liable for the cost of but not the time for repairs or renewals occasioned by latent defects in the Vessel, her machinery or appurtenances, existing at the time of delivery under this Charter, provided such defects have manifested themselves within twelve (12) months after delivery unless otherwise provided in Box 32.
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4.
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Time for Delivery (See Additional Clause 32)
|
5.
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Cancelling
(not applicable when Part III applies, as indicated in Box 37)
|
(a)
|
Should the Vessel not be delivered latest by the cancelling date indicated in Box 15, the Charterers shall have the option of cancelling this Charter by giving the Owners notice of cancellation within thirty-six (36) running hours after the cancelling date stated in Box 15, failing which this Charter shall remain in full force and effect.
|
(b)
|
If it appears that the Vessel will be delayed beyond the cancelling, the Owners may, as soon as they
are in a position to state with reasonable certainty the day on which the Vessel should be ready, give notice thereof to the Charterers asking whether they will exercise their option of cancelling, and the option must then be declared within one hundred and sixty eight (168) running hours of the receipt by the Charterers of such notice or within thirty six (36) running hours after the cancelling date, whichever is the earlier. If the Charterers do not then exercise their option of cancelling, the seventh day after the readiness date stated in the Owners’ notice shall be substituted for the cancelling date indicated in Box 15 for the purpose of this Clause 5.
|
(c)
|
Cancellation under this Clause 5 shall be without prejudice to any claim the Charterers may otherwise have on the Owners under this Charter.
|
6.
|
Trading Restrictions
|
7.
|
Surveys on Delivery and Redelivery
|
8.
|
Inspection (see Additional Clause 49)
|
(a)
|
to ascertain the condition of the Vessel and satisfy themselves that the Vessel is being properly repaired and maintained. The costs and fees for such inspection or survey shall be paid by the Charterer Owners unless the Vessel is found to require repairs or maintenance in order to achieve the condition so provided;
|
(b)
|
in dry-dock if the Charterers have not dry-docked her in accordance with Clause 10(g). The costs and fees for such inspection or survey shall be paid by the Charterers; and
|
(c)
|
for any other commercial reason they consider necessary (provided it does not unduly interfere with the commercial operation of the Vessel). The costs and fees for such inspection and survey shall be paid by the Charterer Owners.
|
9.
|
Inventories, Oil and Stores (Also see Additional Clauses)
|
10.
|
Maintenance and Operation
|
(a)
|
(i)
Maintenance and Repairs
|
(b)
|
Operation of the Vessel
|
(c)
|
The Charterers shall keep the Owners and the mortgagee(s) advised of the intended employment, planned dry-docking and major repairs of the Vessel, as reasonably required.
|
(d)
|
Flag and Name of Vessel
|
(e)
|
Changes to the Vessel
(
See also Additional Clause 51
)
|
(f)
|
Use of the Vessel's Outfit, Equipment and Appliances
|
(g)
|
Periodical Dry-Docking
|
11.
|
Hire (see also Additional Clauses 39 and 40)
|
(a)
|
The Charterers shall pay (or be deemed to have paid, where applicable) hire due to the Owners punctually in accordance with the terms of this Charter in respect of which time shall be of the essence.
|
(b)
|
The Charterers shall pay to the Owners for the hire of the Vessel a lump sum in the amount indicated in Box 22 which shall be payable not later than every thirty (30) running days in advance, the first lump sum being payable on the date and hour of the Vessel's delivery to the Charterers. Hire shall be paid continuously throughout the Charter Period.
|
(c)
|
Payment of hire shall be made in cash without discount in the currency and in the manner indicated in Box 25 and at the place mentioned in Box 26.
|
(d)
|
Final payment of hire, if for a period of less than thirty (30) running days, shall be calculated proportionally according to the number of days and hours remaining before redelivery and advance payment to be effected accordingly.
|
(e)
|
Should the Vessel be lost or missing, hire shall cease from the date and time when she was lost or last heard of. The date upon which the Vessel is to be treated as lost or missing shall be ten (10) days after the Vessel was last reported or when the Vessel is posted as missing by Lloyd's, whichever occurs first. Any hire paid in advance to be adjusted accordingly.
|
(f)
|
Any delay in payment of hire shall entitle the Owners to interest at the rate per annum as agreed in Box 24. If Box 24 has not been filled in, the three months interbank offered rate in London (LIBOR or its successor) for the currency stated in Box 25, as quoted by the British Bankers' Association (BBA) on the date when the hire fell due, increased by 2 per cent., shall apply.
|
(g)
|
Payment of interest due under sub-clause 11(f) shall be made within seven (7) running days of the date of the Owners' invoice specifying the amount payable or, in the absence of an invoice, at the time of the next hire payment date.
|
12.
|
Mortgage (See also Additional Clause 43)
|
*(a)
|
The Owners warrant that they have not effected any mortgage(s) of the Vessel and that they shall not effect any mortgage(s) without the prior consent of the Charterers, which shall not be unreasonably withheld.
|
*(b)
|
The Vessel chartered under this Charter is financed by a mortgage according to the Financial Instrument. The Charterers undertake to comply, and provide such information and documents to enable the Owners to comply, with all such instructions or directions in regard to the employment. insurances, operation, repairs and maintenance of the Vessel as laid down in the Financial Instrument or as may be directed from time to time during the currency of the Charter by the mortgagee(s) in conformity with the Financial Instrument. The Charterers confirm that, for this purpose, they have acquainted themselves with all relevant terms, conditions and provisions of the Financial instrument and agree to acknowledge this in writing in any form that may be required by the mortgagee(s). The Owners warrant that they have not effected any mortgage(s) other than stated in Box 28 and that they shall not agree to any amendment of the mortgage(s) referred to in Box 28 or effect any other mortgage(s) without the prior consent of the Charterers, which shall not be unreasonably withheld.
|
13.
|
Insurance and Repairs (see also Additional Clause 41)
|
*(a)
|
During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against hull and machinery, war and Protection and Indemnity risks (and any risks against which it is compulsory to insure for the operation of the Vessel, including maintaining financial security in accordance with sub-clause 10(a)(iii)) in such form as the Owners shall in writing approve, which approval shall not be un-reasonably withheld. Such insurances shall be arranged by the Charterers to protect the interests of both the Owners and the Charterers and the mortgagee(s) (if any), and the Charterers shall be at liberty to protect under such insurances the interests of any managers they may appoint. Insurance policies shall cover the Owners and the Charterers according to their respective interests. Subject to the provisions of the Financial Instrument, if any, and the approval of the Owners and the insurers, the Charterers shall effect all insured repairs and shall undertake settlement and reimbursement from the insurers of all costs in connection with such repairs as well as insured charges, expenses and liabilities to the extent of coverage under the insurances herein provided for.
|
*(b)
|
If the conditions of the above insurances permit additional insurance to be placed by the parties, such cover shall be limited to the amount for each party set out in Box 30 and Box 31, respectively. The Owners or the Charterers as the case may be shall immediately furnish the other party with particulars of any additional insurance effected, including copies of any cover notes or policies and the written consent of the insurers of any such required insurance in any case where the consent of such insurers is necessary.
|
*(c)
|
The Charterers shall upon the request of the Owners, provide information and promptly execute such documents as may be required to enable the Owners to comply with the insurance provisions of the Financial Instrument.
|
*(d)
|
Subject to the provisions of the Financial lnstrument, if any, should the Vessel become an actual, constructive, compromised or agreed total loss under the insurances required under sub-clause 13(a), all insurance payments for such loss shall be paid to the Owners who shall distribute the moneys between the Owners and Charterers according to their respective interests. The Charterers undertake to notify the Owners and the mortgagee(s), if any, of any occurrences in consequence of which the Vessel is likely to become a total loss as defined in this Clause.
|
*(e)
|
The Owners shall upon the request of the Charterers, promptly execute such documents as may be required to enable the Charterers to abandon the Vessel to insurers and claim a constructive total loss.
|
*(f)
|
For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-clause 13(a), the value of the Vessel is the sum indicated in Box 29.
|
14.
|
Insurance, Repairs and Classification (See Additional Clauses)
|
*(a)
|
During the Charter Period the Vessel shall be kept insured by the Owners at their expense against hull and machinery and war risks under the form of policy or policies attached hereto. The Owners and/or insurers shall not have any right of recovery or subrogation against the Charterers on account of loss of or any damage to the Vessel or her machinery or appurtenances covered by such insurance, or on account of payments made to discharge claims against or liabilities of the Vessel or the Owners covered by such insurance. Insurance policies shall cover the Owners and the Charterers according to their respective interests.
|
*(b)
|
During the Charter Period the Vessel shall be kept insured by the Charterers at their expense against Protection and Indemnity risks (and any risks against which it is compulsory to insure for the operation of the Vessel, including maintaining financial security in accordance with sub-clause 10(a)(iii)) in such form as the Owners shall in writing approve which approval shall not be unreasonably withheld.
|
*(c)
|
In the event that any act or negligence of the Charterers shall vitiate any of the insurance herein provided, the Charterers shall pay to the Owners all losses and indemnify the Owners against all claims and demands which would otherwise have been covered by such insurance.
|
*(d)
|
The Charterers shall, subject to the approval of the Owners or Owners' Underwriters, effect all insured repairs, and the Charterers shall undertake settlement of all miscellaneous expenses in connection with such repairs as well as all insured charges, expenses and liabilities, to the extent of coverage under the insurances provided for under the provisions of sub-clause 14(a). The Charterers to be secured reimbursement through the Owners' Underwriters for such expenditures upon presentation of accounts.
|
*(e)
|
The Charterers to remain responsible for and to effect repairs and settlement of costs and expenses incurred thereby in respect of all other repairs not covered by the insurances and/or not exceeding any possible franchise(s) or deductibles provided for in the insurances.
|
*(f)
|
All time used for repairs under the provisions of sub-clauses 14(d) and 14(e) and for repairs of latent defects according to Clause 3 above, including any deviation, shall be for the Charterers' account and shall form part of the Charter Period.
|
*(g)
|
If the conditions of the above insurances permit additional insurance to be placed by the parties such cover shall be limited to the amount for each party set out in Box 30 and Box 31, respectively. The Owners or the Charterers as the case may be shall immediately furnish the other party with particulars of any additional insurance effected, including copies of any cover notes or policies and the written consent of the insurers of any such required insurance in any case where the consent of such insurers is necessary.
|
*(h)
|
Should the Vessel become an actual, constructive, compromised or agreed total loss under the insurances required under sub-clause 14(a), all insurance payments for such loss shall be paid to the Owners, who shall distribute the moneys between themselves and the Charterers according to their respective interests.
|
*(i)
|
If the Vessel becomes an actual, constructive, compromised or agreed total loss under the insurances arranged by the Owners in accordance with sub-clause 14(a), this Charter shall terminate as of the date of such loss.
|
*(j)
|
The Charterers shall upon the request of the Owners, promptly execute such documents as may be required to enable the Owners to abandon the Vessel to the insurers and claim a constructive total loss.
|
*(k)
|
For the purpose of insurance coverage against hull and machinery and war risks under the provisions of sub-clause 14(a), the value of the Vessel is the sum indicated in Box 29.
|
*(l)
|
Notwithstanding anything contained in sub-clause 10(a), it is agreed that under the provisions of Clause 14, if applicable, the Owners shall keep the Vessel's Class fully up to date with the Classification Society indicated in Box 10 and maintain all other necessary certificates in force at all times.
|
15.
|
Redelivery (See also Additional Clause 51)
|
16.
|
Non‑Lien
|
17.
|
Indemnity (See Also Additional Clause 52)
|
*(a)
|
The Charterers shall indemnify the Owners against any loss, damage or expense incurred by the Owners arising out of or in relation to the operation of the Vessel by the Charterers, and against any lien of whatsoever nature arising out of an event occurring during the Charter Period. If the Vessel be arrested or otherwise detained by reason of claims or liens arising out of her operation hereunder by the Charterers, the Charterers shall at their own expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including the provision of bail.
|
*(b)
|
If the Vessel be arrested or otherwise detained by reason of a claim or claims against the Owners, the Owners shall at their own expense take all reasonable steps to secure that within a reasonable time the Vessel is released, including the provision of bail.
|
18.
|
Lien
|
19.
|
Salvage
|
20.
|
Wreck Removal
|
21.
|
General Average
|
22.
|
Assignment, Sub‑Charter and sale
|
*(a)
|
Subject to the Additional Clauses, the
The
Charterers shall not assign this Charter nor sub‑charter the Vessel on a bareboat basis except with the prior consent in writing of the Owners
, which shall not be unreasonably withheld,
and subject to such terms and conditions as the Owners shall approve.
|
*(b)
|
The Owners shall not sell the Vessel during the currency of this Charter except with the prior written consent of the Charterers, which shall not be unreasonably withheld, and subject to the buyer accepting an assignment of this Charter.
|
23.
|
Contracts of Carriage
|
*(a)
|
The Charterers are to procure that all documents issued during the Charter Period evidencing the terms and conditions agreed in respect of carriage of goods shall contain a paramount clause incorporating any legislation relating to carrier's liability for cargo compulsorily applicable in the trade; if no such legislation exists, the documents shall incorporate the Hague‑Visby Rules. The documents shall also contain the New Jason Clause and the Both‑to‑Blame Collision Clause
.
|
*(b)
|
The Charterers are to procure that all passenger tickets issued during the Charter Period for the carriage of passengers and their luggage under this Charter shall contain a paramount clause incorporating any legislation relating to carrier’s liability for passengers and their luggage compulsorily applicable in the trade; if no such legislation exists, the passenger tickets shall incorporate the Athens Convention Relating to the Carriage of Passengers and their Luggage by Sea, 1974, and any protocol thereto.
|
24.
|
Bank Guarantee
|
25.
|
Requisition/Acquisition
|
*(a)
|
In the event of the Requisition for Hire of the Vessel by any governmental or other competent authority (hereinafter referred to as "Requisition for Hire") irrespective of the date during the Charter Period when "Requisition for Hire" may occur and irrespective of the length thereof and whether or not it be for an indefinite or a limited period of time, and irrespective of whether it may or will remain in force for the remainder of the Charter Period, this Charter shall not be deemed thereby or thereupon to be frustrated or otherwise terminated and the Charterers shall continue to pay the stipulated hire in the manner provided by this Charter until the time when the Charter would have terminated pursuant to any of the provisions hereof always provided however that in the event of "Requisition for Hire" any Requisition Hire or compensation received or receivable by the Owners shall be payable to the Charterers during the remainder of the Charter Period or the period of the "Requisition for Hire" whichever be the shorter.
|
*(b)
|
In the event of the Owners being deprived of their ownership in the Vessel by any Compulsory Acquisition of the Vessel or requisition for title by any governmental or other competent authority (hereinafter referred to as “Compulsory Acquisition”), then, irrespective of the date during the Charter Period when “Compulsory Acquisition” may occur, this Charter shall be deemed terminated as of the date of such “Compulsory Acquisition”. In such event Charter Hire to be considered as earned and to be paid up to the date and time of such “Compulsory Acquisition”.
|
26.
|
War
|
*(a)
|
For the purpose of this Clause, the words 'War Risks" shall include any war (whether actual or threatened), act of war, civil war, hostilities, revolution, rebellion, civil commotion, warlike operations, the laying of mines (whether actual or reported), acts of piracy, acts of terrorists, acts of hostility or malicious damage, blockades (whether imposed against all vessels or imposed selectively against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever), by any person, body, terrorist or political group, or the Government of any state whatsoever, which may be dangerous or are likely to be or to become dangerous to the Vessel, her cargo, crew or other persons on board the Vessel.
|
*(b)
|
The Vessel, unless the written consent of the Owners be first obtained, shall not continue to or go through any port, place, area or zone (whether of land or sea), or any waterway or canal, where it reasonably appears that the Vessel, her cargo, crew or other persons on board the Vessel, in the reasonable judgement of the Owners, may be, or are likely to be, exposed to War Risks. Should the Vessel be within any such place as aforesaid, which only becomes dangerous, or is likely to be or to become dangerous, after her entry into it, the Owners shall have the right to require the Vessel to leave such area.
|
*(c)
|
The Vessel shall not load contraband cargo, or to pass through any blockade, whether such blockade be imposed on all vessels, or is imposed selectively in any way whatsoever against vessels of certain flags or ownership, or against certain cargoes or crews or otherwise howsoever, or to proceed to an area where she shall be subject, or is likely to be subject to a belligerent's right of search and/or confiscation.
|
*(d)
|
If the insurers of the war risks insurance, when Clause 14 is applicable, should require payment of premiums and/or calls because, pursuant to the Charterers' orders, the Vessel is within, or is due to enter and remain within, any area or areas which are specified by such insurers as being subject to additional premiums because of War Risks, then such premiums and/or calls shall be reimbursed by the Charterers to the Owners at the same time as the next payment of hire is due.
|
*(e)
|
The Charterers shall have the liberty:
|
(i)
|
to comply with all orders, directions, recommendations or advice as to departure, arrival, routes, sailing in convoy, ports of call, stoppages, destinations, discharge of cargo, delivery, or in any other way whatsoever, which are given by the Government of the Nation under whose flag the Vessel sails, or any other Government, body or group whatsoever acting with the power to compel compliance with their orders or directions;
|
(ii)
|
to comply with the orders, directions or recommendations of any war risks underwriters who have the authority to give the same under the terms of the war risks insurance;
|
(iii)
|
to comply with the terms of any resolution of the Security Council of the United Nations, any directives of the European Community, the effective orders of any other Supranational body which has the right to issue and give the same, and with national laws aimed at enforcing the same to which the Owners are subject, and to obey the orders and directions of those who are charged with their enforcement.
|
*(f)
|
In the event of outbreak of war (whether there be a declaration of war or not)
(i) between any two or more of the following countries: the United States of America; Russia; the United Kingdom; France; and the People's Republic of China, (ii) between any two or more of the countries stated in Box 36, both the Owners and the Charterers shall have the right to cancel this Charter, whereupon the Charterers shall redeliver the Vessel to the Owners in accordance with Clause 15, if the Vessel has cargo on board after discharge thereof at destination, or if debarred under this Clause from reaching or entering it at a near, open and safe port as directed by the Owners, or if the Vessel has no cargo on board, at the port at which the Vessel then is or if at sea at a near, open and safe port as directed by the Owners. In all cases
hire shall continue to be paid in accordance with Clause 11 and
except as aforesaid
all other provisions of this Charter shall continue to apply
until redelivery
.
|
27.
|
Commission
|
28.
|
Termination (See Additional Clauses 44 and 45)
|
*(a)
|
Charterers' Default
|
(i)
|
the Charterers fail to pay hire in accordance with Clause 11. However, where there is a failure to make punctual payment of hire due to oversight, negligence, errors or omissions on the part of the Charterers or their bankers, the Owners shall give the Charterers written notice of the number of clear banking days stated in Box 34 (as recognised at the agreed place of payment) in which to rectify the failure, and when so rectified within such number of days following the Owners' notice, the payment shall stand as regular and punctual. Failure by the Charterers to pay hire within the number of days stated in Box 34 of their receiving the Owners' notice as provided herein, shall entitle the Owners to withdraw the Vessel from the service of the Charterers and terminate the Charter without further notice;
|
(ii)
|
the Charterers fail to comply with the requirements of:
|
(1)
|
Clause 6 (Trading Restrictions)
|
(2)
|
Clause 13(a) (Insurance and Repairs)
|
(iii)
|
the Charterers fail to rectify any failure to comply with the requirements of sub-clause 10(a)(i) (Maintenance and Repairs) as soon as practically possible after the Owners have requested them in writing so to do and in any event so that the Vessel's insurance cover is not prejudiced.
|
*(b)
|
Owners' Default
|
*(c)
|
Loss of Vessel
|
(d)
|
Either party shall be entitled to terminate this Charter with immediate effect by written notice to the other party in the event of an order being made or resolution passed for the winding up, dissolution, liquidation or bankruptcy of the other party (otherwise than for the purpose of reconstruction or amalgamation) or if a receiver is appointed, or if it suspends payment, ceases to carry on business or makes any special arrangement or composition with its creditors.
|
(e)
|
The termination of this Charter shall be without prejudice to all rights accrued due between the parties prior to the date of termination and to any claim that either party might have.
|
29.
|
Repossession (See Additional Clause 45 and 51)
|
30.
|
Dispute Resolution (See Additional Clause 56)
|
*(a)
|
This Contract shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Contract shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause. The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced. The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within 14 calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the 14 days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the 14 days specified. the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both parties as if he had been appointed by agreement. Nothing herein shall prevent the parties agreeing in writing to vary these provisions to provide for the appointment of a sole arbitrator. In cases where neither the claim nor any counterclaim exceeds the sum of US$50,000 (or such other sum as the parties may agree) the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.
|
*(b)
|
This Contract shall be governed by and construed in accordance with Title 9 of the United States Code and the Maritime Law of the United States and any dispute arising out of or in connection with this Contract shall be referred to three persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen; their decision or that of any two of them shall be final, and for the purposes of enforcing any award, judgement may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators, Inc.
|
*(c)
|
This Contract shall be governed by and construed in accordance with the laws of the place mutually agreed by the parties and any dispute arising out of or in connection with this Contract shall be referred to arbitration at a mutually agreed place, subject to the procedures applicable there.
|
*(d)
|
Notwithstanding (a), (b) or (c) above
Additional Clause 54, the parties may agree at any time to refer to mediation any difference and/or dispute arising out of or in connection with this Contract if the monetary value of the subject matter of such difference and/or dispute does not exceed one hundred and fifty thousand US Dollars (US$150,000) or the equivalent in any other currency.
|
(i)
|
Either Party may at any time and from time to time elect to refer the dispute or part of the dispute to mediation by service on the other party of a written notice (the "Mediation Notice") calling on the other party to agree to mediation.
|
(ii)
|
The other party shall thereupon within 14 calendar days of receipt of the Mediation Notice confirm that they agree to mediation, in which case the parties shall thereafter agree a mediator within a further 14 calendar days, failing which on the application of either party a mediator will be appointed promptly by the Arbitration Tribunal ("the Tribunal") or such person as the Tribunal may designate for that purpose. The mediation shall be conducted in such place and in accordance with such procedure and on such terms as the parties may agree or, in the event of disagreement, as may be set by the mediator.
|
(iii)
|
If the other party does not agree to mediate, that fact may be brought to the attention of the Tribunal and may be taken into account by the Tribunal when allocating the costs of the arbitration as between the parties.
|
(iv)
|
The mediation shall not affect the right of either party to seek such relief or take such steps as it considers necessary to protect its interest.
|
(v)
|
Either party may advise the Tribunal that they have agreed to mediation. The arbitration procedure shall continue during the conduct of the mediation but the Tribunal may take the mediation timetable into account when setting the timetable for steps in the arbitration.
|
(vi)
|
Unless otherwise agreed or specified in the mediation terms, each party shall bear its own costs incurred in the mediation and the parties shall share equally the mediator’s costs and expenses.
|
(vii)
|
The mediation process shall be without prejudice and confidential and no information or documents disclosed during it shall be revealed to the Tribunal except to the extent that they are disclosable under the law and procedure governing the arbitration.
|
*(e)
|
If Box 35 in Part I is not appropriately filled in, sub-clause 30(a) of this Clause shall apply. Sub-clause 30(d) shall apply in all cases.
|
31.
|
Notices (See Additional Clause 53)
|
*(a)
|
Any notice to be given by either party to the other party shall be in writing and may be sent by fax, telex, registered or recorded mail or by personal service.
|
1.
|
Specifications and EPC Contract
|
(a)
|
The Vessel shall be converted in accordance with the Building Contract (hereafter called “the EPC Contract”) as annexed to this Charter, made between the Builders and the Charterers and in accordance with the specifications and plans annexed thereto, such EPC Contract, specifications and plans having been counter-signed as approved by the Owners.
|
(b)
|
No change shall be made in the EPC Contract or in the specifications or plans of the Vessel as approved by the Owners as aforesaid, without the Owners’ consent, other than Permitted Amendments (as defined in the Common Terms Agreement made between the Owners, the Charterers, and Golar LNG Limited and dated on or about the date hereof).
|
(c)
|
The Charterers shall have the right to send their representative to the Builders’ Yard to inspect the Vessel during the course of her construction to satisfy themselves that construction is in accordance with such approved specifications and plans as referred to under sub-clause (a) of this Clause.
|
(d)
|
The Vessel shall be built in accordance with the Conversion Contract and shall be of the description set out therein. Subject to the provisions of sub-clause 2(c)(ii) hereunder, the Charterers shall be bound to accept the Vessel from the Owners, completed and constructed in accordance with the Building Contract, on the date of delivery by the Builders.
The Charterers undertake that having accepted the Vessel they will not thereafter raise any claims against the Owners in respect of the Vessel’s performance or specification or defects, if any.
