Document:

Exhibit 4.1

 

SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

HÖEGH LNG PARTNERS LP

 

     

     

    

 

TABLE OF CONTENTS

 

	Article I
	Definitions and Construction
	 	 	 
	Section 1.1	Definitions	1
	Section 1.2	Construction	21
	 	 	 
	Article II
	ORGANIZATION
	 	 	 
	Section 2.1	Formation	21
	Section 2.2	Name	22
	Section 2.3	Registered Office; Registered Agent; Principal Office; Other Offices	22
	Section 2.4	Purpose and Business	22
	Section 2.5	Powers	22
	Section 2.6	Term	23
	Section 2.7	Title to Partnership Assets	23
	 	 	 
	Article III
	RIGHTS OF LIMITED PARTNERS
	 	 	 
	Section 3.1	Limitation of Liability	23
	Section 3.2	Management of Business	23
	Section 3.3	Outside Activities of the Limited Partners	24
	Section 3.4	Rights of Limited Partners	24
	 	 	 
	Article IV
	CERTIFICATES; RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS
	 	 	 
	Section 4.1	Certificates	25
	Section 4.2	Mutilated, Destroyed, Lost or Stolen Certificates	25
	Section 4.3	Record Holders	26
	Section 4.4	Transfer Generally	26
	Section 4.5	Registration and Transfer of Limited Partner Interests	27
	Section 4.6	Transfer of the General Partner’s General Partner Interest	28
	Section 4.7	Transfer of Incentive Distribution Rights	29
	Section 4.8	Restrictions on Transfers	29
	 	 	 
	Article V
	CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
	 	 	 
	Section 5.1	Contributions Prior to the Closing Date	29
	Section 5.2	Initial Unit Issuances; Tax Election	30
	Section 5.3	Interest and Withdrawal	30
	Section 5.4	Issuances of Additional Partnership Interests	30
	Section 5.5	Limitations on Issuance of Additional Partnership Interests	31
	Section 5.6	Conversion of Subordinated Units to Common Units	31
	Section 5.7	Limited Preemptive Right	32
	Section 5.8	Splits and Combinations	32
	Section 5.9	Fully Paid and Non-Assessable Nature of Limited Partner Interests	33

 

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	Section 5.10	Issuance of Common Units in Connection with Reset of Incentive Distribution Rights	33
	Section 5.11	Capital Accounts	34
	 	 	 
	Article VI
	DISTRIBUTIONS
	 	 	 
	Section 6.1	Requirement and Characterization of Distributions; Distributions to Record Holders	35
	Section 6.2	Distributions of Available Cash from Operating Surplus	35
	Section 6.3	Distributions of Available Cash from Capital Surplus	37
	Section 6.4	Adjustment of Minimum Quarterly Distribution and Target Distribution Levels	37
	Section 6.5	Special Provisions Relating to the Holders of Subordinated Units	38
	Section 6.6	Special Provisions Relating to the Holders of Incentive Distribution Rights	38
	 	 	 
	Article VII
	MANAGEMENT AND OPERATION OF BUSINESS
	 	 	 
	Section 7.1	Management	38
	Section 7.2	The Board of Directors; Election and Appointment; Term; Manner of Acting	39
	Section 7.3	Nominations of Elected Directors	40
	Section 7.4	Removal of Members of Board of Directors	41
	Section 7.5	Resignations of Members of the Board of Directors	41
	Section 7.6	Vacancies on the Board of Directors	41
	Section 7.7	Meetings; Committees; Chairman	42
	Section 7.8	Officers	43
	Section 7.9	Compensation of Directors	44
	Section 7.10	Certificate of Limited Partnership	44
	Section 7.11	Restrictions on the Authority of the Board of Directors and the General Partner	44
	Section 7.12	Reimbursement of the General Partner	45
	Section 7.13	Outside Activities	46
	Section 7.14	Indemnification	47
	Section 7.15	Liability of Indemnitees	49
	Section 7.16	Resolution of Conflicts of Interest; Standards of Conduct and Modification of Duties	50
	Section 7.17	Other Matters Concerning the General Partner and the Board of Directors	52
	Section 7.18	Purchase or Sale of Partnership Interests	52
	Section 7.19	Registration Rights of the General Partner and its Affiliates	53
	Section 7.20	Reliance by Third Parties	55
	 	 	 
	Article VIII
	BOOKS, RECORDS, ACCOUNTING AND REPORTS
	 	 	 
	Section 8.1	Records and Accounting	56
	Section 8.2	Fiscal Year	56

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	Section 8.3	Reports	56
	 	 	 
	Article IX
	TAX MATTERS
	 	 	 
	Section 9.1	Tax Elections and Information	57
	Section 9.2	Tax Withholding	57
	Section 9.3	Conduct of Operations	57
	 	 	 
	Article X
	ADMISSION OF PARTNERS
	 	 	 
	Section 10.1	Admission of Initial Limited Partners	57
	Section 10.2	Admission of Additional Limited Partners	58
	Section 10.3	Admission of Successor General Partner	58
	Section 10.4	Amendment of Agreement and Certificate of Limited Partnership	59
	 	 	 
	Article XI
	WITHDRAWAL OR REMOVAL OF PARTNERS
	 	 	 
	Section 11.1	Withdrawal of the General Partner	59
	Section 11.2	Removal of the General Partner	61
	Section 11.3	Interest of Departing General Partner and Successor General Partner	62
	Section 11.4	Termination of Subordination Period, Conversion of Subordinated Units and Extinguishment of Cumulative Common Unit Arrearages	63
	Section 11.5	Withdrawal of Limited Partners	63
	 	 	 
	Article XII
	DISSOLUTION AND LIQUIDATION
	 	 	 
	Section 12.1	Dissolution	64
	Section 12.2	Continuation of the Business of the Partnership After Dissolution	64
	Section 12.3	Liquidating Trustee	65
	Section 12.4	Liquidation	65
	Section 12.5	Cancellation of Certificate of Limited Partnership	67
	Section 12.6	Return of Contributions	67
	Section 12.7	Waiver of Partition	67
	 	 	 
	Article XIII
	AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE
	 	 	 
	Section 13.1	Amendments to be Adopted Without Approval of the Limited Partners or the General Partner	67
	Section 13.2	Amendment Procedures	69
	Section 13.3	Amendment Requirements	70
	Section 13.4	Special Meetings	71
	Section 13.5	Notice of a Meeting	71
	Section 13.6	Record Date	71
	Section 13.7	Adjournment	72
	Section 13.8	Waiver of Notice; Approval of Meeting; Approval of Minutes	72
	Section 13.9	Quorum and Voting	72
	Section 13.10	Conduct of a Meeting	73

 

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	Section 13.11	Action Without a Meeting	73
	Section 13.12	Right to Vote and Related Matters	74
	 	 	 
	Article XIV
	MERGER, CONSOLIDATION OR CONVERSION
	 	 	 
	Section 14.1	Authority	74
	Section 14.2	Procedure for Merger, Consolidation or Conversion	74
	Section 14.3	Approval by Limited Partners of Merger, Consolidation or Conversion	76
	Section 14.4	Certificate of Merger or Conversion	77
	Section 14.5	Amendment of Partnership Agreement	78
	Section 14.6	Effect of Merger, Consolidation or Conversion	78
	 	 	 
	Article XV
	RIGHT TO ACQUIRE LIMITED PARTNER INTERESTS
	 	 	 
	Section 15.1	Right to Acquire Limited Partner Interests	79
	 	 	 
	Article XVI
	SERIES A CUMULATIVE REDEEMABLE PREFERRED UNITS
	 	 	 
	Section 16.1	Designation	80
	Section 16.2	Units	81
	Section 16.3	Distributions	81
	Section 16.4	Liquidation Rights	82
	Section 16.5	Voting Rights	83
	Section 16.6	Optional Redemption	84
	Section 16.7	Rank	86
	Section 16.8	No Sinking Fund	87
	Section 16.9	Record Holders	87
	Section 16.10	Notices	87
	Section 16.11	Other Rights; Fiduciary Duties	87
	 	 	 
	Article XVII
	GENERAL PROVISIONS
	 	 	 
	Section 17.1	Addresses and Notices	88
	Section 17.2	Further Action	89
	Section 17.3	Binding Effect	89
	Section 17.4	Integration	89
	Section 17.5	Creditors	89
	Section 17.6	Waiver	89
	Section 17.7	Counterparts	89
	Section 17.8	Applicable Law; Forum, Venue and Jurisdiction	89
	Section 17.9	Invalidity of Provisions	90
	Section 17.10	Consent of Partners	91
	Section 17.11	Facsimile Signatures	91
	Section 17.12	Third-Party Beneficiaries	91

 

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SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

HÖEGH LNG PARTNERS LP

 

THIS SECOND AMENDED
AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF HÖEGH LNG PARTNERS LP, dated as of October 5, 2017, is entered
into by and between Höegh LNG GP LLC, a Marshall Islands limited liability company, as the General Partner, and Höegh
LNG Holdings Ltd., a Bermuda company, together with any other Persons who become Partners in the Partnership or parties hereto
as provided herein. In consideration of the covenants, conditions and agreements contained herein, the parties agree as follows:

 

Article I

Definitions and Construction

 

Section 1.1           Definitions.
The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms
used in this Agreement.

 

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

 

“Adjusted
Operating Surplus” means, with respect to any period, Operating Surplus generated with respect to such period (a) less
(i) the amount of any net increase in Working Capital Borrowings (or the Partnership’s proportionate share of any net
increase in Working Capital Borrowings in the case of Subsidiaries that are not wholly-owned) with respect to such period and (ii) the
amount of any net decrease in cash reserves for Operating Expenditures (or the Partnership’s proportionate share of any net
decrease in cash reserves for Operating Expenditures in the case of Subsidiaries that are not wholly-owned) over such period to
the extent such reduction does not relate to an Operating Expenditure made with respect to such period, and (b) plus (i) the
amount of any net decrease in Working Capital Borrowings (or the Partnership’s proportionate share of any net decrease in
Working Capital Borrowings in the case of Subsidiaries that are not wholly-owned) with respect to such period; (ii) the amount
of any net increase in cash reserves (or the Partnership’s proportionate share of any net increase in cash reserves in the
case of Subsidiaries that are not wholly-owned) for Operating Expenditures over such period to the extent such reserve is required
by any debt instrument for the repayment of principal, interest or premium; and (iii) the amount of any net decrease made
in subsequent periods in cash reserves for Operating Expenditures initially established with respect to such period to the extent
such decrease results in a reduction in Adjusted Operating Surplus in subsequent periods pursuant to clause (a)(ii)
above.

 

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“Affiliate”
or “Affiliates” means, with respect to any Person, any other Person that directly or indirectly through
one or more intermediaries controls, is controlled by or is under common control with, the Person in question. As used herein,
the term “control” means the possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

“Aggregate
Quantity of IDR Reset Common Units” has the meaning set forth in Section 5.10(a).

 

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

 

“Agreement”
means this Second Amended and Restated Agreement of Limited Partnership of Höegh LNG Partners LP, as it may be amended,
supplemented or restated from time to time.

 

“Annual
Meeting” means the meeting of Limited Partners to be held every year, commencing in 2014, to elect the Elected Directors
as provided in Section 7.2 and to vote on any other matters brought before the meeting in accordance with this Agreement.

 

“Appointed
Directors” means the members of the Board of Directors appointed by the General Partner in accordance with the provisions
of Article VII.

 

“Arrears”
means, with respect to Series A Distributions for any quarter period, that the full cumulative Series A Distributions
through the most recent Series A Distribution Payment Date have not been paid on all Outstanding Series A Preferred Units.

 

“Associate”
means, when used to indicate a relationship with any Person: (a) any corporation or organization of which such Person is a
director, officer, manager, general partner or managing member or is, directly or indirectly, the owner of 20% or more of any class
of voting stock or other voting interest entitled to vote generally in the election of directors or other governing body as such
entity; (b) any trust or other estate in which such Person has at least a 20% beneficial interest or as to which such Person
serves as trustee or in a similar fiduciary capacity; and (c) any relative or spouse of such Person, or any relative of such
spouse, who has the same principal residence as such Person.

 

“Audit
Committee” means a committee of the Board of Directors which, within one year of the effective date of the Registration
Statement, will be composed of a minimum of three members of the Board of Directors then serving who meet the independence standards
required of directors who serve on an audit committee of a board of directors established by the Securities Exchange Act, and the
rules and regulations of the Commission thereunder and meet the standards for audit committee composition established by the National
Securities Exchange on which the Common Units are listed or admitted to trading.

 

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

 

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

 

(b)          the
amount of any cash reserves (or the Partnership’s proportionate share of cash reserves in the case of Subsidiaries that are
not wholly-owned) established by the Board of Directors to (i) provide for the proper conduct of the business of the Partnership
Group (including reserves for future capital expenditures and for anticipated future credit needs of the Partnership Group) subsequent
to such Quarter, (ii) comply with applicable law or any loan agreement, security agreement, mortgage, debt instrument or other
agreement or obligation to which any Group Member is a party or by which it is bound or its assets are subject, (iii) provide
funds for Series A Payments or (iv) provide funds for distributions under Section 6.2 or Section 6.3
in respect of any one or more of the next four Quarters; provided, however, that the Board of Directors may not establish cash
reserves pursuant to (iv) above if the effect of establishing such reserves would be that the Partnership is unable to distribute
the Minimum Quarterly Distribution on all Common Units, plus any Cumulative Common Unit Arrearages on all Common Units, with respect
to such Quarter; provided further, that disbursements made by a Group Member or cash reserves established, increased or reduced
after the end of such Quarter but on or before the date of determination of Available Cash with respect to such Quarter shall be
deemed to have been made, established, increased or reduced, for purposes of determining Available Cash, within such Quarter if
the Board of Directors so determines.

 

Notwithstanding the
foregoing, “Available Cash” with respect to the Quarter in which the Liquidation Date occurs and any subsequent
Quarter shall equal zero.

 

“Board
of Directors” means the board of directors of the Partnership, composed of Appointed Directors and Elected Directors
appointed or elected, as the case may be, in accordance with the provisions of Article VII and, in the event of a Series
A Trigger Event, Section 16.5(b) and a majority of whom are not United States citizens or residents, which, pursuant
to Section 7.1, and subject to Section 7.11, oversees and directs the operations, management and policies
of the Partnership. The Board of Directors shall constitute a committee within the meaning of Section 30(2)(g) of the Marshall
Islands Act.

 

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“Business
Day” means Monday through Friday of each week, except that a legal holiday recognized as such by the government of
the United States of America or the State of New York shall not be regarded as a Business Day.

 

“Capital
Contribution” means any cash, cash equivalents or the Net Agreed Value of Contributed Property that a Partner contributes
to the Partnership or that is contributed or deemed contributed to the Partnership on behalf of a Partner (including, in the case
of an underwritten offering of Units, the amount of any underwriting discounts or commissions).

 

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

 

“Capital
Surplus” has the meaning assigned to such term in Section 6.1(a).

 

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

 

“Certificate”
means a certificate (a) substantially in the form of Exhibit A to this Agreement with respect to Common Units,
or Exhibit B to this Agreement with respect to Series A Preferred Units, (b) issued in global or book entry
form in accordance with the rules and regulations of the Depositary or (c) in such other form as may be adopted by the Board
of Directors, issued by the Partnership evidencing ownership of one or more Common Units or Series A Preferred Units or a certificate,
in such form as may be adopted by the Board of Directors, issued by the Partnership evidencing ownership of one or more other Partnership
Interests.

 

“Certificate
of Limited Partnership” means the Certificate of Limited Partnership of the Partnership filed with the Registrar
of Corporations of the Marshall Islands as referenced in Section 7.10 as such Certificate of Limited Partnership may
be amended, supplemented or restated from time to time.

 

“claim”
(as used in Section 7.19(c)) has the meaning assigned to such term in Section 7.19(c).

 

    	 	4	 

     

    

 

“Closing
Date” means the first date on which Common Units are sold by the Partnership to the Underwriters pursuant to the
provisions of the Underwriting Agreement.

 

“Closing
Price” means, in respect of any class or series of Limited Partner Interests, as of the date of determination, the
last sale price on such day, regular way, or in case no such sale takes place on such day, the average of the closing bid and asked
prices on such day, regular way, as reported in the principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the principal National Securities Exchange on which the respective Limited Partner Interests are
listed or admitted to trading or, if such Limited Partner Interests are not listed or admitted to trading on any National Securities
Exchange, the last quoted price on such day or, if not so quoted, the average of the high bid and low asked prices on such day
in the over-the-counter market, as reported by any quotation system then in use with respect to such Limited Partner Interests,
or, if on any such day such Limited Partner Interests of such class or series are not quoted by any such system, the average
of the closing bid and asked prices on such day as furnished by a professional market maker making a market in such Limited Partner
Interests of such class or series selected by the Board of Directors, or if on any such day no market maker is making a market
in such Limited Partner Interests of such class or series, the fair value of such Limited Partner Interests on such day as determined
by the Board of Directors.

 

“Code”
means the United States Internal Revenue Code of 1986, as amended and in effect from time to time. Any reference herein to a specific
section or sections of the Code shall be deemed to include a reference to any corresponding provision of any successor law.

 

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

 

“Commences
Commercial Service” and “Commenced Commercial Service” shall mean the date a Capital Improvement
is first put into commercial service by a Group Member (or other Person that is not a subsidiary of a Group Member, as contemplated
in the definition of “Capital Improvement”) following, if applicable, completion of construction, acquisition, development
and testing.

 

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

 

“Common
Unit” means a Partnership Interest representing a fractional part of the Partnership Interests of all Limited Partners,
and having the rights and obligations specified with respect to Common Units in this Agreement. The term “Common Unit”
does not refer to a Subordinated Unit prior to its conversion into a Common Unit pursuant to the terms hereof.

 

“Common
Unit Arrearage” means, with respect to any Common Unit, whenever issued, as to any Quarter within the Subordination
Period, the excess, if any, of (a) the Minimum Quarterly Distribution with respect to a Common Unit in respect of such Quarter
over (b) the sum of all Available Cash distributed with respect to a Common Unit in respect of such Quarter pursuant to Section 6.2(a)(i).

 

    	 	5	 

     

    

 

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

 

“Contributed
Property” means each property or other asset, in such form as may be permitted by the Marshall Islands Act, but excluding
cash, contributed to the Partnership.

 

“Contribution
Agreement” means that certain Contribution, Purchase and Sale Agreement, dated as of August 8, 2014, among the General
Partner, the Partnership, the Operating Company, Höegh LNG and Höegh LNG Ltd., together with the additional conveyance
documents and instruments contemplated or referenced thereunder or entered into in connection therewith.

 

“Cumulative
Common Unit Arrearage” means, with respect to any Common Unit, whenever issued, and as of the end of any Quarter,
the excess, if any, of (a) the sum of the Common Unit Arrearage with respect to an Initial Common Unit for each of the Quarters
within the Subordination Period ending on or before the last day of such Quarter over (b) the sum of any distributions theretofore
made pursuant to Section 6.2(a)(ii) and the second sentence of Section 6.3 with respect to an Initial Common
Unit (including any distributions to be made in respect of the last of such Quarters).

 

“Current
Market Price” means, in respect of any class or series of Limited Partner Interests, as of the date of determination,
the average of the daily Closing Prices per Limited Partner Interest of such class for the 20 consecutive Trading Days immediately
prior to such date.

 

“Deferred
Issuance and Distribution” means both (a) the issuance by the Partnership of additional Common Units that is
equal to the excess, if any, of (x) 1,440,000 minus (y) the aggregate number, if any, of Common Units actually purchased
by and issued to the Underwriters pursuant to the Over-Allotment Option on the Option Closing Date(s), and (b) distributions
of cash pursuant to the Contribution Agreement in an amount equal to the total amount of cash contributed by the Underwriters to
the Partnership on or in connection with any Option Closing Date with respect to Common Units issued by the Partnership upon the
applicable exercise of the Over-Allotment Option in accordance with Section 5.2.

 

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

 

“Depositary”
means, with respect to any Units issued in global form, The Depository Trust Company and its successors and permitted assigns.

 

    	 	6	 

     

    

 

“Elected
Directors” means the members of the Board of Directors who are elected as such in accordance with the provisions
of Article VII and at least three (3) of whom are not: (a) security holders, officers or employees of the General
Partner, (b) officers or employees of any Affiliate of the General Partner, (c) holders of any ownership interest in
the Partnership Group (other than Common Units or awards granted to such director under any long-term incentive plan of any Group
Member) and who also meet the independence standards required of directors who serve on an audit committee of a board of directors
established by the Securities Exchange Act, and the rules and regulations of the Commission thereunder and by the National Securities
Exchange on which the Common Units are listed or admitted to trading or (d) United States citizens or residents.

 

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

 

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

 

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

 

“First
Target Distribution” means $0.388125 per Unit per Quarter (or, with respect to the period commencing on the Closing
Date and ending on September 30, 2014, it means the product of $0.388125 multiplied by a fraction of which the numerator is the
number of days in such period, and of which the denominator is the total number of days in the Quarter in which the Closing Date
occurs), subject to adjustment in accordance with Section 5.10 and Section 6.4.

