Document:

EX-4.2

 Exhibit 4.2 

Execution Version 

SECOND AMENDMENT TO SERIES A PREFERRED UNIT PURCHASE AGREEMENT 

THIS SECOND AMENDMENT TO SERIES A PREFERRED UNIT PURCHASE AGREEMENT (this “Second Amendment”), is entered into as of
May 16, 2017, by and among KNOT OFFSHORE PARTNERS LP, a Marshall Islands limited partnership (the “Partnership”), OMP AY Preferred Limited, a company with limited liability organized under the laws of the Republic of
Malta (“OMP”), Pierfront Capital Mezzanine Fund Pte. Ltd., a limited liability company established under Singapore law (“Pierfront”), and Tortoise Direct Opportunities Fund, LP, a Delaware limited
partnership (“Tortoise”), and together with Pierfront and OMP, the “Purchasers”). 
 W I T N
E S S E T H: 
 WHEREAS, the Partnership and OMP are parties to that certain SERIES A PREFERRED UNIT PURCHASE AGREEMENT, dated as of
December 6, 2016 (as amended by the Assignment and Novation Agreement dated December 20, 2016 and the First Amendment to the Series A Preferred Unit Purchase Agreement, dated as of February 2, 2017 (the “Prior Purchase
Agreement”); and 
 WHEREAS, the Partnership and the Purchasers desire to amend the Prior Purchase Agreement to
provide for, among other things, the issuance and sale of Additional Units to Pierfront and Tortoise on the terms and subject to the conditions set forth herein and in the Prior Purchase Agreement, as amended by this Second Amendment (as so amended,
the “Purchase Agreement”). 
 NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, and for other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows: 

Section 1. Defined Terms. Capitalized terms used but not defined herein (including in the preamble and recitals set forth
above) shall have the meanings ascribed to them in the Purchase Agreement. 
 Section 2. Amendments to the Purchase
Agreement. 
 a. Section 1.01 of the Purchase Agreement is hereby amended by deleting the definitions of “Business
Days”, “Confidentiality Agreements”, “Operating Subsidiaries”, “Partnership Agreement”, “Second A&R LPA”, “Transaction Documents”, “Transaction Fee” and “Vessels” in
their entirety and substituting the following definitions in lieu thereof: 
 “Business Days” means any day
other than a Saturday, Sunday, any legal holiday or day on which banking institutions in the Republic of Malta, the State of New York, the Kingdom of Norway or the Republic of Singapore are authorized or required by Law or other governmental action
to close. 

 “Confidentiality Agreements” means the Confidentiality
Agreement dated on or about November 30, 2016 entered into by the Partnership and OMP, as may be amended from time to time. 

“Operating Subsidiaries” means, collectively, KNOT Shuttle Tankers 12 AS, a company organized under the
laws of Norway, Knutsen Shuttle Tankers XII KS, a limited partnership organized under the laws of Norway, Knutsen Shuttle Tankers XII AS, a company organized under the laws of Norway, KNOT Shuttle Tankers 17 AS, a company organized under the laws of
Norway, KNOT Shuttle Tankers 18 AS, a company organized under the laws of Norway, Knutsen Shuttle Tankers 13 AS, a company organized under the laws of Norway, Knutsen Shuttle Tankers 14 AS, a company organized under the laws of Norway, Knutsen
Shuttle Tankers 15 AS, a company organized under the laws of Norway, KNOT Shuttle Tankers 20 AS, a company organized under the laws of Norway, KNOT Shuttle Tankers 21 AS, a company organized under the laws of Norway, Knutsen NYK Shuttle Tankers 16
AS, a company organized under the laws of Norway, Knutsen Shuttle Tankers 19 AS, a company organized under the laws of Norway, and KNOT Shuttle Tankers 24 AS, a company organized under the laws of Norway. 

“Partnership Agreement” means the First Amended and Restated Agreement of Limited Partnership of KNOT
Offshore Partners LP, dated April 15, 2013, between KNOT Offshore Partners GP LLC and Knutsen NYK Offshore Tankers AS, as amended from time to time in accordance with the terms thereof (including, as the context requires, by the Second A&R LPA
and the Third A&R LPA). 
 “Purchasers” means OMP, Pierfront and Tortoise. 

“Second A&R LPA” means the Second Amended and Restated Agreement of Limited Partnership of KNOT
Offshore Partners LP, dated February 2, 2017. 
 “Transaction Documents” means, collectively, this
Agreement, the Registration Rights Agreement, the Second A&R LPA and the Third A&R LPA. 
 “Transaction
Fee” means one or more of the following, as the context may require: the OMP First Closing Date Transaction Fee, the OMP Second Closing Date Structuring Fee and the Pareto Transaction Fee. 

“Vessels” means collectively, the Fortaleza Knutsen, the Recife Knutsen, the Bodil Knutsen, the Windsor
Knutsen, the Carmen Knutsen, the Hilda Knutsen, the Torill Knutsen, the Dan Cisne, the Dan Sabia, the Ingrid Knutsen, the Raquel Knutsen and the Tordis Knutsen. 

b. Section 1.01 of the Purchase Agreement is hereby amended by adding the following definitions in their corresponding alphabetical
order: 

  
 2 

 “OMP First Closing Date Transaction Fee” means an amount
equal to 2.0% of the OMP Funding Obligation with respect to the First Closing Date. 
 “OMP Second Closing Date
Structuring Fee” means an amount equal to 0.75% of the aggregate of the Pierfront Funding Obligation and the Tortoise Funding Obligation with respect to the Second Closing Date. 

“Pareto” means Pareto Securities Limited. 

“Pareto Transaction Fee” means an amount equal to 1.75% of the aggregate of the Pierfront Funding
Obligation and the Tortoise Funding Obligation with respect to the Second Closing Date. 

“Pierfront” means Pierfront Capital Mezzanine Fund Pte. Ltd., a limited liability company established
under Singapore law. 
 “Pierfront Funding Obligation” means an amount equal to the Purchase Price
multiplied by 1,250,000 Purchased Units to be purchased by Pierfront on the Second Closing Date. 
 “Second
Closing Date” means June 30, 2017 or such other time and date as Pierfront and the Partnership may agree in writing, and which shall be deemed a “Closing Date”. 

“Third A&R LPA” has the meaning specified in Section 2.07(a)(xii). 

“Tortoise” means Tortoise Direct Opportunities Fund, LP, a Delaware limited partnership. 

“Tortoise Funding Obligation” means an amount equal to the Purchase Price multiplied by 416,667
Purchased Units to be purchased by Tortoise on the Second Closing Date. 
 c. Section 2.07(a) of the Purchase Agreement is hereby
amended by deleting clause (xi) in its entirety and substituting the following: 
 “(xi) Such other documents relating to the
transactions contemplated by this Agreement as a Purchaser or its counsel may reasonably request; and” 
 d. Section 2.07(a) of
the Purchase Agreement is hereby amended by adding a new clause (xii) following clause “(xi”) as follows: 
 “(xii) At
the Second Closing Date, an executed copy of the Third Amended and Restated Agreement of Limited Partnership of the Partnership, substantially in the form attached as Exhibit C hereto (the “Third A&R LPA”).” 

  
 3 

 e. Section 3.02 is hereby amended by deleting clause (a) in its entirety and
substituting the following clause (a) in lieu thereof: 
 “(a) As of the date hereof prior to the issuance
and sale of 1,250,000 Purchased Units to Pierfront and 416,667 Purchased Units to Tortoise on the Second Closing Date, the issued and outstanding limited partner interests of the Partnership consist of 29,694,094 Common Units, 2,083,333 Series A
Preferred Units and the incentive distribution rights (as described and defined in the Partnership Agreement, the “Incentive Distribution Rights”). All outstanding Common Units, Series A Preferred Units and Incentive
Distribution Rights and the limited partner interests represented thereby have been duly authorized and validly issued in accordance with the Partnership Agreement and are fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such non-assessability may be affected by Sections 20, 31, 40 and 49 of the Republic of the Marshall Islands Limited Partnership Act (the “Marshall Islands LP Act” and except as provided in the
Partnership Agreement).” 
 f. Section 3.02 is hereby amended by deleting clause (b) in its entirety and
substituting the following clause (b) in lieu thereof: 
 “(a) The General Partner is the sole general partner of
the Partnership, with an approximate 1.85% general partner interest in the Partnership; such general partner interest has been duly authorized and validly issued in accordance with the Partnership Agreement; and the General Partner owns such general
partner interest free and clear of all Liens, except for restrictions on transferability contained in the Partnership Agreement.” 
 g.
Section 3.04 is hereby amended by deleting Section 3.04 in its entirety and substituting the following Section 3.04 in lieu thereof: 

“Section 3.04 Partnership SEC Documents. Since January 1, 2017, the Partnership’s forms,
registration statements, reports, schedules and statements required to be filed by it under the Exchange Act have been filed with the Commission on a timely basis. The Partnership SEC Documents, at the time filed (or in the case of registration
statements, solely on the dates of effectiveness), except to the extent corrected by a subsequent Partnership SEC Document, (a) did not contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and (b) complied as to form in all material respects with the applicable requirements of the Exchange Act
and the Securities Act, as the case may be.”  

  
 4 

 h. Section 3.07 is hereby amended by deleting Section 3.07 in its entirety and
substituting the following Section 3.07 in lieu thereof: 
 “Section 3.07 No Material Adverse Change.
Since December 31, 2016, except as described in the Partnership SEC Documents, (a) no Partnership Entity has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental action, investigation, order or decree, (b) there has not been any material change in the capitalization or material increase in the long-term debt of the Partnership
Entities or any material adverse change or any development involving or which could reasonably be expected to involve, individually or in the aggregate, a prospective material adverse change in or affecting the general affairs, management, condition
(financial or otherwise), stockholders’ equity, partners’ equity, members’ equity, results of operations, business, properties, assets or prospects of the Partnership Entities, taken as a whole, and (c) none of the Partnership
Entities has incurred any liability or obligation, direct, indirect or contingent, or entered into any transactions, whether or not in the ordinary course of business, that, individually or in the aggregate, is material to the Partnership Entities,
taken as a whole.” 
 i. Section 3.17 is hereby amended by deleting Section 3.17 in its entirety and
substituting the following Section 3.17 in lieu thereof: 
 “Section 3.17 Certain Fees. Except
for the OMP First Closing Date Transaction Fee, the OMP Second Closing Date Structuring Fee and the Pareto Structuring Fee, no fees or commissions are or will be payable by the Partnership to brokers, finders or investment bankers with respect to
the sale of any of the Purchased Units or the consummation of the transactions contemplated by this Agreement.” 
 j.
Section 3.28 is hereby amended by deleting Section 3.28 in its entirety and substituting the following Section 3.28 in lieu thereof: 

“Section 3.28 Title To Property. The Partnership Entities have good title to all personal property
described in the Partnership SEC Documents, and each of Knutsen Shuttle Tankers XII KS, Knutsen Shuttle Tankers XII AS, KNOT Shuttle Tankers 17 AS, KNOT Shuttle Tankers 18 AS, Knutsen Shuttle Tankers 13 AS, Knutsen Shuttle Tankers 14 AS, Knutsen
Shuttle Tankers 15 AS, KNOT Shuttle Tankers 20 AS, KNOT Shuttle Tankers 21 AS, Knutsen NYK Shuttle Tankers 16 AS and KNOT Shuttle Tankers 24 AS hold, directly or indirectly, the interest in the applicable Vessel set forth opposite its name on
Exhibit F, in each case free and clear of all Liens except (a) as described, and subject to the limitations contained, in the Partnership SEC Documents, (b) that arise from the indebtedness of the Partnership Entities or (c) as do not
materially affect the value of such property, taken as a whole, and do not materially interfere with the use of such properties, taken as a whole, as they have been used in the past and are proposed to be used in the future, as described in the
Partnership SEC Documents (the Liens described in clauses (a) through (c) above being 

  
 5 

 
“Permitted Liens”); provided that with respect to any interest in real property and buildings held under lease by Partnership Entities, such real property and
buildings are held under valid and subsisting and enforceable leases (except as may be limited by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws relating to or affecting creditors’ rights generally and
by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law)).” 

k. Section 5.04 of the Purchase Agreement is hereby amended by deleting Section 5.04 in its entirety and substituting the
following Section 5.04 in lieu thereof: 
 “Section 5.04 Lock-up Agreement. Without the prior written
consent of the Partnership, except as specifically provided in this Agreement, each Purchaser and its Affiliates shall not, (a) during the period commencing on the First Closing Date and ending on the second anniversary of the First Closing Date,
offer, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of the Purchased
Units, (b) during the period commencing on the date hereof and ending on the second anniversary of the First Closing Date, directly or indirectly engage in any short sales or other derivative or hedging transactions with respect to the Purchased
Units or Common Units of the Partnership, (c) transfer any Purchased Units to any Person, including any governmental entity, including by means of any swap or other transaction or arrangement that transfers or that is designed to, or that might
reasonably be expected to, result in the transfer to another, in whole or in part, any of the economic consequences of ownership of any Purchased Units, regardless of whether any transaction described in clauses (a) through (c) above is to be
settled by delivery of Series A Preferred Units, Common Units or other securities, in cash or otherwise, or (d) effect any transfer of Purchased Units or Conversion Units in a manner that violates the terms of the Partnership Agreement; provided,
however, that (i) such Purchaser may transfer any Purchased Units to an Affiliate of such Purchaser, (ii) after the second anniversary of the First Closing Date, a Purchaser may transfer Purchased Units in an aggregate amount not less
than $10,000,000 (or such lesser amount as the Purchaser holds), subject to compliance with applicable securities laws and the terms of the Partnership Agreement, (iii) such Purchaser may transfer any Purchased Units at any time when the Common
Units are no longer listed or admitted to trading on a national securities exchange, subject to compliance with applicable securities laws and the terms of the Partnership Agreement and (iv) such Purchaser may transfer any Purchased Units at
any time when an event of default has occurred and is continuing under any indebtedness of the Partnership or any Operating Subsidiary in an outstanding principal amount, individually or in the aggregate, of at least $10,000,000.” 

l. Section 8.01 of the Purchase Agreement is hereby amended by deleting Section 8.01 in its entirety and substituting the
following Section 8.01 in lieu thereof: 

  
 6 

 “Section 8.01 Expenses. Except as follows, all costs and
expenses, including fees and disbursements of counsel, financial advisors and accountants, incurred in connection with the Transaction Documents and the transactions contemplated thereby shall be paid by the party incurring such costs and expenses:

 (a) To the extent not already paid, promptly following receipt of an invoice therefore containing reasonable supporting
detail, the Partnership will reimburse the fees and reasonable out-of-pocket expenses for OMP related to the First Closing Date up to an aggregate of $150,000; 

(b) On February 2, 2017, the Partnership paid to OMP the OMP First Closing Date Transaction Fee. The OMP First Closing
Date Transaction Fee was paid by netting such fee from OMP’s Funding Obligation paid at the First Closing Date; provided that for United States federal income tax purposes, payment of the OMP First Closing Date Transaction Fee and the
reimbursements described in Section 8.01(a) are, and will be treated by the parties as, adjustments to the Purchase Price paid by OMP on the First Closing Date for the Purchased Units; 

(c) On the Second Closing Date, the Partnership shall pay to OMP Capital AS the OMP Second Closing Date Structuring Fee; 

(d) On the Second Closing Date, the Partnership shall pay to Pareto the Pareto Transaction Fee; and 

(e) Promptly following receipt of an invoice therefore containing reasonable supporting detail, the Partnership will reimburse
up to an aggregate of (i) $50,000 of the fees and reasonable out-of-pocket expenses related to the Second Closing Date incurred by Pierfront and (ii) $12,500 of the fees and reasonable out-of-pocket expenses related to the Second Closing
Date incurred by Tortoise.” 
 m. Schedule A of the Purchase Agreement is hereby amended by deleting Schedule A in its entirety
and substituting the following Schedule A in lieu thereof: 
 “Schedule A 

 

									
	 Purchaser At the First Closing Date
	  	Purchased Units	 	  	Funding Obligation	 
	 Offshore Merchant Partners Asset Yield Fund, L.P.*
	  	 	2,083,333	 	  	$	49,999,992	 
		  	  
	  
	 	  	  
	  
	 
	 TOTAL
	  	 	2,083,333	 	  	$	49,999,992	 
		  	  
	  
	 	  	  
	  
	 

  

	*	The address of Offshore Merchant Partners Asset Yield Fund, L.P. is Mill Court, La Charroterie, St Peters Port, Guernsey GY1 1EJ. 

  
 7 

									
	 Purchaser At the Second Closing Date
	  	Purchased Units	 	  	Funding Obligation	 
	 Pierfront Capital Mezzanine Fund Pte. Ltd.**
	  	 	1,250,000	 	  	$	30,000,000	 
		  	  
	  
	 	  	  
	  
	 
	 Tortoise Direct Opportunities Fund, LP***
	  	 	416,667	 	  	$	10,000,008	 
		  	  
	  
	 	  	  
	  
	 
	 TOTAL
	  	 	1,666,667	 	  	$	40,000,008”	 
		  	  
	  
	 	  	  
	  
	 

  

	**	The address of Pierfront Capital Mezzanine Fund Pte. Ltd. (UEN 201541517M) is 12 Marina Boulevard #17-03 Marina Bay Financial Centre Singapore 018982. 

	***	The address of Tortoise Direct Opportunities Fund, LP is 11550 Ash Street, Suite 300, Leawood, KS 66211. 

n. Exhibit F of the Purchase Agreement is hereby amended by deleting Exhibit F in its entirety and substituting the following Exhibit F
in lieu thereof: 
 “EXHIBIT F 

VESSELS 
  

					
	 Vessel
	  	 Ownership
	  	Flag Jurisdiction
	Fortaleza Knutsen	  	Knutsen Shuttle Tankers XII KS	  	The Bahamas
	Recife Knutsen	  	Knutsen Shuttle Tankers XII KS	  	The Bahamas
	Bodil Knutsen	  	KNOT Shuttle Tankers 17 AS	  	Isle of Man
	Windsor Knutsen	  	KNOT Shuttle Tankers 18 AS	  	Norway
	Carmen Knutsen	  	Knutsen Shuttle Tankers 13 AS	  	Malta
	Hilda Knutsen	  	Knutsen Shuttle Tankers 14 AS	  	United Kingdom
	Torill Knutsen	  	Knutsen Shuttle Tankers 15 AS	  	United Kingdom
	Dan Cisne	  	KNOT Shuttle Tankers 20 AS	  	Denmark
	Dan Sabia	  	KNOT Shuttle Tankers 21 AS	  	Denmark
	Ingrid Knutsen	  	Knutsen NYK Shuttle Tankers 16 AS	  	United Kingdom
	Raquel Knutsen	  	Knutsen Shuttle Tankers 19 AS	  	Malta
	Tordis Knutsen	  	KNOT Shuttle Tankers 24 AS	  	NIS

 Section 3. Acknowledgement. Each of Pierfront and Tortoise acknowledges that it desires to
acquire the number of Series A Preferred Units set forth opposite its name on Schedule A of the Purchase Agreement, subject to the terms and conditions of the Purchase Agreement (including the Exhibits thereto) and hereby joins in, and agrees to be
bound by and subject to, the Purchase Agreement, with the same force and effect as if it were originally a Purchaser party thereto. The Partnership and OMP hereby acknowledges and agree that each of Pierfront and Tortoise shall be deemed a Purchaser
under the Purchase Agreement with respect to such Series A Preferred Units and that Pierfront and Tortoise shall be entitled to all of the rights and benefits, and subject to all of the obligations, of a Purchaser under the Purchase Agreement from
and after the date of this Second Agreement. 

  
 8 

 Section 4. No Waiver. Except as expressly stated herein, nothing contained
herein shall be deemed to constitute a waiver of compliance with any term or condition contained in the Purchase Agreement or constitute a course of conduct or dealing among the parties. Except as amended hereby, the Purchase Agreement remains
unmodified and in full force and effect. All references in the Transaction Documents to the Purchase Agreement shall be deemed to be references to the Purchase Agreement as amended hereby. 

Section 5. Counterparts. This Second Amendment may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, taken together, shall constitute but one and the same instrument. 

Section 6. Successors and Assigns. This Second Amendment shall be binding upon the Partnership, each of the Purchasers and
their respective successors and permitted assigns. 
 Section 7. Further Assurance. Each party hereby agrees from time to
time after the date first written above, to execute and deliver or cause to be executed and delivered, all such documents, instruments and agreements and to take or cause to be taken such further or other action as may reasonably require in order to
carry out the intent and purposes of this Second Amendment. 
 Section 8. Governing Law: Submission to Jurisdiction. This
Second Amendment, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this Second Amendment or the negotiation, execution or performance of this Second Amendment (including any claim or
cause of action based upon, arising out of or related to any representation or warranty made in or in connection with this Second Amendment), will be construed in accordance with and governed by the laws of the State of New York without regard to
principles of conflicts of laws. Any action against any party relating to the foregoing shall be brought in any federal or state court of competent jurisdiction located within the State of New York, and the parties hereto hereby irrevocably submit
to the non-exclusive jurisdiction of any federal or state court located within the State of New York over any such action. The parties hereby irrevocably waive, to the fullest extent permitted by applicable Law, any objection which they may now or
hereafter have to the laying of venue of any such dispute brought in such court or any defense of inconvenient forum for the maintenance of such dispute. Each of the parties hereto agrees that a judgment in any such dispute may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by Law. 
 Section 9. Severability. Wherever
possible, each provision of this Second Amendment shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Second Amendment shall be prohibited by or invalid under such law, such provision
shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Second Amendment. 

Section 10. Approval. By execution hereof, OMP AY Preferred Limited, as the sole holder of all currently outstanding Series
A Preferred Units, hereby consents to the adoption of the Third A&R LPA, including all changes therein to the terms and conditions of the Series A Preferred Units (and the holders thereof). 

[Remainder of page intentionally left blank; signature pages follow] 

  
 9 

 IN WITNESS WHEREOF, the parties have executed this Second Amendment as of the date first set
forth above. 
  

			
	OMP AY Preferred Limited
		
	By:	 	 /s/ Håvard Vikse /s/ Guido Mizzi

	Name: Håvard Vikse / Guido Mizzi
	Title: Director / Director
	
	PIERFRONT CAPITAL MEZZANINE FUND PTE. LTD. (UEN 201541517M)
		
	By:	 	 /s/ Stephane Delatte

	Name: Stephane Delatte
	Title: Chief Investment Officer
	
	TORTOISE DIRECT OPPORTUNITIES FUND, LP
	
	By: TORTOISE DIRECT OPPORTUNITIES GP LLC, its General Partner
		
	By:	 	 /s/ Kyle Krueger

	Name: Kyle Krueger
	Title: Director
	
	KNOT OFFSHORE PARTNERS LP
		
	By:	 	 /s/ John Costain

	Name: John Costain
	Title: Chief Executive Officer and
	          Chief Financial Officer

 [SIGNATURE PAGE TO SECOND
AMENDMENT TO SERIES A PREFERRED UNIT PURCHASE AGREEMENT] 

  

 Exhibit C 

Form of Third Amended and Restated Agreement of Limited Partnership 

of KNOT Offshore Partners LP 

  
 C-1 

  

 
 THIRD AMENDED AND RESTATED 

AGREEMENT OF LIMITED PARTNERSHIP 

OF 
 KNOT OFFSHORE
PARTNERS LP 
  
  

 

 TABLE OF CONTENTS 

 

							
	ARTICLE I	 
	
	DEFINITIONS AND CONSTRUCTION	 
			
	 Section 1.1
	 	Definitions	  	 	2	 
	 Section 1.2
	 	Construction	  	 	22	 
	
	ARTICLE II	 
	
	ORGANIZATION	 
			
	 Section 2.1
	 	Formation	  	 	22	 
	 Section 2.2
	 	Name	  	 	23	 
	 Section 2.3
	 	Registered Office; Registered Agent; Principal Office; Other Offices	  	 	23	 
	 Section 2.4
	 	Purpose and Business	  	 	23	 
	 Section 2.5
	 	Powers	  	 	23	 
	 Section 2.6
	 	Term	  	 	23	 
	 Section 2.7
	 	Title to Partnership Assets	  	 	24	 
	
	ARTICLE III	 
	
	RIGHTS OF LIMITED PARTNERS	 
			
	 Section 3.1
	 	Limitation of Liability	  	 	24	 
	 Section 3.2
	 	Management of Business	  	 	24	 
	 Section 3.3
	 	Outside Activities of the Limited Partners	  	 	24	 
	 Section 3.4
	 	Rights of Limited Partners	  	 	25	 
	
	ARTICLE IV	 
	
	CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS	 
			
	 Section 4.1
	 	Certificates	  	 	25	 
	 Section 4.2
	 	Mutilated, Destroyed, Lost or Stolen Certificates	  	 	26	 
	 Section 4.3
	 	Record Holders	  	 	26	 
	 Section 4.4
	 	Transfer Generally	  	 	27	 
	 Section 4.5
	 	Registration and Transfer of Limited Partner Interests	  	 	27	 
	 Section 4.6
	 	Transfer of the General Partner’s General Partner Interest	  	 	28	 
	 Section 4.7
	 	Transfer of Incentive Distribution Rights	  	 	29	 
	 Section 4.8
	 	Restrictions on Transfers	  	 	29	 

  
 i 

							
	
	ARTICLE V	 
	
	CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS	 
			
	 Section 5.1
	 	Contributions to the Partnership	  	 	30	 
	 Section 5.2
	 	Tax Election	  	 	30	 
	 Section 5.3
	 	Interest and Withdrawal	  	 	30	 
	 Section 5.4
	 	Issuances of Additional Partnership Interests	  	 	30	 
	 Section 5.5
	 	Limitations on Issuance of Additional Partnership Interests	  	 	31	 
	 Section 5.6
	 	[Reserved]	  	 	31	 
	 Section 5.7
	 	Limited Preemptive Right	  	 	31	 
	 Section 5.8
	 	Splits and Combinations	  	 	32	 
	 Section 5.9
	 	Fully Paid and Non-Assessable Nature of Limited Partner Interests	  	 	32	 
	 Section 5.10
	 	Issuance of Common Units in Connection with Reset of Incentive Distribution Rights	  	 	33	 
	 Section 5.11
	 	Establishment of Series A Preferred Units	  	 	34	 
	
	ARTICLE VI	 
	
	DISTRIBUTIONS	 
			
	 Section 6.1
	 	[Reserved]	  	 	50	 
	 Section 6.2
	 	Requirement and Characterization of Distributions; Distributions to Record Holders	  	 	50	 
	 Section 6.3
	 	Distributions of Available Cash from Operating Surplus	  	 	51	 
	 Section 6.4
	 	Distributions of Available Cash from Capital Surplus	  	 	52	 
	 Section 6.5
	 	Adjustment of Minimum Quarterly Distribution and Target Distribution Levels	  	 	52	 
	 Section 6.6
	 	[Reserved]	  	 	52	 
	 Section 6.7
	 	Special Provisions Relating to the Holders of Incentive Distribution Rights	  	 	52	 
	
	ARTICLE VII	 
	
	MANAGEMENT AND OPERATION OF BUSINESS	 
			
	 Section 7.1
	 	Management	  	 	52	 
	 Section 7.2
	 	The Board of Directors; Election and Appointment; Term; Manner of Acting	  	 	53	 
	 Section 7.3
	 	Nominations of Elected Directors	  	 	54	 
	 Section 7.4
	 	Removal of Members of Board of Directors	  	 	55	 
	 Section 7.5
	 	Resignations of Members of the Board of Directors	  	 	55	 
	 Section 7.6
	 	Vacancies on the Board of Directors	  	 	55	 
	 Section 7.7
	 	Meetings; Committees; Chairman	  	 	55	 
	 Section 7.8
	 	Officers	  	 	57	 
	 Section 7.9
	 	Compensation of Directors	  	 	57	 
	 Section 7.10
	 	Certificate of Limited Partnership	  	 	57	 
	 Section 7.11
	 	Restrictions on the Authority of the Board of Directors and the General Partner	  	 	58	 
	 Section 7.12
	 	Reimbursement of the General Partner	  	 	58	 
	 Section 7.13
	 	Outside Activities	  	 	59	 

  
 ii 

							
	 Section 7.14
	 	Loans from the General Partner; Loans or Contributions from the Partnership or Group Members	  	 	60	 
	 Section 7.15
	 	Indemnification	  	 	61	 
	 Section 7.16
	 	Liability of Indemnitees	  	 	63	 
	 Section 7.17
	 	Resolution of Conflicts of Interest; Standards of Conduct and Modification of Duties	  	 	63	 
	 Section 7.18
	 	Other Matters Concerning the General Partner and the Board of Directors	  	 	66	 
	 Section 7.19
	 	Purchase or Sale of Partnership Interests	  	 	66	 
	 Section 7.20
	 	Registration Rights of the General Partner and its Affiliates	  	 	66	 
	 Section 7.21
	 	Reliance by Third Parties	  	 	69	 
	
	ARTICLE VIII	 
	
	BOOKS, RECORDS, ACCOUNTING AND REPORTS	 
			
	 Section 8.1
	 	Records and Accounting	  	 	69	 
	 Section 8.2
	 	Fiscal Year	  	 	70	 
	 Section 8.3
	 	Reports	  	 	70	 
	
	ARTICLE IX	 
	
	TAX MATTERS	 
			
	 Section 9.1
	 	Tax Elections and Information	  	 	70	 
	 Section 9.2
	 	Tax Withholding	  	 	71	 
	 Section 9.3
	 	Conduct of Operations	  	 	71	 
	
	ARTICLE X	 
	
	ADMISSION OF PARTNERS	 
			
	 Section 10.1
	 	[Reserved]	  	 	71	 
	 Section 10.2
	 	Admission of Additional Limited Partners	  	 	71	 
	 Section 10.3
	 	Admission of Successor General Partner	  	 	72	 
	 Section 10.4
	 	Amendment of Agreement and Certificate of Limited Partnership	  	 	72	 
	
	ARTICLE XI	 
	
	WITHDRAWAL OR REMOVAL OF PARTNERS	 
			
	 Section 11.1
	 	Withdrawal of the General Partner	  	 	72	 
	 Section 11.2
	 	Removal of the General Partner	  	 	74	 
	 Section 11.3
	 	Interest of Departing General Partner and Successor General Partner	  	 	75	 
	 Section 11.4
	 	[Reserved]	  	 	76	 
	 Section 11.5
	 	Withdrawal of Limited Partners	  	 	76	 

  
 iii 

							
	
	ARTICLE XII	 
	
	DISSOLUTION AND LIQUIDATION	 
			
	 Section 12.1
	 	Dissolution	  	 	77	 
	 Section 12.2
	 	Continuation of the Business of the Partnership After Dissolution	  	 	77	 
	 Section 12.3
	 	Liquidating Trustee	  	 	78	 
	 Section 12.4
	 	Liquidation	  	 	78	 
	 Section 12.5
	 	Cancellation of Certificate of Limited Partnership	  	 	80	 
	 Section 12.6
	 	Return of Contributions	  	 	80	 
	 Section 12.7
	 	Waiver of Partition	  	 	80	 
	
	ARTICLE XIII	 
	
	AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE	 
			
	 Section 13.1
	 	Amendments to be Adopted Without Approval of the Limited Partners or the General Partner	  	 	80	 
	 Section 13.2
	 	Amendment Procedures	  	 	82	 
	 Section 13.3
	 	Amendment Requirements	  	 	82	 
	 Section 13.4
	 	Special Meetings	  	 	83	 
	 Section 13.5
	 	Notice of a Meeting	  	 	83	 
	 Section 13.6
	 	Record Date	  	 	84	 
	 Section 13.7
	 	Adjournment	  	 	84	 
	 Section 13.8
	 	Waiver of Notice; Approval of Meeting; Approval of Minutes	  	 	84	 
	 Section 13.9
	 	Quorum and Voting	  	 	84	 
	 Section 13.10
	 	Conduct of a Meeting	  	 	85	 
	 Section 13.11
	 	Action Without a Meeting	  	 	85	 
	 Section 13.12
	 	Right to Vote and Related Matters	  	 	86	 
	
	ARTICLE XIV	 
	
	MERGER, CONSOLIDATION OR CONVERSION	 
			
	 Section 14.1
	 	Authority	  	 	86	 
	 Section 14.2
	 	Procedure for Merger, Consolidation or Conversion	  	 	86	 
	 Section 14.3
	 	Approval by Limited Partners of Merger, Consolidation or Conversion	  	 	88	 
	 Section 14.4
	 	Certificate of Merger or Conversion	  	 	89	 
	 Section 14.5
	 	Amendment of Partnership Agreement	  	 	90	 
	 Section 14.6
	 	Effect of Merger, Consolidation or Conversion	  	 	90	 
	
	ARTICLE XV	 
	
	RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS	 
			
	 Section 15.1
	 	Right to Acquire Limited Partner Interests	  	 	91	 

  
 iv 

							
	
	ARTICLE XVI	 
	
	GENERAL PROVISIONS	 
			
	 Section 16.1
	 	Addresses and Notices	  	 	92	 
	 Section 16.2
	 	Further Action	  	 	93	 
	 Section 16.3
	 	Binding Effect	  	 	93	 
	 Section 16.4
	 	Integration	  	 	93	 
	 Section 16.5
	 	Creditors	  	 	93	 
	 Section 16.6
	 	Waiver	  	 	93	 
	 Section 16.7
	 	Counterparts	  	 	93	 
	 Section 16.8
	 	Applicable Law; Forum, Venue and Jurisdiction	  	 	93	 
	 Section 16.9
	 	Invalidity of Provisions	  	 	94	 
	 Section 16.10
	 	Consent of Partners	  	 	95	 
	 Section 16.11
	 	Facsimile Signatures	  	 	95	 
	 Section 16.12
	 	Third-Party Beneficiaries	  	 	95	 

  
 v 

 THIRD AMENDED AND RESTATED 

AGREEMENT OF LIMITED PARTNERSHIP 

OF 
 KNOT OFFSHORE
PARTNERS LP 
 THIS THIRD AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF KNOT OFFSHORE PARTNERS LP, dated as of [June 30],
2017, is entered into by and between KNOT Offshore Partners GP LLC, a Marshall Islands limited liability company, as the General Partner, together with any other Persons who are or become Partners in the Partnership or parties hereto, as provided
herein. 
 RECITALS 
 A.
The Partnership desires to amend certain provisions herein related to its Series A Preferred Units (as defined herein) and issue 1,666,667 additional Series A Preferred Units as provided in the Series A Purchase Agreement (as defined herein); 

B. Pursuant to Section 5.11(c)(iv)(B) of the Previous Agreement (as defined herein) the Board of Directors has the authority to adopt
certain amendments to the Previous Agreement relating to the transactions contemplated by the Series A Purchase Agreement with the approval of the holders of a majority of the Series A Preferred Units; 

C. OMP AY Preferred Limited, as the holder of all of the Outstanding Series A Preferred Units immediately prior to the date hereof, and
Pierfront Capital Mezzanine Fund Pte. Ltd. and Tortoise Direct Opportunities Fund, LP, as Purchasers (as defined in the Series A Purchase Agreement) of an aggregate of 1,666,667 Series A Preferred Units as of the date hereof, have agreed to, and
approved, this Agreement, including the amended terms of the Series A Preferred Units as provided herein; 
 D. Pursuant to Sections
13.1(d)(i) and 13.1(g) of the Previous Agreement, subject to Section 5.11(c)(iv)(B) of the Previous Agreement, the Board of Directors has the authority to adopt certain amendments to the Previous Agreement relating to the transactions
contemplated by the Series A Purchase Agreement without the approval of any Limited Partner, including, among other things, (i) an amendment the Board of Directors determines to be necessary or appropriate in connection with the authorization
of the issuance of any class or series of Partnership Interest pursuant to Section 5.4 of the Previous Agreement, or (ii) a change that the Board of Directors determines does not adversely affect the Limited Partners (including any
particular class of Partnership Interests as compared to other classes of Partnership Interests); and 
 E. The Board of Directors and the
General Partner have adopted this Agreement pursuant to Sections 13.1(d)(i) and 13.1(g) of the Previous Agreement. 
 NOW, THEREFORE, in
consideration of the covenants and agreements made herein, the Previous Agreement is hereby amended and restated in its entirety as follows: 

 ARTICLE I 

DEFINITIONS AND CONSTRUCTION 

Section 1.1 Definitions. The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary,
applied to the terms used in this Agreement. 
 “Acquisition” means any transaction in which any Group
Member acquires (through an asset acquisition, merger, stock acquisition or other form of investment) control over all or a portion of the assets, properties or business of another Person for the purpose of increasing the operating capacity and/or
asset base of the Partnership Group from the operating capacity and/or asset base of the Partnership Group existing immediately prior to such transaction; provided, however, that
any acquisition of properties or assets of another Person that is made solely for investment purposes shall not constitute an Acquisition under this Agreement. 

“Adjusted Operating Surplus” means, with respect to any period, Operating Surplus generated with respect
to such period (a) less (i) the amount of any net increase in Working Capital Borrowings (or the Partnership’s proportionate share of any net increase in Working Capital Borrowings in the case of Subsidiaries that are not
wholly-owned) with respect to such period and (ii) the amount of any net decrease in cash reserves for Operating Expenditures (or the Partnership’s proportionate share of any net decrease in cash reserves for Operating Expenditures in the
case of Subsidiaries that are not wholly-owned) over such period to the extent such reduction does not relate to an Operating Expenditure made with respect to such period, and (b) plus (i) the amount
of any net decrease in Working Capital Borrowings (or the Partnership’s proportionate share of any net decrease in Working Capital Borrowings in the case of Subsidiaries that are not wholly-owned) with respect to such period; (ii) the
amount of any net increase in cash reserves (or the Partnership’s proportionate share of any net increase in cash reserves in the case of Subsidiaries that are not wholly-owned) for Operating Expenditures over such period to the extent such
reserve is required (A) by any debt instrument for the repayment of principal, interest or premium or (B) for any Series A Payments; and (iii) the amount of any net decrease made in subsequent periods in cash reserves for Operating
Expenditures initially established with respect to such period to the extent such decrease results in a reduction in Adjusted Operating Surplus in subsequent periods pursuant to clause (a)(ii) above. Adjusted Operating Surplus does not
include that portion of Operating Surplus included in clause (a)(i) of the definition of Operating Surplus. Adjusted Operating Surplus includes that portion of Operating Surplus in clause (a)(ii) of the definition of Operating Surplus
only to the extent that cash is received by the Partnership Group. 
 “Affiliate” or
“Affiliates” means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used
herein, the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise. 
 “Aggregate Quantity of IDR Reset Common Units” has the
meaning set forth in Section 5.10(a). 

  
 2 

 “Agreed Value” means the fair market value of the
applicable property or other consideration at the time of contribution or distribution, as the case may be, as determined by the Board of Directors. 

“Agreement” means this Third Amended and Restated Agreement of Limited Partnership of KNOT Offshore
Partners LP, as it may be amended, supplemented or restated from time to time. 
 “Annual
Meeting” means the meeting of Limited Partners to be held every year to elect the Elected Directors as provided in Section 7.2 and to vote on any other matters brought before the meeting in accordance with this
Agreement. 
 “Appointed Directors” means the members of the Board of Directors
appointed by the General Partner in accordance with the provisions of Article VII. 

“Associate” means, when used to indicate a relationship with any Person: (a) any corporation or
organization of which such Person is a director, officer, manager, general partner or managing member or is, directly or indirectly, the owner of 20% or more of any class of voting stock or other voting interest; (b) any trust or other estate
in which such Person has at least a 20% beneficial interest or as to which such Person serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such Person, or any relative of such spouse, who has the same
principal residence as such Person. 
 “Audit Committee” means a committee of the Board
of Directors composed of a minimum of three members of the Board of Directors then serving who meet the independence standards required of directors who serve on an audit committee of a board of directors established by the Securities Exchange Act,
and the rules and regulations of the Commission thereunder and meet the standards for audit committee composition established by the National Securities Exchange on which the Common Units are listed or admitted to trading. 

“Available Cash” means, with respect to any Quarter ending prior to the Liquidation Date: 

(a) the sum of (i) all cash and cash equivalents of the Partnership Group (or the Partnership’s proportionate share
of cash and cash equivalents in the case of Subsidiaries that are not wholly-owned) on hand at the end of such Quarter, (ii) all additional cash and cash equivalents of the Partnership Group (or the
Partnership’s proportionate share of cash and cash equivalents in the case of Subsidiaries that are not wholly-owned) on hand on the date of determination of Available Cash with respect to such Quarter
resulting from Working Capital Borrowings made subsequent to the end of such Quarter, and (iii) all cash and cash equivalents on hand on the date of determination of Available Cash resulting from cash distributions received after the end of
such Quarter from any Group Member’s equity interest in any Person (other than a Subsidiary), which distributions are paid by such Person in respect of operations conducted by such Person during such Quarter, less 

  
 3 

 (b) the amount of any cash reserves (or the Partnership’s
proportionate share of cash reserves in the case of Subsidiaries that are not wholly-owned) established by the Board of Directors to (i) provide for the proper conduct of the business of the Partnership
Group (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership Group) subsequent to such Quarter, (ii) comply with applicable law or any loan agreement, security agreement, mortgage, debt
instrument or other agreement or obligation to which any Group Member is a party or by which it is bound or its assets are subject, (iii) provide funds for Series A Payments and/or (iv) provide funds for distributions under Sections
6.3 or 6.4 in respect of any one or more of the next four Quarters; provided, however, that the Board of Directors may not establish cash reserves pursuant to clause (iv) above if the effect of establishing such
reserves would be that the Partnership is unable to distribute the Minimum Quarterly Distribution on all Common Units with respect to such Quarter; and, provided, further, that disbursements made by a Group Member or cash reserves
established, increased or reduced after the end of such Quarter but on or before the date of determination of Available Cash with respect to such Quarter shall be deemed to have been made, established, increased or reduced, for purposes of
determining Available Cash, within such Quarter if the Board of Directors so determines. 
 Notwithstanding the foregoing,
“Available Cash” with respect to the Quarter in which the Liquidation Date occurs and any subsequent Quarter shall equal zero. 