Nevertheless, in respect of any repairs, replacements or defects which appear within the first 12 months from delivery by the Builders, the Owners shall endeavour to compel the Builders to repair, replace or remedy any defects or to recover from the Builders any expenditure incurred in carrying out such repairs, replacements or remedies. However, the Owners’ liability to the Charterers shall be limited to the extent the Owners have a valid claim against the Builders under the guarantee clause of the Building Contract (a copy whereof has been supplied to the Charterers). The Charterer shall be bound to accept such sums as the Owners are reasonably able to recover under this Clause and shall make no further claim on the Owners for the difference between the amount(s) so recovered and the actual expenditure on repairs, replacement or remedying defects or for any loss of time incurred.
|
2.
|
Time and Place of Delivery
|
(a)
|
Subject to the Vessel having completed her acceptance trials including trials of cargo equipment in accordance with the Building Contract and specifications to the satisfaction of the Charterers, the Owners shall give and the Charterers shall take delivery of the Vessel afloat when ready for delivery and properly documented at the Builders’ Yard or some other safe and readily accessible dock, wharf or place as may be agreed between the parties hereto and the Builders. Under the Building Contract the Builders have estimated that the Vessel will be ready for delivery to the Owners as therein provided by the delivery date for the purpose of this Charter shall be the date when the Vessel is in fact ready for delivery by the Builders after completion of trials whether that be before or after as indicated in the Building Contract. The Charterers shall not be entitled to refuse acceptance of delivery of the Vessel and upon and after such acceptance subject to Clause 1(b), the Charterers shall not be entitled to make any claim against the Owners in respect of any conditions, representations or warranties, whether express or implied as to the seaworthiness of the Vessel or in respect of delay in delivery.
|
(b)
|
If for any reason other than a default by the Owners under the Building Contract, the Builders become entitled under that Contract not to deliver the Vessel to the Owners, the Owner shall upon giving to the Charterers written notice of Builders becoming so entitled, be excused from giving delivery of the Vessel to the Charterers and upon receipt of such notice by the Charterers this Charter shall cease to have effect.
|
(c)
|
If for any reason the Owners become entitled under the Building Contract to reject the Vessel the Owners shall, before exercising such right of rejection, consult the Charterers and thereupon
|
(i)
|
If the Charterers do not wish to take delivery of the Vessel they shall inform the Owners within seven (7) running days by notice in writing and upon receipt by the Owners of such notice this Charter shall cease to have effect; or
|
(ii)
|
If the Charterers wish to take delivery of the Vessel they may by notice in writing within seven (7) running days require the Owners to negotiate with the Builders as to the terms on which delivery should be taken and/or refrain from exercising their right to rejection and upon receipt of such notice the Owners shall commence such negotiations and/or take delivery of the Vessel from the Builders and deliver her to the Charterers.
|
(iii)
|
In no circumstances shall the Charterers be entitled to reject the Vessel unless the Owners are able to reject the Vessel from the Builders;
|
(iv)
|
if this Charter terminates under sub-clause (b) or (c) of this Clause, the Owners shall thereafter not be liable to the Charterers for any claim under or arising out of this Charter or its termination.
|
(d)
|
Any liquidated damages for delay in delivery under the Building Contract and any costs incurred in pursuing a claim therefor shall accrue to the account of the party stated in Box 41(c) or if not filled in shall be shared equally between the parties.
|
3.
|
Guarantee Works
|
4.
|
Name of Vessel
|
5.
|
Survey on Redelivery
|
1.
|
Definitions
|
2.
|
Mortgage
|
3.
|
Termination of Charter by Default
|
Clause 32.
|
DELIVERY OF THE VESSEL
|
32.1
|
Upon the Notice of Actual Readiness being served pursuant to clause 6.2 of the MOA, the Vessel shall be delivered by the Bareboat Charterer (as seller) to the Owner (as buyer) under the MOA, and provided that the conditions precedent set out in Clause 60.2 have been fully satisfied (unless waived by the Owner), the Vessel shall be deemed to have been simultaneously delivered to and accepted (without reservation) by the Bareboat Charterer under this Bareboat Charter, regardless whether the Bareboat Charterer is able to take the possession and/or use of the Vessel. The Bareboat Charterer shall not be entitled for whatever reason to refuse to accept Delivery of the Vessel under this Bareboat Charter.
|
32.2
|
The Owner shall have no responsibility for any loss and/or damage incurred by the Bareboat Charterer as a result of any delay in delivery of the Vessel to the Bareboat Charterer for whatsoever reason.
|
32.3
|
Without prejudice to the provisions of Clauses 32.1 and 32.2, the Owner and the Bareboat Charterer shall on the Delivery Date sign the Protocol of Delivery and Acceptance in the form as attached in Appendix I hereof.
|
32.4
|
Unless the conditions set out in Clause 4.2 of the MOA are satisfied, the Buyer shall not be obliged to take delivery of the Vessel under the MOA and is entitled to cancel the MOA. If the Owner elects not to cancel the MOA but to choose instead to waive any condition in Clause 4.2 of the MOA and take delivery of the Vessel, the Buyer shall not be liable to the Bareboat Charterer for any losses and/or damages incurred by the Bareboat Charterer occasioned by any delay in delivery to the Bareboat Charterer under the Bareboat Charter.
|
CLAUSE 33.
|
LIMITATION ON OWNER’S LIABILITY
|
33.1
|
The Bareboat Charterer hereby expressly acknowledges and agrees that:
|
(a)
|
the Owner makes no condition, term, representation or warranty, express or implied (and whether statutory, contractual or otherwise) as to the Owner’s title to the Vessel or as to the seaworthiness, merchantability, classification, condition, design, quality, operation, performance, capacity or fitness for use or as to the eligibility of the Vessel for any particular trade or operation or any other condition, term, representation or warranty whatsoever, express or implied, with respect to the Vessel. Acceptance of delivery by the Bareboat Charterer or (as the case may be) deemed delivery of the Vessel to the Bareboat Charterer under this Bareboat Charter shall be final and conclusive proof evidencing that, for the purposes of the obligations and liabilities of the Owner hereunder or in connection herewith, the Vessel is on the Delivery Date seaworthy and satisfies all provisions, requirements and specifications of this Bareboat Charter, and that the Vessel is in good working order and repair and without defect or inherent vice whether or not discoverable by the Bareboat Charterer;
|
(b)
|
The Bareboat Charterer hereby waives any and all of its rights in respect of any condition, term, representation or warranty whether express or implied (statutory or otherwise) on the part of the Owner and all of its claims against the Owner howsoever and whatsoever that may arise in respect of the Vessel or the Owner's title thereto, or all of its rights therein or arising out of the operation of the Vessel or the chartering thereof under this Bareboat Charter (including in respect of the seaworthiness or otherwise of the Vessel) unless this is caused by the gross negligence or wilful misconduct of the Owner;
|
(c)
|
The Bareboat Charterer agrees that the Owner shall be under no liability to supply any replacement ship or any piece or part thereof during any period when the Vessel is unusable and shall not be liable to the Bareboat Charterer or any other Group Member or any other party to the Transaction Documents as a result of the Vessel being unusable;
|
(d)
|
the Bareboat Charterer confirms that it has not, in entering into this Bareboat Charter, relied on any condition, warranty or representation by the Owner or any person on the Owner’s behalf (whether authorised or not), express or implied, whether arising by law or otherwise in relation to the Vessel, including, without limitation, conditions, warranties or representations as to the description, seaworthiness, suitability, quality, merchantability, fitness for any purpose, value, state, condition, appearance, safety, durability, design or operation of any kind or nature of the Vessel, and the benefit of any such condition, warranty or representation by the Owner is hereby irrevocably and unconditionally waived by the Bareboat Charterer. To the extent permissible under applicable law, the Bareboat Charterer also waives any rights which it may have in tort in respect of any of the matters referred to above and irrevocably agrees that the Owner shall have no greater liability in tort in respect of any such matter than it would have in contract after taking account of all the foregoing exclusions. No third party making any representation or warranty relating to the Vessel or any part of the Vessel is
|
(e)
|
In particular, and without prejudice to the generality of the foregoing, the Owner shall be under no liability whatsoever and howsoever arising in respect of the sickness, injury, death, loss, damage or delay of or to or in connection with any vessel (including the Vessel) or any person or property whatsoever, whether on board the Vessel or elsewhere, irrespective of whether such injury, death, loss, damage or delay shall arise from the seaworthiness, merchantability, classification, condition, design, quality, operation, performance, capacity or fitness for use or as to the eligibility of the Vessel other than if such injury or death arises as a result of the gross negligence or wilful misconduct of the Owner, and the Bareboat Charterer agrees to indemnify, defend and hold the Owner harmless from any of above liabilities (other than injury or death if they arise from the gross negligence or wilful misconduct of the Owner); and
|
(f)
|
The Owner (including any of its shareholders, Affiliates, consultants, agents and their respective shareholders, directors, officers, employees, or representatives) shall not under any circumstances be liable to the Bareboat Charterer’s (including any of its assigns, novatees, successors, shareholders, Affiliates, consultants, agents, Managers, clients and their respective shareholders, directors, officers, employees, or representatives) for any indirect, special, exemplary, punitive or consequential losses and damages, arising from, or relating to or in connection with the Bareboat Charterer (including but not limited to loss of profit, loss of use, loss of production, loss of revenue, loss of time, loss of contracts or otherwise, in all cases where direct or indirect) irrespective of cause (in contract, at law, in tort or otherwise) unless otherwise provided for in Clause 33.1(b) above in case of injury or death as a result of the gross negligence or wilful misconduct of the Owner.
|
(g)
|
If any defects, repairs or replacements are required for the Vessel within any applicable period of warranty pursuant to the relevant Conversion Contract, the Owner agrees to use reasonable efforts to assist the Bareboat Charterer in requiring the Builder to repair, replace or remedy any defects which are subject of the warranty or recover from the Builder any expenditure incurred in carrying out such repairs, remedies or replacements by the Bareboat Charterer. The cost of any assistance rendered by the Owner shall be for the Bareboat Charterer.
|
CLAUSE 34.
|
MANAGEMENT AND CREW
|
(a)
|
The Managers or other internationally recognised and reputable manager(s) shall be appointed by the Bareboat Charterer to provide and oversee the technical and/or commercial management of the Vessel in accordance with the scope of each relevant Management Agreement which must be in form and substance approved by the Owner. The Bareboat Charterer reserves the right/flexibility to change the Manager, subject to Owner's prior written consent (which shall not be unreasonably withheld or delayed). Without prejudice to the foregoing, the Bareboat Charterer is fully responsible for the technical management of the Vessel (including the arrangements regarding the crew and insurance) at the Bareboat Charterer’s own risk and expense.
|
(b)
|
The Bareboat Charterer shall ensure that properly qualified officers and ratings are engaged to man the Vessel throughout the Charter Period in accordance with the requirements of the Flag State and Insurances.
|
(c)
|
In the event that following notification by the Owner, the Bareboat Charterer fails to comply or remedy the non-compliance with any provisions of Clause 34(a) within a period of five (5) days or of Clause 34(b) within a period of fourteen (14)
|
CLAUSE 35.
|
FLAG AND CLASS
|
CLAUSE 36.
|
IMPROVEMENT, ADDITIONS AND CHANGES
|
36.1
|
Subject to Clause 10(a)(ii) in Part II of this Bareboat Charter and the Owner’s consent, the Bareboat Charterer has the right to fit additional equipment and to make improvements and additions at its expense and risk provided that if such additional equipment, improvements and additions cannot be removed from the Vessel without causing any damage to the Vessel, such damage will be made good by the Bareboat Charterer at its time and expense, and always subject to the satisfaction of the Classification Society’s surveyor. Title to such additional equipment, improvement and addition not removed prior to redelivery of the Vessel shall vest in the Owner on such re-delivery, without requirement for compensation.
|
36.2
|
Subject to Clause 10(a)(ii) in Part II of this Bareboat Charter, the Bareboat Charterer shall, subject to obtaining the Classification Society’s surveyor’s consent, have the right to make structural improvements, additions and changes to the Vessel at the Bareboat Charterer's time, expense and risk provided that the same will not diminish the Market Value, marketability or the title of the Vessel during or at the end of the Charter Period.
|
36.3
|
Notwithstanding the above, the Bareboat Charterer shall defend, indemnify and hold harmless the Owner against any proven and, if applicable, documented loss, damage or expense incurred by the Owner arising out of or in relation to (i) any additional equipment, improvements and/or additions; and/or (ii) any structural improvements, additions and/or changes, fitted or made to the Vessel.
|
36.4
|
During the Charter Period, the Bareboat Charterer shall have the liberty to:
|
(a)
|
paint the Vessel in such colours as it may determine;
|
(b)
|
change the name of the Vessel;
|
CLAUSE 37.
|
CHARTER PERIOD
|
37.1
|
The Charter Period shall be one hundred and twenty (120) calendar months with effect from the Delivery Date unless otherwise terminated in accordance with the terms of this Bareboat Charter.
|
CLAUSE 38.
|
UPFRONT AMOUNT
|
38.1
|
Upfront -Payment
|
38.2
|
Value Maintenance Ratio
|
(i)
|
pay to the Owner an amount sufficient to rectify the non-compliance of the Value Maintenance Ratio; or
|
(ii)
|
pay such amount to the Owner to reduce the Charter-hire Principal to rectify the non-compliance of the Value Maintenance Ratio,
|
38.3
|
Forfeiture
|
CLAUSE 39.
|
CHARTER-HIRE
|
39.1
|
The Bareboat Charterer shall pay Charter-hire quarterly in advance to the Owner’s Account on each Charter-hire Payment Date. Such Charter-hire shall consist of:
|
(a)
|
40 consecutive equal quarterly payments of 1.375% of the Purchase Price (“
Fixed Charter-Hire
”); and
|
(b)
|
Interest accrued on the Charter-hire Principal in respect of the actual number of days elapsed during the Hire Calculation Period ending on the relevant Payment Date calculated on the basis of a year of three hundred sixty (360) days at a rate per annum which is the sum of (a) the Margin and (b) LIBOR in respect of such Hire Calculation Period (“
Variable Charter-Hire
”).
|
(a)
|
the Margin; and
|
(b)
|
the rate notified to the Bareboat Charterer by the Owner as soon as practicable and in any event before Variable Charter-Hire is due to be paid in respect of that Hire Calculation Period, to be that which expresses as a percentage rate per annum the cost to the Owner of funding the Charter-hire Principal from whatever comparable source it may select.
|
(a)
|
at or about noon (London time) on the Quotation Day for the relevant Hire Calculation Period the relevant rate on the Thomson Reuters screen is not available and none or only one of leading banks in the London interbank market supplies a rate to the Owner to determine LIBOR for Dollars for the relevant Hire Calculation Period; or
|
(b)
|
before close of business in Hong Kong on the Quotation Day for the relevant Hire Calculation Period, the cost to the Owner of funding the Charter-hire Principal from whatever source it may select would be in excess of LIBOR;
|
39.2
|
The Vessel shall not be deemed off-hire at any time and the Bareboat Charterer’s obligation to pay all Charter-hire and all other amounts payable under this Bareboat Charter and/or the Acceptable Sub-Charter shall be absolute and unconditional under any and all circumstances and shall not be affected by any circumstances of any nature whatsoever and whether or not similar to any of the matters set out in paragraphs (a) to (l) below, including, without limitation:
|
(a)
|
any termination of the Acceptable Sub-Charter for whatever reason and any period following such termination where the Vessel has no employment;
|
(b)
|
any set-off, counterclaim, recoupment, defence or other right which the Bareboat Charterer may at any time have against the Owner or any other person for any reason whatsoever;
|
(c)
|
the unavailability of the Vessel for any reason, including (but not limited to) any invalidity or other defect in the title, the seaworthiness, condition, design, operation, performance, capacity, merchantability, security interest, or fitness for use or eligibility of the Vessel for any particular trade or operation or for documentation under the laws of any country or any damage to the Vessel;
|
(d)
|
any change, extension, indulgence or other act or omission in respect of any indebtedness or obligation of the Bareboat Charterer, or any sale, exchange, release or surrender of, or other dealing in, any security for any such indebtedness or obligation;
|
(e)
|
any incapacity or defect in powers of the Bareboat Charterer, or any irregular exercise thereof by, or lack of authority of, any person purporting to act on behalf of the Bareboat Charterer;
|
(f)
|
any damage to or loss (including a Total Loss, subject to the terms of this Bareboat Charter), destruction, capture, seizure, judicial attachment or arrest, forfeiture or marshal's or other sale of the Vessel;
|
(g)
|
any libel, attachment, levy, detention, sequestration or taking into custody of the Vessel or any restriction, prevention, interference, interruption or cessation in the use or possession thereof by the Bareboat Charterer for any reason whatsoever, or any inability to engage in any particular trade;
|
(h)
|
any insolvency, bankruptcy, reorganization, arrangement, readjustment of debt, dissolution, liquidation or similar proceedings by or against the Bareboat Charterer;
|
(i)
|
any failure or delay on the part of the Owner whether with or without fault on its part, in performing or complying with any of the terms or covenants hereof unless such failure constitutes an Owner’s Default;
|
(j)
|
any lack of due authorizations or documentation for the Vessel for any particular trade or use, or invalidity, illegality or other defect of this Bareboat Charter;
|
(k)
|
any event or declaration of Force Majeure affecting the Acceptable Sub-Charter to the extent that the performance of the obligations of the parties to the Acceptable Sub-Charter are suspended save for the obligation to pay Sub-Charter Hire which remains payable; and
|
(l)
|
any circumstances which, but for this provision, might operate to exonerate the Bareboat Charterer from liability, whether in whole or in part, under this Bareboat Charter.
|
39.3
|
Notwithstanding anything to the contrary contained in this Bareboat Charter, all payments by the Bareboat Charterer hereunder (whether by way of Charter-hire or otherwise) shall be made:
|
(a)
|
on or before the relevant Charter-hire Payment Date and; if any day for the making of any payment hereunder is not a Business Day, the due date for payment of the same shall be the immediately preceding Business Day; and
|
(b)
|
in US Dollars in funds for same day value to the Owner’s Account or to such other bank account as may from time to time be notified by the Owner to the Bareboat Charterer by not less than five (5) days’ prior written notice.
|
39.4
|
All payments under this Bareboat Charter shall be made without any set-off or counterclaim whatsoever and free and clear of and without withholding or deduction for, or on account of, any present or future income, freight, stamp and other taxes, levies, imposts, duties, fees, charges, restrictions or conditions of any nature (collectively "
Taxes
"). If the Bareboat Charterer is so required to make any withholding or deduction from any such payment, the sum due from the Bareboat Charterer in respect of such payment will be increased to the extent necessary to ensure that, after making such withholding or deduction, the Owner receives a net sum equal to the amount which they would have received had no such withholding or deduction been required to be made. The Bareboat Charterer shall promptly deliver to the Owner any receipts, certificates or other proof evidencing the amounts, if any, paid or payable in respect of any such withholding or deduction as aforesaid.
|
39.5
|
In the event of failure by the Bareboat Charterer to pay on the due date for payment thereof, or in the case of any sum payable on demand, the date of demand therefor, any Charter-Hire or other amount payable by it under this Bareboat Charter, the Owner may make a demand under the Bareboat Charter Guarantee to settle any due but unpaid Charter-Hire or any other amount payable by the Bareboat Charterer under this Bareboat Charter.
|
39.6
|
In addition, the Bareboat Charterer shall pay to the Owner on demand interest on such Charter-Hire from the day following the due date to the date of actual payment (both before and after any relevant judgment or winding up of the Bareboat Charterer) at the rate of percent 2% per annum. Any interest payable under this Bareboat Charter shall accrue from day to day and shall be calculated on the actual number of days and shall be compounded at such intervals as the Owner shall determine and shall be payable on demand.
|
39.7
|
Time of payment of the Charter-hire and all other sums payable under this Bareboat Charter shall be of the essence in this Bareboat Charter subject to any applicable grace periods for payment.
|
CLAUSE 40.
|
COVENANTS ON SUB-CHARTER AND CHARTER-HIRE
|
40.1
|
The Bareboat Charterer shall ensure that the Vessel is continually employed throughout the Charter Period either by the Acceptable Sub-Charterer or, subject to compliance with the terms of Clause 40.2, on time charter basis to another party, at all times and in either case, meeting the Minimum Debt Service Cover Ratio.
|
40.2
|
Provided that the Bareboat Charterer is in compliance with all the terms and conditions under this Bareboat Charter and further subject to Clause 40.4 below, the Bareboat Charterer shall have the right to sub-charter the Vessel on time charter basis to an Acceptable Sub-Charterer, provided that any and all such sub-charters (in any level) shall (a) not diminish, release or discharge any and all obligations and liabilities of the Bareboat Charterer hereunder, (b) not affect, reduce or prejudice any and all the rights, interests, benefits and remedies of the Owner (or the Lender or the Mortgagee) under this Bareboat Charter and applicable laws, (c) not impose upon the Owner any further obligations or liabilities other than those which have already expressly existed in the Bareboat Charter and which were known to the Owner at the date of the Bareboat Charter.
|
40.3
|
Without prejudice to Clause 40.3, if the Bareboat Charterer intends to let the Vessel to any party with a duration of more than one (1) calendar year (inclusive), the Bareboat
|
(a)
|
the Bareboat Charterer shall execute an assignment of such time charter in favour of the Owner in such form and substance required by the Owner whereby all the title, Earnings, interest and rights under such time charter shall be assigned to the Owner and shall use all reasonable efforts that the time charterer acknowledge such assignment to the Owner in writing in such form reasonably required by the Owner; and
|
(b)
|
the Bareboat Charterer shall irrevocably instruct such time charterer to pay all the moneys and Earnings payable to the Bareboat Charterer under the time charter exclusively to the Earnings Account and shall procure that the time charterer undertakes to the Owner in writing to comply with such payment instruction; and
|
(c)
|
if the Owner so requests, further create a charge over the Earnings Account in favour of the Owner and to do all the things to effect and perfect such charge, if the provisions of this clause 40.4 are not adhered to, the Owner shall have the right to demand additional security to be provided by the Bareboat Charterer to Owner’s satisfaction.
|
CLAUSE 41.
|
RISK AND INSURANCES
|
41.1
|
The Bareboat Charterer shall bear all risks whatsoever and howsoever arising from use, navigation, operation, possession and/or maintenance of the Vessel throughout the duration of the Bareboat Charter.
|
41.2
|
Insurance Coverage
|
(a)
|
The Bareboat Charterer undertakes to the Owner that throughout the Charter Period to insure and keep the Vessel insured pursuant to Box 29 and Box 31 of Part I, Clause 13 of Part II of this Bareboat Charter, and otherwise agreed hereof:
|
(i)
|
against fire and usual marine risks (including excess risks) on hull and machinery on terms not less wide than Nordic Marine Insurance Plan of 2013 or later versions, based on an amount not less than 125% of the total amount of the outstanding Charter-hire Principal;
|
(ii)
|
against 4/4ths RDC and 4/4ths FFO risks to be fully insured under the Hull and Machinery insurance and or PNI cover;
|
(iii)
|
against war risks, including terrorism cover and extended to:
|
(iv)
|
against full protection and indemnity risks with a member club of the International Group of P&I Clubs and in the international marine insurance market and to be at a limit which compares with market practice for similar type vessels (currently USD 1,000,000,000);
|
(v)
|
loss of hire insurance on a minimum of daily hire as per the Charter-hire for a limit of indemnity of 180 days;
|
(vi)
|
piracy loss of hire insurance on a minimum of daily hire as per the Charter-hire for a limit of indemnity of not less than 180 days, unless the above loss of hire insurance fully covers this risk;
|
(vii)
|
against such other risks of whatsoever nature and howsoever arising as reasonably required by the Owner (following the agreement of the Bareboat Charterer, such agreement not to be unreasonably withheld) if such a cover is available in the marine insurance market and it is common marine market practice to have it in place;
|
(b)
|
The Bareboat Charterer shall arrange at its cost Armed Guards on board in high risk areas, complying with the guidelines of Best Management Practice 4.
|
(c)
|
The Bareboat Charterer may, in its own discretion, take out FD&D cover and Charterer’s liability insurance. Such cover and insurance shall be for the sole account and benefit of the Bareboat Charterer.
|
(d)
|
The Owner shall be at liberty to take out the Innocent Owner’s (Lessor’s) Interest Insurance and Innocent Owner’s (Lessor’s) Interest Additional Perils Insurance in relation to the Vessel for an amount equivalent to the amounts set out in this Clause 41, and the Bareboat Charterer shall from time to time within seven (7) Business Days on demand reimburse the Owner for all reasonably and properly documented costs, premiums and expenses paid or incurred by the Owner in connection with the same provided that the Bareboat Charterer’s reimbursement shall be no more than the prevailing international market price;
|
(e)
|
Moreover, the Bareboat Charterer shall from time to time within seven (7) Business Days on demand reimburse the Owner for all reasonably and properly documented costs, premiums and expenses paid or incurred by the Owner in effecting Mortgagee’s Insurance Interest policy (MII) and Mortgagee’s Insurance Interest Additional Perils Insurance, and other insurance policies (if not covered under this Clause) if required by the Mortgagee in connection with the Owner’s Loan Agreement for the purpose of financing or re-financing the acquisition of the Vessel.
|
(f)
|
In case the Vessel is required to enter any port, place, or zone that is involved in a state of war, warlike operations, or hostilities, civil war, civil strife, rebellion, or piracy, whether or not such risks are real and or are wrongly perceived, or whether there be a declaration of war or not, or where it might reasonably be expected to be subject to capture, seizure or arrest, or to a hostile act by a belligerent power (the term ‘power’ means any de jure or de facto authority or any other purported governmental organization maintaining naval, military or air forces), the Bareboat Charterer shall effect such additional insurance cover in order to allow the Vessel to enter into any port, place or zone affected by any of the matters referred to in this Clause and shall provide the Owner with copy of the relevant insurance cover prior to the Vessel enter any port, place or zone affected by any of the matters referred to in this Clause 41.2.
|
(g)
|
The Bareboat Charterer shall pay the costs of such additional insurance cover.
|
41.3
|
General Terms and Conditions
|
(a)
|
In Dollars, free of cost and expense to the Owner, and in the joint names of the Owner and the Bareboat Charterer and the Mortgagee (if the Owner so required)
|
(b)
|
On pre-agreed terms consistent with prevailing international market practice from time to time be agreed between the Bareboat Charterer and the Owner; Punctually to pay all premiums, calls, contributions or other sums payable in respect of all such Insurances and to produce copies of all relevant receipts or other evidence of payment when reasonably so requested by the Owner.
|
(c)
|
Through such international reputable brokers which shall from time to time be approved in writing by the Owner (the "
Approved Brokers
") (which shall not be unreasonably withheld) prior to placement of and/or renewal of the insurances (save that the Owner’s consent shall not be required in cases where any renewals are being effected with the same Approved Brokers and the Bareboat Charterer has notified the Owner in writing), and with such international reputable insurance companies, underwriters, war risks and protection and indemnity associations (the "
Approved Insurer(s)
") which shall from time to time be approved in writing by the Owner prior to placement of and/or renewal of the insurances (save that the Owner’s consent shall not be required in cases where any renewals are being effected with the same Approved Insurers and the Bareboat Charterer has notified the Owner in writing). Any Approved Insurer shall mean one with a minimum of Standard & Poor's rating of A or above or Moody’s rating of A or above of AM Best rating of A- or above at the time when the relevant policy is procured / effected, and a protection and indemnity association which is a member of the International Group of Protection and Indemnity Clubs.
|
(d)
|
Unless otherwise provided for in the below Clause 41.6, the Bareboat Charterer shall ensure that the policies and/or entries in respect of the additional insurances cover referred to above Clause 41.2(a)(iv) to (a)(vii) (i.e., the Loss of Hire Insurance, and Piracy Loss of Hire Insurance) in each case state that the Owner is co-assured, and, that all claims under such insurances shall be paid to the Bareboat Charterer unless a Termination Event has occurred and is continuing in which case all such claims shall be paid to the Owner in full notwithstanding the Bareboat Charterer's obligation to pay hire to the Owner. The Bareboat Charterer undertakes to provide the Owner and/or the Mortgagee(s) with letter(s) of undertaking, loss payable clause and/or notices of assignment, the wording and form of which shall be acceptable to the Owner
|
(e)
|
At least twenty one (21) days prior to expiry of the relevant policies, contracts or entries, (i) propose to the Owner of the insurance broker(s) to be employed by the Bareboat Charterer for renewal of such Insurances, and of the proposed renewed amounts and the risks to be covered; (ii) procure that the Approved Brokers and/or the Approved Insurers shall promptly confirm in writing to the Owner as and when each of such renewals is effected and shall provide the Owner with details of the instructions as the Owner may require (except for the pricing information), and shall notify the Owner forthwith in the event of any renewal not being effected by the Bareboat Charterer as aforesaid.