 

    	 	7	 

     

    

 

“Fully
Diluted Weighted Average Basis” means, when calculating the number of Outstanding Units for any period, a basis that
includes (a) the weighted average number of Outstanding Units plus (b) all Partnership Interests and options, rights,
warrants and appreciation rights relating to an equity interest in the Partnership (i) that are convertible into or exercisable
or exchangeable for Units or for which Units are issuable, in each case, that are senior to or pari passu with the Subordinated
Units, (ii) whose conversion, exercise or exchange price is less than the Current Market Price on the date of such calculation,
(iii) that may be converted into or exercised or exchanged for such Units prior to or during the Quarter immediately following
the end of the period for which the calculation is being made without the satisfaction of any contingency beyond the control of
the holder other than the payment of consideration and the compliance with administrative mechanics applicable to such conversion,
exercise or exchange and (iv) that were not converted into or exercised or exchanged for such Units during the period for
which the calculation is being made; provided, however, that for purposes of determining the number of Outstanding Units
on a Fully Diluted Weighted Average Basis when calculating whether the Subordination Period has ended, such Partnership Interests,
options, rights, warrants and appreciation rights shall be deemed to have been Outstanding Units only for the four Quarters that
comprise the last four Quarters of the measurement period; and provided, further, that if consideration will be paid to
any Group Member in connection with such conversion, exercise or exchange, the number of Units to be included in such calculation
shall be that number equal to the difference between (y) the number of Units issuable upon such conversion, exercise or exchange
and (z) the number of Units that such consideration would purchase at the Current Market Price.

 

“General
Partner” means Höegh LNG GP LLC, a Marshall Islands limited liability company, and its successors and permitted
assigns that are admitted to the Partnership as general partner of the Partnership, in its capacity as general partner of the Partnership
(except as the context otherwise requires).

 

“General
Partner Interest” means the non-economic ownership interest of the General Partner in the Partnership (in its capacity
as a general partner and without reference to any Limited Partner Interest held by it), which includes any and all benefits to
which the General Partner is entitled as provided in this Agreement, together with all obligations of the General Partner to comply
with the terms and provisions of this Agreement.

 

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

 

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

 

    	 	8	 

     

    

 

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

 

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

 

“Höegh
LNG” means Höegh LNG Holdings Ltd.

 

“Holder”
has the meaning assigned to such term in Section 7.19(a).

 

“Holders’
Nominee” has the meaning set forth in Section 16.5(b).

 

“IDR Reset
Common Units” has the meaning set forth in Section 5.10(a).

 

“IDR Reset
Election” has the meaning set forth in Section 5.10(a).

 

“Incentive
Distribution Right” means a non-voting Limited Partner Interest, which Partnership Interest will confer upon the
holder thereof only the rights and obligations specifically provided in this Agreement with respect to Incentive Distribution Rights
(and no other rights otherwise available to or other obligations of a holder of a Partnership Interest). Notwithstanding anything
in this Agreement to the contrary, the holder of an Incentive Distribution Right shall not be entitled to vote such Incentive Distribution
Right on any Partnership matter except as may otherwise be required by law.

 

“Incentive
Distributions” means any amount of cash distributed to the holders of the Incentive Distribution Rights pursuant
to Section 6.2.

 

“Incremental
Incentive Distributions” means, with respect to any newly issued equity securities of the Partnership, the incremental
amount of any Incentive Distributions payable under Section 6.2 based solely upon the amount of distributions paid
in respect of such newly issued equity securities.

 

“Indemnified
Persons” has the meaning assigned to such term in Section 7.19(c).

 

“Indemnitee”
means (a) the General Partner, (b) any Departing General Partner, (c) any Person who is or was an Affiliate of the
General Partner or any Departing General Partner, (d) any Person who is or was a manager, managing member, general partner,
director, officer, fiduciary or trustee of any Person which any of the preceding clauses of this definition describes, (e) any
Person who is or was serving at the request of the General Partner or any Departing General Partner or any Affiliate of the General
Partner or any Departing General Partner as an officer, director, member, partner, fiduciary or trustee of another Person (provided,
however, that a Person shall not be an Indemnitee by reason of providing, on a fee-for-services basis, trustee, fiduciary or
custodial services), (f) the members of the Board of Directors, (g) the Officers, and (h) any other Person the Board
of Directors designates as an “Indemnitee” for purposes of this Agreement because such Person’s service,
status or relationship exposes such Person to potential claims, demands, actions, suits or proceedings relating to the Partnership
Group’s business and affairs.

 

    	 	9	 

     

    

 

“Initial
Common Units” means the Common Units sold in the Initial Offering.

 

“Initial
Limited Partners” means Höegh LNG and the Underwriters, in each case upon being admitted as Partners to the
Partnership in accordance with Section 10.1.

 

“Initial
Offering” means the initial public offering and sale of Common Units to the public, as described in the Registration
Statement, including any Common Units sold pursuant to the exercise of the Over-Allotment Option.

 

“Initial
Unit Price” means (a) with respect to the Common Units and the Subordinated Units, the initial public offering
price per Common Unit at which the Underwriters first offered the Common Units to the public for sale as set forth on the cover
page of the prospectus included as part of the Registration Statement and first issued at or after the time the Registration Statement
first became effective or (b) with respect to any other class or series of Units, the price per Unit at which such class or
series of Units is initially sold by the Partnership, as determined by the Board of Directors, in each case adjusted as the Board
of Directors determines to be appropriate to give effect to any distribution, subdivision or combination of Units.

 

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

 

“Investment
Capital Expenditures” means capital expenditures other than Maintenance Capital Expenditures and Expansion Capital
Expenditures.

 

“Junior
Securities” has the meaning set forth in Section 16.7.

 

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

 

    	 	10	 

     

    

 

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

 

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

 

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

 

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

 

“Liquidating
Trustee” means one or more Persons selected by the Board of Directors to perform the functions described in Section 12.4.

 

    	 	11	 

     

    

 

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

 

“Marshall
Islands Act” means the Limited Partnership Act of the Republic of the Marshall Islands, as amended, supplemented
or restated from time to time, and any successor to such statute.

 

“Merger
Agreement” has the meaning assigned to such term in Section 14.1.

 

“Minimum
Quarterly Distribution” means $0.3375 per Unit per Quarter (or with respect to the period commencing on the Closing
Date and ending on September 30, 2014, it means the product of $0.3375 multiplied by a fraction of which the numerator is the number
of days in such period and of which the denominator is the total number of days in the Quarter in which the Closing Date occurs),
subject to adjustment in accordance with Section 5.10 and Section 6.4.

 

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

 

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

 

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

 

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

 

“Omnibus
Agreement” means that Omnibus Agreement, dated as of the Closing Date, among the Partnership, the General Partner,
the Operating Company and Höegh LNG.

 

“Operating
Company” means Höegh LNG Partners Operating LLC, a Marshall Islands limited liability company, and any successors
thereto.

 

    	 	12	 

     

    

 

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

 

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

 

(b)          payments
(including prepayments and prepayment penalties) of principal of and premium on indebtedness other than Working Capital Borrowings
shall not constitute Operating Expenditures; and

 

(c)          Operating
Expenditures shall not include any of (i) Expansion Capital Expenditures, Investment Capital Expenditures or actual Maintenance
Capital Expenditures, but shall include Estimated Maintenance Capital Expenditures, (ii) payment of transaction expenses (including
taxes) relating to Interim Capital Transactions, (iii) Series A Redemption Payments, (iv) payments made to Series A
Holders to purchase or otherwise acquire Series A Preferred Units, (v) distributions to Partners (other than Series A
Distributions) or (vi) repurchases of Partnership Interests, other than repurchases of Partnership Interests by the Partnership
to satisfy obligations under employee benefit plans,

 

where capital expenditures consist of both
(y) Maintenance Capital Expenditures and (z) Expansion Capital Expenditures and/or Investment Capital Expenditures, the
Board of Directors shall determine the allocation between the amounts paid for each.

 

“Operating
Surplus” means, with respect to any period ending prior to the Liquidation Date, on a cumulative basis and without
duplication:

 

    	 	13	 

     

    

 

(a)          the
sum of (i) $25.0 million, (ii) all cash receipts of the Partnership Group (or the Partnership’s proportionate share
of cash receipts in the case of Subsidiaries that are not wholly-owned) for the period beginning on the Closing Date and ending
on the last day of such period, other than cash receipts from Interim Capital Transactions (excluding return on capital from Investment
Capital Expenditures); provided, that cash receipts from the termination of a Hedge Contract prior to its specified termination
date shall be included in Operating Surplus in equal quarterly installments over the remaining scheduled life of such Hedge Contract,
(iii) all cash receipts of the Partnership Group (or the Partnership’s proportionate share of cash receipts in the case
of Subsidiaries that are not wholly-owned) after the end of such period but on or before the date of determination of Operating
Surplus with respect to such period resulting from Working Capital Borrowings and (iv) the amount of cash distributions paid
on equity issued (including Incremental Incentive Distributions) in connection with the construction of a Capital Improvement or
replacement of a capital asset and paid in respect of the period beginning on the date that the Group Member enters into a binding
obligation to commence the construction of such Capital Improvement or replacement of such capital asset and ending on the earlier
to occur of the date that such Capital Improvement or replacement capital asset Commences Commercial Service or the date that it
is abandoned or disposed of (equity issued to fund the construction period interest payments on debt incurred (including periodic
net payments under related Hedge Contracts), or construction period distributions on equity issued (including Incremental Incentive
Distributions), to finance the construction of a Capital Improvement or replacement of a capital asset shall also be deemed to
be equity issued to finance the construction of a Capital Improvement or replacement of such capital asset for purposes of this
clause (iv)), less

 

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

 

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

 

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

 

“Option
Closing Date” means the date or dates on which any Common Units are sold by the Partnership to the Underwriters upon
the exercise of the Over-Allotment Option.

 

“Organizational
Limited Partner” means Höegh LNG, in its capacity as the organizational limited partner of the Partnership.

 

    	 	14	 

     

    

 

“Outstanding”
means, with respect to Partnership Interests, all Partnership Interests that are issued by the Partnership and reflected as outstanding
on the Partnership’s books and records as of the date of determination; provided, however, that if at any time any
Person or Group beneficially owns more than 4.9% of the Outstanding Partnership Interests of any class or series then Outstanding
(or would own such percentage in the event this limitation were applied to other Persons or Groups), all Partnership Interests
owned by such Person or Group in excess of such limitation shall not be voted on any matter and shall not be considered to be Outstanding
when sending notices of a meeting of Limited Partners to vote on any matter (unless otherwise required by law), calculating required
votes (except for purposes of nominating a Person for election to the Board of Directors pursuant to Section 7.3),
determining the presence of a quorum or for other similar purposes under this Agreement, except that Partnership Interests so owned
shall be considered to be Outstanding for purposes of Section 11.1(b)(iv) (such Partnership Interests shall not, however,
be treated as a separate class or series of Partnership Interests for purposes of this Agreement); provided, further, that
the foregoing limitation shall not apply to (a) the General Partner or its Affiliates, or (b) any Person or Group who
acquired more than 4.9% of any Partnership Interests with the prior approval of the Board of Directors after considering the potential
effects of such approval on the Partnership, except, in each case, such limitation shall remain applicable with respect to the
voting of Common Units in the election of the Elected Directors as provided in Section 7.2(a)(ii).

 

“Over-Allotment
Option” means the over-allotment option granted to the Underwriters pursuant to the Underwriting Agreement.

 

“Parity
Securities” has the meaning set forth in Section 16.7(b).

 

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

 

“Partnership”
means Höegh LNG Partners LP, a Marshall Islands limited partnership, and any successors thereto.

 

“Partnership
Group” means the Partnership and its Subsidiaries, including the Operating Company, treated as a single consolidated
entity.

 

“Partnership
Interest” means any class or series of equity interest in the Partnership, which shall include any Limited Partner
Interests and the General Partner Interest but shall exclude any options, rights, warrants, restricted units and appreciation rights
relating to an equity interest in the Partnership.

 

“Paying
Agent” means Computershare, acting in its capacity as paying agent for the Series A Preferred Units, and its
respective successors and assigns or any other payment agent appointed by the Board of Directors; provided, however,
that if no Paying Agent is specifically designated for the Series A Preferred Units, the Partnership shall act in such capacity.

 

“Percentage
Interest” means (a) as of any date of determination as to any Unitholder with respect to Units (other than Series A
Preferred Units), the product obtained by multiplying (i) 100% less the percentage applicable to clause (b) below
by (ii) the quotient obtained by dividing (A) the number of Units (other than Series A Preferred Units) held by
such Unitholder by (B) the total number of all Outstanding Units (other than Series A Preferred Units), and (b) as
to the holders of other Partnership Interests issued by the Partnership in accordance with Section 5.4, the percentage
established as a part of such issuance. The Percentage Interest with respect to an Incentive Distribution Right and to a Series A
Preferred Unit shall at all times be zero.

 

    	 	15	 

     

    

 

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

 

“Plan of
Conversion” has the meaning assigned to such term in Section 14.1.

 

“Preferred
Units” means a Partnership Security, designated as a “Preferred Unit,” which entitles the holder
thereof to a preference with respect to distributions, or as to the distribution of assets upon any Liquidation Event, over Common
Units and Subordinated Units, including the Series A Preferred Units.

 

“Prior
Agreement” means the First Amended and Restated Agreement of Limited Partnership of the Partnership dated as of August 12,
2014.

 

“Pro Rata”
means (a) when used with respect to Units (other than Series A Preferred Units) or any class or series thereof, apportioned
equally among all designated Units (other than Series A Preferred Units) in accordance with their relative Percentage Interests,
(b) when used with respect to Partners or Record Holders, apportioned among all Partners or Record Holders in accordance with
their relative Percentage Interests and (c) when used with respect to holders of Incentive Distribution Rights or Series A
Preferred Units, apportioned equally among all holders of Incentive Distribution Rights or Series A Preferred Units in accordance
with the relative number or percentage of Incentive Distribution Rights or Series A Preferred Units, as applicable, held by
each such holder.

 

“Purchase
Date” means the date determined by the General Partner as the date for purchase of all Outstanding Limited Partner
Interests of a certain class or series (other than Limited Partner Interests owned by the General Partner and its Affiliates) pursuant
to Article XV.

 

“Quarter”
means, unless the context requires otherwise, a fiscal quarter, or, with respect to the first fiscal quarter including the Closing
Date, the portion of such fiscal quarter after the Closing Date, of the Partnership.

 

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

 

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

 

    	 	16	 

     

    

 

“Registration
Statement” means the Partnership’s Registration Statement on Form F-1 (Registration No. 333-197228)
as it has been or as it may be amended or supplemented from time to time, filed by the Partnership with the Commission under the
Securities Act to register the offering and sale of the Common Units in the Initial Offering.

 

“Reset MQD”
has the meaning set forth in Section 5.10(e).

 

“Reset
Notice” has the meaning set forth in Section 5.10(b).

 

“Second
Target Distribution” means $0.421875 per Unit per Quarter (or, with respect to the period commencing on the Closing
Date and ending on September 30, 2014, it means the product of $0.421875 multiplied by a fraction of which the numerator is equal
to the number of days in such period and of which the denominator is the total number of days in the Quarter in which the Closing
Date occurs), subject to adjustment in accordance with Section 5.10 and Section 6.4.

 

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

 

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

 

“Senior
Securities” has the meaning set forth in Section 16.7(c).

 

“Series A
Distribution Payment Date” means each February 15, May 15, August 15 and November 15, commencing
February 15, 2018; provided, however, that if any Series A Distribution Payment Date would otherwise occur
on a day that is not a Business Day, such Series A Distribution Payment Date shall instead be on the immediately succeeding
Business Day.

 

“Series A
Distribution Period” means a period of time from and including the preceding Series A Distribution Payment Date
(other than the initial Series A Distribution Period, which shall commence on and include the Series A Original Issue
Date), to but excluding the next Series A Distribution Payment Date for such Series A Distribution Period.

 

“Series A
Distribution Rate” means a rate equal to 8.75% per annum of the Stated Series A Liquidation Preference per Series A
Preferred Unit.

 

“Series A
Distribution Record Date” has the meaning set forth in Section 16.3(b).

 

“Series A
Distributions” means distributions with respect to Series A Preferred Units pursuant to Section 16.3.

 

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

 

    	 	17	 

     

    

 

“Series A
Liquidation Preference” means a liquidation preference for each Series A Preferred Unit initially equal to $25.00
per share, which liquidation preference shall be subject to (a) increase by the per Series A Preferred Unit amount of
any accumulated and unpaid distributions (whether or not such distributions shall have been declared) and (b) decrease upon
a distribution in connection with a Liquidation Event described in Section 16.4 which does not result in payment in
full of the liquidation preference of such Series A Preferred Unit.

 

“Series A
Original Issue Date” means October 5, 2017.

 

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

 

“Series A
Preferred Unit” means a Preferred Unit having the designations, preferences, rights, powers and duties set forth
in Article XVI.

 

“Series A
Redemption Date” has the meaning set forth in Section 16.6.

 

“Series A
Redemption Notice” has the meaning set forth in Section 16.6(b).

 

“Series A
Redemption Price” has the meaning set forth in Section 16.6(a).

 

“Series A
Redemption Payments” means payments to be made to the holders of Series A Preferred Units to redeem Series A
Preferred Units in accordance with Section 16.6.

 

“Series
A Trigger Event” means any time at which six quarterly Series A Distributions, whether consecutive or not, are in
Arrears.

 

“Special
Approval” means approval by a majority of the members of the Conflicts Committee.

 

“Stated
Series A Liquidation Preference” means an amount equal to $25.00 per Series A Preferred Unit.

 

“Subordinated
Unit” means a Unit representing a fractional part of the Partnership Interests of all Limited Partners and having
the rights and obligations specified with respect to Subordinated Units in this Agreement. The term “Subordinated Unit”
does not include a Common Unit. A Subordinated Unit that is convertible into a Common Unit shall not constitute a Common Unit until
such conversion occurs.

 

“Subordination
Period” means the period commencing on the Closing Date and ending on the first to occur of the following dates:

 

(a)          the
second Business Day following the distribution of Available Cash to Partners pursuant to Section 6.1(a) in respect
of any Quarter ending on or after June 30, 2019, in respect of which (i) (A) distributions of Available Cash from Operating
Surplus on each of the Outstanding Common Units, Subordinated Units and any other Outstanding Units that are senior or equal in
right of distribution to the Subordinated Units equaled or exceeded the sum of the Minimum Quarterly Distribution during each of
the three consecutive, non-overlapping four-Quarter periods immediately preceding such date and (B) the Adjusted Operating
Surplus for each of the three consecutive, non-overlapping four-Quarter periods immediately preceding such date equaled or exceeded
the sum of the Minimum Quarterly Distribution on all of the Common Units, Subordinated Units and any other Units that are senior
or equal in right of distribution to the Subordinated Units that were Outstanding during such periods on a Fully Diluted Weighted
Average Basis with respect to each such period and (ii) there are no Cumulative Common Unit Arrearages; and

 

    	 	18	 

     

    

 

(b)          the
date on which the General Partner is removed as general partner of the Partnership upon the requisite vote by holders of Outstanding
Units under circumstances where Cause does not exist and no Units held by the General Partner and its Affiliates are voted in favor
of such removal.

 

“Subsidiary”
means, with respect to any Person, (a) a corporation of which more than 50% of the voting power of shares entitled (without
regard to the occurrence of any contingency) to vote in the election of directors or other governing body of such corporation is
owned, directly or indirectly, at the date of determination, by such Person, by one or more Subsidiaries (as defined, but excluding
subsection (d) of this definition) of such Person or a combination thereof, (b) a partnership (whether general
or limited) in which such Person or a Subsidiary (as defined, but excluding subsection (d) of this definition) of such
Person is, at the date of determination, a general or limited partner of such partnership, but only if more than 50% of the partnership
interests of such partnership (considering all of the partnership interests of the partnership as a single class) is owned, directly
or indirectly, at the date of determination, by such Person, by one or more Subsidiaries (as defined, but excluding subsection (d)
of this definition) of such Person, or a combination thereof, (c) any other Person (other than a corporation or a partnership)
in which such Person, one or more Subsidiaries (as defined, but excluding subsection (d) of this definition) of such
Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) at least a majority ownership
interest or (ii) the power to elect or direct the election of a majority of the directors or other governing body of such
Person, or (d) any other Person in which such Person, one or more Subsidiaries (as defined, but excluding this subsection (d)
of this definition) of such Person, or a combination thereof, directly or indirectly, at the date of determination, has (i) less
than a majority ownership interest or (ii) less than the power to elect or direct the election of a majority of the directors
or other governing body of such Person, provided, that (A) such Person, one or more Subsidiaries (as defined, but excluding
this subsection (d) of this definition) of such Person, or a combination thereof, directly or indirectly, at the date
of the determination, has at least a 20% ownership interest in such other Person, (B) such Person accounts for such other
Person (under U.S. GAAP, as in effect on the later of the date of investment in such other Person or material expansion of the
operations of such other Person) on a consolidated or equity accounting basis, (C) such Person has directly or indirectly
material negative control rights regarding such other Person including over such other Person’s ability to materially expand
its operations beyond that contemplated at the date of investment in such other Person, and (D) such other Person is (i) formed
and maintained for the sole purpose of owning or leasing, operating and chartering vessels or liquefied natural gas infrastructure
assets and (ii) obligated under its constituent documents or as a result of unanimous agreement of its owners, to distribute
to its owners all of its income on at least an annual basis (less any cash reserves that are approved by such Person). For the
avoidance of doubt, SRV Joint Gas Ltd. and SRV Joint Gas Two Ltd. shall be deemed to be Subsidiaries.