“Average VWAP” per Common Unit over a certain period shall mean the arithmetic average of the VWAP per Common Unit for
each Trading Day in such period. 
 “Board of Directors” means the board of directors of the Partnership, composed
of Appointed Directors and Elected Directors appointed or elected, as the case may be, in accordance with the provisions of Article VII (and, in the event of a Series A Trigger Event, Section 5.11(c)(iv)(D)) and a majority of whom
are not United States citizens or residents, which, pursuant to Section 7.1, and subject to Section 7.11, oversees and directs the operations, management and policies of the Partnership. The Board of Directors shall
constitute a committee within the meaning of Section 30(2)(g) of the Marshall Islands Act. 
 “Business
Day” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of the United States of America or the State of New York shall not be regarded as a Business Day. 

“Capital Contribution” means (a) with respect to any Partner, any cash, cash equivalents or the Net
Agreed Value of Contributed Property that a Partner contributes to the Partnership or that is contributed or deemed contributed to the Partnership on behalf of a Partner (including, in the case of an underwritten offering of Units, the amount of any
underwriting discounts or commissions) or (b) with respect to the General Partner only, (i) distributions of cash that the General Partner is entitled to receive but otherwise waives such that the Partnership retains such cash or
(ii) Common Units that the General Partner contributes to the Partnership. 

  
 4 

 “Capital Improvement” means any (a) addition or
improvement to the capital assets owned by any Group Member, (b) acquisition of existing, construction of new or improvement or replacement of existing, capital assets by any Group Member or (c) capital contribution by a Group Member to a
Person that is not a Subsidiary, in which a Group Member has, or after such capital contribution will have, an equity interest, to fund the Group Member’s pro rata share of the cost of the addition or improvement to or the acquisition of
existing, or the construction of new, or the improvement or replacement of existing, capital assets by such Person, in each case if such addition, improvement, replacement, acquisition or construction is made to increase the operating capacity
and/or asset base of the Partnership Group from the operating capacity and/or asset base of the Partnership Group or such Person, as the case may be, existing immediately prior to such addition, improvement, replacement, acquisition or construction;
provided, however, that any such addition, improvement, acquisition or construction that is made solely for investment purposes shall not constitute a Capital Improvement. 

“Capital Surplus” has the meaning assigned to such term in Section 6.2(a). 

“Cause” means a court of competent jurisdiction has entered a final, non-appealable judgment finding a
Person liable to the Partnership or any Limited Partner for actual fraud or willful misconduct in its capacity as a general partner of the Partnership or as a member of the Board of Directors, as the case may be. 

“Certificate” means a certificate (a) substantially in the form of Exhibit A to this
Agreement, with respect to Common Units, and Exhibit B with respect to Series A Preferred Units, (b) issued in global or book entry form in accordance with the rules and regulations of the Depository or (c) in such other form as may
be adopted by the Board of Directors, issued by the Partnership evidencing ownership of one or more Common Units or Series A Preferred Units, or a certificate, in such form as may be adopted by the Board of Directors, issued by the Partnership
evidencing ownership of one or more other Partnership Interests. 
 “Certificate of Limited
Partnership” means the Certificate of Limited Partnership of the Partnership filed with the Registrar of Corporations of The Marshall Islands as referenced in Section 7.10 as such Certificate of Limited Partnership may be
amended, supplemented or restated from time to time. 
 “claim” (as used in
Section 7.20(c)) has the meaning assigned to such term in Section 7.20(c). 
 “Closing
Date” means April 15, 2013, the first date on which Common Units were sold by the Partnership to the Underwriters pursuant to the provisions of the Underwriting Agreement. 

“Closing Price” means, in respect of any class or series of Limited Partner Interests, as of the date of
determination, the last sale price on such day, regular way, or in case no such sale takes place on such day, the average of the closing bid and asked prices on such day, regular way, as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the principal National Securities Exchange on which the respective Limited Partner Interests are listed or admitted to trading or, if such Limited 

  
 5 

 
Partner Interests are not listed or admitted to trading on any National Securities Exchange, the last quoted price on such day or, if not so quoted, the average of the high bid and low asked
prices on such day in the over-the-counter market, as reported by any quotation system then in use with respect to such Limited Partner Interests, or, if on any such day
such Limited Partner Interests of such class or series are not quoted by any such system, the average of the closing bid and asked prices on such day as furnished by a professional market maker making a market in such Limited Partner Interests of
such class or series selected by the Board of Directors, or if on any such day no market maker is making a market in such Limited Partner Interests of such class or series, the fair value of such Limited Partner Interests on such day as determined
by the Board of Directors. 
 “Code” means the United States Internal Revenue Code of 1986, as amended
and in effect from time to time. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law. 

“Combined Interest” has the meaning assigned to such term in Section 11.3(a). 

“Commences Commercial Service” and “Commenced Commercial Service” shall mean the
date a Capital Improvement is first put into commercial service by a Group Member following, if applicable, completion of construction, acquisition, development and testing. 

“Commission” means the United States Securities and Exchange Commission. 

“Common Unit” means a Partnership Interest having the rights and obligations specified with respect to
Common Units in this Agreement. The term “Common Unit” does not include a Series A Preferred Unit prior to its conversion into a Common Unit pursuant to the terms hereof. 

“Conflicts Committee” means a committee of the Board of Directors composed entirely of two or more
directors who are not any of the following: (a) security holders, officers or employees of the General Partner, (b) officers, directors or employees of any Affiliate of the General Partner or (c) holders of any ownership interest in
the Partnership Group (other than Common Units or awards granted to such director under any long-term incentive plan of any Group Member) and who also meet the independence standards required of directors who
serve on an audit committee of a board of directors established by the Securities Exchange Act, and the rules and regulations of the Commission thereunder and by the National Securities Exchange on which the Common Units are listed or admitted to
trading. 
 “Contributed Property” means each property or other asset, in such form as
may be permitted by the Marshall Islands Act, but excluding cash, contributed to the Partnership. 

“Contribution Agreement” means that certain Contribution and Conveyance Agreement, dated as of
April 15, 2013, among the General Partner, the Partnership, the Operating Company, KNOT and the other parties named therein, together with the additional conveyance documents and instruments contemplated or referenced thereunder or entered into
in connection therewith. 
 “Current Market Price” means, in respect of any class or
series of Limited Partner Interests, as of the date of determination, the average of the daily Closing Prices per Limited Partner Interest of such class or series for the 20 consecutive Trading Days immediately prior to such
date. 

  
 6 

 “Departing General Partner” means a former General Partner
from and after the effective date of any withdrawal or removal of such former General Partner pursuant to Sections 11.1 or 11.2. 

“Depository” means, with respect to any Units issued in global form, The Depository Trust Company and
its successors and permitted assigns. 
 “Elected Directors” means the members of the
Board of Directors who are elected as such in accordance with the provisions of Article VII and at least three of whom are not any of the following: (a) security holders, officers or employees of the General Partner, (b) officers or
employees of any Affiliate of the General Partner, (c) holders of any ownership interest in the Partnership Group (other than Common Units or awards granted to such director under any long-term incentive plan of any Group Member) and who also
meet the independence standards required of directors who serve on an audit committee of a board of directors established by the Securities Exchange Act, and the rules and regulations of the Commission thereunder and by the National Securities
Exchange on which the Common Units are listed or admitted to trading or (d) United States citizens or residents. 

“Estimated Maintenance Capital Expenditures” means an estimate made in good faith by the Board of
Directors (with the concurrence of the Conflicts Committee) of the average quarterly Maintenance Capital Expenditures that the Partnership will need to incur to maintain over the long-term the operating capacity and asset base of the Partnership
Group (including the Partnership’s proportionate share of the average quarterly Maintenance Capital Expenditures of its Subsidiaries that are not wholly-owned) existing at the time the estimate is made.
The Board of Directors (with the concurrence of the Conflicts Committee) will be permitted to make such estimate in any manner it determines reasonable. The estimate will be made at least annually and whenever an event occurs that is likely to
result in a material adjustment to the amount of Maintenance Capital Expenditures on a long-term basis. The Partnership shall disclose to its Partners any change in the amount of Estimated Maintenance Capital
Expenditures in its reports made in accordance with Section 8.3 to the extent not previously disclosed. Any adjustments to Estimated Maintenance Capital Expenditures shall be prospective only. 

“Event of Withdrawal” has the meaning assigned to such term in Section 11.1(a).

 “Expansion Capital Expenditures” means cash expenditures for Acquisitions or Capital
Improvements. Expansion Capital Expenditures shall not include Maintenance Capital Expenditures or Investment Capital Expenditures. Expansion Capital Expenditures shall include interest payments (and related fees) on debt incurred and distributions
on equity issued, in each case, to fund the construction of a Capital Improvement and paid in respect of the period beginning on the date that a Group Member enters into a binding obligation to commence construction of the Capital Improvement and
ending on the earlier to occur of the date that such Capital Improvement Commences Commercial Service or the date that such Capital Improvement is abandoned or disposed of. Debt incurred or equity issued to fund any such construction period interest
payments, or such construction period distributions on equity paid in  

  
 7 

 
respect of such period shall also be deemed to be debt incurred or equity issued, as the case may be, to fund the construction of a Capital Improvement, and the Incremental Incentive
Distributions paid in respect of such newly issued equity shall be deemed to be distributions paid on equity issued to finance the construction of a Capital Improvement. 

“First Target Distribution” means $0.43125 per Common Unit per Quarter, subject to adjustment in
accordance with Sections 5.10 and 6.5. 
 “General Partner” means KNOT
Offshore Partners GP LLC, a Marshall Islands limited liability company, and its successors and permitted assigns that are admitted to the Partnership as general partner of the Partnership, in its capacity as general partner of the Partnership
(except as the context otherwise requires). 
 “General Partner Interest” means the
ownership interest of the General Partner in the Partnership (in its capacity as a general partner and without reference to any Limited Partner Interest held by it), which is evidenced by General Partner Units and includes any and all benefits to
which the General Partner is entitled as provided in this Agreement, together with all obligations of the General Partner to comply with the terms and provisions of this Agreement. 

“General Partner Unit” means a fractional part of the General Partner Interest having the rights and
obligations specified with respect to the General Partner Interest. A General Partner Unit is not a Unit. 

“Group” means a Person that with or through any of its Affiliates or Associates has any agreement,
arrangement, understanding or relationship for the purpose of acquiring, holding, voting (except voting pursuant to a revocable proxy or consent given to such Person in response to a proxy or consent solicitation made to 10 or more Persons),
exercising investment power over or disposing of any Partnership Interests with any other Person that beneficially owns, or whose Affiliates or Associates beneficially own, directly or indirectly, Partnership Interests. 

“Group Member” means a member of the Partnership Group. 

“Group Member Agreement” means the partnership agreement of any Group Member, other than the
Partnership, that is a limited or general partnership, the limited liability company agreement of any Group Member that is a limited liability company, the certificate of incorporation and bylaws (or similar organizational documents) of any Group
Member that is a corporation, the joint venture agreement or similar governing document of any Group Member that is a joint venture and the governing or organizational or similar documents of any other Group Member that is a Person other than a
limited or general partnership, limited liability company, corporation or joint venture, in each case as such may be amended, supplemented or restated from time to time. 

“Hedge Contract” means any exchange, swap, forward, future, cap, floor, collar or other similar
agreement or arrangement entered into for the purpose of hedging the Partnership Group’s exposure to fluctuations in the price of interest rates, currencies or commodities in their operations and not for speculative purposes. 

“Holder” has the meaning assigned to such term in Section 7.20(a). 

  
 8 

 “Holders’ Nominee” has the meaning assigned to such term in
Section 5.11(c)(iv)(D). 
 “IDR Reset Common Units” has the meaning set forth in
Section 5.10(a). 
 “IDR Reset Election” has the meaning set forth in Section
5.10(a). 
 “Incentive Distribution Right” means a
non-voting Limited Partner Interest, which Partnership Interest will confer upon the holder thereof only the rights and obligations specifically provided in this Agreement with respect to Incentive
Distribution Rights (and no other rights otherwise available to or other obligations of a holder of a Partnership Interest). Notwithstanding anything in this Agreement to the contrary, the holder of an Incentive Distribution Right shall not be
entitled to vote such Incentive Distribution Right on any Partnership matter except as may otherwise be required by law. 

“Incentive Distributions” means any amount of cash distributed to the holders of the Incentive
Distribution Rights pursuant to Section 6.3. 
 “Incremental Incentive
Distributions” means, with respect to any newly issued equity securities of the Partnership, the incremental amount of any Incentive Distributions payable under Section 6.3 based solely upon the amount of distributions paid
in respect of such newly issued equity securities. 
 “Indemnified Persons” has the
meaning assigned to such term in Section 7.20(c). 
 “Indemnitee” means
(a) the General Partner, (b) any Departing General Partner, (c) any Person who is or was an Affiliate of the General Partner or any Departing General Partner, (d) any Person who is or was a member, partner, director, officer,
fiduciary or trustee of any Person which any of the preceding clauses of this definition describes, (e) any Person who is or was serving at the request of the General Partner or any Departing General Partner or any Affiliate of the General
Partner or any Departing General Partner as an officer, director, member, partner, fiduciary or trustee of another Person (provided, however, that a Person shall not be an Indemnitee by reason of providing, on a
fee-for-services basis, trustee, fiduciary or custodial services), (f) the members of the Board of Directors, (g) the Officers, and (h) any other Person
the Board of Directors designates as an “Indemnitee” for purposes of this Agreement. 
 “Initial
Common Units” means the Common Units sold in the Initial Offering. 
 “Initial
Offering” means the initial public offering and sale of Common Units to the public, as described in the Registration Statement. 

“Initial Series A Issuance Date” means February 2, 2017. 

“Initial Unit Price” means (a) with respect to the Common Units, $21.00 (the initial public
offering price per Common Unit at which the Underwriters first offered the Common Units to the public for sale) or (b) with respect to any other class or series of Units, the price per Unit at which such class or series of Units is initially
sold by the Partnership, as determined by the Board of Directors, in each case adjusted as the Board of Directors determines to be appropriate to give effect to any distribution, subdivision or combination of Units. 

  
 9 

 “Interim Capital Transactions” means the following
transactions if they occur prior to the Liquidation Date: (a) borrowings, refinancings or refundings of indebtedness (other than Working Capital Borrowings and other than for items purchased on open account in the ordinary course of business)
by any Group Member and sales of debt securities of any Group Member; (b) sales of equity interests of any Group Member (including the Common Units sold to the Underwriters in the Initial Offering or pursuant to the exercise of the
Over-Allotment Option); (c) sales or other voluntary or involuntary dispositions of any assets of any Group Member (including assets acquired using Investment Capital Expenditures) other than (i) sales or other dispositions of inventory,
accounts receivable and other assets in the ordinary course of business and (ii) sales or other dispositions of assets as part of normal retirements or replacements; (d) capital contributions received; and (e) corporate
reorganizations or restructurings. 
 “Investment Capital Expenditures” means capital
expenditures other than Maintenance Capital Expenditures and Expansion Capital Expenditures. 

“KNOT” means Knutsen NYK Offshore Tankers AS. 

“Limited Partner” means, unless the context otherwise requires, each limited partner as of the
date of this Agreement, each additional Person that becomes a Limited Partner pursuant to the terms of this Agreement and any Departing General Partner upon the change of its status from General Partner to Limited Partner pursuant to
Section 11.3, in each case, in such Person’s capacity as a limited partner of the Partnership; provided, however, that when the term “Limited Partner” is used herein in the context of any vote or other approval,
including Articles XIII and XIV, such term shall not, solely for such purpose, include any holder of an Incentive Distribution Right (solely with respect to its Incentive Distribution Rights and not with respect to any other Limited
Partner Interest held by such Person) except as may otherwise be required by law. Limited Partners may include custodians, nominees or any other individual or entity in its own or any representative capacity. 

“Limited Partner Interest” means the ownership interest of a Limited Partner in the Partnership, which
may be evidenced by Common Units, Preferred Units, Incentive Distribution Rights or other Partnership Interests or a combination thereof or interest therein, and includes any and all benefits to which such Limited Partner is entitled as provided in
this Agreement, together with all obligations of such Limited Partner to comply with the terms and provisions of this Agreement; provided, however, that when the term “Limited Partner Interest” is used
herein in the context of any vote or other approval, including Articles XIII and XIV, such term shall not, solely for such purpose, include any Incentive Distribution Right except as may otherwise be required by law. 

“Liquidation Date” means (a) in the case of an event giving rise to the dissolution of the
Partnership of the type described in clauses (a) and (b) of the first sentence of Section 12.2, the date on which the applicable time period during which the holders of Outstanding Units have the right to elect to
continue the business of the Partnership has expired without such an election being made, and (b) in the case of any other event giving rise to the dissolution of the Partnership, the date on which such event occurs. 

  
 10 

 “Liquidation Event” means the occurrence of a dissolution
or liquidation of the Partnership, whether voluntary or involuntary; provided, however, that a Liquidation Event shall not precede the Liquidation Date. Neither the sale of all or substantially all of the property or business of the Partnership nor
the consolidation or merger of the Partnership with or into any other Person, individually or in a series of transactions, shall be deemed a Liquidation Event. 

“Liquidation Preference” means, in connection with any distribution arising from a Liquidation Event
pursuant to Section 12.4 and with respect to any holder of any class or series of Partnership Interests, the amount otherwise payable to such holder in such distribution with respect to such class or series of Partnership Interests
(assuming no limitation on the assets of the Partnership available for such distribution), including an amount equal to any accrued but unpaid distributions thereon to the date fixed for such payment, whether or not declared (if the terms of the
applicable class or series of Partnership Securities so provide). For avoidance of doubt, for the foregoing purposes the Series A Liquidation Preference is the Liquidation Preference with respect to the Series A Preferred Units. 

“Liquidating Trustee” means one or more Persons selected by the Board of Directors to perform the
functions described in Section 12.4. 
 “Maintenance Capital Expenditures” means
cash expenditures (including expenditures for the addition or improvement to, or the replacement of, the capital assets owned by any Group Member or for the acquisition of existing, or the construction or development of new, capital assets) if such
expenditure is made to maintain, including over the long term, the operating capacity and/or asset base of the Partnership Group. Maintenance Capital Expenditures shall not include Expansion Capital Expenditures or Investment Capital Expenditures.
Maintenance Capital Expenditures shall include interest payments (and related fees) on debt incurred and distributions in respect of equity issued, in each case, to finance the construction or development of a replacement asset and paid in respect
of the period beginning on the date that the Group Member enters into a binding obligation to commence constructing or developing a replacement asset and ending on the earlier to occur of the date that such replacement asset Commences Commercial
Service or the date that such replacement asset is abandoned or disposed of. Debt incurred to pay or equity issued to fund the construction or development period interest payments, or such construction or development period distributions on equity
shall also be deemed to be debt incurred or equity issued, as the case may be, to finance the construction or development of a replacement asset, and the Incremental Incentive Distributions paid in respect of such newly issued equity shall be deemed
to be distributions paid on equity issued to finance the construction or development of a replacement asset. 

“Marshall Islands Act” means the Limited Partnership Act of The Republic of the Marshall Islands, as
amended, supplemented or restated from time to time, and any successor to such statute. 
 “Merger
Agreement” has the meaning assigned to such term in Section 14.1. 
 “Minimum
Quarterly Distribution” means $0.375 per Common Unit per Quarter, subject to adjustment in accordance with Sections 5.10 and 6.5. 

  
 11 

 “National Securities Exchange” means an exchange registered
with the Commission under Section 6(a) of the Securities Exchange Act, supplemented or restated from time to time, and any successor to such statute. 

“Net Agreed Value” means, (a) in the case of any Contributed Property, the Agreed Value of such
property reduced by any liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed, and (b) in the case of any property distributed to a Partner by the Partnership, the Agreed
Value of such property, reduced by any indebtedness either assumed by such Partner upon such distribution or to which such property is subject at the time of distribution. 

“New GP Owner” shall have the meaning assigned to such term in the definition of “Series A Change
of Control.” 
 “Norwegian Resident Holders” means all persons (including
individuals, entities, partnerships, trusts and estates) that are residents of Norway for purposes of the Tax Act on Income and Wealth. 

“Notice of Election to Purchase” has the meaning assigned to such term in Section 15.1(b).

 “Officers” has the meaning assigned to such term in Section 7.8(a). 

“Omnibus Agreement” means that Omnibus Agreement, dated as of the Closing Date, among KNOT, the
Partnership, the General Partner, the Operating Company, KNOT Shuttle Tankers 17 AS and KNOT Shuttle Tankers 18 AS. 

“Operating Company” means KNOT Offshore Partners UK LLC, a Marshall Islands limited liability company,
and any successors thereto. 
 “Operating Company Agreement” means the First Amended and
Restated Limited Liability Company Agreement of the Operating Company, as it may be amended, supplemented or restated from time to time. 

“Operating Expenditures” means all Partnership Group cash expenditures (or the Partnership’s
proportionate share of expenditures in the case of Subsidiaries that are not wholly-owned), including taxes, employee and director compensation, reimbursements of expenses of the General Partner, repayment of
Working Capital Borrowings, debt service payments, Series A Distributions, capital expenditures, payments made in the ordinary course of business under any Hedge Contracts (provided, (y) with respect to
amounts paid in connection with the initial purchase of any Hedge Contract, such amounts shall be amortized over the life of the Hedge Contract and (z) that payments made in connection with the termination of any Hedge Contract prior to the
expiration of its stipulated settlement or termination date shall be included in Operating Expenditures in equal quarterly installments over the remaining scheduled life of such Hedge Contract), subject to the following: 

  
 12 

 (a) deemed repayments of Working Capital Borrowings deducted from Operating
Surplus pursuant to clause (b)(iii) of the definition of Operating Surplus shall not constitute Operating Expenditures when actually repaid; 

(b) payments (including prepayments and prepayment penalties) of principal of and premium on indebtedness other than Working
Capital Borrowings shall not constitute Operating Expenditures; and 
 (c) Operating Expenditures shall not include any of
(i) Expansion Capital Expenditures, Investment Capital Expenditures or actual Maintenance Capital Expenditures, but shall include Estimated Maintenance Capital Expenditures, (ii) payment of transaction expenses (including taxes) relating
to Interim Capital Transactions, (iii) Series A Redemption Payments, (iv) payments made to Series A Preferred Unitholders to purchase or otherwise acquire Series A Preferred Units in accordance with Section 7.19, or
(v) distributions to Partners, other than Series A Distributions, 
 where capital expenditures consist of both (y) Maintenance Capital
Expenditures and (z) Expansion Capital Expenditures and/or Investment Capital Expenditures, the Board of Directors (with the concurrence of the Conflicts Committee) shall determine the allocation between the amounts paid for each. 

“Operating Surplus” means, with respect to any period ending prior to the Liquidation Date, on a
cumulative basis and without duplication: 
 (a) the sum of (i) $17.0 million, (ii) all cash
receipts of the Partnership Group (or the Partnership’s proportionate share of cash receipts in the case of Subsidiaries that are not wholly-owned) for the period beginning on the Closing Date and ending
on the last day of such period, other than cash receipts from Interim Capital Transactions (excluding return on capital from Investment Capital Expenditures); provided, that cash receipts from the termination of a Hedge Contract prior to its
specified termination date shall be included in Operating Surplus in equal quarterly installments over the remaining scheduled life of such Hedge Contract, (iii) all cash receipts of the Partnership Group (or the Partnership’s
proportionate share of cash receipts in the case of Subsidiaries that are not wholly-owned) after the end of such period but on or before the date of determination of Operating Surplus with respect to such
period resulting from Working Capital Borrowings and (iv) the amount of cash distributions paid on equity issued (including Incremental Incentive Distributions) in connection with the construction of a Capital Improvement or replacement of a
capital asset and paid in respect of the period beginning on the date that the Group Member enters into a binding obligation to commence the construction of such Capital Improvement or replacement of such capital asset and ending on the earlier to
occur of the date that such Capital Improvement or replacement capital asset Commences Commercial Service or the date that it is abandoned or disposed of (equity issued to fund the construction period interest payments on debt incurred (including
periodic net payments under related Hedge Contracts), or construction  

  
 13 

 
period distributions on equity issued (including Incremental Incentive Distributions), to finance the construction of a Capital Improvement or replacement of a capital asset shall also be deemed
to be equity issued to finance the construction of a Capital Improvement or replacement of such capital asset for purposes of this clause (iv)), less 

(b) the sum of (i) Operating Expenditures for the period beginning immediately after the Closing Date and ending on
the last day of such period, (ii) the amount of cash reserves (or the Partnership’s proportionate share of cash reserves in the case of Subsidiaries that are not wholly-owned) established by the Board of Directors to provide funds for
future Operating Expenditures, (iii) all Working Capital Borrowings not repaid within 12 months after having been incurred and (iv) any cash loss realized on disposition of an Investment Capital Expenditure; provided, however, that
disbursements made (including contributions to a Group Member or disbursements on behalf of a Group Member) or cash reserves established, increased or reduced after the end of such period but on or before the date of determination of Available Cash
with respect to such period shall be deemed to have been made, established, increased or reduced, for purposes of determining Operating Surplus, within such period if the Board of Directors so determines. 

Notwithstanding the foregoing, “Operating Surplus” with respect to the Quarter in which the Liquidation Date occurs and any
subsequent Quarter shall equal zero. Cash receipts from Investment Capital Expenditures shall be treated as cash receipts only to the extent they are a return on capital, but in no event shall a return of capital be treated as cash receipts. 

“Opinion of Counsel” means a written opinion of counsel (who may be regular counsel to the Partnership
or the General Partner or any of its Affiliates) acceptable to the Board of Directors. 

“Outstanding” means, with respect to Partnership Interests, all Partnership Interests that are issued by the
Partnership and reflected as outstanding on the Partnership’s books and records as of the date of determination; provided, however, that if at any time any Person or Group beneficially owns more than 4.9% of the Outstanding Partnership
Interests of any class or series then Outstanding (or would own such percentage in the event this limitation were applied to other Persons or Groups), all Partnership Interests owned by such Person or Group in excess of such limitation shall not be
voted on any matter and shall not be considered to be Outstanding when sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required by law), calculating required votes (except for purposes of nominating a Person
for election to the Board of Directors pursuant to Section 7.3), determining the presence of a quorum or for other similar purposes under this Agreement, except that Partnership Interests so owned shall be considered to be Outstanding
for purposes of Section 11.1(b)(iv) (such Partnership Interests shall not, however, be treated as a separate class or series of Partnership Interests for purposes of this Agreement); provided, further, that the foregoing
limitation shall not apply to (a) the General Partner or its Affiliates or (b) any Person or Group who acquired more than 4.9% of any Partnership Interests with the prior approval of the Board of Directors after considering the potential
effects of such approval on the Partnership, except, in each case, such limitation shall 

  
 14 

 
remain applicable with respect to the voting of Common Units in the election of the Elected Directors as provided in Section 7.2(a)(ii); and provided, further, that
Common Units held by Norwegian Resident Holders shall not be considered to be Outstanding with respect to the voting of Common Units in the election of the Elected Directors. For the avoidance of doubt the foregoing limitation shall apply to the
holders of Series A Preferred Units with respect to the voting of the Series A Preferred Units together with the Common Units as a single class as set forth in Section 5.11(c)(iv). 

“Partners” means the General Partner and the Limited Partners. 

“Partnership” means KNOT Offshore Partners LP, a Marshall Islands limited partnership, and any
successors thereto. 
 “Partnership Group” means the Partnership and its Subsidiaries,
including the Operating Company, treated as a single consolidated entity. 
 “Partnership
Interest” means any class or series of equity interest in the Partnership (but excluding any options, rights, warrants, restricted units and appreciation rights relating to an equity interest in the Partnership), including Common Units,
Preferred Units, General Partner Units and Incentive Distribution Rights. 
 “Partnership
Restructuring Event” means (i) any restructuring, simplification or similar transaction or series of transactions that modifies, eliminates or otherwise restructures the general partner interest, the Incentive Distribution Rights
or the equity interests of the General Partner or its Affiliates, or (ii) any initial public offering directly or indirectly involving the equity interests of the General Partner and/or the General Partner Interest or the Incentive Distribution
Rights. 
 “Percentage Interest” means as of any date of determination (a) as to
the General Partner with respect to General Partner Units and as to any Unitholder with respect to Units (other than in respect of Series A Preferred Units), the product obtained by multiplying (i) 100% less the percentage applicable to
clause (b) below by (ii) the quotient obtained by dividing (A) the number of Units (other than in respect of Series A Preferred Units) held by such Unitholder or the number of General Partner Units held by the General Partner,
as the case may be, by (B) the total number of all Outstanding Units (other than the Series A Preferred Units) and General Partner Units, and (b) as to the holders of other Partnership Interests issued by the Partnership in accordance with
Section 5.4, the percentage established as a part of such issuance. The Percentage Interest with respect to an Incentive Distribution Right and to a Series A Preferred Unit shall at all times be zero. 

“Paying Agent” means American Stock Transfer and Trust Company, LLC, acting in its capacity as paying
agent for the Series A Preferred Units, and its respective successors and assigns or any other payment agent appointed by the Partnership. 

“Person” means an individual or a corporation, firm, limited liability company, partnership, joint
venture, trust, unincorporated organization, association, governmental agency or political subdivision thereof or other entity. 

  
 15 

 “Plan of Conversion” has the meaning assigned to such term
in Section 14.1. 
 “Preferred Units” means a Partnership Interest, including the
Series A Preferred Units, designated as a “Preferred Unit,” which entitles the holder thereof to a preference with respect to distributions, or as to the distribution of assets upon any Liquidation Event, over Common Units.

 “Previous Agreement” means the Second Amended and Restated Agreement of Limited Partnership
of the Partnership dated as of February 2, 2017. 
 “Pro Rata” means (a) when
used with respect to Units (other than Series A Preferred Units) or any class or series thereof, apportioned equally among all designated Units (other than Series A Preferred Units) in accordance with their relative Percentage Interests,
(b) when used with respect to Partners or Record Holders, apportioned among all Partners or Record Holders in accordance with their relative Percentage Interests and (c) when used with respect to holders of Incentive Distribution Rights or
Series A Preferred Units, apportioned equally among all holders of Incentive Distribution Rights or Series A Preferred Units in accordance with the relative number or percentage of Incentive Distribution Rights or Series A Preferred Units, as
applicable, held by each such holder. 
 “Purchase Date” means the date determined by
the General Partner as the date for purchase of all Outstanding Limited Partner Interests of a certain class or series (other than Limited Partner Interests owned by the General Partner and its Affiliates) pursuant to Article XV.

 “Quarter” means, unless the context requires otherwise, a fiscal quarter, of the
Partnership. 
 “Record Date” means the date established by the Board of Directors or
otherwise in accordance with this Agreement for determining (a) the identity of the Record Holders entitled to notice of, or to vote at, any meeting of Limited Partners or entitled to vote by ballot or give approval of Partnership action in
writing without a meeting or entitled to exercise rights in respect of any lawful action of Limited Partners or (b) the identity of Record Holders entitled to receive any report or distribution or to participate in any offer. 

“Record Holder” means (a) the Person in whose name a Common Unit or Series A Preferred Unit, as applicable, is
registered on the books of the Transfer Agent as of the closing of business on a particular Business Day, or (b) with respect to other Partnership Interests, the Person in whose name any such other Partnership Interest is registered on the
books that the Board of Directors has caused to be kept as of the closing of business on such Business Day (which books may be kept, at the Board of Directors’ option, by the Transfer Agent), subject to Section 5.11(c)(iv)(A). 

“Registration Rights Agreement” means the Registration Rights Agreement, dated as of February 2,
2017 by and between the Partnership and the Series A Preferred Holders as of such date and the RRA Joinder Agreement, dated as of [June 30], 2017, by and between the Partnership and the joining parties as of such date. 

  
 16 

 “Registration Statement” means the Partnership’s
Registration Statement on Form F-1 (Registration No. 333-186947) as it has been or as it may be amended or supplemented from time to time, filed by the Partnership with the Commission under the Securities
Act to register the offering and sale of the Common Units in the Initial Offering. 
 “Reset MQD” has
the meaning set forth in Section 5.10(e). 
 “Reset Notice” has the meaning set forth in
Section 5.10(b). 
 “RRA Joinder Agreement” means a joinder agreement in the form attached
as Exhibit A to the Registration Rights Agreement.  
 “Second Target Distribution”
means $0.46875 per Common Unit per Quarter, subject to adjustment in accordance with Sections 5.10 and 6.5. 

“Securities Act” means the Securities Act of 1933, as amended, supplemented or restated from time to
time and any successor to such statute. 
 “Securities Exchange Act” means the
Securities Exchange Act of 1934, as amended, supplemented or restated from time to time and any successor to such statute. 

“Series A Change of Control” means the occurrence of any of the following events: (a) KNOT or
Affiliates of KNOT have ceased, directly or indirectly, in one or more series of related transactions, to own more than 50% of the voting equity interests of the General Partner (the Person, if any, acquiring more than 50% of the voting equity
interests of the General Partner, and each Person, if any, that subsequently acquires more than 50% of the voting power or economic interest of the General Partner, is hereinafter referred to as a “New GP Owner”), if such
transactions give such New GP Owner more than 50% of the voting equity interests in the General Partner and the right to elect more than half of the members of the board of directors of the General Partner; (b) any sale, lease, transfer,
conveyance or other disposition by the Partnership, in one or a series of related transactions, of all or substantially all of the assets of the Partnership and its subsidiaries, taken as a whole; (c) the removal of KNOT Offshore Partners GP
LLC as the General Partner of the Partnership, except for cases in which any successor General Partner is an Affiliate of KNOT or of any Series A Preferred Unitholder or their respective Affiliates; (d) at any time during the first five years
following the Initial Series A Issuance Date, KNOT (directly or indirectly) fails to own at least of 25% of the then outstanding Common Units and General Partner Units on an aggregate basis; or (e) at any time when the Common Units are no
longer listed or admitted to trading on a National Securities Exchange; provided, however, that no Partnership Restructuring Event shall constitute a Series A Change of Control. 

“Series A Conversion Date” has the meaning assigned to such term in Section
5.11(c)(vii)(D). 
 “Series A Conversion Notice” has the meaning assigned to such
term in Section 5.11(c)(vii)(C)(1). 

  
 17 

 “Series A Conversion Notice Date” has the meaning assigned
to such term in Section 5.11(c)(vii)(C)(1). 
 “Series A Conversion Rate” means
1.0, unless and until such rate is adjusted as set forth in Section 5.11(c)(vii)(E) or redetermined pursuant to Section 5.11(c)(vii)(F).  

“Series A Conversion Unit” means a Common Unit issued upon conversion of a Series A Preferred Unit
pursuant to Section 5.11(c)(vii). Immediately upon such issuance, each Series A Conversion Unit shall be considered a Common Unit for all purposes hereunder. 

“Series A Converting Unitholder” means a Person entitled to receive Common Units upon conversion of any
Series A Preferred Units. 
 “Series A Distribution Amount” means an amount per Quarter
per Series A Preferred Unit outstanding as of the applicable Record Date equal to $0.48 (equivalent to an 8.0% annual distribution rate); provided that the Series A Distribution Amount for the Quarter in which any Series A Issuance Date occurs shall
be prorated for such period, commencing on the related Series A Issuance Date for such Series A Preferred Unit and ending on, and including, the last day of such Quarter. 

“Series A Distribution Payment Date” has the meaning assigned to such term in Section
5.11(c)(i)(A). 
 “Series A Forced Conversion Notice” has the meaning assigned to
such term in Section 5.11(c)(vii)(C)(2). 
 “Series A Forced Conversion Notice
Date” has the meaning assigned to such term in Section 5.11(c)(vii)(C)(2). 

“Series A Issuance Date” means the Initial Series A Issuance Date or the Subsequent Series A Issuance
Date, as applicable. 
 “Series A Issue Price” means $24.00 per Series A Preferred
Unit. 
 “Series A Junior Securities” means any class or series of Partnership Interest
that, with respect to distributions on such Partnership Interest and distributions upon liquidation of the Partnership, ranks junior to the Series A Preferred Units, including but not limited to Common Units, but excluding any Series A Parity
Securities and Series A Senior Securities and excluding the General Partner Interest. 
 “Series A
Liquidation Preference” means, with respect to each Series A Preferred Unit Outstanding as of the date of such determination, an amount equal to the sum of (i) the Series A Issue Price, plus (ii) any Series A Unpaid Cash
Distributions, plus (iii) all accrued but unpaid distributions on such Series A Preferred Unit with respect to the Quarter in which the liquidation occurs to the date fixed for the payment of any amounts upon liquidation. 

  
 18 

 “Series A Parity Securities” means any class or series of Partnership
Interests that, with respect to distributions on such Partnership Interests or distributions upon liquidation of the Partnership, ranks pari passu with the Series A Preferred Units, but excluding the General Partner Interest. 

“Series A Payments” means, collectively, Series A Distributions and Series A Redemption Payments.

 “Series A Preferred Unitholder” means a Record Holder of Series A Preferred Units.

 “Series A Preferred Units” has the meaning assigned to such term in Section
5.11(a). 
 “Series A Purchase Agreement” means the Series A Preferred Unit Purchase
Agreement, dated as of December 6, 2016, by and among the Partnership and the Series A Purchasers, as amended by the Assignment and Novation Agreement, dated December 20, 2016, the First Amendment to the Series A Preferred Unit Purchase
Agreement, dated February 2, 2017, and the Second Amendment to the Series A Preferred Unit Purchase Agreement, dated May 16, 2017, and as may be further amended from time to time. 

“Series A Purchasers” means those Persons set forth on Schedule A to the Series A Purchase
Agreement. 
 “Series A Quarterly Distribution” has the meaning assigned to such term in
Section 5.11(c)(i)(A). 
 “Series A Redemption Date” has the meaning set forth in
Section 5.11(c)(viii).  
 “Series A Redemption Notice” has the meaning set
forth in Section 5.11(c)(viii)(B).  
 “Series A Redemption Payments” means
payments to be made to the holders of Series A Preferred Units to redeem Series A Preferred Units in accordance with Section 5.11(c). 

“Series A Redemption Price” means the redemption price (expressed as a percentage of the Series A Issue
Price) set forth below, plus accrued and unpaid distributions, if any, on the Series A Preferred Units redeemed to the applicable Series A Redemption Date, if redeemed during any twelve-month period commencing on February 2 of the applicable
year indicated below, beginning on February 2, 2019: 
  

					
	 YEAR
	  	PERCENTAGE	 
	 2019
	  	 	130.00	% 
	 2020
	  	 	125.50	% 
	 2021
	  	 	121.00	% 
	 2022
	  	 	116.50	% 
	 2023
	  	 	112.00	% 
	 2024
	  	 	107.50	% 
	 2025
	  	 	103.00	% 
	 2026
	  	 	100.00	% 

  
 19 

         , provided, however, that notwithstanding the percentages
set forth in the table above, if at any time beginning on February 2, 2019 and ending on February 2, 2023, the Series A Conversion Rate is greater than 1.2632, the Series A Redemption Price shall be 116.50% of the Series A Issue Price,
plus accrued and unpaid distributions, if any, on the Series A Preferred Units redeemed to the applicable Series A Redemption Date. 

“Series A Senior Securities” means any class or series of Partnership Interests that, with respect to
distributions on such Partnership Interests or distributions upon liquidation of the Partnership, ranks senior to the Series A Preferred Units, but excluding the General Partner Interest. 

“Series A Trigger Event” means any time at which there are Series A Unpaid Cash Distributions resulting
from the failure to pay the Series A Distribution Amount with respect to four consecutive Quarters. 

“Series A Unpaid Cash Distributions” has the meaning assigned to such term in
Section 5.11(c)(i)(B).  
 “Special Approval” means approval by a majority
of the members of the Conflicts Committee. 
 “Subsequent Series A Issuance Date” means
[June 30], 2017. 
 “Subsidiary” means, with respect to any Person, (a) a corporation of which
more than 50% of the voting power of shares entitled (without regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is owned, directly or indirectly, at the date of
determination, by such Person, by one or more Subsidiaries (as defined, but excluding subsection (d) of this definition) of such Person or a combination thereof, (b) a partnership (whether general or limited) in which such Person or
a Subsidiary (as defined, but excluding subsection (d) of this definition) of such Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership interests of such
partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries (as defined, but excluding subsection
(d) of this definition) of such Person, or a combination thereof, (c) any other Person (other than a corporation or a partnership) in which such Person, one or more Subsidiaries (as defined, but excluding subsection (d) of
this definition) of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership interest or (ii) the power to elect or direct the election of a majority of the
directors or other governing body of such Person, or (d) any other Person in which such Person, one or more Subsidiaries (as defined, but excluding this subsection (d) of this definition) of such Person, or a combination thereof,
directly or indirectly, at the date of determination, has (i) less than a majority ownership interest or (ii) less than the power to elect or direct the election of a majority of the directors or other governing body of such Person,
provided, that (A) such Person, one or more Subsidiaries (as defined, but excluding this subsection (d) of this definition) of such Person, or a combination thereof, directly or indirectly, at the date of the determination,
has at least a 20% ownership interest in such other Person, (B) such Person accounts for such other Person (under U.S. GAAP, as in effect on the later of the date of investment in such other Person or material expansion of the operations of
such other Person) on a consolidated or equity accounting basis, (C) such Person has directly or indirectly 

  
 20 

 
material negative control rights regarding such other Person including over such other Person’s ability to materially expand its operations beyond that contemplated at the date of investment
in such other Person, and (D) such other Person is (i) other than with respect to the Operating Company, formed and maintained for the sole purpose of owning or leasing, operating and chartering vessels and (ii) obligated under its
constituent documents, or as a result of a unanimous agreement of its owners, to distribute to its owners all of its income on at least an annual basis (less any cash reserves that are approved by such Person). 