|
(f)
|
If any of the Insurances form part of a fleet cover, the Bareboat Charterer shall, procure the Approved Brokers to obtain a written confirmation from the Approved Insurer(s) not to cancel the insurances for reason of non-payment of premiums for other vessels under such fleet cover or of premiums for such other Insurances, and, only to the extent allowed under the relevant terms of the Insurances, procure that the Approved Brokers to obtain a written confirmation from Approved Insurer(s) that they shall neither set-off against any claims in respect of the Vessel any premiums due in respect of that of other vessels under such fleet cover or any premiums due for other Insurances. Notwithstanding the above, the Bareboat Charterer undertake to issue a separate policy containing the foregoing agreements in respect of the Vessel being part of a fleet cover if requested by the Owner; and, the Bareboat Charterer always undertakes to the Owner that the insurances of the other vessels under a fleet cover and its performance (including any default and/or invalidity under any of the insurances of the other vessels) thereunder shall not in any events prejudice or adversely affect any and all the insurances of the Vessel (including, but not limited to, the validity and enforceability of the insurances of the Vessel);
|
(g)
|
Arrange for the execution of such guarantees as may from time to time be required by any protection and indemnity or war risks association. The Bareboat Charterer shall be obliged to timely arrange or procure to be timely arranged and provide for acceptable security to any party whosoever who may demand same including and not limited to third party claimants in the event the P&I Club
|
(h)
|
Procure that the interest of the Owner shall be endorsed and, where the Insurances have been assigned to the Owner, by means of a notice of assignment the Owner shall be furnished with the originals or certified true copies thereof, and, the Bareboat Charterer shall procure that the Approved Brokers shall issue to the Owner the standard form of letter(s) of undertaking of such Approved Broker(s) as soon as practically possible but in any event within ten (10) Business Days after Delivery Date; The Bareboat Charterer shall use its reasonable endeavours to procure that the Approved Broker incorporates any reasonable comments of the Owner and/or the Mortgagee;
|
(i)
|
Produce to the Owner upon demand copies (certified by a lawyer of the Bareboat Charterer or the Approved Brokers as being true copies) of all policies, certificates of insurance or entry, cover notes and binders relating to the Insurances and to furnish the Owner with any other evidence of the existence of the Insurances as the Owner may request. The Bareboat Charterer shall procure that the Approved Brokers or the Approved Insurers give to the Owner such information as to the Insurances taken out or being or to be taken out in compliance with the Bareboat Charterer's obligations under the foregoing provisions or as to any other matter which may be relevant to the Insurances as the Owner may reasonably request (except for the pricing information of the Insurances);
|
(j)
|
Procure that any protection and indemnity and/or war risks associations (if applicable and subject to the respective rules of the relevant association) in which the Vessel is for the time being entered shall record/confirm the interests of the Owner and/or the Mortgagee, including endorsing the relevant Loss Payable Clause (taking into account the associations' standard wording) on the relevant certificate of entry or policy and shall furnish the Owner with a certified true copy of such certificate of entry, letter(s) of undertaking and/or notices of assignment as may from time to time be required by the Owner, in form and substance acceptable to the Owner and the Mortgagee;
|
(k)
|
Undertakes to furnish the Owner from time to time with a detailed report signed by an independent firm of marine insurance brokers or an independent firm of international reputable insurance consultant appointed by the Bareboat Charterer dealing with the Insurances maintained on the Vessel and stating the opinion of such firm as to the adequacy thereof, if so requested by the Owner, but at the cost of the Bareboat Charterer;
|
(l)
|
The Bareboat Charterer shall do all things necessary and provide all documents, evidence and information to enable the Owner to collect or recover any moneys which shall at any time become due to the Owner in respect of the Insurances;
|
(m)
|
Undertakes not to employ the Vessel or suffer the Vessel to be employed otherwise than in conformity with the terms of the instruments of insurance aforesaid (including any warranties express or implied therein) without first obtaining the consent of the insurers to such employment and complying with such requirements as to extra premium or otherwise as the insurers may prescribe;
|
(n)
|
To apply all sums receivable under the Insurances which are paid to the Bareboat Charterer in accordance with the Loss Payable Clauses in repairing all damage and/or in discharging the liability in respect whereof the insurance moneys shall have been received;
|
(o)
|
To ensure that if the Vessel shall at any time enter the waters under the jurisdiction of the United States of America and/or the Exclusive Economic Zone (as defined in the Oil Pollution Act): (i) the certificate of entry for the Vessel issued by the protection and indemnity association with which it is entered is endorsed with the U.S. Oil Pollution Clause 20/2/91 (as amended or replaced from time to time) and to procure for the Owner sufficient documentary evidence (including a Certificate of Financial Responsibility (C.O.F.R) in line with the requirements of the US Coast Guard, if applicable) that the Bareboat Charterer have provided all declarations and satisfied all other requirements of the association and that the U.S. Trading Exclusion Clause (as defined in the rules and policies of such protection and indemnity association) has been deleted from the cover; (ii) make all such quarterly or other voyage declarations as may from time to time be required by the protection and indemnity risks association in order to maintain cover for trading to the United States of America and Exclusive Economic Zone and promptly deliver to the Owner copies of all such declarations;
|
(p)
|
The Bareboat Charterer shall ensure that the policies and/or entries in respect of the insurances against hull and marine risks and/or war risks are, in each case, duly endorsed with the interests of the Owner to the effect that, subject always to the rights and entitlements of the Bareboat Charterer contained herein payment of a claim for a Total Loss of the Vessel will be made in accordance with Clause 41.6 below; and, payment in respect of a claim which is not for a Total Loss of the Vessel shall, subject to the (i) and (ii) below, be made to the Bareboat Charterer who shall apply the same to make good the loss and fully repair all damage and otherwise to maintain the Vessel in accordance with its obligations hereunder provided however: (i) that claim in respect of a Major Casualty shall be paid to the Bareboat Charterer with the prior written consent of the Owner (which shall not be unreasonably withheld) and, subject to any consent which may be required from the Mortgagee, such consent shall be given provided that the Bareboat Charterer has furnished the Owner with documentary evidence to the satisfaction of the Owner that necessary repairs have been effected and the Bareboat Charterer has made payment for the same, and (ii) that all such sums shall be payable as aforesaid only until such time after the occurrence of the Bareboat Charterer's Default as the Owner may otherwise direct to the contrary and all such sums of any and all claims shall be paid to the Owner or to the Mortgagee in its capacity as the Owner's assignee;
|
(q)
|
The Bareboat Charterer shall ensure that the entries in respect of protection and indemnity risks provide for moneys payable thereunder to be paid either (i) to the claimant in settlement of the Vessel's liability to him, or (ii) (unless and until after the occurrence of a Charterer's Default the Owner shall direct that those shall be paid to the Owner), the Bareboat Charterer or other party in reimbursement for any payment properly made to a third party or claimant;
|
41.4
|
The Owner shall be entitled to review the requirements of this Clause 41 from time to time in order to take account of necessary changes in circumstances arising as a result of any amendment to the existing laws of, or adoption of new laws by, any relevant jurisdiction after the date of this Bareboat Charter. The Owner may, at all times subject to the opinion(s) of an independent firm of international reputable insurance consultants, notify the Bareboat Charterer in writing from time to time of any proposed modification to the requirements of this Clause 41. Such modification shall take effect within one (1) day from the date it is notified in writing to the Bareboat Charterer and shall take the form of an amendment to this Clause 41. However where the proposed modification to the requirements of this Clause 41 would result in a material increase to the costs of the insurance the Owner shall consult with the Bareboat Charterer in good faith in order to find a mutually acceptable solution within the next period of fourteen (14) days. Once a solution has been found the modification shall take effect immediately. If a solution cannot be found, Owner shall be entitled to exercise the Put Option pursuant to Clause
|
41.5
|
The Bareboat Charterer shall not do any act or permit or suffer any act to be done whereby any insurance required as aforesaid shall or may be suspended, impaired or become defective, unless otherwise specifically permitted under the insurance policies. The Bareboat Charterer shall not make any alteration to any of the insurances referred to in this Clause without prior written approval by the Owner (which shall not be unreasonably withheld) and shall not make, do, consent or agree to any act or omission which might render any such instrument of insurance invalid or unenforceable or render any sum payable thereunder repayable in whole or in part.
|
41.6
|
Total Loss
|
CLAUSE 42.
|
CARGO EXCLUSION CLAUSE
|
42.1
|
All cargoes to be carried shall be limited to those permitted by the Vessel’s Classification Society’s and those referred to in the Vessel’s specifications. All cargoes are to be carried in conformity with IMO and international and local regulations, and the requirement of the Insurances, using best practice at all times.
|
CLAUSE 43.
|
OWNER’S RIGHT OF SALE AND MORTGAGE
|
43.1
|
Owner’s Right of Sale
|
43.2
|
Owner’s Right of Mortgage
|
CLAUSE 44.
|
TERMINATION EVENTS
|
44.1
|
Each of the following events shall be a “
Termination Event
” for the purpose of this Bareboat Charter:
|
(a)
|
if the Bareboat Charterer or any Obligor fails to make any payment of any amount under this Bareboat Charter or any Finance Document on its due date (taking into account any applicable grace period) or, in the case of sums expressed to be payable by the Bareboat Charterer on written demand, within five (5) Business Days following the date of the written demand therefor;
|
(b)
|
the Bareboat Charterer fails to comply with any term of the following Clauses within the relevant period: Clause 34 (
Management and Crew
), Clause 35 (
Flag and Class
), Clause 40 (
Covenants on Sub-Charter and Charter-hire)
excepting Clause 40.1 which is subject to the Put Option, Clause 41 (
Risks and Insurance)
specifically Clause 41.5, or Clause 49 (
Charterer’s Undertakings
); and if such failure to comply is capable of being remedied, but is not remedied within five (5) Business Days of the Owner giving notice to the Bareboat Charterer of such failure to comply;
|
(c)
|
any circumstance or event which is referred to as a “Termination Event” in this Bareboat Charter or otherwise agreed by the parties to be referred to as a “Termination Event” for the purpose of this Bareboat Charter;
|
(d)
|
the Bareboat Charterer or any Obligor fails to observe or perform any of its obligations under any Finance Document within any applicable grace periods for remedy. For the avoidance of doubt, failure to provide any document or information requested shall constitute a remediable breach within thirty (30) Business Days for the purposes of this clause provided that no insurance or P&I cover is interrupted;
|
(e)
|
any representation or warranty of the Bareboat Charterer or any Obligor in the Finance Documents or in any document or certificate furnished to the Owner in connection herewith or therewith is or proves to have been untrue, inaccurate or misleading in any material respect, when made or deemed made and materially affects the obligations of the Bareboat Charterer under this Bareboat Charter;
|
(f)
|
any consent, authorisation, licence or approval necessary for this Bareboat Charter to be or remain as valid and legally binding obligations of the Bareboat Charterer, or to enable the Bareboat Charterer to perform its obligations hereunder or thereunder, is adversely modified or is not granted or is revoked, suspended, withdrawn or terminated or expires and is not renewed and such modification, revocation, suspension, withdrawal, termination, expiry or lapse or renewal is not remedied within a period of 15 Business Days;
|
(g)
|
if a petition is filed or order made or an effective resolution passed by a court or any other authority having competent jurisdiction, for the compulsory or voluntary winding-up or dissolution of the Bareboat Charterer or a Group Member (other than for the purposes of amalgamation or reconstruction in respect of which the prior written approval of the Owner has first been obtained) or any proceedings analogous to winding-up proceedings are begun in any jurisdiction in relation to the Bareboat Charterer or a Group Member, excepting any frivolous or vexatious proceedings which are discharged, stayed or dismissed within twenty-one days of commencement;
|
(h)
|
if the Bareboat Charterer or a Group Member stops payment generally or ceases to carry on or suspends payment of, or is unable to or admits inability to pay, all or a substantial part of its debts as they fall due or makes any special arrangement or composition with its creditors generally or shall otherwise become or be adjudicated insolvent;
|
(i)
|
if an administrator, administrative receiver, receiver or trustee or similar official is appointed over the whole, or a material part, of the property, assets or undertaking
|
(j)
|
the Bareboat Charterer or a Group Member applies to any court or other tribunal for, a moratorium or suspension of payments with respect to all or a substantial part of its debts or liabilities;
|
(k)
|
the Bareboat Charterer or a Group Member convenes or gives notice to convene a meeting of all or any class or Group Member of its creditors with a view to proposing or making, or proposes or makes, any arrangement or composition with or assignment for the benefit of all or any class or Group Member of its creditors or declares, or applies to any court or other tribunal for, a moratorium or suspension of payments with respect to all or a substantial part of its debts or liabilities;
|
(l)
|
if an encumbrancer takes possession of, or distress or execution is levied upon, the whole, or a material part of the property, assets or undertaking of the Bareboat Charterer or a Group Member and the Bareboat Charterer or a Group Member fails to release the same within ninety (90) days (or a longer period as agreed between the Owner and the Bareboat Charterer) from the date of the possession, distress or execution;
|
(m)
|
any Security Documents does not create legal, valid, binding and enforceable security over the assets charged under that Security Document or the ranking or priority of such security is adversely affected (other than by Permitted Security Interests);
|
(n)
|
if the Bareboat Charterer or a Group Member ceases, or threatens to cease, to carry on all or a substantial part of its business or disposes or threatens to dispose (other than for full arm's length consideration) of the whole or a material part of its property, assets or undertaking without the prior consent of the Owner;
|
(o)
|
if any covenants of the Bareboat Charterer or any Obligor in this Bareboat Charter or any Finance Documents are not complied with in any material respect and this has or is likely to have, in the reasonable opinion of the Owner, a Material Adverse Effect on the ability of the Bareboat Charterer to perform its obligations under this Bareboat Charter unless the Bareboat Charterer satisfies the Owner (acting reasonably) within ten (10) Business Days of the Owner’s notice that the event will not have a Material Adverse Effect;
|
(p)
|
if an event of default occurs in relation to any Financial Indebtedness of the Bareboat Charterer or a Group Member exceeding ten million Dollars (US$10,000,000) or, in each case the equivalent in any other currency;
|
(q)
|
if the Bareboat Charterer ceases to be a company resident in the jurisdiction of its incorporation without the prior consent of the Owner;
|
(r)
|
if it becomes impossible or unlawful for the Bareboat Charterer in any material respect to fulfil any of its obligations under this Bareboat Charter;
|
(s)
|
if any Environmental Incident or other event or series of events occurs which, in the reasonable opinion of the Owner, has or is likely to have a Material Adverse Effect;
|
(t)
|
if the Bareboat Charterer repudiates this Bareboat Charter or does or causes or permits to be done any act or thing evidencing an intention to repudiate this Bareboat Charter;
|
(u)
|
any Security in respect of any of the property (or part thereof) which is the subject of any Security Document becomes unenforceable;
|
(v)
|
if the Bareboat Charter fails to provide additional security as set out in Clause 38.2 to remedy any non-compliance with the Minimum Debt Service Cover Ratio to the Owner’s satisfaction;
|
(w)
|
If the auditors of the Group qualify their report on the audited financial statements of the Group (or any of them) in any way whatsoever which is reasonably likely to have a Material Adverse Effect;
|
(x)
|
if the Manager of the Vessel changes without the prior written consent of the Owner (such consent not to be unreasonably withheld or delayed);
|
(y)
|
if the Vessel is arrested, confiscated, seized, taken in execution, impounded, forfeited, or detained (unless caused by an act or omission of the Owner) in exercise or purported exercise of any possessory lien or other claim, provided that such arrest or detention is not discharged within ninety (90) days after such arrest or detention (or such longer period as may be agreed);
|
(z)
|
the Project or the Vessel or any part thereof reasonably considered by the Owner to be material is abandoned by any Group Member or the Vessel operations suffer permanent cessation and in each case the same cannot be remedies to the satisfaction of the Owner;
|
(aa)
|
if the authority or ability of a Group Member to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any government, regulatory or other authority or other person in relation to the Bareboat Charterer or any of its assets;
|
(ab)
|
any litigation, alternative dispute resolution, arbitration or administrative proceedings is taking place, or threatened against any Group Member or any of its assets, rights or revenues which, if adversely determined, might have a Material Adverse Effect;
|
(ac)
|
if the Bareboat Charter fails to exercise its Purchase Obligation in Clause 50;
|
(ad)
|
If the Bareboat Charterer fails to purchase the Vessel pursuant to the Put Options in Clause 50.5 or 50.6;
|
(ae)
|
If the MOA is terminated for whatever reason.
|
44.2
|
The occurrence of a Termination Event shall entitle the Owner (but not be bound and without prejudice to the Bareboat Charterer’s obligations) by notice to the Bareboat Charterer to terminate this Bareboat Charter forthwith and recover any and all amounts due and payable hereunder and/or resulting from such termination in the manner as set out in Clause 45 (
Owner’s Rights on Termination
).
|
44.3
|
The Owner shall not be under any liability whatsoever to the Bareboat Charterer for loss or damage whatsoever occasioned by the Bareboat Charterer for the termination of this Bareboat Charter and the Bareboat Charterer shall indemnify the Owner on demand for any and all liabilities, losses, costs and expenses incurred by the Owner pursuant to this Clause or otherwise resulting from the occurrence of a Termination Event always provided that the Bareboat Charterer shall not be liable for any liabilities, losses, costs and expenses incurred by the Owner where the Termination Event has occurred due to the gross negligence, or wilful misconduct by the Owner.
|
CLAUSE 45.
|
Owner’s Rights on Termination
|
45.1
|
At any time following Delivery, upon the occurrence of a Termination Event, the Owner may, by notice to the Bareboat Charterer immediately, or on such date as the Owner shall specify, terminate this Bareboat Charter. Upon the Owner’s termination, the Owner shall be entitled
|
(a)
|
to demand that the Bareboat Charterer pay the Termination Sum to the Owner on the Termination Date or such later date as the Owner shall specify in exchange for transfer of ownership in the Vessel to the Owner; or
|
(b)
|
(but not bound and without prejudice to the Bareboat Charterer’s obligations hereunder) to retake possession of the Vessel by way of Redelivery as set out in Clause 51.
|
45.2
|
Upon the Owner’s notice of retaking the Vessel, the Bareboat Charterer shall, unless otherwise instructed by the Owner, assist the Owner with the Demobilisation of the Vessel from the Project Site and redeliver the Vessel to the Owner in accordance with Clause 51 and pursuant to the notice issued by and from the Owner pursuant to Clause 45.1, and, (a) at the nearest safe and available port practicable for redelivery or at such other port as the Owner may reasonably specify or at the Project Site; (b) with her class maintained without any conditions or recommendation; (c) free of average damage affecting the Vessel's class; (d) with all the Vessel's classification, trading, national and international certificates that the Vessel had when she was delivered by the Owner to the Bareboat Charterer under this Bareboat Charter, valid and un-extended without conditions or recommendation and falling due for a minimum of three (3) months from the time of redelivery; (e) in the same or as good structure, state, condition and class as that in which she was on Delivery, fair wear and tear not affecting class excepted; and (f) with all such spare parts and other equipment she had at Delivery. The Bareboat Charterer shall also procure that the Master and Crew shall obey the lawful orders of the Owner as regards the navigation and management of the Vessel and shall no longer obey the Bareboat Charterer.
|
45.3
|
Unless covered by the Termination Sum which the Bareboat Charterer has paid, the Bareboat Charterer shall pay, indemnify or reimburse the Owner on demand, all Losses suffered by the Owner arising out of or in connection with any Termination Event caused by the actions of the Bareboat Charterer including, without prejudice to the generality of the foregoing, all liabilities, costs and expenses (including but not limited to legal and advisory fees) so incurred arising from the Demobilisation from the Project Site and Redelivery including but not limited to the costs of recovering possession of, and in moving, storing, insuring and maintaining, the Vessel and in carrying out any works or modifications required together with interest thereon pursuant to Clause 39.5 from the date on which the relevant Losses were suffered by the Owner until the date of payment or reimbursement thereof (both before and after any relevant judgment or winding up of the Bareboat Charterer).
|
45.4
|
Any amount due to the Owner under this Clause 45 shall bear interest pursuant to Clause 39.6 (before and after any relevant judgment or any winding-up of the Bareboat Charterer) from the Termination Date up to and including the date of the Owner's actual receipt thereof.
|
45.5
|
Notwithstanding the termination of this Bareboat Charter pursuant to Clause 44 (
Termination Events
), the Bareboat Charterer shall irrevocably and unconditionally continue to comply with its obligations under this Bareboat Charter and shall be obliged to take such action as Owner may prescribe to protect the Vessel until the Vessel is redelivered to the Owner in accordance with Clause 51.
|
45.6
|
In the event that the Bareboat Charterer fails within ten (10) Business Days to meet in full the Owner’s demand for payment of the Termination Sum and accrued interest pursuant to this Clause, the Owner may at its option:
|
(a)
|
where applicable and pursuant to its rights under the assignment of the Acceptable Sub-Charter, approach the Acceptable Sub-Charterer with a view to getting their consent to any alternative arrangements in relation to performing the Acceptable Sub-Charter; or
|
(b)
|
sell the Vessel free of any charter, lease or other engagement concerning the Vessel on arm's length terms at market price;
|
i.
|
an amount equal to the aggregate of the expenses, disbursements, taxes, costs and losses whatsoever (including but not limited to legal and advisory fees) as may have been incurred by the Owner in respect of the sale of the Vessel shall be deducted from the gross proceeds of the sale of the Vessel; the balance of the sale proceeds is referred to hereinafter as the “
Net Sale Proceeds
”;
|
ii.
|
an amount equal to the Termination Sum shall be deducted from the Net Sale Proceeds. If the Net Sale Proceeds are insufficient to satisfy all amounts due and payable from the Bareboat Charterer to the Owner hereunder, the Bareboat Charterer and the Security Parties shall pay the shortfall to the Owner;
|
iii.
|
if there is any balance after deduction of the Termination Sum, such balance shall be paid to the Bareboat Charterer;
|
iv.
|
if the tendering and/or sale of the Vessel fails due to whatever reason, provided that the Owner has taken all customary procedures in the process of the tendering and/or sale of the Vessel, the Vessel shall be at the sole and discretional disposal of the Owner thereafter without prejudice to the Bareboat Charterer’s obligation to pay the Termination Sum and any other accrued liabilities hereunder.
|
45.7
|
The Owner shall be entitled to all its rights and remedies under any or all the Security Documents.
|
CLAUSE 46.
|
ASSIGNMENT AND SUB-CHARTERING
|
46.1
|
This Bareboat Charter shall be binding upon and enure for the benefit of the Owner and the Bareboat Charterer and their respective successors and permitted assignees.
|
46.2
|
The Bareboat Charterer shall not be entitled to assign or transfer any of its rights or obligations under this Bareboat Charter, unless with the prior written consent of the Owner.
|
46.3
|
In addition to the Owner's right to transfer its rights under Clause 43 (
Owner’s Right of Sale and Mortgage
), the Owner shall be entitled, subject to clause 48.3 below, to assign any of its rights and interest under this Bareboat Charter to another party, including a financial institution, provided the prior written consent of the Bareboat Charterer has been obtained (such consent not to be unreasonably withheld or delayed). However, such consent is not required where Owner assigns any of its rights and interest under this Bareboat Charter to the Mortgagees.
|
46.4
|
The Bareboat Charterer undertakes that it will not sub-charter the Vessel on a bareboat basis to any party except with the prior consent in writing of the Owner, and subject to such terms and conditions as the Owner shall approve.
|
CLAUSE 47.
|
CHARTERER'S REPRESENTATIONS AND WARRANTIES
|
47.1
|
The Bareboat Charterer acknowledges that the Owner has entered into this Bareboat Charter in reliance on representations by the Bareboat Charterer in the following terms, and the Bareboat Charterer hereby represents and warrants to the Owner as follows:
|
(a)
|
the Bareboat Charterer is a corporation duly organized, registered, validly existing and in good standing under the laws of its establishment jurisdiction, has the corporate power and authority to execute, perform and comply with its obligations under, and has taken all necessary action to authorise its entry into this Bareboat Charter and each Transaction Document to which it is a party, and the transactions contemplated by the Transaction Documents to which it is a party, and to carry on its business as presently conducted;
|
(b)
|
In respect of the Bareboat Charterer, all governmental, corporate, shareholder’s and other consents, licenses, approvals, authorizations, waivers and actions necessary for the execution, performance and registration (if appropriate) of this Bareboat Charter, and the Transaction Documents to which it is a party, have been made or obtained or will be made or obtained and are or will be in full force and effect at the relevant time;
|
(c)
|
Subject to any reservations expressed in any legal opinion, this Bareboat Charter, and the Transaction Documents to which it is a party, constitutes legal, valid and binding obligations of the Bareboat Charterer and the execution or performance by the Bareboat Charterer of this Bareboat Charter and the Transaction Documents to which it is a party, is not, and will not during the Charter Period, be inconsistent with and does not contravene (i) any existing law or regulation of any governmental of official authority or body, or (ii) the constitutional documents of the Bareboat Charterer, or (iii) any agreement, contract or other undertaking to which the Bareboat Charterer is a party or which is binding on the Bareboat Charterer or any of its assets. Each of the Finance Documents to which the Bareboat Charterer may become a party will, when executed, constitute its legal, valid and binding agreement and the execution or performance by the Bareboat Charterer of such Finance Document will not be inconsistent with and will not contravene (i) any existing law or regulation of any governmental of official authority or body, or (ii) the constitutional documents of the Bareboat Charterer, or (iii) any agreement, contract or other undertaking to which the Bareboat Charterer are a party or which is binding on the Bareboat Charterer or any of its assets;
|
(d)
|
Subject to any reservations expressed in any legal opinion, this Bareboat Charter and the Transaction Documents, to which it is a party constitutes the valid and legally binding and enforceable obligations of the Bareboat Charterer ranking at least pari passu with all other of its unsecured obligations and liabilities (actual or contingent) other than any such preferred by law;
|
(e)
|
to the best of its knowledge and belief, there are no actions, suits, proceedings, insolvency or creditors’ process, administrative or arbitrations taking place, pending, or, threatened, before any court, administrative agency, arbitrator or governmental body against the Bareboat Charterer, or against any of the assets of the Bareboat Charterer which will, if adversely determined, materially adversely affect or be likely to materially adversely affect the normal operation of the Vessel under this Bareboat Charter;
|
(f)
|
the execution, delivery, registration (if necessary) or performance by the Bareboat Charterer of this Bareboat Charter or any transaction herein contemplated or the compliance with the terms hereof does or will not contravene any provision of law, statute, decree, rule or regulation to which the Bareboat
|
(g)
|
no Termination Event has occurred and/or is continuing;
|
(h)
|
on the Delivery Date, no Group Member or any of their respective Subsidiaries, or any of their respective directors, officers or employees, or to the knowledge of the Bareboat Charterer or the Guarantor, any persons acting on any of their behalf in connection with the Bareboat Charter is a Restricted Party or is aware of any valid claim, action, suit, proceeding or investigation against it with respect to sanctions by any Sanctions Authority.
|
(i)
|
to the best of its knowledge and belief, no event or omission has occurred which entitles any creditor(s) of the Bareboat Charterer to declare any Financial Indebtedness of US$10,000,000 due and payable prior to its specified maturity or to cancel or terminate any loan or other facility or to decline to make any advances or further advance thereunder;
|
(j)
|
any and all documents, certificates, statement or other information furnished to the Owner by or on behalf of the Bareboat Charterer in connection with the transactions contemplated hereby or thereby (including but without limitation to, financial information) do or did not at the time when made contain any untrue statement of a fact or omit to state a material fact necessary in order to make the statements contained herein and therein not misleading; and
|
47.2
|
The representations and warranties contained in this Clause hereof shall be deemed to be made on the date of this Agreement and repeated by the Bareboat Charterer on each Charter-hire Payment Date as if made with reference to the facts and circumstances existing on such date, and the rights of the Owner in respect thereof shall survive delivery or redelivery of the Vessel until the end of the Charter Period or Charter Period, whichever is the later.
|
CLAUSE 48.
|
OWNER’S REPRESENTATIONS AND WARRANTIES
|
48.1
|
The Owner acknowledges that the Bareboat Charterer has entered into this Bareboat Charter in reliance on representations by the Owner in the following terms, and the Owner hereby represents and warrants to the Bareboat Charterer as follows and all representations and warranties of the Owner hereunder shall subsist throughout the Security Period:
|
(a)
|
the Owner is a corporation duly organized, registered, validly existing and in good standing under the laws of its establishment jurisdiction, has the corporate power and authority to execute and perform this Bareboat Charter and the Transaction Documents to which it is a party, and to carry on its business as presently conducted and contemplated hereby and thereby;
|
(b)
|
all governmental, corporate, shareholder’s and other consents, licenses, approvals, authorizations, waivers and actions necessary for the execution, performance and registration (if appropriate) of this Bareboat Charter, and the Transaction Documents to which it is a party, have been made or obtained and are in full force and effect;
|
(c)
|
this Bareboat Charter, and the Transaction Documents to which it is a party, constitutes legal, valid and binding obligations of the Owner and the execution or performance by the Owner of this Bareboat Charter and the Transaction Documents to which it is a party, is not, and will not during the Charter Period, be inconsistent with and does not contravene (i) any existing law or regulation of any governmental of official authority or body, or (ii) the constitutional documents of the Owner; and
|
(d)
|
the execution, delivery, registration (if necessary) or performance by the Owner of this Bareboat Charter or any transaction herein contemplated or the compliance with the terms hereof does or will not contravene any provision of law, statute, decree, rule or regulation to which the Owner is subject or any judgment, decree, franchise or permit applicable to the Owner, or will not conflict with, or result in any breach of, any of the terms, covenants, conditions and provisions of, or constitute a default under, or result in the creation or imposition of any lien, security interest, charge or Encumbrance upon any property or assets of the Owner pursuant to the terms of any indenture, mortgage, deed of trust, agreement or other instrument to which the Owner is a party or is subject or by which it is bound; and
|
(e)
|
No event of default under the Owner’s Loan Agreement has occurred and/or is continuing.
|
48.2
|
The representations and warranties contained in this Clause hereof shall be deemed to be repeated by the Owner on each Charter-hire Payment Date as if made with reference to the facts and circumstances existing on such date, and the rights of the Bareboat Charterer in respect thereof shall survive delivery or re-delivery of the Vessel until the end of the Charter Period or Security Period, whichever is later.