 

    	 	19	 

     

    

 

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

 

“Third
Target Distribution” means $0.50625 per Unit per Quarter (or, with respect to the period commencing on the Closing
Date and ending on September 30, 2014, it means the product of $0.50625 multiplied by a fraction of which the numerator is equal
to the number of days in such period and of which the denominator is the total number of days in the Quarter in which the Closing
Date occurs), subject to adjustment in accordance with Section 5.10 and Section 6.4.

 

“Trading
Day” means, for the purpose of determining the Current Market Price of any class or series of Limited Partner Interests,
a day on which the principal National Securities Exchange on which such class or series of Limited Partner Interests is listed
or admitted for trading is open for the transaction of business or, if Limited Partner Interests of a class or series are
not listed on any National Securities Exchange, a day on which banking institutions in New York City generally are open.

 

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

 

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

 

“Underwriter”
means each Person named as an underwriter in Schedule I to the Underwriting Agreement who purchases Common Units pursuant
thereto.

 

“Underwriting
Agreement” means the Underwriting Agreement, dated August 7, 2014, among the Underwriters, the Partnership, the General
Partner, the Operating Company and Höegh LNG, providing for the purchase of Common Units from the Partnership by such Underwriters
in connection with the Initial Offering.

 

“Unit”
means a Partnership Interest that is designated as a “Unit” and shall include Common Units, Preferred Units
and Subordinated Units, but shall not include (a) the General Partner Interest or (b) the Incentive Distribution Rights.

 

“Unitholders”
means the holders of Units.

 

“Unit Majority”
means (a) during the Subordination Period, (i) a majority of the Outstanding Common Units (excluding Common Units owned
by the General Partner and its Affiliates) voting as a single class and (ii) a majority of the Outstanding Subordinated Units,
voting as a single class, and (b) after the end of the Subordination Period, at least a majority of the Outstanding Common
Units, voting as a single class.

 

“Unit Register”
means the register of the Partnership for the registration and transfer of Limited Partnership Interests as provided in Section 4.5.

 

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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 Common Units.

 

“U.S. GAAP”
means United States generally accepted accounting principles consistently applied.

 

“Volume-Weighted
Average Market Price” means, for a specified period of consecutive Trading Days for the Common Units, an amount equal
to (a) the cumulative sum of the products of (x) the sale price for each trade of Common Units occurring during such
period multiplied by (y) the number of Common Units sold at such price, divided by (b) the total number of Common Units
so traded during such period.

 

“Withdrawal
Opinion of Counsel” has the meaning assigned to such term in Section 11.1(b)(i).

 

“Working
Capital Borrowings” means borrowings used solely for working capital purposes or to pay distributions to Partners
made pursuant to a credit facility, commercial paper facility or similar financing arrangement available to a Group Member, provided,
that when such borrowing is incurred it is the intent of the borrower to repay such borrowings within 12 months from sources
other than additional Working Capital Borrowings.

 

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

 

Article II

ORGANIZATION

 

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

 

    	 	21	 

     

    

 

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

 

Section 2.3           Registered
Office; Registered Agent; Principal Office; Other Offices. Unless and until changed by the Board
of Directors, the registered office of the Partnership in the Marshall Islands shall be located at Trust Company Complex, Ajeltake
Island, Ajeltake Road, Majuro, Marshall Islands MH96960, and the registered agent for service of process on the Partnership in
the Marshall Islands at such registered office shall be The Trust Company of the Marshall Islands, Inc. The principal office of
the Partnership shall be located at Wessex House, 5th Floor, 45 Reid Street, Hamilton, HM 12, Bermuda, or such other
place as the Board of Directors may from time to time designate by notice to the General Partner and the Limited Partners. The
Partnership may maintain offices at such other place or places within or outside the Marshall Islands as the Board of Directors
determines to be necessary or appropriate. The address of the General Partner shall be at Wessex House, 5th Floor,
45 Reid Street, Hamilton, HM 12, Bermuda, or such other place as the General Partner may from time to time designate by notice
to the Limited Partners.

 

Section 2.4           Purpose
and Business. The purpose and nature of the business to be conducted by the Partnership shall
be to (a) engage directly in, or enter into or form any corporation, partnership, joint venture, limited liability company
or other arrangement to engage indirectly in, any business activity that is approved by the Board of Directors and that lawfully
may be conducted by a limited partnership organized pursuant to the Marshall Islands Act and, in connection therewith, to exercise
all of the rights and powers conferred upon the Partnership pursuant to the agreements relating to such business activity, and
(b) do anything necessary or appropriate to the foregoing, including the making of capital contributions or loans to a Group
Member.

 

Section 2.5           Powers.
The Partnership shall be empowered to do any and all acts and things necessary and appropriate for the furtherance and accomplishment
of the purposes and business described in Section 2.4 and for the protection and benefit of the Partnership.

 

    	 	22	 

     

    

 

Section 2.6           Term.
The term of the Partnership commenced upon the filing of the Certificate of Limited Partnership in accordance with the Marshall
Islands Act and shall continue in existence until the dissolution of the Partnership in accordance with the provisions of Article XII.
The existence of the Partnership as a separate legal entity shall continue until the cancellation of the Certificate of Limited
Partnership as provided in the Marshall Islands Act.

 

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

 

Article III

RIGHTS
OF LIMITED PARTNERS

 

Section 3.1           Limitation
of Liability. The Limited Partners shall have no liability under this Agreement except as expressly
provided in this Agreement or the Marshall Islands Act.

 

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

 

    	 	23	 

     

    

 

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

 

Section 3.4           Rights
of Limited Partners.

 

(a)          In
addition to other rights provided by this Agreement or by the Marshall Islands Act, and except as limited by Section 3.4(b),
each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest as a Limited
Partner in the Partnership, upon reasonable written demand stating the purpose of such demand and at such Limited Partner’s
own expense, to:

 

(i)          have
furnished to him a current list of the name and last known business, residence or mailing address of each Partner;

 

(ii)         obtain
true and full information regarding the amount of cash and a description and statement of the Net Agreed Value of any other Capital
Contribution by each Partner and which each Partner has agreed to contribute in the future, and the date on which each became a
Partner;

 

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

 

(iv)        obtain
true and full information regarding the status of the business and financial condition of the Partnership Group; and

 

(v)         obtain
such other information regarding the affairs of the Partnership as is just and reasonable.

 

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

 

    	 	24	 

     

    

 

Article IV

CERTIFICATES;
RECORD HOLDERS; TRANSFER OF PARTNERSHIP INTERESTS

 

Section 4.1           Certificates.
Subject to Section 16.2(b) with respect to Series A Preferred Units, unless the Partnership shall determine otherwise
in respect of some or all of any or all classes of Partnership Interests, Partnership Interests shall not be evidenced by certificates.
Certificates that may be issued shall be executed on behalf of the Partnership by the Chairman of the Board of Directors, President,
Chief Executive Officer or any Executive Vice President or Vice President and the Chief Financial Officer or the Secretary or any
Assistant Secretary of the Partnership. If a Transfer Agent has been appointed for a class of Partnership Interests, no Certificate
for such class of Partnership Interests shall be valid for any purpose until it has been countersigned by the Transfer Agent; provided,
however, that if the Partnership elects to issue Partnership Interests of such class in global
form, the Certificate shall be valid upon receipt of a certificate from the Transfer Agent certifying that the Partnership Interests
have been duly registered in accordance with the directions of the Partnership. If Common Units are evidenced by Certificates,
on or after the date on which Subordinated Units are converted into Common Units pursuant to the terms of Section 5.6,
the Record Holders of such Subordinated Units (a) if the Subordinated Units are evidenced by Certificates, may exchange such
Certificates for Certificates evidencing Common Units or (b) if the Subordinated Units are not evidenced by Certificates,
shall be issued Certificates evidencing Common Units.

 

Section 4.2           Mutilated,
Destroyed, Lost or Stolen Certificates.

 

(a)          If
any mutilated Certificate is surrendered to the Transfer Agent (for Common Units or Preferred Units) or the Partnership (for Partnership
Interests other than Common Units or Preferred Units), the appropriate Officers on behalf of the Partnership shall execute, and
the Transfer Agent (for Common Units or Preferred Units) shall countersign and deliver in exchange therefor, a new Certificate
evidencing the same number and type of Partnership Interests as the Certificate so surrendered.

 

(b)          The
appropriate Officers on behalf of the Partnership shall execute and deliver, and the Transfer Agent (for Common Units or Preferred
Units), as applicable, shall countersign, a new Certificate in place of any Certificate previously issued, or issue uncertificated
Units, if the Record Holder of the Certificate:

 

(i)          makes
proof by affidavit, in form and substance satisfactory to the Partnership, that a previously issued Certificate has been lost,
destroyed or stolen;

 

(ii)         requests
the issuance of a new Certificate or the issuance of uncertificated Units before the Partnership has notice that the Certificate
has been acquired by a purchaser for value in good faith and without notice of an adverse claim;

 

    	 	25	 

     

    

 

(iii)        if
requested by the Partnership, delivers to the Partnership a bond, in form and substance satisfactory to the Partnership, with surety
or sureties and with fixed or open penalty as the Board of Directors may direct to indemnify the Partnership, the Partners, the
General Partner and the Transfer Agent against any claim that may be made on account of the alleged loss, destruction or theft
of the Certificate; and

 

(iv)        satisfies
any other reasonable requirements imposed by the Board of Directors.

 

If a Limited Partner
fails to notify the Partnership within a reasonable period of time after he has notice of the loss, destruction or theft of a Certificate,
and a transfer of the Limited Partner Interests represented by the Certificate is registered before the Partnership, the General
Partner or the Transfer Agent receives such notification, the Limited Partner shall be precluded from making any claim against
the Partnership, the General Partner or the Transfer Agent for such transfer or for a new Certificate or uncertificated Units.

 

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

 

Section 4.3           Record
Holders. The Partnership shall be entitled to recognize the Record Holder as the Partner with
respect to any Partnership Interest and, accordingly, shall not be bound to recognize any equitable or other claim to, or interest
in, such Partnership Interest on the part of any other Person, regardless of whether the Partnership shall have actual or other
notice thereof, except as otherwise provided by law or any applicable rule, regulation, guideline or requirement of any National
Securities Exchange on which such Partnership Interests are listed or admitted to trading. Without limiting the foregoing, when
a Person (such as a broker, dealer, bank, trust company or clearing corporation or an agent of any of the foregoing) is acting
as nominee, agent or in some other representative capacity for another Person in acquiring and/or holding Partnership Interests,
as between the Partnership on the one hand, and such other Persons on the other, such representative Person (a) shall be the
Record Holder of such Partnership Interest and (b) shall be bound by this Agreement and shall have the rights and obligations
of a Partner hereunder and as, and to the extent, provided for herein.

 

Section 4.4           Transfer
Generally.

 

(a)          The
term “transfer,” when used in this Agreement with respect to a Partnership Interest, shall mean a transaction (i) by
which the General Partner assigns its General Partner Interest to another Person or by which a holder of Incentive Distribution
Rights assigns its Incentive Distribution Rights to another Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise or (ii) by which the holder of a Limited Partner
Interest (other than an Incentive Distribution Right) assigns such Limited Partner Interest to another Person who is or becomes
a Limited Partner, and includes a sale, assignment, gift, exchange or any other disposition by law or otherwise, excluding a pledge,
encumbrance, hypothecation or mortgage, but including any transfer upon foreclosure of any pledge, encumbrance, hypothecation or
mortgage.

 

    	 	26	 

     

    

 

(b)          No
Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in
this Article IV. Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article IV
shall be null and void.

 

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

 

Section 4.5           Registration
and Transfer of Limited Partner Interests.

 

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

 

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

 

(c)          By
acceptance of the transfer of a Limited Partner Interest in accordance with this Section 4.5 and except as otherwise
provided in Section 4.8, each transferee of a Limited Partner Interest (including any nominee holder or an agent or
representative acquiring such Limited Partner Interests for the account of another Person) (i) shall be admitted to the Partnership
as a Limited Partner with respect to the Limited Partner Interests so transferred to such Person when any such transfer or admission
is reflected in the books and records of the Partnership and such Limited Partner becomes the Record Holder of the Limited Partner
Interests so transferred, (ii) shall become bound, and shall be deemed to have agreed to be bound, by the terms of this Agreement,
(iii) represents that the transferee has the capacity, power and authority to enter into this Agreement and (iv) makes
the consents, acknowledgments and waivers contained in this Agreement, all with or without execution of this Agreement by such
Person. The transfer of any Limited Partner Interests and the admission of any new Limited Partner shall not constitute an amendment
to this Agreement.

 

    	 	27	 

     

    

 

(d)          Subject
to the provisions set forth in this Article IV and applicable securities laws, Limited Partner Interests shall be freely
transferable.

 

(e)          The
General Partner and its Affiliates shall have the right at any time to transfer their Subordinated Units, Common Units and Preferred
Units, if any, to one or more Persons.

 

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

 

(a)          Subject
to Section 4.6(c) below, prior to June 30, 2024, the General Partner shall not transfer all or any part of its General
Partner Interest to a Person unless such transfer (i) has been approved by the prior written consent or vote of the holders
of at least a majority of the Outstanding Common Units (excluding Common Units held by the General Partner and its Affiliates)
or (ii) is of all, but not less than all, of its General Partner Interest to (A) an Affiliate of the General Partner
(other than an individual) or (B) another Person (other than an individual) in connection with (y) the merger or consolidation
of the General Partner with or into such other Person or (z) the transfer by the General Partner of all or substantially all of
its assets to such other Person.

 

(b)          Subject
to Section 4.6(c) below, on or after June 30, 2024, the General Partner may transfer all or any of its General Partner
Interest without Unitholder approval.

 

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

 

    	 	28	 

     

    

 

Section 4.7           Transfer
of Incentive Distribution Rights. Prior to June 30, 2019, a holder of Incentive Distribution Rights
may transfer any or all of the Incentive Distribution Rights held by such holder without any consent of the Unitholders to (a) an
Affiliate of such holder (other than an individual) or (b) another Person (other than an individual) in connection with (i) the
merger or consolidation of such holder of Incentive Distribution Rights with or into such other Person or (ii) the transfer
by such holder of all or substantially all of its assets to such other Person. Any other transfer of the Incentive Distribution
Rights prior to June 30, 2019 shall require the prior approval of holders of at least a majority of the Outstanding Common Units
(excluding Common Units held by Höegh LNG and its Affiliates). On or after June 30, 2019, any holder of Incentive Distribution
Rights may transfer any or all of its Incentive Distribution Rights without Unitholder approval. Notwithstanding anything herein
to the contrary, (a) the transfer of Common Units issued pursuant to Section 5.10 shall not be treated as a transfer
of all or any part of the Incentive Distribution Rights and (b) no transfer of Incentive Distribution Rights to another Person
shall be permitted unless the transferee agrees to be bound by the provisions of this Agreement. The General Partner and any transferee
or transferees of the Incentive Distribution Rights may agree in a separate instrument as to the General Partner’s exercise
of its rights with respect to the Incentive Distribution Rights under Section 11.3.

 

Section 4.8           Restrictions
on Transfers.

 

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

 

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

 

Article V

CAPITAL
CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS

 

Section 5.1           Contributions
Prior to the Closing Date. In connection with the formation of the Partnership under the Marshall
Islands Act, the General Partner was admitted as the General Partner of the Partnership and the Organizational Limited Partner
made an initial Capital Contribution in the amount of $1,000 in exchange for a Limited Partner Interest equal to a 100% Percentage
Interest and was admitted as a Limited Partner of the Partnership. As of the Closing Date, and effective with the admission of
another Limited Partner to the Partnership, the interests of the Organizational Limited Partner were redeemed as provided in the
Contribution Agreement and the initial Capital Contribution of the Organizational Limited Partner was refunded.

 

    	 	29	 

     

    

 

Section 5.2           Initial
Unit Issuances; Tax Election.

 

(a)          On
the Closing Date, pursuant to the Contribution Agreement, (i) Höegh LNG assigned and transferred to the Partnership 100%
of the equity interests in the Operating Company and the SRV and Lampung Promissory Note (as defined in the Contribution Agreement),
in exchange for (A) 13,156,060 Subordinated Units and 2,116,060 Common Units, (B) all of the Incentive Distribution Rights
and (C) the right to receive the Deferred Issuance and Distribution and (ii) the General Partner continued to own the
General Partner Interest.

 

(b)          On
the Closing Date and pursuant to the Underwriting Agreement, each Underwriter paid cash to the Partnership in exchange for the
issuance by the Partnership of Common Units to each Underwriter, all as set forth in the Underwriting Agreement.

 

(c)          Upon
the exercise of the Over-Allotment Option, each Underwriter paid cash to the Partnership in exchange for the issuance by the Partnership
of Common Units to each Underwriter, all as set forth in the Underwriting Agreement.

 

(d)          Effective
on or before the Closing Date, the Partnership elected to be treated as an association taxable as a corporation solely for U.S.
federal income tax purposes.

 

Section 5.3           Interest
and Withdrawal. No interest shall be paid by the Partnership on Capital Contributions. No Partner
shall be entitled to the withdrawal or return of its Capital Contribution, except to the extent, if any, that distributions made
pursuant to this Agreement or upon dissolution of the Partnership may be considered and permitted as such by law and then only
to the extent provided for in this Agreement. Except to the extent expressly provided in this Agreement, no Partner shall have
priority over any other Partner either as to the return of Capital Contributions or as to profits, losses or distributions.

 

Section 5.4           Issuances
of Additional Partnership Interests.

 

(a)          Subject
to any approvals required by Series A Holders pursuant to Section 16.5(c)(ii), the Partnership may issue additional
Partnership Interests and options, rights, warrants and appreciation rights relating to the Partnership Interests for any Partnership
purpose at any time and from time to time to such Persons for such consideration and on such terms and conditions as the Board
of Directors shall determine, all without the approval of any Partners.

 

    	 	30	 

     

    

 

(b)          Each
additional Partnership Interest authorized to be issued by the Partnership pursuant to Section 5.4(a) may be issued
in one or more classes, or one or more series of any such classes, with such designations, preferences, rights, powers and duties
(which may be senior to existing classes and series of Partnership Interests), as shall be fixed by the Board of Directors, including
(i) the right to share in Partnership distributions; (ii) the rights upon dissolution and liquidation of the Partnership;
(iii) whether, and the terms and conditions upon which, the Partnership may or shall be required to redeem the Partnership
Interest (including sinking fund provisions); (iv) whether such Partnership Interest is issued with the privilege of conversion
or exchange and, if so, the terms and conditions of such conversion or exchange; (v) the terms and conditions upon which each
Partnership Interest will be issued, evidenced by certificates and assigned or transferred; (vi) the method for determining
the Percentage Interest as to such Partnership Interest; and (vii) the right, if any, of each such Partnership Interest to
vote on Partnership matters, including matters relating to the relative rights, preferences and privileges of such Partnership
Interest.

 

(c)          The
Board of Directors shall take all actions that it determines to be necessary or appropriate in connection with (i) each issuance
of Partnership Interests and options, rights, warrants and appreciation rights relating to Partnership Interests pursuant to this
Section 5.4, including Common Units issued in connection with the Deferred Issuance and Distribution, (ii) the
conversion of the Combined Interest into Units pursuant to the terms of this Agreement, (iii) the issuance of Common Units
pursuant to Section 5.10, (iv) the admission of additional Limited Partners and (v) all additional issuances
of Partnership Interests. The Board of Directors shall determine the relative rights, powers and duties of the holders of the Units
or other Partnership Interests being so issued. The Board of Directors shall do all things necessary to comply with the Marshall
Islands Act and is authorized and directed to do all things that it determines to be necessary or appropriate in connection with
any future issuance of Partnership Interests or in connection with the conversion of the Combined Interest into Units pursuant
to the terms of this Agreement, including compliance with any statute, rule, regulation or guideline of any federal, state or other
governmental agency or any National Securities Exchange on which the Units or other Partnership Interests are listed or admitted
to trading.

 

Section 5.5           Limitations
on Issuance of Additional Partnership Interests. The Partnership may issue an unlimited number
of Partnership Interests (or options, rights, warrants or appreciation rights related thereto) pursuant to Section 5.4
without the approval of the Partners; provided, however, that no fractional units
shall be issued by the Partnership; and provided, further, that without the
approval of the General Partner, the Partnership shall not issue any equity where such issuance (as determined by the Board of
Directors) (a) is not reasonably expected to be accretive to equity within 12 months of issuance or (b) would otherwise
have a material adverse impact on the General Partner, the General Partner Interest or the ability of the Partnership to satisfy
the tests set forth in the definition of Subordination Period.