“Surviving Business Entity” has the meaning assigned to such term in Section 14.2(b)(ii).

 “Third Target Distribution” means $0.5625 per Unit per Quarter, subject to adjustment in
accordance with Sections 5.10 and 6.5. 
 “Trading Day” means, for the
purpose of determining the Current Market Price of any class or series of Limited Partner Interests, a day on which the principal National Securities Exchange on which such class or series of Limited Partner Interests is listed or admitted for
trading is open for the transaction of business or, if Limited Partner Interests of a class or series are not listed on any National Securities Exchange, a day on which banking institutions in New York City generally are open. 

“transfer” or “transfers” has the meaning assigned to such term in Section 4.4(a).

 “Transfer Agent” means such bank, trust company or other Person (including the Partnership or one
of its Affiliates) as shall be appointed from time to time by the Partnership to act as registrar and transfer agent for the Common Units or any other class of Partnership Interest; provided,
however, that if no Transfer Agent is specifically designated for any other Partnership Interests, the Partnership shall act in such capacity. 

“Underwriter” means each Person named as an underwriter in Schedule I to the Underwriting Agreement who
purchased Common Units pursuant thereto. 
 “Underwriting Agreement” means the
Underwriting Agreement dated April 9, 2013 among the Underwriters, the Partnership, the General Partner, the Operating Company, KNOT Shuttle Tankers AS and KNOT, providing for the purchase of Common Units from the Partnership by such
Underwriters in connection with the Initial Offering. 
 “Unit” means a Partnership
Interest that is designated as a “Unit” and shall include Common Units and Preferred Units, but shall not include (a) General Partner Units (or the General Partner Interest represented thereby) or (b) the Incentive
Distribution Rights. 
 “Unit Majority” means at least a majority of the Outstanding Common Units,
subject to Section 5.11(c)(iv)(A). 
 “Unit Register” means the register of the
Partnership for the registration and transfer of Limited Partnership Interests as provided in Section 4.5. 

“Unitholders” means the holders of Units. 

  
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 “Unrecovered Capital” means at any time, with respect to a
Common Unit, the Initial Unit Price less the sum of all distributions constituting Capital Surplus theretofore made in respect of an Initial Common Unit and any distributions of cash (or the Net Agreed Value of any distributions in kind) in
connection with the dissolution and liquidation of the Partnership theretofore made in respect of an Initial Common Unit, adjusted as the Board of Directors determines to be appropriate to give effect to any distribution, subdivision or combination
of such Units. 
 “U.S. GAAP” means United States generally accepted accounting
principles consistently applied. 
 “VWAP” for a Common Unit, as of a particular trading
date means the volume-weighted average trading price, as adjusted for splits, combinations and other similar transactions, of a Common Unit on the National Securities Exchange on which the Common Units are then listed or admitted to trading.

 “Withdrawal Opinion of Counsel” has the meaning assigned to such term in Section
11.1(b)(i). 
 “Working Capital Borrowings” means borrowings used solely for working
capital purposes or to pay distributions to Partners made pursuant to a credit facility, commercial paper facility or similar financing arrangement available to a Group Member, provided, that when such borrowing is
incurred it is the intent of the borrower to repay such borrowings within 12 months from sources other than additional Working Capital Borrowings. 

Section 1.2 Construction. Unless the context requires otherwise: (a) any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa; (b) references to Articles and Sections refer to Articles and Sections of this Agreement;
(c) the term “include” or “includes” means includes, without limitation, and “including” means including, without limitation; and (d) the terms “hereof”, “herein” and “hereunder”
refer to this Agreement as a whole and not to any particular provision of this Agreement. The table of contents and headings contained in this Agreement are for reference purposes only, and shall not affect in any way the meaning or interpretation
of this Agreement. 
 ARTICLE II 

ORGANIZATION 
 Section 2.1
Formation. The Partnership was formed pursuant to the provisions of the Marshall Islands Act and has been operated as a limited partnership pursuant to the Previous Agreement. The Previous Agreement is hereby amended and restated in its
entirety. This amendment and restatement shall become effective on the date of this Agreement. Except as expressly provided to the contrary in this Agreement, the rights, duties (including fiduciary duties), liabilities and obligations of the
Partners and the administration, dissolution and termination of the Partnership shall be governed by the Marshall Islands Act. All Partnership Interests shall constitute personal property of the owner thereof for all purposes and a Partner has no
interest in specific Partnership property. 

  
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 Section 2.2 Name. The name of the Partnership shall be “KNOT Offshore Partners
LP”. The Partnership’s business may be conducted under any other name or names as determined by the Board of Directors. The words “Limited Partnership” or the letters “LP” or similar words or letters shall be included
in the Partnership’s name where necessary for the purpose of complying with the laws of any jurisdiction that so requires. The Board of Directors may change the name of the Partnership at any time and from time to time in compliance with the
requirements of the Marshall Islands Act and shall notify the General Partner and the Limited Partners of such change in the next regular communication to the Limited Partners. 

Section 2.3 Registered Office; Registered Agent; Principal Office; Other Offices. Unless and until changed by the Board of Directors,
the registered office of the Partnership in The Marshall Islands shall be located at Trust Company Complex, Ajeltake Island, Ajeltake Road, Majuro, Marshall Islands MH 96960, and the registered agent for service of process on the Partnership in The
Marshall Islands at such registered office shall be The Trust Company of The Marshall Islands, Inc. The principal office of the Partnership shall be located at 2 Queen’s Cross, Aberdeen, Aberdeenshire AB15 4YB, United Kingdom, or such other
place as the Board of Directors may from time to time designate by notice to the General Partner and the Limited Partners. The Partnership may maintain offices at such other place or places within or outside The Marshall Islands as the Board of
Directors determines to be necessary or appropriate. The address of the General Partner shall be at 2 Queen’s Cross, Aberdeen, Aberdeenshire AB15 4YB, United Kingdom, or such other place as the General Partner may from time to time designate by
notice to the Limited Partners. 
 Section 2.4 Purpose and Business. The purpose and nature of the business to be conducted by the
Partnership shall be to (a) engage directly in, or enter into or form any corporation, partnership, joint venture, limited liability company or other arrangement to engage indirectly in, any business activity that lawfully may be conducted by a
limited partnership organized pursuant to the Marshall Islands Act and, in connection therewith, to exercise all of the rights and powers conferred upon the Partnership pursuant to the agreements relating to such business activity, and (b) do
anything necessary or appropriate to the foregoing, including the making of capital contributions or loans to a Group Member. 
 Section 2.5
Powers. The Partnership shall be empowered to do any and all acts and things necessary and appropriate for the furtherance and accomplishment of the purposes and business described in Section 2.4 and for the protection and benefit
of the Partnership. 
 Section 2.6 Term. The term of the Partnership commenced upon the filing of the Certificate of Limited
Partnership in accordance with the Marshall Islands Act and shall continue in existence until the dissolution of the Partnership in accordance with the provisions of Article XII. The existence of the Partnership as a separate legal entity
shall continue until the cancellation of the Certificate of Limited Partnership as provided in the Marshall Islands Act. 

  
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 Section 2.7 Title to Partnership Assets. Title to Partnership assets, whether real, personal or mixed and
whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of
the Partnership assets may be held in the name of the Partnership, the General Partner, one or more of its Affiliates or one or more nominees, as the Board of Directors may determine. The General Partner hereby declares and warrants that any
Partnership assets for which record title is held in the name of the General Partner or one or more of its Affiliates or one or more nominees shall be held by the General Partner or such Affiliate or nominee for the use and benefit of the
Partnership in accordance with the provisions of this Agreement; provided, however, that the General Partner shall use commercially reasonable efforts to cause record title to such assets (other than those assets in respect of which the Board
of Directors determines that the expense and difficulty of conveyancing makes transfer of record title to the Partnership impracticable) to be vested in the Partnership as soon as reasonably practicable; and, provided, further, that, prior to
the withdrawal or removal of the General Partner or as soon thereafter as practicable, the General Partner shall use reasonable efforts to effect the transfer of record title to the Partnership and, prior to any such transfer, will provide for the
use of such assets in a manner satisfactory to the Board of Directors. All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which record title to such Partnership assets is
held. 
 ARTICLE III 

RIGHTS OF LIMITED PARTNERS 

Section 3.1 Limitation of Liability. The Limited Partners shall have no liability under this Agreement except as expressly provided in
this Agreement or the Marshall Islands Act. The General Partner shall be liable for the obligations of the Partnership. 
 Section 3.2
Management of Business. No Limited Partner, in its capacity as such, shall participate in the operation, management or control (within the meaning of the Marshall Islands Act) of the Partnership’s business, transact any business in the
Partnership’s name or have the power to sign documents for or otherwise bind the Partnership. Any action taken by any Affiliate of the General Partner or any officer, director, employee, manager, member, general partner, agent or trustee of the
General Partner or any of its Affiliates, or any officer, director, employee, manager, member, general partner, agent or trustee of a Group Member, in its capacity as such, shall not be deemed to be participation in the control of the business of
the Partnership by a limited partner of the Partnership (within the meaning of Section 30 of the Marshall Islands Act) and shall not affect, impair or eliminate the limitations on the liability of the Limited Partners under this Agreement. 

Section 3.3 Outside Activities of the Limited Partners. Subject to the provisions of Section 7.13 and the Omnibus
Agreement, which shall continue to be applicable to the Persons referred to therein, regardless of whether such Persons shall also be Limited Partners, each Limited Partner shall be entitled to and may have business interests and engage in business
activities in addition to those relating to the Partnership, including business interests and activities in direct competition with the Partnership Group. Neither the Partnership nor any of the other Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner. 

  
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 Section 3.4 Rights of Limited Partners. 

(a) In addition to other rights provided by this Agreement or by the Marshall Islands Act, and except as limited by Section 3.4(v),
each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest as a Limited Partner in the Partnership, upon reasonable written demand stating the purpose of such demand and at such Limited
Partner’s own expense, to: 
 (i) have furnished to him a current list of the name and last known business, residence or
mailing address of each Partner; 
 (ii) obtain true and full information regarding the amount of cash and a description and
statement of the Net Agreed Value of any other Capital Contribution by each Partner and which each Partner has agreed to contribute in the future, and the date on which each became a Partner; 

(iii) have furnished to him a copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto;

 (iv) obtain true and full information regarding the status of the business and financial condition of the Partnership
Group; and 
 (v) obtain such other information regarding the affairs of the Partnership as is just and reasonable. 

(b) The Board of Directors may keep confidential from the Limited Partners, for such period of time as the Board of Directors deems reasonable,
(i) any information that the Board of Directors reasonably believes to be in the nature of trade secrets or (ii) other information the disclosure of which the Board of Directors in good faith believes (A) is not in the best interests
of the Partnership Group, (B) could damage the Partnership Group or its business or (C) that any Group Member is required by law or by agreement with any third party to keep confidential (other than agreements with Affiliates of the
Partnership the primary purpose of which is to circumvent the obligations set forth in this Section 3.4). 
 ARTICLE IV

 CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS 

Section 4.1 Certificates. Notwithstanding anything otherwise to the contrary herein, unless the Board of Directors shall determine
otherwise in respect of some or all of any or all classes of Partnership Interests, Partnership Interests shall not be evidenced by certificates. Certificates that may be issued shall be executed on behalf of the Partnership by the Chairman of the
Board of Directors, President, Chief Executive Officer or any Executive Vice President or Vice President and the Chief Financial Officer or the Secretary or any Assistant Secretary of the General Partner. If a Transfer Agent has been appointed for a
class of Partnership Interests, no Certificate for such class of Partnership Interests shall be valid for any purpose until it has been countersigned by the Transfer Agent; provided, however, that if the General Partner elects to cause the
Partnership to issue Partnership Interests of such class in global form, the Certificate shall be valid upon receipt of a certificate from the Transfer Agent certifying that the Partnership Interests have been duly registered in accordance with the
directions of the Partnership. 

  
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 Section 4.2 Mutilated, Destroyed, Lost or Stolen Certificates. 

(a) If any mutilated Certificate is surrendered to the Transfer Agent or the Partnership, as applicable, the appropriate Officers on behalf of
the Partnership shall execute, and the Transfer Agent or the Partnership, as applicable, shall countersign and deliver in exchange therefor, a new Certificate evidencing the same number and type of Partnership Interests as the Certificate so
surrendered. 
 (b) The appropriate Officers on behalf of the Partnership shall execute and deliver, and the Transfer Agent (for Common
Units), as applicable, shall countersign, a new Certificate in place of any Certificate previously issued, or issue uncertificated Units, if the Record Holder of the Certificate: 

(i) makes proof by affidavit, in form and substance satisfactory to the Partnership, that a previously issued Certificate has
been lost, destroyed or stolen; 
 (ii) requests the issuance of a new Certificate or the issuance of uncertificated Units
before the Partnership has notice that the Certificate has been acquired by a purchaser for value in good faith and without notice of an adverse claim; 

(iii) if requested by the Partnership, delivers to the Partnership a bond, in form and substance satisfactory to the
Partnership, with surety or sureties and with fixed or open penalty as the Board of Directors may direct to indemnify the Partnership, the Partners, the General Partner and the Transfer Agent against any claim that may be made on account of the
alleged loss, destruction or theft of the Certificate; and 
 (iv) satisfies any other reasonable requirements imposed by the
Board of Directors. 
 If a Limited Partner fails to notify the Partnership within a reasonable period of time after he has notice of the
loss, destruction or theft of a Certificate, and a transfer of the Limited Partner Interests represented by the Certificate is registered before the Partnership, the General Partner or the Transfer Agent receives such notification, the Limited
Partner shall be precluded from making any claim against the Partnership, the General Partner or the Transfer Agent for such transfer or for a new Certificate or uncertificated Units. 

(c) As a condition to the issuance of any new Certificate or uncertificated Units under this Section 4.2, the Partnership may
require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Transfer Agent) reasonably connected therewith. 

Section 4.3 Record Holders. The Partnership shall be entitled to recognize the Record Holder as the Partner with respect to any
Partnership Interest and, accordingly, shall not be bound to recognize any equitable or other claim to, or interest in, such Partnership Interest on the part of any other Person, regardless of whether the Partnership shall have actual or other
notice 

  
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thereof, except as otherwise provided by law or any applicable rule, regulation, guideline or requirement of any National Securities Exchange on which such Partnership Interests are listed or
admitted to trading. Without limiting the foregoing, when a Person (such as a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing) is acting as nominee, agent or in some other representative capacity for
another Person in acquiring and/or holding Partnership Interests, as between the Partnership on the one hand, and such other Persons on the other, such representative Person (a) shall be the Record Holder of such Partnership Interest and
(b) shall be bound by this Agreement and shall have the rights and obligations of a Partner hereunder and as, and to the extent, provided for herein. 

Section 4.4 Transfer Generally. 

(a) The term “transfer,” when used in this Agreement with respect to a Partnership Interest, shall mean a transaction (i) by
which the General Partner assigns its General Partner Units to another Person or by which a holder of Incentive Distribution Rights assigns its Incentive Distribution Rights to another Person, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise or (ii) by which the holder of a Limited Partner Interest (other than an Incentive Distribution Right) assigns such Limited Partner Interest to another
Person who is or becomes a Limited Partner, and includes a sale, assignment, gift, exchange or any other disposition by law or otherwise, excluding a pledge, encumbrance, hypothecation or mortgage, but including any transfer upon foreclosure of any
pledge, encumbrance, hypothecation or mortgage. 
 (b) No Partnership Interest shall be transferred, in whole or in part, except in
accordance with the terms and conditions set forth in this Article IV. Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article IV shall be null and void. 

(c) Nothing contained in this Agreement shall be construed to prevent a disposition by any stockholder, member, partner or other owner of the
General Partner of any or all of the shares of stock, membership interests, partnership interests or other ownership interests in the General Partner, and the term “transfer” shall not mean any such disposition. 

Section 4.5 Registration and Transfer of Limited Partner Interests. 

(a) The General Partner shall keep or cause to be kept on behalf of the Partnership a register in which, subject to such reasonable regulations
as it may prescribe and subject to the provisions of Section 4.5(b), the Partnership will provide for the registration and transfer of Limited Partner Interests. The Transfer Agent is hereby appointed registrar and transfer agent for the
purpose of registering Common Units and Series A Preferred Units and transfers of such Common Units or Series A Preferred Units as herein provided. The Partnership shall not recognize transfers of Certificates evidencing Limited Partner Interests
unless such transfers are effected in the manner described in this Section 4.5. Upon surrender of a Certificate for registration of transfer of any Limited Partner Interests evidenced by a Certificate, and subject to the provisions of
Section 4.5(b), the appropriate Officers on behalf of the Partnership shall execute and deliver, and in the case of Common Units and the Series A Preferred Units, the Transfer Agent shall countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the holder’s instructions, one or more new Certificates evidencing the same aggregate number and type of Limited Partner Interests as was evidenced by the Certificate
so surrendered. 

  
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 (b) The Partnership shall not recognize any transfer of Limited Partner Interests until
the Certificates evidencing such Limited Partner Interests are surrendered for registration of transfer. No charge shall be imposed by the Partnership for such transfer; provided, however, that as a condition to the issuance of any new
Certificate under this Section 4.5, the Partnership may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed with respect thereto. 

(c) By acceptance of the transfer of a Limited Partner Interest in accordance with this Section 4.5 and except as otherwise
provided in Section 4.8, each transferee of a Limited Partner Interest (including any nominee holder or an agent or representative acquiring such Limited Partner Interests for the account of another Person) (i) shall be admitted to
the Partnership as a Limited Partner with respect to the Limited Partner Interests so transferred to such Person when any such transfer or admission is reflected in the books and records of the Partnership and such Limited Partner becomes the Record
Holder of the Limited Partner Interests so transferred, (ii) shall become bound, and shall be deemed to have agreed to be bound, by the terms of this Agreement, (iii) represents that the transferee has the capacity, power and authority to
enter into this Agreement and (iv) makes the consents, acknowledgments and waivers contained in this Agreement, all with or without execution of this Agreement by such Person. The transfer of any Limited Partner Interests and the admission of
any new Limited Partner shall not constitute an amendment to this Agreement. 
 (d) Subject to the provisions set forth in this Article
IV and applicable securities laws, Limited Partner Interests shall be freely transferable. 
 (e) The General Partner and its Affiliates
shall have the right at any time to transfer their Preferred Units and Common Units (whether issued upon conversion of the Preferred Units or otherwise), if any and as applicable, to one or more Persons. 

Section 4.6 Transfer of the General Partner’s General Partner Interest. 

(a) Subject to Section 4.6(c) below, prior to March 31, 2023, the General Partner shall not transfer all or any part of its
General Partner Interest (represented by General Partner Units) to a Person unless such transfer (i) has been approved by the prior written consent or vote of the holders of at least a majority of the Outstanding Common Units (excluding Common
Units held by the General Partner and its Affiliates) or (ii) is of all, but not less than all, of its General Partner Interest to (A) an Affiliate of the General Partner (other than an individual) or (B) another Person (other than an
individual) in connection with (y) the merger or consolidation of the General Partner with or into such other Person or (z) the transfer by the General Partner of all or substantially all of its assets to such other Person. 

(b) Subject to Section 4.6(c) below, on or after March 31, 2023, the General Partner may transfer all or any of its General
Partner Interest without Unitholder approval. 

  
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 (c) Notwithstanding anything herein to the contrary, no transfer by the General Partner of all or
any part of its General Partner Interest to another Person shall be permitted unless (i) the transferee agrees to assume the rights and duties of the General Partner under this Agreement and to be bound by the provisions of this Agreement,
(ii) the Partnership receives an Opinion of Counsel that such transfer would not result in the loss of limited liability of any Limited Partner or of any limited partner or member of any other Group Member under, as applicable, the Marshall
Islands Act or the laws of any such entity’s jurisdiction of formation and (iii) such transferee also agrees to purchase all (or the appropriate portion thereof, if applicable) of the partnership or membership interest of the General
Partner as the general partner or managing member, if any, of each other Group Member. In the case of a transfer pursuant to and in compliance with this Section 4.6, the transferee or successor (as the case may be) shall, subject to
compliance with the terms of Section 10.3, be admitted to the Partnership as the General Partner immediately prior to the transfer of the General Partner Interest, and the business of the Partnership shall continue without dissolution.

 Section 4.7 Transfer of Incentive Distribution Rights. Prior to March 31, 2018, a holder of Incentive Distribution Rights may
transfer any or all of the Incentive Distribution Rights held by such holder without any consent of the Unitholders to (a) an Affiliate of such holder (other than an individual) or (b) another Person (other than an individual) in
connection with (i) the merger or consolidation of such holder of Incentive Distribution Rights with or into such other Person or (ii) the transfer by such holder of all or substantially all of its assets to such other Person. Any other
transfer of the Incentive Distribution Rights prior to March 31, 2018, shall require the prior approval of holders of at least a majority of the Outstanding Common Units (excluding Common Units held by KNOT and its Affiliates). On or after
March 31, 2018, any holder of Incentive Distribution Rights may transfer any or all of its Incentive Distribution Rights without Unitholder approval. Notwithstanding anything herein to the contrary, (a) the transfer of Common Units issued
pursuant to Section 5.10 shall not be treated as a transfer of all or any part of the Incentive Distribution Rights and (b) no transfer of Incentive Distribution Rights to another Person shall be permitted unless the transferee
agrees to be bound by the provisions of this Agreement. The General Partner and any transferee or transferees of the Incentive Distribution Rights may agree in a separate instrument as to the General Partner’s exercise of its rights with
respect to the Incentive Distribution Rights under Section 11.3. 
 Section 4.8 Restrictions on Transfers. 

(a) Except as provided in Section 4.8(b) below, but notwithstanding the other provisions of this Article IV, no transfer of
any Partnership Interests shall be made if such transfer would (i) violate the then applicable U.S. federal or state securities laws, laws of the Republic of the Marshall Islands or rules and regulations of the Commission, any state securities
commission or any other governmental authority with jurisdiction over such transfer or (ii) terminate the existence or qualification of the Partnership or any Group Member under the laws of the jurisdiction of its formation. 

(b) Nothing contained in this Article IV, or elsewhere in this Agreement, shall preclude the settlement of any transactions involving
Partnership Interests entered into through the facilities of any National Securities Exchange on which such Partnership Interests are listed or admitted to trading. 

  
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 (c) The transfer of a Series A Preferred Unit shall be subject to the restrictions imposed by
this Article IV and by Section 5.11(c)(xi). 
 ARTICLE V 

CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS 

Section 5.1 Contributions to the Partnership. The General Partner and the Limited Partners have previously made Capital Contributions
for interests in the Partnership. 
 Section 5.2 Tax Election. The Partnership has elected to be treated as an association taxable as
a corporation solely for U.S. federal income tax purposes. 
 Section 5.3 Interest and Withdrawal. No interest shall be paid by the
Partnership on Capital Contributions. No Partner shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent, if any, that distributions made pursuant to this Agreement or upon dissolution of the Partnership may
be considered and permitted as such by law and then only to the extent provided for in this Agreement. Except to the extent expressly provided in this Agreement, no Partner shall have priority over any other Partner either as to the return of
Capital Contributions or as to profits, losses or distributions. 
 Section 5.4 Issuances of Additional Partnership Interests. 

(a) Subject to any approvals required by Series A Preferred Unitholders pursuant to Section 5.11(c)(v), the Partnership may issue
additional Partnership Interests and options, rights, warrants and appreciation rights relating to the Partnership Interests for any Partnership purpose at any time and from time to time to such Persons for such consideration and on such terms and
conditions as the Board of Directors shall determine, all without the approval of any Partners. 
 (b) Each additional Partnership Interest
authorized to be issued by the Partnership pursuant to Section 5.4(a) may be issued in one or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties (which may be senior to
existing classes and series of Partnership Interests), as shall be fixed by the Board of Directors, including (i) the right to share in Partnership distributions; (ii) the rights upon dissolution and liquidation of the Partnership;
(iii) whether, and the terms and conditions upon which, the Partnership may or shall be required to redeem the Partnership Interest (including sinking fund provisions); (iv) whether such Partnership Interest is issued with the privilege of
conversion or exchange and, if so, the terms and conditions of such conversion or exchange; (v) the terms and conditions upon which each Partnership Interest will be issued, evidenced by certificates and assigned or transferred; (vi) the
method for determining the Percentage Interest as to such Partnership Interest; and (vii) the right, if any, of each such Partnership Interest to vote on Partnership matters, including matters relating to the relative rights, preferences and
privileges of such Partnership Interest. 
 (c) The Board of Directors shall take all actions that it determines to be necessary or
appropriate in connection with (i) each issuance of Partnership Interests and options, rights, warrants and appreciation rights relating to Partnership Interests pursuant to this Section 5.4, (ii) the conversion of the General
Partner Interest (represented by General Partner Units) or any 

  
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Incentive Distribution Rights or any convertible Partnership Interest into Units pursuant to the terms of this Agreement, (iii) the issuance of Common Units pursuant to
Section 5.10, (iv) the admission of additional Limited Partners and (v) all additional issuances of Partnership Interests. The Board of Directors shall determine the relative rights, powers and duties of the holders of the
Units or other Partnership Interests being so issued. The Board of Directors shall do all things necessary to comply with the Marshall Islands Act and is authorized and directed to do all things that it determines to be necessary or appropriate in
connection with any future issuance of Partnership Interests or in connection with the conversion of the General Partner Interest or any Incentive Distribution Rights or any convertible Partnership Interest into Units pursuant to the terms of this
Agreement, including compliance with any statute, rule, regulation or guideline of any federal, state or other governmental agency or any National Securities Exchange on which the Units or other Partnership Interests are listed or admitted to
trading. 
 Section 5.5 Limitations on Issuance of Additional Partnership Interests. Subject to Section 5.11(c)(v), the
Partnership may issue an unlimited number of Partnership Interests (or options, rights, warrants or appreciation rights related thereto) pursuant to Section 5.4 without the approval of the Partners; provided, however, that no
fractional units shall be issued by the Partnership; and provided, further, that without the approval of the General Partner, the Partnership shall not issue any equity where such issuance (as determined by the Board of Directors) (a) is
not reasonably expected to be accretive to equity within 12 months of issuance or (b) would otherwise have a material adverse impact on the General Partner or the General Partner Interest. For the avoidance of doubt, this Section 5.5 shall
not restrict the ability of the Partnership to issue additional Series A Preferred Units as provided by the Series A Purchase Agreement prior to June 30, 2017. 

Section 5.6 [Reserved]. 

Section 5.7 Limited Preemptive Right. 

(a) Except as provided in this Section 5.7, no Person shall have any preemptive, preferential or other similar right with respect
to the issuance of any Partnership Interest, whether unissued, held in the treasury or hereafter created. The General Partner shall have the right, which it may from time to time assign in whole or in part to any of its Affiliates, to purchase
Partnership Interests from the Partnership whenever, and on the same terms that, the Partnership issues Partnership Interests to Persons other than the General Partner and its Affiliates, to the extent necessary to maintain the Percentage Interests
of the General Partner and its Affiliates equal to that which existed immediately prior to the issuance of such Partnership Interests; provided, however, that the amount of any series of Preferred Units issued by the Partnership from time to time
that the General Partner shall have a right to purchase pursuant to this Section 5.7 shall equal the product of (a) the aggregate Percentage Interest of the General Partner and its Affiliates multiplied by (b) the number of
such series of Preferred Units so issued. 
 (b) Upon the issuance of any additional Limited Partner Interests by the Partnership (other than
Common Units issued in connection with a reset of the Incentive Distribution target levels or the issuance of Limited Partner Interests upon conversion of outstanding Limited Partner Interests), the General Partner may, in exchange for a
proportionate number of General Partner Units, make additional Capital Contributions in an amount equal to the product obtained 

  
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by multiplying (i) the quotient determined by dividing (A) the General Partner’s Percentage Interest immediately prior to such issuance by (B) 100 less the General
Partner’s Percentage Interest immediately prior to such issuance by (ii) the amount contributed to the Partnership by the Limited Partners in exchange for such additional Limited Partner Interests. The General Partner shall not be
obligated to make additional Capital Contributions to the Partnership. 
 Section 5.8 Splits and Combinations. 

(a) Subject to Sections 5.8(d) and 6.5 (dealing with adjustments of distribution levels), the Partnership may make a Pro Rata
distribution of Partnership Interests to all Record Holders or may effect a subdivision or combination of Partnership Interests so long as, after any such event, each Partner shall have the same Percentage Interest in the Partnership as before such
event, and any amounts calculated on a per Unit basis or stated as a number of Units are proportionately adjusted. 
 (b) Whenever such a Pro
Rata distribution, subdivision or combination of Partnership Interests is declared, the Board of Directors shall select a Record Date as of which the distribution, subdivision or combination shall be effective and shall send notice thereof at least
20 days prior to such Record Date to each Record Holder as of a date not less than 10 days prior to the date of such notice. The Board of Directors also may cause a firm of independent public accountants selected by it to calculate the number of
Partnership Interests to be held by each Record Holder after giving effect to such distribution, subdivision or combination. The Board of Directors shall be entitled to rely on any certificate provided by such firm as conclusive evidence of the
accuracy of such calculation. 
 (c) Promptly following any such distribution, subdivision or combination, the Partnership may issue
Certificates or uncertificated Partnership Interests to the Record Holders of Partnership Interests as of the applicable Record Date representing the new number of Partnership Interests held by such Record Holders, or the Board of Directors may
adopt such other procedures that it determines to be necessary or appropriate to reflect such changes. If any such combination results in a smaller total number of Partnership Interests Outstanding, the Partnership shall require, as a condition to
the delivery to a Record Holder of such new Certificate or uncertificated Partnership Interest, the surrender of any Certificate held by such Record Holder immediately prior to such Record Date. 

(d) The Partnership shall not issue fractional Units upon any distribution, subdivision or combination of Units. If a distribution, subdivision
or combination of Units would result in the issuance of fractional Units but for the provisions of this Section 5.8(d), each fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the next higher
Unit). 
 Section 5.9 Fully Paid and Non-Assessable Nature of Limited Partner Interests. All
Limited Partner Interests issued pursuant to, and in accordance with the requirements of, this Article V shall be fully paid and non-assessable Limited Partner Interests in the Partnership, except as such non-assessability may be affected by
the Marshall Islands Act. 

  
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 Section 5.10 Issuance of Common Units in Connection with Reset of Incentive Distribution
Rights. 
 (a) Subject to the provisions of this Section 5.10, the holder of the Incentive Distribution Rights
(or, if there is more than one holder of the Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights) shall have the right, at any time when the Partnership has made a distribution pursuant to
Section 6.3(e) for each of the four most recently completed Quarters and the amount of each such distribution did not exceed Adjusted Operating Surplus for such Quarter, to make an election (the “IDR Reset
Election”) to cause the Minimum Quarterly Distribution and the Target Distributions to be reset in accordance with the provisions of Section 5.10(e) and, in connection therewith, the holder or holders of the Incentive
Distribution Rights will become entitled to receive their respective proportionate shares of a number of Common Units (“IDR Reset Common Units”) derived by dividing (i) the average of the aggregate amount of cash
distributions made by the Partnership for each of the two full Quarters immediately preceding the giving of the Reset Notice in respect of the Incentive Distribution Rights by (ii) the average of the cash distributions made by the Partnership
in respect of each Common Unit for each of the two full Quarters immediately preceding the giving of the Reset Notice (the number of Common Units determined by such quotient is referred to herein as the “Aggregate Quantity of IDR Reset
Common Units”). If at the time of any IDR Reset Election the General Partner and its Affiliates are not the holders of a majority interest of the Incentive Distribution Rights, then the IDR Reset Election shall be subject to the prior
approval of the Board of Directors that the conditions described in the immediately preceding sentence have been satisfied. Upon the issuance of such IDR Reset Common Units, the Partnership will issue to the General Partner that number of additional
General Partner Units equal to the product of (i) the quotient obtained by dividing (A) the Percentage Interest of the General Partner immediately prior to such issuance by (B) a percentage equal to 100% less such Percentage Interest
and (ii) the number of such IDR Reset Common Units, and the General Partner shall not be obligated to make any additional Capital Contribution to the Partnership in exchange for such issuance. The making of the IDR Reset Election in the manner
specified in Section 5.10(b) shall cause the Minimum Quarterly Distribution and the Target Distributions to be reset in accordance with the provisions of Section 5.10(c) and, in connection therewith, the holder or holders of
the Incentive Distribution Rights will become entitled to receive IDR Reset Common Units and the General Partner will become entitled to receive General Partner Units on the basis specified above, without any further approval required by the General
Partner or the Unitholders, at the time specified in Section 5.10(c), unless the IDR Reset Election is rescinded pursuant to Section 5.10(d). 

(b) To exercise the right specified in Section 5.10(a), the holder of the Incentive Distribution Rights (or, if there is more than
one holder of the Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights) shall deliver a written notice (the “Reset Notice”) to the Partnership. Within 10 Business Days
after the receipt by the Partnership of such Reset Notice, the Partnership shall deliver a written notice to the holder or holders of the Incentive Distribution Rights of the Partnership’s determination of the aggregate number of Common Units
that each holder of Incentive Distribution Rights will be entitled to receive. 

  
 33 

 (c) The holder or holders of the Incentive Distribution Rights will be entitled to receive the
Aggregate Quantity of IDR Reset Common Units and the General Partner will become entitled to receive the related additional General Partner Units on the 15th Business Day after receipt by the
Partnership of the Reset Notice, and the Partnership may issue Certificates for the Common Units or uncertificated Partnership Interests to the holder or holders of the Incentive Distribution Rights. 

(d) If the principal National Securities Exchange upon which the Common Units are then traded has not approved the listing or admission for
trading of the Common Units to be issued pursuant to this Section 5.10 on or before the 30th calendar day following the Partnership’s receipt of the Reset Notice and such approval
is required by the rules and regulations of such National Securities Exchange, then the holder of the Incentive Distribution Rights (or, if there is more than one holder of the Incentive Distribution Rights, the holders of a majority in interest of
the Incentive Distribution Rights) shall have the right to either rescind the IDR Reset Election or elect to receive other Partnership Interests having such terms as the General Partner may approve, with the approval of the Conflicts Committee, that
will provide (i) the same economic value, in the aggregate, as the Aggregate Quantity of IDR Reset Common Units would have had at the time of the Partnership’s receipt of the Reset Notice, as determined by the Board of Directors, and
(ii) for the subsequent conversion (on terms acceptable to the National Securities Exchange upon which the Common Units are then traded) of such Partnership Interests into Common Units within not more than 12 months following the
Partnership’s receipt of the Reset Notice upon the satisfaction of one or more conditions that are reasonably acceptable to the holder of the Incentive Distribution Rights (or, if there is more than one holder of the Incentive Distribution
Rights, the holders of a majority in interest of the Incentive Distribution Rights). 
 (e) The Minimum Quarterly Distribution, First Target
Distribution, Second Target Distribution and Third Target Distribution shall be adjusted at the time of the issuance of Common Units or other Partnership Interests pursuant to this Section 5.10 such that (i) the Minimum Quarterly
Distribution shall be reset to equal to the average cash distribution amount per Common Unit for the two Quarters immediately prior to the Partnership’s receipt of the Reset Notice (the “Reset MQD”), (ii) the First
Target Distribution shall be reset to equal 115% of the Reset MQD, (iii) the Second Target Distribution shall be reset to equal 125% of the Reset MQD and (iv) the Third Target Distribution shall be reset to equal 150% of the Reset MQD.

 Section 5.11 Establishment of Series A Preferred Units. 

(a) General. The Partnership hereby designates and creates a series of Preferred Units to be
designated as “Series A Convertible Preferred Units” (the “Series A Preferred Units”), consisting of a total of 3,750,000 authorized Series A Preferred Units, which represent a fractional part of the Partnership
Interests of all Limited Partners, and having the same rights, preferences and privileges, and subject to the same duties and obligations, as the Common Units, except as set forth in this Section 5.11 and in Section 12.4.
However, in the event of any conflict between the rights, preferences, privileges, duties and obligations of the Common Units or any other class of Partnership Interest as set forth in this Agreement and the provisions of this
Section 5.11 and in Section 12.4 that specifically set forth the rights, preferences, privileges, duties and obligations of the Series A Preferred Units, such specific provisions shall control. On 

  
 34 

 
the Initial Series A Issuance Date, a total of 2,083,333 Series A Preferred Units were issued and outstanding and on June 30, 2017 a total of 1,666,667 additional Series A Preferred Units
will be issued and outstanding, and thereafter, no additional Series A Preferred Units shall be designated, created or issued. No fractional Series A Preferred Units shall be issued. 

(b) Rank of Series A Preferred Units. The Series A Preferred Units will rank senior to all Common Units and any other class or series of
equity securities of the Partnership outstanding as of the Closing Date with respect to distribution rights and Liquidation Preference. 

(c) Rights of Series A Preferred Units. The Series A Preferred Units shall have the following rights, preferences and privileges and the
Series A Preferred Unitholders shall be subject to the following duties and obligations: 
 (i) Distributions. 

(A) Commencing with the Quarter ending on March 31, 2017, the Record Holders of the Series A Preferred Units
as of an applicable Record Date for any Quarter shall be entitled to receive cumulative distributions in respect of such Quarter equal to the sum of (1) the Series A Distribution Amount and (2) any Series A Unpaid Cash Distributions
(collectively, a “Series A Quarterly Distribution”), prior to any other distributions made in respect of any other Partnership Interests pursuant to Sections 6.3 or 6.4, in the amount set forth in this
Section 5.11(c)(i)(A) in respect of each outstanding Series A Preferred Unit. All such distributions shall be paid quarterly in cash within forty-five (45) days after the end of each Quarter (each such payment date, a
“Series A Distribution Payment Date”). If the Partnership establishes a Record Date for any distribution to be made by the Partnership on other Partnership Interests pursuant to Sections 6.3 or 6.4 in respect of
any Quarter, then the Record Date established pursuant to this Section 5.11(c)(i)(A) for a Series A Quarterly Distribution in respect of such Quarter shall be the same Record Date. For the avoidance of doubt, subject to
Section 5.11(c)(i)(C), the Series A Preferred Units shall not be entitled to any distributions made pursuant to Section 6.4 for any Quarter so long as the Series A Quarterly Distribution has been declared and paid on the
Series A Preferred Units with respect to such Quarter. 
 (B) If the Partnership fails to pay in
full the Series A Distribution Amount of any Series A Quarterly Distribution in cash when due for any Quarter, then from and after the first date of such failure and continuing until such failure is cured by payment in full in cash of all such
arrearages, (1) the amount of such unpaid cash distributions (“Series A Unpaid Cash Distributions”) unless and until paid will accrue and accumulate from and including the first day of the Quarter immediately following
the Quarter in respect of which such payment is due until paid in full and (2) the Partnership shall not be permitted to, and shall not, declare or make any distributions in respect of any Common Units or Series A Junior Securities (including,
for the avoidance of doubt, with respect to the Quarter for which the Partnership first failed to pay in full the Series A Distribution Amount of any Series A Quarterly Distribution in cash when due). No interest or sum of money in lieu of interest
or distributions, whether payable in cash, property or Units, shall be payable in respect of any Series A Unpaid Cash Distributions.  

  
 35 

 (C) Notwithstanding anything in this Section 5.11(c)(i) to the
contrary, with respect to any Series A Preferred Unit that is converted into a Common Unit, the Record Holder thereof shall not be entitled to a distribution in respect of such Series A Preferred Unit and a distribution in respect of such Common
Unit with respect to the same period, but shall be entitled only to the distribution to be paid based upon the class of Units held as of the close of business on the applicable Record Date. For the avoidance of doubt, if a Series A Conversion Date
occurs prior to the close of business on a Record Date for payment of a distribution on the Common Units, the applicable Record Holder of Series A Preferred Units shall receive, with respect to any Series A Preferred Units that have converted into
Common Units, only the distribution in respect of such Common Units with respect to such period. 
 (D) Notwithstanding
anything in Article VI to the contrary, the holders of the Incentive Distribution Rights shall not be entitled to receive distributions that correspond or relate to amounts distributed to Unitholders in respect of Series A Preferred Units.

 (ii) Issuance of the Series A Preferred Units. The Series A Preferred Units shall be issued by the Partnership
pursuant to the terms and conditions of the Series A Purchase Agreement. 
 (iii) Liquidation Rights. 