|
48.3
|
Provided that the Bareboat Charterer does not breach any terms of this Bareboat Charter and the Acceptable Sub-Charterer does not breach any terms of the Acceptable Sub-Charter, the Owner hereby agrees not to disturb or interfere with the Bareboat Charterer’s possession and quiet enjoyment of the Vessel during the Charter Period issued or to be issued by the Owner and not breach the terms of any of its financing agreements that the Owner has entered into with the Mortgagee which would cause the Mortgagee to interfere with the Bareboat Charterer’s rights under this Bareboat Charter in the Vessel.
|
CLAUSE 49.
|
CHARTERER’S UNDERTAKINGS
|
(a)
|
provide to the Owner the unaudited quarterly management accounts of the Bareboat Charterer and the Guarantor (in such form as is customarily prepared) as soon as available and in no event later than ninety (90) days after the end of the relevant financial period;
|
(b)
|
provide to the Owner the audited annual financial statements of the Guarantor and unaudited annual financial statements of the Bareboat Charterer signed by its chief financial officer as soon as available and in no event later than one hundred and eighty (180) days after the end of its financial year, such accounts and financial statements to be prepared in accordance with US GAAP and audited by Ernst and Young or another internationally recognized accountancy
|
(c)
|
provide to the Owner as soon as practicable after the same are instituted or known to the Bareboat Charterer, details of any material litigation, arbitration or administrative proceedings involving the Bareboat Charterer or any Obligor, which are reasonably likely to have a Material Adverse Effect on the ability of the Bareboat Charterer or any Obligor to perform its obligations under this Bareboat Charter or, as the case may be, the Security Documents;
|
(d)
|
provide to the Owner, promptly following request by the Owner, certified copies of all class records, class certificates and survey reports and copies of all management reports;
|
(e)
|
provide to the Owner, promptly following request by the Owner, all such information as it may from time to time regarding the Vessel, compliance with the ISM Code, the ISPS Code and Annex VI (Regulation for the Prevention of Air Pollution from Ships) to MARPOL, the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001;
|
(f)
|
provide to the Owner, as soon as practicable following the request by the Owner, such further information in the possession or control of the Bareboat Charterer with respect to the financial condition and operations of the Bareboat Charterer;
|
(g)
|
assist the Owner with any reasonable request to provide relevant documentation or information required by the Owner for the satisfaction of conditions precedent under the Owner’s Loan Agreement, so far as these conditions precedent relate to and reflect the conditions precedent set out in this Bareboat Charter;
|
(h)
|
obtain and promptly renew from time to time and will whenever so required promptly furnish certified copies to the Owner of, all such authorizations, approvals, consents and licenses (if any) as may be required under any applicable law or regulation to enable the Bareboat Charterer to perform its obligations under this Bareboat Charter or the Security Documents to which it is a party, or required for the validity or enforceability of this Bareboat Charter or the Security Documents to which it is a party, and the Bareboat Charterer shall in all material respects comply with the terms of the same;
|
(i)
|
notify the Owner by email of: (i) any damage to the Vessel anticipated to be in excess of the Major Casualty Amount, within 24 hours of the occurrence of the same; (ii) any occurrence resulting in the Vessel becoming or being likely to become a Total Loss, within 24 hours of the occurrence; (iii) any requirement or recommendation made by any insurer or Classification Society, or by any competent authority, which is not complied with within any time limit imposed by such insurer, Classification Society or authority; (iv) any arrest of the Vessel or the exercise or purported exercise of any lien on the Vessel or any requisition of the Vessel for hire, within 24 hours of the occurrence; (v) the occurrence of any Bareboat Charterer’s / Acceptable Sub-Charterer’s Default.
|
(j)
|
at all times ensure the Vessel is operated in compliance with all applicable laws, international and port state conventions, codes and regulations including, without limitation, ISM Code, the ISPS Code and Annex VI to MARPOL and ensure such compliance by the crews, employees, agents and representatives of the Bareboat Charterer and the Manager at all times;
|
(k)
|
ensure that the Vessel is in possession of a valid Safety Management Certificate, a valid International Ship Security Certificate and an International Air Pollution Prevention Certificate and in all respects in compliance with all applicable international conventions, codes and regulations, including without limitation the International Convention for Safety of Life at Sea (SOLAS) 1974 (as adopted, amended or replaced from time to time), the ISM Code and the ISPS Code, and ensure such compliance by the Manager and that the Manager shall be in possession of a Document of Compliance appropriate for the Vessel and Annex VI (Regulations for the Prevention of Air Pollution from Ships) to MARPOL and a certificate issued pursuant to the International Convention on Civil Liability for Bunker Oil Pollution Damage 2001;
|
(l)
|
where relevant, make such periodical voyage declarations as may be required in accordance with all applicable insurance conditions especially in order to maintain insurance cover for trading in and to the United States of America and the Exclusive Economic Zone (as defined in the US Oil Pollution Act of 1990 (as may be amended and/or re-enacted from time to time hereafter);
|
(m)
|
where relevant, to obtain in a timely manner, if the Vessel at any time shall call in any US port, in accordance with the regulations of the US Oil Pollution Act 1999 (as may be amended and/or re-enacted from time to time) and in line with the requirements of the US Coast Guard, a Certificate of Financial Responsibility (C.O.F.R), a copy of which shall promptly be provided to the Owner;
|
(n)
|
following an inspection of the Vessel by the Owner or its representatives pursuant to Clause 8, comply with any requests from the Owner for repairs or works to the Vessel if required to ensure that the Vessel is maintained in the class and condition required by this Bareboat Charter and if the Bareboat Charterer disputes the need for any such repairs or works the matter shall be referred to the Classification Society whose decision on such matter shall be binding on the Owner and the Bareboat Charterer;
|
(o)
|
permit the Owner, subject to having given the Bareboat Charterer at least thirty (30) days’ prior written notice and the inspection or survey not interfering with the normal operation and trading of the Vessel, to inspect or survey the Vessel or instruct a duly authorized surveyor or representative to carry out such survey (at their own risk if aboard the Vessel) on its behalf in order to ascertain the condition of the Vessel and/or to inspect/procure copies of the Vessel's logs and records certified as true by the Vessel's master at any reasonable time or times upon giving a written notice to the Bareboat Charterer. The Bareboat Charterer shall bear the cost of such inspections including without limitation the fees of any surveyor once a year and for any further inspections carried out by the Owner at any time when any Charterer’s Default has occurred which is continuing. The Bareboat Charterer shall afford all proper facilities for such inspections and give the Owner reasonable advance notice of any intended dry-docking of the Vessel;
|
(p)
|
with at least thirty (30) days prior notice by the Owner, to request information relating to the Bareboat Charterer’s offices and to inspect any of the Bareboat Charterer’s assets, premises, books and records relating to the Vessel which accurately reflect in all material respects all of the Bareboat Charterer’s business, affairs and transactions subject to the provision of such information not interfering with the normal operations of the offices of the Bareboat Charterer or the Obligor or causing the Bareboat Charterer or Obligor to breach its confidentiality obligations to third parties or investors;
|
(q)
|
do the following:
|
(i)
|
comply with all Environmental Laws in relation to using and operating the Vessel;
|
(ii)
|
obtain, maintain and ensure compliance with all requisite environmental permits in relation to using and operating the Vessel; and
|
(iii)
|
implement procedures to monitor compliance with and to prevent liability under any environmental law applicable to the use and operation of the Vessel;
|
(r)
|
carry on and conduct its business in a proper and efficient manner, keep in existence all its material rights and privileges and maintain its books and records, including the log books, in a proper and efficient manner and in the language of English;
|
(s)
|
comply in all respects with all laws and contractual obligations to which it is subject if failure so to comply would materially impair its ability to perform its obligations under this Bareboat Charter;
|
(t)
|
bear all expenses and all other costs in connection with any survey of the Vessel, if any, including the cost of docking and undocking, if required, as well as all repair costs incurred; and
|
(u)
|
comply fully with the provisions of Clause 41 of the Bareboat Charter regarding Insurance;
|
(v)
|
procure that the Bareboat Charterer Guarantor remains listed on NASDAQ or any other major stock exchanges;
|
(w)
|
promptly upon becoming aware of any change of law, advise the owner of any change of law or regulation which is reasonably likely to cause a Material Adverse Effect;
|
(x)
|
The Bareboat Charterer will not enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction without the prior consent of the Owner;
|
(y)
|
The Bareboat Charterer will not change its percentage shareholding held by the Shareholders without the prior written consent of the Owner unless such change is as a result of (i) a Cash Call under Article 16 of the Shareholder Agreement (as defined therein); (ii) a transfer under Article 19 of the Shareholder Agreement; (iii) a call or put option (as applicable) under Articles 20 and 21 of the Shareholder Agreement; (iv) Golar GHK Lessors Limited acquiring new shares in the Bareboat Charterer; or (v) the MLP;
|
(z)
|
Except with approval of the Owner, the Vessel shall not enter or remain in any zone which has been declared a war zone by any applicable government entity or the Vessel’s risk insurers;
|
(aa)
|
Except with approval of the Owner, the Bareboat Charterer shall not enter into any charter commitment of the Vessel other than the Bareboat Charter and Acceptable Sub-Charter;
|
(ab)
|
Ensure that the Vessel is maintained by the Managers or an internationally recognised and reputable technical and commercial manager during the Charter Period;
|
(ac)
|
On an annual basis, the Bareboat Charterer shall to Owner provide at its cost, a valuation of the Vessel carried out by an Approved Valuer;
|
(ad)
|
The Bareboat Charterer shall throughout the Charter Period ensure that the Vessel is at all times operated and maintained in accordance with the then prevailing and generally accepted industry standards for operation and maintenance of similar Vessels;
|
(ae)
|
promptly inform the Owner of:-
|
(i)
|
any material occurrence of which it becomes aware which has or which might reasonably be expected to have a Material Adverse Effect;
|
(ii)
|
any Default under this Bareboat Charter of which it becomes aware and will from time to time, if so requested by the Owner, confirm to the Owner in writing that, save as otherwise stated in such confirmation, no Default has occurred and is continuing.
|
(af)
|
procure that there is no Change of Control in relation to the Bareboat Charterer or the Bareboat Charterer Guarantor without the prior consent of the Owner (such consent not to be unreasonably withheld or delayed); and
|
(ag)
|
To proceed with an MLP on the following conditions:
|
(1)
|
The Bareboat Charterer undertakes to procure that upon the occurrence of MLP, Golar MLP shall, for such time it is the Parent, forthwith grant the MLP Guarantee, which shall include the following covenants:
|
(2)
|
Golar MLP or Golar OpCo (as relevant) shall have granted a replacement Shares Security in respect of the Bareboat Charterer to the Owner in form and substance acceptable to the Owner.
|
(3)
|
The Bareboat Charterer, Golar OpCo, Golar MLP shall deliver to the Owner such documents as the Owner may require in connection with the MLP, including any corporate authorisations for the Bareboat Charterer,
|
(ah)
|
undertakes and agrees that throughout the Charter Period, without prior written approval by the Owner:
|
(1)
|
the Bareboat Charterer shall not create or permit to subsist any Encumbrance over the Vessel (save for the Permitted Encumbrances);
|
(2)
|
without prejudice to Clause 34(a), the Bareboat Charterer shall not repudiate or terminate the Management Agreement or amend or vary any of its material terms of, or permit or suffer any amendment or variation of any of its material terms and procure that the Manager at all times shall comply with all relevant international and domestic regulations pertaining to the operation of the Vessel;
|
(3)
|
the Bareboat Charterer shall not incur any indebtedness other than any indebtedness incurred in the ordinary course of its business or incurred from any of its shareholders on no worse terms than those available in an arm's length transaction;
|
(4)
|
the Bareboat Charterer shall not acquire any assets other than assets acquired in the ordinary course of its business or acquired from any of its shareholders on no worse terms than those available in an arm's length transaction.
|
CLAUSE 50.
|
PURCHASE OPTION, PURCHASE OBLIGATION AND PUT OPTION
|
50.1
|
The Bareboat Charterer shall have the option (the “
Purchase Option
”) to purchase the Vessel on an “as is, where is” basis and to terminate this Bareboat Charter on any Purchase Option Date, provided that:
|
(a)
|
no Termination Event has occurred and is continuing, and no other event has occurred, which with the giving of notice and/or lapse of time would, if not remedied, would constitute a Termination Event;
|
(b)
|
the Bareboat Charterer shall serve the Owner with at least four (4) months’ prior written notice, which shall notify the Owner of its intention to exercise its purchase option and terminate this Bareboat Charter pursuant to this Clause 50.1 and shall specify the intended Purchase Option Date; and
|
(c)
|
on or before the intended Purchase Option Date, pay to the Owner the Purchase Option Price calculated in accordance with Appendix IV of this Agreement.
|
50.2
|
In the event that the Bareboat Charterer exercises the Purchase Option and has fully satisfied its obligations under the said Clause 50.1, the Owner shall transfer to the Bareboat Charterer (or its nominee) all of the Owner’s rights, title and interests in and to the Vessel on the basis of "as is, where is" with any mortgage created pursuant to a Security Document and the Mortgagee’s mortgage fully discharged and free from all other Encumbrances caused by the Owner. All registration, reasonable legal or other
|
50.3
|
In the event that the Bareboat Charterer exercises the Purchase Option the Bareboat Charterer shall (i) pay to the Owner, in addition to the Purchase Option Price referred to in Clause 50.1(c), a prepayment fee in an amount equal to zero point five per cent (0.5%) of the Purchase Option Price and (ii) indemnify the Owner on demand for any and all reasonable liabilities, losses, costs and expenses incurred by the Owner (including costs in relation to the termination of any USD interest rate swaps) pursuant to this Clause 50.
|
50.4
|
If no Purchase Option has been exercised by the Bareboat Charterer during the Charter Period, on the last day of the Charter Period, the Bareboat Charterer shall be obligated to purchase the Vessel from the Owner at the Purchase Obligation Price (the “
Purchase Obligation
”). Upon payment by the Bareboat Charterer of the Purchase Obligation Price, the Owner shall transfer to the Bareboat Charterer (or its nominee) all of the Owner’s rights, title and interests in and to the Vessel on the basis of "as is where is" with any mortgage created pursuant to a Security Document and the Mortgagee’s mortgage fully discharged and free from other Encumbrances caused by the Owner and without any further representation or warranty from the Owner. All registration, reasonable legal or other expenses directly incurred in transferring the title from the Owner to the Bareboat Charterer (or its nominee) shall be for the Bareboat Charterer’s account. If the Bareboat Charterer fails to comply with the Purchase Obligation and pay the Purchase Obligation Price within five (5) days from the date the Owner notifies the Bareboat Charter of its Purchase Obligation, the Owner shall be entitled to terminate the Bareboat Charter forthwith in accordance with Clause 45.
|
50.5
|
In the event that the Acceptable Sub-Charter is terminated, repudiated, rescinded or cancelled for any reason whatsoever or if no agreement is reached regarding any change to the insurance provisions pursuant to Clause 41.4, in either case on or after the 5
th
anniversary of the Bareboat Charter during the Charter Period, and the Bareboat Charterer is unable to secure a Replacement Sub-Charter and procure a Replacement Sub-Charter Guarantee, the Owner shall be entitled to require the Bareboat Charterer to purchase the Vessel (as is, where is) (a “
Put Option
”) at the Purchase Option Price set out in Appendix IV of this Agreement). The Put Option shall be deemed to be exercised forthwith upon the giving of notice in writing by the Owner to the Bareboat Charterer immediately. In addition, the Bareboat Charter shall pay the Owner a prepayment fee in an amount equal to zero point five per cent (0.5%) of the Purchase Option Price ( such prepayment fee together with the Purchase Option Price a “
Put Option Price
”). In addition, the Bareboat Charter shall indemnify the Owner on demand for any and all reasonable liabilities, losses, costs and expenses incurred by the Owner (including costs in relation to the termination of any USD interest rate swaps) pursuant to this Clause 50.5. Failure to comply with this Clause 50.5 constitutes a Termination Event within the meaning of Clause 44 and entitles the Owner to terminate the Bareboat Charter in accordance with Clause 45.
|
50.6
|
In the event that the Acceptable Sub-Charter is terminated, repudiated, rescinded or cancelled for any reason whatsoever or if no agreement is reached regarding any change to the insurance provisions pursuant to Clause 41.4, in either case prior to the 5
th
anniversary of the Bareboat Charter and the Bareboat Charterer is unable to secure a Replacement Sub-Charterer and procure a Replacement Sub-Charter Guarantee, the Owner shall be entitled to require the Bareboat Charterer to purchase the Vessel (as is, where is) (a “
Put Option
”) for a price (a “
Put Option Price
”)
calculated as follows:
|
(i)
|
the aggregate of the full amount of the Charter-Hire Principal then outstanding, including for the avoidance of doubt any Fixed Charter-hire unpaid at such time and the Purchase Obligation Price but excluding the Upfront Amount;
|
(iii)
|
all Variable Charter-hire due and payable but unpaid under the Bareboat Charter up to the Termination Date together with interest, if any, (as stipulated in Clause 39.6) accrued thereon from the due date therefor to the Termination Date; and
|
(iv)
|
a prepayment fee in an amount equal to two per cent (2%) on the aggregate of (i) and (ii) above.
|
50.7
|
Both the Owner and the Bareboat Charterer agree to use the form of Vessel Buyback Agreement set out in
Appendix III
of this Bareboat Charter for the transfer as described in this Clause 50.
|
CLAUSE 51.
|
REDELIVERY OF VESSEL
|
51.1
|
Redelivery of the Vessel shall occur if the Bareboat Charter is terminated in accordance with Clause 45 and the Owner elects to retake possession of the Vessel. Pending the actual Redelivery, the Bareboat Charterer shall be obliged at its own cost, to take such action as Owner may prescribe to protect the Vessel.
|
51.2
|
Without prejudice to Clause 45 (
Owner’s Right on Termination
), at the risk, time and expense of the Bareboat Charterer, the Bareboat Charter shall demobilise the Vessel from the Project Site and redeliver the same to the Owner hereunder within thirty (30) days of the date of the notice for Redelivery by the Owner: (i) subject to compliance with insurance policies, at the nearest safe and available port practical for the Bareboat Charterer without hindrance or interference by the courts or local authorities, or at such other port as the parties may mutually agree, within the permitted redelivery range contained herein and without prejudice to its obligations herein; (ii) with her class maintained without any conditions or recommendation; (iii) free of average damage affecting the Vessel’s class; (iv) with all the Vessel’s classification, trading, national and international certificates, valid and un-extended without conditions or recommendation and falling due for a minimum of three (3) months from the time of redelivery; (v) in the same or as good structure, state, condition and Class as that in which she was deemed to be delivered under Clause 3 of Part II of this Bareboat Charter, fair wear and tear not affecting Class excepted; (vi) with all such spare parts and other equipment (or equivalent replacements) she had at the time of Delivery under this Bareboat Charter; (vii) having been dry-docked in accordance with the rules and regulations of the Classification Society; (viii) having had her underwater parts treated with ample anti-fouling to last for the ensuing period up to the next scheduled dry docking of the Vessel; (ix) free of any cargo and passengers (unless otherwise agreed by the Owner); (x) with all information generated during the Charter Period in respect of the use, possession, operation, navigation and the physical condition of the Vessel, whether or not such information is contained in the Bareboat Charterer’s equipment, computer or property; (xi) deletion of the bareboat charter registration in favour of the Bareboat Charterer and reinstatement of the underlying registry in favour of the Owner if applicable; and (xii) on or before redelivery, a fully executed deed of novation to novate the Bareboat Charterer’s rights under Article IX (Warranty of Quality) of the Conversion Contracts to the Owner, if applicable.
|
51.3
|
The Owner shall, during the period of thirty (30) days prior to the end of the Charter Period, be entitled (subject to the Bareboat Charterer not having exercised its Purchase Option at that time), at its own risk, expense and time, to place one or more
|
51.4
|
Without prejudice to the generality or the provisions of Clause 8, Part II, any inspection of the Vessel carried out pursuant thereto may include an under-water inspection of the Vessel provided that the same shall be carried out during such time as she is in port.
|
51.5
|
Such inspection of the Vessel's parts below the deepest load line shall be carried out by a Class-approved diver with the Class surveyor in attendance at the Owner's risk and expense on arrival at port of redelivery. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective, so as to affect the Vessel's certificate of Class, such defects shall be made good at the Bareboat Charterer's expense and time to the reasonable satisfaction of the Classification Society.
|
CLAUSE 52.
|
INDEMNITY
|
52.1
|
The Bareboat Charterer agrees that is shall at all times during this Bareboat Charter assume all liability for and shall defend, indemnify and hold Owner harmless from and against:
|
(a)
|
Any and all reasonable and documented costs and expenses directly incurred by the Owner as a result of its entering into of this Bareboat Charter, the Transaction Documents and the Security Documents, including without limitation the costs, expenses, fees, charges for legal services, evaluation, consultancy, survey, registration of relevant charges, perfection of any securities and others arising out of or in connection with this Bareboat Charter (for the avoidance of doubt, the Bareboat Charterer shall have the benefit of any fee cap or other fee arrangement agreed by the Owner with its advisers);
|
(b)
|
any and all reasonable and documented costs and expenses directly incurred in connection with this Bareboat Charter and any Security Document or the Vessel, and any costs, charges, or expenses which the Bareboat Charterer have agreed to pay under this Bareboat Charter and shall be claimed or assessed against or paid by the Owner;
|
(c)
|
any Taxes (as defined in Clause 39.4) imposed on, or suffered by, the Owner;
|
(d)
|
any and all Losses suffered or incurred by the Owner and arising directly or indirectly out of the design, manufacture, delivery, non-delivery, purchase, importation, registration, ownership, chartering, sub-chartering, possession, control, use, operation, condition, maintenance, repair, replacement, refurbishment, modification, overhaul, insurance, sale or other disposal, return or storage of or loss of or damage to the Vessel or otherwise in connection with the Vessel including but not limited to those Losses described in Clause 47.5 and including any and all claims in tort or in contract by a sub-charterer of the Vessel from the Bareboat Charterer or by the holders of any Bills of Lading issued by the Bareboat Charterer;
|
(e)
|
any and all Losses suffered or incurred by the Owner which result directly or indirectly from claims which may at any time be made on the ground that any design, article or material of or in the Vessel or the operation or use thereof constitutes or is alleged to constitute an infringement of patent or copyright or registered design or other intellectual property right or any other right whatsoever;
|
(f)
|
any and all Losses suffered or incurred by the Owner (acting reasonably) in preventing or attempting to prevent the arrest, confiscation, seizure, taking in execution, impounding, forfeiture or detention of the Vessel, or in securing the release of the Vessel therefrom;
|
(g)
|
any and all Losses suffered or incurred by Owner as a result of any termination of the Acceptable Sub-Charter due to the act or omission of the Bareboat Charterer or the Acceptable Sub-Charterer including but not limited to all reasonable costs directly or indirectly incurred in connection with selling the Vessel pursuant to Clause 43.1 and Redelivery pursuant to Clause 51, unless caused by the Owner;
|
(h)
|
any and all Losses suffered or incurred by the Owner with respect to or as a direct result of the presence, escape, seepage, spillage, leaking, discharge or migration from the Vessel of oil or any other hazardous substance, including without limitation, any claims asserted or arising under the US Oil Pollution Act of 1990 (as same may be amended and/or re-enacted from time to time hereafter) or similar legislation, regardless of whether or not caused by or within the control of the Bareboat Charterer; and
|
(i)
|
any and all Losses incurred or suffered by the Owner in liquidating, employing or prepaying funds acquired or borrowed to purchase or finance or refinance the Vessel (including any costs incurred in unwinding any associated interest rate or currency swaps or currency futures) following any default in payment hereunder or the occurrence of any Termination Event.
|
52.2
|
If, under any applicable law, whether as a result of judgment against the Bareboat Charterer or the liquidation of the Bareboat Charterer or for any other reason, any payment to be made by the Bareboat Charterer under or in connection with this Bareboat Charter is made or is recovered in a currency other than the currency (the "
currency of obligation
") in which it is payable pursuant to this Bareboat Charter then, to the extent that the payment (when converted into the currency of obligation at the rate of exchange on the date for the determination of liabilities permitted by the applicable law) falls short of the amount unpaid under this Bareboat Charter, the Bareboat Charterer shall as a separate and independent obligation, fully indemnify the Owner against the amount of the shortfall; and for the purposes of this sub-clause "rate of exchange' means the best rate at which the Owner is able on the relevant date to purchase the currency of obligation with the other currency.
|
52.3
|
The indemnities contained in this Clause 52, and each other indemnity contained in this Bareboat Charter, shall survive any termination or other ending of this Bareboat Charter and any breach by, or repudiation or alleged repudiation by, the Bareboat Charterer or the Owner of this Bareboat Charter.
|
52.4
|
All moneys payable by the Bareboat Charterer under this Clause 52 shall be paid on demand but in any event within five (5) Business Days after the date of the Owner’s demand.
|
CLAUSE 53.
|
COMMUNICATION
|
(a)
|
In the case of the Owner:
|
Postal Address:
|
c/o CSSC (Hong Kong) Shipping Company Limited, Shanghai Office
|
(b)
|
In the case of the Bareboat Charterer:
|
Postal Address: c/o Golar Management Ltd, 13th Floor, 1 America Square,
|
17 Crosswall, London, EC3N 2LB, United Kingdom
|
CLAUSE 54.
|
LAW AND JURISDICTION
|
54.1
|
Governing law
|
54.2
|
Proceedings
|
CLAUSE 55.
|
NO PARTNERSHIP OR AGENCY
|
CLAUSE 56.
|
SEVERABILITY CLAUSE
|
CLAUSE 57.
|
THIRD PARTY RIGHTS
|
CLAUSE 58.
|
CUMULATIVE RIGHTS AND NO WAIVER
|
CLAUSE 59.
|
CONFIDENTIALITY
|
59.1
|
to its directors, employees, advisors, consultants, agents, subcontractors and Affiliates who have a need to know for the performance of the project and the Bareboat Charter and who have been informed of the obligations of confidentiality herein, and each Party shall ensure that its directors, employees, advisors, consultants, agents, subcontractors and Affiliates comply with this Clause 59;
|
59.2
|
to financial advisors, investment bankers, underwriters, brokers, lenders or other lending or financial institution advising on, providing or considering the provision of financing to the receiving Party;
|
59.3
|
to any third party to whom is required to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
|
59.4
|
to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administration or other proceedings or disputes in respect of the terms of this Bareboat Charter.
|
CLAUSE 60.
|
CONDITIONS PRECEDENT
|
60.1
|
The effectiveness of this Bareboat Charter (save for Clauses 39.2 which shall become effective immediately upon the execution of this Bareboat Charter) shall be subject to the fulfilment of the following conditions precedent:
|
(a)
|
the Owner’s receipt of an executed original of each Security Document in favour of the Owner and an executed original of the acknowledgment to the Assignment of the Sub-Charter Documents from the Acceptable Sub-Charterer;
|
(b)
|
the Owner’s receipt of the following documents (where applicable, in a form and substance reasonably required by the Owner):
|
(i)
|
certified true copies of the up-to-date Certificate of Incorporation and Articles of Association (or, in each case, its equivalent in its place of incorporation) of the Bareboat Charterer;
|
(ii)
|
an original copy of the up-to-date Good Standing Certificate of the Bareboat Charterer (or its equivalent in its place of incorporation);
|
(iii)
|
such documentary evidence (including the board of directors' resolutions) legally sufficient to show the due corporate approval by any Obligor of this Bareboat Charter and any Transaction Documents to which such Obligor is a party and the due authorisation by such Obligor in favour of a person or persons to execute for and on behalf of such Obligor this Bareboat Charter and any Transaction Documents to which such Obligor is a party under seal (where appropriate) and any other notices and documents required in connection therewith, amongst other things, including:
|
A.
|
such Obligor’s original or certified copy of board of directors' or shareholders’ resolutions which approves the transaction contemplated therein; and
|
B.