 

Section 5.6           Conversion
of Subordinated Units to Common Units.

 

(a)          The
Subordinated Units shall convert into Common Units on a one-for-one basis upon the expiration of the Subordination Period.

 

    	 	31	 

     

    

 

(b)          Notwithstanding
any other provision of this Agreement, the Subordinated Units will automatically convert into Common Units on a one-for-one basis
as set forth in, and pursuant to the terms of, Section 11.4.

 

Section 5.7           Limited
Preemptive Right. Except as provided in this Section 5.7 or as otherwise provided
in a separate agreement by the Partnership, no Person shall have any preemptive, preferential or other similar right with respect
to the issuance of any Partnership Interest, whether unissued, held in the treasury or hereafter created. The General Partner
shall have the right, which it may from time to time assign in whole or in part to any of its Affiliates, to purchase Partnership
Interests from the Partnership whenever, and on the same terms that, the Partnership issues Partnership Interests to Persons other
than the General Partner and its Affiliates, to the extent necessary to maintain the Percentage Interests of the General Partner
and its Affiliates equal to that which existed immediately prior to the issuance of such Partnership Interests; provided,
however, that the amount of any series of Preferred Units issued by the Partnership from time
to time that the General Partner shall have a right to purchase pursuant to this Section 5.7 shall equal the product
of (a) the aggregate Percentage Interest of the General Partner and its Affiliates multiplied by (b) the number of Preferred
Units so issued.

 

Section 5.8           Splits
and Combinations.

 

(a)          Subject
to Section 5.8(d) and Section 6.4 (dealing with adjustments of distribution levels), the Partnership may
make a Pro Rata distribution of Partnership Interests (other than Series A Preferred Units) to all Record Holders of the same
class or series of Partnership Interests or may effect a subdivision or combination so long as, after any such event, each Partner
holding such class or series of Partnership Interests shall have the same Percentage Interest in the Partnership as before such
event, and any amounts calculated on a per Unit basis (including any Common Unit Arrearage or Cumulative Common Unit Arrearage
and including those based on the Series A Liquidation Preference or the Stated Series A Liquidation Preference) or stated
as a number of Units are proportionately adjusted.

 

(b)          Whenever
such a Pro Rata distribution, subdivision or combination of Partnership Interests is declared, the Board of Directors shall select
a Record Date as of which the distribution, subdivision or combination shall be effective and shall send notice thereof at least
20 days prior to such Record Date to each Record Holder as of a date not less than 10 days prior to the date of such notice. The
Board of Directors also may cause a firm of independent public accountants selected by it to calculate the number of Partnership
Interests to be held by each Record Holder after giving effect to such distribution, subdivision or combination. The Board of Directors
shall be entitled to rely on any certificate provided by such firm as conclusive evidence of the accuracy of such calculation.

 

    	 	32	 

     

    

 

(c)          Promptly
following any such distribution, subdivision or combination, the Partnership may issue Certificates or uncertificated Partnership
Interests to the Record Holders of Partnership Interests of the relevant class or series of Partnership Interest as of the applicable
Record Date representing the new number of Partnership Interests held by such Record Holders, or the Board of Directors may adopt
such other procedures that it determines to be necessary or appropriate to reflect such changes. If any such combination results
in a smaller total number of Partnership Interests Outstanding, the Partnership shall require, as a condition to the delivery to
a Record Holder of such new Certificate or uncertificated Partnership Interest, the surrender of any Certificate held by such Record
Holder immediately prior to such Record Date.

 

(d)          The
Partnership shall not issue fractional Units upon any distribution, subdivision or combination of Units. If a distribution, subdivision
or combination of Units would result in the issuance of fractional Units but for the provisions of this Section 5.8(d),
each fractional Unit shall be rounded to the nearest whole Unit (and a 0.5 Unit shall be rounded to the next higher Unit).

 

Section 5.9           Fully
Paid and Non-Assessable Nature of Limited Partner Interests. All Limited Partner Interests issued
pursuant to, and in accordance with the requirements of, this Article V shall be fully paid and non-assessable Limited
Partner Interests in the Partnership, except as such non-assessability may be affected by the Marshall Islands Act.

 

Section 5.10         Issuance
of Common Units in Connection with Reset of Incentive Distribution Rights.

 

(a)          Subject
to the provisions of this Section 5.10, the holder of the Incentive Distribution Rights (or, if there is more than
one holder of the Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights) shall
have the right, at any time when there are no Subordinated Units Outstanding and the Partnership has made a distribution pursuant
to Section 6.2(b)(v) for each of the four most recently completed Quarters and the amount of each such distribution
did not exceed Adjusted Operating Surplus for such Quarter, to make an election (the “IDR Reset Election”)
to cause the Minimum Quarterly Distribution and the Target Distributions to be reset in accordance with the provisions of Section 5.10(e)
and, in connection therewith, the holder or holders of the Incentive Distribution Rights will become entitled to receive their
respective proportionate shares of a number of Common Units (“IDR Reset Common Units”) derived by
dividing (i) the average of the aggregate amount of cash distributions made by the Partnership for each of the two full Quarters
immediately preceding the giving of the Reset Notice in respect of the Incentive Distribution Rights by (ii) the average of
the cash distributions made by the Partnership in respect of each Common Unit for each of the two full Quarters immediately preceding
the giving of the Reset Notice (the number of Common Units determined by such quotient is referred to herein as the “Aggregate
Quantity of IDR Reset Common Units”). The making of the IDR Reset Election in the manner specified in Section 5.10(b)
shall cause the Minimum Quarterly Distribution and the Target Distributions to be reset in accordance with the provisions of Section 5.10(c)
and, in connection therewith, the holder or holders of the Incentive Distribution Rights will become entitled to receive IDR Reset
Common Units on the basis specified above, without any further approval required by the General Partner, the Board of Directors
or the Unitholders, at the time specified in Section 5.10(c), unless the IDR Reset Election is rescinded pursuant to
Section 5.10(d).

 

    	 	33	 

     

    

 

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

 

(c)          The
holder or holders of the Incentive Distribution Rights will be entitled to receive the Aggregate Quantity of IDR Reset Common Units
on the 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 Board of
Directors may approve, with the approval of the Conflicts Committee, that will provide (i) the same economic value, in the
aggregate, as the Aggregate Quantity of IDR Reset Common Units would have had at the time of the Partnership’s receipt of
the Reset Notice, as determined by the Board of Directors, and (ii) for the subsequent conversion (on terms acceptable to
the National Securities Exchange upon which the Common Units are then traded) of such Partnership Interests into Common Units within
not more than 12 months following the Partnership’s receipt of the Reset Notice upon the satisfaction of one or more conditions
that are reasonably acceptable to the holder of the Incentive Distribution Rights (or, if there is more than one holder of the
Incentive Distribution Rights, the holders of a majority in interest of the Incentive Distribution Rights).

 

(e)          The
Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution shall be adjusted
at the time of the issuance of Common Units or other Partnership Interests pursuant to this Section 5.10 such that
(i) the Minimum Quarterly Distribution shall be reset to equal to the average cash distribution amount per Common Unit for
the two Quarters immediately prior to the Partnership’s receipt of the Reset Notice (the “Reset MQD”),
(ii) the First Target Distribution shall be reset to equal 115% of the Reset MQD, (iii) the Second Target Distribution
shall be reset to equal 125% of the Reset MQD and (iv) the Third Target Distribution shall be reset to equal 150% of the Reset
MQD.

 

Section 5.11         Capital
Accounts. The Partnership shall not maintain capital accounts.

 

    	 	34	 

     

    

 

Article VI

DISTRIBUTIONS

 

Section 6.1           Requirement
and Characterization of Distributions; Distributions to Record Holders.

 

(a)          Subject
to Section 16.3, within 45 days following the end of each Quarter commencing with the Quarter ending on September 30,
2014, an amount equal to 100% of Available Cash with respect to such Quarter shall, subject to Section 51 of the Marshall
Islands Act, be distributed in accordance with this Article VI by the Partnership to the Partners as of the Record
Date selected by the Board of Directors. All amounts of Available Cash distributed by the Partnership on any date following the
Closing Date from any source shall be deemed to be Operating Surplus until the sum of all amounts of Available Cash theretofore
distributed by the Partnership to the Partners following the Closing Date pursuant to Section 6.2 equals the Operating
Surplus from the Closing Date through the close of the immediately preceding Quarter. Any remaining amounts of Available Cash distributed
by the Partnership on such date shall, except as otherwise provided in Section 6.3, be deemed to be “Capital
Surplus.” Notwithstanding any provision to the contrary contained in this Agreement, the Partnership shall not make
a distribution to any Partner on account of its interest in the Partnership if such distribution would violate the Marshall Islands
Act or any other applicable law. For the avoidance of doubt, the Series A Preferred Units shall not be entitled to distributions
made pursuant to this Section 6.1(a).

 

(b)          Notwithstanding
the first three sentences of Section 6.1(a), in the event of the dissolution and liquidation of the Partnership, all
receipts received during or after the Quarter in which the Liquidation Date occurs, other than from borrowings described in (a)(ii)
of the definition of Available Cash, shall be applied and distributed solely in accordance with, and subject to the terms and conditions
of, Section 12.4.

 

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

 

Section 6.2           Distributions
of Available Cash from Operating Surplus.

 

(a)          During
Subordination Period. Available Cash with respect to any Quarter or portion thereof within the Subordination Period that is deemed
to be Operating Surplus pursuant to the provisions of Section 6.1 or Section 6.3 shall, subject to Section 51
of the Marshall Islands Act, be distributed as follows (subject to Section 16.3 and except as otherwise contemplated
by Section 5.4 in respect of other Partnership Interests issued pursuant thereto):

 

    	 	35	 

     

    

 

(i)          First,
100% to all the Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then
Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;

 

(ii)         Second,
100% to all Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding
an amount equal to the Cumulative Common Unit Arrearage existing with respect to such Quarter;

 

(iii)        Third,
100% to all Unitholders holding Subordinated Units, Pro Rata, until there has been distributed in respect of each Subordinated
Unit then Outstanding an amount equal to the Minimum Quarterly Distribution for such Quarter;

 

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

 

(v)         Fifth,
(A) 15% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 85% to all Unitholders, Pro Rata, until
there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution
over the First Target Distribution for such Quarter;

 

(vi)        Sixth,
(A) 25% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 75% to all Unitholders, Pro Rata, until
there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution
over the Second Target Distribution for such Quarter; and

 

(vii)       Thereafter,
(A) 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 50% to all Unitholders, Pro Rata;

 

provided, however, that if the Minimum
Quarterly Distribution, the First Target Distribution, the Second Target Distribution and the Third Target Distribution have been
reduced to zero pursuant to the second sentence of Section 6.4, the distribution of Available Cash that is deemed to
be Operating Surplus with respect to any Quarter will be made solely in accordance with Section 6.2(a)(vii).

 

(b)          After
Subordination Period. Available Cash with respect to any Quarter after the Subordination Period that is deemed to be Operating
Surplus pursuant to the provisions of Section 6.1 or Section 6.3, shall subject to Section 51 of the
Marshall Islands Act, be distributed as follows (subject to Section 16.3 and except as otherwise required by Section 5.4(b)
in respect of additional Partnership Interests issued pursuant thereto):

 

(i)          First,
100% to the Unitholders Pro Rata, until there has been distributed in respect of each Unit then Outstanding an amount equal to
the Minimum Quarterly Distribution for such Quarter;

 

    	 	36	 

     

    

 

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

 

(iii)        Third,
(A) 15% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 85% to all Unitholders, Pro Rata, until
there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Second Target Distribution
over the First Target Distribution for such Quarter;

 

(iv)        Fourth,
(A) 25% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 75% to all Unitholders, Pro Rata, until
there has been distributed in respect of each Unit then Outstanding an amount equal to the excess of the Third Target Distribution
over the Second Target Distribution for such Quarter; and

 

(v)         Thereafter,
(A) 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (B) 50% to all Unitholders, Pro Rata;

 

provided, however, that if the Minimum
Quarterly Distribution, the First Target Distribution, the Second Target Distribution and the Third Target Distribution have been
reduced to zero pursuant to the second sentence of Section 6.4, the distribution of Available Cash that is deemed to
be Operating Surplus with respect to any Quarter will be made solely in accordance with Section 6.2(b)(v). For the
avoidance of doubt, the Series A Preferred Units shall not be entitled to distributions made pursuant to this Section 6.2.

 

Section 6.3           Distributions
of Available Cash from Capital Surplus. Available Cash that is deemed to be Capital Surplus pursuant
to the provisions of Section 6.1(a) shall, subject to Section 51 of the Marshall Islands Act and Section 16.3
in respect of Series A Preferred Units, be distributed, unless the provisions of Section 6.1 require otherwise,
100% to the Unitholders (other than the Series A Holders) Pro Rata, until the Minimum Quarterly Distribution is reduced to
zero pursuant to the second sentence of Section 6.4. Available Cash that is deemed to be Capital Surplus shall then
be distributed 100% to the Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common
Unit then Outstanding an amount equal to the Cumulative Common Unit Arrearage. Thereafter, and subject to Section 16.3,
all Available Cash shall be distributed as if it were Operating Surplus and shall be distributed in accordance with Section 6.2.

 

Section 6.4           Adjustment
of Minimum Quarterly Distribution and Target Distribution Levels. The Minimum Quarterly Distribution,
First Target Distribution, Second Target Distribution, Third Target Distribution, Common Unit Arrearages and Cumulative Common
Unit Arrearages shall be proportionately adjusted in the event of any distribution, combination or subdivision (whether effected
by a distribution payable in Units or otherwise) of Units or other Partnership Interests in accordance with Section 5.8.
In the event of a distribution of Available Cash that is deemed to be from Capital Surplus, the then applicable Minimum Quarterly
Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution, shall be reduced in the same
proportion that the distribution had to the fair market value of the Common Units prior to the announcement of the distribution.
If the Common Units are publicly traded on a National Securities Exchange, the fair market value will be the Current Market Price
before the announcement of the distribution. If the Common Units are not publicly traded, the fair market value will be determined
by the Board of Directors.

 

    	 	37	 

     

    

 

Section 6.5           Special
Provisions Relating to the Holders of Subordinated Units. Except with respect to the right to
vote on or approve matters requiring the vote or approval of a percentage of the holders of Outstanding Common Units and the right
to participate in distributions made with respect to Common Units, the holder of a Subordinated Unit shall have all of the rights
and obligations of a Unitholder holding Common Units hereunder; provided, however,
that immediately upon the conversion of Subordinated Units into Common Units, the Unitholder holding a Subordinated Unit shall
possess all of the rights and obligations of a Unitholder holding Common Units hereunder, including the right to vote as a Common
Unitholder and the right to participate in distributions made with respect to Common Units.

 

Section 6.6           Special
Provisions Relating to the Holders of Incentive Distribution Rights. Notwithstanding anything
to the contrary set forth in this Agreement, the holders of the Incentive Distribution Rights (a) shall possess the rights
and obligations provided in this Agreement with respect to a Limited Partner pursuant to Articles III and VII
and (b) shall not (i) be entitled to vote on any matters requiring the approval or vote of the holders of Outstanding
Units, except as provided by law, or (ii) be entitled to any distributions other than as provided in Sections 6.2(a)(v),
6.2(a)(vi) and 6.2(a)(vii), 6.2(b)(iii), Sections 6.2(b)(iv) and 6.2(b)(v), and Section 12.4.

 

Article VII

MANAGEMENT
AND OPERATION OF BUSINESS

 

Section 7.1           Management.

 

(a)          Except
as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Partnership shall
be vested exclusively in the Board of Directors and, subject to the direction of the Board of Directors and in accordance with
the provisions of Section 7.8, the Officers. Neither the General Partner (except as otherwise expressly provided in
this Agreement), nor any Limited Partner shall have any management power or control over the business and affairs of the Partnership.
Thus, except as expressly provided in this Agreement, the business and affairs of the Partnership shall be managed by or under
the direction of the Board of Directors, and the day-to-day activities of the Partnership shall be conducted on the Partnership’s
behalf by the Officers. In order to enable the Board of Directors to manage the business and affairs of the Partnership, the General
Partner, except as otherwise expressly provided in this Agreement, hereby irrevocably delegates to the Board of Directors all management
powers over the business and affairs of the Partnership that it may now or hereafter possess under applicable law. The General
Partner further agrees to take any and all action necessary and appropriate, as determined by the Board of Directors, to effect
any duly authorized actions by the Board of Directors, including executing or filing any agreements, instruments or certificates,
delivering all documents, providing all information and taking or refraining from taking action as may be necessary or appropriate
to achieve the effective delegation of power described in this Section 7.1(a). Each of the Partners and each Person
who may acquire an interest in a Partnership Interest hereby approves, consents to, ratifies and confirms such delegation. The
delegation by the General Partner to the Board of Directors of management powers over the business and affairs of the Partnership
pursuant to the provisions of this Agreement shall not cause the General Partner to cease to be a general partner of the Partnership
nor shall it cause the Board of Directors or any member thereof to be a general partner of the Partnership or to have or be subject
to the liabilities of a general partner of the Partnership.

 

    	 	38	 

     

    

 

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

 

Section 7.2           The
Board of Directors; Election and Appointment; Term; Manner of Acting.

 

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

 

    	 	39	 

     

    

 

(i)          Subject
to Section 16.5(b), the Appointed Directors shall be appointed by the General Partner and each Appointed Director shall
hold office until his successor is duly appointed by the General Partner and qualified or until his earlier death, resignation
or removal; and

 

(ii)         The
Class IV Elected Director shall next be elected at the 2018 Annual Meeting for a four-year term expiring on the date of the
fourth succeeding Annual Meeting, the Class I Elected Director shall next be elected at the 2019 Annual Meeting for a four-year
term expiring on the fourth succeeding Annual Meeting, the Class II Elected Director shall next be elected at the 2020 Annual
Meeting for a four-year term expiring on the fourth succeeding Annual Meeting and the Class III Director shall next be elected
at the 2021 Annual Meeting for a four-year term expiring on the fourth succeeding Annual Meeting, in each case by a plurality of
the votes of the Outstanding Common Units present in person or represented by proxy at the Annual Meeting with each Outstanding
Common Unit having one vote. At each subsequent Annual Meeting, Elected Directors will be elected to succeed the class of Elected
Directors whose term has expired by a plurality of the votes of the Outstanding Common Units present in person or by proxy at the
Annual Meeting with each Outstanding Common Unit having one vote.

 

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

 

(c)          Each
member of the Board of Directors shall have one vote. The vote of the majority of the members of the Board of Directors present
at a meeting at which a quorum is present shall be the act of the Board of Directors. A majority of the number of members of the
Board of Directors then in office shall constitute a quorum for the transaction of business at any meeting of the Board of Directors,
but if less than a quorum is present at a meeting, a majority of the members of the Board of Directors present at such meeting
may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.

 

Section 7.3           Nominations
of Elected Directors. The Board of Directors shall be entitled to nominate individuals to stand
for election as Elected Directors at an Annual Meeting. In addition, any Limited Partner or Group of Limited Partners that beneficially
owns 10% or more of the Outstanding Common Units shall be entitled to nominate one or more individuals to stand for election as
Elected Directors at an Annual Meeting by providing written notice thereof to the Board of Directors not more than 120 days and
not less than 90 days prior to the date of such Annual Meeting; provided, however,
that in the event that the date of the Annual Meeting was not publicly announced by the Partnership by mail, press release or otherwise
more than 100 days prior to the date of such meeting, such notice, to be timely, must be delivered to the Board of Directors
not later than the close of business on the 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 16.5(b), any Appointed Director may be removed at any time, (i) without Cause, only by
the General Partner and, (ii) with Cause, by (x) the General Partner, (y) by the affirmative vote of the holders
of a majority of the Outstanding Units at a properly called meeting of the Limited Partners or (z) by the affirmative vote
of a majority of the other members of the Board of Directors.

 

(b)          Any
Elected Director may be removed at any time, with Cause, only by the affirmative vote of a majority of the other members of the
Board of Directors or at a properly called meeting of the Limited Partners only by the affirmative vote of the holders of a majority
of the Outstanding Common Units.

 

Section 7.5           Resignations
of Members of the Board of Directors. Any member of the Board of Directors may resign at any time
by giving written notice to the Board of Directors. Such resignation shall take effect at the time specified therein.

 

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

 

(a)          Subject
to Section 16.5(b), if any Appointed Director is removed, resigns or is otherwise unable to serve as a member of the
Board of Directors, the General Partner shall, in its individual capacity, appoint an individual to fill the vacancy.

 

(b)          If
any Elected Director is removed, resigns or is unable to serve as a member of the Board of Directors, the vacancy shall be filled
by a majority of the Elected Directors then serving.

 

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

 

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Section 7.7           Meetings;
Committees; Chairman.