(A) Subject to Section 5.11(c)(iii)(B), upon the occurrence of any Liquidation Event, Series A Preferred Unitholders (to
the extent their Series A Preferred Units have not been converted to Common Units in accordance with Section 5.11(c)(vii) prior to the occurrence of such Liquidation Event) shall be entitled to receive out of the assets of the
Partnership or proceeds thereof legally available for distribution to the Partners, (i) after satisfaction of all liabilities, if any, to creditors of the Partnership, (ii) after all applicable distributions of such assets or proceeds
being made to or set aside for the holders of any Series A Senior Securities then Outstanding in respect of such Liquidation Event, (iii) concurrently with any applicable distributions of such assets or proceeds being made to or set aside for
holders of any Series A Parity Interests then Outstanding in respect of such Liquidation Event and (iv) before any distribution of such assets or proceeds is made to or set aside for the holders of Common Units and any other classes or series
of Series A Junior Securities as to such distribution, a liquidating distribution or payment in full redemption of such Series A Preferred Units, in an amount equal to the Series A Liquidation Preference. For purposes of clarity, upon the occurrence
of any Liquidation Event, (x) the holders of then Outstanding Series A Senior Securities shall be entitled to receive the applicable Liquidation Preference on such Series A Senior Securities before any distribution

  
 36 

 
shall be made with respect to the Series A Preferred Units or any Series A Parity Securities and (y) the Series A Preferred Unitholders shall be entitled to the Series A Liquidation
Preference per Series A Preferred Unit in cash, concurrently with any distribution made to the holders of any Series A Parity Securities and before any distribution shall be made to the holders of Common Units or any other Series A Junior
Securities. Series A Preferred Holders shall not be entitled to any other amounts from the Partnership, in their capacity as Series A Preferred Holders, after they have received the Series A Liquidation Preference. The payment of the Series A
Liquidation Preference in full shall be a payment in redemption of the Series A Preferred Units, such that, from and after payment of the full Series A Liquidation Preference, any such Series A Preferred Unit shall thereafter be cancelled and no
longer be Outstanding. 
 (B) If, in the event of any distribution or payment described in
Section 5.11(c)(iii)(A) above where the Partnership’s assets available for distribution to holders of the Outstanding Series A Preferred Units and any Series A Parity Interests are insufficient to satisfy the applicable Liquidation
Preference for such Series A Preferred Units and Parity Interests, the Partnership’s then remaining assets or proceeds thereof legally available for distribution to unitholders of the Partnership shall be distributed among the holders of
Outstanding Series A Preferred Units and such Series A Parity Securities, as applicable, ratably on the basis of their relative aggregate Liquidation Preferences. To the extent that the Series A Preferred Holders receive a partial payment of their
Series A Liquidation Preference, such partial payment shall reduce the Series A Liquidation Preference of their Series A Preferred Units, but only to the extent of such amount paid. 

(C) After payment of the applicable Liquidation Preference in full to the holders of the Outstanding Series A Preferred Units
and any Series A Parity Securities, the Partnership’s remaining assets and funds shall be distributed among the holders of the Common Units and any other Series A Junior Securities then Outstanding according to their respective rights and
preferences. 
 (iv) Voting Rights. 

(A) Except as otherwise provided in this paragraph and Section 5.11(c)(iv)(B), the Outstanding Series A Preferred
Units shall have voting rights that are identical to the voting rights of the Outstanding Common Units and shall vote with the Common Units as a single class, so that each Outstanding Series A Preferred Unit will be entitled to one vote for each
Common Unit into which such Series A Preferred Unit is then convertible at the then applicable Series A Conversion Rate (or, if the Series A Preferred Units are not then convertible, assuming that such Series A Preferred Units are convertible at the
then applicable Series A Conversion Rate) on each matter with respect to which each Record Holder of a Common Unit is entitled to vote; provided, however, that, notwithstanding anything in this Agreement to the contrary, the Series A
Preferred Units shall not have any right to nominate, appoint or elect any of the Elected Directors or the Appointed Directors other than as set forth in Section

  
 37 

 
5.11(c)(iv)(D) following the occurrence of a Series A Trigger Event. Other than with respect to the nomination, appointment or election of any member of the Board of Directors, each
reference in this Agreement to a vote of Record Holders of Common Units shall be deemed to be a reference to the Record Holders of Common Units and Series A Preferred Units on an “as if” converted basis, and the definition of “Unit
Majority” shall correspondingly be construed to mean at least a majority of the Common Units and the Series A Preferred Units, on an “as if” converted basis, voting together as a single class during any period in which any Series A
Preferred Units are Outstanding. 
 (B) Notwithstanding any other provision of this Agreement, in addition to all other
requirements of the Marshall Islands Act, and all other voting rights granted under this Agreement, the affirmative vote of at least 67% of the Series A Preferred Units, voting separately as a class based upon one vote per Series A Preferred Unit,
will be necessary for any amendment (excluding any amendment of a ministerial or administrative nature) to this Agreement or the Certificate of Limited Partnership that (i) adversely affects any of the rights, preferences and privileges of the
Series A Preferred Units or (ii) amends or modifies any of the terms of the Series A Preferred Units. Without limiting the generality of the preceding sentence, any action shall be deemed to adversely affect the holders of the Series A
Preferred Units if such action would: 
 (1) reduce the Series A Distribution Amount, change the form of payment of
distributions on the Series A Preferred Units, defer the date from which distributions on the Series A Preferred Units will accrue, cancel accrued and unpaid distributions on the Series A Preferred Units, or change the seniority rights of the
holders of the Series A Preferred Units as to the payment of distributions in relation to the unitholders of any other class or series of units; 

(2) reduce the amount payable or change the form of payment to the holders of the Series A Preferred Units upon the voluntary
or involuntary liquidation, dissolution or winding up, or sale of all or substantially all of the assets, of the Partnership, or change the seniority of the Liquidation Preferences of the holders of the Series A Preferred Units in relation to the
rights upon liquidation of the holders of any other class or series of units; 
 (3) make the Series A Preferred Units
redeemable or convertible at the option of the Partnership other than as set forth in this Agreement; or 
 (4) result in
the Partnership incurring or assuming additional indebtedness that would cause the Partnership’s total consolidated indebtedness to represent more than 70% of its total consolidated capitalization. 

  
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 (C) Notwithstanding anything to the contrary in this
Section 5.11(c)(iv), except as contemplated by Section 5.11(c)(iv)(A), in no event shall the consent of the Series A Preferred Unitholders, be required in connection with any Partnership Restructuring Event or Series A Change
of Control. For the avoidance of doubt, the foregoing shall not limit the voting rights of any Series A Preferred Unitholder in connection with the vote of Record Holders of Common Units and Series A Preferred Units together as a single class. 

(D) Upon the occurrence of a Series A Trigger Event, the Partnership shall notify the Holders of Series A
Preferred Units and the Holders of any other series of Preferred Units upon which like rights have been conferred and are exercisable, of the occurrence thereof, whereupon the General Partner will promptly substitute one of the Appointed Directors
for one director selected by the Holders of the Preferred Units (with such like rights) by written notice to the Partnership holding at least 67% of the Preferred Units (with such like rights) then outstanding (a “Holders’
Nominee”) and appoint such Holders’ Nominee to the Board of Directors as an Appointed Director; provided, however, that the Holder’s Nominee shall not be a
resident of Norway for purposes of the Tax Act on Income and Wealth unless the General Partner so consents. In no event will the Holders of Preferred Units be entitled to more than one Holders’ Nominee. Upon payment of all accrued and unpaid
distributions then-outstanding in respect of the Preferred Units, the Holders’ Nominee will agree to resign from the Board of Directors effective immediately, unless and until a subsequent Series A Trigger Event, if any, occurs. Subject to the
preceding sentence, any Holders’ Nominee may be removed at any time without Cause only by the Holders of 67% of the Series A Preferred Units and the Holders of any other series of Preferred Units upon which such rights have been conferred and
are exercisable, voting together as a class. If any Holders’ Nominee is removed, resigns or is otherwise unable to serve as a member of the Board of Directors, the Holders of a majority of the outstanding Series A Preferred Units and, if
applicable, any other Preferred Units, voting together as a class, shall appoint an individual to fill the vacancy. 

(E) Notwithstanding anything to the contrary herein, (x) if a Series A Preferred Unitholder is a Norwegian Resident
Holder, the Series A Preferred Units held by such Person will have none of the voting rights described in this Section 5.11(c)(iv) and (y) the 4.9% limitation set forth in the definition of “Outstanding” shall apply to the
Holders of Series A Preferred Units with respect to the voting of the Series A Preferred Units together with the Common Units as a single class. 

(v) Series A Senior Securities; Series A Parity Securities. The Partnership
will not, without the affirmative vote of the holders of at least 67% of the Series A Preferred Units, issue any Series A Parity Securities or Series A Senior Securities (or amend the provisions of any class of Partnership Interest to make such
class a class of Series A Parity Securities or Series A Senior Securities); provided, however, that the Partnership may, without the affirmative vote of the holders of Preferred Units, create (by reclassification or
otherwise) and issue Series A Junior Securities in an unlimited amount;  

  
 39 

 
provided, further, however, that the Partnership may issue after the Initial Series A Issuance Date Series A Parity Securities such that the aggregate amount of the Series A Preferred
Units then outstanding and the Series A Parity Securities, on a pro-forma basis for such issuance, does not exceed 33.33% of the book value of the sum of the Partnership’s then outstanding aggregate amount of Common Units, Series A Parity
Securities (including the Series A Preferred Units) and Series A Junior Securities, without the consent of the holders of the Series A Preferred Units. 

(vi) Certificates. 

(A) If requested by a Series A Preferred Unitholder, the Series A Preferred Units shall be evidenced by certificates in such
form as the Board of Directors may approve and, subject to any applicable legal, regulatory and contractual requirements or any other limitations set forth in this Section 5.11, may be assigned or transferred in a manner identical to the
assignment and transfer of other Units. Any certificates evidencing Series A Preferred Units shall be separately identified and shall not bear the same CUSIP number as any certificates evidencing Common Units. 

(B) Any certificate(s) representing the Series A Preferred Units may be imprinted with a legend in substantially the following
form: 
 “NEITHER THE OFFER NOR SALE OF THESE SECURITIES HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE
SECURITIES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IN THE CASE OF A
TRANSACTION EXEMPT FROM REGISTRATION, UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT OR THE PARTNERSHIP HAS RECEIVED DOCUMENTATION REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER SUCH ACT. THIS SECURITY IS
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER SET FORTH IN THE THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF THE PARTNERSHIP, DATED AS OF [JUNE 30 2017], A COPY OF WHICH MAY BE OBTAINED FROM THE PARTNERSHIP AT ITS PRINCIPAL EXECUTIVE
OFFICES.” 
 (vii) Conversion. 

(A) At the Option of the Series A Preferred Unitholders. Beginning with the earlier of (i) second anniversary of the
Initial Series A Issuance Date and (ii) immediately prior to the liquidation, dissolution and winding up of the Partnership under Section 12.4, the Series A Preferred Units owned by any Series A Preferred Unitholder shall be
convertible, in the sole discretion of such Series 

  
 40 

 
A Preferred Unitholder, in whole or in part, at any time and from time to time upon the request of such Series A Preferred Unitholder, but not more than once per Quarter per Series A Preferred
Unitholder, into a number of Common Units determined by multiplying the number of Series A Preferred Units to be converted by the Series A Conversion Rate; provided, however, that the Partnership shall not be obligated to honor any such
conversion request if such conversion request does not involve an underlying value of Common Units held by one or more Series A Preferred Unitholders in an aggregate of at least $10,000,000 based on the Closing Price of Common Units on the Trading
Day immediately preceding the Series A Conversion Notice Date (or such lesser amount to the extent such exercise covers all of such Series A Preferred Unitholder’s Series A Preferred Units). Immediately upon the effectiveness of any conversion
of Series A Preferred Units, all rights of the Series A Converting Unitholder in respect thereof shall cease, including, without limitation, any further accrual of distributions, and such Series A Converting Unitholder thereafter shall be treated
for all purposes as the owner of Common Units. Fractional Common Units shall not be issued to any person pursuant to this Section 5.11(c)(vii)(A) (each fractional Common Unit shall be rounded down with the remainder being paid an amount
in cash based on the Closing Price of Common Units on the Trading Day immediately preceding such date of conversion). 

(B) At the Option of the Partnership. At any time following the second anniversary of the Initial Series A
Issuance Date, the Partnership, in its sole discretion, shall have the right at any time, but not more than once per Quarter, to convert all or any portion of the then outstanding Series A Preferred Units into a number of Common Units determined by
multiplying the number of Series A Preferred Units to be converted by the Series A Conversion Rate. Fractional Common Units shall not be issued to any person pursuant to this Section 5.11(c)(vii)(B) (each fractional Common Unit shall be
rounded down with the remainder being paid an amount in cash based on the Closing Price of Common Units on the Trading Day immediately preceding such date of conversion). Notwithstanding the foregoing, in order for the Partnership to exercise such
option, 
 (1) the aggregate market value (calculated using the Average VWAP for the twenty (20) Trading Days
immediately preceding the date the Partnership furnishes the Series A Forced Conversion Notice) of the Common Units into which the then outstanding Series A Preferred Units are convertible, based on the then applicable Series A Conversion Rate, must
be greater than one hundred thirty percent (130%) of the aggregate Series A Issue Price of the then outstanding Series A Preferred Units; 

(2) the aggregate market value (calculated using the Closing Price for the last Trading Day immediately preceding the date the
Partnership furnishes the Series A Forced Conversion Notice) of the Common Units into which the then outstanding Series A Preferred Units are convertible, based on the then applicable Series A Conversion Rate, must be greater than one hundred thirty
percent (130%) of the aggregate Series A Issue Price of the then outstanding Series A Preferred Units; 

  
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 (3) the average daily trading volume of the Common Units on the National
Securities Exchange on which the Common Units are then listed or admitted to trading must be equal to or exceed 40,000 (as such amount may be adjusted to reflect any Unit split, combination or similar event) for the twenty (20) Trading Day
period immediately preceding the date that the Partnership furnishes the Series A Forced Conversion Notice; 
 (4) the
Partnership must have an effective registration statement on file with the Commission covering resales of the underlying Common Units to be received upon any such conversion; and 

(5) the Partnership must have paid any accrued and unpaid distributions on the Series A Preferred Units to the date of
conversion; 
 provided, however, in each case, that each such conversion by the Partnership shall be for an aggregate amount of
Series A Preferred Units involving an underlying value of Common Units of at least $10,000,000 based on the Closing Price of Common Units on the Trading Day immediately preceding the date of such conversion (or such lesser amount if such amount
includes all then outstanding Series A Preferred Units) and shall be allocated among the Series A Preferred Unitholders on a Pro Rata basis or on such other basis as may be agreed upon by the Series A Preferred Unitholders. 

(C) Conversion Notice.  

(1) To convert Series A Preferred Units into Common Units pursuant to Section 5.11(c)(vii)(A), the
Series A Converting Unitholder shall give written notice (a “Series A Conversion Notice,” and the date such notice is received, a “Series A Conversion Notice Date”) to the Partnership stating that such
Series A Preferred Unitholder elects to so convert Series A Preferred Units and shall state or include therein with respect to Series A Preferred Units to be converted pursuant to Section 5.11(c)(vii)(A) the following: (a) the
number of Series A Preferred Units to be converted, and (b) if a Certificate has been issued for such Series A Preferred Units, the Certificate(s) evidencing the Series A Preferred Units to be converted and duly endorsed.  

(2) To convert Series A Preferred Units into Common Units pursuant to Section 5.11(c)(vii)(B), the
Partnership shall give written notice (a “Series A Forced Conversion Notice,” and the date such notice is received, a “Series A Forced Conversion Notice Date”) to each Record Holder of Series A
Preferred Units stating that the Partnership elects to force conversion of such Series A Preferred Units pursuant to Section 5.11(c)(vii)(B). The Series A Conversion Units shall be issued in the name of the Record Holder of such Series A
Preferred Units. 

  
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 (D) Timing; Certificates. If a
Series A Conversion Notice is delivered by a Series A Preferred Unitholder to the Partnership or a Series A Forced Conversion Notice is delivered by the Partnership to a Series A Preferred Unitholder, each in accordance with
Section 5.11(c)(vii)(C), the Partnership shall issue the Series A Conversion Units no later than seven (7) days after the Series A Conversion Notice Date or the Series A Forced Conversion Notice Date, as the case may be, occurs (any
date of issuance of such Common Units, a “Series A Conversion Date”). On the Series A Conversion Date, if the Transfer Agent is participating in the Depository’s Fast Automated Securities Transfer program, the
Partnership shall use its commercially reasonable efforts to cause its Transfer Agent to electronically transmit the Series A Conversion Units issuable upon conversion to such Series A Preferred Unitholder (or designated recipient(s)), by crediting
the account of the Series A Preferred Unitholder (or designated recipient(s)) prime broker with the Depository through its Deposit Withdrawal Agent Commission system. If the Transfer Agent is not participating in the Depository’s Fast Automated
Securities Transfer program, or if requested by such Series A Preferred Unitholder, the Partnership shall issue to such Series A Preferred Unitholder (or designated recipient(s)) a Certificate or Certificates for the number of Series A Conversion
Units to which such Series A Preferred Unitholder shall be entitled. The parties agree to coordinate with the Depository to accomplish this objective. Upon issuance of Series A Conversion Units to the Series A Converting Unitholder, all rights under
the converted Series A Preferred Units shall cease, and such Series A Converting Unitholder shall be treated for all purposes as the Record Holder of such Series A Conversion Units. 

(E) Distributions, Combinations, Subdivisions and Reclassifications by the Partnership. If, after the Initial
Series A Issuance Date, the Partnership (i) makes a distribution on its Common Units payable in Common Units or another Partnership Interest, (ii) subdivides or splits its outstanding Common Units into a greater number of Common Units,
(iii) combines or reclassifies its Common Units into a smaller number of Common Units or (iv) issues by reclassification of its Common Units any Partnership Interests (including any reclassification in connection with a merger,
consolidation or business combination in which the Partnership is the surviving Person), in each case other than in connection with a Series A Change of Control (which shall be governed by Section 5.11(c)(vii)(F)), then the Series A
Conversion Rate in effect at the time of the Record Date for such distribution or the effective date of such subdivision, split, combination or reclassification shall be proportionately adjusted so that the conversion of the Series A Preferred Units
after such time shall entitle each Series A Preferred Unitholder to receive the aggregate number of Common Units (or any Partnership Interests into which such Common Units would have been combined, consolidated, merged or reclassified pursuant to
clauses (iii) and (iv) above) that such Series A Preferred Unitholder would have been entitled to receive if the  

  
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Series A Preferred Units had been converted into Common Units immediately prior to such Record Date or effective date, as the case may be, and in the case of a merger, consolidation or business
combination in which the Partnership is the surviving Person, the Partnership shall provide effective provisions to ensure that the provisions in this Section 5.11 relating to the Series A Preferred Units shall not be abridged or amended
and that the Series A Preferred Units shall thereafter retain the same powers, preferences and relative participating, optional and other special rights, and the qualifications, limitations and restrictions thereon, that the Series A Preferred Units
had immediately prior to such transaction or event. An adjustment made pursuant to this Section 5.11(c)(vii)(E) shall become effective immediately after the Record Date in the case of a distribution and shall become effective immediately
after the effective date in the case of a subdivision, combination, reclassification (including any reclassification in connection with a merger, consolidation or business combination in which the Partnership is the surviving Person) or split. Such
adjustment shall be made successively whenever any event described above shall occur. 
 (F) Quarterly
Redetermination of Series A Conversion Rate. 
 (1) The Series A Conversion Rate shall be redetermined on a
quarterly basis. The redetermined Series A Conversion Rate shall become effective at 11:59 p.m. prevailing Eastern Time on the later of the (a) date of public dissemination by the Partnership of the Partnership’s quarterly earnings press
release with respect to the immediately preceding Quarter and (b) ex-dividend date relating to the quarterly cash distribution with respect to such Quarter. The Series A Conversion Rate, as redetermined, shall be equal to the Series A Issue
Price divided by the product of (x) the book value per Common Unit at the end of the immediately preceding Quarter (pro-forma for per unit cash distributions payable with respect to such Quarter) multiplied by (y) the quotient of
(i) the Series A Issue Price divided by (ii) the book value per Common Unit on the Initial Series A Issuance Date. 

(2) If during a Quarter the Partnership declares an extraordinary or special cash distribution, the Series A Conversion Rate
will be further adjusted to reflect the extraordinary or special cash distribution as if it had occurred immediately prior to the end of the immediately preceding Quarter. Such further adjustment shall become effective at 11:59 p.m. prevailing
Eastern Time on the ex-dividend date relating to such extraordinary or special cash distribution. 
 (3) In the event, and
at the time of, a purchase or issuance by the Partnership of Common Units after the Initial Series A Issuance Date, the Series A Conversion Rate will be further adjusted to reflect such purchase or issuance of Common Units as if it had been effected
at a price equal to the book value per Common Unit on the last day of the immediately preceding Quarter. The adjustment referred to in this Section

  
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5.11(c)(vii)(F), as so calculated, shall be included in the redetermination of the Series A Conversion Rate in Quarters subsequent to the Quarter in which the repurchase or issuance
occurs. For the avoidance of doubt, the intended effect of the adjustment to the Series A Conversation Rate provided in this Section 5.11(c)(vii)(F) is reflected in the example computations set forth in Exhibit C to this
Agreement. 
 (4) In the event a change in accounting principles occurs that impacts the computation of book value per
Common Unit, there shall be an adjustment to the calculation of the Series A Conversion Rate so that the Series A Conversion Rate immediately preceding such change in accounting principles is identical to the Series A Conversion Rate immediately
following such change in accounting principles. The adjustment referred to in this Section 5.11(c)(vii)(F), as so calculated, shall be included in the redetermination of the Series A Conversion Rate in Quarters from and including the
Quarter in which the change in accounting principles occurs. 
 (5) Distributions of property or securities of the
Partnership for which no other adjustment to the Series A Conversion Rate is provided in this Agreement shall be treated as if cash was distributed by the Partnership in an amount equal to the market value of such property or securities at the time
of such distribution, such market value to be determined by the Board of Directors in good faith. 
 (viii)
Optional Redemption. Subject to clause (F) below, the Partnership shall have the right at any time and from time to time, during the period beginning on or after the second anniversary and ending on the tenth
anniversary of the Initial Series A Issuance Date, to redeem the Series A Preferred Units, in whole or in part, from any source of funds legally available for such purpose. Any such redemption shall occur on a date set by the Partnership (the
“Series A Redemption Date”). 
 (A) The Partnership shall effect any such redemption by
paying cash for each Series A Preferred Unit to be redeemed equal to the then applicable Series A Redemption Price on such Series A Redemption Date. So long as the Series A Preferred Units are held of record by the nominee of the Depository, the
Series A Redemption Price shall be paid by the Paying Agent to the Depository on the Series A Redemption Date. 

(B) The Partnership shall give notice of any redemption by mail, postage prepaid, not less than 30 days and not
more than 60 days before the scheduled Series A Redemption Date, to the Series A Preferred Holders (as of 5:00 p.m. New York City time on the Business Day next preceding the day on which notice is given) of any Series A Preferred Units to be
redeemed as such Series A Preferred Holders’ names appear on the books of the Transfer Agent and at the address of such Series A Preferred Holders shown therein. Such notice (the “Series A Redemption Notice”) shall
state: (1) the Series A Redemption Date, (2)  

  
 45 

 
the number of Series A Preferred Units to be redeemed and, if less than all Outstanding Series A Preferred Units are to be redeemed, the number (and the identification) of Units to be redeemed
from such Series A Preferred Holder, (3) the Series A Redemption Price, (4) the place where the Series A Preferred Units are to be redeemed and shall be presented and surrendered for payment of the Series A Redemption Price therefor and
(5) that distributions on the Units to be redeemed shall cease to accumulate from and after such Series A Redemption Date. 

(C) If the Partnership elects to redeem less than all of the Outstanding Series A Preferred Units, the number of Series A
Preferred Units to be redeemed shall be determined by the Board of Directors, and such Series A Preferred Units shall be redeemed by such method of selection as the Depository shall determine either Pro Rata or by lot, with adjustments to avoid
redemption of fractional Series A Preferred Units. The Series A Preferred Units not redeemed shall remain Outstanding and entitled to all the rights and preferences provided in this Section 5.11. 

(D) If the Partnership gives or causes to be given a Series A Redemption Notice, the Partnership shall deposit with the Paying
Agent funds, sufficient to redeem the Series A Preferred Units as to which such Series A Redemption Notice shall have been given, no later than 5:00 p.m. New York City time on the Business Day immediately preceding the Series A Redemption Date, and
shall give the Paying Agent irrevocable instructions and authority to pay the Series A Redemption Price to the Series A Preferred Holders to be redeemed upon surrender or deemed surrender (which shall occur automatically if the certificate
representing such Series A Preferred Units is issued in the name of the Depository or its nominee) of the Certificates therefor as set forth in the Series A Redemption Notice. If the Series A Redemption Notice shall have been given, from and after
the Series A Redemption Date, unless the Partnership defaults in providing funds sufficient for such redemption at the time and place specified for payment pursuant to the Series A Redemption Notice, all Series A Distributions on such Series A
Preferred Units to be redeemed shall cease to accumulate and all rights of holders of such Series A Preferred Units as Limited Partners with respect to such Series A Preferred Units shall cease, except the right to receive the Series A Redemption
Price, and such Series A Preferred Units shall not thereafter be transferred on the books of the Transfer Agent or be deemed to be Outstanding for any purpose whatsoever. The Partnership shall be entitled to receive from the Paying Agent the
interest income, if any, earned on such funds deposited with the Paying Agent (to the extent that such interest income is not required to pay the Series A Redemption Price of the Series A Preferred Units to be redeemed), and the holders of any
Series A Preferred Units so redeemed shall have no claim to any such interest income. Any funds deposited with the Paying Agent hereunder by the Partnership for any reason, including redemption of Series A Preferred Units, that remain unclaimed or
unpaid after two years after the applicable Series A Redemption Date or other payment date, shall be, to the extent permitted by law, repaid to the Partnership upon its written request, after which repayment the

  
 46 

 
Series A Preferred Holders entitled to such redemption or other payment shall have recourse only to the Partnership. Notwithstanding any Series A Redemption Notice, there shall be no redemption
of any Series A Preferred Units called for redemption until funds sufficient to pay the full Series A Redemption Price of such Series A Preferred Units shall have been deposited by the Partnership with the Paying Agent. 

(E) Any Series A Preferred Units that are redeemed or otherwise acquired by the Partnership shall be canceled and shall not be
considered outstanding. If only a portion of the Series A Preferred Units represented by a Certificate shall have been called for redemption, upon surrender of the Certificate to the Paying Agent (which shall occur automatically if the Certificate
representing such Series A Preferred Units is registered in the name of the Depository or its nominee), the Paying Agent shall issue to the Series A Preferred Holders a new Certificate (or adjust the applicable book-entry account) representing the
number of Series A Preferred Units represented by the surrendered Certificate that have not been called for redemption. 

(F) Upon receipt of a Series A Redemption Notice, a Holder of Series A Preferred Units may elect, instead, to convert such
Series A Preferred Units that are the subject of the Series A Redemption Notice into a number of Common Units determined by multiplying the number of Series A Preferred Units to be converted by the Series A Conversion Rate. 

(ix) Redemption at Series A Preferred Holders’ Option. The Series A Preferred Holders shall have the right
to cause the Partnership to redeem the Series A Preferred Units, in full or in part, solely on the date that is the tenth anniversary of the Initial Series A Issuance Date. Any Series A Preferred Holders exercising its right pursuant to this
Section 5.11(c)(ix) must provide notice to the Partnership by mail not less than 30 days and not more than 60 days before the tenth anniversary of the Initial Series A Issuance Date, setting forth its desire to exercise its optional
redemption right pursuant to this Section 5.11(c)(ix) and the number of Series A Preferred Units that it wishes to redeem. The Partnership shall, at its option, redeem the Series A Preferred Units pursuant to this paragraph (i) in
cash at a price equal to 70% of the Series A Issue Price, plus any accrued and unpaid distributions in respect of such Series A Preferred Units, or (ii) in Common Units such that each Series A Preferred Unit receives Common Units worth 80% of
the Series A Issue Price, plus any accrued and unpaid distributions thereon. The value of the Common Units to be delivered pursuant to clause (ii) of the preceding sentence shall be determined based on the VWAP of the Common Units for the
thirty (30) Trading Day period ending on the fifth Trading Day immediately prior to the redemption date.  

  
 47 

 (x) Redemption Upon a Series A Change of
Control. 
 (A) Promptly upon entry into definitive agreements or the existence of other definitive
documentation that provide for a Series A Change of Control, if the Partnership has not issued a press release or other widely disseminated public statement regarding the entry into such definitive agreements, the Partnership shall provide written
notice thereof to the Series A Preferred Unitholders. If a Series A Change of Control occurs, then each Series A Preferred Unitholder, with respect to all but not less than all of its Series A Preferred Units, by notice given to the Partnership
within ten (10) Business Days of the date the Partnership provides written notice of the execution of definitive agreements that provide for such Series A Change of Control, shall be entitled to require the Partnership to redeem their Series A
Preferred Units for a cash amount equal to 100% of the Series A Issue Price, plus accrued and unpaid distributions if any, on such Series A Preferred Units. 

(B) For the avoidance of doubt, the approval of the Series A Preferred Unitholders shall not be required in connection with a
Series A Change of Control or Partnership Restructuring Event; however, Series A Preferred Unitholders shall be entitled to vote on a one-for-one as-converted basis if there is a vote of holders of the Common Units in connection with either
circumstance. 
 (xi) Series A Preferred Unit Transfer Restrictions. 

(A) Notwithstanding any other provision of this Section 5.11(c)(xi), each Series A Purchaser shall be permitted at
any time after the Series A Issuance Date to transfer any Series A Preferred Units owned by such Series A Purchaser to any of its Affiliates or to any other Series A Purchaser. 

(B) Without the prior written consent of the Partnership, except as specifically provided in this Agreement, each Series A
Preferred Unitholder shall not, (a) during the period commencing on the Initial Series A Issuance Date and ending on the second anniversary of the Initial Series A Issuance Date, offer, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any of its Series A Preferred Units, (b) during the period commencing on the
Initial Series A Issuance Date and ending on the second anniversary of the Initial Series A Issuance Date, directly or indirectly engage in any short sales or other derivative or hedging transactions with respect to the Series A Preferred Units,
Common Units of the Partnership that are designed to, or that might reasonably be expected to, result in the transfer to another, in whole or in part, any of the economic consequences of ownership of any Series A Preferred Units, (c) transfer
any Series A Preferred Units to any non-U.S. resident individual, non-U.S. corporation or partnership, or any other non-U.S. entity, including any foreign governmental entity, including by means of any swap or other transaction or arrangement that
transfers or that is designed to, or that might reasonably be expected to, result in the transfer to another, in whole or in part, any of the economic consequences of ownership of any Series A Preferred Units, regardless of whether any transaction
described in clauses (a) through (c) above is to be settled by delivery of Series A Preferred Units, Common Units or other securities, in cash or otherwise, or (d) effect any transfer of Series A Preferred Units or Series A Conversion
Units in a manner that violates the terms 

  
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of this Agreement; provided, however, that such Series A Preferred Unitholder may (i) pledge all or any portion of its Series A Preferred Units to any holders of obligations owed by the
Series A Preferred Unitholders, including to the trustee for, or representative of, such holders, (ii) transfer all or a portion of its Series A Preferred Units at any time when the Common Units are no longer listed or admitted to trading on a
National Securities Exchange and (iii) transfer all or a portion of its Series A Preferred Units at any time when an event of default has occurred and is continuing under any indebtedness of the Partnership or its Subsidiaries in an outstanding
principal amount, individually or in the aggregate, of at least $10,000,000. Notwithstanding the foregoing, any transferee receiving any Series A Preferred Units pursuant to this Section 5.11(c)(xi)(B) shall agree to the restrictions set
forth in this Section 5.11(c)(xi)(B). 
 (C) Following the second anniversary of the Initial Series A Issuance
Date, each Series A Preferred Unitholder or their permitted transferees may freely transfer Series A Preferred Units involving an underlying value of Common Units of at least $12,500,000 based on the Closing Price of Common Units on the Trading Day
immediately preceding the date of such transfer (or such lesser amount if it (i) constitutes the remaining holdings of such Series A Preferred Unitholder or (ii) has been approved by the Partnership, in its sole discretion), subject to
compliance with applicable securities laws and this Agreement. 
 (xii) Fully Paid and Non-assessable. Any
Series A Conversion Unit(s) delivered pursuant to Section 5.11(c)(vii) shall be validly issued, fully paid and non-assessable (except as such non-assessability may be affected by the Marshall Islands Act), free and clear of any liens,
claims, rights or encumbrances other than those arising under the Marshall Islands Act or this Agreement or created by the holders thereof. 

(xiii) Partnership Restructuring Event. Subject to Section 5.11(c)(viii), if (A) a Partnership
Restructuring Event occurs or the Partnership engages in any other recapitalization, reorganization, consolidation, merger, spin-off or other business combination (other than a Series A Change of Control) and (B) (1) the Partnership will
not be the surviving entity of such Partnership Restructuring Event or other event or (2) the Partnership will be the surviving entity but its Common Units will cease to be listed or admitted to trading on a National Securities Exchange, the
Partnership shall deliver or cause to be delivered to the Series A Preferred Unitholders, in exchange for their Series A Preferred Units upon consummation of such Partnership Restructuring Event or other event, a security in the surviving entity
that has substantially similar rights, preferences and privileges as the Series A Preferred Units, including, for the avoidance of doubt, the right to distributions equal in amount, timing and priority to those provided in
Section 5.11(c)(i) and a conversion rate proportionately adjusted such that the conversion of such security in the surviving entity immediately following the Partnership Restructuring Event or such other event would entitle the holder to
the number of common securities of such surviving entity (together with a number of common securities of equivalent value to any other assets received by Common Unitholders in such Partnership Restructuring Event or such other event) which, if a
Series A Preferred Unit had been converted into Common Units immediately prior to such Partnership Restructuring Event or such other  

  
 49 

 
event, such Record Holder would have been entitled to receive immediately following such Partnership Restructuring Event or such other event. Notwithstanding anything to the contrary in this
Section 5.11(c)(xiii), if a Partnership Restructuring Event occurs prior to the second anniversary of the Initial Series A Issuance Date, the Partnership shall have the right to redeem the Series A Preferred Units, in whole or in part, for a
cash amount equal to 130.0% of the Series A Issue Price, plus accrued and unpaid distributions, if any, on the Series A Preferred Units redeemed to the applicable Series A Redemption Date. 

(xiv) Notices. For the avoidance of doubt, the Partnership shall distribute to the Record Holders of Series A Preferred Units
copies of all notices, materials, annual and quarterly reports, proxy statements, information statements and any other documents distributed generally to the Record Holders of Common Units of the Partnership, at such times and by such method as such
documents are distributed to such Record Holders of such Common Units. 
 ARTICLE VI 

DISTRIBUTIONS 
 Section
6.1 [Reserved] 
 Section 6.2 Requirement and Characterization of Distributions; Distributions to Record Holders. 

(a) Subject to Section 5.11(c)(i), within 45 days following the end of each Quarter, an amount equal to 100% of Available Cash with
respect to such Quarter shall, subject to Section 51 of the Marshall Islands Act, be distributed in accordance with this Article VI by the Partnership to the Partners as of the Record Date selected by the Board of Directors. All amounts
of Available Cash distributed by the Partnership on any date following the Closing Date from any source shall be deemed to be Operating Surplus until the sum of all amounts of Available Cash theretofore distributed by the Partnership to the Partners
following the Closing Date pursuant to Section 6.3 equals the Operating Surplus from the Closing Date through the close of the immediately preceding Quarter. Any remaining amounts of Available Cash distributed by the Partnership on such
date shall, except as otherwise provided in Section 6.4, be deemed to be “Capital Surplus.” Notwithstanding any provision to the contrary contained in this Agreement, the Partnership shall not make a distribution
to any Partner on account of its interest in the Partnership if such distribution would violate the Marshall Islands Act or any other applicable law. This Section 6.2(a) shall not apply to Series A Preferred Units. 

(b) Notwithstanding the first three sentences of Section 6.2(a), in the event of the dissolution and liquidation of the
Partnership, all receipts received during or after the Quarter in which the Liquidation Date occurs, other than from borrowings described in clause (a)(ii) of the definition of Available Cash, shall be applied and distributed solely in
accordance with, and subject to the terms and conditions of, Section 12.4. 

  
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 (c) Each distribution in respect of a Partnership Interest shall be paid by the Partnership,
directly or through the Transfer Agent or through any other Person or agent, only to the Record Holder of such Partnership Interest as of the Record Date set for such distribution. Such payment shall constitute full payment and satisfaction of the
Partnership’s liability in respect of such payment, regardless of any claim of any Person who may have an interest in such payment by reason of an assignment or otherwise. 

Section 6.3 Distributions of Available Cash from Operating Surplus. Available Cash with respect to any Quarter that is deemed to be
Operating Surplus pursuant to the provisions of Sections 6.2 or 6.4 shall, subject to Section 51 of the Marshall Islands Act, be distributed as follows, except as otherwise contemplated by Section 5.4 in respect of
other Partnership Interests issued pursuant thereto: 
 (a) First, 100% to the General Partner and the Unitholders Pro Rata,
until there has been distributed in respect of each Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter 

(b) Second, 100% to the General Partner and the Unitholders Pro Rata, until there has been distributed in respect of each Unit
then Outstanding an amount equal to the excess of the First Target Distribution over the Minimum Quarterly Distribution for such Quarter; 

(c) Third, (i) to the General Partner in accordance with its Percentage Interest; (ii) 13% to the holders of the Incentive
Distribution Rights, Pro Rata; and (iii) to all Unitholders, Pro Rata, a percentage equal to 100% less the sum of the percentages applicable to subclauses (i) and (ii) of this clause (c), until there has been
distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution over the First Target Distribution for such Quarter; 

(d) Fourth, (i) to the General Partner in accordance with its Percentage Interest; (ii) 23% to the holders of the Incentive
Distribution Rights, Pro Rata; and (iii) to all Unitholders, Pro Rata, a percentage equal to 100% less the sum of the percentages applicable to subclause (i) and (ii) of this clause (d), until there has been
distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution over the Second Target Distribution for such Quarter; and 

(e) Thereafter, (i) to the General Partner in accordance with its Percentage Interest; (ii) 48% to the holders of the
Incentive Distribution Rights, Pro Rata; and (iii) to all Unitholders, Pro Rata, a percentage equal to 100% less the sum of the percentages applicable to subclauses (i) and (ii) of this clause (e); 

provided, however, that if the Minimum Quarterly Distribution, the First Target Distribution, the Second Target Distribution and the Third Target
Distribution have been reduced to zero pursuant to the second sentence of Section 6.5, the distribution of Available Cash that is deemed to be Operating Surplus with respect to any Quarter will be made solely in accordance with
Section 6.3(e). No distributions shall be made with respect to Series A Preferred Units pursuant to this Section 6.3. 

  
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 Section 6.4 Distributions of Available Cash from Capital Surplus. Available Cash that is
deemed to be Capital Surplus pursuant to the provisions of Section 6.2(a) shall, subject to Section 51 of the Marshall Islands Act and subject to the provisions in respect of Series A Preferred Units, be distributed, unless the
provisions of Section 6.2 require otherwise, 100% to the General Partner and the Unitholders (other than Series A Preferred Unitholders) Pro Rata, until the Minimum Quarterly Distribution is reduced to zero pursuant to the second
sentence of Section 6.5. Thereafter, and subject to Section 5.11(c)(i), all Available Cash shall be distributed as if it were Operating Surplus and shall be distributed in accordance with Section 6.3. 

Section 6.5 Adjustment of Minimum Quarterly Distribution and Target Distribution Levels. The Minimum Quarterly Distribution, First
Target Distribution, Second Target Distribution and Third Target Distribution shall be proportionately adjusted in the event of any distribution, combination or subdivision (whether effected by a distribution payable in Units or otherwise) of Units
or other Partnership Interests in accordance with Section 5.8. In the event of a distribution of Available Cash that is deemed to be from Capital Surplus, the then applicable Minimum Quarterly Distribution, First Target Distribution,
Second Target Distribution and Third Target Distribution, shall be reduced in the same proportion that the distribution had to the fair market value of the Common Units prior to the announcement of the distribution. If the Common Units are publicly
traded on a National Securities Exchange, the fair market value will be the Current Market Price before the announcement of the distribution. If the Common Units are not publicly traded, the fair market value will be determined by the Board of
Directors. 
 Section 6.6 [Reserved]. 

Section 6.7 Special Provisions Relating to the Holders of Incentive Distribution Rights. Notwithstanding anything to the contrary set
forth in this Agreement, the holders of the Incentive Distribution Rights (a) shall possess the rights and obligations provided in this Agreement with respect to a Limited Partner pursuant to Articles III and VII and
(b) shall not (i) be entitled to vote on any matters requiring the approval or vote of the holders of Outstanding Units, except as provided by law, or (ii) be entitled to any distributions other than as provided in Sections
6.3(c), 6.3(d), 6.3(e), and 12.4. 
 ARTICLE VII 

MANAGEMENT AND OPERATION OF BUSINESS 

Section 7.1 Management. 