|
notarized Power of Attorney in favour of the signatory/ies in English showing the due corporate approval by such Obligor of this Bareboat Charter and any Transaction Documents to which such Obligor is a party and the due authorisation by such Obligor in favour of a person or persons to execute for and on behalf of such Obligor this Bareboat Charter and any Transaction Documents to which such Obligor is a party under seal (where appropriate) and any other notices and documents required in connection therewith;
|
(iv)
|
certified true copies of the up-to-date Business Licence and Articles of Association (or, in each case, its equivalent in its place of incorporation) of the Guarantor;
|
(v)
|
such documentary evidence (including the board of directors' resolutions) legally sufficient to show the due corporate approval by the Guarantor of the provision of the Bareboat Charter Guarantee and the due authorisation by the Guarantor in favour of a person or persons to execute for and on behalf of the Bareboat Charter Guarantee under seal (where appropriate), amongst other things, including:
|
A.
|
the Guarantor original or certified copy of board of directors' or shareholders’ resolutions (as appropriate and required according the Articles of Association of the Guarantor) which approves the providing of the Bareboat Charter Guarantee in favour of the Owner;
|
B.
|
notarized Power of Attorney in favour of the signatory/ies in English showing the due authorisation by the Guarantor in favour of a person or persons to execute for and on behalf of the Bareboat Charterer this Bareboat Charter and any Transaction Documents to which the Bareboat Charterer is a party under seal (where appropriate) and any other notices and documents required in connection therewith;
|
(vi)
|
the Group Structure Chart;
|
(c)
|
such evidence as the Owner may reasonably require as to the due execution of any Charter Document and the due incorporation of the Acceptable Sub-Charterer and by the Acceptable Sub-Charter Guarantor, their power and authority to enter into and perform each relevant Charter Document to which it is a party and all other documents and instruments to give effect to the same;
|
(d)
|
a copy of any Authorisation or other document, opinion or assurance which the Owner considers to be necessary or desirable (if it has notified the Bareboat Charter accordingly) in connection with the entry into and performance of the transactions contemplated by any Transaction Document or for the validity and enforceability of any Transaction Document;
|
(e)
|
evidence of delivery of the Vessel pursuant to the MOA;
|
(f)
|
An original counterpart of the Bareboat Charter, the Fee Letter, the Mortgage, the Shares Security, the Bareboat Charter Guarantee, the Vessel Contracts Assignment, the Acceptable Sub-Charter, the Acceptable Sub-Charter Guarantee, the Manager’s Undertaking and the General Assignment each duly executed and delivered by the parties thereto as well as evidence that all notices, acknowledgements, authorizations, invoices, letters, transfers, certificates and other any other documents required thereunder have been duly executed and delivered;
|
(g)
|
If relevant, legal opinions from Cameroon counsel confirming the effectiveness and enforceability of the Binding Term sheet or, as the case may be, the TSA, failing which a confirmation in writing from the Bareboat Charterer that it has procured all Consents and Project Authorisations required in connection with the Project and the operation of the Vessel, the Binding Term Sheet, the TSA (if applicable) and Perenco Security Arrangements are in full force and effect.
|
(h)
|
audited financial statements in respect of the Group on a consolidated basis and unaudited financial statements in respect of the Bareboat Charterer as at their respective last financial year;
|
(i)
|
evidence that Golar Management Ltd has accepted its appointment as agent for service of process for the Bareboat Charterer and the Guarantor under the Transaction Documents to which they are respectively a party;
|
(j)
|
such documentary evidence relating to the Bareboat Charterer and the Guarantor as the Owner may require to satisfy its “know your customer” regulatory obligations;
|
(k)
|
evidence that all fees, costs and expenses due under the Bareboat Charter and each Transaction Document have been paid by the Bareboat Charterer; and
|
(l)
|
evidence satisfactory to the Owner than the Vessel is registered with the Flag State(s).
|
60.2
|
As condition precedent to delivery of the Vessel under this Bareboat Charter, the Bareboat Charterer shall prior to or on the Delivery Date, obtain and deliver to the Owner the following documents in form and substance satisfactory to the Owner:
|
(a)
|
The Delivery Costs and any other amount which is due and payable having been paid by the Bareboat Charterer;
|
(b)
|
evidence as supported by the insurance broker’s original statement (including all insurance policies) that the Vessel is adequately insured in accordance with the provisions of this Bareboat Charter, draft of which shall be provided to the Owner for comments and or approval at least seven (7) Business Days before the Delivery Date;
|
(c)
|
duly executed original Security Documents in favour of the Owner (together with all notices, consents, acknowledgements, letters and other documents required to be received, given or exchanged pursuant to the aforesaid Security Documents other than the letter of undertakings from the Approved Brokers and Approved Insurers);
|
(d)
|
certified copy of the Management Agreement;
|
(e)
|
copy of the Classification Certificate of the Vessel issued by the Classification Society and all other Vessel's certificates and relevant delivery documents, including the valid and current (a) Document of Compliance under the ISM Code in respect of the Manager, (b) Safety Management Certificate (“SMC”) under the ISM Code in respect of the Vessel, (c) ISSC in respect of the Vessel, (d) International Air Pollution Prevention Certificate (IAPPC) in respect of the Vessel issued under Annex VI (Regulations for the Prevention of Air Pollution from Ships) to MARPOL;
|
(f)
|
a written statement from the Bareboat Charterer that, as at the Delivery Date, no Event of Default under the Pre-delivery Financing Agreement has occurred which is continuing unremedied; and
|
(g)
|
on the Delivery Date, each of the representations and warranties contained in Clause 47 being true and correct in all material respects by reference to the facts and circumstances then existing; and
|
(h)
|
any document that the Mortgagee may reasonably require in connection with the conditions precedent set out in this Clause 60.2.
|
CLAUSE 61.
|
LENDERS’ REQUIREMENTS FOR FURTHER AMENDMENTS
|
CLAUSE 62.
|
NOMINATION
|
CLAUSE 63.
|
REGISTRATION
|
CLAUSE 64.
|
ADDITIONAL CLAUSES
|
CLAUSE 65.
|
CONCLUSIVE AGREEMENT
|
THE OWNER
By: ______________________
Name:
Title: Director / Attorney-in-fact
|
THE CHARTERER
By: ________________________
Name:
Title: Director / Attorney-in-fact
|
End of Charter Year
|
Purchase Option Price
|
5
|
52.5% of the Purchase Price
|
6
|
47.0% of the Purchase Price
|
7
|
41.5% of the Purchase Price
|
8
|
36.0% of the Purchase Price
|
9
|
30.5% of the Purchase Price
|
BAREBOAT CHARTERER
|
|
|
SIGNED
by
For and on behalf of
GOLAR HILLI CORPORATION
In the presence of
|
)
)
)
|
/s/ Brian Tienzo
|
|
|
Signature/Title Attorney in fact
|
OWNER
|
|
|
SIGNED
by
For and on behalf of
FORTUNE LIANJIANG SHIPPING S.A.
In the presence of
|
)
)
)
|
/s/ Yang Li
|
|
|
Signature/Title
|
End of Charter Year
|
Purchase Option Price
|
5
|
52.5%
of the Purchase Price
|
6
|
47.0%
of the Purchase Price
|
7
|
41.5%
of the Purchase Price
|
8
|
36.0%
of the Purchase Price
|
9
|
30.5%
of the Purchase Price
|
BAREBOAT CHARTERER
|
|
|
SIGNED
by
For and on behalf of
GOLAR HILLI CORPORATION
In the presence of
|
)
)
)
|
/s/ Brian Tienzo
|
|
|
Signature/Title Attorney in fact
|
OWNER
|
|
|
SIGNED
by
For and on behalf of
FORTUNE LIANJIANG SHIPPING S.A.
In the presence of
|
)
)
)
|
/s/ Yang Li
|
|
|
Signature/Title
|
Confidential
Execution Version
|
||||
|
Dated
9 September 2015
|
|
||
|
||||
GOLAR HILLI CORPORATION
as Seller
FORTUNE LIANJIANG SHIPPING S.A.
as Buyer
|
||||
|
Memorandum of Agreement
|
|
||
|
(1)
|
Fortune Lianjiang Shipping S.A.(Reg. No. 71932), a company incorporated in the Republic of the Marshall Islands with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 in its capacity as Buyer; and
|
(2)
|
Golar Hilli Corporation (Reg. No. 68975), a company incorporated in Republic of The Marshall Islands with its registered office at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands, MH96960 in its capacity as Seller)
|
(A)
|
Golar Hilli Corporation in each of its separate capacities as Borrower, Seller and Bareboat Charterer, Golar LNG Limited as Guarantor, and Fortune Lianjiang Shipping S.A. in each of its separate capacities as Lender, Buyer and Owner have entered into a Common Terms Agreement dated
9 September 2015
setting out the defined terms in respect of the transaction.
|
(B)
|
The Seller, the Builder and the Sub-Contractor (as applicable) have entered into the Conversion Contracts pursuant to which the "Hilli", a second hand LNG vessel is to be converted to a Floating Liquefied Natural Gas Vessel as more particularly described in Clause 2 ("
Vessel
").
|
(C)
|
The Conversion Works in respect of the Vessel are due to be completed on or before the Cancelling Date.
|
(D)
|
The Seller has now agreed to transfer and sell the Vessel to the Buyer and the Buyer has agreed to purchase and take delivery of the Vessel from the Seller in accordance with this MOA.
|
(E)
|
Upon the Buyer taking delivery of the Vessel under this MOA, the Buyer will charter the Vessel to the Bareboat Charterer in accordance with the Bareboat Charter.
|
1
|
Definitions
|
1.1
|
Terms and conditions defined in the Common Terms Agreement shall have the same meaning when used in this MOA, including the Recitals hereto, unless otherwise defined herein.
|
1.2
|
Unless a contrary indication appears, in the event of any conflict or inconsistency between any provision of this MOA and any provision of the Bareboat Charter, the provisions of the Bareboat Charter shall prevail.
|
2
|
Sale of the Vessel
|
3
|
Purchase Price
|
3.1
|
The Purchase Price shall be the Market Value unless the Market Value is greater than the Initial Project Budget, in which case, the Purchase Price shall be an amount equal to the Initial Project Budget. Where the Market Value is less than the amount outstanding under the Pre-Delivery Financing Agreement, the Purchase Price shall be that Market Value and any shortfall shall be for the Seller’s account.
|
3.2
|
In all cases and under no circumstances shall the Purchase Price exceed the Initial Project Budget.
|
3.3
|
The Buyer shall appoint two Approved Valuers to each carry out a Valuation on the Vessel. The Approved Valuers shall provide the Buyer and the Seller with a Valuation Certificate at least three (3) Business Days before the Delivery Date. The Market Value shall be the arithmetic average of both valuations set out in the Valuation Certificates.
|
3.4
|
The reasonable costs of providing all such Valuation Certificates by the Approved Valuers shall be for the Seller's account.
|
4
|
Pre-Delivery Financing and Buyer's Obligation to Take Delivery
|
4.1
|
It is agreed between the Seller and the Buyer that during the Construction Period the Buyer shall provide the Pre-delivery Financing to the Seller to assist with the funding of its instalment payments payable pursuant to the Conversion Contracts.
|
4.2
|
Upon receipt of the Seller's written Notice of Actual Readiness pursuant to Clause 6.2 below, the Buyer shall on the Delivery Date be obliged to take Delivery of the Vessel from the Seller and pay the Purchase Price (as calculated in accordance with Clause 3) in accordance with Clause 5.1 subject to the following conditions being met on or before 30 August 2018 (the Cancelling Date):
|
(a)
|
The Revenue Start Date has occurred and the Seller certifies in writing thereof;
|
(b)
|
The Buyer (acting reasonably) is satisfied that on Delivery, all sums due and owing under the Pre-Delivery Financing Agreement will be fully repaid;
|
(c)
|
the Seller and the Technical Adviser have carried out a joint physical inspection ("
Final Joint Inspection
") of the Vessel and the Vessel's Classification records, and declared in writing to the Buyer that the Vessel is acceptable and ready for delivery, with present Class maintained, free from any damage, class conditions and/or recommendations affecting the Vessel's Class, and with all class certificates and trading certificates (both national and international) clean and valid;
|
(d)
|
a copy each of the Technical Adviser's report (as required under the Technical Adviser's Scope of Work) and class reports (where applicable and reasonably requested by the Buyer) has been given to the Buyer;
|
(e)
|
Clause 11 of the MOA regarding the Vessel's condition on Delivery has been complied with;
|
(f)
|
the Bareboat Charter and the Bareboat Charter Guarantee has been duly executed prior to the entering of this MOA and the Bareboat Charterer has confirmed in writing to the Owner that it will accept the Vessel and will take delivery of the same under the Bareboat Charter;
|
(g)
|
The conditions precedents in Box 4 of the Binding Term Sheet (or, if relevant, equivalent provision in the TSA or a Replacement Sub-Charter) have been satisfied or waived by the parties to the Binding Term Sheet (or, if relevant, the TSA or a Replacement Sub-Charter), and the Binding Term Sheet (or, if relevant, the TSA or a Replacement Sub-Charter) has become effective prior to the entering of this MOA;
|
(h)
|
The Acceptable Sub-Charter and the Acceptable Sub-Charter Guarantee is duly executed and is effective;
|
(i)
|
Evidence that the 1st priority Mortgage which the Builder has over the Vessel is discharged or will be discharged immediately prior to Delivery;
|
(j)
|
The Seller has procured from the Builder, a no claims certificate confirming that the Builder releases, waives and discharges forever the Vessel from any and all claims, debts, liabilities, demands, obligations, costs, expenses, actions, and causes of action of every nature, character and description, vested and contingent, whether known or unknown which the Builder may have against the Seller, arising out of or in connection with the Conversion Contracts;
|
(k)
|
each and all Security Documents and the acknowledgments from the Acceptable Sub-Charterer and the Acceptable Sub-Charter Guarantor in relation to the notices of assignment issued pursuant to the Assignment of the Acceptable Sub-Charter and the Acceptable Sub-
|
(l)
|
the receipt by the Buyer of all documents and evidence set out in Clause 8 of this MOA;
|
(m)
|
the Seller's confirmation in writing that Clause 9 of this MOA has been complied with; and
|
(n)
|
The Seller's confirmation in writing that all Consents and Project Authorisations required in connection with the Project and/or the Vessel or otherwise at the time this representation is made have been obtained or effected and are in full force and effect and valid under applicable local law.
|
5
|
Payment of the Purchase Price and Upfront Amount
|
5.1
|
Upon all conditions set out in Clause 4.2 being satisfied and complied with, the Buyer shall pay on the Delivery Date pay to the Seller the
Actual Purchase Price
in an amount based on the following formula: AP = P less U less C, and less O.
|
(o)
|
AP
stands for the actual purchase price payable by the Buyer to the Seller on the Delivery Date.
|
(p)
|
P
stands for the Purchase Price.
|
(q)
|
U
stands for the Upfront Amount.
|
(r)
|
C
stands for the First Charter-Hire payable by the Bareboat Charterer to the Owner under the Bareboat Charter, and once deducted from the Purchase Price by way of a set off shall be deemed as a full payment of the First Charter-hire by the Bareboat Charterer to the Owner.
|
(s)
|
O
stands for the outstanding principal and accrued interest payable by the Seller to the Buyer on the Delivery Date and calculated in accordance with the Pre-Delivery Financing Agreement, which shall be deemed to have been paid in full by the Seller pursuant to the Pre-Delivery Financing Agreement once being applied and set off against the Purchase Price.
|
5.2
|
The Parties agree that the Upfront Amount shall be provided on an unsecured, and interest free basis and that it shall only be applied in accordance with this MOA and Clause 38.1 (
Upfront Amount
) of the Bareboat Charter.
|
5.3
|
On the Delivery Date, the Buyer shall, upon delivery of the Vessel and subject to the conditions set out in Clause 4.2 being satisfied and complied with, pay the Actual Purchase Price in Dollars to the Sellers' bank nominated bank account notified by the Seller to the Buyer in writing no later than ten (10) Business Days in advance. Any charge from the Buyer's bank, including intermediate bank(s), if any, incurred for remitting the Balance shall be for the Buyer's account and any charge from the Seller's bank, including intermediate bank(s), if any, incurred in receiving the Balance shall be for the Seller's account.
|
6
|
Time and place of delivery and notices
|
6.1
|
Provided Notice of Actual Readiness has not yet been given, the Seller shall keep the Buyer reasonably well informed of the progress of the Conversion Works and the Vessel's itinerary including when the Vessel is on the Project Site. In particular, the Seller shall inform the Buyer when the following milestones have been achieved:-
|
(a)
|
When the Vessel leaves the Builder's Yard for the Singapore anchorage to carry out remaining commissioning of the Conversion Works, and a Certificate of Vessel Leaving the Yard has been signed pursuant to Article 18 of the EPC Contract;
|
(b)
|
When the Vessel has been re-delivered upon completion of the remaining commissioning of the Conversion Works at the Singapore anchorage, pursuant to Article 20 of the EPC Contract;
|
(c)
|
When Sailaway has occurred;
|
(d)
|
When the Vessel has arrived on the Project Site to carry out the Project Site Works;
|
(e)
|
When the Ready for First Gas Certificate has been issued by the Seller to the Sub-Contractor;
|
(f)
|
When Project Site Commissioning has been completed and the Seller has issued the Ready for Start-up Certificate pursuant to Article 24 of the EPC Contract;
|
(g)
|
When the start-up and Performance Tests in Article 25 of the EPC Contract have been completed and the Guaranteed Performance Certificate has been signed-off by the Seller;
|
(h)
|
When each of the milestones referred to in Box 5 (a) to (d) of the Binding Term Sheet or TSA (if applicable) or equivalent provisions under a Replacement Sub-Charter have been met and the delivery windows referred to therein;
|
(i)
|
When the Revenue Start Date is likely to occur.
|
6.2
|
When the Vessel is in every respect physically ready for delivery in accordance with this MOA, and the Revenue Start Date has occurred, the Seller shall tender a written Notice of Actual Readiness of the Vessel to the Buyer. If none of the circumstances set out in Clause 6.3 below have occurred, the Vessel shall be delivered and taken over safely afloat at the Project Site on the Delivery Date as follows:
|
(a)
|
Subject to the conditions in Clause 4.2 being satisfied, the Vessel shall be delivered by the Seller to the Buyer; however in any case, the Delivery shall take place before the Cancelling Date; and
|
(b)
|
Upon Delivery of the Vessel to the Buyer under this MOA, the Vessel shall immediately be delivered to the Bareboat Charterer under the Bareboat Charter.
|
6.3
|
If the Vessel becomes an actual, constructive or compromised total loss before delivery and/or before the provisions of Clause 8 (Documentation) have been satisfied by the Seller, this MOA shall become null and void
|
7
|
Spares, bunkers and other items
|
7.1
|
The Seller shall deliver the Vessel to the Buyer "as is, where is" and with everything belonging to her on board and on shore in accordance with the terms of the Conversion Contracts and this MOA. All spare parts and spare equipment including spare propeller(s)/propeller blade(s), spare anchor, if any, belonging to the Vessel at the time of delivery used or unused, whether on board or not shall become the Buyer's property on delivery, but spares on order are excluded. The radio installation and navigational equipment shall be included in the sale, along with all unused stores and provisions without extra payment.
|
7.2
|
An inventory of unused bunkers, lubricants/lubricating oil, grease, fuel oil or other liquids, and consumables supplied by the Builder and left on board at delivery of the Vessel, shall be taken over and paid for by the Seller. Upon delivery of the Vessel from the Seller to the Buyer, such unused bunkers, lubricants/lubricating oil, grease, fuel oil or other liquids, and consumables shall be deemed to be taken over and be paid for by the Bareboat Charterer. No payment shall be made by the Buyer to the Seller for such unused bunkers, lubricants/lubricating oil, grease, fuel oil or other liquids, and consumables on board on the Delivery Date of the Vessel. The Seller shall provide the original payment receipt on the Delivery Date to show that they have paid such unused bunkers, lubricants/lubricating oil, grease, fuel oil or other liquids, and consumables.
|
8
|
Documentation
|
(a)
|
In exchange for payment of the Purchase Price in Clause 5 above and as a condition precedent to Delivery in Clause 4.2 above, the Seller shall furnish the Buyer with delivery documents as follows:-
|
(i)
|
One original bill(s) of sale in a form recordable in the Flag State, transferring the title of the Vessel from the Seller to the Buyer and warranting that the Vessel is free from all mortgages, encumbrances and maritime liens or any other debts whatsoever, duly notarially attested and legalised or apostilled, as required by the Flag State;
|
(ii)
|
original builders certificate or equivalent under the Conversion Contracts;
|
(iii)
|
confirmation of Class issued not later than 72 hours prior to Delivery (Buyer to accept provisional / interim certificates if applicable) confirming that the Vessel is in Class and free of condition/recommendation;
|
(iv)
|
transcript of register (or equivalent) issued by the competent authorities stating that the Vessel is free from registered encumbrances, dated on the Delivery Date and faxed to the Buyer at the closing with the original to be couriered to the Buyer promptly after Delivery;
|
(v)
|
Certified copies of the constitutional documents of the Seller, or a statement from an officer of the Seller that no changes have been made since such document was delivered to the Buyer in connection with the execution of the Pre-Delivery Financing Agreement, the Bareboat Charter and the Acceptable Sub-Charter;
|
(vi)
|
Certified copy of a good standing certificate of the Seller dated not later than three (3) Business Days prior to Delivery;
|
(vii)
|
Minutes of a Meeting of the Shareholders and Board of Directors of the Seller approving the sale of the Vessel to the Buyers, authorising the execution of the Bill of Sale, Protocols of Delivery and Acceptance and any other documents required to effect the sale and transfer of the Vessel to the Buyer and the granting of a Power of Attorney in respect of the same;
|
(viii)
|
An original Power of Attorney duly executed by the Seller appointing and authorising one or more Attorney(s)-in-Fact, inter alia, to act on behalf of the Seller to execute, sign and deliver the Bill of Sale, Protocol of Delivery and Acceptance and delivery of the Vessel to the Buyer, duly notarized and in the performance of this MOA, duly notarially attested and legalised or apostilled (as reasonably required);
|
(ix)
|
A Certificate signed by the Company Secretary of the Seller certifying the identity of the current directors of the Seller;
|
(x)
|
An original commercial invoice stating the main particulars of the Vessel and the Balance and signed by the Seller;
|
(xi)
|
Copy of the Document of Compliance (DOC) in respect of the Manager;
|
(xii)
|
Copy of the Vessel's Safe Manning Certificate (SMC);
|
(xiii)
|
Copy of the Vessel's International Ship Security (ISSC);
|
(xiv)
|
Declaration of warranty issued by the Builder stating that the Vessel is free from any liens, charges, claims, mortgages, taxes, or other encumbrances of whatsoever nature;
|
(xv)
|
An original Protocol of Redelivery and Acceptance signed by the Builder and the Seller confirming the date and time of Redelivery of the Vessel;
|
(xvi)
|
All documents to be delivered at Redelivery in accordance with the EPC Contract;
|
(xvii)
|
A copy of each Management Agreement between the Bareboat Charterer and the Manager in respect of the technical and commercial management of the Vessel;
|
(xviii)
|
A Certificate of Deletion (if applicable) of the Vessel from the Vessel's Registry or a Letter of Undertaking to provide the Certificate of Deletion and closed CSR from the present Flag within thirty (30) Business Days of the Delivery Date;
|
(xix)
|
the Seller's letter of confirmation that to the best of their knowledge the Vessel has not sustained any grounding or any other damage to the underwater parts since the Joint Final Inspection and is not black-listed by any government, state, country political sub division and union.
|
(xx)
|
Valuation Certificate prepared by the Approved Valuers which are required to determine the Purchase Price in accordance with Clause 3;
|
(xxi)
|
The reports from the Technical Adviser as required pursuant to the Technical Adviser's Scope of Work confirming that the Conversion Works carried out on the Vessel have been in accordance with the specifications set out in the Conversion Contracts and the relevant performance requirements set out in the Binding Term Sheet or the TSA (if applicable) and that the Vessel is in a position to earn sufficient monies pursuant to the Acceptable Sub-Charter to enable the Bareboat Charterer to meets all its payment obligations under the Bareboat Charter, and that the Vessel is in all material respects ready and in a condition acceptable to the Buyer, acting reasonably;
|
(xxii)
|
Evidence reasonably satisfactory to the Buyer that any defaults of the Borrower under the terms of the Pre-Delivery Financing Agreement in respect of the Vessel have been remedied by the Borrower or waived by the Lender;
|
(xxiii)
|
Evidence reasonably satisfactory to the Buyer that the conditions precedent under the Bareboat Charter have been or will be met on Delivery and that the Vessel may be immediately delivered by the Owner to the Bareboat Charterer under the Bareboat Charter;
|
(xxiv)
|
Any such additional documents as may reasonably be required by the competent authorities of the Flag State for the purpose of registering the Vessel;
|
(xxv)
|
Copies of all insurance policies, cover notes and certificates of entry for the Vessel in compliance with the terms of the Bareboat Charter showing the Owner as a co-assured;
|
(xxvi)
|
A copy of the Acceptable Sub-Charter and the Acceptable Sub-Charter Guarantee.
|
(b)
|
At the time of Delivery, the Buyer shall provide the Seller with:
|
(i)
|
A certified true copy of the Buyer's constitutional documents;
|
(ii)
|
Evidence that all necessary corporate, shareholder and other action has been taken by the Buyer including the original Minutes/Resolution of Buyers' Board of Directors authorising the execution of the Power of Attorney and any documents required to
|
(iii)
|
Original Power Of Attorney of the Buyers, authorising the attorney(s)-in-fact, inter alia, to perform its obligations under the MOA and to effect payment of the Purchase Price and other payments, the execution of the Protocol of Delivery and Acceptance and any other documents which may be required to transfer and register the Vessel, and to do any acts as may be required to effect the purchase, transfer and registration of the Vessel, duly notarised and apostilled; and
|
(iv)
|
Quiet Enjoyment Letter.
|
(c)
|
If at the time of delivery of the Vessel the Classification Society or any other party has not issued the final certificates, then the Buyer will accept temporary certificates. The Seller shall arrange for such temporary certificates to be replaced with the permanent ones as soon as practical but in no event later than the time when the temporary certificates expire, and also provide the Buyer with a letter of undertaking to provide these certificates.
|
(d)
|
If any of the documents listed in Sub-clauses (a) and (b) above are not in the English language they shall be accompanied by an English translation by an authorised translator.
|
(e)
|
The Buyer and Seller shall at the time of Delivery sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Seller to the Buyer.
|
(f)
|
At the time of the physical delivery on board the Vessel, and concurrent with the exchange of documents in Sub-clause (a) and Sub-clause (b) above, the Seller shall hand to the Buyer the Classification certificate(s), plans, drawings, record books and manuals (excluding ISM/ISPS manuals), which are on board the Vessel. All other documents and certificates which are on board and pertinent to the Vessel shall also be handed over to the Buyer unless the Seller is required to retain the same, in which case the Buyer has the right to take copies and leave the photocopies on board the Vessel. All other documents and technical documentation which may be in the Seller's possession shall following Delivery be forwarded to the Buyer after Delivery, if they so request with reasonable forwarding charges, if any, to be for the Buyer's account. The Seller may keep the Vessel's log books but the Buyer has the right to take copies of the same. In instances where documents are to remain on the Vessel at all times the Buyer is permitted to take copies on board the Vessel at their own cost.
|
(g)
|
A copy each of the following documents duly executed by the relevant parties to the documents as follows:-
|
(i)
|
A copy of the Bareboat Charter duly executed by the Owner and the Bareboat Charterer;
|
(ii)
|
A copy of the Acceptable Sub-Charter duly executed by the Bareboat Charterer and the Acceptable Sub-Charterer;
|
(iii)
|
A copy of the Bareboat Charter Guarantee duly executed by the Bareboat Charter Guarantor and the Owner; and
|
(iv)
|
A copy of the Acceptable Sub-Charter Guarantee.