 

(a)          Regular
meetings of the Board of Directors shall be held at such times and places as shall be designated from time to time by resolution
of the Board of Directors. Notice of such regular meetings shall not be required. Special meetings of the Board of Directors may
be called by the Chairman of the Board of Directors and shall be called by the Secretary upon the written request of two members
of the Board of Directors, on at least 48 hours’ prior written notice to the other members. Any such notice, or waiver thereof,
need not state the purpose of such meeting except as may otherwise be required by law. Attendance of a member of the Board of Directors
at a meeting (including pursuant to the penultimate sentence of this Section 7.7(a)) shall constitute a waiver of notice
of such meeting, except where such member attends the meeting for the express purpose of objecting to the transaction of any business
on the ground that the meeting is not lawfully called or convened. Any action required or permitted to be taken at a meeting of
the Board of Directors may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing,
setting forth the action so taken, is signed by all the members of the Board of Directors. Members of the Board of Directors may
participate in and hold meetings by means of conference telephone, videoconference or similar communications equipment by means
of which all Persons participating in the meeting can hear each other, and participation in such meetings shall constitute presence
in person at the meeting. The Board of Directors may establish any additional rules governing the conduct of its meetings that
are not inconsistent with the provisions of this Agreement.

 

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

 

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

 

Section 7.8           Officers.

 

(a)          The
Board of Directors, as set forth below, shall appoint or designate agents of the Partnership, referred to as “Officers”
of the Partnership as described in this Section 7.8. Such Officers may be employed by any Group Member directly or
may be employed by one or more third parties, including Höegh LNG and its Affiliates, and designated by the Board of Directors
to perform officer functions for the benefit of the Partnership.

 

(b)          The
Board of Directors shall appoint or designate such Officers and agents as may from time to time appear to be necessary or advisable
in the conduct of the affairs of the Partnership, who shall hold such titles, exercise such powers and authority and perform such
duties as shall be determined from time to time by resolution of the Board of Directors. The Officers may include a Chairman of
the Board of Directors, an Executive Vice Chairman or Vice Chairman of the Board of Directors, a Chief Executive Officer, a President,
a Chief Financial Officer, any and all Vice Presidents, a Secretary, any and all Assistant Secretaries, a Treasurer, any and all
Assistant Treasurers and any other Officers appointed or designated by the Board of Directors pursuant to this Section 7.8.
Any person may hold two or more offices.

 

(c)          The
Officers, including any Officer employed by a third party and designated by the Board of Directors to perform officer services
for the benefit of the Partnership, shall be appointed by the Board of Directors at such time and for such terms as the Board of
Directors shall determine. Any Officer may be removed, with or without Cause, only by the Board of Directors. Vacancies in any
office may be filled only by the Board of Directors.

 

(d)          The
Board of Directors may grant powers of attorney or other authority as appropriate to establish and evidence the authority of the
Officers and other Persons.

 

(e)          Unless
otherwise provided by resolution of the Board of Directors, no Officer shall have the power or authority to delegate to any Person
such Officer’s rights and powers as an Officer to manage the business and affairs of the Partnership.

 

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Section 7.9           Compensation
of Directors. The members of the Board of Directors who are not employees of the Partnership,
the General Partner or its Affiliates shall receive such compensation for their services as members of the Board of Directors or
members of a committee of the Board of Directors shall determine. In addition, the members of the Board of Directors shall be entitled
to be reimbursed for out-of-pocket costs and expenses incurred in the course of their service hereunder.

 

Section 7.10         Certificate
of Limited Partnership. The General Partner has caused the Certificate of Limited Partnership
to be filed with the Registrar of Corporations of the Marshall Islands as required by the Marshall Islands Act. The General Partner
shall use all commercially reasonable efforts to cause to be filed such other certificates or documents that the Board of Directors
determines to be necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership
(or a partnership or other entity in which the limited partners have limited liability) in the Marshall Islands or any other jurisdiction
in which the Partnership may elect to do business or own property. To the extent the Board of Directors determines such action
to be necessary or appropriate, the General Partner shall file or cause to be filed amendments to and restatements of the Certificate
of Limited Partnership and do all things to maintain the Partnership as a limited partnership (or a partnership or other entity
in which the limited partners have limited liability) under the laws of the Marshall Islands or of any other jurisdiction in which
the Partnership may elect to do business or own property. Subject to the terms of Section 3.4(a), the General Partner
shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Limited Partnership, any qualification
document or any amendment thereto to any Limited Partner.

 

Section 7.11         Restrictions
on the Authority of the Board of Directors and the General Partner. Except as provided in Articles XII
and XIV, the Board of Directors may not sell, exchange or otherwise dispose of all or substantially all of the assets of
the Partnership Group, taken as a whole, in a single transaction or a series of related transactions (including by way of merger,
consolidation, other combination or sale of ownership interests in the Partnership’s Subsidiaries) without the approval of
holders of a Unit Majority and the General Partner; provided, however, that this
provision shall not preclude or limit the ability of the Board of Directors to mortgage, pledge, hypothecate or grant a security
interest in all or substantially all of the assets of the Partnership Group and shall not apply to any forced sale of any or all
of the assets of the Partnership Group pursuant to the foreclosure of, or other realization upon, any such encumbrance. The transfer
of the General Partner Interest to and the election of a successor general partner of the Partnership shall be made in accordance
with Section 4.6, Section 11.1 and Section 11.2.

 

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Section 7.12         Reimbursement
of the General Partner.

 

(a)          Except
as provided in this Section 7.12 and elsewhere in this Agreement, the General Partner shall not be compensated for
its services as a general partner or managing member of any Group Member.

 

(b)          The
General Partner shall be reimbursed on a monthly basis, or such other basis as the Board of Directors may determine, for any direct
and indirect expenses it incurs that are allocable to the Partnership Group or payments it makes on behalf of the Partnership Group
(including salary, bonus, incentive compensation and other amounts paid to any Person, including Affiliates of the General Partner,
to perform services for the Partnership Group or for the General Partner in the discharge of its duties to the Partnership Group,
which amounts shall also include reimbursement for any Common Units purchased to satisfy obligations of the Partnership under any
of its equity compensation plans). The Board of Directors shall determine the expenses that are allocable to the Partnership Group.
Reimbursements pursuant to this Section 7.12 shall be in addition to any reimbursement to the General Partner as a
result of indemnification pursuant to Section 7.14.

 

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

 

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Section 7.13         Outside
Activities.

 

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

 

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

 

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

 

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

 

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(e)          The
General Partner and each of its Affiliates may own and acquire Units or other Partnership Interests in addition to those acquired
on the Closing Date and, except as otherwise provided in this Agreement, shall be entitled to exercise, at their option, all rights
relating to all Units or other Partnership Interests acquired by them. The term “Affiliates” as used in this
Section 7.13(e) with respect to the General Partner shall not include any Group Member.

 

Section 7.14         Indemnification.

 

(a)          To
the fullest extent permitted by the Marshall Islands Act but subject to the limitations expressly provided in this Agreement, all
Indemnitees shall be indemnified and held harmless by the Partnership from and against any and all losses, claims, damages, liabilities,
joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or investigative,
in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, by reason of its status as an
Indemnitee; provided, however, that the Indemnitee shall not be indemnified and held harmless if there has been a final
and non-appealable judgment entered by a court of competent jurisdiction determining that, in respect of the matter for which the
Indemnitee is seeking indemnification pursuant to this Section 7.14, the Indemnitee acted in bad faith or engaged in
fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s conduct was
unlawful; and, provided, further, that no indemnification pursuant to this Section 7.14 shall be available to
the General Partner or its Affiliates (other than a Group Member) with respect to its or their obligations incurred pursuant to
the Underwriting Agreement, the Omnibus Agreement or the Contribution Agreement (other than obligations incurred by the General
Partner on behalf of the Partnership). Any indemnification pursuant to this Section 7.14 shall be made only out of
the assets of the Partnership, it being agreed that the General Partner shall not be personally liable for such indemnification
and shall have no obligation to contribute or loan any monies or property to the Partnership to enable it to effectuate such indemnification.

 

(b)          To
the fullest extent permitted by the Marshall Islands Act, expenses (including legal fees and expenses) incurred by an Indemnitee
who is indemnified pursuant to Section 7.14(a) in defending any claim, demand, action, suit or proceeding shall, from
time to time, be advanced by the Partnership prior to a determination that the Indemnitee is not entitled to be indemnified upon
receipt by the Partnership of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined
that the Indemnitee is not entitled to be indemnified as authorized in this Section 7.14.

 

(c)          The
indemnification provided by this Section 7.14 shall be in addition to any other rights to which an Indemnitee may be
entitled under any agreement, pursuant to any vote of the holders of Outstanding Limited Partner Interests, as a matter of law
or otherwise, both as to actions in the Indemnitee’s capacity as an Indemnitee and as to actions in any other capacity (including
any capacity under the Underwriting Agreement), and shall continue as to an Indemnitee who has ceased to serve in such capacity
and shall inure to the benefit of the heirs, successors, assigns and administrators of the Indemnitee.

 

    	 	47	 

     

    

 

(d)          The
Partnership may purchase and maintain (or reimburse the General Partner or its Affiliates for the cost of) insurance, on behalf
of the Board of Directors and the General Partner, its Affiliates and such other Persons as the Board of Directors shall determine,
against any liability that may be asserted against, or expense that may be incurred by, such Person in connection with the Partnership’s
activities or such Person’s activities on behalf of the Partnership, regardless of whether the Partnership would have the
power to indemnify such Person against such liability under the provisions of this Agreement or law.

 

(e)          For
purposes of this Section 7.14, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary
of an employee benefit plan whenever the performance by the Indemnitee of its duties to the Partnership also imposes duties on,
or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee
with respect to an employee benefit plan pursuant to applicable law shall constitute “fines” within the meaning of
Section 7.14(a); and action taken or omitted by the Indemnitee with respect to any employee benefit plan in the performance
of its duties for a purpose reasonably believed by it to be in the best interest of the participants and beneficiaries of the plan
shall be deemed to be for a purpose that is in the best interests of the Partnership.

 

(f)          In
no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth
in this Agreement.

 

(g)          An
Indemnitee shall not be denied indemnification in whole or in part under this Section 7.14 because the Indemnitee had
an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by
the terms of this Agreement.

 

(h)          The
provisions of this Section 7.14 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators
and shall not be deemed to create any rights for the benefit of any other Persons.

 

(i)          No
amendment, modification or repeal of this Section 7.14 or any provision hereof shall in any manner terminate, reduce
or impair the right of any past, present or future Indemnitee to be indemnified by the Partnership, nor the obligations of the
Partnership to indemnify any such Indemnitee under and in accordance with the provisions of this Section 7.14 as in
effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring,
in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

 

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Section 7.15         Liability
of Indemnitees.

 

(a)          Notwithstanding
anything to the contrary set forth in this Agreement, no Indemnitee shall be liable for monetary damages to the Partnership, the
Limited Partners or any other Persons who have acquired Partnership Interests or are otherwise bound by this Agreement, for losses
sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there has been a final and non-appealable
judgment entered by a court of competent jurisdiction determining that, in respect of the matter in question, the Indemnitee acted
in bad faith or engaged in fraud or willful misconduct or, in the case of a criminal matter, acted with knowledge that the Indemnitee’s
conduct was criminal.

 

(b)          Subject
to their obligations and duties as members of the Board of Directors or as the General Partner, respectively, set forth in Section 7.1(a),
members of the Board of Directors and the General Partner may exercise any of the powers granted to them and perform any of the
duties imposed upon them hereunder either directly or by or through its agents, and the members of the Board of Directors and the
General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by the Board
of Directors or the General Partner in good faith.

 

(c)          To
the extent that, at law or in equity, an Indemnitee has duties (including fiduciary duties) and liabilities relating thereto to
the Partnership or to the Partners, the General Partner and any other Indemnitee acting in connection with the Partnership’s
business or affairs shall not be liable to the Partnership or to any Partner for its good faith reliance on the provisions of this
Agreement.

 

(d)          Any
amendment, modification or repeal of this Section 7.15 or any provision hereof shall be prospective only and shall
not in any way affect the limitations on the liability of the Indemnitees under this Section 7.15 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole
or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

 

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Section 7.16         Resolution
of Conflicts of Interest; Standards of Conduct and Modification of Duties.

 

(a)          Unless
otherwise expressly provided in this Agreement or any Group Member Agreement, whenever a potential conflict of interest exists
or arises between the General Partner or any of its Affiliates, or any member of the Board of Directors, on the one hand, and the
Partnership, any Group Member or any Partner, on the other, any resolution or course of action in respect of such conflict of interest
shall be permitted and deemed approved by all Partners, and shall not constitute a breach of this Agreement, of any Group Member
Agreement, of any agreement contemplated herein or therein, or of any duty stated or implied by law or equity, if the resolution
or course of action in respect of such conflict of interest is (i) approved by Special Approval, (ii) approved by the
vote of a majority of the Outstanding Common Units (excluding Common Units owned by the General Partner and its Affiliates), (iii) on
terms no less favorable to the Partnership than those generally being provided to or available from unrelated third parties or
(iv) fair and reasonable to the Partnership, taking into account the totality of the relationships between the parties involved
(including other transactions that may be particularly favorable or advantageous to the Partnership). The General Partner and the
Board of Directors may but shall not be required in connection with the resolution of such conflict of interest to seek Special
Approval of such resolution, and the General Partner or the Board of Directors, as the case may be, may also adopt a resolution
or course of action that has not received Special Approval. If Special Approval is sought, then, notwithstanding any other provision
of this Agreement or law that would otherwise apply, (x) the Conflicts Committee will be authorized in connection with its
determination of whether to provide Special Approval to consider any and all factors as it determines to be relevant or appropriate
under the circumstances and (y) it will be presumed that, in making its decision, the Conflicts Committee acted in good faith,
and if Special Approval is not sought and the Board of Directors determines that the resolution or course of action taken with
respect to a conflict of interest satisfies either of the standards set forth in clauses (iii) or (iv) above,
then it shall be presumed that, in making its decision the Board of Directors, acted in good faith, and, in either case, in any
proceeding brought by any Limited Partner or by or on behalf of such Limited Partner or any other Limited Partner or the Partnership
challenging such approval, the Person bringing or prosecuting such proceeding shall have the burden of overcoming such presumption.
Notwithstanding anything to the contrary in this Agreement or any duty otherwise existing at law or equity, the existence of the
conflicts of interest described in the Registration Statement are hereby approved by all Partners and shall not constitute a breach
of this Agreement or of any duty hereunder or existing at law, in equity or otherwise.

 

(b)          Whenever
the General Partner makes a determination or takes or declines to take any other action, or any of its Affiliates causes it to
do so, in its capacity as the general partner of the Partnership as opposed to in its individual capacity, whether under this Agreement,
any Group Member Agreement or any other agreement contemplated hereby or otherwise, then, unless another express standard is provided
for in this Agreement, the General Partner, or such Affiliates causing it to do so, shall make such determination or take or decline
to take such other action in good faith and shall not be subject to any other or different standards imposed by this Agreement,
any Group Member Agreement, any other agreement contemplated hereby or under the Marshall Islands Act or any other law, rule or
regulation or at equity. In order for a determination or other action to be in “good faith” for purposes of this Agreement,
the Person or Persons making such determination or taking or declining to take such other action must believe that the determination
or other action is in the best interests of the Partnership, unless the context otherwise requires.

 

(c)          Whenever
the General Partner makes a determination or takes or declines to take any other action in its capacity as a Partner, or any of
its Affiliates causes it to do so, in its individual capacity as opposed to in its capacity as the general partner of the Partnership,
whether under this Agreement, any Group Member Agreement or any other agreement contemplated hereby or otherwise, then the General
Partner, or such Affiliates causing it to do so, are entitled to make such determination or to take or decline to take such other
action free of any duty (including any fiduciary duty) or obligation whatsoever to the Partnership or any Limited Partner, any
Record Holder or any other Person bound by this Agreement, and, to the fullest extent permitted by law, the General Partner, or
such Affiliates causing it to do so, shall not be required to act in good faith or pursuant to any other standard imposed by this
Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Marshall Islands Act or any other law,
rule or regulation or at equity. By way of illustration and not of limitation, whenever the phrase, “at the option of the
General Partner,” or some variation of that phrase, is used in this Agreement, it indicates that the General Partner is acting
in its individual capacity. For the avoidance of doubt, whenever the General Partner votes or transfers its Units, General Partner
Interest or Incentive Distribution Rights, if any, to the extent permitted under this Agreement, or refrains from voting or transferring
its Units, General Partner Interest or Incentive Distribution Rights, as appropriate, it shall be acting in its individual capacity.
The General Partner’s organizational documents may provide that determinations to take or decline to take any action in its
individual, rather than representative, capacity may or shall be determined by its members, if the General Partner is a limited
liability company, stockholders, if the General Partner is a corporation, or the members or stockholders of the General Partner’s
general partner, if the General Partner is a limited partnership.

 

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(d)          Whenever
the Board of Directors makes a determination or takes or declines to take any other action, whether under this Agreement, any Group
Member Agreement or any other agreement contemplated hereby or otherwise, then, unless another express standard is provided for
in this Agreement, the Board of Directors, shall make such determination or take or decline to take such other action in good faith
and shall not be subject to any other or different standards imposed by this Agreement, any Group Member Agreement, any other agreement
contemplated hereby or under the Marshall Islands Act or any other law, rule or regulation or at equity. In order for a determination
or other action to be in “good faith” for purposes of this Agreement, the Person or Persons making such determination
or taking or declining to take such other action must believe that the determination or other action is in the best interests of
the Partnership, unless the context otherwise requires.

 

(e)          Notwithstanding
anything to the contrary in this Agreement, the General Partner and its Affiliates shall have no duty or obligation, express or
implied, to (i) approve the sale or other disposition of any asset of the Partnership Group (if such approval is required
pursuant to Section 7.11) or (ii) permit any Group Member to use any facilities or assets of the General Partner
and its Affiliates, except as may be provided in contracts entered into from time to time specifically dealing with such use. Any
determination by the General Partner or any of its Affiliates to enter into such contracts shall, in each case, be at their option.

 

(f)          Except
as expressly set forth in this Agreement, neither the General Partner nor the Board of Directors or any other Indemnitee shall
have any duties or liabilities, including fiduciary duties, to the Partnership or any Limited Partner and the provisions of this
Agreement, to the extent that they restrict, eliminate or otherwise modify the duties and liabilities, including fiduciary duties,
of the Board of Directors or the General Partner or any other Indemnitee otherwise existing at law or in equity, are agreed by
the Partners to replace such other duties and liabilities of the Board of Directors or the General Partner or such other Indemnitee.
Notwithstanding anything to the contrary, but subject to Section 7.16(c) and without reference to the definition of
“good faith” in Section 7.16(b), neither the General Partner nor the Board of Directors nor any other Indemnitee
shall owe any fiduciary duties to Series A Holders other than a contractual duty of good faith and fair dealing.

 

(g)          The
Unitholders hereby authorize the Board of Directors, on behalf of the Partnership as a partner or member of a Group Member, to
approve of actions by the general partner or managing member of such Group Member similar to those actions permitted to be taken
by the Board of Directors pursuant to this Section 7.16.

 

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Section 7.17         Other
Matters Concerning the General Partner and the Board of Directors.

 

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

 

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

 

(c)          The
General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly
authorized officers, a duly appointed attorney or attorneys-in-fact or the duly authorized officers of the Partnership.

 

Section 7.18         Purchase
or Sale of Partnership Interests. Subject to Section 16.6(f), the Board of Directors
may cause the Partnership to purchase or otherwise acquire Partnership Interests; provided that the
Board of Directors may not cause any Group Member to purchase Subordinated Units during the Subordination Period. As long as Partnership
Interests are held by any Group Member, such Partnership Interests shall not be considered Outstanding for any purpose, except
as otherwise provided herein. The General Partner or any Affiliate of the General Partner may purchase or otherwise acquire and
sell or otherwise dispose of Partnership Interests for its own account, subject to the provisions of Articles IV and
X and Section 16.6(f).

 

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Section 7.19         Registration
Rights of the General Partner and its Affiliates.