(a) Except as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Partnership shall be
vested exclusively in the Board of Directors and, subject to the direction of the Board of Directors and in accordance with the provisions of Section 7.8, the Officers. No Limited Partner shall have any management power or control over
the business and affairs of the Partnership. Thus, except as expressly provided in this Agreement, the business and affairs of the Partnership shall be managed by or under the direction of the Board of Directors, and the day-to-day activities of the Partnership shall be conducted on the Partnership’s behalf by the Officers. In order to enable the Board of Directors to manage the business
and affairs of the Partnership, the General Partner, except as otherwise expressly provided in this Agreement, hereby irrevocably delegates to the Board of Directors all management powers over the business and affairs of the Partnership that it may
now or hereafter possess under applicable law. The General Partner further agrees to take any and all action 

  
 52 

 
necessary and appropriate, in the sole discretion of the Board of Directors, to effect any duly authorized actions by the Board of Directors, including executing or filing any agreements,
instruments or certificates, delivering all documents, providing all information and taking or refraining from taking action as may be necessary or appropriate to achieve the effective delegation of power described in this
Section 7.1(a). Each of the Partners and each Person who may acquire an interest in a Partnership Interest hereby approves, consents to, ratifies and confirms such delegation. The delegation by the General Partner to the Board of
Directors of management powers over the business and affairs of the Partnership pursuant to the provisions of this Agreement shall not cause the General Partner to cease to be a general partner of the Partnership nor shall it cause the Board of
Directors or any member thereof to be a general partner of the Partnership or to have or be subject to the liabilities of a general partner of the Partnership. 

(b) Notwithstanding any other provision of this Agreement, any Group Member Agreement, the Marshall Islands Act or any applicable law, rule or
regulation, each of the Partners and each other Person who may acquire an interest in Partnership Interests hereby (i) approves, consents to, ratifies and confirms the General Partner’s delegation of management powers to the Board of
Directors pursuant to paragraph (a) of this Section 7.1; (ii) approves, ratifies and confirms the execution, delivery and performance by the parties thereto of this Agreement, the Underwriting Agreement, the Omnibus
Agreement, the Contribution Agreement, any Group Member Agreement of any other Group Member and the other agreements described in or filed as exhibits to the Registration Statement that are related to the transactions contemplated by the
Registration Statement; (iii) agrees that the General Partner (on behalf of the Partnership) is authorized to execute, deliver and perform the agreements referred to in clause (ii) of this sentence and the other agreements, acts,
transactions and matters described in or contemplated by the Underwriting Agreement or described in or filed as exhibits to the Registration Statement, in each case, on behalf of the Partnership without any further act, approval or vote of the
Partners or the other Persons who may acquire an interest in Partnership Interests; and (iv) agrees that the execution, delivery or performance by the Board of Directors, the General Partner, any Group Member or any Affiliate of any of them of
this Agreement or any agreement authorized or permitted under this Agreement (including the exercise by the General Partner or any Affiliate of the General Partner of the rights accorded pursuant to Article XV) shall not constitute a breach
by the Board of Directors or the General Partner of any duty that the Board of Directors or the General Partner may owe the Partnership or the Limited Partners or any other Persons under this Agreement (or any other agreements) or of any duty stated
or implied by law or equity. 
 Section 7.2 The Board of Directors; Election and Appointment; Term; Manner of Acting. 

(a) The Board of Directors shall consist of seven individuals, three of whom shall be Appointed Directors and four of whom shall be Elected
Directors. The Elected Directors shall be divided into four classes: Class I, comprising one Elected Director, Class II, comprising one Elected Director, Class III, comprising one Elected Director and Class IV, comprising one Elected Director. Any
vacancy among the Appointed Directors shall be filled as if an Appointed Director had resigned, in accordance with Section 7.6. The successors of the members of the Board of Directors shall be appointed or elected, as the case may be, as
follows: 

  
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 (i) Subject to Section 5.11(c)(iv)(D), each Appointed Director shall
be appointed by the General Partner and shall hold office until his successor is duly appointed by the General Partner and qualified or until his earlier death, resignation or removal; and 

(ii) The Class IV Elected Director shall next be elected at the 2017 Annual Meeting for a four-year term expiring on the date
of the fourth succeeding Annual Meeting, the Class I Elected Director shall be elected at the 2018 Annual Meeting for a four-year term expiring on the fourth succeeding Annual Meeting, the Class II Elected Director shall be elected at the 2019
Annual Meeting for a four-year term expiring on the fourth succeeding Annual Meeting and the Class III Director shall be elected at the 2020 Annual Meeting for a four-year term expiring on the fourth
succeeding Annual Meeting, in each case by a plurality of the votes of the Outstanding Common Units present in person or represented by proxy at the Annual Meeting with each Outstanding Common Unit having one vote. 

(b) Each member of the Board of Directors appointed or elected, as the case may be, at an Annual Meeting shall hold office until the fourth
succeeding Annual Meeting and until his successor is duly elected or appointed, as the case may be, and qualified, or until his earlier death, resignation or removal. 

(c) Each member of the Board of Directors shall have one vote. The vote of the majority of the members of the Board of Directors present at a
meeting at which a quorum is present shall be the act of the Board of Directors. A majority of the number of members of the Board of Directors then in office shall constitute a quorum for the transaction of business at any meeting of the Board of
Directors, but if less than a quorum is present at a meeting, a majority of the members of the Board of Directors present at such meeting may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a
quorum shall be present. 
 Section 7.3 Nominations of Elected Directors. The Board of Directors shall be entitled to nominate
individuals to stand for election as Elected Directors at an Annual Meeting. In addition, any Limited Partner or Group of Limited Partners that beneficially owns 10% or more of the Outstanding Common Units shall be entitled to nominate one or more
individuals to stand for election as Elected Directors at an Annual Meeting by providing written notice thereof to the Board of Directors not more than 120 days and not less than 90 days prior to the date of such Annual Meeting; provided,
however, that in the event that the date of the Annual Meeting was not publicly announced by the Partnership by mail, press release or otherwise more than 100 days prior to the date of such meeting, such notice, to be timely, must be delivered
to the Board of Directors not later than the close of business on the 10th day following the date on which the date of the Annual Meeting was announced. Such notice shall set forth (a) the
name and address of the Limited Partner or Limited Partners making the nomination or nominations, (b) the number of Common Units beneficially owned by such Limited Partner or Limited Partners, (c) such information regarding the nominee(s)
proposed by the Limited Partner or Limited Partners as would be required to be included in a proxy statement relating to the solicitation of proxies for the election of directors filed pursuant to the proxy rules of the Commission had the nominee(s)
been nominated or intended to be nominated to the Board of Directors, (d) the written consent of each nominee to serve as a member of the Board of Directors if so elected and (e) a certification that such nominee(s) qualify as Elected
Directors. 

  
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 Section 7.4 Removal of Members of Board of Directors. Members of the Board of Directors
may only be removed as follows: 
 (a) Except as provided in Section 5.11(c)(iv)(D), an Appointed Director may be removed at any time,
(i) without Cause, only by the General Partner and, (ii) with Cause, by (x) the General Partner, (y) by the affirmative vote of the holders of a majority of the Outstanding Units at a properly called meeting of the Limited
Partners or (z) by the affirmative vote of a majority of the other members of the Board of Directors. 
 (b) Any Elected Director may be
removed at any time, with Cause, only by the affirmative vote of a majority of the other members of the Board of Directors or at a properly called meeting of the Limited Partners only by the affirmative vote of the holders of a majority of the
Outstanding Common Units. 
 Section 7.5 Resignations of Members of the Board of Directors. Any member of the Board of Directors may
resign at any time by giving written notice to the Board of Directors. Such resignation shall take effect at the time specified therein. 

Section 7.6 Vacancies on the Board of Directors. Vacancies on the Board of Directors may be filled only as follows: 

(a) Except as provided in Section 5.11(c)(iv)(D), if any Appointed Director is removed, resigns or is otherwise unable to serve as
a member of the Board of Directors, the General Partner shall, in its individual capacity, appoint an individual to fill the vacancy. 
 (b)
If any Elected Director is removed, resigns or is unable to serve as a member of the Board of Directors, the vacancy shall be filled by a majority of the Elected Directors then serving. 

(c) A director appointed or elected pursuant to this Section 7.6 to fill a vacancy shall be appointed or elected, as the case may
be, for no more than the unexpired term of his predecessor in office. 
 Section 7.7 Meetings; Committees; Chairman. 

(a) Regular meetings of the Board of Directors shall be held at such times and places as shall be designated from time to time by resolution of
the Board of Directors. Notice of such regular meetings shall not be required. Special meetings of the Board of Directors may be called by the Chairman of the Board of Directors and shall be called by the Secretary upon the written request of two
members of the Board of Directors, on at least 48 hours prior written notice to the other members. Any such notice, or waiver thereof, need not state the purpose of such meeting except as may otherwise be required by law. Attendance of a member of
the Board of Directors at a meeting (including pursuant to the penultimate sentence of this Section 7.7(a)) shall constitute a waiver of notice of such meeting, except where such member attends the meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting 

  
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is not lawfully called or convened. Any action required or permitted to be taken at a meeting of the Board of Directors may be taken without a meeting, without prior notice and without a vote if
a consent or consents in writing, setting forth the action so taken, is signed by all the members of the Board of Directors. Members of the Board of Directors may participate in and hold meetings by means of conference telephone, videoconference or
similar communications equipment by means of which all Persons participating in the meeting can hear each other, and participation in such meetings shall constitute presence in person at the meeting. The Board of Directors may establish any
additional rules governing the conduct of its meetings that are not inconsistent with the provisions of this Agreement. 
 (b) The Board of
Directors shall appoint the members of the Audit Committee and the Conflicts Committee. The Audit Committee and the Conflicts Committee shall, in each case, perform the functions delegated to it pursuant to the terms of this Agreement and such other
matters as may be delegated to it from time to time by resolution of the Board of Directors. The Board of Directors, by a majority of the whole Board of Directors, may appoint one or more additional committees of the Board of Directors to consist of
one or more members of the Board of Directors, which committee(s) shall have and may exercise such of the powers and authority of the Board of Directors (including in respect of Section 7.1) with respect to the management of the business
and affairs of the Partnership as may be provided in a resolution of the Board of Directors. Any committee designated pursuant to this Section 7.7(b) shall choose its own chairman, shall keep regular minutes of its proceedings and report
the same to the Board of Directors when requested, shall fix its own rules or procedures and shall meet at such times and at such place or places as may be provided by such rules or by resolution of such committee or resolution of the Board of
Directors. At every meeting of any such committee, the presence of a majority of all the members thereof shall constitute a quorum and the affirmative vote of a majority of the members present shall be necessary for the taking of any action. Any
action required or permitted to be taken at a meeting of a committee of the Board of Directors may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, is signed
by all the members of the committee of the Board of Directors. Subject to the first sentence of this Section 7.7(b), the Board of Directors may designate one or more members of the Board of Directors as alternate members of any committee
who may replace any absent or disqualified member at any meeting of such committee. Subject to the first sentence of this Section 7.7(b), in the absence or disqualification of a member of a committee, the member or members present at any
meeting and not disqualified from voting, whether or not constituting a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member. 

(c) The Appointed Directors may designate one of the members of the Board of Directors as Chairman of the Board of Directors. The Chairman of
the Board of Directors, if any, and if present and acting, shall preside at all meetings of the Board of Directors. In the absence of the Chairman of the Board of Directors, another member of the Board of Directors chosen by the Appointed Directors
shall preside. If, at any time, the Board of Directors consists solely of Elected Directors, the Board of Directors may designate one of its members as Chairman of the Board of Directors and shall, in the absence of the Chairman of the Board of
Directors at a meeting of the Board of Directors, designate another member of the Board of Directors to preside at the meeting. 

  
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 Section 7.8 Officers. 

(a) The Board of Directors, as set forth below, shall appoint or designate agents of the Partnership, referred to as
“Officers” of the Partnership as described in this Section 7.8. Such Officers may be employed by any Group Member directly or may be employed by one or more third parties, including KNOT and its Affiliates, and
designated by the Board of Directors to perform officer functions for the benefit of the Partnership. 
 (b) The Board of Directors shall
appoint or designate such Officers and agents as may from time to time appear to be necessary or advisable in the conduct of the affairs of the Partnership, who shall hold such titles, exercise such powers and authority and perform such duties as
shall be determined from time to time by resolution of the Board of Directors. The Officers may include a Chairman of the Board of Directors, an Executive Vice Chairman or Vice Chairman of the Board of Directors, a Chief Executive Officer, a
President, a Chief Financial Officer, any and all Vice Presidents, a Secretary, any and all Assistant Secretaries, a Treasurer, any and all Assistant Treasurers and any other Officers appointed or designated by the Board of Directors pursuant to
this Section 7.8. Any person may hold two or more offices. 
 (c) The Officers, including any Officer employed by a third party
and designated by the Board of Directors to perform officer services for the benefit of the Partnership, shall be appointed by the Board of Directors at such time and for such terms as the Board of Directors shall determine. Any Officer may be
removed, with or without Cause, only by the Board of Directors. Vacancies in any office may be filled only by the Board of Directors. 
 (d)
The Board of Directors may grant powers of attorney or other authority as appropriate to establish and evidence the authority of the Officers and other Persons. 

(e) Unless otherwise provided by resolution of the Board of Directors, no Officer shall have the power or authority to delegate to any Person
such Officer’s rights and powers as an Officer to manage the business and affairs of the Partnership. 
 Section 7.9 Compensation of
Directors. The members of the Board of Directors who are not employees of the Partnership, the General Partner or its Affiliates shall receive such compensation for their services as members of the Board of Directors or members of a committee of
the Board of Directors shall determine. In addition, the members of the Board of Directors shall be entitled to be reimbursed for out-of-pocket costs and expenses
incurred in the course of their service hereunder. 
 Section 7.10 Certificate of Limited Partnership. The General Partner caused the
Certificate of Limited Partnership to be filed with the Registrar of Corporations of The Marshall Islands as required by the Marshall Islands Act. The General Partner shall use all commercially reasonable efforts to cause to be filed such other
certificates or documents that the Board of Directors determines to be necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership or other entity in which the limited partners
have limited liability) in The Marshall Islands or any other jurisdiction in which the Partnership may elect to do business or own property. To the extent the Board of Directors determines such action to be necessary or appropriate, the General
Partner shall file or cause to 

  
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be filed amendments to and restatements of the Certificate of Limited Partnership and do all things to maintain the Partnership as a limited partnership (or a partnership or other entity in which
the limited partners have limited liability) under the laws of The Marshall Islands or of any other jurisdiction in which the Partnership may elect to do business or own property. Subject to the terms of Section 3.4(a), the General
Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Limited Partnership, any qualification document or any amendment thereto to any Limited Partner. 

Section 7.11 Restrictions on the Authority of the Board of Directors and the General Partner. 

(a) Except as otherwise provided in this Agreement, neither the Board of Directors nor the General Partner may, without written approval of the
specific act by holders of all of the Outstanding Limited Partner Interests or by other written instrument executed and delivered by holders of all of the Outstanding Limited Partner Interests subsequent to the date of this Agreement, take any
action in contravention of this Agreement. 
 (b) Except as provided in Articles XII and XIV, the Board of Directors may not
sell, exchange or otherwise dispose of all or substantially all of the assets of the Partnership Group, taken as a whole, in a single transaction or a series of related transactions (including by way of merger, consolidation, other combination or
sale of ownership interests in the Partnership’s Subsidiaries) without the approval of holders of a Unit Majority and the General Partner; provided, however, that this provision shall not preclude or limit the ability of the Board of
Directors to mortgage, pledge, hypothecate or grant a security interest in all or substantially all of the assets of the Partnership Group and shall not apply to any forced sale of any or all of the assets of the Partnership Group pursuant to the
foreclosure of, or other realization upon, any such encumbrance. The transfer of the General Partner Interest to and the election of a successor general partner of the Partnership shall be made in accordance with Sections 4.6, 11.1 and
11.2. 
 Section 7.12 Reimbursement of the General Partner. 

(a) Except as provided in this Section 7.12 and elsewhere in this Agreement, the General Partner shall not be compensated for its
services as a general partner or managing member of any Group Member. 
 (b) The General Partner shall be reimbursed on a monthly basis, or
such other basis as the Board of Directors may determine, for any direct and indirect expenses it incurs that are allocable to the Partnership Group or payments it makes on behalf of the Partnership Group (including salary, bonus, incentive
compensation and other amounts paid to any Person, including Affiliates of the General Partner, to perform services for the Partnership Group or for the General Partner in the discharge of its duties to the Partnership Group, which amounts shall
also include reimbursement for any Common Units purchased to satisfy obligations of the Partnership under any of its equity compensation plans). The Board of Directors shall determine the expenses that are allocable to the Partnership Group.
Reimbursements pursuant to this Section 7.12 shall be in addition to any reimbursement to the General Partner as a result of indemnification pursuant to Section 7.15. 

  
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 (c) Subject to the applicable rules and regulations of the National Securities Exchange on which
the Common Units are listed, the Board of Directors, without the approval of the Partners (who shall have no right to vote in respect thereof), may propose and adopt on behalf of the Partnership employee benefit plans, employee programs and employee
practices (including plans, programs and practices involving the issuance of Partnership Interests or options to purchase or rights, warrants or appreciation rights or phantom or tracking interests relating to Partnership Interests), or cause the
Partnership to issue Partnership Interests in connection with, or pursuant to, any employee benefit plan, employee program or employee practice maintained or sponsored by the Partnership, the General Partner or any of its Affiliates, in each case
for the benefit of employees and directors of the Partnership, the General Partner, any Group Member or any Affiliate thereof, or any of them, in respect of services performed, directly or indirectly, for the benefit of the Partnership Group. The
Partnership agrees to issue and sell to the General Partner or any of its Affiliates any Partnership Interests that the General Partner or such Affiliates are obligated to provide to any employees and directors pursuant to any such employee benefit
plans, employee programs or employee practices. Expenses incurred by the General Partner in connection with any such plans, programs and practices (including the net cost to the General Partner or such Affiliates of Partnership Interests purchased
by the General Partner or such Affiliates from the Partnership or otherwise to fulfill options or awards under such plans, programs and practices) shall be reimbursed in accordance with Section 7.12(b). Any and all obligations of the
General Partner under any employee benefit plans, employee programs or employee practices adopted by the General Partner as permitted by this Section 7.12(c) shall constitute obligations of the General Partner hereunder and shall be
assumed by any successor General Partner approved pursuant to Sections 11.1 or 11.2 or the transferee of or successor to all of the General Partner’s General Partner Interest pursuant to Section 4.6. 

Section 7.13 Outside Activities. 

(a) The General Partner, for so long as it is the general partner of the Partnership (i) agrees that its sole business will be to act as a
general partner or managing member, as the case may be, of the Partnership and any other partnership or limited liability company of which the Partnership is, directly or indirectly, a partner or member and to undertake activities that are ancillary
or related thereto (including being a limited partner in the Partnership), (ii) shall not engage in any business or activity or incur any debts or liabilities except in connection with or incidental to (A) its performance as general
partner or managing member, if any, of one or more Group Members or as described in or contemplated by the Registration Statement or (B) the acquiring, owning or disposing of debt or equity securities in any Group Member and (iii) except
to the extent permitted in the Omnibus Agreement, shall not acquire or own any Five-Year Vessels (as such term is defined in the Omnibus Agreement). 

(b) KNOT, the Partnership, the General Partner and the Operating Company have entered into the Omnibus Agreement, which agreement sets forth
certain restrictions on the ability of KNOT and certain of its Affiliates to acquire or own any Five-Year Vessels (as such term is defined in the Omnibus Agreement). 

(c) Except as specifically restricted by Section 7.13(a) or the Omnibus Agreement, each Indemnitee (other than the General Partner)
shall have the right to engage in businesses of every type and description and other activities for profit and to engage in and possess an interest 

  
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in other business ventures of any and every type or description, whether in businesses engaged in or anticipated to be engaged in by any Group Member, independently or with others, including
business interests and activities in direct competition with the business and activities of any Group Member, and none of the same shall constitute a breach of this Agreement or any duty expressed or implied by law to any Group Member or any
Partner. Notwithstanding anything to the contrary in this Agreement, (i) the possessing of competitive interests and engaging in competitive activities by any Indemnitees (other than the General Partner) in accordance with the provisions of
this Section 7.13 is hereby approved by the Partnership and all Partners and (ii) it shall be deemed not to be a breach of any duty (including any fiduciary duty) or any other obligation of any type whatsoever of the General Partner
or of any Indemnitee for the Indemnitees (other than the General Partner) to engage in such business interests and activities in preference to or to the exclusion of the Partnership. 

(d) Notwithstanding anything to the contrary in this Agreement, the doctrine of corporate opportunity, or any analogous doctrine, shall not
apply to an Indemnitee (including the General Partner) and, subject to the terms of Sections 7.13(a), 7.13(b), 7.13(c) and the Omnibus Agreement, no Indemnitee (including the General Partner) who acquires knowledge of a
potential transaction, agreement, arrangement or other matter that may be an opportunity for the Partnership shall have any duty to communicate or offer such opportunity to the Partnership, and, subject to the terms of Sections 7.13(a),
7.13(b), 7.13(c) and the Omnibus Agreement, such Indemnitee (including the General Partner) shall not be liable to the Partnership, to any Limited Partner or any other Person for breach of any fiduciary or other duty by reason of the
fact that such Indemnitee (including the General Partner) pursues or acquires such opportunity for itself, directs such opportunity to another Person or does not communicate such opportunity or information to the Partnership; provided, that
such Indemnitee (including the General Partner) does not engage in such business or activity as a result of using confidential or proprietary information provided by or on behalf of the Partnership to such Indemnitee (including the General Partner).

 (e) The General Partner and each of its Affiliates may own and acquire Units or other Partnership Interests in addition to those acquired
on the Closing Date and, except as otherwise provided in this Agreement, shall be entitled to exercise, at their option, all rights relating to all Units or other Partnership Interests acquired by them. The term “Affiliates”
as used in this Section 7.13(e) with respect to the General Partner shall not include any Group Member. 
 Section 7.14 Loans
from the General Partner; Loans or Contributions from the Partnership or Group Members. 
 (a) The General Partner or any of its
Affiliates may lend to any Group Member, and any Group Member may borrow from the General Partner or any of its Affiliates, funds needed or desired by the Group Member for such periods of time and in such amounts as the General Partner and the Board
of Directors may determine; provided, however, that in any such case the lending party may not charge the borrowing party interest at a rate greater than the rate that would be charged the borrowing party or impose terms less favorable to the
borrowing party than would be charged or imposed on the borrowing party by unrelated lenders on comparable loans made on an arms’ length basis (without reference to the lending party’s financial abilities or guarantees), all as determined
by the General Partner and the Board of Directors. The borrowing  

  
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party shall reimburse the lending party for any costs (other than any additional interest costs) incurred by the lending party in connection with the borrowing of such funds. For purposes of this
Section 7.14(a) and Section 7.14(b), the term “Group Member” shall include any Affiliate of a Group Member that is controlled by the Group Member. 

(b) The Partnership may lend or contribute to any Group Member, and any Group Member may borrow from the Partnership, funds on terms and
conditions determined by the Board of Directors. No Group Member may lend funds to the General Partner or any of its Affiliates (other than another Group Member). 

(c) No borrowing by any Group Member or the approval thereof by the General Partner or the Board of Directors shall be deemed to constitute a
breach of any duty, expressed or implied, of the General Partner or its Affiliates or the Board of Directors to the Partnership or the Limited Partners if the purpose or effect of such borrowing is directly or indirectly to enable distributions to
the General Partner or its Affiliates (including in their capacities as Limited Partners) to exceed the General Partner’s Percentage Interest of the total amount distributed to all partners. 

Section 7.15 Indemnification. 

(a) To the fullest extent permitted by the Marshall Islands Act but subject to the limitations expressly provided in this Agreement, all
Indemnitees shall be indemnified and held harmless by the Partnership from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest,
settlements or other amounts arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative, in which any Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, by reason of its status as an Indemnitee; provided, however, that the Indemnitee shall not be indemnified and held harmless if there has been a final and non-appealable judgment entered by a
court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee is seeking indemnification pursuant to this Section 7.15, the Indemnitee acted in bad faith or engaged in fraud or willful misconduct or,
in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was unlawful; and, provided, further, that no indemnification pursuant to this Section 7.15 shall be available to the General Partner or its
Affiliates (other than a Group Member) with respect to its or their obligations incurred pursuant to the Underwriting Agreement, the Omnibus Agreement or the Contribution Agreement (other than obligations incurred by the General Partner on behalf of
the Partnership). Any indemnification pursuant to this Section 7.15 shall be made only out of the assets of the Partnership, it being agreed that the General Partner shall not be personally liable for such indemnification and shall have
no obligation to contribute or loan any monies or property to the Partnership to enable it to effectuate such indemnification. 
 (b)
To the fullest extent permitted by the Marshall Islands Act, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified pursuant to Section 7.15(a) in defending any claim, demand, action, suit or proceeding
shall, from time to time, be advanced by the Partnership prior to a determination that the Indemnitee is not entitled to be indemnified upon receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it
shall be determined that the Indemnitee is not entitled to be indemnified as authorized in this Section 7.15. 

  
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 (c) The indemnification provided by this Section 7.15 shall be in addition to any
other rights to which an Indemnitee may be entitled under any agreement, pursuant to any vote of the holders of Outstanding Limited Partner Interests, as a matter of law or otherwise, both as to actions in the Indemnitee’s capacity as an
Indemnitee and as to actions in any other capacity (including any capacity under the Underwriting Agreement), and shall continue as to an Indemnitee who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors,
assigns and administrators of the Indemnitee. 
 (d) The Partnership may purchase and maintain (or reimburse the General Partner or its
Affiliates for the cost of) insurance, on behalf of the Board of Directors and the General Partner, its Affiliates and such other Persons as the Board of Directors shall determine, against any liability that may be asserted against, or expense that
may be incurred by, such Person in connection with the Partnership’s activities or such Person’s activities on behalf of the Partnership, regardless of whether the Partnership would have the power to indemnify such Person against such
liability under the provisions of this Agreement or law. 
 (e) For purposes of this Section 7.15, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by the Indemnitee of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning of Section 7.15(a); and action
taken or omitted by the Indemnitee with respect to any employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the best interest of the participants and beneficiaries of the plan shall be deemed to be
for a purpose that is in the best interests of the Partnership. 
 (f) In no event may an Indemnitee subject the Limited Partners to personal
liability by reason of the indemnification provisions set forth in this Agreement. 
 (g) An Indemnitee shall not be denied indemnification
in whole or in part under this Section 7.15 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement. 

(h) The provisions of this Section 7.15 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators
and shall not be deemed to create any rights for the benefit of any other Persons. 
 (i) No amendment, modification or repeal of this
Section 7.15 or any provision hereof shall in any manner terminate, reduce or impair the right of any past, present or future Indemnitee to be indemnified by the Partnership, nor the obligations of the Partnership to indemnify any such
Indemnitee under and in accordance with the provisions of this Section 7.15 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted. 

  
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 Section 7.16 Liability of Indemnitees. 

(a) Notwithstanding anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the
Partnership, the Limited Partners or any other Persons who have acquired Partnership Interests or are otherwise bound by this Agreement, for losses sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there
has been a final and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted in bad faith or engaged in fraud or
willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was criminal. 
 (b) Subject
to their obligations and duties as members of the Board of Directors or as the General Partner, respectively, set forth in Section 7.1(a), members of the Board of Directors and the General Partner may exercise any of the powers granted
to them and perform any of the duties imposed upon them hereunder either directly or by or through its agents, and the members of the Board of Directors and the General Partner shall not be responsible for any misconduct or negligence on the part of
any such agent appointed by the Board of Directors or the General Partner in good faith. 
 (c) To the extent that, at law or in equity, an
Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to the Partnership or to the Partners, the General Partner and any other Indemnitee acting in connection with the Partnership’s business or affairs shall not be
liable to the Partnership or to any Partner for its good faith reliance on the provisions of this Agreement. 
 (d) Any amendment,
modification or repeal of this Section 7.16 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the liability of the Indemnitees under this Section 7.16 as in effect
immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be
asserted. 
 Section 7.17 Resolution of Conflicts of Interest; Standards of Conduct and Modification of Duties. 

(a) Unless otherwise expressly provided in this Agreement or any Group Member Agreement, whenever a potential conflict of interest exists or
arises between the General Partner or any of its Affiliates, or any member of the Board of Directors, on the one hand, and the Partnership, any Group Member or any Partner, on the other, any resolution or course of action in respect of such conflict
of interest shall be permitted and deemed approved by all Partners, and shall not constitute a breach of this Agreement, of any Group Member Agreement, of any agreement contemplated herein or therein, or of any duty stated or implied by law or
equity, if the resolution or course of action in respect of such conflict of interest is (i) approved by Special Approval, (ii) approved by the vote of a majority of the Outstanding Common Units (excluding

  
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Common Units owned by the General Partner and its Affiliates), (iii) on terms no less favorable to the Partnership than those generally being provided to or available from unrelated third
parties or (iv) fair and reasonable to the Partnership, taking into account the totality of the relationships between the parties involved (including other transactions that may be particularly favorable or advantageous to the Partnership). The
General Partner and the Board of Directors may but shall not be required in connection with the resolution of such conflict of interest to seek Special Approval of such resolution, and the General Partner or the Board of Directors, as the case may
be, may also adopt a resolution or course of action that has not received Special Approval. If Special Approval is sought, then, notwithstanding any other provision of this Agreement or law that would otherwise apply, (x) the Conflicts
Committee will be authorized in connection with its determination of whether to provide Special Approval to consider any and all factors as it determines to be relevant or appropriate under the circumstances and (y) it will be presumed that, in
making its decision, the Conflicts Committee acted in good faith, and if Special Approval is not sought and the Board of Directors determines that the resolution or course of action taken with respect to a conflict of interest satisfies either of
the standards set forth in clauses (iii) or (iv) above, then it shall be presumed that, in making its decision the Board of Directors, acted in good faith, and, in either case, in any proceeding brought by any Limited Partner
or by or on behalf of such Limited Partner or any other Limited Partner or the Partnership challenging such approval, the Person bringing or prosecuting such proceeding shall have the burden of overcoming such presumption. Notwithstanding anything
to the contrary in this Agreement or any duty otherwise existing at law or equity, the existence of the conflicts of interest described in the Registration Statement are hereby approved by all Partners and shall not constitute a breach of this
Agreement or of any duty hereunder or existing at law, in equity or otherwise. 
 (b) Whenever the General Partner makes a determination or
takes or declines to take any other action, or any of its Affiliates causes it to do so, in its capacity as the general partner of the Partnership as opposed to in its individual capacity, whether under this Agreement, any Group Member Agreement or
any other agreement contemplated hereby or otherwise, then, unless another express standard is provided for in this Agreement, the General Partner, or such Affiliates causing it to do so, shall make such determination or take or decline to take such
other action in good faith and shall not be subject to any other or different standards imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Marshall Islands Act or any other law, rule or
regulation or at equity. In order for a determination or other action to be in “good faith” for purposes of this Agreement, the Person or Persons making such determination or taking or declining to take such other action must reasonably
believe that the determination or other action is in the best interests of the Partnership, unless the context otherwise requires. 
 (c)
Whenever the General Partner makes a determination or takes or declines to take any other action, or any of its Affiliates causes it to do so, in its individual capacity as opposed to in its capacity as the general partner of the Partnership,
whether under this Agreement, any Group Member Agreement or any other agreement contemplated hereby or otherwise, then the General Partner, or such Affiliates causing it to do so, are entitled to make such determination or to take or decline to take
such other action free of any duty (including any fiduciary duty) or obligation whatsoever to the Partnership or any Limited Partner, any Record Holder or any other Person bound by this Agreement, and, to the fullest extent permitted by law, the
General Partner, or such Affiliates causing it to do so, shall not be required to act in good faith or pursuant to any 

  
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other standard imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Marshall Islands Act or any other law, rule or regulation or at equity.
By way of illustration and not of limitation, whenever the phrase, “at the option of the General Partner,” or some variation of that phrase, is used in this Agreement, it indicates that the General Partner is acting in its individual
capacity. For the avoidance of doubt, whenever the General Partner votes or transfers its Units, General Partner Interest or Incentive Distribution Rights, if any, to the extent permitted under this Agreement, or refrains from voting or transferring
its Units, General Partner Units or Incentive Distribution Rights, as appropriate, it shall be acting in its individual capacity. The General Partner’s organizational documents may provide that determinations to take or decline to take any
action in its individual, rather than representative, capacity may or shall be determined by its members, if the General Partner is a limited liability company, stockholders, if the General Partner is a corporation, or the members or stockholders of
the General Partner’s general partner, if the General Partner is a limited partnership. 
 (d) Whenever the Board of Directors makes a
determination or takes or declines to take any other action, whether under this Agreement, any Group Member Agreement or any other agreement contemplated hereby or otherwise, then, unless another express standard is provided for in this Agreement,
the Board of Directors, shall make such determination or take or decline to take such other action in good faith and shall not be subject to any other or different standards imposed by this Agreement, any Group Member Agreement, any other agreement
contemplated hereby or under the Marshall Islands Act or any other law, rule or regulation or at equity. In order for a determination or other action to be in “good faith” for purposes of this Agreement, the Person or Persons making such
determination or taking or declining to take such other action must reasonably believe that the determination or other action is in the best interests of the Partnership, unless the context otherwise requires. 

(e) Notwithstanding anything to the contrary in this Agreement, the General Partner and its Affiliates shall have no duty or obligation,
express or implied, to (i) approve the sale or other disposition of any asset of the Partnership Group (if such approval is required pursuant to Section 7.11(b)) or (ii) permit any Group Member to use any facilities or assets
of the General Partner and its Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use. Any determination by the General Partner or any of its Affiliates to enter into such contracts
shall, in each case, be at their option. 
 (f) Except as expressly set forth in this Agreement, neither the General Partner nor the Board of
Directors or any other Indemnitee shall have any duties or liabilities, including fiduciary duties, to the Partnership or any Limited Partner and the provisions of this Agreement, to the extent that they restrict, eliminate or otherwise modify the
duties and liabilities, including fiduciary duties, of the Board of Directors or the General Partner or any other Indemnitee otherwise existing at law or in equity, are agreed by the Partners to replace such other duties and liabilities of the Board
of Directors or the General Partner or such other Indemnitee. Notwithstanding anything to the contrary, but subject to Section 7.17(c) and without reference to the definition of “good faith” in Section 7.17(b), to
the fullest extent permitted by the Marshall Islands Act, neither the General Partner, the Board of Directors nor any other Indemnitee shall owe any fiduciary duties to Series A Preferred Unitholders other than a contractual duty of good faith and
fair dealing. 

  
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 (g) The Unitholders hereby authorize the Board of Directors, on behalf of the Partnership as a
partner or member of a Group Member, to approve of actions by the general partner or managing member of such Group Member similar to those actions permitted to be taken by the Board of Directors pursuant to this Section 7.17. 

Section 7.18 Other Matters Concerning the General Partner and the Board of Directors. 

(a) The General Partner and the Board of Directors may rely and shall be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. 

(b) The General Partner and the Board of Directors may consult with legal counsel, accountants, appraisers, management consultants, investment
bankers and other consultants and advisers selected by either of them, and any act taken or omitted to be taken in reliance upon the advice or opinion (including an Opinion of Counsel) of such Persons as to matters that the General Partner or the
Board of Directors reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such advice or opinion. 

(c) The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly
authorized officers, a duly appointed attorney or attorneys-in-fact or the duly authorized officers of the Partnership. 
 Section 7.19
Purchase or Sale of Partnership Interests. The Board of Directors may cause the Partnership to purchase or otherwise acquire Partnership Interests. As long as Partnership Interests are held by any Group Member, such Partnership Interests
shall not be considered Outstanding for any purpose, except as otherwise provided herein. The General Partner or any Affiliate of the General Partner may purchase or otherwise acquire and sell or otherwise dispose of Partnership Interests for its
own account, subject to the provisions of Articles IV and X. 
 Section 7.20 Registration Rights of the General Partner and
its Affiliates. 
 (a) If (i) the General Partner or any Affiliate of the General Partner (including for purposes of this
Section 7.20, any Person that is an Affiliate of the General Partner at the date hereof notwithstanding that it may later cease to be an Affiliate of the General Partner) holds Partnership Interests that it desires to sell and
(ii) Rule 144 of the Securities Act (or any successor rule or regulation to Rule 144) or another exemption from registration is not available to enable such holder of Partnership Interests (the “Holder”) to dispose of
the number of Partnership Interests it desires to sell at the time it desires to do so without registration under the Securities Act, then at the option and upon the request of the Holder, the Partnership shall file with the Commission as promptly
as practicable after receiving such request, and use its commercially reasonable efforts to cause to become effective and remain effective for a period of not less than six months following its effective date or such shorter period as shall
terminate when all Partnership Interests covered by such registration statement have been sold, a 

  
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registration statement under the Securities Act registering the offering and sale of the number of Partnership Interests specified by the Holder; provided, however, that the
Partnership shall not be required to effect more than three registrations in total pursuant to this Section 7.20(a), no more than one of which shall be required to be made at any time that the Partnership is not eligible to use Form F-3 (or a comparable form) for the registration under the Securities Act of its securities; and, provided, further, that if the Conflicts Committee determines in good faith that the requested registration
would be materially detrimental to the Partnership and its Partners because such registration would (x) materially interfere with a significant acquisition, merger, disposition, corporate reorganization or other similar transaction involving
the Partnership, (y) require premature disclosure of material information that the Partnership has a bona fide business purpose for preserving as confidential or (z) render the Partnership unable to comply with requirements under
applicable securities laws, then the Partnership shall have the right to postpone such requested registration for a period of not more than six months after receipt of the Holder’s request, such right pursuant to this
Section 7.20(a) not to be utilized more than once in any 12-month period. The Partnership shall use its commercially reasonable efforts to resolve any deferral with respect to any such registration
and/or filing. Except as provided in the first sentence of this Section 7.20(a), the Partnership shall be deemed not to have used all its commercially reasonable efforts to keep the registration statement effective during the applicable
period if it voluntarily takes any action that would result in Holders of Partnership Interests covered thereby not being able to offer and sell such Partnership Interests at any time during such period, unless such action is required by applicable
law or regulations. In connection with any registration pursuant to this Section 7.20(a), the Partnership shall (i) promptly prepare and file (A) such documents as may be necessary to register or qualify the securities subject
to such registration under the securities laws of such states as the Holder shall reasonably request (provided, however, that no such qualification shall be required in any jurisdiction where, as a result thereof, the Partnership would become
subject to general service of process or to taxation or qualification to do business as a foreign corporation or partnership doing business in such jurisdiction solely as a result of such registration), and (B) such documents as may be
necessary to apply for listing or to list the Partnership Interests subject to such registration on such National Securities Exchange as the Holder shall reasonably request, and (ii) do any and all other acts and things that may be necessary or
appropriate to enable the Holder to consummate a public sale of such Partnership Interests in such states. Except as set forth in Section 7.20(c), all costs and expenses of any such registration and offering (other than the underwriting
discounts and commissions) shall be paid by the Partnership, without reimbursement by the Holder. 
 (b) If the Partnership shall at any time
propose to file a registration statement under the Securities Act for an offering of equity interests of the Partnership for cash (other than an offering relating solely to an employee benefit plan), the Partnership shall use its commercially
reasonable efforts to include such number or amount of Partnership Interests held by any Holder in such registration statement as the Holder shall request; provided, however, that the Partnership is not required to make any effort or take any
action to so include the Partnership Interests of the Holder once the registration statement becomes or is declared effective by the Commission, including any registration statement providing for the offering from time to time of Partnership
Interests pursuant to Rule 415 of the Securities Act. If the proposed offering pursuant to this Section 7.20(b) shall be an underwritten offering, then, in the event that the managing underwriter or managing underwriters of such offering
advise the Partnership and the Holder in writing that in their opinion the inclusion of all or some of the Holder’s Partnership Interests 

  
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would adversely and materially affect the success of the offering, the Partnership shall include in such offering only that number or amount, if any, of Partnership Interests held by the Holder
that, in the opinion of the managing underwriter or managing underwriters, will not so adversely and materially affect the offering. Except as set forth in Section 7.20(c), all costs and expenses of any such registration and offering
(other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by the Holder. 

(c) If underwriters are engaged in connection with any registration referred to in this Section 7.20, the Partnership
shall provide indemnification, representations, covenants, opinions and other assurance to the underwriters in form and substance reasonably satisfactory to such underwriters. Further, in addition to and not in limitation of the Partnership’s
obligation under Section 7.15, the Partnership shall, to the fullest extent permitted by law, indemnify and hold harmless the Holder, its officers, directors and each Person who controls the Holder (within the meaning of the Securities
Act) and any agent thereof (collectively, “Indemnified Persons”) from and against any and all losses, claims, demands, actions, causes of action, assessments, damages, liabilities (joint or several), costs and expenses
(including interest, penalties and reasonable attorneys’ fees and disbursements), resulting to, imposed upon, or incurred by the Indemnified Persons, directly or indirectly, under the Securities Act or otherwise (hereinafter referred to in this
Section 7.20(c) as a “claim” and in the plural as “claims”) based upon, arising out of or resulting from any untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which any Partnership Interests were registered under the Securities Act or any state securities or Blue Sky laws, in any preliminary prospectus or issuer free writing prospectus as defined in Rule 433 of the
Securities Act (if used prior to the effective date of such registration statement), or in any summary, free writing or final prospectus or in any amendment or supplement thereto (if used during the period the Partnership is required to keep the
registration statement current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements made therein not misleading;
provided, however, that the Partnership shall not be liable to any Indemnified Person to the extent that any such claim arises out of, is based upon or results from an untrue statement or alleged untrue statement
or omission or alleged omission made in such registration statement, such preliminary, summary, free writing or final prospectus or such amendment or supplement, in reliance upon and in conformity with written information furnished to the
Partnership by or on behalf of such Indemnified Person specifically for use in the preparation thereof. 
 (d) The
provisions of Sections 7.20(a) and 7.20(b) shall continue to be applicable with respect to the General Partner (and any of the General Partner’s Affiliates) after it ceases to be a general partner of the Partnership, during a
period of two years subsequent to the effective date of such cessation and for so long thereafter as is required for the Holder to sell all of the Partnership Interests with respect to which it has requested during such two-year period inclusion in
a registration statement otherwise filed or that a registration statement be filed; provided, however, that the Partnership shall not be required to file successive registration statements covering the same Partnership Interests for which
registration was demanded during such two-year period. The provisions of Section 7.20(c) shall continue in effect thereafter. 