|
(h)
|
Any other documents that may be reasonably requested by the Mortgagee including but not limited to acknowledgments of any assignments by the Buyer or any Security Documents.
|
9
|
Encumbrances
|
10
|
Taxes, fees and expenses
|
11
|
Condition on delivery
|
11.1
|
The Vessel shall be delivered to the Buyer in accordance with the specifications set out in the Conversion Contracts, and shall thereafter be inspected and approved by the Technical Advisor and classed in accordance with the specifications in the Conversion Contracts and this MOA. The Vessel shall be delivered to the Buyer with her Class maintained without condition/recommendation and free from any damage affecting class and classification certificates and national/international certificates as at the Delivery Date. Following the execution of the MOA, the Seller shall not agree to any material modification or changes to the specifications set out in the Conversion Contracts and the MOA without the Buyer's prior written consent (such consent not to be unreasonably withheld or delayed) save for Permitted Amendments.
|
11.2
|
The Seller shall notify the Buyer upon immediately becoming aware of any material dispute with the Builder arising out of or in relation to the Conversion Contracts. The Seller shall also notify the Buyer within ten (10) Business Days of becoming aware that the Seller or the Builder is entitled to terminate the Conversion Contracts. A dispute is considered material if when it is adversely determined, might have a Material Adverse Effect.
|
11.3
|
The Seller shall not terminate the Conversion Contracts or enter into mitigation or dispute resolution procedures regarding a material dispute with the Builder unless approved by the Buyer (such consent not to be unreasonably withheld or delayed) and shall do so if instructed by the Buyer (acting reasonably). If the Seller enters into mitigation or dispute resolution procedures with the Builder without the Buyer's consent in breach of this Clause 11.3, the Buyer shall be entitled (but not obliged to) cancel this MOA.
|
12
|
Additional Rights of Inspection
|
12.1
|
Subject to agreeing timely visits with the Manager, the Buyer and/or the Technical Adviser shall have the right to attend any of the performance tests and any commissioning including Project Site Commissioning being carried out on the Vessel.
|
12.2
|
The Technical Adviser shall have the right to inspect the Vessel at any time during the Conversion Works by giving at least three (3) Business Days' notice and the Seller shall use reasonable endeavours to keep the Technical Adviser informed of the Vessel's schedule, of any upcoming milestones and of any inspections and tests as set out in Clause 6.1.
|
12.3
|
The Seller shall give the Technical Adviser at least three (3) Business Days advance notice of the Final Joint Inspection to be carried out for the purposes of the Scheduled Commissioning Start Date occurring.
|
12.4
|
The Seller shall make available for Buyer's and/or the Technical Adviser's review all relevant and material correspondence, notices and other documents related to technical (as opposed to commercial) matters and shall provide copies of the same upon request, the costs of such request to be for the Seller's account.
|
13
|
Name/markings
|
14
|
Buyer's default
|
15
|
Seller's default
|
15.1
|
The Buyer shall be entitled to cancel this MOA in the event that by the Cancelling Date:-
|
(a)
|
the Seller fails to deliver the Vessel; or
|
(b)
|
the Seller fails to meet the conditions in Clause 4.2 and/or to provide the documents in Clause 8 for the purposes of Delivery in Clause 6 of this MOA; or
|
(c)
|
if the Binding Term Sheet or TSA (whichever is applicable) and the Perenco Security Arrangements is terminated for whatever reason, and a Replacement Sub-Charter is not secured before the Delivery Date.
|
15.2
|
In the event the Seller fails to deliver the Vessel as referred to in Clause 15.1, it shall compensate the Buyer for its direct losses and for all reasonable expenses together with interest whether or not the Buyer cancels this MOA or accelerates the repayment of the Pre-delivery Financing in accordance with the terms of the Pre-Delivery Financing Agreement, provided that the Buyer shall not be entitled to compensation if such losses or expenses arose out of gross negligence or wilful misconduct of the Buyer.
|
16
|
Automatic Termination
|
(a)
|
the Seller fails to satisfy the Conditions Precedent set out in Schedule 2, Part A of the Pre-delivery Financing Agreement;
|
(b)
|
When Mandatory Cancellation under Clause 6.5 of the Pre-delivery Financing Agreement is triggered;
|
(c)
|
When the Lender exercises its rights under Clause 18.25 of the Pre-delivery Financing Agreement pursuant to the occurrence of an Event of Default which is continuing.
|
17
|
Assignments
|
18
|
Representations and warranties
|
18.1
|
Each Party to this MOA represents and warrants to the other Party to this MOA that:
|
(a)
|
It is duly incorporated and validly existing under the laws of its jurisdiction of incorporation and has power to carry on its business as it is now being conducted and to own its property and other assets;
|
(b)
|
Subject to legal reservations, it has full power, capacity and authority to execute, deliver and perform its obligations under this MOA and all necessary corporate, shareholder and other actions have been taken to authorise the execution, delivery and performance of the same and this MOA constitutes its valid and legally binding obligations.
|
18.2
|
On the Delivery Date, each of the Parties to this MOA shall be deemed to repeat the respective representations and warranties in Clause 18.1 as if made with reference to the facts and circumstances existing on such date and such representations and warranties, and the respective rights of the Parties hereunder, shall survive the execution of this MOA and the payment of the Balance.
|
19
|
Severability of provisions
|
20
|
Counterparts
|
21
|
Third Party rights
|
22
|
Law and Jurisdiction
|
22.1
|
This MOA and any non-contractual obligations connected with it shall be governed by and construed in accordance with English law.
|
22.2
|
Any dispute arising out of or in connection with this MOA, including any question regarding its existence, validity or termination, shall be referred to the Hong Kong International Arbitration Centre ("HKIAC") and finally resolved by arbitration under the rules promulgated by the HKIAC (the "HKIAC Rules"), which HKIAC Rules are deemed to be incorporated by reference into this clause. The seat, or legal place, of arbitration shall be Hong Kong. The language to be used in the arbitral proceedings shall be English.
|
23
|
Notices
|
For the Buyer:
|
c/o CSSC (Hong Kong) Shipping Company Limited, Shanghai Office, Room 608, Marine Tower , No.1 Pudong Avenue, Shanghai, PRC
Attention: Mr Teng Fei / Mr Zhou Shen
Email: project@csscshipping.com
Fax: +86 21 6886 3070
|
For the Seller:
|
c/o Golar Management Ltd, 13th Floor, One America Square, 17 Crosswall, London EC3N 2LB, United Kingdom
Attention: Mr Brian Tienzo
Email: brian.tienzo@golar.com
Fax: +44 (0)207 063 7901
|
24
|
Entire Agreement
|
SELLER
|
|
|
SIGNED
by
For and on behalf of
GOLAR HILLI CORPORATION
In the presence of
|
)
)
)
|
/s/ Brian Tienzo
Attorney-in-fact
|
|
|
Signature/Title
|
BUYER
|
|
|
SIGNED
by
For and on behalf of
FORTUNE LIANJIANG SHIPPING S.A.
In the presence of
|
)
)
)
|
/s/ Yang Li
|
|
|
Signature/Title
|
(a)
|
a conversion contract dated [
l
] entered into between (i) Keppel Shipyard Limited (the "
Builder
") and (ii) [
l
] for the conversion of the vessel named "Golar Hilli" and registered under the [
l
] flag with IMO number [
l
] (the "
Vessel
") together with all addenda thereto (the "
Conversion Contract
"); and
|
(a)
|
a memorandum of agreement dated [
l
] (the "
MOA
") and made between Golar Hilli Corporation (the "
Seller
") and Fortune Lianjiang Shipping S.A. (the "
Buyer
") in respect of the Vessel.
|
(i)
|
The Redelivery Date has occurred;
|
(ii)
|
The Vessel has been converted in compliance with the Conversion Contracts save for the Project Site Commissioning referred to in the EPC Contract which is still continuing; and
|
(iii)
|
The Vessel was accepted without reservation by the Seller under the Conversion Contracts (save for the Project Site Commissioning) for the purpose of commencing work under the Acceptable Sub-Charter.
|
|
Dated
9 September 2015
|
|
GOLAR HILLI CORPORATION
as Borrower
GOLAR HILLI CORPORATION
as Seller
GOLAR HILLI CORPORATION
as Bareboat Charterer
and
GOLAR LNG LIMITED
as Guarantor
and
FORTUNE LIANJIANG SHIPPING S.A.
as Lender
FORTUNE LIANJIANG SHIPPING S.A.
as Buyer
FORTUNE LIANJIANG SHIPPING S.A.
as Owner
|
||
COMMON TERMS AGREEMENT
in respect of financing for FLNG "HILLI"
|
(1)
|
GOLAR HILLI CORPORATION
as Borrower;
|
(2)
|
GOLAR HILLI CORPORATION
as Seller;
|
(3)
|
GOLAR HILLI CORPORATION
as Bareboat Charterer;
|
(4)
|
GOLAR LNG LIMITED
as Guarantor;
|
(5)
|
FORTUNE LIANJIANG SHIPPING S.A.
as Lender;
|
(6)
|
FORTUNE LIANJIANG SHIPPING S.A.
as Buyer; and
|
(7)
|
FORTUNE LIANJIANG SHIPPING S.A.
as Owner.
|
(A)
|
Golar Hilli and the Builder have entered into the Conversion Contracts for the Conversion Works to be carried out in respect of the Vessel.
|
(B)
|
In order to part-finance the Conversion Works in respect of the Vessel, Golar Hilli as "Borrower" has entered into or will enter into the Pre-delivery Financing Agreement with Fortune as "Lender" whereby the Lender will agree to make available the Pre-delivery Financing up to the Facility Limit (and subject to the terms and conditions set out in the Pre-delivery Financing Agreement).
|
(C)
|
The obligations of the Borrower under the Pre-delivery Financing Agreement will be guaranteed by GLNG as "Guarantor" pursuant to the Pre-delivery Guarantee in favour of the Lender.
|
(D)
|
Golar Hilli has entered into the Binding Term Sheet in respect of the Vessel for FLNG tolling services and the Perenco Security Arrangements have been established.
|
(E)
|
Upon or following the Revenue Start Date, but not later than the Cancelling Date, Golar Hilli as "Seller" will deliver the Vessel to Fortune as "Buyer" pursuant to the MOA, whereupon the Purchase Price will be made available in order to, inter alia, repay the Pre-delivery Financing.
|
(F)
|
Immediately upon Delivery of the Vessel by the Buyer to the Seller under the MOA, Fortune as "Owner" will deliver the Vessel to Golar Hilli as "Bareboat Charterer" pursuant to the Bareboat Charter.
|
(G)
|
GLNG as "Guarantor" will guarantee to the Owner the performance of the Bareboat Charterer's obligations under the Bareboat Charter and the MOA (subject to the terms and conditions set out in the Bareboat Charter Guarantee).
|
1
|
Definitions
|
1.1
|
The following defined terms shall be applicable to the Common Terms Documents as applicable:
|
(a)
|
the Binding Term Sheet;
|
(b)
|
the TSA; or
|
(c)
|
a Replacement Sub-Charter
|
(a)
|
the Perenco Security Arrangements; or
|
(b)
|
a Replacement Sub-Charter Guarantee
|
(a)
|
such corporation(s) as approved by the Lender acting reasonably as the person(s) to provide the Perenco Security Arrangements; or
|
(b)
|
a Replacement Sub-Charter Guarantor
|
(a)
|
Sanaga Partners; or
|
(b)
|
a Replacement Sub-Charterer
|
(a)
|
the Vessel subject to the Builder’s Mortgage;
|
(b)
|
the Conversion Contracts (and, for the avoidance of doubt, including the Keppel Guarantee);
|
(c)
|
the Insurances, Earnings and Requisition Compensation;
|
(d)
|
the Builder's Risks Insurances; and
|
(e)
|
the Charter Documents;
|
(a)
|
the Borrower Assigned Property;
|
(b)
|
all the Borrower's other assets and undertakings; and
|
(c)
|
all proceeds of realisation or enforcement of any Security Interest under a Security Document in or over any of the foregoing or the exercise of all and any rights, powers and remedies in relation to any such Security Interest over the foregoing
|
(a)
|
the interest which the Lender should have received pursuant to the terms of the Pre-delivery Financing Agreement for the period from the date of receipt of all or any part of the principal amount of the Loan to the last day of the current Interest Period in respect of the Loan, had the principal amount received been paid on the last day of that Interest Period
|
(b)
|
the amount of interest which the Lender would be able to obtain by placing an amount equal to the principal amount received by it on deposit with a leading bank in the London interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
|
(a)
|
all policies and contracts of insurance; and
|
(b)
|
all entries of the Vessel in a protection and indemnity or war risks or other mutual insurance association in the joint names of: (i) the Builder (in the case of the Vessel) and (ii) the Borrower in respect of or in connection with the Vessel taken out under the EPC Contract and the Topsides Contract;
|
(a)
|
deposits with first class international banks the maturity of which does not exceed 12 months;
|
(b)
|
bonds, certificates of deposit and other money market instruments or securities issued or guaranteed by the Norwegian or United States Governments; and
|
(c)
|
any other instrument approved by the Lender or, as the case may be, the Owner
|
(a)
|
GLNG and Golar MLP cease to, on an aggregate basis, directly or indirectly control at least 70% equity interest in Golar Hilli; and
|
(b)
|
prior to an MLP, two or more persons acting in concert or any individual person:
|
(i)
|
acquire, legally and/or beneficially and either directly or indirectly, in excess of 35 per cent of the issued share capital (or equivalent) of GLNG or
|
(ii)
|
have the right or ability to control, either directly or indirectly, the affairs or the composition of the majority of the board of directors (or equivalent) of GLNG; or
|
(c)
|
after an MLP has occurred, two or more persons acting in concert or any individual person (other than the parent):
|
(i)
|
acquires, legally and/or beneficially and either directly or indirectly, in excess of 50% of the issued share capital (or equivalent) of Golar MLP; or
|
(ii)
|
have the right or ability to control, either directly or indirectly, the affairs of Golar MLP (other than through the right or ability to appoint the majority of the board of directors (or equivalent) of Golar MLP or, following appointment, any continuing right or ability to exercise such control through the directors so appointed).
|
(a)
|
the Bareboat Charter Documents and any other guarantee or security given to or issued for the benefit of the Owner by any person for the Bareboat Charterer's obligations under them; and
|
(b)
|
any Acceptable Sub-Charter, any Acceptable Sub-Charter Guarantee and any other guarantee or security given to or issued for the benefit of the Bareboat Charterer by any person for the Acceptable Sub-Charterer’s obligations under them
|
(a)
|
is or becomes public information other than as a direct or indirect result of any breach by the Lender of clause 30 (Confidentiality) of the Pre-delivery Financing Agreement; or
|
(b)
|
is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
|
(c)
|
is known by Fortune before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by the Lender, the Buyer or the Owner after that date, from a source which is, as far as Fortune is aware, unconnected with the Group and which, in either case, as far as Fortune is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality
|
(a)
|
any Event of Default; or
|
(b)
|
any event or circumstance specified in clause 18 (Events of Default) of the Pre-delivery Financing Agreement which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents in relation to the Pre-delivery Financing Agreement or any combination of the foregoing) be an Event of Default;
|
(a)
|
in accordance with the terms of the MOA from the Seller to the Buyer; and
|
(b)
|
in accordance with the terms of the Bareboat Charter from the Owner to the Bareboat Charterer
|
(a)
|
in respect of the MOA, the date on which Delivery actually occurs (calculated from 00:01 am of that date) as evidenced by the relevant Protocol of Delivery and Acceptance, duly executed by the Seller and the Buyer under the MOA and the Owner and the Bareboat Charterer under the Bareboat Charter, such date to be after the Scheduled Commissioning Start Date and no later than the Cancelling Date; and
|
(b)
|
in respect of the Bareboat Charter, the date on which the Vessel is delivered by the Owner to the Bareboat Charter under the Bareboat Charter (calculated from 00:01 am of that date) as evidenced by the relevant Protocol of Delivery and Acceptance.
|
(a)
|
the Vessel or the Borrower or the Manager or the Bareboat Charterer is reasonably likely to be liable for Environmental Claims arising from the Spill (other than Environmental Claims arising and fully satisfied before the date of the Pre-delivery Financing Agreement); and/or
|
(b)
|
the Vessel is or may reasonably be expected to be arrested or attached in connection with any such Environmental Claim
|
(a)
|
seven hundred million dollars ($700,000,000); and
|
(b)
|
60% of the Initial Project Budget;
|
(a)
|
all Performance Tests at the Project Site;
|
(b)
|
Project Site Commissioning;
|
(c)
|
pre-commissioning of the Sub-Contract Works;
|
(d)
|
commissioning of the Builder's Works;
|
(e)
|
mechanical completion certificates;
|
(f)
|
commissioning certificates;
|
(g)
|
protocol of mechanical completion;
|
(h)
|
protocol of redelivery and acceptance; and
|
(i)
|
certificate of Vessel Leaving the Yard
|
(a)
|
in respect of the Pre-delivery Financing Agreement:
|
(i)
|
the Pre-delivery Financing Agreement;
|
(ii)
|
the Pre-delivery Security Documents;
|
(iii)
|
the Fee Letter;
|
(iv)
|
the Co-ordination Agreement;
|
(v)
|
each Drawdown Notice; and
|
(vi)
|
any other documents designated as such by the Lender and the Borrower at any time;
|
(b)
|
in respect of the Bareboat Charter:
|
(i)
|
the Bareboat Charter Documents;
|
(ii)
|
the Post-delivery Security Documents;
|
(iii)
|
the Fee Letter; and
|
(iv)
|
any other documents designated as such by the Owner and the Bareboat Charterer at any time
|
(a)
|
money borrowed and debit balances at banks or other financial institutions;
|
(b)
|
any debt instrument;
|
(c)
|
acceptance credit facilities;
|
(d)
|
receivables sold or discounted (other than any receivables to the extent they are old on a non-recourse basis);
|
(e)
|
deferred payments for assets or services acquired (but not ordinary trade credit);
|
(f)
|
finance leases and hire purchase contracts;
|
(g)
|
a counter-indemnity in respect of a guarantee given by a financial institution;
|
(h)
|
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value will be taken into account);
|
(i)
|
any other transaction having the commercial effect of a borrowing; and
|
(j)
|
guarantees of Indebtedness of any person falling within any of (a) to (i) above
|
(a)
|
prior to an MLP, GLNG, or
|
(b)
|
after an MLP, either (i) Golar MLP or (ii) GLNG and Golar MLP together in their relevant proportions;
|
(a)
|
Fortune; and
|
(b)
|
an Affiliate of Fortune
|
(a)
|
Golar Hilli or the Guarantor becomes insolvent or unable to pay its debts;
|
(b)
|
Golar Hilli or the Guarantor is dissolved or enters into liquidation, administration, administrative receivership, receivership, a voluntary arrangement, a scheme of arrangement with creditors, any analogous or similar procedure in any jurisdiction other than England or any other form of procedure relating to insolvency, reorganisation or dissolution in any jurisdiction; or any step is taken by any person with a view to any of those things;
|
(c)
|
Golar Hilli or the Guarantor ceases to carry on business, stops payment of its debts or any class of them or enters into any compromise or arrangement in respect of its debts or any class of them; or takes any step to do any of those things;
|
(d)
|
any judgment or order against Golar Hilli or the Guarantor is not stayed or complied with within 14 days;
|
(e)
|
any execution, distress, sequestration or other legal process is commenced against any of the assets of Golar Hilli or the Guarantor and is not discharged within 7 days; or
|
(f)
|
any steps are taken to enforce any security over any assets of Golar Hilli or the Guarantor
|
(a)
|
the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;
|
(b)
|
the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for, or indemnify a person against, non-payment of UK stamp duty may be void and defences of set-off or counterclaim;
|
(c)
|
similar principles, rights and defences under the laws of any Relevant Jurisdiction; and
|
(d)
|
any reservations as to matters of law referred to in the legal opinions to be delivered to the Lender under clause 4 (Advances) of the Pre-delivery Financing Agreement
|
(a)
|
the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for Dollars for a period of 3 months and as displayed on the "LIBOR 01" or "LIBOR 02" page on the Thomson Reuters screen (or any replacement the Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of the Thomson Reuters at or about 11:00 a.m. (London time) on the Quotation Day; or
|
(b)
|
if, on the Quotation Day, no such rate appears is available under paragraph (a), LIBOR shall be the arithmetic mean (rounded up to the nearest five (5) decimal places) of the respective offered rates quoted by leading banks to Fortune in the London interbank market for deposits in Dollars in an amount comparable to such sum for such period at or about 11:00 a.m. (London time) (or such other period as may be required under the Bareboat Charter (with Fortune notifying the Bareboat Charterer of such requirement promptly after the execution of the Bareboat Charter)) on the Quotation Day
|
(a)
|
the business, operations, property, condition (financial or otherwise) of the Borrower, Bareboat Charterer or Guarantor; or
|
(b)
|
the ability of an Obligor to perform all or any of its obligations under the Transaction Documents; or
|
(c)
|
the validity or enforceability of, or the effectiveness or ranking of any Security Interest granted or purported to be granted pursuant to any of the Finance Documents on the rights and remedies of Fortune under any of the Finance Documents.
|
(a)
|
subject to the proviso below, any amendment to the EPC Contract, the Topsides Contract, the Tripartite Direct Agreement, the Acceptable Sub-Charter or the Acceptable Sub-Charter Guarantee which relates to matters of a purely technical or operational nature which would not (in the reasonable opinion of Fortune (in consultation with the Technical Adviser) be expected to:
|
(i)
|
require Golar Hilli to effect or otherwise result in a material structural alteration to the Vessel or affect the safety or structural integrity thereof; or
|
(ii)
|
result in any change in the amount (by way of reduction) or calculation of the Charter-hire or the Acceptable Sub-Charter Hire; or
|
(iii)
|
result in any material change in the method or timing of payment of the Charter-hire or the Acceptable Sub-Charter Hire; or
|
(iv)
|
result in any material change in the method of the measurement of the performance of the Borrower, the Bareboat Charterer or the Acceptable Sub-Charterer and/or the Vessel; or
|
(v)
|
result in any change to the charter term under either the Bareboat Charter or the Acceptable Sub-Charter (subject to paragraph (b) below) or the termination provisions of the Bareboat Charter or the Acceptable Sub-Charter; or
|
(vi)
|
result in any change to the termination and/or force majeure provisions (if applicable) of a Project Document; or
|
(vii)
|
result in any breach of any Group Member's obligations under the Finance Documents; or
|
(viii)
|
result in any change to any counterparty to a Project Document; or
|
(ix)
|
result in any Cost Overruns which are not evidenced to the satisfaction of Fortune being fully funded by Golar Hilli by way of equity or a Shareholder Loan (which is subordinated to the rights of Fortune under the Finance Documents by way of a Subordination Deed); or
|
(b)
|
any extension of the term of the Bareboat Charter or the Acceptable Sub-Charter or any reduction of the term of the Bareboat Charter or the Acceptable Sub-Charter provided that the initial charter term following such reduction is a minimum of five (5) years; provided always that any amendment to the EPC Contract, the Topsides Contract, the Tripartite Direct Agreement, the Acceptable Sub-Charter or the Bareboat Charter anticipated in accordance with this definition shall only be permitted if on or before the date of any such amendment, Fortune shall have received, on terms satisfactory to it, evidence that the Pre-delivery Guarantor or, as the case may be, the Guarantor has reconfirmed all its obligations under the Pre-delivery Guarantee or, as the case may be, the Bareboat Charter Guarantee, the Keppel Guarantor has reconfirmed all its obligations under the Keppel Guarantee and that the Acceptable Sub-Charterer Guarantors have reconfirmed their obligations under any Acceptable Sub-Charter Guarantee and that the Bareboat Charter Guarantee, the Keppel Guarantee and any Acceptable Sub-Charter Guarantee continue in full force and effect together with such legal opinions as may be reasonably required in connection therewith
|
(a)
|
created pursuant to the Finance Documents and any Encumbrance arising from the own acts or defaults or claims against the Owner personally for which the Owner would not be entitled to indemnification under the Bareboat Charter;
|
(b)
|
for Taxes either not yet assessed or, if assessed, not yet due and payable or being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided) so long as any such proceedings or the continued existence of such Encumbrance do not involve any likelihood of the sale, forfeiture or loss of, or of any interest in, the Vessel;
|
(c)
|
liens arising in the ordinary course of business by statute or by operation of law in respect of obligations which are not overdue or which are being contested in good faith by appropriate proceedings (and for the payment of which adequate reserves have been provided) so long as any such proceedings or the continued existence of such lien do not involve any likelihood of the sale, forfeiture or loss of, or of any interest in, the Vessel;
|
(d)
|
arising out of claims, judgements or awards against the Bareboat Charterer which are being contested in good faith or which are subject to a pending appeal and for which there shall have been granted a stay of execution pending such appeal and for the payment of which adequate reserves have been provided;
|
(e)
|
Permitted Liens;
|
(f)
|
until the Delivery Date, the Builder's Mortgage; or
|
(g)
|
approved by Fortune
|
(a)
|
Shares Security;
|
(b)
|
Bareboat Charter Guarantee;
|
(c)
|
Subordination Deed;
|
(d)
|
Vessel Contracts Assignments;
|
(e)
|
Manager's Undertaking;
|
(f)
|
General Assignment;
|
(g)
|
Assignment of the Sub-Charter Documents;
|
(h)
|
Account Security Deeds;
|
(i)
|
Quiet Enjoyment Letter;
|
(j)
|
Vessel Buy Back Agreement; and
|
(k)
|
any other document designated a "Post-delivery Security Document" by the Parties to the Bareboat Charter
|
(a)
|
Mortgage;
|
(b)
|
Shares Security
|
(c)
|
Pre-delivery Guarantee;
|
(d)
|
Subordination Deed;
|
(e)
|
Vessel Contracts Assignment;
|
(f)
|
Manager's Undertaking;
|
(g)
|
General Assignment;
|
(h)
|
Assignment of the Sub-Charter Documents; and
|
(i)
|
any other document designated a "Pre-delivery Security Document" by the Parties to the Pre-delivery Financing Agreement
|
(a)
|
any offer, gift, payment, promise to pay, commission, fee, loan or other consideration which would constitute bribery or a breach of the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other applicable law of any Relevant Jurisdiction or England and Wales; or
|
(b)
|
any offer, gift, payment, promise to pay, commission, fee, loan or other consideration which would or might constitute bribery within the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions of 17 December 1997
|
(a)
|
under the MOA substantially in the form of Schedule 1 to the MOA; and
|
(b)
|
under the Bareboat Charter substantially in the form of Appendix I to the Bareboat Charter
|
(a)
|
with respect to the Pre-delivery Financing Agreement, the redelivery of the Vessel by the Builder to the Borrower under the EPC Contract, as evidenced by the Protocol of Redelivery and Acceptance
|
(b)
|
with respect to the Bareboat Charter, the redelivery of the Vessel by the Bareboat Charterer to the Owner following termination of the Bareboat Charter
|
(a)
|
its jurisdiction of incorporation;
|
(b)
|
any jurisdiction where any Charged Property owned by it is situated; and
|
(c)
|
any jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it;
|
(a)
|
that is listed on any Sanctions List or any other sanctions-related list of persons, vessels or entities published by or on behalf of the European Union, the member states of the European Union, the United States of America and any authority acting on behalf of them (in each case, whether designated by name or by reason of being included in a class of person, vessel or entity);
|
(b)
|
that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to comprehensive country-wide sanctions administered or enforced by the European Union, the member states of the European Union, the United States of America or any authority acting on behalf of any of them and which attach legal effect to being domiciled, registered as located in, having its main place of business in, and/or being incorporate under the laws of such country; or
|
(c)
|
that is directly or indirectly owned or controlled by a person referred to in paragraph(s) (a) and/or (b) above
|
(a)
|
Golar has, over a period of three (3) consecutive months, received in the Earnings Account sufficient monies to ensure that the aggregate of such monies will be equivalent to or greater than 1.2 times of the First Charter-hire; and
|
(b)
|
the Technical Advisor has in their due diligence report, verified and confirmed that:
|
(i)
|
the Vessel has been converted in accordance with the specifications set out in the Conversion Contracts;
|
(ii)
|
the Vessel meets the relevant performance requirements set out in the Binding Term Sheet or the TSA (if applicable); and
|
(iii)
|
the Vessel is in a position to earn sufficient monies pursuant to the Acceptable Sub-Charter to enable Golar Hilli to meet all its payment obligations under the Bareboat Charter.