 

(a)          If
(i) the General Partner or any Affiliate of the General Partner (including for purposes of this Section 7.19,
any Person that is an Affiliate of the General Partner at the date hereof notwithstanding that it may later cease to be an Affiliate
of the General Partner) holds Partnership Interests that it desires to sell and (ii) Rule 144 of the Securities Act (or
any successor rule or regulation to Rule 144) or another exemption from registration is not available to enable such holder
of Partnership Interests (the “Holder”) to dispose of the number of Partnership Interests it desires
to sell at the time it desires to do so without registration under the Securities Act, then at the option and upon the request
of the Holder, the Partnership shall file with the Commission as promptly as practicable after receiving such request, and use
its commercially reasonable efforts to cause to become effective and remain effective for a period of not less than six months
following its effective date or such shorter period as shall terminate when all Partnership Interests covered by such registration
statement have been sold, a registration statement under the Securities Act registering the offering and sale of the number of
Partnership Interests specified by the Holder; provided, however, that the Partnership shall not be required to effect more
than three registrations in total pursuant to this Section 7.19(a), no more than one of which shall be required to
be made at any time that the Partnership is not eligible to use Form F-3 (or a comparable form) for the registration under
the Securities Act of its securities; and, provided, further, that if the Conflicts Committee determines in good faith that
the requested registration would be materially detrimental to the Partnership and its Partners because such registration would
(x) materially interfere with a significant acquisition, merger, disposition, corporate reorganization or other similar transaction
involving the Partnership, (y) require premature disclosure of material information that the Partnership has a bona fide business
purpose for preserving as confidential or (z) render the Partnership unable to comply with requirements under applicable securities
laws, then the Partnership shall have the right to postpone such requested registration for a period of not more than six months
after receipt of the Holder’s request, such right pursuant to this Section 7.19(a) not to be utilized more than
once in any 12-month period. The Partnership shall use its commercially reasonable efforts to resolve any deferral with respect
to any such registration and/or filing. Except as provided in the first sentence of this Section 7.19(a), the Partnership
shall be deemed not to have used all its commercially reasonable efforts to keep the registration statement effective during the
applicable period if it voluntarily takes any action that would result in Holders of Partnership Interests covered thereby not
being able to offer and sell such Partnership Interests at any time during such period, unless such action is required by applicable
law or regulations. In connection with any registration pursuant to this Section 7.19(a), the Partnership shall (i) promptly
prepare and file (A) such documents as may be necessary to register or qualify the securities subject to such registration
under the securities laws of such states as the Holder shall reasonably request (provided, however, that no such qualification
shall be required in any jurisdiction where, as a result thereof, the Partnership would become subject to general service of process
or to taxation or qualification to do business as a foreign corporation or partnership doing business in such jurisdiction solely
as a result of such registration), and (B) such documents as may be necessary to apply for listing or to list the Partnership
Interests subject to such registration on such National Securities Exchange as the Holder shall reasonably request, and (ii) do
any and all other acts and things that may be necessary or appropriate to enable the Holder to consummate a public sale of such
Partnership Interests in such states. Except as set forth in Section 7.19(c), all costs and expenses of any such registration
and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership, without reimbursement by
the Holder.

 

(b)          If
the Partnership shall at any time propose to file a registration statement under the Securities Act for an offering of equity interests
of the Partnership for cash (other than an offering relating solely to an employee benefit plan), the Partnership shall use its
commercially reasonable efforts to include such number or amount of Partnership Interests held by any Holder in such registration
statement as the Holder shall request; provided, however, that the Partnership is not required to make any effort or take
any action to so include the Partnership Interests of the Holder once the registration statement becomes or is declared effective
by the Commission, including any registration statement providing for the offering from time to time of Partnership Interests pursuant
to Rule 415 of the Securities Act. If the proposed offering pursuant to this Section 7.19(b) shall be an underwritten
offering, then, in the event that the managing underwriter or managing underwriters of such offering advise the Partnership and
the Holder in writing that in their opinion the inclusion of all or some of the Holder’s Partnership Interests would adversely
and materially affect the success of the offering, the Partnership shall include in such offering only that number or amount, if
any, of Partnership Interests held by the Holder that, in the opinion of the managing underwriter or managing underwriters, will
not so adversely and materially affect the offering. Except as set forth in Section 7.19(c), all costs and expenses
of any such registration and offering (other than the underwriting discounts and commissions) shall be paid by the Partnership,
without reimbursement by the Holder.

 

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(c)          If
underwriters are engaged in connection with any registration referred to in this Section 7.19, the Partnership shall
provide indemnification, representations, covenants, opinions and other assurance to the underwriters in form and substance reasonably
satisfactory to such underwriters. Further, in addition to and not in limitation of the Partnership’s obligation under Section 7.14,
the Partnership shall, to the fullest extent permitted by law, indemnify and hold harmless the Holder, its officers, directors
and each Person who controls the Holder (within the meaning of the Securities Act) and any agent thereof (collectively, “Indemnified
Persons”) from and against any and all losses, claims, demands, actions, causes of action, assessments, damages,
liabilities (joint or several), costs and expenses (including interest, penalties and reasonable attorneys’ fees and disbursements),
resulting to, imposed upon, or incurred by the Indemnified Persons, directly or indirectly, under the Securities Act or otherwise
(hereinafter referred to in this Section 7.19(c) as a “claim” and in the plural as “claims”)
based upon, arising out of or resulting from any untrue statement or alleged untrue statement of any material fact contained in
any registration statement under which any Partnership Interests were registered under the Securities Act or any state securities
or Blue Sky laws, in any preliminary prospectus or issuer free writing prospectus as defined in Rule 433 of the Securities
Act (if used prior to the effective date of such registration statement), or in any summary, free writing or final prospectus or
in any amendment or supplement thereto (if used during the period the Partnership is required to keep the registration statement
current), or arising out of, based upon or resulting from the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements made therein not misleading; provided, however, that the Partnership
shall not be liable to any Indemnified Person to the extent that any such claim arises out of, is based upon or results from an
untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, such preliminary,
summary, free writing or final prospectus or such amendment or supplement, in reliance upon and in conformity with written information
furnished to the Partnership by or on behalf of such Indemnified Person specifically for use in the preparation thereof.

 

(d)          The
provisions of Section 7.19(a) and Section 7.19(b) shall continue to be applicable with respect to the General
Partner (and any of the General Partner’s Affiliates) after it ceases to be a general partner of the Partnership, during
a period of two years subsequent to the effective date of such cessation and for so long thereafter as is required for the Holder
to sell all of the Partnership Interests with respect to which it has requested during such two-year period inclusion in a registration
statement otherwise filed or that a registration statement be filed; provided, however, that the Partnership shall not be
required to file successive registration statements covering the same Partnership Interests for which registration was demanded
during such two-year period. The provisions of Section 7.19(c) shall continue in effect thereafter.

 

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(e)          The
rights to cause the Partnership to register Partnership Interests pursuant to this Section 7.19 may be assigned (but
only with all related obligations) by a Holder to a transferee or assignee of such Partnership Interests, provided (i) the
Partnership is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee
or assignee and the Partnership Interests with respect to which such registration rights are being assigned, and (ii) such
transferee or assignee agrees in writing to be bound by and subject to the terms set forth in this Section 7.19.

 

(f)          Any
request to register Partnership Interests pursuant to this Section 7.19 shall (i) specify the Partnership Interests
intended to be offered and sold by the Person making the request, (ii) express such Person’s present intent to offer
such Partnership Interests for distribution, (iii) describe the nature or method of the proposed offer and sale of Partnership
Interests, and (iv) contain the undertaking of such Person to provide all such information and materials and take all action
as may be required in order to permit the Partnership to comply with all applicable requirements in connection with the registration
of such Partnership Interests.

 

Section 7.20         Reliance
by Third Parties. Notwithstanding anything to the contrary in this Agreement, any Person dealing
with the Partnership shall be entitled to assume that the Board of Directors, the General Partner and any Officer authorized by
the Board of Directors to act on behalf of and in the name of the Partnership has full power and authority to encumber, sell or
otherwise use in any manner any and all assets of the Partnership and to enter into any authorized contracts on behalf of the Partnership,
and such Person shall be entitled to deal with the Board of Directors, the General Partner or any such Officer as if it were the
Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all defenses
or other remedies that may be available against such Person to contest, negate or disaffirm any action of the Board of Directors,
the General Partner or any such Officer in connection with any such dealing. In no event shall any Person dealing with the Board
of Directors, the General Partner or any such Officer or its representatives be obligated to ascertain that the terms of this Agreement
have been complied with or to inquire into the necessity or expedience of any act or action of the Board of Directors, the General
Partner or any such Officer or its representatives. Each and every certificate, document or other instrument executed on behalf
of the Partnership by the Board of Directors, the General Partner, the Officers or representatives of the General Partner authorized
by the General Partner or the Board of Directors shall be conclusive evidence in favor of any and every Person relying thereon
or claiming thereunder that (a) at the time of the execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (b) the Person executing and delivering such certificate, document or instrument was
duly authorized and empowered to do so for and on behalf of the Partnership and (c) such certificate, document or instrument
was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.

 

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Article VIII

BOOKS,
RECORDS, ACCOUNTING AND REPORTS

 

Section 8.1           Records
and Accounting. The Partnership shall keep or cause to be kept at the principal office of the
Partnership appropriate books and records with respect to the Partnership’s business, including all books and records necessary
to provide to the Limited Partners any information required to be provided pursuant to Section 3.4(a). Any books and
records maintained by or on behalf of the Partnership in the regular course of its business, including the record of the Record
Holders of Units or other Partnership Interests, books of account and records of Partnership proceedings, may be kept on, or be
in the form of, computer disks, hard drives, magnetic tape, photographs, micrographics or any other information storage device;
provided, however, that the books and records so maintained are convertible into
clearly legible written form within a reasonable period of time. The books of the Partnership shall be maintained, for financial
reporting purposes, on an accrual basis in accordance with U.S. GAAP. The Partnership shall not be required to keep books on a
cash basis and the Board of Directors shall be permitted to calculate cash-based measures, including Operating Surplus and Adjusted
Operating Surplus, by making such adjustments to its accrual basis books to account for non-cash items and other adjustments as
the Board of Directors determines to be necessary or appropriate.

 

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

 

Section 8.3           Reports.

 

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

 

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

 

(c)          The
Board of Directors shall be deemed to have made a report available to each Record Holder as required by this Section 8.3
if it has either (i) filed such report with the Commission via its Electronic Data Gathering Analysis and Retrieval System
and such report is publicly available on such system or (ii) made such report on any publicly available website maintained
by the Partnership.

 

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Article IX

TAX
MATTERS

 

Section 9.1           Tax
Elections and Information.

 

(a)          The
Partnership is authorized and shall elect to be treated as an association taxable as a corporation for U.S. federal income tax
purposes effective on or before the Closing Date. Except as otherwise provided herein, the Board of Directors shall determine whether
the Partnership should make any other elections permitted by any applicable tax law.

 

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

 

(c)          Each
Partner shall provide the Partnership with all information reasonably requested by the Partnership to enable the Partnership to
claim the exemption from U.S. federal income tax under Section 883 of the Code.

 

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

 

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

 

Article X

ADMISSION
OF PARTNERS

 

Section 10.1         Admission
of Initial Limited Partners. Upon the issuance by the Partnership of Common Units, Subordinated
Units and Incentive Distribution Rights to Höegh LNG and the Underwriters as described in Section 5.1 and Section 5.2,
such parties were automatically admitted to the Partnership as Initial Limited Partners in respect of the Common Units, Subordinated
Units or Incentive Distribution Rights issued to them.

 

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Section 10.2         Admission
of Additional Limited Partners.

 

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

 

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

 

(c)          Any
transfer of a Limited Partner Interest shall not entitle the transferee to receive distributions or to any other rights to which
the transferor was entitled until the transferee becomes a Limited Partner pursuant to Section 10.2(a).

 

Section 10.3         Admission
of Successor General Partner. A successor General Partner approved pursuant to Section 11.1
or Section 11.2 or the transferee of or successor to all or part of the General Partner Interest pursuant to Section 4.6
who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective
immediately prior to the withdrawal or removal of the predecessor or transferring General Partner, pursuant to Section 11.1
or Section 11.2 or the transfer of the General Partner Interest pursuant to Section 4.6; provided,
however, that no such Person shall be admitted to the Partnership as a successor or additional
General Partner until compliance with the terms of Section 4.6 has occurred and such Person has executed and delivered
such other documents or instruments as may be required to effect such admission. Any such successor or additional General Partner
is hereby authorized to and shall, subject to the terms hereof, carry on the business of the members of the Partnership Group without
dissolution.

 

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

 

Article XI

WITHDRAWAL
OR REMOVAL OF PARTNERS

 

Section 11.1         Withdrawal
of the General Partner.

 

(a)          The
General Partner shall be deemed to have withdrawn from the Partnership upon the occurrence of any one of the following events (each
such event herein referred to as an “Event of Withdrawal”):

 

(i)          The
General Partner voluntarily withdraws from the Partnership by giving written notice to the other Partners;

 

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

 

(iii)        The
General Partner is removed pursuant to Section 11.2;

 

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

 

(v)         The
General Partner is adjudged bankrupt or insolvent, or has entered against it an order for relief in any bankruptcy or insolvency
proceeding;

 

(vi)        (A) in
the event the General Partner is a corporation, the filing of a certificate of dissolution, or its equivalent, for the corporation
or the revocation of its charter and the expiration of 90 days after the date of notice to the General Partner of revocation without
a reinstatement of its charter; (B) in the event the General Partner is a partnership or a limited liability company, the
dissolution and commencement of winding up of the General Partner; (C) in the event the General Partner is acting in such
capacity by virtue of being a trustee of a trust, the termination of the trust; (D) in the event the General Partner is a
natural person, his death or adjudication of incompetency; and (E) otherwise in the event of the termination of the General
Partner.

 

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If an Event of Withdrawal specified in
Section 11.1(a)(iv), 11.1(a)(v) or 11.1(a)(vi)(A), 11.1(a)(vi)(B), 11.1(a)(vi)(C) or 11.1(a)(vi)(E)
occurs, the withdrawing General Partner shall give notice to the Limited Partners within 30 days after such occurrence. The
Partners hereby agree that only the Events of Withdrawal described in this Section 11.1 shall result in the withdrawal
of the General Partner from the Partnership.

 

(b)          Withdrawal
of the General Partner from the Partnership upon the occurrence of an Event of Withdrawal shall not constitute a breach of this
Agreement under the following circumstances:

 

(i)          at
any time during the period beginning on the Closing Date and ending at 12:00 midnight, prevailing Eastern Time, on June 30,
2024, the General Partner voluntarily withdraws by giving at least 90 days’ advance notice of its intention to withdraw
to the Limited Partners, such withdrawal to take effect on the date specified in the notice; provided, however, that prior
to the effective date of such withdrawal, the withdrawal is approved by Unitholders holding at least a majority of the Outstanding
Common Units (excluding Common Units held by the General Partner and its Affiliates) and the General Partner delivers to the Partnership
an Opinion of Counsel (“Withdrawal Opinion of Counsel”) that such withdrawal (following the selection
of the successor General Partner) would not result in the loss of the limited liability of any Limited Partner or any Group Member;

 

(ii)         at
any time after 12:00 midnight, prevailing Eastern Time, on June 30, 2024, the General Partner voluntarily withdraws by
giving at least 90 days’ advance notice to the Unitholders, such withdrawal to take effect on the date specified in such
notice (provided, that, prior to the effective date of such withdrawal, the General Partner delivers to the Partnership
a Withdrawal Opinion of Counsel);

 

(iii)        at
any time that the General Partner ceases to be the General Partner pursuant to Section 11.1(a)(ii) or is removed pursuant
to Section 11.2; or

 

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

 

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Section 11.2         Removal
of the General Partner. The General Partner may be removed if such removal is approved by the
Unitholders holding at least 75% of the Outstanding Common and Subordinated Units (including Common and Subordinated Units held
by the General Partner and its Affiliates), voting as a single class. Any such action by such holders or the Board of Directors
for removal of the General Partner must also provide for the election of a successor General Partner by the majority vote of the
outstanding Common Units and Subordinated Units, voting together as a single class. Such removal shall be effective immediately
following the admission of a successor General Partner pursuant to Section 10.3. The removal of the General Partner
shall also automatically constitute the removal of the General Partner as general partner or managing member, to the extent applicable,
of the other Group Members of which the General Partner is a general partner or a managing member. If a Person is elected as a
successor General Partner in accordance with the terms of this Section 11.2, such Person shall, upon admission pursuant
to Section 10.3, automatically become a successor general partner or managing member, to the extent applicable, of
the other Group Members of which the General Partner is a general partner or a managing member. The right of the holders of Outstanding
Common and Subordinated Units to remove the General Partner shall not exist or be exercised unless the Partnership has received
an Opinion of Counsel opining as to the matters covered by a Withdrawal Opinion of Counsel. Any successor General Partner elected
in accordance with the terms of this Section 11.2 shall be subject to the provisions of Section 10.3.

 

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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 Common and Subordinated Units under circumstances where
Cause does not exist, if the successor General Partner is elected in accordance with the terms of Section 11.1 or Section 11.2,
(A) the Departing General Partner shall have the option, exercisable prior to the effective date of the departure of such
Departing General Partner, to require its successor to purchase its General Partner Interest and its or its Affiliates’ general
partner interest (or equivalent interest), if any, in the other Group Members and all of its or its Affiliates’ Incentive
Distribution Rights, if any, (collectively, the “Combined Interest”) in exchange for an amount in cash
equal to the fair market value of such Combined Interest, such amount to be determined and payable as of the effective date of
its departure and (B) the other holders of the Incentive Distribution Rights shall have the option, exercisable prior to the
effective date of the departure of such Departing General Partner, to require such successor to purchase such holders’ Incentive
Distribution Rights in exchange for an amount in cash equal to the fair market value of such Incentive Distribution Rights, such
amount to be determined and payable as of the effective date of the Departing General Partner’s departure. If the General
Partner is removed by the holders of Outstanding Common and Subordinated Units under circumstances where Cause exists or if the
General Partner withdraws under circumstances where such withdrawal violates this Agreement, and if a successor General Partner
is elected in accordance with the terms of Section 11.1 or Section 11.2 (or if the business of the Partnership
is continued pursuant to Section 12.2 and the successor General Partner is not the former General Partner), such successor
shall have the option, exercisable prior to the effective date of the departure of such Departing General Partner (or, in the event
the business of the Partnership is continued, prior to the date the business of the Partnership is continued), to purchase the
Combined Interest in exchange for an amount in cash equal to such fair market value of such Combined Interest of the Departing
General Partner. In either event, the Departing General Partner shall be entitled to receive all reimbursements due such Departing
General Partner pursuant to Section 7.12, including any employee related liabilities (including severance liabilities),
incurred in connection with the termination of any employees employed by the Departing General Partner or its Affiliates (other
than any Group Member) for the benefit of the Partnership or the other Group Members.

 

For purposes of this
Section 11.3(a), the fair market value of the Combined Interest and the value of the Incentive Distribution Rights
held by holders other than the Departing General Partner shall be determined by agreement between the Departing General Partner
and its successor or, failing agreement within 30 days after the effective date of such Departing General Partner’s departure,
by an independent investment banking firm or other independent expert selected by the Departing General Partner and its successor,
which, in turn, may rely on other experts, and the determination of which shall be conclusive as to such matter. If such parties
cannot agree upon one independent investment banking firm or other independent expert within 45 days after the effective date of
such departure, then the Departing General Partner shall designate an independent investment banking firm or other independent
expert, the Departing General Partner’s successor shall designate an independent investment banking firm or other independent
expert, and such firms or experts shall mutually select a third independent investment banking firm or independent expert, which
third independent investment banking firm or other independent expert shall determine the fair market value of the Combined Interest
and the value of the Incentive Distribution Rights held by holders other than the Departing General Partner. In making its determination,
such third independent investment banking firm or other independent expert may consider the value of the Units, including then
current trading price of Units on any National Securities Exchange on which Units are then listed or admitted to trading, the value
of the Partnership’s assets, the value of the Incentive Distribution Rights and the General Partner Interest, the rights
and obligations of the Departing General Partner and other factors it may deem relevant.

 

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(b)          If
the Combined Interest is not purchased in the manner set forth in Section 11.3(a), the Departing General Partner (or
its transferee) shall become a Limited Partner and the Combined Interest shall be converted into Common Units pursuant to a valuation
made by an investment banking firm or other independent expert selected pursuant to Section 11.3(a), without reduction
in such Partnership Interest (but subject to proportionate dilution by reason of the admission of its successor). Any successor
General Partner shall indemnify the Departing General Partner (or its transferee) as to all debts and liabilities of the Partnership
arising on or after the date on which the Departing General Partner (or its transferee) becomes a Limited Partner. For purposes
of this Agreement, conversion of the Combined Interest to Common Units will be characterized as if the Departing General Partner
(or its transferee) contributed the Combined Interest to the Partnership in exchange for the newly issued Common Units.

 

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

 

Section 11.4         Termination
of Subordination Period, Conversion of Subordinated Units and Extinguishment of Cumulative Common Unit Arrearages.
Notwithstanding any provision of this Agreement, if the General Partner is removed as general partner of the Partnership under
circumstances where Cause does not exist and no Units held by the General Partner and its Affiliates are voted in favor of such
removal, (a) the Subordination Period will end and all Subordinated Units will immediately and automatically convert into
Common Units on a one-for-one basis, (b) all Cumulative Common Unit Arrearages on the Common Units will be extinguished, (c) the
General Partner will have the right to convert its General Partner Interest and its Incentive Distribution Rights into Common Units
or to receive cash in exchange therefor, as provided in Section 11.3 and (d) the other holders of the Incentive
Distribution Rights will have the right to convert their Incentive Distribution Rights into Common Units or to receive cash in
exchange therefor, as provided in Section 11.3.