  
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 (e) The rights to cause the Partnership to register Partnership Interests pursuant to this
Section 7.20 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such Partnership Interests, provided (i) the Partnership is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or assignee and the Partnership Interests with respect to which such registration rights are being assigned, and (ii) such transferee or assignee agrees in writing to be
bound by and subject to the terms set forth in this Section 7.20. 
 (f) Any request to register Partnership Interests pursuant
to this Section 7.20 shall (i) specify the Partnership Interests intended to be offered and sold by the Person making the request, (ii) express such Person’s present intent to offer such Partnership Interests for
distribution, (iii) describe the nature or method of the proposed offer and sale of Partnership Interests, and (iv) contain the undertaking of such Person to provide all such information and materials and take all action as may be required
in order to permit the Partnership to comply with all applicable requirements in connection with the registration of such Partnership Interests. 

Section 7.21 Reliance by Third Parties. Notwithstanding anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the Board of Directors, the General Partner and any Officer authorized by the Board of Directors to act on behalf of and in the name of the Partnership has full power and authority to encumber, sell or
otherwise use in any manner any and all assets of the Partnership and to enter into any authorized contracts on behalf of the Partnership, and such Person shall be entitled to deal with the Board of Directors, the General Partner or any such Officer
as if it were the Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all defenses or other remedies that may be available against such Person to contest, negate or disaffirm any
action of the Board of Directors, the General Partner or any such Officer in connection with any such dealing. In no event shall any Person dealing with the Board of Directors, the General Partner or any such Officer or its representatives be
obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the Board of Directors, the General Partner or any such Officer or its representatives. Each and
every certificate, document or other instrument executed on behalf of the Partnership by the Board of Directors, the General Partner, the Officers or representatives of the General Partner authorized by the General Partner or the Board of Directors
shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (a) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect,
(b) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership and (c) such certificate, document or instrument was duly executed and
delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership. 
 ARTICLE VIII 

BOOKS, RECORDS, ACCOUNTING AND REPORTS 

Section 8.1 Records and Accounting. The Partnership shall keep or cause to be kept at the principal office of the Partnership
appropriate books and records with respect to the Partnership’s business, including all books and records necessary to provide to the Limited Partners any information required to be provided pursuant to Section 3.4(a). Any books and

  
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records maintained by or on behalf of the Partnership in the regular course of its business, including the record of the Record Holders of Units or other Partnership Interests, books of
account and records of Partnership proceedings, may be kept on, or be in the form of, computer disks, hard drives, punch cards, magnetic tape, photographs, micrographics or any other information storage device; provided, however, that the
books and records so maintained are convertible into clearly legible written form within a reasonable period of time. The books of the Partnership shall be maintained, for financial reporting purposes, on an accrual basis in accordance with U.S.
GAAP. The Partnership shall not be required to keep books on a cash basis and the Board of Directors shall be permitted to calculate cash-based measures, including Operating Surplus and Adjusted Operating Surplus, by making such adjustments to its
accrual basis books to account for non-cash items and other adjustments as the Board of Directors determines to be necessary or appropriate. 

Section 8.2 Fiscal Year. The fiscal year of the Partnership shall be a fiscal year ending December 31. 

Section 8.3 Reports. 
 (a)
As soon as practicable, but in no event later than 120 days after the close of each fiscal year of the Partnership, the Partnership shall cause to be mailed or made available, by any reasonable means (including posting on or accessible through the
Partnership’s or the Commission’s website), to each Record Holder of a Unit as of a date selected by the Board of Directors, an annual report containing financial statements of the Partnership for such fiscal year of the Partnership,
presented in accordance with U.S. GAAP, including a balance sheet and statements of operations, Partnership equity and cash flows, such statements to be audited by a firm of independent public accountants selected by the Board of Directors. 

(b) As soon as practicable, but in no event later than 90 days after the close of each Quarter except the last Quarter of each fiscal year, the
Partnership shall cause to be mailed or made available, by any reasonable means (including posting on or accessible through the Partnership’s or the Commission’s website), to each Record Holder of a Unit, as of a date selected by the Board
of Directors, a report containing unaudited financial statements of the Partnership and such other information as may be required by applicable law, regulation or rule of any National Securities Exchange on which the Units are listed or admitted to
trading, or as the Board of Directors determines to be necessary or appropriate. 
 ARTICLE IX 

TAX MATTERS 
 Section 9.1
Tax Elections and Information. 
 (a) The Partnership is authorized and has elected to be treated as an association taxable as a
corporation for U.S. federal income tax purposes. Except as otherwise provided herein, the Board of Directors shall determine whether the Partnership should make any other elections permitted by any applicable tax law. 

  
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 (b) The tax information reasonably required by Record Holders for U.S. federal income tax
reporting purposes with respect to a calendar taxable year shall be furnished to them within 90 days of the close of each calendar year. 

(c) Each Partner shall provide the Partnership with all information reasonably requested by the Partnership to enable the Partnership to claim
the exemption from U.S. federal income tax under Section 883 of the Code. 
 Section 9.2 Tax Withholding. Notwithstanding any
other provision of this Agreement, the Board of Directors is authorized to take any action that may be required or advisable to cause the Partnership and other Group Members to comply with any withholding requirements with respect to any tax
established under any U.S. federal, state or local or any non-U.S. law. To the extent that the Partnership is required or elects to withhold and pay over to any taxing authority any amount with respect to a
distribution or payment to or for the benefit of any Partner, the Board of Directors may treat the amount withheld as a distribution of cash to such Partner in the amount of such withholding from such Partner. 

Section 9.3 Conduct of Operations. The Board of Directors shall use commercially reasonable efforts to conduct the business of the
Partnership and its Affiliates in a manner that does not require a holder of Common Units or Series A Preferred Units to file a tax return in any jurisdiction with which the holder has no contact other than through ownership of Common Units or
Series A Preferred Units. 
 ARTICLE X 

ADMISSION OF PARTNERS 

Section 10.1 [Reserved]. 

Section 10.2 Admission of Additional Limited Partners. 

(a) By acceptance of the transfer of any Limited Partner Interests in accordance with Article IV or the acceptance of any Limited
Partner Interests issued pursuant to Article V or pursuant to a merger, consolidation or conversion pursuant to Article XIV, each transferee of, or other such Person acquiring, a Limited Partner Interest (including any nominee holder
or an agent or representative acquiring such Limited Partner Interests for the account of another Person) (i) shall be admitted to the Partnership as a Limited Partner with respect to the Limited Partner Interests so transferred or issued to
such Person when any such transfer, issuance or admission is reflected in the books and records of the Partnership and such Limited Partner becomes the Record Holder of the Limited Partner Interests so transferred, (ii) shall become bound, and
shall be deemed to have agreed to be bound, by the terms of this Agreement, (iii) represents that the transferee or other recipient has the capacity, power and authority to enter into this Agreement and (iv) makes the consents,
acknowledgements and waivers contained in this Agreement, all with or without execution of this Agreement by such Person. The transfer of any Limited Partner Interests and the admission of any new Limited Partner shall not constitute an amendment to
this Agreement. A Person may become a Limited Partner or Record Holder of a Limited Partner Interest without the consent or approval of any of the Partners. A Person may not become a Limited Partner until such Person acquires a Limited Partner
Interest and until such Person is reflected in the books and records of the Partnership as the Record Holder of such Limited Partner Interest. 

  
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 (b) The name and mailing address of each Limited Partner shall be listed on the books and records
of the Partnership maintained for such purpose by the Partnership or the Transfer Agent. The General Partner shall update the books and records of the Partnership from time to time as necessary to reflect accurately the information therein (or shall
cause the Transfer Agent to do so, as applicable). A Limited Partner Interest may be represented by a Certificate, as provided in Section 4.1. 

(c) Any transfer of a Limited Partner Interest shall not entitle the transferee to receive distributions or to any other rights to which the
transferor was entitled until the transferee becomes a Limited Partner pursuant to Section 10.2(a). 
 Section 10.3 Admission
of Successor General Partner. A successor General Partner approved pursuant to Sections 11.1 or 11.2 or the transferee of or successor to all or part of the General Partner Interest (represented by General Partner Units) pursuant
to Section 4.6 who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective immediately prior to the withdrawal or removal of the predecessor or transferring General
Partner, pursuant to Sections 11.1 or 11.2 or the transfer of the General Partner Interest (represented by General Partner Units) pursuant to Section 4.6; provided, however, that no such Person shall be
admitted to the Partnership as a successor or additional General Partner until compliance with the terms of Section 4.6 has occurred and such Person has executed and delivered such other documents or instruments as may be required to
effect such admission. Any such successor or additional General Partner is hereby authorized to and shall, subject to the terms hereof, carry on the business of the members of the Partnership Group without dissolution. 

Section 10.4 Amendment of Agreement and Certificate of Limited Partnership. To effect the admission to the Partnership of any Partner,
the Board of Directors shall take all steps necessary or appropriate under the Marshall Islands Act to amend the records of the Partnership to reflect such admission and, if necessary, to prepare as soon as practicable an amendment to this Agreement
and, if required by law, the Board of Directors shall prepare and file an amendment to the Certificate of Limited Partnership. 
 ARTICLE
XI 
 WITHDRAWAL OR REMOVAL OF PARTNERS 

Section 11.1 Withdrawal of the General Partner. 

(a) The General Partner shall be deemed to have withdrawn from the Partnership upon the occurrence of any one of the following
events (each such event herein referred to as an “Event of Withdrawal”): 
 (i) The
General Partner voluntarily withdraws from the Partnership by giving written notice to the other Partners; 

  
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 (ii) The General Partner transfers all of its rights as General Partner pursuant
to Section 4.6; 
 (iii) The General Partner is removed pursuant to Section 11.2; 

(iv) The General Partner (A) makes a general assignment for the benefit of creditors; (B) files a voluntary petition
in bankruptcy; (C) files a voluntary petition or answer seeking for itself a liquidation, dissolution or similar relief (but not a reorganization) under any law; (D) files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against the General Partner in a proceeding of the type described in clauses (A), (B) or (C) of this Section 11.1(a)(iv); or (E) seeks, consents to or
acquiesces in the appointment of a trustee (but not a debtor in possession), receiver or liquidating trustee of the General Partner or of all or any substantial part of its properties; 

(v) The General Partner is adjudged bankrupt or insolvent, or has entered against it an order for relief in any bankruptcy or
insolvency proceeding; 
 (vi) (A) in the event the General Partner is a corporation, the filing of a certificate of
dissolution, or its equivalent, for the corporation or the revocation of its charter and the expiration of 90 days after the date of notice to the General Partner of revocation without a reinstatement of its charter; (B) in the event the
General Partner is a partnership or a limited liability company, the dissolution and commencement of winding up of the General Partner; (C) in the event the General Partner is acting in such capacity by virtue of being a trustee of a trust, the
termination of the trust; (D) in the event the General Partner is a natural person, his death or adjudication of incompetency; and (E) otherwise in the event of the termination of the General Partner. 

If an Event of Withdrawal specified in Sections 11.1(a)(iv), 11.1(a)(v) or 11.1(a)(vi)(A), 11.1(a)(vi)(B), 11.1(a)(vi)(C)
or 11.1(a)(vi)(E) occurs, the withdrawing General Partner shall give notice to the Limited Partners within 30 days after such occurrence. The Partners hereby agree that only the Events of Withdrawal described in this Section 11.1
shall result in the withdrawal of the General Partner from the Partnership. 
 (b) Withdrawal of the General Partner from the Partnership
upon the occurrence of an Event of Withdrawal shall not constitute a breach of this Agreement under the following circumstances: 

(i) at any time prior to 12:00 midnight, prevailing Eastern Time, on March 31, 2023, the General Partner voluntarily
withdraws by giving at least 90 days’ advance notice of its intention to withdraw to the Limited Partners, such withdrawal to take effect on the date specified in the notice; provided, however, that prior to the effective date of such
withdrawal, the withdrawal is approved by Unitholders holding at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates) and the General Partner delivers to the Partnership an Opinion
of Counsel (“Withdrawal Opinion of Counsel”) that such withdrawal (following the selection of the successor General Partner) would not result in the loss of the limited liability of any Limited Partner or any
Group Member; 

  
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 (ii) at any time after 12:00 midnight, prevailing Eastern Time, on March 31,
2023, the General Partner voluntarily withdraws by giving at least 90 days’ advance notice to the Unitholders, such withdrawal to take effect on the date specified in such notice (provided, that, prior to the effective date of such
withdrawal, the General Partner delivers to the Partnership a Withdrawal Opinion of Counsel); 
 (iii) at any time that the
General Partner ceases to be the General Partner pursuant to Section 11.1(a)(ii) or is removed pursuant to Section 11.2; or 

(iv) notwithstanding clause (i) of this Section 11.1(b), at any time that the General Partner
voluntarily withdraws by giving at least 90 days’ advance notice of its intention to withdraw to the Limited Partners, such withdrawal to take effect on the date specified in the notice, if at the time such notice is given one Person and its
Affiliates (other than the General Partner and its Affiliates) own beneficially or of record or control at least 50% of the Outstanding Units. The withdrawal of the General Partner from the Partnership upon the occurrence of an Event of Withdrawal
shall also constitute the withdrawal of the General Partner as general partner or managing member, if any, to the extent applicable, of the other Group Members. If the General Partner gives a notice of withdrawal pursuant to
Section 11.1(a)(i), the holders of a Unit Majority, may, prior to the effective date of such withdrawal, elect a successor General Partner. The Person so elected as successor General Partner shall automatically become the successor
general partner or managing member, to the extent applicable, of the other Group Members of which the General Partner is a general partner or a managing member. If, prior to the effective date of the General Partner’s withdrawal, a successor is
not selected by the Unitholders as provided herein or, if applicable, the Partnership does not receive a Withdrawal Opinion of Counsel, the Partnership shall be dissolved in accordance with Section 12.1. Any successor General Partner
elected in accordance with the terms of this Section 11.1 shall be subject to the provisions of Section 10.3. 

Section 11.2 Removal of the General Partner. The General Partner may be removed if such removal is approved by the Unitholders holding
at least 66 2⁄3% of the Outstanding Units (including Units held by the General Partner and its Affiliates), voting as a single class. Any such action by such
holders or the Board of Directors for removal of the General Partner must also provide for the election of a successor General Partner by the majority vote of the outstanding Common Units. Such removal shall be effective immediately following the
admission of a successor General Partner pursuant to Section 10.3. The removal of the General Partner shall also automatically constitute the removal of the General Partner as general partner or managing member, to the extent applicable,
of the other Group Members of which the General Partner is a general partner or a managing member. If a Person is elected as a successor General Partner in accordance with the terms of this Section 11.2, such Person shall, upon admission
pursuant to Section 10.3, automatically become a successor general partner or managing member, to the extent applicable, of the other Group Members of which the General Partner is a general partner or a managing member. The right of the
holders of Outstanding Units to remove the General Partner shall not exist or be exercised unless the Partnership has received an Opinion of Counsel opining as to the matters covered by a Withdrawal Opinion of Counsel. Any successor General Partner
elected in accordance with the terms of this Section 11.2 shall be subject to the provisions of Section 10.3. 

  
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 Section 11.3 Interest of Departing General Partner and Successor General Partner. 

(a) In the event of (i) withdrawal of the General Partner under circumstances where such withdrawal does not violate this
Agreement or (ii) removal of the General Partner by the holders of Outstanding Units under circumstances where Cause does not exist, if the successor General Partner is elected in accordance with the terms of Sections 11.1 or
11.2, (A) the Departing General Partner shall have the option, exercisable prior to the effective date of the departure of such Departing General Partner, to require its successor to purchase its General Partner Interest (represented by
General Partner Units) and its general partner interest (or equivalent interest), if any, in the other Group Members and its Incentive Distribution Rights, if any, (collectively, the “Combined Interest”) in exchange for an
amount in cash equal to the fair market value of such Combined Interest, such amount to be determined and payable as of the effective date of its departure and (B) the other holders of the Incentive Distribution Rights shall have the option,
exercisable prior to the effective date of the departure of such Departing General Partner, to require such successor to purchase such holders’ Incentive Distribution Rights in exchange for an amount in cash equal to the fair market value of
such Incentive Distribution Rights, such amount to be determined and payable as of the effective date of the Departing General Partner’s departure. If the General Partner is removed by the Unitholders under circumstances where Cause exists or
if the General Partner withdraws under circumstances where such withdrawal violates this Agreement, and if a successor General Partner is elected in accordance with the terms of Sections 11.1 or 11.2 (or if the business of the
Partnership is continued pursuant to Section 12.2 and the successor General Partner is not the former General Partner), such successor shall have the option, exercisable prior to the effective date of the departure of such Departing
General Partner (or, in the event the business of the Partnership is continued, prior to the date the business of the Partnership is continued), to purchase the Combined Interest in exchange for an amount in cash equal to such fair market value of
such Combined Interest of the Departing General Partner. In either event, the Departing General Partner shall be entitled to receive all reimbursements due such Departing General Partner pursuant to Section 7.12, including any employee
related liabilities (including severance liabilities), incurred in connection with the termination of any employees employed by the Departing General Partner or its Affiliates (other than any Group Member) for the benefit of the Partnership or the
other Group Members. 
 For purposes of this Section 11.3(a), the fair market value of the Departing General
Partner’s Combined Interest and the value of the Incentive Distribution Rights held by holders other than the Departing General Partner shall be determined by agreement between the Departing General Partner and its successor or, failing
agreement within 30 days after the effective date of such Departing General Partner’s departure, by an independent investment banking firm or other independent expert selected by the Departing General Partner and its successor, which, in turn,
may rely on other experts, and the determination of which shall be conclusive as to such matter. If such parties cannot agree upon one independent investment banking firm or other independent expert within 45 days after the effective date of such
departure, then the Departing General Partner shall designate an independent investment banking 

  
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firm or other independent expert, the Departing General Partner’s successor shall designate an independent investment banking firm or other independent expert, and such firms or experts
shall mutually select a third independent investment banking firm or independent expert, which third independent investment banking firm or other independent expert shall determine the fair market value of the Combined Interest of the Departing
General Partner and the value of the Incentive Distribution Rights held by holders other than the Departing General Partner. In making its determination, such third independent investment banking firm or other independent expert may consider the
then current trading price of Units on any National Securities Exchange on which Units are then listed or admitted to trading, the value of the Partnership’s assets, the rights and obligations of the Departing General Partner and other factors
it may deem relevant. 
 (b) If the Combined Interest is not purchased in the manner set forth in Section 11.3(a), the Departing
General Partner (or its transferee) shall become a Limited Partner and its Combined Interest shall be converted into Common Units pursuant to a valuation made by an investment banking firm or other independent expert selected pursuant to
Section 11.3(a), without reduction in such Partnership Interest (but subject to proportionate dilution by reason of the admission of its successor). Any successor General Partner shall indemnify the Departing General Partner (or its
transferee) as to all debts and liabilities of the Partnership arising on or after the date on which the Departing General Partner (or its transferee) becomes a Limited Partner. For purposes of this Agreement, conversion of the Combined Interest of
the Departing General Partner to Common Units will be characterized as if the Departing General Partner (or its transferee) contributed its Combined Interest to the Partnership in exchange for the newly issued Common Units. 

(c) If a successor General Partner is elected in accordance with the terms of Sections 11.1 or 11.2 (or if the Partnership is
continued pursuant to Section 12.2 and the successor General Partner is not the former General Partner) and the option described in Section 11.3(a) is not exercised by the party entitled to do so, the successor General
Partner shall, at the effective date of its admission to the Partnership, contribute to the Partnership cash in the amount equal to the product of (i) the quotient obtained by dividing (A) the Percentage Interest of the General Partner
Interest of the Departing General Partner by (B) a percentage equal to 100% less the Percentage Interest of the General Partner Interest of the Departing General Partner and (ii) the Net Agreed Value of the Partnership’s assets on
such date. In such event, such successor General Partner shall, subject to the following sentence, be entitled to its Percentage Interest of all Partnership distributions to which the Departing General Partner was entitled. In addition, the
successor General Partner shall cause this Agreement to be amended to reflect that, from and after the date of such successor General Partner’s admission, the successor General Partner’s interest in all Partnership distributions shall be
its Percentage Interest. 
 Section 11.4 [Reserved]. 

Section 11.5 Withdrawal of Limited Partners. No Limited Partner shall have any right to withdraw from the Partnership; provided,
however, that when a transferee of a Limited Partner’s Limited Partner Interest becomes a Record Holder of the Limited Partner Interest so transferred, such transferring Limited Partner shall cease to be a Limited Partner with respect to
the Limited Partner Interest so transferred. 

  
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 ARTICLE XII 

DISSOLUTION AND LIQUIDATION 

Section 12.1 Dissolution. The Partnership shall not be dissolved by the admission of additional Limited Partners or by the admission of
a successor or additional General Partner in accordance with the terms of this Agreement. Upon the removal or withdrawal of the General Partner, if a successor General Partner is elected pursuant to Sections 11.1 or 11.2, the
Partnership shall not be dissolved and the Board of Directors shall continue the business of the Partnership. The Partnership shall dissolve, and (subject to Section 12.2) its affairs shall be wound up, upon: 

(a) an election to dissolve the Partnership by the General Partner and our Board of Directors that is approved by the holders of a Unit
Majority; 
 (b) at any time there are no Limited Partners, unless the Partnership is continued without dissolution in accordance with the
Marshall Islands Act; 
 (c) the entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Marshall
Islands Act; or 
 (d) an Event of Withdrawal of the General Partner as provided in Section 11.1(a) (other than
Section 11.1(a)(ii)), unless a successor is elected and an Opinion of Counsel is received as provided in Sections 11.1(b) or 11.2 and such successor is admitted to the Partnership pursuant to Section 10.3. 

Section 12.2 Continuation of the Business of the Partnership After Dissolution. Upon (a) dissolution of the Partnership following
an Event of Withdrawal caused by the withdrawal or removal of the General Partner as provided in Sections 11.1(a)(i) or 11.1(a)(iii) and the failure of the Partners to select a successor to such Departing General Partner pursuant to
Sections 11.1 or 11.2, then within 90 days thereafter, or (b) dissolution of the Partnership upon an event constituting an Event of Withdrawal as defined in Sections 11.1(a)(iv), 11.1(a)(v) or 11.1(a)(vi),
then, to the maximum extent permitted by the Marshall Islands Act, within 180 days thereafter, the holders of a Unit Majority may elect in writing to continue the business of the Partnership on the same terms and conditions set forth in this
Agreement by appointing, effective as of the date of the Event of Withdrawal, as a successor General Partner a Person approved by the holders of a Unit Majority. Unless such an election is made within the applicable time period as set forth above,
the Partnership shall dissolve and conduct only activities necessary to wind up its affairs. If such an election is so made, then: 

(i) the Partnership shall continue without dissolution unless earlier dissolved in accordance with this Article XII;

 (ii) if the successor General Partner is not the former General Partner, then the interest of the former General Partner
shall be treated in the manner provided in Section 11.3; and 

  
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 (iii) the successor General Partner shall be admitted to the Partnership as
General Partner, effective as of the Event of Withdrawal, by agreeing in writing to be bound by this Agreement; provided, however, that the right of the holders of a Unit Majority to approve a successor General Partner and to reconstitute and
to continue the business of the Partnership shall not exist and may not be exercised unless the Partnership has received an Opinion of Counsel that the exercise of the right would not result in the loss of limited liability of any Limited Partner.

 Section 12.3 Liquidating Trustee. Upon dissolution of the Partnership, unless the business of the Partnership is continued
pursuant to Section 12.2, the Board of Directors shall select one or more Persons to act as Liquidating Trustee. The Liquidating Trustee (if other than the General Partner) shall be entitled to receive such compensation for its services
as may be approved by holders of at least a majority of the Outstanding Common Units. The Liquidating Trustee (if other than the General Partner) shall agree not to resign at any time without 15 days’ prior notice and may be removed at any
time, with or without cause, by notice of removal approved by holders of at least a majority of the Outstanding Common Units. Upon dissolution, removal or resignation of the Liquidating Trustee, a successor and substitute Liquidating Trustee (who
shall have and succeed to all rights, powers and duties of the original Liquidating Trustee) shall within 30 days thereafter be approved by the holders of at least a majority of the Outstanding Common Units. The right to approve a successor or
substitute Liquidating Trustee in the manner provided herein shall be deemed to refer also to any such successor or substitute Liquidating Trustee approved in the manner herein provided. Except as expressly provided in this Article XII, the
Liquidating Trustee approved in the manner provided herein shall have and may exercise, without further authorization or consent of any of the parties hereto, all of the powers conferred upon the Board of Directors and the General Partner under the
terms of this Agreement (but subject to all of the applicable limitations, contractual and otherwise, upon the exercise of such powers, other than the limitation on sale set forth in Section 7.11(b)) necessary or appropriate to carry out
the duties and functions of the Liquidating Trustee hereunder for and during the period of time required to complete the winding up and liquidation of the Partnership as provided for herein. 

Section 12.4 Liquidation. The Liquidating Trustee shall proceed to dispose of the assets of the Partnership, discharge its liabilities,
and otherwise wind up its affairs in such manner and over such period as determined by the Liquidating Trustee, subject to the Marshall Islands Act and the following: 

(a) The assets may be disposed of by public or private sale or by distribution in kind to one or more Partners on such terms as the Liquidating
Trustee and such Partner or Partners may agree. If any property is distributed in kind, the Partner receiving the property shall be deemed for purposes of Section 12.4(c) to have received cash equal to its fair market value, and
contemporaneously therewith, appropriate cash distributions must be made to the other Partners. The Liquidating Trustee may defer liquidation or distribution of the Partnership’s assets for a reasonable time if it determines that an immediate
sale or distribution of all or some of the Partnership’s assets would be impractical or would cause undue loss to the Partners. The Liquidating Trustee may distribute the Partnership’s assets, in whole or in part, in kind if it determines
that a sale would be impractical or would cause undue loss to the Partners. 

  
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 (b) The Liquidating Trustee shall first satisfy the liabilities of the Partnership. Liabilities
of the Partnership include amounts owed to the Liquidating Trustee as compensation for serving in such capacity (subject to the terms of Section 12.3) and amounts to Partners otherwise than in respect of their distribution rights under
Article VI and, as applicable, Article V. With respect to any liability that is contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidating Trustee shall either settle such claim for such amount as it
deems appropriate or establish a reserve of cash or other assets to provide for its payment. When paid, any unused portion of the reserve shall be distributed as additional liquidation proceeds. 

(c) All property and all cash in excess of that required to discharge liabilities as provided in this Section 12.4 shall be
distributed, subject to Section 5.11(c)(iii) in respect of the Series A Preferred units, as follows: 
 (i) If
the Current Market Price of the Common Units as of the date three trading days prior to the announcement of the proposed liquidation exceeds the Unrecovered Capital for a Common Unit: 

(A) First, (x) to the General Partner in accordance with its Percentage Interest and (y) to all the Unitholders
holding Common Units, Pro Rata, a percentage equal to 100% less the General Partner’s Percentage Interest, until there has been distributed in respect of each Common Unit then Outstanding an amount equal to such Current Market Price of a Common
Unit; and 
 (B) Thereafter (x) to the General Partner in accordance with its Percentage Interest; (y) 48% to the
holders of the Incentive Distribution Rights, Pro Rata; and (z) to all Unitholders holding Common Units, Pro Rata, a percentage equal to 100% less the sum of the percentages applicable to subclauses (x) and (y) of this
clause (i)(B); 
 (ii) If the Current Market Price of a Common Unit as of the date three trading days prior to the
announcement of the proposed liquidation is equal to or less than the Unrecovered Capital for a Common Unit: 
 (A) First,
(x) to the General Partner in accordance with its Percentage Interest and (y) to all the Unitholders holding Common Units, Pro Rata, a percentage equal to 100% less the General Partner’s Percentage Interest, until there has been
distributed in respect of each Common Unit then Outstanding an amount equal to the Unrecovered Capital for a Common Unit; and 

(B) Thereafter, (x) to the General Partner in accordance with its Percentage Interest; (y) 48% to the holders of the
Incentive Distribution Rights, Pro Rata; and (z) to all Unitholders holding Common Units, Pro Rata, a percentage equal to 100% less the sum of the percentages applicable to subclauses (x) and (y) of this clause
(ii)(B); 
 Distributions with respect to Series A Preferred Units described in Section 5.11(c)(iii) in connection with a liquidation or
dissolution of the Partnership shall be made pursuant to Section 5.11(c)(iii), rather than pursuant to clause (i) or (ii) of this Section 12.4. 

  
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 Section 12.5 Cancellation of Certificate of Limited Partnership. Upon the completion of
the distribution of Partnership cash and property as provided in Section 12.4 in connection with the liquidation of the Partnership, the Certificate of Limited Partnership and all qualifications of the Partnership as a foreign limited
partnership in jurisdictions other than the Marshall Islands shall be canceled and such other actions as may be necessary to terminate the Partnership shall be taken. 

Section 12.6 Return of Contributions. The General Partner shall not be personally liable for, and shall have no obligation to
contribute or loan any monies or property to the Partnership to enable it to effectuate, the return of the Capital Contributions of the Limited Partners or Unitholders, or any portion thereof, it being expressly understood that any such return shall
be made solely from Partnership assets. 
 Section 12.7 Waiver of Partition. To the maximum extent permitted by law, each Partner
hereby waives any right to partition of the Partnership property. 
 ARTICLE XIII 

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE 

Section 13.1 Amendments to be Adopted Without Approval of the Limited Partners or the General Partner. The General Partner and each
Limited Partner agree that the Board of Directors, without the approval of any Limited Partner or, subject to Section 5.5, the General Partner, may amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file
and record whatever documents may be required in connection therewith, to reflect: 
 (a) a change in the name of the Partnership, the
location of the principal place of business of the Partnership, the registered agent of the Partnership or the registered office of the Partnership; 

(b) admission, substitution, withdrawal or removal of Partners in accordance with this Agreement; 

(c) a change that the Board of Directors determines to be necessary or appropriate to qualify or continue the qualification of the Partnership
as a limited partnership or a partnership in which the Limited Partners have limited liability under the Marshall Islands Act; 
 (d) subject
to Section 5.11(c)(iv), to the extent applicable, a change that the Board of Directors determines (i) does not adversely affect the Limited Partners (including any particular class of Partnership Interests as compared to other
classes or series of Partnership Interests) in any material respect, (ii) to be necessary or appropriate to (A) satisfy any requirements, conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any
Marshall Islands authority (including the Marshall Islands Act) or (B) facilitate the trading of the Units or comply with any rule, regulation, guideline or requirement of any National Securities Exchange on which the Units are or will be
listed, or admitted to trading, (iii) to be necessary or appropriate in connection with action taken by the Board of Directors pursuant to Section 5.8 or (iv) is required to effect the intent expressed in the Registration
Statement or the intent of the provisions of this Agreement or is otherwise contemplated by this Agreement; 

  
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 (e) a change in the fiscal year or taxable year of the Partnership and any other changes that the
Board of Directors determines to be necessary or appropriate as a result of a change in the fiscal year or taxable year of the Partnership including, if the Board of Directors shall so determine, a change in the definition of “Quarter” and
the dates on which distributions (other than Series A Distributions) are to be made by the Partnership; 
 (f) an amendment that is
necessary, in the Opinion of Counsel, to prevent the Partnership, the members of the Board of Directors, or the General Partner or its or their directors, officers, trustees or agents from in any manner being subjected to the provisions of the U.S.
Investment Company Act of 1940, as amended, the U.S. Investment Advisers Act of 1940, as amended, or “plan asset” regulations adopted under the U.S. Employee Retirement Income Security Act of 1974, as amended, regardless of whether such
regulations are substantially similar to plan asset regulations currently applied or proposed by the United States Department of Labor; 

(g) subject to Section 5.11(c)(v), amendment that the Board of Directors, and if required by Section 5.5, the General
Partner, determines to be necessary or appropriate in connection with the authorization of issuance of any class or series of Partnership Interests pursuant to Section 5.4; 

(h) an amendment that the Board of Directors determines to be necessary or appropriate for the authorization of additional Partnership
Interests or rights to acquire Partnership Interests, including any amendment that the Board of Directors determines is necessary or appropriate in connection with: 

(i) the adjustments of the Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third
Target Distribution in connection with the IDR Reset Election in accordance with Section 5.10; 
 (ii) the
implementation of the provisions relating to KNOT’s right to reset its Incentive Distribution Rights in exchange for Common Units; 

(iii) any modification of the Incentive Distribution Rights made in connection with the issuance of additional Partnership
Interests or rights to acquire Partnership Interests, provided, that, with respect to this clause (iii), any such modifications to the Incentive Distribution Rights and the related issuance of Partnership Interests have received
Special Approval; or 
 (iv) any amendment expressly permitted in this Agreement to be made by the Board of Directors acting
alone; 
 (i) an amendment effected, necessitated or contemplated by a Merger Agreement approved in accordance with Section 14.3;

 (j) an amendment that the Board of Directors determines to be necessary or appropriate to reflect and account for the formation by the
Partnership of, or investment by the Partnership in, any corporation, partnership, joint venture, limited liability company or other Person, in connection with the conduct by the Partnership of activities permitted by the terms of
Section 2.4; 

  
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 (k) a conversion, merger or conveyance pursuant to Section 14.3(d); or 

(l) any other amendments substantially similar to the foregoing. 

Section 13.2 Amendment Procedures. Except as provided in Sections 13.1 and 13.3, all amendments to this Agreement shall
be made in accordance with the following requirements. Amendments to this Agreement may be proposed only by, or with the written consent of, the Board of Directors; provided, however, that the Board of Directors shall have no duty or
obligation to propose any amendment to this Agreement and may decline to do so free of any fiduciary duty or obligation whatsoever to the Partnership or any Limited Partner, any Record Holder or any other Person and, in declining to propose an
amendment, to the fullest extent permitted by applicable law shall not be required to act in good faith or pursuant to any other standard imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the
Marshall Islands Act or any other law, rule or regulation. Subject to Section 5.11(c)(iv), to the extent applicable, a proposed amendment shall be effective upon its approval by the Board of Directors and, if applicable, the holders of a
Unit Majority, unless a greater or different percentage is required under this Agreement or by the Marshall Islands Act. Each proposed amendment that requires the approval of the holders of a specified percentage of Outstanding Units shall be set
forth in a writing that contains the text of the proposed amendment. If such an amendment is proposed, the Board of Directors shall seek the written approval of the requisite percentage of Outstanding Units or call a meeting of the Unitholders to
consider and vote on such proposed amendment. The Board of Directors shall notify all Record Holders upon final adoption of any such proposed amendments. 

Section 13.3 Amendment Requirements. 

(a) Notwithstanding the provisions of Sections 13.1 and 13.2, no provision of this Agreement that establishes a percentage of
Outstanding Units (including Units deemed owned by the General Partner and its Affiliates) required to take any action shall be amended, altered, changed, repealed or rescinded in any respect that would have the effect of (i) in the case of any
provision of this Agreement other than Sections 11.2 or 13.4, reducing such percentage or (ii) in the case of Sections 11.2 or 13.4, increasing such percentage, unless such amendment is approved by the written
consent or the affirmative vote of holders of Outstanding Units whose aggregate Outstanding Units constitute not less than the voting requirement sought to be reduced. 

(b) Notwithstanding the provisions of Sections 13.1 and 13.2, no amendment to this Agreement may (i) enlarge the obligations
of any Limited Partner without its consent, unless such enlargement shall be deemed to have occurred as a result of an amendment approved pursuant to Section 13.3(c) or (ii) enlarge the obligations of, restrict in any way any action
by or rights of, or reduce in any way the amounts distributable, reimbursable or otherwise payable to, the General Partner or any of its Affiliates without its consent, which consent may be given or withheld at the General Partner’s option.

  
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 (c) Except as provided in Section 14.3 and subject to Section 5.11(c)(iv)
with respect to the Series A Preferred Units and without limitation of the Board of Directors’ authority to adopt amendments to this Agreement without the approval of any Partners as contemplated in Section 13.1, any amendment that
would have a material adverse effect on the rights or preferences of any class or series of Partnership Interests in relation to other classes or series of Partnership Interests must be approved by the holders of not less than a majority of the
Outstanding Partnership Interests of the class affected. If the General Partner determines an amendment does not satisfy the requirements of Section 13.1(d)(i) because it adversely affects one or more classes or series of Partnership
Interests, as compared to other classes or series of Partnership Interests, in any material respect, such amendment shall only be required to be approved by the adversely affected class, classes or series. 

(d) Notwithstanding any other provision of this Agreement, except for amendments pursuant to Section 13.1 and except as otherwise
provided by Section 14.3(b), no amendments shall become effective without the approval of the holders of at least 90% of the Outstanding Units voting as a single class, classes or series unless the Partnership obtains an Opinion of
Counsel to the effect that such amendment will not affect the limited liability of any Limited Partner under applicable law. 
 (e) Except as
provided in Section 13.1, this Section 13.3 shall only be amended with the approval of the holders of at least 90% of the Outstanding Units. 

Section 13.4 Special Meetings. All acts of Limited Partners to be taken pursuant to this Agreement shall be taken in the manner
provided in this Article XIII. Special meetings of the Limited Partners may be called by the General Partner, the Board of Directors or by Limited Partners owning 20% or more of the Outstanding Units of the class, classes or series for which
a meeting is proposed. Limited Partners shall call a special meeting by delivering to the Board of Directors one or more requests in writing stating that the signing Limited Partners wish to call a special meeting and indicating the general or
specific purposes for which the special meeting is to be called, it being understood that the purposes of such special meeting may only be to vote on matters that require the vote of the Unitholders pursuant to this Agreement. Within 60 days after
receipt of such a call from Limited Partners or within such greater time as may be reasonably necessary for the Partnership to comply with any statutes, rules, regulations, listing agreements or similar requirements governing the holding of a
meeting or the solicitation of proxies for use at such a meeting, the Board of Directors shall send a notice of the meeting to the Limited Partners either directly or indirectly through the Transfer Agent. A meeting shall be held at a time and place
determined by the Board of Directors on a date not less than 10 days nor more than 60 days after the mailing of notice of the meeting. Limited Partners shall not vote on matters that would cause the Limited Partners to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so as to jeopardize the Limited Partners’ limited liability under the Marshall Islands Act or the law of any other jurisdiction in which the Partnership is qualified to
do business. 
 Section 13.5 Notice of a Meeting. Notice of a meeting called pursuant to Section 13.4 shall be given to
the Record Holders of the class, classes or series of Units for which a meeting is proposed in writing by mail or other means of written communication in accordance with Section 16.1 at least 10 days in advance of such meeting. The
notice shall be deemed to have been given at the time when deposited in the mail or sent by other means of written communication. 

  
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 Section 13.6 Record Date. For purposes of determining the Limited Partners entitled to
notice of or to vote at a meeting of the Limited Partners or to give approvals without a meeting as provided in Section 13.11, the Board of Directors may set a Record Date, which shall not be less than 10 nor more than 60 days before
(a) the date of the meeting (unless such requirement conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange on which the Units are listed or admitted to trading, in which case the rule, regulation,
guideline or requirement of such National Securities Exchange shall govern) or (b) in the event that approvals are sought without a meeting, the date by which Limited Partners are requested in writing by the Board of Directors to give such
approvals. If the Board of Directors does not set a Record Date, then (a) the Record Date for determining the Limited Partners entitled to notice of or to vote at a meeting of the Limited Partners shall be the close of business on the day next
preceding the day on which notice is given, and (b) the Record Date for determining the Limited Partners entitled to give approvals without a meeting shall be the date the first written approval is deposited with the Partnership in care of the
Board of Directors in accordance with Section 13.11. 
 Section 13.7 Adjournment. When a meeting is adjourned to another
time or place, notice need not be given of the adjourned meeting and a new Record Date need not be fixed, if the time and place thereof are announced at the meeting at which the adjournment is taken, unless such adjournment shall be for more than 45
days. At the adjourned meeting, the Partnership may transact any business which might have been transacted at the original meeting. If the adjournment is for more than 45 days or if a new Record Date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given in accordance with this Article XIII. 
 Section 13.8 Waiver of Notice; Approval of Meeting;
Approval of Minutes. The transactions of any meeting of Limited Partners, however called and noticed, and whenever held, shall be as valid as if it had occurred at a meeting duly held after regular call and notice, if a quorum is present either
in person or by proxy. Attendance of a Limited Partner at a meeting shall constitute a waiver of notice of the meeting, except when the Limited Partner attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or convened; and except that attendance at a meeting is not a waiver of any right to disapprove the consideration of matters required to be included in the notice of the meeting,
but not so included, if the disapproval is expressly made at the meeting. 
 Section 13.9 Quorum and Voting. The holders of 33 1⁄3% of the Outstanding Units of the class, classes or series for which a meeting has been called (including Outstanding Units deemed owned by the General Partner
and its Affiliates) represented in person or by proxy shall constitute a quorum at a meeting of Limited Partners of such class, classes or series unless any such action by the Limited Partners requires approval by holders of a greater percentage of
such Units, in which case the quorum shall be such greater percentage, provided, however, that the Series A Preferred Units shall not be considered for purposes of determining whether a quorum is present for purposes of electing directors. At
any meeting of the Limited Partners duly called and held in accordance with this Agreement at which a quorum is present, the act of Limited 

  
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Partners holding Outstanding Units that in the aggregate represent a majority of the Outstanding Units entitled to vote and present in person or by proxy at such meeting shall be deemed to
constitute the act of all Limited Partners, unless a greater or different percentage is required with respect to such action under the provisions of this Agreement, in which case the act of the Limited Partners holding Outstanding Units that in the
aggregate represent at least such greater or different percentage shall be required. The Limited Partners present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment, notwithstanding the
withdrawal of enough Limited Partners to leave less than a quorum, if any action taken (other than adjournment) is approved by the required percentage of Outstanding Units specified in this Agreement (including Outstanding Units deemed owned by the
General Partner and its Affiliates). In the absence of a quorum, any meeting of Limited Partners may be adjourned from time to time by the affirmative vote of holders of at least a majority of the Outstanding Units entitled to vote at such meeting
(including Outstanding Units deemed owned by the General Partner and its Affiliates) and represented either in person or by proxy, but no other business may be transacted, except as provided in Section 13.7. 