|
(a)
|
in respect of the Pre-delivery Financing Agreement, the Pre-delivery Security Documents; and
|
(b)
|
in respect of the Bareboat Charter, the Post-delivery Security Documents
|
(a)
|
any mortgage, charge, pledge, lien, hypothecation, assignment by way of security, trust arrangement for the purpose of providing security or other security interest of any kind in any jurisdiction;
|
(b)
|
any proprietary interest over an asset, or any contractual arrangement in relation to an asset, in each case created in relation to Financial Indebtedness and which has the same commercial effect as if security had been created over it; and
|
(c)
|
any right of set-off created by agreement
|
(a)
|
which is controlled, directly or indirectly, by the first mentioned company or corporation;
|
(b)
|
more than half the issued equity share capital of which is beneficially owned, directly or indirectly, by the first mentioned company or corporation; or
|
(c)
|
which is a Subsidiary of another Subsidiary of the first mentioned company or corporation
|
(a)
|
the full amount of the Charter-hire Principal then outstanding, including for the avoidance of doubt any Fixed Charter-hire unpaid at such time and the Purchase Obligation Price but excluding the Upfront Amount;
|
(b)
|
all Variable Charter-hire due and payable but unpaid under the Bareboat Charter up to and including the Termination Date together with interest (as stipulated in Clause 39.6 of the Bareboat Charter) accrued thereon from the due date therefor to the Termination Date;
|
(c)
|
a prepayment fee to be charged at the rate of two (2) percent on the aggregate of (i) and (ii) above, such sum being agreed by the Parties to be a genuine pre-estimate of the loss suffered by the Owner as a result of the termination and therefore not a penalty;
|
(d)
|
any sums (other than Charter-hire) due and payable but unpaid under the Bareboat Charter together with interest accrued thereon up to and including the Termination Date; and
|
(e)
|
any and all Losses (including but not limited to reasonable legal and advisory fees or terminating any USD interest rate swaps (if any) incurred by the Owner as a result of its entering into the Bareboat Charter and the other Finance Documents and including without prejudice to the generality of the foregoing, all Losses incurred or suffered by the Owner in liquidating, employing or prepaying funds acquired or borrowed to purchase or finance or refinance the Vessel (including any costs incurred in unwinding any associated interest rate or currency swaps or currency futures)
|
(a)
|
actual, constructive, compromised or arranged total loss; or
|
(b)
|
requisition for title, confiscation, expropriation, nationalisation, seizure or other compulsory acquisition by a government entity; or
|
(c)
|
hijacking, theft, condemnation, capture, seizure, arrest or detention for more than 90 days
|
(a)
|
in the case of an actual total loss, the date it happened or, if such date is not known, the date on which the vessel was last reported;
|
(b)
|
in the case of a constructive, compromised, agreed or arranged total loss, the earliest of:
|
(c)
|
the date notice of abandonment of the vessel is given to its insurers by Golar Hilli or Fortune; or
|
(d)
|
if the insurers do not admit such a claim, the date later determined by a competent court of law to have been the date on which the total loss happened; or
|
(e)
|
the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the relevant insurers;
|
(f)
|
in the case of a requisition for title, confiscation or compulsory acquisition, the date it happened; and
|
(g)
|
in the case of hijacking, theft, condemnation, capture, seizure, arrest or detention, the date 90 days after the date upon which it happened
|
(a)
|
the date 180 days after its Total Loss Date; and
|
(b)
|
the date upon which insurance proceeds or Requisition Compensation for such Total Loss are paid by insurers or the relevant government entity
|
(a)
|
in respect of the Pre-delivery Financing Agreement, the Finance Documents in relation to the Pre-delivery Financing Agreement and the Project Documents; and
|
(b)
|
in respect of the Bareboat Charter, the Finance Documents in relation to the Bareboat Charter, the MOA, the Acceptable Sub-Charter, the Acceptable Sub-Charter Guarantee, the Conversion Contracts and any other documents designated as such by the Owner and the Bareboat Charterer
|
1.2
|
Interpretation
|
(a)
|
the table of contents, the summary and the headings are inserted for convenience only and do not affect the interpretation of the relevant Common Terms Document or other Finance Document;
|
(b)
|
references to clauses and schedules are to clauses of, and schedules to, the relevant Common Terms Document or other Finance Document;
|
(c)
|
references to a person include an individual, firm, company, corporation, unincorporated body of persons, any government entity, any government entity, state or agency of that state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);
|
(d)
|
references to any person include its successors in title, permitted assignees and permitted transferees;
|
(e)
|
words importing the plural include the singular and vice versa;
|
(f)
|
references to a time of day are to Hong Kong time, using the 24 hour clock (unless the context otherwise requires);
|
(g)
|
references to any enactment include that enactment as re-enacted; and, if an enactment is amended, any provision of any Common Terms Document or other Finance Document which refers to that enactment will be amended in such manner as the Lender, the Buyer or the Owner (as relevant) after consultation with the Borrower, the Seller or the Bareboat Charterer (as relevant determines to be necessary in order to preserve the intended effect of the relevant Common Terms Document or other Finance Document.;
|
(h)
|
references to a provision of law or regulation shall be a reference to that provision as amended, supplemented, replaced or re-enacted;
|
(i)
|
assets
includes present and future properties, assets, intellectual property rights, real property, personal property, rights, revenues, uncalled capital and any rights to receive, or require delivery of, or exercise direct control over any of the foregoing;
|
(j)
|
references to a Common Terms Document or other Finance Document or any other agreement or instrument is a reference to that Common Terms Document or other Finance Document or other agreement or instrument as it may from time to time be amended, re-stated, novated, however fundamentally;
|
(k)
|
an
obligation
means any duty, obligation or liability of any kind;
|
(l)
|
a term
including
shall be construed as meaning including without limitation;
|
(m)
|
approved
means, as the case may be, approved in writing by the Lender or the Owner (on such conditions as the Lender or the Owner may impose) and approval and approve shall be construed accordingly;
|
(n)
|
an
authorisation
means any authorisation, consent, concession, approval, resolution, licence, exemption, filing, notarisation or registration;
|
(o)
|
control
of an entity means:
|
(i)
|
the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:-
|
(ii)
|
cast, or control the casting of, more than 50 per cent of the maximum number of votes that might be cast at a general meeting of that entity; or
|
(iii)
|
appoint or remove all, or the majority, of all directors or other equivalent officers of that entity; or
|
(iv)
|
give directions with respect to the operating and financial policies of that entity with which the directors or other equivalent officers of that entity are obliged to comply; and/or
|
(v)
|
the holding beneficially of more than 50 per cent of the issued share capital of that entity (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital) (and, for this purpose, any Security Interest over share capital shall be disregarded in determining the beneficial ownership of such share capital);
|
(p)
|
the term
disposal
or
dispose
means a sale, transfer or other disposal (including by way of lease or loan but not including by way of loan of money) by a person of all or part of its assets whether by one transaction or a series of transactions and whether at the same time or over a period of time, but not the creation of a Security Interest;
|
(q)
|
the
equivalent
of an amount specified in a particular currency (the
specified currency amount
) shall be construed as a reference to the amount of the other relevant currency which can be purchased with the specified currency amount in the London foreign exchange market at or about 11 a.m. on the date the calculation falls to be made for spot delivery, as conclusively determined by Fortune (with the relevant exchange rate of any such purchase being Fortune's spot rate of exchange);
|
(r)
|
a
government entity
means any government, state or agency of state;
|
(s)
|
a
guarantee
means any guarantee, letter of credit, bond, indemnity or similar assurance against loss or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;
|
(t)
|
indebtedness
includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present, future actual or contingent;
|
(u)
|
month
means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that:
|
(i)
|
if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that month (if there is one) or on the immediately preceding Business Day (if there is not); and
|
(ii)
|
if there is no numerically corresponding day in that month, that period shall end on the last Business Day in that month
|
(v)
|
pay or repay in clause 16 (Business restrictions) of the Pre-delivery Financing Agreement includes any by way of set-off, combination of accounts or otherwise;
|
(w)
|
a
regulation
includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation and includes (without limitation) any Basel II Regulation or Basel III Regulation;
|
(x)
|
right
means any right, privilege, power or remedy, any proprietary interest in any asset and any other interest or remedy of any kind, whether actual or contingent, present or future, arising under contract or law, or in equity;
|
(y)
|
(i) the
liquidation, winding up, dissolution, or administration of person
or (ii)
a receiver
or
administrative receiver
or
administrator
in the context of insolvency proceedings or security enforcement actions in respect of a person shall be construed so as to include any equivalent or analogous proceedings or any equivalent and analogous person or appointee (respectively) under the law of the jurisdiction in which such person is established or incorporated or any jurisdiction in which such person carries on business including (in respect of proceedings) the seeking or occurrences of liquidation, winding-up, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors;
|
(z)
|
A provision of law is a reference to that provision as amended or re-enacted; and
|
(aa)
|
In
an agreed form
means:
|
(i)
|
where a document has already been executed, such document in its executed form; and
|
(ii)
|
prior to the execution of a document, the form of such document agreed in writing between Fortune and Golar Hilli is the form in which that document is to be executed.
|
2
|
Notices
|
2.1
|
Any notice or other communication to a party to the Transaction Documents must be in writing. It must be addressed for the attention of such person, and sent to such address, fax number or email address as that party may from time to time notify to the other parties.
|
2.2
|
It shall be deemed to have been received by the relevant party on receipt at that address.
|
2.3
|
The initial administrative details of the parties are contained in Schedule 1, but a party may amend its own details at any time by notice to the other parties.
|
3
|
English Translations
|
3.1
|
Any notice given under or in connection with the Transaction Documents must be in English.
|
3.2
|
Where any other document provided to the Lender or the Owner under the terms of the Transaction Documents is not in English, that document must be accompanied by an English translation, certified to be an accurate translation of the original.
|
3.3
|
The English translation will prevail over the original document unless that document is a constitutional, statutory or other official document.
|
4
|
Partial Invalidity
|
5
|
Confidentiality
|
6
|
Counterparts
|
7
|
Law and Jurisdiction
|
7.1
|
Law
|
7.2
|
Proceedings
|
Party
|
Address
|
Fax Number
|
Attention
|
Borrower / Seller / Bareboat Charterer
|
c/o Golar Management Ltd, 13th Floor, 1 America Square, 17 Crosswall, London EC3N 2LB, United Kingdom
|
|
Mr. Brian Tienzo
|
Lender / Buyer / Owner
|
c/o CSSC (Hong Kong) Shipping Company Limited, Shanghai Office, Room 608, Marine Tower , No.1 Pudong Avenue, Shanghai, PRC
|
86 21 6886 3070
|
Mr Teng Fei / Mr Zhou Shen
|
Guarantor
|
c/o Golar Management Ltd, 13th Floor, 1 America Square, 17 Crosswall, London EC3N 2LB, United Kingdom
|
|
Mr. Brian Tienzo
|
BORROWER
|
|
|
SIGNED
by
For and on behalf of
GOLAR HILLI CORPORATION
In the presence of
/s/ Anders Schau
|
)
)
)
|
/s/ Brian Tienzo
|
SELLER
|
|
|
SIGNED
by
For and on behalf of
GOLAR HILLI CORPORATION
In the presence of
/s/ Anders Schau
|
)
)
)
|
/s/ Brian Tienzo
|
|
|
|
BAREBOAT CHARTERER
|
|
|
SIGNED
by
For and on behalf of
GOLAR HILLI CORPORATION
In the presence of
/s/ Anders Schau
|
)
)
)
|
/s/ Brian Tienzo
|
|
|
|
GUARANTOR
|
|
|
SIGNED
by
For and on behalf of
GOLAR LNG LIMITED
In the presence of
/s/ Anders Schau
|
)
)
)
|
/s/ Brian Tienzo
|
|
|
|
LENDER
|
|
|
SIGNED
by
For and on behalf of
FORTUNE LIANJIANG SHIPPING S.A.
In the presence of
/s/ Anders Schau
|
)
)
)
|
/s/ Yang Li
|
|
|
|
BUYER
|
|
|
SIGNED
by
For and on behalf of
FORTUNE LIANJIANG SHIPPING S.A.
In the presence of
/s/ Anders Schau
|
)
)
)
|
/s/ Yang Li
|
|
|
|
OWNER
|
|
|
SIGNED
by
For and on behalf of
FORTUNE LIANJIANG SHIPPING S.A.
In the presence of
/s/ Anders Schau
|
)
)
)
|
/s/ Yang Li
|
|
|
|
CONFIDENTIAL
|
||||
|
Dated 12 July 2018
|
|
||
|
||||
GOLAR LNG LIMITED
GOLAR LNG PARTNERS LP
and
FORTUNE LIANJIANG SHIPPING S.A.
|
||||
|
Deed of Amendment, restatement and accession relating to a Guarantee dated 9 September 2015
|
|
||
|
(1)
|
GOLAR LNG LIMITED
whose registered office is at 2
nd
floor S.E. Pearman Building, 9 Par-la-Ville Road, Hamilton HM11, Bermuda (the
Existing
Guarantor
);
|
(2)
|
GOLAR LNG PARTNERS LP
whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (the
Acceding Guarantor
); and
|
(3)
|
FORTUNE LIANJIANG SHIPPING S.A.
whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 (
Fortune
).
|
1
|
Definitions and interpretation
|
1.1
|
In this Deed:
|
1.2
|
No term of this Deed is enforceable under the Contracts (Rights of Third Parties) Act 1999 by anyone other than a party to this Agreement.
|
1.3
|
This Deed may be executed in counterparts.
|
1.4
|
It is intended that this Deed takes effect as a deed even though Fortune may only execute it under hand.
|
1.5
|
In accordance with the Common Terms Agreement (as such term is defined in the Original Agreement), each of the Existing Guarantor, the Acceding Guarantor and Fortune designate this Deed a Finance Document.
|
2
|
Amendment and restatement
|
2.1
|
the Acceding Guarantor shall become a party to the Original Agreement as a Guarantor; and
|
2.2
|
the Original Agreement shall be amended and restated as set out in Schedule 1 (
Amended and restated guarantee
) to this Deed; and
|
2.3
|
the Acceding Guarantor and the Existing Guarantor shall observe and perform the obligations set out in the Original Agreement as amended and restated in the form set out in Schedule 1 (
Amended and restated guarantee
) to this Deed.
|
3
|
Governing law
|
Confidential Draft: 18 December 2013
|
||||
|
Dated 9 September 2015, as amended and restated at 12 July 2018
|
|
||
|
||||
Golar LNG Limited (1)
Golar LNG Partners LP (2)
and
Fortune Lianjiang Shipping S.A. (3)
|
||||
|
GUARANTEE
relating to a memorandum of agreement and a bareboat charter for a floating liquefied natural gas vessel named “ Hilli Episeyo " |
|
||
|
(1)
|
Golar LNG Limited
(
GLNG)
whose registered office is at 2
nd
floor S.E. Pearman Building, 9 Par-la-Ville Road, Hamilton HM11, Bermuda;
|
(2)
|
Golar LNG Partners LP
(
Golar MLP
) whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960,
|
(3)
|
Fortune Lianjiang Shipping S.A.
, (
Fortune
) whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 in its capacity as "Owner" and "Seller.
|
(A)
|
Golar Hilli Corporation (
Golar Hilli
) in each of its separate capacities as Borrower, Seller and Bareboat Charterer, GLNG in its capacity as Guarantor and Fortune in each of its separate capacities as Lender, Buyer and Owner have entered into a Common Terms Agreement dated 9 September 2015 setting out certain defined terms in respect of the Project.
|
(B)
|
The Builder has, inter alia, entered into the EPC Contract with Golar Hilli for the conversion of the floating liquefied natural gas vessel "Hilli Episeyo" (formerly known as “Hilli”) (the
Vessel
).
|
(C)
|
Golar Hilli as Seller and Fortune as buyer have entered into the MOA for the purchase and sale of the Vessel.
|
(D)
|
Golar Hilli as Bareboat Charterer and Fortune as Owner have entered into the Bareboat Charter in respect of the Vessel.
|
(E)
|
The Bareboat Charterer, SNH and Perenco have entered into the Acceptable Sub-Charter in respect of the Vessel.
|
(F)
|
The Vessel has been delivered under the MOA and Bareboat Charter.
|
(G)
|
GLNG has entered into a guarantee with Fortune on 9 September 2015, to guarantee the due and proper performance by Golar Hilli of its duties and obligations arising under or in connection with the MOA as Seller, and the Bareboat Charter as Bareboat Charterer.
|
(H)
|
The Guarantors have agreed to severally guarantee to the Owner the due and proper performance by Golar Hilli of its duties and obligations arising under or in connection with the Bareboat Charter as Bareboat Charterer upon the terms of this Guarantee.
|
1
|
Interpretation
|
1.1
|
Terms and conditions defined in the Common Terms Agreement (as amended by the side letter dated 1 June 2018) shall have the same meaning when used in this Guarantee including the Recitals hereto unless otherwise defined herein.
|
1.2
|
In this Guarantee:
|
2
|
Guarantee
|
2.1
|
In consideration of Fortune agreeing to charter the Vessel pursuant to the Bareboat Charter, each Guarantor (subject to clause 2.6 below) hereby severally guarantees to Fortune the due and proper performance by Golar Hilli of all of Golar Hilli's duties and obligations arising under or in connection with the Bareboat Charter, and each Guarantor hereby absolutely, irrevocably and unconditionally undertakes as primary obligor and not as mere surety to pay to Fortune, within five (5) Business Days of Fortune's demand at any time and from time to time, a several share of the Guaranteed Amount.
|
2.2
|
As a separate and independent stipulation, each Guarantor (subject to clause 2.6 below) agrees that if any purported obligation or liability of Golar Hilli which would have been the subject of this Guarantee had it been valid and enforceable is not or ceases to be valid or enforceable against Golar Hilli on any ground whatsoever (including, without limitation, any irregular exercise or absence of any corporate power or lack of authority of, or breach of duty by, any person purporting to act on behalf of Golar Hilli or any legal or other limitation, whether under the Limitation Act 1980 (United Kingdom) or otherwise or Incapacity or any change in the constitution of Golar Hilli) each Guarantor shall nevertheless be severally liable to Fortune in respect of that purported obligation or liability as if the same were fully valid and enforceable and each Guarantor was the principal debtor in respect thereof.
|
2.3
|
Each Guarantor (subject to clause 2.6 below) shall be liable for and shall within five (5) Business Days of Fortune’s demand indemnify and save harmless Fortune from and against any and all losses, damages, expenses, liabilities, claims, costs or proceedings which Fortune suffers or incurs by reason of any failure of any Guarantor to comply with clause 2.1 or 2.2, including costs, losses and/or legal and other expenses which are imposed on or incurred by Fortune in seeking to enforce and enforcing this Guarantee and in seeking to enforce and enforcing any judgment or order obtained in respect of this Guarantee.
|
2.4
|
Subject to the provisions of clauses 3, 8 and 9 the liability of each Guarantor under this Guarantee in respect of each obligation or liability shall be limited to the extent that Golar Hilli would have been liable under or in connection with the Bareboat Charter for such obligation or liability.
|
2.5
|
Each Guarantor waives any right it may have of first requiring Golar Hilli (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person, prior to a claim against any Guarantor under this clause 2. This waiver applies irrespective of any law or provision of the Finance Documents to the contrary.
|
2.6
|
Each Guarantor’s liability under this Guarantee is several (and not joint) and such liability of each Guarantor shall be on a pro rata basis equal and up to, respectively, GLNG’s proportionate ownership (aggregated with that of KSI and B&V, if any), and Golar MLP’s proportionate ownership of Common Units in GHL.
|
2.7
|
For the avoidance of doubt, any notice and/or demand to be served on any Guarantor in respect of any obligations for which it is liable shall be addressed to, and served on, both Guarantors, notwithstanding their several liability.
|
3
|
Indemnity
|
4
|
Liability Unconditional
|
(a)
|
any variation, amendment, alteration or supplement to the Bareboat Charter or to the extent, nature or method of performance of the duties and/or obligations referred to in the Bareboat Charter, in each case, however fundamental such variation, amendment, alteration and/or supplement is and/or any novation of the Bareboat Charter;
|
(b)
|
any allowance of time, waiver, forbearance, delay, forgiveness, indulgence, compromise, delay by or on the part of Fortune in asserting any of its rights against Golar Hilli or other dealing under or in connection with the Bareboat Charter or in respect of any right or remedy arising under the Bareboat Charter;
|
(c)
|
any settlement or arrangement made between Fortune and Golar Hilli in relation to the Bareboat Charter;
|
(d)
|
any composition, discharge, release, concession, waiver or other variation of liability entered into with, or granted to, Golar Hilli;
|
(e)
|
the Bareboat Charter or any provision thereof being or becoming illegal, invalid, void, voidable or unenforceable;
|
(f)
|
termination of the Bareboat Charter or Golar Hilli's employment under the Bareboat Charter;
|
(g)
|
any disability, Incapacity, lack of power, authority or legal personality of, dissolution or change in the members of, status of, legal limitation, change in ownership or change in status of Golar Hilli;
|
(h)
|
an Insolvency Event;
|
(i)
|
a change in the constitution of Golar Hilli;
|
(j)
|
Fortune taking, holding, varying, realising or not enforcing any other security for the liabilities of Golar Hilli under the Bareboat Charter or any document or security;
|
(k)
|
any funder exercising any rights it may have to assume any rights and/or obligations of Fortune under Bareboat Charter pursuant to any collateral warranty or any third party rights vested in it pursuant to the terms of the Bareboat Charter or any document or security;
|
(l)
|
an amalgamation, merger, consolidation of either Guarantor and Golar Hilli; or
|
(m)
|
any other act, omission or default which in the absence of this provision would or might have operated to discharge, reduce, exonerate or otherwise affect the liability of either Guarantor under the terms of this Guarantee,
|
5
|
Continuity and Discharge of the Guarantee
|
5.1
|
Each Guarantor agrees that this Guarantee:
|
(a)
|
shall not be revocable by any Guarantor;
|
(b)
|
shall be a continuing guarantee and accordingly shall apply in relation to all of the duties, obligations, provisions, warranties or indemnities of Golar Hilli under and arising out of the Bareboat Charter and remain in full force and effect until all the said duties, obligations, provisions, warranties or indemnities shall have been irrevocably and unconditionally carried out, completed and discharged in accordance with the Bareboat Charter;
|
(c)
|
shall be additional to and not in substitution for any rights or remedies that Fortune may have against Golar Hilli under the Bareboat Charter or at law;
|
(d)
|
shall be additional to and shall not be in any way prejudiced by any other guarantee or security from time to time held by Fortune; and
|
(e)
|
shall remain in full force and effect as long as Golar Hilli remains under any actual or contingent liability under or in connection with the terms of the Bareboat Charter.
|
5.2
|
Each Guarantor agrees that, notwithstanding clause 2.1, Fortune shall not be obliged, before enforcing any of its rights or remedies under this Guarantee, to commence proceedings or take any other action against or in respect of Golar Hilli or any other person or enforce any other guarantee or security from time to time held by Fortune in respect of the duties and/or obligations of Golar Hilli under or in connection with the Bareboat Charter, provided that Fortune shall make such a claim against each Guarantor.
|
5.3
|
Each Guarantor agrees that, as long as this Guarantee remains in force and effect and until all obligations of Golar Hilli and each Guarantor respectively under or in connection with the Bareboat Charter and this Guarantee have been irrevocably and unconditionally discharged in full, it shall not:
|
(a)
|
take any security from Golar Hilli in connection with this Guarantee (and, if taken, any such security shall be held by the Guarantors as security for its liability to Fortune under this Guarantee);
|
(b)
|
take any step to enforce any right or claim against Golar Hilli in respect of any payment made under or liability arising from or in connection with this Guarantee or claim or prove in competition with Fortune against Golar Hilli or demand or accept repayment of any monies from Golar Hilli or claim any right of contribution, set-off or indemnity against Golar Hilli;
|
(c)
|
take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Lender under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with the Finance Documents by the Lender; or
|
(d)
|
be subrogated to any right or security of Fortune,
|
(e)
|
and any sums received by the Guarantor or the amount of any set-off exercised by the Guarantor in breach of this clause 5.3 shall be held by the Guarantor in trust for and shall be promptly paid to Fortune.
|
6
|
Representations and Warranties
|
6.1
|
Each Guarantor hereby warrants, represents and undertakes to Fortune that:
|
(a)
|
it is duly incorporated under the laws of the country of its incorporation, possesses the capacity to sue and be sued in its own name and has the power to carry on its business and to own its property and other assets;
|
(b)
|
it has the power to execute, deliver and perform its obligations under this Guarantee and all necessary corporate, shareholder and other action and consents have been taken or, as the case may be, received to authorise the execution, delivery and performance of this Guarantee;
|
(c)
|
its obligations under this Guarantee constitute its legal, valid and binding obligations and are in full force and effect and rank at least pari passu with all other of its present and future unsecured and unsubordinated indebtedness (with the exception of any obligations which are mandatorily preferred by law and not by contract);
|
(d)
|
no authorisations, approvals or consents of any governmental or regulatory authority or agency or any other person and no filings or registrations with any governmental authority or agency are necessary for its execution, delivery or performance of this Guarantee for its enforceability of validity (or alternatively, in relation to filings and registrations, an undertaking to effect any registrations, filings in relation to this Guarantee as soon as reasonably practicable and do all such things as Fortune may reasonably require in order to facilitate the enforcement of this Guarantee or exercise any of the rights held by Fortune under this Guarantee);
|
(e)
|
the creation of this Guarantee does not contravene the constitutional documents of the Guarantor;
|
(f)
|
there is no pending action, suit or proceeding at law or in equity by or before a court or arbitral tribunal, or to the best of its knowledge, threatened against it which would reasonably be expected to have a material adverse effect on any Guarantor's liability to perform its obligations under this Guarantee; and
|
(g)
|
the creation of this Guarantee and the performance and observance of the obligations hereunder does not:
|
(i)
|
contravene any existing applicable law, statute, rule, regulation or any judgment to which any Guarantor is subject;
|
(ii)
|
conflict with or result in any breach of the terms or constitute a default under any agreement or other instrument to which any Guarantor is a party or subject; and/or
|
(iii)
|
result in the creation of or imposition of or oblige any Guarantor or any of its subsidiaries to create any charge or other encumbrance or any of its subsidiaries, assets, rights or revenues.
|
7
|
Undertakings and Covenants
|
7.1
|
Undertakings
|
7.2
|
GLNG Financial Covenants
|
(a)
|
Free Liquid Assets
|
(b)
|
Current Assets to Current Liabilities
|
(c)
|
Consolidated Net Worth
|
7.3
|
Golar MLP Financial Covenants
|
(a)
|
Free Liquid Assets
|
(b)
|
Net Debt to EBITDA
|
(c)
|
Consolidated Tangible Net Worth
|
(d)
|
EBITDA to Consolidated Debt Service
|
8
|
Payment under the Guarantee
|
8.1
|
Gross up of payments
|
8.2
|
Currency of payments
|
(a)
|
Subject to clause 8.3 below, all payments for any sums payable by any Guarantor under this Guarantee shall be paid in Dollars.
|
(b)
|
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the cost, expenses or Taxes are incurred.
|
(c)
|
Any amount expressed to be payable in a currency other than Dollars shall be paid in that other currency.
|
8.3
|
Currency indemnity
|
(a)
|
making or filing a claim or proof against that Guarantor;
|
(b)
|
obtaining an order or judgment in any court or other tribunal; or
|
(c)
|
enforcing any order or judgment given or made in relation to this Guarantee,
|
9
|
Interest
|
10
|
Assignment
|
10.1
|
Golar MLP may not assign or transfer all or part of its rights or obligations under this Guarantee.