 

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

 

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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 Section 11.1 or Section 11.2, the Partnership shall not be dissolved
and the Board of Directors shall continue the business of the Partnership. The Partnership shall dissolve, and (subject to Section 12.2)
its affairs shall be wound up, upon:

 

(a)          an
election to dissolve the Partnership by the General Partner and our Board of Directors that is approved by the holders of a Unit
Majority;

 

(b)          at
any time there are no Limited Partners, unless the Partnership is continued without dissolution in accordance with the Marshall
Islands Act;

 

(c)          the
entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Marshall Islands Act; or

 

(d)          an
Event of Withdrawal of the General Partner as provided in Section 11.1(a) (other than Section 11.1(a)(ii)),
unless a successor is elected and an Opinion of Counsel is received as provided in Section 11.1(b) or Section 11.2
and such successor is admitted to the Partnership pursuant to Section 10.3.

 

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

 

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

 

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

 

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

 

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

 

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

 

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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 XVI as applicable.
With respect to any liability that is contingent, conditional or unmatured or is otherwise not yet due and payable, the Liquidating
Trustee shall either settle such claim for such amount as it deems appropriate or establish a reserve of cash or other assets to
provide for its payment. When paid, any unused portion of the reserve shall be distributed as additional liquidation proceeds.

 

(c)          All
property and all cash in excess of that required to discharge liabilities as provided in this Section 12.4 shall be
distributed, subject to Section 16.4 in respect of Series A Preferred Units, as follows:

 

(i)          If
the Current Market Price of the Common Units as of the date three trading days prior to the announcement of the proposed liquidation
exceeds the Unrecovered Capital for a Common Unit plus the Cumulative Common Unit Arrearage:

 

(A)         First,
to all the Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding
an amount equal to such Current Market Price of a Common Unit;

 

(B)         Second,
to all Unitholders holding Subordinated Units, Pro Rata, until there has been distributed in respect of each Subordinated Unit
then Outstanding an amount equal to such Current Market Price of a Common Unit; and

 

(C)         Thereafter,
(x) 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (y) 50% to all Unitholders holding Common
Units and Subordinated Units, Pro Rata;

 

(ii)         If
the Current Market Price of the Common Units as of the date three trading days prior to the announcement of the proposed liquidation
is equal to or less than the Unrecovered Capital for a Common Unit plus the Cumulative Common Unit Arrearage:

 

(A)         First,
to all the Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding
an amount equal to the Unrecovered Capital for a Common Unit;

 

(B)         Second,
to all Unitholders holding Common Units, Pro Rata, until there has been distributed in respect of each Common Unit then Outstanding
an amount equal to the Cumulative Common Unit Arrearage;

 

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(C)         Third,
to all Unitholders holding Subordinated Units, Pro Rata, until there has been distributed in respect of each Subordinated Unit
then Outstanding an amount equal to the Unrecovered Capital for a Common Unit (as calculated prior to the distribution specified
in clause (ii)(A) above); and

 

(D)         Thereafter,
(x) 50% to the holders of the Incentive Distribution Rights, Pro Rata; and (y) 50% to all Unitholders holding Common Units
and Subordinated Units, Pro Rata.

 

Distributions with respect to Series A
Preferred Units in connection with a liquidation or dissolution of the Partnership shall be made pursuant to Section 16.4,
rather than pursuant to clause (i) or (ii) of this Section 12.4(c).

 

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

 

Section 12.6         Return
of Contributions. The General Partner shall not be personally liable for, and shall have no obligation
to contribute or loan any monies or property to the Partnership to enable it to effectuate, the return of the Capital Contributions
of the Limited Partners or Unitholders, or any portion thereof, it being expressly understood that any such return shall be made
solely from Partnership assets.

 

Section 12.7         Waiver
of Partition. To the maximum extent permitted by law, each Partner hereby waives any right to
partition of the Partnership property.

 

Article XIII

AMENDMENT
OF PARTNERSHIP AGREEMENT; MEETINGS; RECORD DATE

 

Section 13.1         Amendments
to be Adopted Without Approval of the Limited Partners or the General Partner. The General Partner
and each Limited Partner agree that the Board of Directors, without the approval of any Limited Partner or, subject to Section 5.5,
the General Partner, may amend any provision of this Agreement and execute, swear to, acknowledge, deliver, file and record whatever
documents may be required in connection therewith, to reflect:

 

(a)          a
change in the name of the Partnership, the location of the principal place of business of the Partnership, the registered agent
of the Partnership or the registered office of the Partnership;

 

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

 

(c)          a
change that the Board of Directors determines to be necessary or appropriate to qualify or continue the qualification of the Partnership
as a limited partnership or an entity in which the Limited Partners have limited liability under the Marshall Islands Act;

 

(d)          subject
to Section 16.5, to the extent applicable, a change that the Board of Directors determines (i) does not adversely
affect the Limited Partners (including any particular class or series of Partnership Interests as compared to other classes or
series of Partnership Interests) in any material respect, (ii) to be necessary or appropriate to (A) satisfy any requirements,
conditions or guidelines contained in any opinion, directive, order, ruling or regulation of any Marshall Islands authority (including
the Marshall Islands Act) or (B) facilitate the trading of the Units or comply with any rule, regulation, guideline or requirement
of any National Securities Exchange on which the Units are or will be listed, or admitted to trading, (iii) to be necessary
or appropriate in connection with action taken by the Board of Directors pursuant to Section 5.8 or (iv) is required
to effect the intent expressed in the Registration Statement or the intent of the provisions of this Agreement or is otherwise
contemplated by this Agreement;

 

(e)          a
change in the fiscal year or taxable year of the Partnership and any other changes that the Board of Directors determines to be
necessary or appropriate as a result of a change in the fiscal year or taxable year of the Partnership including, if the Board
of Directors shall so determine, a change in the definition of “Quarter” and the dates on which distributions (other
than Series A Distributions) are to be made by the Partnership;

 

(f)          an
amendment that is necessary, in the Opinion of Counsel, to prevent the Partnership, the members of the Board of Directors, or the
General Partner or its or their directors, officers, trustees or agents from in any manner being subjected to the provisions of
the U.S. Investment Company Act of 1940, as amended, the U.S. Investment Advisers Act of 1940, as amended, or “plan asset”
regulations adopted under the U.S. Employee Retirement Income Security Act of 1974, as amended, regardless of whether such
regulations are substantially similar to plan asset regulations currently applied or proposed by the United States Department of
Labor;

 

(g)          subject
to Section 16.5, an amendment that the Board of Directors, and if required by Section 5.5, the General
Partner, determines to be necessary or appropriate in connection with the authorization of issuance of any class or series of Partnership
Interests pursuant to Section 5.4;

 

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

 

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(i)          the
adjustments of the Minimum Quarterly Distribution, First Target Distribution, Second Target Distribution and Third Target Distribution
in connection with the IDR Reset Election in accordance with Section 5.10;

 

(ii)         the
implementation of the provisions relating to Höegh LNG’s right to reset its Incentive Distribution Rights in exchange
for Common Units;

 

(iii)        any
modification of the Incentive Distribution Rights made in connection with the issuance of additional Partnership Interests or rights
to acquire Partnership Interests, provided, that, with respect to this clause (iii), any such modifications
to the Incentive Distribution Rights and the related issuance of Partnership Interests have received Special Approval; or

 

(iv)        any
amendment expressly permitted in this Agreement to be made by the Board of Directors acting alone;

 

(i)          an
amendment effected, necessitated or contemplated by a Merger Agreement approved in accordance with Section 14.3;

 

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

 

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

 

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

 

Section 13.2         Amendment
Procedures. Except as provided in Section 13.1 and Section 13.3, all amendments to this
Agreement shall be made in accordance with the following requirements. Amendments to this Agreement may be proposed only by, or
with the written consent of, the Board of Directors; provided, however, that the
Board of Directors shall have no duty or obligation to propose any amendment to this Agreement and may decline to do so free of
any fiduciary duty or obligation whatsoever to the Partnership or any Limited Partner, any Record Holder or any other Person and,
in declining to propose an amendment, to the fullest extent permitted by applicable law shall not be required to act in good faith
or pursuant to any other standard imposed by this Agreement, any Group Member Agreement, any other agreement contemplated hereby
or under the Marshall Islands Act or any other law, rule or regulation. Subject to Section 16.5, to the extent applicable,
a proposed amendment shall be effective upon its approval by the Board of Directors and, if applicable, the holders of a Unit Majority,
unless a greater or different percentage is required under this Agreement or by the Marshall Islands Act. Each proposed amendment
that requires the approval of the holders of a specified percentage of Outstanding Units shall be set forth in a writing that contains
the text of the proposed amendment. If such an amendment is proposed, the Board of Directors shall seek the written approval of
the requisite percentage of Outstanding Units or call a meeting of the Unitholders to consider and vote on such proposed amendment.
The Board of Directors shall notify all Record Holders upon final adoption of any such proposed amendments.

 

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Section 13.3         Amendment
Requirements.

 

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

 

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

 

(c)          Except
as provided in Section 14.3 and subject to Section 16.5(c)(i) with respect to Series A Preferred Units,
and without limitation of the Board of Directors’ authority to adopt amendments to this Agreement without the approval of
any Partners as contemplated in Section 13.1, any amendment that would have a material adverse effect on the rights
or preferences of any class or series of Partnership Interests in relation to other classes or series of Partnership Interests
must be approved by the holders of not less than a majority of the Outstanding Partnership Interests of the class or series affected.
If the Board of Directors determines an amendment does not satisfy the requirements of Section 13.1(d)(i) because it adversely
affects one or more classes of Partnership Interests, as compared to other classes of Partnership Interests, in any material respect,
such amendment shall only be required to be approved by the adversely affected class or classes.

 

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

 

(e)          Except
as provided in Section 13.1, this Section 13.3 shall only be amended with the approval of the holders of
at least 90% of the Outstanding Units.

 

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

 

Section 13.5         Notice
of a Meeting. Notice of a meeting called pursuant to Section 13.4 shall be given to
the Record Holders of the class, classes or series of Units for which a meeting is proposed in writing by mail or other means of
written communication in accordance with Section 17.1 at least 10 days in advance of such meeting. The notice shall
be deemed to have been given at the time when deposited in the mail or sent by other means of written communication.

 

Section 13.6         Record
Date. For purposes of determining the Limited Partners entitled to notice of or to vote at a meeting
of the Limited Partners or to give approvals without a meeting as provided in Section 13.11, the Board of Directors
may set a Record Date, which shall not be less than 10 nor more than 60 days before (a) the date of the meeting
(unless such requirement conflicts with any rule, regulation, guideline or requirement of any National Securities Exchange on which
the Units are listed or admitted to trading, in which case the rule, regulation, guideline or requirement of such National Securities
Exchange shall govern) or (b) in the event that approvals are sought without a meeting, the date by which Limited Partners
are requested in writing by the Board of Directors to give such approvals. If the Board of Directors does not set a Record Date,
then (a) the Record Date for determining the Limited Partners entitled to notice of or to vote at a meeting of the Limited
Partners shall be the close of business on the day next preceding the day on which notice is given, and (b) the Record Date
for determining the Limited Partners entitled to give approvals without a meeting shall be the date the first written approval
is deposited with the Partnership in care of the Board of Directors in accordance with Section 13.11.

 

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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 331⁄3% 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. At any meeting of the Limited Partners duly called and held in accordance with this Agreement at which
a quorum is present, the act of Limited Partners holding Outstanding Units that in the aggregate represent a majority of the Outstanding
Units entitled to vote and present in person or by proxy at such meeting shall be deemed to constitute the act of all Limited Partners,
unless a greater or different percentage is required with respect to such action under the provisions of this Agreement, in which
case the act of the Limited Partners holding Outstanding Units that in the aggregate represent at least such greater or different
percentage shall be required. The Limited Partners present at a duly called or held meeting at which a quorum is present may continue
to transact business until adjournment, notwithstanding the withdrawal of enough Limited Partners to leave less than a quorum,
if any action taken (other than adjournment) is approved by the required percentage of Outstanding Units specified in this Agreement
(including Outstanding Units deemed owned by the General Partner and its Affiliates). In the absence of a quorum, any meeting of
Limited Partners may be adjourned from time to time by the affirmative vote of holders of at least a majority of the Outstanding
Units entitled to vote at such meeting (including Outstanding Units deemed owned by the General Partner and its Affiliates) and
represented either in person or by proxy, but no other business may be transacted, except as provided in Section 13.7.

 

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

 

Section 13.11         Action
Without a Meeting. If authorized by the Board of Directors, any action that may be taken at a
meeting of the Limited Partners may be taken without a meeting if an approval in writing setting forth the action so taken is signed
by Limited Partners owning not less than the minimum percentage of the Outstanding Units (including Units deemed owned by the General
Partner and its Affiliates) that would be necessary to authorize or take such action at a meeting at which all the Limited Partners
were present and voted (unless such provision conflicts with any rule, regulation, guideline or requirement of any National Securities
Exchange on which the Units are listed or admitted to trading, in which case the rule, regulation, guideline or requirement of
such National Securities Exchange shall govern). Prompt notice of the taking of action without a meeting shall be given to the
Limited Partners who have not approved the action in writing. The Board of Directors may specify that any written ballot submitted
to Limited Partners for the purpose of taking any action without a meeting shall be returned to the Partnership within the time
period, which shall be not less than 20 days, specified by the Board of Directors. If a ballot returned to the Partnership
does not vote all of the Units held by the Limited Partners, the Partnership shall be deemed to have failed to receive a ballot
for the Units that were not voted. If approval of the taking of any action by the Limited Partners is solicited by any Person other
than by or on behalf of the Board of Directors, the written approvals shall have no force and effect unless and until (a) they
are deposited with the Partnership in care of the Board of Directors, (b) approvals sufficient to take the action proposed
are dated as of a date not more than 90 days prior to the date sufficient approvals are deposited with the Partnership and (c) an
Opinion of Counsel is delivered to the Board of Directors to the effect that the exercise of such right and the action proposed
to be taken with respect to any particular matter (i) will not cause the Limited Partners to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so as to jeopardize the Limited Partners’ limited
liability, and (ii) is otherwise permissible under the applicable statutes then governing the rights, duties and liabilities
of the Partnership and the Partners.

 

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Section 13.12         Right
to Vote and Related Matters.

 

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

 

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

 

Article XIV

MERGER,
CONSOLIDATION OR CONVERSION

 

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

 

Section 14.2         Procedure
for Merger, Consolidation or Conversion.

 

(a)          Merger,
consolidation or conversion of the Partnership pursuant to this Article XIV requires the approval of the Board of Directors
and the prior consent of the General Partner; provided, however, that, to the fullest extent permitted by law, the General
Partner shall have no duty or obligation to consent to any merger, consolidation or conversion of the Partnership and may decline
to do so free of any fiduciary duty or obligation whatsoever to the Partnership or any Limited Partner and, in declining to consent
to a merger, consolidation or conversion, shall not be required to act in good faith or pursuant to any other standard imposed
by this Agreement, any Group Member Agreement, any other agreement contemplated hereby or under the Marshall Islands Act or any
other law, rule or regulation or at equity.

 

(b)          If
the Board of Directors and the General Partner shall determine to consent to the merger, consolidation or conversion, the Board
of Directors and the General Partner shall approve the Merger Agreement, which shall set forth:

 

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(i)          the
names and jurisdictions of formation or organization of each of the business entities proposing to merge or consolidate;

 

(ii)         the
name and jurisdiction of formation or organization of the business entity that is to survive the proposed merger or consolidation
(the “Surviving Business Entity”);

 

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

 

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

 

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

 

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

 

(vii)       such
other provisions with respect to the proposed merger or consolidation that the Board of Directors and the General Partner determine
to be necessary or appropriate.

 

(c)          If
the Board of Directors and the General Partner shall determine to consent to the conversion the Board of Directors and the General
Partner shall approve the Plan of Conversion, which shall set forth:

 

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

 

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

 

(iii)        a
statement as to the type of entity that the converted entity is to be and the state or country under the laws of which the converted
entity is to be incorporated, formed or organized;

 

(iv)        the
manner and basis of exchanging or converting the equity securities of each constituent business entity for, or into, cash, property
or interests, rights, securities or obligations of the converted entity or another entity, or for the cancellation of such equity
securities;

 

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

 

(vi)        in
an attachment or exhibit, the certificate of limited partnership, certificate of formation, articles of incorporation, or other
organizational documents of the converted entity;

 

(vii)       the
effective time of the conversion, which may be the date of the filing of the articles of conversion or a later date specified in
or determinable in accordance with the Plan of Conversion (provided, that if the effective time of the conversion is to
be later than the date of the filing of such articles of conversion, the effective time shall be fixed at a date or time certain
and stated in such articles of conversion); and

 

(viii)      such
other provisions with respect to the proposed conversion the Board of Directors and the General Partner determines to be necessary
or appropriate.

 

Section 14.3         Approval
by Limited Partners of Merger, Consolidation or Conversion.

 

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

 

(b)          Except
as provided in Section 14.3(d) and 14.3(e), the Merger Agreement or Plan of Conversion, as the case may be,
shall be approved upon receiving the affirmative vote or consent of the holders of a Unit Majority, unless the Merger Agreement
or Plan of Conversion, as the case may be, effects an amendment to any provisions of this Agreement that, if contained in an amendment
to this Agreement adopted pursuant to Article XIII, would require for its approval the vote or consent of a greater
percentage of the Outstanding Units or of any class of Partnership Interests, in which case such greater percentage vote or consent
shall be required for approval of the Merger Agreement or the Plan of Conversion, as the case may be.

 

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(c)          Except
as provided in Section 14.3(d) and 14.3(e), after such approval by vote or consent of the Limited Partners,
and at any time prior to the filing of the certificate of merger or certificate of conversion pursuant to Section 14.4,
the merger, consolidation or conversion may be abandoned pursuant to provisions therefor, if any, set forth in the Merger Agreement
or Plan of Conversion, as the case may be.

 

(d)          Notwithstanding
anything else contained in this Article XIV or in this Agreement, the Board of Directors is permitted, without Limited
Partner approval, to convert the Partnership or any Group Member into a new limited liability entity, to merge the Partnership
or any Group Member into, or convey all of the Partnership’s assets to, another limited liability entity which shall be newly
formed and shall have no assets, liabilities or operations at the time of such conversion, merger or conveyance other than those
it receives from the Partnership or other Group Member if (i) the Board of Directors has received an Opinion of Counsel that
the conversion, merger or conveyance, as the case may be, would not result in the loss of the limited liability of any Limited
Partner, (ii) the sole purpose of such conversion, merger or conveyance is to effect a mere change in the legal form of the
Partnership into another limited liability entity and (iii) the governing instruments of the new entity provide the Limited
Partners, the General Partner and the Board of Directors with the same rights and obligations as are herein contained.

 

(e)          Additionally,
notwithstanding anything else contained in this Article XIV or in this Agreement, the Board of Directors, with the
prior consent of the General Partner, is permitted, without Limited Partner approval, to merge or consolidate the Partnership with
or into another entity if (i) the Board of Directors has received an Opinion of Counsel that the merger or consolidation,
as the case may be, would not result in the loss of the limited liability of any Limited Partner, (ii) the merger or consolidation
would not result in an amendment to this Agreement, other than any amendments that could be adopted pursuant to Section 13.1,
(iii) the Partnership is the Surviving Business Entity in such merger or consolidation, (iv) each Unit outstanding immediately
prior to the effective date of the merger or consolidation is to be an identical Unit of the Partnership after the effective date
of the merger or consolidation, and (v) the number of Partnership Interests to be issued by the Partnership in such merger
or consolidation does not exceed 20% of the Partnership Interests Outstanding immediately prior to the effective date of such merger
or consolidation.

 

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

 

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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;

 

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

 

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

 

Article XV

RIGHT
TO ACQUIRE LIMITED PARTNER INTERESTS

 

Section 15.1         Right
to Acquire Limited Partner Interests.

 

(a)          Notwithstanding
any other provision of this Agreement, if at any time from and after the Closing Date the General Partner and its Affiliates hold
more than 80% of the total Limited Partner Interests of any class or series then Outstanding, except for the Series A Preferred
Units, the General Partner shall then have the right, which right it may assign and transfer in whole or in part to the Partnership
or any Affiliate of the General Partner, exercisable at its option, to purchase all, but not less than all, of such Limited Partner
Interests of such class or series then Outstanding held by Persons other than the General Partner and its Affiliates, at the greater
of (x) the Current Market Price as of the date three days prior to the date that the notice described in Section 15.1(b)
is mailed and (y) the highest price paid by the General Partner or any of its Affiliates for any such Limited Partner Interest
of such class purchased during the 90-day period preceding the date that the notice described in Section 15.1(b) is
mailed. Notwithstanding the foregoing, the repurchase right described in this Article XV shall not apply to Series A
Preferred Units.