Section 13.10 Conduct of a Meeting. The Board of Directors shall have full power and authority concerning the manner of conducting any
meeting of the Limited Partners or solicitation of approvals in writing, including the determination of Persons entitled to vote, the existence of a quorum, the satisfaction of the requirements of Section 13.4, the conduct of voting, the
validity and effect of any proxies and the determination of any controversies, votes or challenges arising in connection with or during the meeting or voting. The Chairman of the Board of Directors shall serve as chairman of any meeting and shall
further designate a Person to take the minutes of any meeting. All minutes shall be kept with the records of the Partnership maintained by the Board of Directors. The Board of Directors may make such other regulations consistent with applicable law
and this Agreement as it may deem advisable concerning the conduct of any meeting of the Limited Partners or solicitation of approvals in writing, including regulations in regard to the appointment of proxies, the appointment and duties of
inspectors of votes and approvals, the submission and examination of proxies and other evidence of the right to vote, and the revocation of approvals in writing. 

Section 13.11 Action Without a Meeting. If authorized by the Board of Directors, any action that may be taken at a meeting of the
Limited Partners may be taken without a meeting if an approval in writing setting forth the action so taken is signed by Limited Partners owning or deemed owning not less than the minimum percentage of the Outstanding Units (including Units deemed
owned by the General Partner and its Affiliates) that would be necessary to authorize or take such action at a meeting at which all the Limited Partners were present and voted (unless such provision conflicts with any rule, regulation, guideline or
requirement of any National Securities Exchange on which the Units are listed or admitted to trading, in which case the rule, regulation, guideline or requirement of such National Securities Exchange shall govern). Prompt notice of the taking of
action without a meeting shall be given to the Limited Partners who have not approved the action in writing. The Board of Directors may specify that any written ballot submitted to Limited Partners for the purpose of taking any action without a
meeting shall be returned to the Partnership within the time period, which shall be not less than 20 days, specified by the Board of Directors. If a ballot returned to the Partnership does not vote all of the Units held by the Limited Partners, the
Partnership shall be deemed to have failed to receive a ballot for the Units that were not voted. If approval of the taking of any action by the Limited Partners 

  
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is solicited by any Person other than by or on behalf of the Board of Directors, the written approvals shall have no force and effect unless and until (a) they are deposited with the
Partnership in care of the Board of Directors, (b) approvals sufficient to take the action proposed are dated as of a date not more than 90 days prior to the date sufficient approvals are deposited with the Partnership and (c) an Opinion
of Counsel is delivered to the Board of Directors to the effect that the exercise of such right and the action proposed to be taken with respect to any particular matter (i) will not cause the Limited Partners to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so as to jeopardize the Limited Partners’ limited liability, and (ii) is otherwise permissible under the applicable statutes then governing the rights, duties and
liabilities of the Partnership and the Partners. 
 Section 13.12 Right to Vote and Related Matters. 

(a) Only those Record Holders of the Units on the Record Date set pursuant to Section 13.6 (and also subject to the limitations
contained in the definition of “Outstanding”) shall be entitled to notice of, and to vote at, a meeting of Limited Partners or to act with respect to matters as to which the holders of the Outstanding Units have the right to vote or to
act. All references in this Agreement to votes of, or other acts that may be taken by, the Outstanding Units shall be deemed to be references to the votes or acts of the Record Holders of such Outstanding Units. 

(b) With respect to Units that are held for a Person’s account by another Person (such as a broker, dealer, bank, trust company or
clearing corporation, or an agent of any of the foregoing), in whose name such Units are registered, such other Person shall, in exercising the voting rights in respect of such Units on any matter, and unless the arrangement between such Persons
provides otherwise, vote such Units in favor of, and at the direction of, the Person who is the beneficial owner, and the Partnership shall be entitled to assume it is so acting without further inquiry. The provisions of this
Section 13.12(b) (as well as all other provisions of this Agreement) are subject to the provisions of Section 4.3. 
  

ARTICLE XIV 
 MERGER,
CONSOLIDATION OR CONVERSION 
 Section 14.1 Authority. The Partnership may merge or consolidate with or into one or more
corporations, limited liability companies, statutory trusts or associations, real estate investment trusts, common law trusts or unincorporated businesses, including a partnership (whether general or limited (including a limited liability
partnership)) or convert into any such entity, pursuant to a written agreement of merger or consolidation (“Merger Agreement”) or a written plan of conversion (“Plan of Conversion”), as the case may
be, in accordance with this Article XIV. 
 Section 14.2 Procedure for Merger, Consolidation or Conversion. 

(a) Merger, consolidation or conversion of the Partnership pursuant to this Article XIV requires the approval of the Board of
Directors and the prior consent of the General Partner; provided, however, that, to the fullest extent permitted by law, neither the Board of Directors nor  

  
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the General Partner shall have a duty or obligation to consent to any merger, consolidation or conversion of the Partnership and may decline to do so free of any fiduciary duty or obligation
whatsoever to the Partnership or any Limited Partner and, in declining to consent to a merger, consolidation or conversion, shall not be required to act in good faith or pursuant to any other standard imposed by this Agreement, any Group Member
Agreement, any other agreement contemplated hereby or under the Marshall Islands Act or any other law, rule or regulation or at equity. 

(b) If the Board of Directors and the General Partner shall determine to consent to the merger, consolidation or conversion, the Board of
Directors and the General Partner shall approve the Merger Agreement, which shall set forth: 
 (i) the names and
jurisdictions of formation or organization of each of the business entities proposing to merge or consolidate; 
 (ii) the
name and jurisdiction of formation or organization of the business entity that is to survive the proposed merger or consolidation (the “Surviving Business Entity”); 

(iii) the terms and conditions of the proposed merger or consolidation; 

(iv) the manner and basis of exchanging or converting the equity securities of each constituent business entity for, or into,
cash, property or interests, rights, securities or obligations of the Surviving Business Entity; and (A) if any interests, securities or rights of any constituent business entity are not to be exchanged or converted solely for, or into, cash,
property or interests, rights, securities or obligations of the Surviving Business Entity, the cash, property or interests, rights, securities or obligations of any general or limited partnership, corporation, trust, limited liability company,
unincorporated business or other Person (other than the Surviving Business Entity) which the holders of such interests, securities or rights are to receive in exchange for, or upon conversion of their interests, securities or rights, and (B) in
the case of securities represented by certificates, upon the surrender of such certificates, which cash, property or interests, rights, securities or obligations of the Surviving Business Entity or any general or limited partnership, corporation,
trust, limited liability company, unincorporated business or other Person (other than the Surviving Business Entity), or evidences thereof, are to be delivered; 

(v) a statement of any changes in the constituent documents or the adoption of new constituent documents (the articles or
certificate of incorporation, articles of trust, declaration of trust, certificate or agreement of limited partnership or other similar charter or governing document) of the Surviving Business Entity to be effected by such merger or consolidation;

 (vi) the effective time of the merger, which may be the date of the filing of the certificate of merger pursuant to
Section 14.4 or a later date specified in or determinable in accordance with the Merger Agreement (provided, that if the effective time of the merger is to be later than the date of the filing of such certificate of merger, the
effective time shall be fixed at a date or time certain at or prior to the time of the filing of such certificate of merger and stated therein); and 

  
 87 

 (vii) such other provisions with respect to the proposed merger or consolidation
that the Board of Directors and the General Partner determine to be necessary or appropriate. 
 (c) If the Board of Directors and the
General Partner shall determine to consent to the conversion the Board of Directors and the General Partner shall approve the Plan of Conversion, which shall set forth: 

(i) the name of the converting entity and the converted entity; 

(ii) a statement that the Partnership is continuing its existence in the organizational form of the converted entity; 

(iii) a statement as to the type of entity that the converted entity is to be and the state or country under the laws of which
the converted entity is to be incorporated, formed or organized; 
 (iv) the manner and basis of exchanging or converting the
equity securities of each constituent business entity for, or into, cash, property or interests, rights, securities or obligations of the converted entity or another entity, or for the cancellation of such equity securities; 

(v) in an attachment or exhibit, the certificate of limited partnership of the Partnership; 

(vi) in an attachment or exhibit, the certificate of limited partnership, certificate of formation, articles of incorporation,
or other organizational documents of the converted entity; 
 (vii) the effective time of the conversion, which may be
the date of the filing of the articles of conversion or a later date specified in or determinable in accordance with the Plan of Conversion (provided, that if the effective time of the conversion is to be later than the date of the filing of
such articles of conversion, the effective time shall be fixed at a date or time certain and stated in such articles of conversion); and 

(viii) such other provisions with respect to the proposed conversion the Board of Directors and the General Partner determines
to be necessary or appropriate. 
 Section 14.3 Approval by Limited Partners of Merger, Consolidation or Conversion. 

(a) Except as provided in Sections 14.3(d) and 14.3(e), the Board of Directors, upon its and the General Partner’s approval
of the Merger Agreement or the Plan of Conversion, as the case may be, shall direct that the Merger Agreement or the Plan of Conversion and the merger, consolidation or conversion contemplated thereby, as applicable, be submitted to a vote of
Limited Partners, whether at a special meeting or by written consent, in either case in accordance with the requirements of Article XIII. A copy or a summary of the Merger Agreement or the Plan of Conversion, as the case may be, shall be
included in or enclosed with the notice of a special meeting or the written consent. 

  
 88 

 (b) Except as provided in Sections 14.3(d) and 14.3(e), the Merger Agreement or
Plan of Conversion, as the case may be, shall be approved upon receiving the affirmative vote or consent of the holders of a Unit Majority. 

(c) Except as provided in Sections 14.3(d) and 14.3(e), after such approval by vote or consent of the Limited Partners, and at
any time prior to the filing of the certificate of merger or certificate of conversion pursuant to Section 14.4, the merger, consolidation or conversion may be abandoned pursuant to provisions therefor, if any, set forth in the Merger
Agreement or Plan of Conversion, as the case may be. 
 (d) Notwithstanding anything else contained in this Article XIV or in this
Agreement, the Board of Directors is permitted, without Limited Partner approval, to convert the Partnership or any Group Member into a new limited liability entity, to merge the Partnership or any Group Member into, or convey all of the
Partnership’s assets to, another limited liability entity which shall be newly formed and shall have no assets, liabilities or operations at the time of such conversion, merger or conveyance other than those it receives from the Partnership or
other Group Member if (i) the Board of Directors has received an Opinion of Counsel that the conversion, merger or conveyance, as the case may be, would not result in the loss of the limited liability of any Limited Partner, (ii) the sole
purpose of such conversion, merger or conveyance is to effect a mere change in the legal form of the Partnership into another limited liability entity and (iii) the governing instruments of the new entity provide the Limited Partners, the
General Partner and the Board of Directors with the same rights and obligations as are herein contained. 
 (e) Additionally, notwithstanding
anything else contained in this Article XIV or in this Agreement, the Board of Directors, with the prior consent of the General Partner, is permitted, without Limited Partner approval, to merge or consolidate the Partnership with or into
another entity if (i) the Board of Directors has received an Opinion of Counsel that the merger or consolidation, as the case may be, would not result in the loss of the limited liability of any Limited Partner, (ii) the merger or
consolidation would not result in an amendment to this Agreement, other than any amendments that could be adopted pursuant to Section 13.1, (iii) the Partnership is the Surviving Business Entity in such merger or consolidation,
(iv) each Unit outstanding immediately prior to the effective date of the merger or consolidation is to be an identical Unit of the Partnership after the effective date of the merger or consolidation, and (v) the number of Partnership
Interests to be issued by the Partnership in such merger or consolidation does not exceed 20% of the Partnership Interests Outstanding immediately prior to the effective date of such merger or consolidation. 

Section 14.4 Certificate of Merger or Conversion. Upon the required approval by the Board of Directors, the General Partner and the
Unitholders of a Merger Agreement or Plan of Conversion, as the case may be, a certificate of merger or conversion, as applicable, shall be executed and filed in conformity with the requirements of the Marshall Islands Act. 

  
 89 

 Section 14.5 Amendment of Partnership Agreement. Pursuant to Section 20(2) of the
Marshall Islands Act, an agreement of merger or consolidation approved in accordance with Section 20(2) of the Marshall Islands Act may (a) effect any amendment to this Agreement or (b) effect the adoption of a new partnership
agreement for a limited partnership if it is the Surviving Business Entity. Any such amendment or adoption made pursuant to this Section 14.5 shall be effective at the effective time or date of the merger or consolidation. 

Section 14.6 Effect of Merger, Consolidation or Conversion. 

(a) At the effective time of the certificate of merger: 

(i) all of the rights, privileges and powers of each of the business entities that has merged or consolidated, and all
property, real, personal and mixed, and all debts due to any of those business entities and all other things and causes of action belonging to each of those business entities, shall be vested in the Surviving Business Entity and after the merger or
consolidation shall be the property of the Surviving Business Entity to the extent they were of each constituent business entity; 

(ii) the title to any real property vested by deed or otherwise in any of those constituent business entities shall not revert
and is not in any way impaired because of the merger or consolidation; 
 (iii) all rights of creditors and all liens on or
security interests in property of any of those constituent business entities shall be preserved unimpaired; and 
 (iv) all
debts, liabilities and duties of those constituent business entities shall attach to the Surviving Business Entity and may be enforced against it to the same extent as if the debts, liabilities and duties had been incurred or contracted by it. 

(b) At the effective time of the certificate of conversion, for all purposes of the laws of the Marshall Islands: 

(i) the Partnership shall continue to exist, without interruption, but in the organizational form of the converted entity
rather than in its prior organizational form; 
 (ii) all rights, title, and interests to all real estate and other property
owned by the Partnership shall remain vested in the converted entity in its new organizational form without reversion or impairment, without further act or deed, and without any transfer or assignment having occurred, but subject to any existing
liens or other encumbrances thereon; 
 (iii) all liabilities and obligations of the Partnership shall continue to be
liabilities and obligations of the converted entity in its new organizational form without impairment or diminution by reason of the conversion; 

(iv) all rights of creditors or other parties with respect to or against the prior interest holders or other owners of the
Partnership in their capacities as such in existence as of the effective time of the conversion will continue in existence as to those liabilities and obligations and are enforceable against the converted entity by such creditors and obligees to the
same extent as if the liabilities and obligations had originally been incurred or contracted by the converted entity; and 

  
 90 

 (v) the Partnership Interests that are to be converted into partnership
interests, shares, evidences of ownership, or other rights or securities in the converted entity or cash as provided in the Plan of Conversion shall be so converted, and Partners shall be entitled only to the rights provided in the Plan of
Conversion. 
  
 ARTICLE XV 

RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS 

Section 15.1 Right to Acquire Limited Partner Interests. 

(a) Notwithstanding any other provision of this Agreement, if at any time the General Partner and its Affiliates hold more than 80% of the
total Limited Partner Interests of any class or series then Outstanding, the General Partner shall then have the right, which right it may assign and transfer in whole or in part to the Partnership or any Affiliate of the General Partner,
exercisable at its option, to purchase all, but not less than all, of such Limited Partner Interests of such class or series then Outstanding held by Persons other than the General Partner and its Affiliates, at the greater of (x) the Current
Market Price as of the date three days prior to the date that the notice described in Section 15.1(b) is mailed and (y) the highest price paid by the General Partner or any of its Affiliates for any such Limited Partner Interest of
such class or series purchased during the 90-day period preceding the date that the notice described in Section 15.1(b) is mailed. Notwithstanding the foregoing, the repurchase right described in
this Article XV shall not apply to Series A Preferred Units. 
 (b) If the General Partner, any Affiliate of the General Partner or the
Partnership elects to exercise the right to purchase Limited Partner Interests granted pursuant to Section 15.1(a), the General Partner shall deliver to the Transfer Agent notice of such election to purchase (the “Notice of
Election to Purchase”) and shall cause the Transfer Agent to mail a copy of such Notice of Election to Purchase to the Record Holders of Limited Partner Interests of such class, classes or series (as of a Record Date selected by the
General Partner) at least 10, but not more than 60, days prior to the Purchase Date. Such Notice of Election to Purchase shall also be published for a period of at least three consecutive days in at least two daily newspapers of general circulation
printed in the English language and published in the Borough of Manhattan, New York. The Notice of Election to Purchase shall specify the Purchase Date and the price (determined in accordance with Section 15.1(a)) at which Limited
Partner Interests will be purchased and state that the General Partner, its Affiliate or the Partnership, as the case may be, elects to purchase such Limited Partner Interests, upon surrender of Certificates representing such Limited Partner
Interests, if any, in exchange for payment, at such office or offices of the Transfer Agent as the Transfer Agent may specify, or as may be required by any National Securities Exchange on which such Limited Partner Interests are listed. Any such
Notice of Election to Purchase mailed to a Record Holder of Limited Partner Interests at his address as reflected in the records of the Transfer Agent shall be conclusively presumed to have been given regardless of whether the owner receives such
notice. On or prior to the Purchase Date, the 

  
 91 

 
General Partner, its Affiliate or the Partnership, as the case may be, shall deposit with the Transfer Agent cash in an amount sufficient to pay the aggregate purchase price of all of such
Limited Partner Interests to be purchased in accordance with this Section 15.1. If the Notice of Election to Purchase shall have been duly given as aforesaid at least 10 days prior to the Purchase Date, and if on or prior to the Purchase
Date the deposit described in the preceding sentence has been made for the benefit of the holders of Limited Partner Interests subject to purchase as provided herein, then from and after the Purchase Date to the extent Certificates for the Limited
Partner Interests are outstanding, notwithstanding that any Certificate shall not have been surrendered for purchase, all rights of the holders of such Limited Partner Interests (including any rights pursuant to Articles IV, V,
VI and XII) shall thereupon cease, except the right to receive the applicable purchase price (determined in accordance with Section 15.1(a)) for Limited Partner Interests therefor, without interest, upon surrender to the
Transfer Agent of the Certificates representing such Limited Partner Interests, and such Limited Partner Interests shall thereupon be deemed to be transferred to the General Partner, its Affiliate or the Partnership, as the case may be, on the
record books of the Transfer Agent and the Partnership, and the General Partner or any Affiliate of the General Partner, or the Partnership, as the case may be, shall be deemed to be the owner of all such Limited Partner Interests from and after the
Purchase Date and shall have all rights as the owner of such Limited Partner Interests (including all rights as owner of such Limited Partner Interests pursuant to Articles IV, V, VI and XII). 

(c) At any time from and after the Purchase Date, a holder of an Outstanding Limited Partner Interest subject to purchase as provided in this
Section 15.1 may surrender his Certificate evidencing such Limited Partner Interest to the Transfer Agent in exchange for payment of the amount described in Section 15.1(a), without interest thereon. 

 
 ARTICLE XVI 

GENERAL PROVISIONS 

Section 16.1 Addresses and Notices. 

(a) Any notice, demand, request, report or proxy materials required or permitted to be given or made to a Partner under this Agreement shall be
in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail or by other means of written communication to the Partner at the address described below. Any notice, payment or report to be given
or made to a Partner hereunder shall be deemed conclusively to have been given or made, and the obligation to give such notice or report or to make such payment shall be deemed conclusively to have been fully satisfied, upon sending of such notice,
payment or report to the Record Holder of such Partnership Interests at his address as shown on the records of the Transfer Agent or as otherwise shown on the records of the Partnership, regardless of any claim of any Person who may have an interest
in such Partnership Interests by reason of any assignment or otherwise. An affidavit or certificate of making of any notice, payment or report in accordance with the provisions of this Section 16.1 executed by a member of the Board of
Directors, the General Partner, the Transfer Agent or the mailing organization shall be prima facie evidence of the giving or making of such notice, payment or report. If any notice, payment or report addressed to a Record Holder at the address of
such Record Holder appearing on the books and records of the Transfer Agent or the Partnership is returned by the United States 

  
 92 

 
Postal Service marked to indicate that the United States Postal Service is unable to deliver it, such notice, payment or report and any subsequent notices, payments and reports shall be deemed to
have been duly given or made without further mailing (until such time as such Record Holder or another Person notifies the Transfer Agent or the Partnership of a change in his address) if they are available for the Partner at the principal office of
the Partnership for a period of one year from the date of the giving or making of such notice, payment or report to the other Partners. Any notice to the Partnership shall be deemed given if received by the General Partner or the Board of Directors
at the principal office of the Partnership designated pursuant to Section 2.3. The General Partner and the Board of Directors may rely and shall be protected in relying on any notice or other document from a Partner or other Person if
believed by it to be genuine. 
 (b) The terms “in writing,” “written communications,” “written notice” and
words of similar import shall be deemed satisfied under this Agreement by use of e-mail and other forms of electronic communication. 

Section 16.2 Further Action. The parties shall execute and deliver all documents, provide all information and take or refrain from
taking action as may be necessary or appropriate to achieve the purposes of this Agreement. 
 Section 16.3 Binding Effect. This
Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors, legal representatives and permitted assigns. 

Section 16.4 Integration. This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter
hereof and supersedes all prior agreements and understandings pertaining thereto. 
 Section 16.5 Creditors. None of the provisions
of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership. 
 Section 16.6 Waiver.
No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach of any other
covenant, duty, agreement or condition. 
 Section 16.7 Counterparts. This Agreement may be executed in counterparts, all of which
together shall constitute an agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing
its signature hereto or, in the case of a Person acquiring a Limited Partner Interest, pursuant to Section 10.2(a), immediately upon the acquisition of such Limited Partner Interests without execution hereof. 

Section 16.8 Applicable Law; Forum, Venue and Jurisdiction. 

(a) This Agreement shall be construed in accordance with and governed by the laws of The Republic of the Marshall Islands, without regard to
the principles of conflicts of law. 

  
 93 

 (b) Each of the Partners and each Person holding any beneficial interest in the Partnership
(whether through a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing or otherwise): 

(i) irrevocably agrees that any claims, suits, actions or proceedings (A) arising out of or relating in any way to this
Agreement (including any claims, suits or actions to interpret, apply or enforce the provisions of this Agreement or the duties, obligations or liabilities among Partners or of Partners to the Partnership, or the rights or powers of, or restrictions
on, the Partners or the Partnership), (B) brought in a derivative manner on behalf of the Partnership, (C) asserting a claim of breach of a fiduciary duty owed by any director, officer, or other employee of the Partnership or the General
Partner, or owed by the General Partner, to the Partnership or the Partners, (D) asserting a claim arising pursuant to any provision of the Marshall Islands Act or (E) asserting a claim governed by the internal affairs doctrine shall be
exclusively brought in the Court of Chancery of the State of Delaware (or, if such court does not have subject matter jurisdiction thereof, any other court located in the State of Delaware with subject matter jurisdiction), unless otherwise provided
for by Marshall Islands law, in each case regardless of whether such claims, suits, actions or proceedings sound in contract, tort, fraud or otherwise, are based on common law, statutory, equitable, legal or other grounds, or are derivative or
direct claims; 
 (ii) irrevocably submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware
(or, if such court does not have subject matter jurisdiction thereof, any other court located in the State of Delaware with subject matter jurisdiction), unless otherwise provided for by Marshall Islands law, in connection with any such claim, suit,
action or proceeding; 
 (iii) agrees not to, and waives any right to, assert in any such claim, suit, action or proceeding
that (A) it is not personally subject to the jurisdiction of the Court of Chancery of the State of Delaware or of any other court to which proceedings in the Court of Chancery of the State of Delaware may be appealed, (B) such claim, suit,
action or proceeding is brought in an inconvenient forum, or (C) the venue of such claim, suit, action or proceeding is improper; 

(iv) expressly waives any requirement for the posting of a bond by a party bringing such claim, suit, action or proceeding; and

 (v) consents to process being served in any such claim, suit, action or proceeding by mailing, certified mail, return
receipt requested, a copy thereof to such party at the address in effect for notices hereunder, and agrees that such services shall constitute good and sufficient service of process and notice thereof; provided, nothing in clause
(v) hereof shall affect or limit any right to serve process in any other manner permitted by law. 
 Section 16.9 Invalidity of
Provisions. If any provision or part of a provision of this Agreement is or becomes for any reason, invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions and part thereof
contained herein 

  
 94 

 
shall not be affected thereby and this Agreement shall, to the fullest extent permitted by law, be reformed and construed as if such invalid, illegal or unenforceable provision, or part of a
provision, had never been contained herein, and such provision or part reformed so that it would be valid, legal and enforceable to the maximum extent possible. 

Section 16.10 Consent of Partners. Each Partner hereby expressly consents and agrees that, whenever in this Agreement it is specified
that an action may be taken upon the affirmative vote or consent of less than all of the Partners (including any amendment to this Agreement), such action may be so taken upon the concurrence of less than all of the Partners and each Partner shall
be bound by the results of such action (including any amendment to this Agreement). 
 Section 16.11 Facsimile Signatures. The use of
facsimile signatures affixed in the name and on behalf of the transfer agent and registrar of the Partnership on certificates representing Common Units and Preferred Units is expressly permitted by this Agreement. 

Section 16.12 Third-Party Beneficiaries. Each Partner agrees that any Indemnitee shall be
entitled to assert rights and remedies hereunder as a third party beneficiary hereto with respect to those provisions of this Agreement affording a right, benefit or privilege to such Indemnitee. 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 

  
 95 

 IN WITNESS WHEREOF, this Third Amended and Restated Agreement of Limited Partnership has been
executed as of the date first written above. 
  

			
	KNOT OFFSHORE PARTNERS LP
		
	By:	 	  

		 	Name: John Costain
		 	Title:   Authorized Person
	
	GENERAL PARTNER
	
	KNOT OFFSHORE PARTNERS GP LLC
		
	By:	 	  

		 	Name: Øystein M. Kalleklev
		 	Title:   Authorized Person

 SIGNATURE PAGE TO 

THIRD AMENDED AND RESTATED 

AGREEMENT OF LIMITED PARTNERSHIP 

 EXHIBIT A 

to the Third Amended and Restated 

Agreement of Limited Partnership of 

KNOT OFFSHORE PARTNERS LP 

Certificate Evidencing Common Units 

Representing Limited Partner Interests in 

KNOT OFFSHORE PARTNERS LP 
  

			
	No.	  	Common Units

 In accordance with Section 4.1 of the Third Amended and Restated Agreement of Limited Partnership
of KNOT Offshore Partners LP, as amended, supplemented or restated from time to time (the “Partnership Agreement”), KNOT Offshore Partners LP, a Marshall Islands limited partnership (the
“Partnership”), hereby certifies that                     (the “Holder”) is the registered owner of
the above designated number of Common Units representing limited partner interests in the Partnership (the “Common Units”) transferable on the books of the Partnership, in person or by duly authorized attorney, upon surrender
of this Certificate properly endorsed. The rights, preferences and limitations of the Common Units are set forth in, and this Certificate and the Common Units represented hereby are issued and shall in all respects be subject to the terms and
provisions of, the Partnership Agreement. Copies of the Partnership Agreement are on file at, and will be furnished without charge on delivery of written request to the Partnership at, the principal office of the Partnership located at 2
Queen’s Cross, Aberdeen, Aberdeenshire AB15 4YB, United Kingdom. Capitalized terms used herein but not defined shall have the meanings given them in the Partnership Agreement. 

The Holder, by accepting this Certificate, is deemed to have (a) requested admission as, and agreed to become, a Limited Partner and to
have agreed to comply with and be bound by and to have executed the Partnership Agreement, (b) represented and warranted that the Holder has all right, power and authority and, if an individual, the capacity necessary to enter into the
Partnership Agreement and (c) made the waivers and given the consents and approvals contained in the Partnership Agreement. 
 This
Certificate shall not be valid for any purpose unless it has been countersigned and registered by the Transfer Agent and Registrar. This Certificate shall be governed by and construed in accordance with the laws of the Marshall Islands. 

 

			
	Dated:
                                    	  	
	Countersigned and Registered by:	  	KNOT OFFSHORE PARTNERS LP
		
	  
	  	By:
                                         
                               
	as Transfer Agent and Registrar	  	        Title:
		  	
		
	By:                                     
                                         
  	  	By:
                                         
                               
	 Authorized Signature
	  	        Title:

  
 A-1 

 [Reverse of Certificate] 

ABBREVIATIONS 
 The
following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as follows according to applicable laws or regulations: 
  

							
	TEN COM	  	—	  	as tenants in common	  	 UNIF GIFT/TRANSFERS MIN ACT

                        
Custodian                             

(Cust) (Minor)

	TEN ENT	  	—	  	as tenants by the entireties	  	
	JT TEN	  	—	  	as joint tenants with right of survivorship and not as tenants in common	  	under Uniform Gifts /Transfers to CD Minors Act (State)

 Additional abbreviations, though not in the above list, may also be used. 

ASSIGNMENT OF COMMON UNITS 

in 
 KNOT OFFSHORE
PARTNERS LP 
 FOR VALUE RECEIVED,
                                         
    hereby assigns, conveys, sells and transfers unto 
  

			
	  
	  	  

	(Please print or typewrite name and address of Assignee)	  	(Please insert Social Security or other identifying number of Assignee)

                     Common Units
representing limited partner interests evidenced by this Certificate, subject to the Partnership Agreement, and does hereby irrevocably constitute and
appoint                         as its
attorney-in-fact with full power of substitution to transfer the same on the books of KNOT Offshore Partners LP. 

  
 A-2 

					
	Date:	  	NOTE:	  	The signature to any endorsement hereon must correspond with the name as written upon the face of this Certificate in every particular, without alteration, enlargement or change.
			
	THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15	  		  	
                          
                                         
     
 (Signature)
  

                          
                                         
     
 (Signature)

 No transfer of the Common Units evidenced hereby will be registered on the books of the Partnership, unless
the Certificate evidencing the Common Units to be transferred is surrendered for registration or transfer. 

  
 A-3 

 EXHIBIT B 

to the Third Amended and Restated 

Agreement of Limited Partnership of 

KNOT Offshore Partners LP 

Certificate Evidencing 

Series A Convertible Preferred Units 

Representing Limited Partner Interests in 

KNOT Offshore Partners LP 
  

			
	No.                        	  	                    Series A Preferred Units

 In accordance with Section 5.11(c)(vi) of the Third Amended and Restated Agreement of Limited
Partnership of KNOT Offshore Partners LP, as amended, supplemented or restated from time to time (the “Partnership Agreement”), KNOT Offshore Partners LP, a Marshall Islands limited partnership (the
“Partnership”), hereby certifies that                             (the
“Holder”) is the registered owner of                     Series A Convertible Preferred Units representing limited partner
interests in the Partnership (the “Series A Preferred Units”) transferable (subject to the Partnership Agreement) on the books of the Partnership, in person or by duly authorized attorney, upon
surrender of this Certificate properly endorsed. The rights, preferences and limitations of the Series A Preferred Units are set forth in, and this Certificate and the Series A Preferred Units represented hereby are issued and shall in all respects
be subject to the terms and provisions of, the Partnership Agreement. Copies of the Partnership Agreement are on file at, and will be furnished without charge on delivery of written request to the Partnership at, the principal office of the
Partnership located at 2 Queen’s Cross, Aberdeen, Aberdeenshire AB15 4YB, United Kingdom. Capitalized terms used herein but not defined shall have the meanings given them in the Partnership Agreement. 

NEITHER THE OFFER NOR SALE OF THESE SECURITIES HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THESE SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION THEREUNDER AND, IN THE CASE OF A TRANSACTION EXEMPT FROM
REGISTRATION, UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT OR THE PARTNERSHIP HAS RECEIVED DOCUMENTATION REASONABLY SATISFACTORY TO IT THAT SUCH TRANSACTION DOES NOT REQUIRE REGISTRATION UNDER SUCH ACT. THIS SECURITY IS SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER SET FORTH IN THE THIRD AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF THE PARTNERSHIP, DATED AS OF JUNE 30, 2017, A COPY OF WHICH MAY BE OBTAINED FROM THE PARTNERSHIP AT ITS PRINCIPAL EXECUTIVE OFFICES. 

The Holder, by accepting this Certificate, is deemed to have (i) requested admission as, and agreed to become, a Limited Partner and to
have agreed to comply with and be bound by and to have executed the Partnership Agreement, (ii) represented and warranted that the Holder has 

  
 B-1 

 
all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, (iii) granted the powers of attorney provided for in the Partnership
Agreement and (iv) made the waivers and given the consents and approvals contained in the Partnership Agreement. 
 This Certificate
shall not be valid for any purpose unless it has been countersigned and registered by the Transfer Agent and Registrar. This Certificate shall be governed by and construed in accordance with the laws of the Republic of the Marshall Islands. 

 

			
	Dated:                                	  	
	Countersigned and Registered by:	  	KNOT OFFSHORE PARTNERS LP
		
	  
	  	By:
                                         
                   
	as Transfer Agent and Registrar	  	        Title:
		
	By:                                     
                   	  	By:                                     
                       
	        Authorized Signature	  	        Title:

 [Reverse of Certificate] 

ABBREVIATIONS 
 The
following abbreviations, when used in the inscription on the face of this Certificate, shall be construed as follows according to applicable laws or regulations: 
  

							
	 TEN COM
 TEN ENT

 
 JT TEN
	  	 -
 -

 
 -
	  	 as tenants in common
 as tenants by the
entireties
  
 as joint tenants with right of survivorship and not as tenants in
common
	  	 UNIF GIFT/TRANSFERS MIN ACT

                 Custodian
                    

(Cust)                        
(Minor)
 Under Uniform Gifts/Transfers to CD Minors Act (State)

		  		  	  
 Additional abbreviations, though not in the above list, may
also be used.

  
 B-2 

 ASSIGNMENT OF SERIES A PREFERRED UNITS OF 

KNOT Offshore Partners LP 
 FOR VALUE
RECEIVED,             hereby assigns, conveys, sells and transfers unto 
  

			
	  
	  	  

	(Please print or typewrite name and address of assignee)	  	(Please insert Social Security or other identifying number of assignee)
	
	                     Series A Preferred Units representing limited partner interests evidenced by this
Certificate, subject to the Partnership Agreement, and does hereby irrevocably constitute and appoint                      as its
attorney-in-fact with full power of substitution to transfer the same on the books of KNOT Offshore Partners LP
		
	Date:
                                         
               	  	NOTE: The signature to any endorsement hereon must correspond with the name as written upon the face of this Certificate in every particular. without alteration, enlargement or change.
		
	THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15	  	
                          
                                         
 
 (Signature)
  

                          
                                         
 
 (Signature)

	  
	  	
	
	 No transfer of the Series A Preferred Units evidenced hereby will be registered on the books of the
Partnership, unless the Certificate evidencing the Series A Preferred Units to be transferred is surrendered for registration or transfer.

  
 B-3 

 EXHIBIT C 

Model Computations 
 of
Redetermined Series A Conversion Rate 
 Pursuant to Section 5.11(c)(vii)(F) 

  
 C-1 

 Exhibit C—Model Conversion Rate computations 

 

											
		  	Upon the Closing Date	  		  				 	
		  	Series A Issue Price	  	(i)	  	$	24.00	 	 	
		  	Book value per Common Unit 1)	  	(ii)	  	$	18.50	 	 	GAAP
		  	Implied premium	  	( (i) divided by (ii) ) minus 1	  	 	29.7	%	 	
		  	Implied conversion strike price	  	Book value per Common Unit1); multiplied by (1 plus the implied premium)	  	$	24.00	 	 	Idential to Series A Issue Price as per the Closing Date
		  	Series A Conversion Rate	  	Series A Issue Price divided by the implied conversion strike price	  	 	1.0000	 	 	Series A Conversion Rate (1.0000 (one Common Unit per Series A Preferred Unit))
	(1)	  	Redetermined Series A Conversion Rate	  				 	
		  	Book value per Common Unit 1)	  		  	$	18.00	 	 	GAAP
		  	Implied premium	  	( (i) divided by (ii) ) minus 1	  	 	29.7	%	 	
		  	Implied conversion strike price	  	Book value per Common Unit1); multiplied by (1 plus the implied premium)	  	$	23.35	 	 	
		  	Series A Conversion Rate	  	Series A Issue Price divided by implied conversion strike price	  	 	1.0278	 	 	Redetermined Series A Conversion Rate
	(2)	  	Adjustment to Series A Conversion Rate due to extraordinary or special cash distribution	  				 	
		  	Extraordinary or special cash distribution (per Common Unit) during the Quarter	  		  	$	2.00	 	 	
		  	Book value per Common Unit 1)	  		  	$	18.00	 	 	
		  	Book value per Common Unit adjusted for extraordinary or special distribution	  		  	$	16.00	 	 	
		  	Implied premium	  	( (i) divided by (ii) ) minus 1	  	 	29.7	%	 	
		  	Implied conversion strike price	  	Book value per Common Unit1); multiplied by (1 plus the implied premium)	  	$	20.76	 	 	
		  	Series A Conversion Rate	  	Series A Issue Price divided by implied conversion strike price	  	 	1.1563	 	 	Redetermined Series A Conversion Rate

  
 C-2 

											
	(3)	  	Adjustment to Series A Conversion Rate due to issuance of Common Units	 	 	
		  	Book value per Common Unit 1)	  		  	$	16.00	 	 	
		  	Book value per Common Unit pro-forma for net issuance proceeds	  	(ii)	  	$	20.00	 	 	
		  	Implied conversion strike price prior to euqity issuance	  	(i)	  	$	20.76	 	 	
		  	Adjusted implied premium	  	( (i) divided by (ii) ) minus 1	  	 	3.8	%	 	Adjustment to implied premium to ensure that Conversion Rate is not changed due to the equity issuance
		  	Implied conversion strike price	  	Book value per Common Unit1); multiplied by (1 plus the implied premium)	  	$	20.76	 	 	
		  	Series A Conversion Rate	  	Series A Issue Price divided by implied conversion strike price	  	 	1.1563	 	 	Conversion Rate remains constant (i.e. to example (2) above)
	(4)	  	Adjustment to Series A Conversion Rate due to change in accounting principle	  				 	
		  	Book value per Common Unit 1)	  		  	$	20.00	 	 	
		  	Book value per Common Unit following effect of change in accounting principle	  	(ii)	  	$	15.00	 	 	
		  	Implied conversion strike price prior to change in accounting principle	  	(i)	  	$	20.76	 	 	
		  	Adjusted implied premium	  	( (i) divided by (ii) ) minus 1	  	 	38.4	%	 	Adjustment to implied premium to ensure that Conversion Rate is not changed due to change in accounting principle
		  	Implied conversion strike price	  	Book value per Common Unit1); multiplied by (1 plus the implied premium)	  	$	20.76	 	 	
		  	Series A Conversion Rate	  	Series A Issue Price divided by implied conversion strike price	  	 	1.1563	 	 	Conversion Rate remains constant (i.e. to example (2) above)
	(5)	  	Adjustment to Series A Conversion Rate due to distributions of property or securities of the Partnership	  				 	
		  	Distributions of property or securities of the Partnership	  		  	 	2.00	 	 	Value as determined by the Board of Directors
		  	Book value per Common Unit 1)	  		  	 	15.00	 	 	
		  	Book value per Common Unit adjusted for extraordinary or special distribution	  		  	 	13.00	 	 	
		  	Adjusted implied premium	  	( (i) divided by (ii) ) minus 1	  	 	38.4	%	 	Adjusted premium used on redetermination of Series A Conversion Rate in subsequent Quarters
		  	Implied conversion strike price	  	Book value per Common Unit1); multiplied by (1 plus the implied premium)	  	 	17.99	 	 	
		  	Series A Conversion Rate	  	Series A Issue Price divided by implied conversion strike price	  	 	1.3341	 	 	Redetermined Series A Conversion Rate

 Notes: 
  

	1)	Book value per Common Unit at the end of the immediately preceding Quarter (pro-forma for per unit cash distributions payable with respect to such Quarter) 

  
 C-3gldd-ex101_6.htm

EXHIBIT 10.1

GREAT LAKES DREDGE & DOCK CORPORATION

2017 LONG-TERM INCENTIVE PLAN

I.  INTRODUCTION

1.1    Purposes.  The purposes of the Great Lakes Dredge & Dock Corporation 2017 Long‐Term Incentive Plan (this “Plan”) are (i) to align the interests of the Corporation’s stockholders and the recipients of awards under this Plan by increasing the proprietary interest of such recipients in the Corporation’s growth and success, (ii) to advance the interests of the Corporation by attracting and retaining Non-Employee Directors, officers, other employees, consultants, independent contractors and agents and (iii) to motivate such persons to act in the long‐term best interests of the Corporation and its stockholders.  