|
10.2
|
GLNG may not assign or transfer all or part of its rights or obligations under this Guarantee (a
Transfer
), unless the following conditions are met:
|
(a)
|
the Transfer is to Golar MLP or a wholly owned subsidiary of Golar MLP which is guaranteed by Golar MLP on terms acceptable to Fortune;
|
(b)
|
the Transfer will not adversely affect Fortune's rights and interest under the Bareboat Charter and will be on terms acceptable to Fortune (acting reasonably);
|
(c)
|
Fortune has been given prior written notice of and to of such Transfer;
|
(d)
|
Golar MLP or such wholly owned subsidiary which is guaranteed by Golar MLP on terms acceptable to Fortune executes a guarantee and indemnity in favour of Fortune on terms and conditions acceptable to Fortune acting reasonably in respect of the Transfer representing such part of its equity interest in the Golar Hilli as is being transferred from GLNG to Golar MLP;
|
(e)
|
Golar Hilli has signed the Acceptable Sub-Charter or, as the case may be, the TSA with SNH and Perenco;
|
(f)
|
the Minimum Debt Service Cover Ratio is met;
|
(g)
|
the Acceptable Sub-Charter Guarantee has been issued and Fortune is satisfied that the same is legal, valid and binding and in full force and effect; and
|
(h)
|
no further change to the ownership of Golar Hilli is or will be permitted during the remaining Charter Period (except as permitted by the terms of the Bareboat Charter) without the prior written consent of Fortune.
|
10.3
|
Upon such Transfer taking place Fortune will release GLNG of such of its obligations under this Guarantee as shall have been transferred to Golar MLP or such wholly owned subsidiary of Golar MLP and are covered under the guarantee and indemnity referred to under Clause 10.2 (d).
|
10.4
|
Fortune may assign or transfer, with the Guarantors’ prior consent (such consent not to be unreasonably withheld), any of its rights or obligations under this Guarantee to the Mortgagee or any person to whom Fortune assigns its rights under the Bareboat Charter by giving the Guarantors not less than seven (7) days’ advance notice.
|
11
|
Notices
|
(a)
|
be in writing delivered personally or by first‑class prepaid letter (airmail if available) or telex or facsimile transmission or other means of telecommunication in permanent written form;
|
(b)
|
be deemed to have been received, subject as otherwise provided in this Guarantee in the case of a letter, when delivered personally or seven days after it has been put into the post, in the case of a facsimile or other means of telecommunication in permanent written form, at the time of despatch when a complete and legible copy is received by the addressee (provided that, if the date of despatch is not a business day in the country of the addressee or if the time of despatch is after the close of business in the country of the addressee it shall be deemed to have been received at the opening of business on the next such business day) and;
|
(c)
|
be sent:
|
(i)
|
to GLNG at:
|
Address:
|
6
th
Floor, The Zig Zag
|
(ii)
|
to Golar MLP at:
|
Address:
|
6
th
Floor, The Zig Zag
|
Email:
|
Attention:
|
Mr. Brian Tienzo
|
(iii)
|
to Fortune at:
|
12
|
No Waiver and Provisions Severable
|
12.1
|
No failure or delay by Fortune in exercising any right or remedy shall operate as a waiver, nor shall any single or partial exercise or waiver of any right or remedy preclude its further exercise or the exercise of any other right or remedy.
|
12.2
|
Each of the provisions of this Guarantee is severable and distinct from the others, and if for any reason any such provision or part of a provision is or becomes ineffective, inoperable, invalid or unenforceable it shall be severed and deemed to be deleted from this Guarantee, and in such event the remaining provisions of this Guarantee shall continue to have full force and effect.
|
13
|
Rights of Third Parties
|
14
|
Counterparts
|
15
|
Governing Law
|
15.1
|
This Guarantee and any other non-contractual obligations connected with it shall be governed by and construed in accordance with English law.
|
15.2
|
The parties irrevocably agree that all disputes arising under or in connection with this Guarantee, any other non-contractual obligations connected with it, or in connection with the negotiation, existence, legal validity, enforceability or termination of this Guarantee, regardless of whether the same shall be regarded as contractual claims or not, shall be exclusively governed by and determined only in accordance with English law.
|
16
|
Jurisdiction
|
SIGNED, SEALED and DELIVERED
as a
DEED
for and on behalf of
GOLAR LNG LIMITED
in the presence of:
…………………………………………………..
Name of witness:
Address of witness:
|
by _______________________________
(Attorney-in-fact)
|
SIGNED, SEALED and DELIVERED
as a
DEED
for and on behalf of
GOLAR LNG PARTNERS LP
in the presence of:
…………………………………………………..
Name of witness:
Address of witness:
|
by _______________________________
(Attorney-in-fact)
|
FORTUNE LIANJIANG SHIPPING S.A.
By: …………………………………………..
Name: …………………………………………..
Title: …………………………………………..
|
SIGNED, SEALED
and
DELIVERED
as a
DEED
|
)
|
for and on behalf of
GOLAR LNG LIMITED
|
) /s/Pernille Noraas
|
by PERNILLE NORAAS
|
) …………………………………
|
pursuant to a power of attorney dated 13 April 2018
|
) Attorney-in-fact
|
in the presence of:
|
)
|
SIGNED, SEALED
and
DELIVERED
as a
DEED
|
)
|
for and on behalf of
GOLAR LNG PARTNERS LP
|
) /s/Pernille Noraas
|
by PERNILLE NORAAS
|
) …………………………………
|
pursuant to board resolutions passed on 15 August 2017
|
) Attorney-in-fact
|
in the presence of:
|
)
|
1.
|
DEFINITIONS AND INTERPRETATION
2
|
3.
|
GUARANTEE AND INDEMNITY
5
|
4.
|
PRESERVATION OF GUARANTEE
6
|
5.
|
REPRESENTATIONS AND WARRANTIES
8
|
6.
|
GENERAL UNDERTAKINGS
10
|
7.
|
EXPENSES AND INDEMNITY
10
|
8.
|
PAYMENTS
11
|
9.
|
SET-OFF
11
|
10.
|
EVIDENCE AND CALCULATIONS
11
|
11.
|
AMENDMENTS AND WAIVERS
12
|
12.
|
CHANGES TO THE PARTIES
12
|
13.
|
DISCLOSURE OF INFORMATION
12
|
14.
|
NOTICES
13
|
15.
|
PARTIAL INVALIDITY
13
|
16.
|
RIGHTS OF THIRD PARTIES
13
|
17.
|
COUNTERPARTS
14
|
18.
|
GOVERNING LAW AND JURISDICTION
14
|
SCHEDULE
|
15
|
CONTACT DETAILS
|
15
|
SIGNATURES
|
16
|
(1)
|
Golar LNG Partners LP
whose registered address is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960,
(the "
Guarantor
"); and
|
(2)
|
Standard Chartered Bank
(the "
Bank
") as lender under the Facility Letter (as defined below).
|
1.
|
DEFINITIONS AND INTERPRETATION
|
1.1
|
Definitions
|
(a)
|
deposits with first class international banks the maturity of which does not exceed 12 months;
|
(b)
|
bonds, certificates of deposit and other money market instruments or securities issued or guaranteed by the Norwegian or United States Governments; and
|
(c)
|
any other instrument approved by the Bank.
|
(a)
|
the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
|
(i)
|
cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the company;
|
(ii)
|
appoint or remove all, or the majority, of the directors or other equivalent officers of the company; or
|
(iii)
|
give directions with respect to the operating and financial policies of the company with which the directors or other equivalent officers of the company are obliged to comply; or
|
(b)
|
the holding beneficially of more than 50% of the issued share capital of the company (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).
|
(a)
|
adjusted to exclude Interest Receivable and Interest Payable and other similar income or costs to the extent not already excluded;
|
(b)
|
adjusted to exclude any gain or loss realised on the disposal of fixed assets (whether tangible or intangible);
|
(c)
|
after adding back depreciation and amortisation charged which relates to such period;
|
(d)
|
adjusted to exclude any exceptional or extraordinary costs or income; and
|
(e)
|
after deducting any profit arising out of the release of any provisions against a liability or charge and adding back any provision relating to long term assets or contracts.
|
(a)
|
monies borrowed;
|
(b)
|
any amount raised under any other transaction (however structured) having the commercial effect of a borrowing; and
|
(c)
|
the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) and (b) above.
|
(a)
|
the value of Cash Equivalents shall be deemed to be their quoted price, as at any date of determination, on any recognised exchange (being an exchange recognised and approved by the Bank) on which the same are listed or any dealing facility through which the same are generally traded; and
|
(b)
|
any cash or Cash Equivalents denominated in a currency other than dollars shall be deemed to have a value in dollars equal to the dollar equivalent thereof at the rate of exchange published daily by the Account Bank as at any date of determination.
|
(a)
|
the amounts charged and posted (or estimated to be charged and posted) as a current accrual accrued during such period in respect of members of the Golar MLP Group by way of Interest on all Financial Indebtedness, but excluding any amount accruing as interest in-kind (and not as cash payment) to the extent capitalised as principal during such period; and
|
(b)
|
net payments in relation to interest rate or currency hedging arrangements in respect of Financial Indebtedness (after deducting net income in relation to such interest rate or currency hedging arrangements).
|
(a)
|
the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors; and
|
(b)
|
the time barring of claims under any applicable law, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of stamp duty may be void and defences of set-off or counterclaim.
|
(a)
|
which is Controlled, directly or indirectly, by the first named person;
|
(b)
|
more than half the issued share capital of which is beneficially owned, directly or indirectly, by the first named person; or
|
(c)
|
which is a Subsidiary of another Subsidiary of the first named person.
|
1.2
|
Interpretation
|
(a)
|
Terms defined in the Facility Letter have the same meaning in this Guarantee unless expressly defined in this Guarantee.
|
(b)
|
The provisions of paragraph 2 of Schedule 3
(Definitions and Interpretation)
of the Facility Letter apply to this Guarantee as though they were set out in full in this Guarantee except that references to the Facility Letter and Facility Document are to be construed as references to this Guarantee.
|
(c)
|
If the Bank considers that an amount paid to it under any Facility Document is capable of being avoided or set aside on the liquidation or otherwise, or administration of the payer, then that amount will not be considered to have been irrevocably paid for the purposes of this Guarantee.
|
2.
|
GUARANTEE AND INDEMNITY
|
(a)
|
The Guarantor irrevocably and unconditionally:
|
(i)
|
as principal obligor guarantees to the Bank punctual performance by the Borrower of all its obligations under the Facility Documents;
|
(ii)
|
undertakes with the Bank that, whenever the Borrower does not pay any amount when due under or in connection with any Facility Document it must within two (2) days of demand by the Bank pay that amount as if it were the principal obligor in respect of that amount; and
|
(iii)
|
agrees to indemnify the Bank immediately on demand against any loss or liability suffered by the Bank if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal. The amount of the loss or liability under this indemnity will be equal to the amount the Bank would otherwise have been entitled to recover.
|
(b)
|
Notwithstanding anything to the contrary, the Bank agrees that prior to making any demand on the Guarantor under paragraph (a)(ii) above for an unpaid amount, the Bank shall make a demand on the Parent Company under the equivalent clause of the Parent Company Guarantee for that amount. If the Parent Company fails to pay the amount claimed by the Bank in full within two (2) days of the Bank’s demand, the Bank shall be entitled to make a demand on the Guarantor under paragraph (a)(ii) above for that amount or any of it that remains unpaid by the Parent Company.
|
(c)
|
For the avoidance of doubt the Guarantor’s liability is several (and not joint) and, subject to paragraphs (d) and (e) below, shall not exceed the Guarantee Limit.
|
(d)
|
The Guarantee Limit shall be determined at the date the claim by the Bank under the Guarantee is made and not at the date of payment by the Guarantor.
|
(e)
|
If, as a result of any change to the Guarantee Proportion or reduction in the amount of the Performance Guarantee, the Guarantee Limit is reduced, the Guarantor shall not be entitled to be in reimbursed for any payment(s) made by the Guarantor prior to the reduction becoming effective in the event the total of such payment(s) exceed the reduced Guarantee Limit.
|
3.
|
PRESERVATION OF GUARANTEE
|
3.1
|
Continuing guarantee
|
(a)
|
This Guarantee is a continuing guarantee and will extend to the ultimate balance of all sums payable by the Borrower under the Facility Documents regardless of any intermediate payment or discharge or settlement of account in whole or in part.
|
(b)
|
The Bank may make multiple demands under this Guarantee.
|
3.2
|
Reinstatement
|
(a)
|
the Guarantor's liability will continue as if the payment, discharge, avoidance or reduction had not occurred; and
|
(b)
|
the Bank will be entitled to recover the value or amount of that security or payment from the Guarantor as if the payment, discharge, avoidance or reduction had not occurred.
|
3.3
|
Waiver of defences
|
(a)
|
the existence of any claim of set-off or other rights which the Guarantor may have against the Borrower, the Bank or any other person or which the Borrower may have at any time against the Bank;
|
(b)
|
any time, waiver or consent granted to, or composition with, the Borrower or any other person;
|
(c)
|
the taking, amendment, compromise, exchange, renewal or release of, or failure to perfect, take up or enforce any rights against or security over assets of, the Borrower or any other person or any non-presentation or non-observance of any formality or other requirements in respect of any instrument or any failure to realise the full value of any security;
|
(d)
|
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of the Borrower or any other person;
|
(e)
|
any amendment (however fundamental), increase in, waiver, release or replacement of any Facility Document or any other agreement, document or security;
|
(f)
|
any unenforceability, illegality or invalidity of any obligation of any person under any Facility Document, any other agreement, document or security;
|
(g)
|
any insolvency or reorganisation or similar proceedings of the Borrower;
|
(h)
|
any variation, renewal, increase, extension, compromise, discharge, dealing with, exchange or renewal of any right or remedy which the Bank may have now or after the date of this Guarantee against the Borrower or any other person; or
|
(i)
|
any change in the constitution (whether by amalgamation, merger, reconstruction or otherwise) or ownership of the Borrower or the Bank or any other person.
|
3.4
|
Immediate recourse
|
(a)
|
proceed against any person;
|
(b)
|
enforce any other rights or security; or
|
(c)
|
claim payment from any person,
|
3.5
|
Appropriations
|
(a)
|
The Bank (or any trustee or agent on its behalf) may at any time without affecting the Guarantor's liability under this Guarantee:
|
(i)
|
refrain from applying or enforcing any other moneys, security or rights held or received by the Bank (or any trustee or agent on its behalf) against those amounts; or
|
(ii)
|
apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise); and
|
(b)
|
hold in a suspense account any moneys received from the Guarantor or on account of the liability of the Guarantor under this Guarantee.
|
3.6
|
Non-competition
|
(a)
|
all amounts which may be or become payable by the Borrower under or in connection with the Facility Documents have been irrevocably paid in full; or
|
(b)
|
the Bank otherwise requests,
|
(i)
|
be subrogated to any rights, security or moneys held, received or receivable by the Bank (or any trustee or agent on its behalf);
|
(ii)
|
be entitled to any right of contribution or indemnity in respect of any payment made or moneys received on account of the Guarantor's liability under this Guarantee;
|
(iii)
|
claim, rank, prove or vote as a creditor of the Borrower or its estate in competition with the Bank (or any trustee or agent on its behalf); or
|
(iv)
|
receive, claim or have the benefit of any payment, distribution or security from or on account of the Borrower, or exercise any right of set-off as against the Borrower.
|
3.7
|
Additional security
|
4.
|
REPRESENTATIONS AND WARRANTIES
|
4.1
|
Status
|
4.2
|
Binding obligations
|
4.3
|
Non-conflict
|
(a)
|
any law or regulation or any official or judicial order applicable to it;
|
(b)
|
its constitutional documents; or
|
(c)
|
any agreement or instrument binding upon it or any of its assets.
|
4.4
|
Powers and authority
|
4.5
|
Validity and admissibility in evidence
|
(a)
|
to enable it lawfully to enter into, exercise its rights and comply with its obligations in this Guarantee; and
|
(b)
|
to make this Guarantee admissible in evidence in its jurisdiction of formation,
|
4.6
|
Governing law and enforcement
|
(a)
|
English law as the governing law of this Guarantee will be recognised and enforced in the Guarantor's jurisdiction of formation.
|
(b)
|
Any judgment obtained in England in relation to this Guarantee will be recognised and enforced in its jurisdiction of formation.
|
4.7
|
No filing or stamp taxes
|
4.8
|
No default
|
(a)
|
To the best of the Guarantor’s knowledge, no Termination Event is outstanding or will result from the entry into, or the performance of any transaction contemplated by this Guarantee.
|
(b)
|
To the best of the Guarantor’s knowledge, no other event is outstanding which constitutes a default under any Facility Document or any other document which is binding on it or which its assets are subject which might have in the Bank's opinion a material adverse effect on the business, operations, financial condition or prospects or its ability to perform its obligations under this Guarantee.
|
4.9
|
Financial statements
|
(a)
|
have been prepared in accordance with the relevant GAAP, consistently applied; and
|
(b)
|
fairly represents its consolidated financial condition and operations as at the date to which they were drawn up and there has been no material adverse change in its business, operations, assets or financial condition since the date to which those accounts were drawn up.
|
4.10
|
Litigation
|
4.11
|
Taxes
|
4.12
|
Immunity
|
(a)
|
Its entry into this Guarantee, and the exercise by it of its rights and performance of its obligations under this Guarantee will constitute, commercial acts not connected in any way with any government or state function, requirement, service or transaction performed for commercial purposes.
|
(b)
|
It will not be entitled to claim immunity from suit, execution, attachment or other legal process in any proceedings taken in its jurisdiction of formation in relation to this Guarantee.
|
5.
|
GENERAL UNDERTAKINGS
|
5.1
|
Pari Passu Ranking
|
(a)
|
that its obligations and liabilities under this Guarantee will at all times rank (except in respect of statutory preferential debts) at least pari passu with all its present and future unsecured indebtedness; and
|
(b)
|
not to take or receive any security in respect of the Guarantor’s liability under this Guarantee.
|
5.2
|
Financial Covenants
|
(a)
|
its Tangible Net Worth shall be equal to or greater than US$124,000,000;
|
(b)
|
its Free Liquid Assets shall total at least US$30,000,000; and
|
(c)
|
on any financial quarter end date, the ratio of Net Debt to EBITDA of the Golar MLP Group for the previous 12 months, on a trailing four quarter basis, shall be no greater than 6.50:1.
|
5.3
|
Financial statements and other information
|
(a)
|
its audited consolidated financial statements for each of its financial years as soon as they become available;
|
(b)
|
information necessary to enable the Bank to comply with "know your customer" or similar identification procedures as the Bank may request from time to time;
|
(c)
|
details of any litigation, arbitration or other proceedings pending or threatened; and
|
(d)
|
any further information as the Bank may reasonably request from time to time in writing regarding the Guarantor.
|
5.4
|
Changes to the Guarantee Proportion
|
6.
|
EXPENSES AND INDEMNITY
|
(a)
|
immediately on demand by the Bank, pay all costs and expenses (including legal fees and any applicable Tax) incurred in connection with this Guarantee by the Bank or any attorney, manager, agent or other person appointed by the Bank under this Guarantee including any arising from any actual or alleged breach by any person of any law or regulation; and
|
(b)
|
keep each of the persons referred to in paragraph (a) above indemnified against any failure or delay in paying those costs or expenses.
|
7.
|
PAYMENTS
|
7.1
|
Tax gross-up
|
(a)
|
The Guarantor must make all payments under this Guarantee without any set-off or counterclaim and free from any deduction or withholding for or on account of any Tax.
|
(b)
|
If the Guarantor is required by law to make any such deduction or withholding, it must:
|
(i)
|
pay to the Bank any additional amount as may be necessary to ensure that the Bank receives the full amount of the relevant payment as if that deduction or withholding had not been made; and
|
(ii)
|
supply promptly to the Bank evidence satisfactory to the Bank that it has accounted to the relevant Authority for the withholding or deduction.
|
7.2
|
Default Interest
|
(a)
|
If the Guarantor fails to pay any amount payable by it under this Guarantee on its due date, interest ("
Default Interest
") will accrue daily on the entire overdue amount from the due date up to the date of actual payment (both before and after judgment) at the Default Rate and will be immediately payable on demand by the Bank.
|
(b)
|
Default Interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount on any basis that the Bank may select.
|
8.
|
SET-OFF
|
9.
|
EVIDENCE AND CALCULATIONS
|
9.1
|
Accounts
|
9.2
|
Certificates and determinations
|
9.3
|
Calculations
|
10.
|
AMENDMENTS AND WAIVERS
|
10.1
|
Procedure
|
10.2
|
Waivers and remedies cumulative
|
11.
|
CHANGES TO THE PARTIES
|
11.1
|
Assignments and transfers by the Guarantor
|
11.2
|
Assignments and transfers by the Bank
|
12.
|
DISCLOSURE OF INFORMATION
|
(a)
|
the Bank’s holding company, head office, subsidiaries, subsidiaries of the Bank’s holding company, Affiliates, representative and branch offices in any jurisdiction (together with the Bank, the
"
Permitted Parties
");
|
(b)
|
service providers or professional advisors of the Permitted Parties who are under a duty of confidentiality to the Permitted Parties;
|
(c)
|
any actual or potential participant, sub-participant, assignee or transferee of the Bank’s rights or obligations under the Facility, this Guarantee or any transaction between the Bank and Guarantor (or any agent or adviser of any of the foregoing) who are under a confidentiality undertaking to the Bank;
|
(d)
|
any rating agency, insurer or insurance broker, or direct or indirect provider of credit protection;
|
(e)
|
as required by law or regulation or any government, quasi-government, taxation, administrative, regulatory or supervisory body or authority, court or tribunal; or
|
(f)
|
any other person involved in any funding, operational arrangement or other transaction under this Guarantee or under which payments may be made by reference to this Guarantee.
|
13.
|
NOTICES
|
13.1
|
In writing
|
13.2
|
Contact details
|
13.3
|
Effectiveness
|
(a)
|
Any communication, notice or documents made or delivered to the Guarantor in connection with this Guarantee will only be effective:
|
(i)
|
if by way of fax, at the time shown on the transmission report as being successfully sent;
|
(ii)
|
if delivered personally, at the time of delivery;
|
(iii)
|
if sent by post, three (3) Business Days after posting;
|
(iv)
|
if sent by email, at the time sent by the Bank, and
|
(b)
|
Any communication or document given to the Bank will be effective only when actually received by the Bank.
|
(c)
|
A communication given under paragraph (a) above but received on a non Business Day or after business hours in the place of receipt will only be deemed to be given on the next Business Day in that place.
|
14.
|
PARTIAL INVALIDITY
|
15.
|
RIGHTS OF THIRD PARTIES
|
(a)
|
a person not a Party has no right to enjoy or enforce any benefit under it; and
|
(b)
|
the consent of any person not a Party is not required to amend this Guarantee.
|
16.
|
COUNTERPARTS
|
17.
|
GOVERNING LAW AND JURISDICTION
|
(a)
|
This Guarantee and all non-contractual obligations arising in any way out of or in connection with this Guarantee are governed by English law and the Guarantor irrevocably submits to the non-exclusive jurisdiction of the English courts.
|
(b)
|
The Guarantor irrevocably appoints Golar Management Ltd. of 6
th
Floor, The Zig Zag, 70 Victoria Street, London, SW1E 6SQ, United Kingdom as its agent under this Guarantee for service of process in any proceedings before the English courts in connection with this Guarantee. If any person appointed as process agent is unable to act as process agent for that purpose, a new process agent must be appointed immediately and the Guarantor must notify the Bank of the new process agent’s name and address. The Bank may appoint a new process agent if the Guarantor fails to comply and the Bank will notify the Guarantor of the name and address of the new process agent.
|
1.
|
STANDARD CHARTERED BANK
|
Address:
|
1 Basinghall Avenue,
London EC2V 5DD
|
Fax:
|
|
Relevant contact (officer/department):
|
Mr. Tom Barneby
|
2.
|
THE GUARANTOR
|
Address:
|
c/o Golar Management Ltd
6
th
Floor, The Zig Zag
70 Victoria Street, London
SW1E 6SQ, United Kingdom
|
Fax:
|
+44 (0)207 063 7901
|
Relevant contact (officer/department):
|
Mr. Brian Tienzo
|
Executed and delivered as a deed by _
Pernille Noraas_______,
a duly authorised attorney-in-fact for and on behalf of
Golar LNG Partners LP |
)
) ) ) /s/ Pernille Noraas
In the presence of:
/s/ Elizabeth Lord
...............................................................
Name: Elizabeth Lord
Title: Legal Counsel
Address: 6
th
Floor, the Zig Zag, 70 Victoria Street, London, SW1E 6SQ
Date: 28 November 2018
|
Signed for and on behalf of
Standard Chartered Bank |
)
) ) /s/ Karin Flinspach |
|
Authorised Signatory
|
Subsidiary
|
|
Ownership Interest
|
|
Jurisdiction of Formation
|
Golar Partners Operating LLC
|
|
100%
|
|
Marshall Islands
|
Golar LNG Holding Corporation
|
|
100%
|
|
Marshall Islands
|
Golar Maritime (Asia) Inc.
|
|
100%
|
|
Republic of Liberia
|
Faraway Maritime Shipping Company
|
|
60%
|
|
Republic of Liberia
|
Golar LNG 2215 Corporation
|
|
100%
|
|
Marshall Islands
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Golar Spirit Corporation
|
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100%
|
|
Marshall Islands
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Golar Freeze Holding Corporation
|
|
100%
|
|
Marshall Islands
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Golar 2215 UK Ltd
|
|
100%
|
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United Kingdom
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Golar Winter UK Ltd
|
|
100%
|
|
United Kingdom
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Golar Freeze UK Ltd
|
|
100%
|
|
United Kingdom
|
Golar Servicos de Operacao de Embaracaoes Limited
|
|
100%
|
|
Brazil
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Golar Khannur Corporation
|
|
100%
|
|
Marshall Islands
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Golar LNG (Singapore) Pte. Ltd.
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100%
|
|
Singapore
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PT Golar Indonesia*
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49%
|
|
Indonesia
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Golar LNG 2234 LLC
|
|
100%
|
|
Republic of Liberia
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Golar Winter Corporation
|
|
100%
|
|
Marshall Islands
|
Golar Grand Corporation
|
|
100%
|
|
Marshall Islands
|
Golar Eskimo Corporation
|
|
100%
|
|
Marshall Islands
|
Golar Hull M2031 Corporation
|
|
100%
|
|
Marshall Islands
|
*
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Golar LNG Partners LP holds all of the voting stock and controls all of the economic interests in PT Golar Indonesia (“PTGI”) pursuant to a Shareholder's Agreement with the other shareholder of PTGI, PT Pesona Sentra Utama (“PT Pesona”). PT Pesona holds the remaining 51% interest in the issued share capital of PTGI.
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1.
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I have reviewed this annual report on Form 20-F of Golar LNG Partners LP (the “registrant”);
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2.
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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;
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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 registrant as of, and for, the periods presented in this report;
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4.
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As the registrant’s certifying officer, I am 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 registrant and have:
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a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;
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b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my 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 registrant’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
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d.
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report)
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5.
|
As the registrant’s certifying officer, I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’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 registrant’s ability to record, process, summarize and report financial information; and
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b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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GOLAR LNG PARTNERS LP
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By:
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/s/Brian Tienzo
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Brian Tienzo
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Principal Executive, Financial and Accounting Officer
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|
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|
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a)
|
Registration Statement (Form F-3 No. 333-219065) of Golar LNG Partners LP and in the related Prospectus;
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b)
|
Registration Statement (Form F-3 No. 333-214241) of Golar LNG Partners LP and in the related Prospectus; and
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c)
|
Registration Statement (Form S-8 No. 333-212485) pertaining to Long-Term Incentive plan of Golar LNG Partners LP.
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