1.2    Certain Definitions.

“Affiliate” means any corporation that is a parent or subsidiary corporation (as defined in Sections 424(e) and (f) of the Code) with respect to the Corporation.  

“Agreement” shall mean the written or electronic agreement evidencing an award hereunder between the Corporation and the recipient of such award.

“Board” shall mean the Board of Directors of the Corporation.

“Business Combination” shall have the meaning set forth in Section 5.8(b)(3).  

“Change in Control” shall have the meaning set forth in Section 5.8(b).  

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Committee” shall mean the Compensation Committee of the Board or, with respect to grants to Non-Employee Directors, the Nominating and Corporate Governance Committee of the Board, or subcommittees thereof, or such other committee designated by the Board, in each case, consisting of two or more members of the Board, each of whom is intended to be (i) a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act, (ii) an “outside director” within the meaning of Section 162(m) of the Code and (iii) “independent” within the meaning of the rules of Nasdaq or, if the Common Stock is not listed on Nasdaq, within the meaning of the rules of the principal stock exchange on which the Common Stock is then traded.  

“Common Stock” shall mean the common stock, par value $0.0001 per share, of the Corporation, and all rights appurtenant thereto.

“Corporation” shall mean Great Lakes Dredge & Dock Corporation, a corporation organized under the laws of the State of Delaware, or any successor thereto.

“Corporation Voting Securities” shall have the meaning set forth in Section 5.8(b)(1).  

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

“Fair Market Value” shall mean the closing sales price of a share of Common Stock as reported on Nasdaq on the date as of which such value is being determined or, if the Common Stock is not listed on Nasdaq, the closing sales price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if the Common Stock is not listed on a national stock exchange or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate and in compliance with Section 409A of the Code. 

“Free-Standing SAR” shall mean an SAR which is not granted in tandem with, or by reference to, an option, which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock) or, to the extent set forth in the applicable Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs which are exercised.

“Incentive Stock Option” shall mean an option to purchase shares of Common Stock that meets the requirements of Section 422 of the Code, or any successor provision, which is intended by the Committee to constitute an Incentive Stock Option.

“Incumbent Board” shall have the meaning set forth in Section 5.8(b)(2).  

“Non-Employee Director” shall mean any director of the Corporation who is not an officer or employee of the Corporation or any Affiliate.

“Nonqualified Stock Option” shall mean an option to purchase shares of Common Stock which is not an Incentive Stock Option.

“Other Stock Award” shall mean an award granted pursuant to Section 3.4 of the Plan.

“Performance Award” shall mean a right to receive an amount of cash, Common Stock, or a combination of both, contingent upon the attainment of specified Performance Measures within a specified Performance Period.

“Performance Measures” shall mean the criteria and objectives, established by the Committee, which shall be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition to the vesting of the holder’s interest, in the case of a Restricted Stock Award, of the shares of Common Stock subject to such award, or, in the case of a Restricted Stock Unit Award, Other Stock Award or Performance Award, to the holder’s receipt of the shares of Common Stock subject to such award or of payment with respect to such award. To the extent necessary for an award to be qualified performance-based compensation under Section 162(m) of the Code and the regulations thereunder, such criteria and objectives shall include one or more of the following corporate-wide or subsidiary, division, operating unit, line of business, project, geographic or individual measures:  (a) net earnings (including EBITDA); (b) operating earnings, income or margin; (c) earnings growth; (d) net income; (e) net income applicable to shares; (f) gross revenue or revenue by pre-defined business; (g) revenue backlog; (h) gross profit or margin; (i) margins realized on delivered services; (j) cash flow, including operating cash flow, cash flow per share, free cash flow, discounted cash flow return on investment, cash flow in excess of cost of capital and cash flow margin; (k) earnings per share; (l) return on stockholders’ or common stockholders’ equity; (m) stock price; (n) return on investments; (o) return on capital or invested capital; (p) return on assets; (q) total stockholder return; (r) economic value added (income in excess of cost of capital); (s) customer satisfaction; (t) operating expenses, cost control or expense reduction; (u) ratio of operating expenses to operating revenues; (v) market share; (w) interest expense; (x) accounts receivables; (y) market penetration; (z) business expansion; (aa) cost targets; (bb) reductions in errors or omissions; (cc) management of employment practices and employee benefits; (dd) supervision of litigation; and (ee) efficiency, in each case, absolute or relative to peer-group comparative.  Each such goal may be expressed on an absolute or relative basis and may include comparisons based on current internal targets, the past performance of the Corporation (including the performance of one or more subsidiaries, divisions, or operating units) or the past or current performance of other companies or market indices (or a combination of such past and current performance). In addition to the ratios specifically enumerated above, performance goals may include comparisons relating to capital (including, but not limited to, the cost of capital), shareholders’ equity, shares outstanding, assets or net assets, sales, or any combination thereof.  The applicable performance measures may be applied on a pre- or post-tax basis and may be adjusted in accordance with Section 162(m) of the Code to include or exclude objectively determinable components of any performance measure, including, without limitation, foreign exchange gains and losses, asset writedowns, acquisitions and divestitures, change in fiscal year, unbudgeted capital expenditures, special charges such as restructuring or impairment charges, debt refinancing costs, extraordinary or noncash items, unusual, infrequently occurring, nonrecurring or one-time events affecting the Corporation or its financial statements or changes in law or accounting principles (“Adjustment Events”).  In the sole discretion of the Committee, unless such action would cause a grant to a covered employee to fail to qualify as qualified performance-based compensation under Section 162(m) of the Code, the Committee may amend or adjust the Performance Measures or other terms and conditions of an outstanding award in recognition of any Adjustment Events. With respect to participants who are not “covered employees” within the meaning of Section 162(m) of the Code and who, in the Committee’s judgment, are not likely to be covered employees at any time during the applicable performance period or during any period in which an award may be paid following a performance period, the performance goals may consist of any objective or subjective corporate-wide or subsidiary, division, operating unit or individual measures, whether or not listed herein.  Performance goals shall be subject to such other special rules and conditions as the Committee may establish at any time; provided, however, that to the extent such goals relate to awards to “covered employees” within the meaning of Section 162(m) of the Code, such special rules and conditions shall not be inconsistent with the provisions of Treasury regulation Section 1.162-27(e) or any successor regulation describing “qualified performance-based compensation.”

“Performance Period” shall mean any period designated by the Committee during which (i) the Performance Measures applicable to an award shall be measured and (ii) the conditions to vesting applicable to an award shall remain in effect.

2

 

“Prior Plan” shall mean the Great Lakes Dredge & Dock Corporation 2007 Long‐Term Incentive Plan and each other equity plan maintained by the Corporation under which awards are outstanding as of the effective date of this Plan.

“Replacement Award” means an award granted in place of outstanding awards in connection with a Change in Control if: (i) it is of the same type as the replaced award; (ii) it has a value intended to preserve the value of the replaced award; (iii) it relates to publicly traded equity securities of the Corporation or its successor in the Change in Control or another entity that is affiliated with the Corporation or its successor following the Change in Control; and (iv) its other terms and conditions are not less favorable to the participant than the terms and conditions of the replaced award (including the provisions that would apply in the event of a subsequent Change in Control). Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the replaced award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions for Replacement Awards are satisfied shall be made by the Board, as constituted immediately before the Change in Control, in its sole discretion.

“Restricted Stock” shall mean shares of Common Stock which are subject to a Restriction Period and which may, in addition thereto, be subject to the attainment of specified Performance Measures within a specified Performance Period.

“Restricted Stock Award” shall mean an award of Restricted Stock under this Plan.

“Restricted Stock Unit” shall mean a right to receive one share of Common Stock or, in lieu thereof and to the extent set forth in the applicable Agreement, the Fair Market Value of such share of Common Stock in cash, which shall be contingent upon the expiration of a specified Restriction Period and which may, in addition thereto, be contingent upon the attainment of specified Performance Measures within a specified Performance Period.

“Restricted Stock Unit Award” shall mean an award of Restricted Stock Units under this Plan.

“Restriction Period” shall mean any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to such award, or (ii) the conditions to vesting applicable to a Restricted Stock Unit Award or Other Stock Award shall remain in effect.

“SAR” shall mean a stock appreciation right which may be a Free‐Standing SAR or a Tandem SAR.

“Stock Award” shall mean a Restricted Stock Award, Restricted Stock Unit Award or Other Stock Award.

“Substitute Award” shall mean an award granted under this Plan upon the assumption of, or in substitution for, outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction, including a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an option or SAR. 

“Surviving Corporation” shall have the meaning set forth in Section 5.8(b)(3).  

“Tandem SAR” shall mean an SAR which is granted in tandem with, or by reference to, an option (including a Nonqualified Stock Option granted prior to the date of grant of the SAR), which entitles the holder thereof to receive, upon exercise of such SAR and surrender for cancellation of all or a portion of such option, shares of Common Stock (which may be Restricted Stock) or, to the extent set forth in the applicable Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of shares of Common Stock subject to such option, or portion thereof, which is surrendered.

“Tax Date” shall have the meaning set forth in Section 5.5.

“Ten Percent Holder” shall have the meaning set forth in Section 2.1(a).

3

 

1.3    Administration.  This Plan shall be administered by the Committee.  Any one or a combination of the following awards may be made under this Plan to eligible persons: (i) options to purchase shares of Common Stock in the form of Incentive Stock Options or Nonqualified Stock Options; (ii) SARs in the form of Tandem SARs or Free‐Standing SARs; (iii) Stock Awards in the form of Restricted Stock, Restricted Stock Units or Other Stock Awards; and (iv) Performance Awards.  The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount and timing of each award to such persons and, if applicable, the number of shares of Common Stock subject to an award, the number of SARs, the number of Restricted Stock Units, the dollar value subject to a Performance Award, the purchase price or base price associated with the award, the time and conditions of exercise or settlement of the award and all other terms and conditions of the award, including, without limitation, the form of the Agreement evidencing the award.  In addition, the Committee shall have discretion to:  (i) modify the terms of any award, and authorize the exchange or replacement of Awards; provided, however, that (x) no such modification, exchange or substitution will materially impair the rights of a participant with respect to any Award previously granted without the affected participant’s written consent, (y) in no event will the Committee be permitted to reduce the purchase price of any outstanding option or SAR or to exchange or replace an outstanding option or SAR with a new option or SAR with a lower purchase or take any other action that would constitute a repricing under Section 2.4, except pursuant to Section 5.7 or in connection with a Change in Control, and (z) the Committee shall use reasonable efforts to ensure that any such modification, exchange or substitution will not violate Code Section 409A; and (ii)  determine whether a participant has engaged in the operation or management of a business that is in competition with the Corporation or any of its Affiliates, or whether a participant has violated the restrictive covenants of Section 5.13.  The Committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding options and SARs shall become exercisable in part or in full, (ii) all or a portion of the Restriction Period applicable to any outstanding awards shall lapse, (iii) all or a portion of the Performance Period applicable to any outstanding awards shall lapse and (iv) the Performance Measures (if any) applicable to any outstanding awards shall be deemed to be satisfied at the target, maximum or any other level.  The Committee shall, subject to the terms of this Plan, interpret this Plan and the application thereof, establish rules and regulations it deems necessary or desirable for the administration of this Plan and may impose, incidental to the grant of an award, conditions with respect to the award, such as limiting competitive employment or other activities.  All such interpretations, rules, regulations and conditions shall be conclusive and binding on all parties.

The Committee may delegate some or all of its power and authority hereunder to the Board (or any members thereof) or, subject to applicable law, to a subcommittee of the Board, a member of the Board, the Chief Executive Officer or other executive officer of the Corporation as the Committee deems appropriate; provided, however, that (i) the Committee may not delegate its power and authority to the Board (or any members thereof) or the Chief Executive Officer or other executive officer of the Corporation with regard to the grant of an award to any person who is a “covered employee” within the meaning of Section 162(m) of the Code or who, in the Committee’s judgment, is likely to be a covered employee at any time during the period an award hereunder to such employee would be outstanding; and (ii) the Committee may not delegate its power and authority to a member of the Board, the Chief Executive Officer or other executive officer of the Corporation with regard to the selection for participation in this Plan of an officer, director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an award to such an officer, director or other person.  

No member of the Board or Committee, and neither the Chief Executive Officer nor any other executive officer to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission, interpretation, construction or determination made in connection with this Plan in good faith, and the members of the Board and the Committee and the Chief Executive Officer or other executive officer shall be entitled to indemnification and reimbursement by the Corporation in respect of any claim, loss, damage or expense (including attorneys’ fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the Corporation’s Certificate of Incorporation and/or By-laws) and under any directors’ and officers’ liability insurance that may be in effect from time to time.

1.4    Eligibility.  Participants in this Plan shall consist of such officers, other employees, Non-Employee Directors, consultants, independent contractors, agents, and persons expected to become officers, other employees, Non-Employee Directors, consultants, independent contractors and agents of the Corporation and its Affiliates as the Committee in its sole discretion may select from time to time.  The Committee’s selection of a person to participate in this Plan at any time shall not require the Committee to select such person to participate in this Plan at any other time.  Except as otherwise provided for in an Agreement, for purposes of this Plan, references to employment by the Corporation shall also mean employment by an Affiliate, and references to employment shall include service as a Non-Employee Director, consultant, independent contractor or agent.  The Committee shall determine, in its sole discretion, the extent to which a participant shall be considered employed during an approved leave of absence.

4

 

1.5    Shares Available.  Subject to adjustment as provided in Section 5.7 and to all other limits set forth in this Plan, 3,300,000 shares of Common Stock shall initially be available for all awards under this Plan, other than Substitute Awards (reduced by the number of shares of Common Stock subject to awards granted under any Prior Plan on or after March 17, 2017).  Subject to adjustment as provided in Section 5.7, no more than 3,300,000 shares of Common Stock in the aggregate may be issued under the Plan in connection with Incentive Stock Options.  The number of shares of Common Stock that remain available for future grants under the Plan shall be reduced by the sum of the aggregate number of shares of Common Stock which become subject to outstanding options, outstanding Free-Standing SARs, outstanding Stock Awards and outstanding Performance Awards denominated in shares of Common Stock.  

To the extent that shares of Common Stock subject to an outstanding option, SAR, Stock Award or Performance Award granted under the Plan or a Prior Plan, other than Substitute Awards, are not issued or delivered by reason of (i) the expiration, termination, cancellation or forfeiture of such award (excluding shares subject to an option cancelled upon settlement in shares of a related Tandem SAR or shares subject to a Tandem SAR cancelled upon exercise of a related option) or (ii) the settlement of such award in cash, then such shares of Common Stock shall again be available under this Plan; provided, however, that shares of Common Stock subject to an award under this Plan or a Prior Plan shall not again be available for issuance under this Plan if such shares are (x) shares that were subject to an option or stock-settled SAR and were not issued or delivered upon the net settlement or net exercise of such option or SAR, (y) shares delivered to or withheld by the Corporation to pay the purchase price or the withholding taxes related to the exercise of an option or SAR or (z) shares repurchased by the Corporation on the open market with the proceeds of an option exercise.  Shares of Common Stock subject to an award granted under this Plan or the Prior Plan that were delivered to or withheld by the Corporation to pay the withholding taxes related to a Stock Award or Performance Award under this Plan or the Prior Plan (including Performance Units, as contemplated under the Prior Plan) shall again be available for issuance under this Plan.  At the time this Plan becomes effective, none of the shares of Common Stock available for future grant under the Prior Plans shall be available for grant under such Prior Plans or this Plan.  

The number of shares of Common Stock available for awards under this Plan shall not be reduced by (i) the number of shares of Common Stock subject to Substitute Awards or (ii) available shares under a stockholder approved plan of a company or other entity which was a party to a corporate transaction with the Corporation (as appropriately adjusted to reflect such corporate transaction) which become subject to awards granted under this Plan (subject to applicable stock exchange requirements).

Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination thereof.

1.6    Per Person Limits.  To the extent necessary for an award to be qualified performance-based compensation under Section 162(m) of the Code and the regulations thereunder (i) the maximum number of shares of Common Stock with respect to which options or SARs, or a combination thereof, may be granted during any fiscal year of the Corporation to any person shall be 1,000,000, subject to adjustment as provided in Section 5.7; (ii) the maximum number of shares of Common Stock with respect to which Stock Awards subject to Performance Measures or Performance Awards denominated in Common Stock that may be granted during any fiscal year of the Corporation to any person shall be 500,000, subject to adjustment as provided in Section 5.7; and (iii) the maximum amount that may be payable with respect to Performance Awards denominated in cash that may be granted during any fiscal year of the Corporation to any person shall be $5,000,000;  provided, however, that each of the per person limits set forth in this sentence shall be multiplied by two for awards granted to a participant in the year in which such participant’s employment with the Corporation commences.  The aggregate value of cash compensation and the grant date fair value of shares of Common Stock that may be paid or granted during any fiscal year of the Corporation to any Non-Employee Director shall not exceed $500,000; provided, however, that the per person limit set forth in this sentence shall be multiplied by two with respect to compensation and awards granted to any Non-Executive Chairman of the Board. 

II.  STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

2.1    Stock Options.  The Committee may, in its discretion, grant options to purchase shares of Common Stock to such eligible persons as may be selected by the Committee.  Each option, or portion thereof, that is not an Incentive Stock Option, shall be a Nonqualified Stock Option.  To the extent that the aggregate Fair Market Value (determined as of the date of grant) of shares of Common Stock with respect to which options designated as Incentive Stock Options are exercisable for the first time by a participant during any calendar year (under this Plan or any other plan of the Corporation or any Affiliate) exceeds the amount (currently $100,000) established by the Code, such options shall constitute Nonqualified Stock Options.

5

 

Options shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

(a)    Number of Shares and Purchase Price.  The number of shares of Common Stock subject to an option and the purchase price per share of Common Stock purchasable upon exercise of the option shall be determined by the Committee; provided, however, that the purchase price per share of Common Stock purchasable upon exercise of an option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such option; provided further, that if an Incentive Stock Option shall be granted to any person who, at the time such option is granted, owns capital stock possessing more than 10 percent of the total combined voting power of all classes of capital stock of the Corporation (or of any Affiliate) (a “Ten Percent Holder”), the purchase price per share of Common Stock shall not be less than the price (currently 110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option.

Notwithstanding the foregoing, in the case of an option that is a Substitute Award, the purchase price per share of the shares subject to such option may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate purchase price thereof does not exceed the excess of: (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Corporation, over (y) the aggregate purchase price of such shares.

(b)    Option Period and Exercisability.  The period during which an option may be exercised shall be determined by the Committee; provided, however, that no option shall be exercised later than ten years after its date of grant; provided further, that if an exercise would violate applicable securities laws, the Nonqualified Stock Option will be exercisable no more than 30 days after the exercise of the option first would no longer violate applicable securities laws.  Notwithstanding anything herein to the contrary, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such option shall not be exercised later than five years after its date of grant.  The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of an option or to the exercisability of all or a portion of an option.  The Committee shall determine whether an option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time.  An exercisable option, or portion thereof, may be exercised only with respect to whole shares of Common Stock.

(c)    Method of Exercise.  An option may be exercised (i) by giving written notice to the Corporation specifying the number of whole shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment to the Corporation’s satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures established by the Corporation) of shares of Common Stock having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (C) authorizing the Corporation to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary to satisfy such obligation, (D) in cash by a broker-dealer acceptable to the Corporation to whom the participant has submitted an irrevocable notice of exercise or (E) a combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the option; (ii) if applicable, by surrendering to the Corporation any Tandem SARs which are cancelled by reason of the exercise of the option; and (iii) by executing such documents as the Corporation may reasonably request.  Any fraction of a share of Common Stock which would be required to pay such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the participant.  No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Corporation’s satisfaction).

2.2    Stock Appreciation Rights.  The Committee may, in its discretion, grant SARs to such eligible persons as may be selected by the Committee.  The Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a Free-Standing SAR.

SARs shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:

(a)    Number of SARs and Base Price.  The number of SARs subject to an award shall be determined by the Committee.  Any Tandem SAR related to an Incentive Stock Option shall be granted at the same time that such Incentive Stock Option is granted.  The base price of a Tandem SAR shall be the purchase price per share of Common Stock of the related option.  The base price of a Free-Standing SAR shall be determined by the Committee; provided, however, that such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such SAR (or, if earlier, the date of grant of the option for which the SAR is exchanged or substituted).

6

 

Notwithstanding the foregoing, in the case of an SAR that is a Substitute Award, the base price per share of the shares subject to such SAR may be less than 100% of the Fair Market Value per share on the date of grant, provided, that the excess of:  (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate base price thereof does not exceed the excess of:  (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity that were subject to the grant assumed or substituted for by the Corporation, over (y) the aggregate base price of such shares.

(b)    Exercise Period and Exercisability.  The period for the exercise of an SAR shall be determined by the Committee; provided, however, that (i) no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture or other termination of the related option and (ii) no Free-Standing SAR shall be exercised later than ten years after its date of grant; provided, however, that if an exercise would violate applicable securities laws, the Free-Standing SAR will be exercisable no more than 30 days after the exercise of the Free-Standing SAR first would no longer violate applicable securities laws.  The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of an SAR or to the exercisability of all or a portion of an SAR.  The Committee shall determine whether an SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time.  An exercisable SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common Stock and, in the case of a Free‐Standing SAR, only with respect to a whole number of SARs.  If an SAR is exercised for shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c), or such shares shall be transferred to the holder in book entry form with restrictions on the shares duly noted, and the holder of such Restricted Stock shall have such rights of a stockholder of the Corporation as determined pursuant to Section 3.2(d).  Prior to the exercise of a stock-settled SAR, the holder of such SAR shall have no rights as a stockholder of the Corporation with respect to the shares of Common Stock subject to such SAR.  

(c)    Method of Exercise.  A Tandem SAR may be exercised (i) by giving written notice to the Corporation specifying the number of whole SARs which are being exercised, (ii) by surrendering to the Corporation any options which are cancelled by reason of the exercise of the Tandem SAR and (iii) by executing such documents as the Corporation may reasonably request.  A Free-Standing SAR may be exercised (A) by giving written notice to the Corporation specifying the whole number of SARs which are being exercised and (B) by executing such documents as the Corporation may reasonably request.  No shares of Common Stock shall be issued and no certificate representing Common Stock shall be delivered until any withholding taxes thereon, as described in Section 5.5, have been paid (or arrangement made for such payment to the Corporation’s satisfaction).

2.3    Termination of Employment or Service.  All of the terms relating to the exercise, cancellation or other disposition of an option or SAR (i) upon a termination of employment with or service to the Corporation of the holder of such option or SAR, as the case may be, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement.

2.4    No Repricing.   The Committee shall not, without the approval of the stockholders of the Corporation, (i) reduce the purchase price or base price of any previously granted option or SAR, (ii) cancel any previously granted option or SAR in exchange for another option or SAR with a lower purchase price or base price or (iii) cancel any previously granted option or SAR in exchange for cash or another award if the purchase price of such option or the base price of such SAR exceeds the Fair Market Value of a share of Common Stock on the date of such cancellation, in each case, other than in connection with a Change in Control or the adjustment provisions set forth in Section 5.7.

2.5    No Dividend Equivalents.   Notwithstanding anything in an Agreement to the contrary, the holder of an option or SAR shall not be entitled to receive dividend equivalents with respect to the number of shares of Common Stock subject to such option or SAR.

III.  STOCK AWARDS

3.1    Stock Awards.  The Committee may, in its discretion, grant Stock Awards to such eligible persons as may be selected by the Committee.  The Agreement relating to a Stock Award shall specify whether the Stock Award is a Restricted Stock Award, a Restricted Stock Unit Award or, in the case of an Other Stock Award, the type of award being granted.

3.2    Terms of Restricted Stock Awards.  Restricted Stock Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a)    Number of Shares and Other Terms.  The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee.

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(b)    Vesting and Forfeiture.  The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such award (i) if the holder of such award remains continuously in the employment of the Corporation during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Corporation during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.   

(c)    Stock Issuance.  During the Restriction Period, the shares of Restricted Stock shall be held by a custodian in book entry form with restrictions on such shares duly noted or, alternatively, a certificate or certificates representing a Restricted Stock Award shall be registered in the holder’s name and may bear a legend, in addition to any legend which may be required pursuant to Section 5.6, indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms and conditions of this Plan and the Agreement relating to the Restricted Stock Award.  All such certificates shall be deposited with the Corporation, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Corporation of all or a portion of the shares of Common Stock subject to the Restricted Stock Award in the event such award is forfeited in whole or in part.  Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the Corporation’s right to require payment of any taxes in accordance with Section 5.5, the restrictions shall be removed from the requisite number of any shares of Common Stock that are held in book entry form, and all certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award.

(d)    Rights with Respect to Restricted Stock Awards.  Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such award shall have all rights as a stockholder of the Corporation, including, but not limited to, voting rights, the right to receive dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock.  Notwithstanding the foregoing, all distributions and dividends with respect to shares of Common Stock, including a regular cash dividend, shall be deposited with the Corporation and shall be subject to the same restrictions as the shares of Common Stock with respect to which such distribution or dividend was made.

3.3    Terms of Restricted Stock Unit Awards.  Restricted Stock Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a)    Number of Shares and Other Terms.  The number of shares of Common Stock subject to a Restricted Stock Unit Award, including the number of shares that are earned upon the attainment of any specified Performance Measures, and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee.

(b)    Vesting and Forfeiture.  The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Restricted Stock Unit Award (i) if the holder of such award remains continuously in the employment of the Corporation during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Corporation during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.  

(c)    Settlement of Vested Restricted Stock Unit Awards.  The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder thereof shall be entitled to receive dividend equivalents, and, if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such award.  Any dividend equivalents with respect to Restricted Stock Units shall be subject to the same restrictions as such Restricted Stock Units.   Prior to the settlement of a Restricted Stock Unit Award, the holder of such award shall have no rights as a stockholder of the Corporation with respect to the shares of Common Stock subject to such award.

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3.4    Other Stock Awards.  Subject to the limitations set forth in the Plan, the Committee is authorized to grant other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, shares of Common Stock, including without limitation shares of Common Stock granted as a bonus and not subject to any vesting conditions, dividend equivalents, deferred stock units, stock purchase rights and shares of Common Stock issued in lieu of obligations of the Corporation to pay cash under any compensatory plan or arrangement, subject to such terms as shall be determined by the Committee.  The Committee shall determine the terms and conditions of such awards, which may include the right to elective deferral thereof, subject to such terms and conditions as the Committee may specify in its discretion.   Notwithstanding anything herein to the contrary, any dividend equivalents with respect to an award shall be subject to the same vesting conditions as the underlying award.

3.5    Termination of Employment or Service.  All of the terms relating to the satisfaction of Performance Measures and the termination of the Restriction Period or Performance Period relating to a Stock Award, or any forfeiture and cancellation of such award (i) upon a termination of employment with or service to the Corporation of the holder of such award, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement. 

IV.  PERFORMANCE AWARDS

4.1    Performance Awards.  The Committee may, in its discretion, grant Performance Awards to such eligible persons as may be selected by the Committee.

4.2    Terms of Performance Awards.  Performance Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.

(a)    Value of Performance Awards and Performance Measures.  The method of determining the value of the Performance Award and the Performance Measures and Performance Period applicable to a Performance Award shall be determined by the Committee.

(b)    Vesting and Forfeiture.  The Agreement relating to a Performance Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Performance Award if the specified Performance Measures are satisfied or met during the specified Performance Period and for the forfeiture of such award if the specified Performance Measures are not satisfied or met during the specified Performance Period. 

(c)    Settlement of Vested Performance Awards.  The Agreement relating to a Performance Award shall specify whether such award may be settled in shares of Common Stock (including shares of Restricted Stock) or cash or a combination thereof.  If a Performance Award is settled in shares of Restricted Stock, such shares of Restricted Stock shall be issued to the holder in book entry form or a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.2(c) and the holder of such Restricted Stock shall have such rights as a stockholder of the Corporation as determined pursuant to Section 3.2(d).  Any dividends or dividend equivalents with respect to a Performance Award shall be subject to the same restrictions as such Performance Award.  Prior to the settlement of a Performance Award in shares of Common Stock, including Restricted Stock, the holder of such award shall have no rights as a stockholder of the Corporation.

4.3    Termination of Employment or Service.  All of the terms relating to the satisfaction of Performance Measures and the termination of the Performance Period relating to a Performance Award, or any forfeiture and cancellation of such award (i) upon a termination of employment with or service to the Corporation of the holder of such award, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement.

V.  GENERAL

5.1    Effective Date and Term of Plan.  This Plan shall be submitted to the stockholders of the Corporation for approval at the Corporation’s 2017 annual meeting of stockholders and, if approved by the affirmative vote of a majority of the shares of Common Stock present in person or represented by proxy at such annual meeting of stockholders, shall become effective as of the date on which the Plan was approved by stockholders.  This Plan shall terminate as of the first annual meeting of the Corporation’s stockholders to occur on or after the tenth anniversary of its effective date, unless terminated earlier by the Board.  Termination of this Plan shall not affect the terms or conditions of any award granted prior to termination.

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Awards hereunder may be made at any time prior to the termination of this Plan, provided that no Incentive Stock Option may be granted later than ten years after the date on which the Plan was approved by the Board.  In the event that this Plan is not approved by the stockholders of the Corporation, this Plan and any awards hereunder shall be void and of no force or effect.  If approved by stockholders of the Corporation, no new awards shall be granted under any Prior Plan following such approval. 

5.2    Amendments.  The Board may amend this Plan as it shall deem advisable; provided, however, that no amendment to the Plan shall be effective without the approval of the Corporation’s stockholders if (i) stockholder approval is required by applicable law, rule or regulation, including Section 162(m) of the Code and any rule of Nasdaq, or any other stock exchange on which the Common Stock is then traded, or (ii) such amendment seeks to modify Section 2.4 hereof; provided further, that no amendment may materially impair the rights of a holder of an outstanding award without the consent of such holder.

5.3    Agreement.  Each award under this Plan shall be evidenced by an Agreement setting forth the terms and conditions applicable to such award.  No award shall be valid until an Agreement is executed by the Corporation and, to the extent required by the Corporation, executed or electronically accepted by the recipient of such award. Upon such execution or acceptance and delivery of the Agreement to the Corporation within the time period specified  by the Corporation, such award shall be effective as of the effective date set forth in the Agreement.

5.4    Non-Transferability.  No award shall be transferable other than by will, the laws of descent and distribution or pursuant to beneficiary designation procedures approved by the Corporation or, to the extent expressly permitted in the Agreement relating to such award, to the holder’s family members, a trust or entity established by the holder for estate planning purposes, a charitable organization designated by the holder or pursuant to a domestic relations order, in each case, without consideration.  Except to the extent permitted by the foregoing sentence or the Agreement relating to an award, each award may be exercised or settled during the holder’s lifetime only by the holder or the holder’s legal representative or similar person.  Except as permitted by the second preceding sentence, no award may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process.  Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any award, such award and all rights thereunder shall immediately become null and void.

5.5    Tax Withholding.  The Corporation shall have the right to require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash pursuant to an award made hereunder, payment by the holder of such award of any federal, state, local or other taxes which may be required to be withheld or paid in connection with such award.  An Agreement may provide that (i) the Corporation shall withhold whole shares of Common Stock which would otherwise be delivered to a holder, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with an award (the “Tax Date”), or withhold an amount of cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Corporation; (B) delivery (either actual delivery or by attestation procedures established by the Corporation) to the Corporation of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation; (C) authorizing the Corporation to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, in either case equal to the amount necessary to satisfy any such obligation; (D) in the case of the exercise of an option, a cash payment by a broker-dealer acceptable to the Corporation to whom the participant has submitted an irrevocable notice of exercise or (E) any combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the award.  Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the minimum statutory withholding rate (or, if permitted by the Corporation, such other rate as will not cause adverse accounting consequences under the accounting rules then in effect, and is permitted under applicable IRS withholding rules).  Any fraction of a share of Common Stock which would be required to satisfy such an obligation shall be disregarded and the remaining amount due shall be paid in cash by the holder.

5.6    Restrictions on Shares.  Each award made hereunder shall be subject to the requirement that if at any time the Corporation determines that the listing, registration or qualification of the shares of Common Stock subject to such award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder, such shares shall not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Corporation.  The Corporation may require that certificates evidencing shares of Common Stock delivered pursuant to any award made hereunder bear a legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder.

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5.7    Adjustment.   In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation or any successor or replacement accounting standard) that causes the per share value of shares of Common Stock to change, such as a stock dividend, stock split, spinoff, rights offering or recapitalization through an extraordinary cash dividend, the number and class of securities available under this Plan, the terms of each outstanding option and SAR (including the number and class of securities subject to each outstanding option or SAR and the purchase price or base price per share), the terms of each outstanding Stock Award (including the number and class of securities subject thereto), the terms of each outstanding Performance Award (including the number and class of securities subject thereto, if applicable), the maximum number of securities with respect to which options or SARs may be granted during any fiscal year of the Corporation to any one grantee, the maximum number of shares of Common Stock that may be awarded during any fiscal year of the Corporation to any one grantee pursuant to a Stock Award that is subject to Performance Measures or a Performance Award, as set forth in Section 1.6, shall be appropriately adjusted by the Committee, such adjustments to be made in the case of outstanding options and SARs in accordance with Section 409A of the Code.  In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Corporation, such equitable adjustments described in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee to prevent dilution or enlargement of rights of participants. In either case, the decision of the Committee regarding any such adjustment shall be final, binding and conclusive.

5.8    Change in Control.    Notwithstanding anything contained in this Plan or any award Agreement to the contrary, in the event of a Change in Control (as defined below) pursuant to which the outstanding awards are not replaced with Replacement Awards, the following shall occur upon a Change in Control with respect to any such awards outstanding as of such Change in Control: 

	
 
	
(1)
	
any and all options and SARs granted hereunder shall become immediately exercisable, and shall remain exercisable for the remainder of their term; 

	
 
	
(2)
	
any restrictions imposed on Stock Awards shall lapse and all Stock Awards shall become fully vested;  

	
 
	
(3)
	
Performance Awards shall vest or become exercisable or payable in accordance with the applicable Agreements; and 

	
 
	
(4)
	
the Board (as constituted prior to such Change in Control) may, in its discretion, require outstanding awards, in whole or in part, to be surrendered to the Corporation by the holder, and to be immediately cancelled by the Corporation, and to provide for the holder to receive (i) a cash payment in an amount equal to (A) in the case of an option or an SAR, the aggregate number of shares of Common Stock then subject to the portion of such option or SAR surrendered, whether or not vested or exercisable, multiplied by the excess, if any, of the Fair Market Value of a share of Common Stock as of the date of the Change in Control, over the purchase price or base price per share of Common Stock subject to such option or SAR, (B) in the case of a Stock Award or a Performance Award denominated in shares of Common Stock, the number of shares of Common Stock then subject to the portion of such award surrendered to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to the terms of the underlying Agreement, whether or not vested, multiplied by the Fair Market Value of a share of Common Stock as of the date of the Change in Control, and (C) in the case of a Performance Award denominated in cash, the value of the Performance Award then subject to the portion of such award surrendered to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to the terms of the underlying Agreement; (ii) shares of capital stock of the corporation resulting from or succeeding to the business of the Corporation pursuant to such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (i) above; or (iii) a combination of the payment of cash pursuant to clause (i) above and the issuance of shares pursuant to clause (ii) above

; provided, however, that awards that provide for a deferral of compensation within the meaning of Section 409A of the Code shall be settled in accordance with the applicable Agreements, subject to the terms of the Plan and Section 409A of the Code

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(b)    For purposes of this Plan, a “Change in Control” shall be deemed to have occurred if: 

	
 
	
(1)
	
the “beneficial ownership” (as defined in Rule 13d-3 under the Exchange Act) of securities representing more than 33-1/3% of the combined voting power of the then outstanding voting securities of the Corporation entitled to vote generally in the election of directors (the “Corporation Voting Securities”) is accumulated, held or acquired by a Person (as defined in Section 3(a)(9) of the Exchange Act, as modified, and used in Sections 13(d) and 14(d) thereof) (other than the Corporation, any trustee or other fiduciary holding securities under an employee benefit plan of the Corporation, holders of capital stock of the Corporation as of the date hereof or an affiliate thereof, any corporation owned, directly or indirectly, by the Corporation’s stockholders in substantially the same proportions as their ownership of stock of the Corporation); provided, however that any acquisition from the Corporation or any acquisition pursuant to a transaction that complies with clauses (i), (ii) and (iii) of subparagraph (3) of this paragraph will not be a Change in Control under this subparagraph (1), and provided further, that immediately prior to such accumulation, holding or acquisition, such Person was not a direct or indirect beneficial owner of twenty-five percent (25%) or more of the Corporation Voting Securities; or

	
 
	
(2)
	
individuals who, as of the date of Plan, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Corporation’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board will be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or

	
 
	
(3)
	
consummation by the Corporation of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Corporation or the acquisition of assets or stock of another entity (a “Business Combination”), in each case, unless immediately following such Business Combination: (i) more than 50.1% of the combined voting power of then outstanding voting securities entitled to vote generally in the election of directors of (x) the corporation resulting from such Business Combination (the “Surviving Corporation”), or (y) if applicable, a corporation that as a result of such transaction owns the Corporation or all or substantially all of the Corporation’s assets either directly or through one or more subsidiaries (the “Parent Corporation”), is represented, directly or indirectly by Corporation Voting Securities outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Corporation Voting Securities were converted pursuant to such Business Combination), and such voting power among the holders thereof is in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Corporation Voting Securities; (ii) no Person (excluding any employee benefit plan (or related trust) of the Corporation or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 33-1/3% or more of the combined voting power of the then outstanding voting securities eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) except to the extent that such ownership of the Corporation existed prior to the Business Combination and (iii) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or

	
 
	
(4)
	
approval by the Corporation’s stockholders of a complete liquidation or dissolution of the Corporation.  

provided, that with respect to any nonqualified deferred compensation that becomes payable on account of the Change in Control, the transaction or event described in clause (1), (2), (3) or (4) also constitutes a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5) if required in order for the payment not to violate Section 409A of the Code.

5.9    Deferrals.  The Committee may determine that the delivery of shares of Common Stock or the payment of cash, or a combination thereof, upon the settlement of all or a portion of any award made hereunder shall be deferred, or the Committee may, in its sole discretion, approve deferral elections made by holders of awards.  Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion, subject to the requirements of Section 409A of the Code.

5.10    No Right of Participation, Employment or Service.  Unless otherwise set forth in an employment agreement, no person shall have any right to participate in this Plan.  Neither this Plan nor any award made hereunder shall confer upon any person any right to continued employment by or service with the Corporation or any Affiliate or affect in any manner the right of the Corporation or any Affiliate to terminate the employment or service of any person at any time without liability hereunder.

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5.11    Rights as Stockholder.  No person shall have any right as a stockholder of the Corporation with respect to any shares of Common Stock or other equity security of the Corporation which is subject to an award hereunder unless and until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security.

5.12    Designation of Beneficiary.  To the extent permitted by the Corporation, a holder of an award may file with the Corporation a written designation of one or more persons as such holder’s beneficiary or beneficiaries (both primary and contingent) in the event of the holder’s death or incapacity.  To the extent an outstanding option or SAR granted hereunder is exercisable, such beneficiary or beneficiaries shall be entitled to exercise such option or SAR pursuant to procedures prescribed by the Corporation.  Each beneficiary designation shall become effective only when filed in writing with the Corporation during the holder’s lifetime on a form prescribed by the Corporation.  The spouse of a married holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse.  The filing with the Corporation of a new beneficiary designation shall cancel all previously filed beneficiary designations.  If a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the holder, then each outstanding award held by such holder, to the extent vested or exercisable, shall be payable to or may be exercised by such holder’s executor, administrator, legal representative or similar person. 

5.13    Restrictive Covenants.  An Agreement may provide that, notwithstanding any other provision of this Plan to the contrary, if the participant breaches the non-compete, non-solicitation, non-disclosure or other restrictive covenants of the Agreement, whether during or after termination of employment or service, in addition to any other penalties or restrictions that may apply under any employment agreement, state law, or otherwise, the participant will forfeit, to the maximum extent permitted by applicable law: 

(a)    any and all awards granted to him or her under the Plan, including awards that have become vested and exercisable; 

(b)    the profit the participant has realized on the exercise of any options or SAR, which is the difference between the purchase price and the Fair Market Value of any option the participant exercised after terminating employment or service and within the six month period immediately preceding the participant’s termination of employment or service (the participant may be required to repay such difference to the Corporation);

(c)    the profit the participant has realized on any Stock Awards or stock-settled Performance Awards, which shall mean, the proceeds realized upon the disposition of any portion of such award which became vested after terminating employment or service and within the six month period immediately preceding the participant’s termination of employment or service (the participant may be required to repay such amount to the Corporation); and/or

(d)    the amount participant realized with respect to any cash-settled Performance Awards, which shall mean the dollar value of such award which became vested after terminating employment or service and within the six month period immediately preceding the participant’s termination of employment or service (the participant may be required to repay such amount to the Corporation).

5.14    Awards Subject to Clawback.  The awards granted under this Plan and any cash payment or shares of Common Stock delivered pursuant to such an award are subject to forfeiture, recovery by the Corporation or other action pursuant to the applicable award Agreement or any clawback or recoupment policy which the Corporation may adopt from time to time, including without limitation any such policy which the Corporation may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.

5.15    Governing Law.  This Plan, each award hereunder and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to principles of conflicts of laws.

5.16    Foreign Employees.  Without amending this Plan, the Committee may grant awards to eligible persons who are foreign nationals and/or reside outside of the United States on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Corporation or its Affiliates operates or has employees.

 

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