 

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(b)          If
the General Partner, any Affiliate of the General Partner or the Partnership elects to exercise the right to purchase Limited Partner
Interests granted pursuant to Section 15.1(a), the General Partner shall deliver to the Transfer Agent notice of such
election to purchase (the “Notice of Election to Purchase”) and shall cause the Transfer Agent to mail
a copy of such Notice of Election to Purchase to the Record Holders of Limited Partner Interests of such class or series (as of
a Record Date selected by the General Partner) at least 10, but not more than 60, days prior to the Purchase Date. Such Notice
of Election to Purchase shall also be published for a period of at least three consecutive days in at least two daily newspapers
of general circulation printed in the English language and published in the Borough of Manhattan, New York. The Notice of Election
to Purchase shall specify the Purchase Date and the price (determined in accordance with Section 15.1(a)) at which
Limited Partner Interests will be purchased and state that the General Partner, its Affiliate or the Partnership, as the case may
be, elects to purchase such Limited Partner Interests, upon surrender of Certificates representing such Limited Partner Interests,
if any, in exchange for payment, at such office or offices of the Transfer Agent as the Transfer Agent may specify, or as may be
required by any National Securities Exchange on which such Limited Partner Interests are listed. Any such Notice of Election to
Purchase mailed to a Record Holder of Limited Partner Interests at his address as reflected in the records of the Transfer Agent
shall be conclusively presumed to have been given regardless of whether the owner receives such notice. On or prior to the Purchase
Date, the General Partner, its Affiliate or the Partnership, as the case may be, shall deposit with the Transfer Agent cash in
an amount sufficient to pay the aggregate purchase price of all of such Limited Partner Interests to be purchased in accordance
with this Section 15.1. If the Notice of Election to Purchase shall have been duly given as aforesaid at least 10 days
prior to the Purchase Date, and if on or prior to the Purchase Date the deposit described in the preceding sentence has been made
for the benefit of the holders of Limited Partner Interests subject to purchase as provided herein, then from and after the Purchase
Date to the extent Certificates for the Limited Partner Interests are outstanding, notwithstanding that any Certificate shall not
have been surrendered for purchase, all rights of the holders of such Limited Partner Interests (including any rights pursuant
to Articles IV, V, VI and XII) shall thereupon cease, except the right to receive the applicable
purchase price (determined in accordance with Section 15.1(a)) for Limited Partner Interests therefor, without interest,
upon surrender to the Transfer Agent of the Certificates representing such Limited Partner Interests, and such Limited Partner
Interests shall thereupon be deemed to be transferred to the General Partner, its Affiliate or the Partnership, as the case may
be, on the record books of the Transfer Agent and the Partnership, and the General Partner or any Affiliate of the General Partner,
or the Partnership, as the case may be, shall be deemed to be the owner of all such Limited Partner Interests from and after the
Purchase Date and shall have all rights as the owner of such Limited Partner Interests (including all rights as owner of such Limited
Partner Interests pursuant to Articles IV, V, VI and XII).

 

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

 

Article XVI

SERIES A
CUMULATIVE REDEEMABLE PREFERRED UNITS

 

Section 16.1         Designation.
On September 28, 2017, the Board of Directors designated and created a series of Preferred Units to be designated as “8.75%
Series A Cumulative Redeemable Preferred Units,” and fixed the preferences, rights, powers and duties of the holders
of the Series A Preferred Units as set forth in this Article XVI. Each Series A Preferred Unit shall be identical
in all respects to every other Series A Preferred Unit, except as to the respective dates from which the Series A Liquidation
Preference shall increase or from which Series A Distributions may begin accruing, to the extent such dates may differ. The
Series A Preferred Units represent perpetual equity interests in the Partnership and shall not give rise to a claim by the
holder for redemption thereof at a particular date.

 

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Section 16.2         Units.

 

(a)          The
authorized number of Series A Preferred Units shall be unlimited. Series A Preferred Units that are purchased or otherwise
acquired by the Partnership shall be cancelled.

 

(b)          The
Series A Preferred Units shall be represented by a single certificate registered in the name of the Depository or its nominee,
and no Series A Holder shall be entitled to receive a certificate evidencing such Units, unless otherwise required by law
or the Depository gives notice of its intention to resign or is no longer eligible to act as such and the Partnership shall have
not selected a substitute Depository within 60 calendar days thereafter. So long as the Depository shall have been appointed and
is serving, payments and communications made by the Partnership to Series A Holders shall be made by making payments to, and
communicating with, the Depository.

 

Section 16.3         Distributions.

 

(a)          Distributions
on each Series A Preferred Unit shall be cumulative and shall accrue at the Series A Distribution Rate from the Series A
Original Issue Date (or, for any subsequently issued and newly Outstanding Series A Preferred Units, from the Series A
Distribution Payment Date immediately preceding the issuance date of such Units) until such time as the Partnership pays the Series A
Distribution or redeems the Series A Preferred Units in full in accordance with Section 16.6 below, whether or
not such Series A Distributions shall have been declared. Series A Holders shall be entitled to receive Series A
Distributions from time to time out of any assets of the Partnership legally available for the payment of distributions at the
Series A Distribution Rate per Series A Preferred Unit, when, as, and if declared by the Board of Directors. Distributions,
to the extent declared by the Board of Directors to be paid by the Partnership in accordance with this Section 16.3,
shall be paid quarterly on each Series A Distribution Payment Date. Distributions shall accumulate in each Series A Distribution
Period from and including the preceding Series A Distribution Payment Date (other than the initial Series A Distribution
Period, which shall commence on and include the Series A Original Issue Date), to but excluding the next Series A Distribution
Payment Date for such Series A Distribution Period, and distributions shall accrue on accumulated Series A Distributions
at the Series A Distribution Rate. If any Series A Distribution Payment Date otherwise would occur on a date that is
not a Business Day, declared Series A Distributions shall be paid on the immediately succeeding Business Day without the accumulation
of additional distributions. Series A Distributions shall be payable based on a 360-day year consisting of twelve 30-day months.

 

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(b)          Not
later than 5:00 p.m., New York City time, on each Series A Distribution Payment Date, the Partnership shall pay those Series A
Distributions, if any, that shall have been declared by the Board of Directors to Series A Holders on the Record Date for
the applicable Series A Preferred Distribution. The Record Date (the “Series A Distribution Record Date”)
for any Series A Distribution payment shall be the fifth Business Day immediately preceding the applicable Series A Distribution
Payment Date, except that in the case of payments of Series A Distributions in arrears, the Series A Distribution Record
Date with respect to a Series A Distribution Payment Date shall be such date as may be designated by the Board of Directors
in accordance with this Article XVI. No distribution shall be declared or paid or set apart for payment on any Junior
Securities (other than a distribution payable solely in Junior Securities) unless full cumulative Series A Distributions have
been or contemporaneously are being paid or provided for on all Outstanding Series A Preferred Units and any Parity Securities
through the most recent respective Series A Distribution Payment Dates. Accumulated Series A Distributions in arrears
for any past Series A Distribution Period may be declared by the Board of Directors and paid on any date fixed by the Board
of Directors, whether or not a Series A Distribution Payment Date, to Series A Holders on the record date for such payment,
which may not be more than 60 days, nor less than 15 days, before such payment date. Subject to the next succeeding sentence, if
all accumulated Series A Distributions in arrears on all Outstanding Series A Preferred Units and any Parity Securities
shall not have been declared and paid, or if sufficient funds for the payment thereof shall not have been set apart, payment of
accumulated distributions in arrears on the Series A Preferred Units and any such Parity Securities shall be made in order
of their respective distribution payment dates, commencing with the earliest. If less than all distributions payable with respect
to all Series A Preferred Units and any Parity Securities are paid, any partial payment shall be made pro rata with respect
to the Series A Preferred Units and any Parity Securities entitled to a distribution payment at such time in proportion to
the aggregate distribution amounts remaining due in respect of such Series A Preferred Units and Parity Securities at such
time. Subject to Sections 12.4 and 16.6, Series A Holders shall not be entitled to any distribution, whether
payable in cash, property or units, in excess of full cumulative Series A Distributions. Except insofar as distributions accrue
on the amount of any accumulated and unpaid Series A Distributions as described in Section 16.3(a), no interest
or sum of money in lieu of interest shall be payable in respect of any distribution payment which may be in arrears on the Series A
Preferred Units. So long as the Series A Preferred Units are held of record by the nominee of the Depository, declared Series A
Distributions shall be paid to the Depository in same-day funds on each Series A Distribution Payment Date.

 

Section 16.4         Liquidation
Rights.

 

(a)          Upon
the occurrence of any Liquidation Event, Series A Holders shall be entitled to receive out of the assets of the Partnership
or proceeds thereof legally available for distribution to the Partners, (i) after satisfaction of all liabilities, if any,
to creditors of the Partnership, (ii) after all applicable distributions of such assets or proceeds being made to or set aside
for the holders of any Senior Securities then Outstanding in respect of such Liquidation Event, (iii) concurrently with any
applicable distributions of such assets or proceeds being made to or set aside for holders of any Parity Securities then Outstanding
in respect of such Liquidation Event and (iv) before any distribution of such assets or proceeds is made to or set aside for
the holders of Common Units, Subordinated Units and any other classes or series of Junior Securities as to such distribution, a
liquidating distribution or payment in full redemption of such Series A Preferred Units in an amount equal to the Series A
Liquidation Preference. For purposes of clarity, upon the occurrence of any Liquidation Event, (x) the holders of then Outstanding
Senior Securities shall be entitled to receive the applicable Liquidation Preference on such Senior Securities before any distribution
shall be made to the Series A Preferred Units or any Parity Securities and (y) the Series A Holders shall be entitled
to the Series A Liquidation Preference per Series A Preferred Unit in cash concurrently with any distribution made to
the holders of Parity Securities and before any distribution shall be made to the holders of Common Units, Subordinated Units or
any other Junior Securities. Series A Holders shall not be entitled to any other amounts from the Partnership, in their capacity
as Series A Holders, after they have received the Series A Liquidation Preference. The payment of the Series A Liquidation
Preference shall be a payment in redemption of the Series A Preferred Units such that, from and after payment of the full
Series A Liquidation Preference, any such Series A Preferred Unit shall thereafter be cancelled and no longer be Outstanding.

 

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(b)          If,
in the event of any distribution or payment described in Section 16.4(a) above where the Partnership’s assets
available for distribution to holders of the Outstanding Series A Preferred Units and any Parity Securities are insufficient
to satisfy the applicable Liquidation Preference for such Series A Preferred Units and Parity Securities, the Partnership’s
then remaining assets or proceeds thereof legally available for distribution to unitholders of the Partnership shall be distributed
among the holders of Outstanding Series A Preferred Units and such Parity Securities, as applicable, ratably on the basis
of their relative aggregate Liquidation Preferences. To the extent that the Series A Holders receive a partial payment of
their Series A Liquidation Preference, such partial payment shall reduce the Series A Liquidation Preference of their
Series A Preferred Units, but only to the extent of such amount paid.

 

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

 

Section 16.5         Voting
Rights.

 

(a)          Notwithstanding
anything to the contrary in this Agreement, the Series A Preferred Units shall have no voting rights except as set forth in
Section 13.3(d), this Section 16.5 or as otherwise provided by non-waivable provisions of the Marshall
Islands Act.

 

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(b)          Upon
the occurrence of a Series A Trigger Event, the Series A Holders shall have the right, voting as a class together with holders
of any Parity Securities upon which like voting rights have been conferred and are exercisable, at a meeting of the Board of Directors
called for such purpose within 30 days after receipt by the Partnership and the General Partner of a request by Series A Holders
holding a majority of the Outstanding Series A Preferred Units, to elect one member of the Board of Directors; provided,
however, that the right of the Series A Holders shall not apply to the election of another director if (i) Series A Holders
and holders of Parity Securities upon which like voting rights have been conferred, voting as a class, have previously elected
a member of the Board of Directors and (ii) such director continues to serve on the Board of Directors. Upon such request, the
General Partner will promptly substitute one of the Appointed Directors for one director selected by the Series A Holders (a “Holders’
Nominee”) and appoint such Holders’ Nominee to the Board of Directors as an Appointed Director. Such right
of such Series A Holders to elect a member of the Board of Directors shall continue until the Partnership pays in full, or
declares and sets aside funds for the payment of, all Series A Distributions accumulated and in arrears on the Series A
Preferred Units, at which time such right shall terminate, subject to the revesting of such right in the event of each and every
subsequent Series A Trigger Event. Upon any termination of the right of the Series A Holders and, if applicable, holders of
any other Parity Securities to vote as a class for such director, the term of office of the Holders’ Nominee then in office
shall terminate immediately. Any director elected by the Series A Holders and, if applicable, any other Parity Securities
shall be entitled to one vote on any matter before the Board of Directors. Any Holders’ Nominee may be removed at any time
without Cause only by the Holders of a majority of the Outstanding Series A Preferred Units and, if applicable, the holders of
any other series of Parity Securities upon which like voting rights have been conferred and are exercisable, voting together as
a class. If any Holders’ Nominee is removed, resigns or is otherwise unable to serve as a member of the Board of Directors,
the Holders of a majority of the outstanding Series A Preferred Units and, if applicable, any other Parity Securities voting together
as a class, shall appoint an individual to fill the vacancy.

 

(c)

 

(i)          Unless
the Board of Directors shall have received the affirmative vote or consent of the holders of at least 66-2/3% of the Outstanding
Series A Preferred Units, voting as a class, the Board of Directors shall not adopt any amendment to this Agreement that would
have a material adverse effect on the existing terms of the Series A Preferred Units.

 

(ii)         Unless
the Board of Directors shall have received the affirmative vote or consent of the holders of at least 66-2/3% of the Outstanding
Series A Preferred Units, voting as a class together with holders of any other Parity Securities upon which like voting rights
have been conferred and are exercisable, the Partnership shall not (x) issue any Parity Securities if the cumulative dividends
payable on Outstanding Series A Preferred Units are in arrears or (y) create or issue any Senior Securities.

 

(d)          For
any matter described in this Section 16.5 in which the Series A Holders are entitled to vote as a class (whether
separately or together with the holders of any Parity Securities), such Series A Holders shall be entitled to one vote per
Outstanding Series A Preferred Unit. Any Series A Preferred Units held by the Partnership or any of its subsidiaries
or Affiliates shall not be entitled to vote.

 

Section 16.6         Optional
Redemption. The Partnership shall have the right at any time, and from time to time, on or after
October 5, 2022 to redeem the Series A Preferred Units, in whole or in part, from any source of funds legally available for
such purpose. Any such redemption shall occur on a date set by the Board of Directors (the “Series A
Redemption Date”).

 

(a)          The
Partnership shall effect any such redemption by paying cash for each Series A Preferred Unit to be redeemed equal to the Series A
Liquidation Preference for such Series A Preferred Unit on such Series A Redemption Date (the “Series A
Redemption Price”). So long as the Series A Preferred Units are held of record by the nominee of the Depository,
the Series A Redemption Price shall be paid by the Paying Agent to the Depository on the Series A Redemption Date.

 

    	 	84	 

     

    

 

(b)          The
Partnership shall give notice of any redemption by mail, postage prepaid, not less than 30 days and not more than 60 days before
the scheduled Series A Redemption Date, to the Series A Holders (as of 5:00 p.m. New York City time on the Business Day
next preceding the day on which notice is given) of any Series A Preferred Units to be redeemed as such Series A Holders’
names appear on the books of the Transfer Agent and at the address of such Series A Holders shown therein. Such notice (the
“Series A Redemption Notice”) shall state: (1) the Series A Redemption Date, (2) the
number of Series A Preferred Units to be redeemed and, if less than all Outstanding Series A Preferred Units are to be
redeemed, the number (and the identification) of Units to be redeemed from such Series A Holder, (3) the Series A
Redemption Price, (4) the place where the Series A Preferred Units are to be redeemed and shall be presented and surrendered
for payment of the Series A Redemption Price therefor and (5) that distributions on the Units to be redeemed shall cease
to accumulate from and after such Series A Redemption Date.

 

(c)          If
the Partnership elects to redeem less than all of the Outstanding Series A Preferred Units, the number of Series A Preferred
Units to be redeemed shall be determined by the Partnership, and such Series A Preferred Units shall be redeemed by such method
of selection as the Depository shall determine either Pro Rata or by lot, with adjustments to avoid redemption of fractional Series A
Preferred Units. The aggregate Series A Redemption Price for any such partial redemption of the Outstanding Series A
Preferred Units shall be allocated correspondingly among the redeemed Series A Preferred Units. The Series A Preferred
Units not redeemed shall remain Outstanding and entitled to all the rights and preferences provided in this Article XVI.

 

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

 

    	 	85	 

     

    

 

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

 

(f)          Notwithstanding
anything to the contrary in this Article XVI, in the event that full cumulative distributions on the Series A
Preferred Units and any Parity Securities shall not have been paid or declared and set apart for payment, none of the Partnership,
the General Partner or any Affiliate of the General Partner shall be permitted to repurchase, redeem or otherwise acquire, in whole
or in part, any Series A Preferred Units or Parity Securities except pursuant to a purchase or exchange offer made on the
same terms to all Series A Holders and any Parity Securities. None of the Partnership, the General Partner or any Affiliate
of the General Partner shall be permitted to redeem, repurchase or otherwise acquire any Common Units or any other Junior Securities
unless full cumulative distributions on the Series A Preferred Units and any Parity Securities for all prior and the then-ending
Series A Distribution Periods shall have been paid or declared and set apart for payment.

 

Section 16.7         Rank.
The Series A Preferred Units shall be deemed to rank:

 

(a)          Senior
to (i) the Common Units, (ii) the Subordinated Units and (iii) any other class or series of Partnership Securities established
after the Series A Original Issue Date by the Board of Directors, the terms of which class or series do not expressly provide
that it is made senior to or on parity with the Series A Preferred Units as to distributions and distributions upon any Liquidation
Event (collectively referred to with the Partnership’s Common Units as “Junior Securities”);

 

(b)          On
a parity with any class or series of Partnership Securities established after the Series A Original Issue Date by the Board
of Directors, the terms of which class or series are not expressly subordinated or senior to the Series A Preferred Units
as to distributions and distributions upon any Liquidation Event (collectively referred to as “Parity Securities”);
and

 

    	 	86	 

     

    

 

(c)          Junior
to any class or series of Partnership Securities established after the Series A Original Issue Date by the Board of Directors,
the terms of which class or series expressly provide that it ranks senior to the Series A Preferred Units as to distributions
and distributions upon any Liquidation Event (collectively referred to as “Senior Securities”).

 

The Partnership may
issue Junior Securities and, subject to any approvals required by Series A Holders pursuant to Section 16.5(c)(ii),
Parity Securities, from time to time in one or more classes or series without the consent of the Series A Holders. The Board
of Directors has the authority to determine the preferences, powers, qualifications, limitations, restrictions and special or relative
rights or privileges, if any, of any such class or series before the issuance of any Partnership Securities of such class or series.

 

Section 16.8         No
Sinking Fund. The Series A Preferred Units shall not have the benefit of any sinking fund.

 

Section 16.9         Record
Holders. To the fullest extent permitted by applicable law, the General Partner, Partnership,
the Registrar, the Transfer Agent and the Paying Agent may deem and treat any Series A Holder as the true, lawful and absolute
owner of the applicable Series A Preferred Units for all purposes, and neither the General Partner, the Partnership nor the
Registrar, the Transfer Agent or the Paying Agent shall be affected by any notice to the contrary.

 

Section 16.10         Notices.
All notices or communications in respect of the Series A Preferred Units shall be sufficiently given if given in writing and
delivered in person or by first class mail, postage prepaid, or if given in such other manner as may be permitted in this Article XVI,
this Agreement or by applicable law.

 

Section 16.11         Other
Rights; Fiduciary Duties.

 

The Series A Preferred
Units shall not have any voting powers, preferences or relative, participating, optional or other special rights, or qualifications,
limitations or restrictions thereof, other than as set forth in this Article XVI or as provided by applicable law.
Notwithstanding anything to the contrary in this Agreement, but subject to Section 7.16(c) and without reference to
the definition of “good faith” in Section 7.16(b), neither the General Partner nor the Board of Directors
nor any other Indemnitee shall owe any fiduciary duties to Series A Holders, other than a contractual duty of good faith and
fair dealing.

 

    	 	87	 

     

    

 

Article XVII

GENERAL
PROVISIONS

 

Section 17.1         Addresses
and Notices.

 

(a)          Any
notice, demand, request, report or proxy materials required or permitted to be given or made to a Partner under this Agreement
shall be in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail or
by other means of written communication to the Partner at the address described below. Any notice, payment or report to be given
or made to a Partner hereunder shall be deemed conclusively to have been given or made, and the obligation to give such notice
or report or to make such payment shall be deemed conclusively to have been fully satisfied, upon sending of such notice, payment
or report to the Record Holder of such Partnership Interests at his address as shown on the records of the Transfer Agent or as
otherwise shown on the records of the Partnership, regardless of any claim of any Person who may have an interest in such Partnership
Interests by reason of any assignment or otherwise. Notwithstanding the foregoing, if (i) a Partner shall consent to receiving
notices, demands, requests, reports or proxy materials via electronic mail or by the Internet or (ii) the rules of the Commission
shall permit any report or proxy materials to be delivered electronically or made available via the Internet, any such notice,
demand, request, report or proxy materials shall be deemed given or made when delivered or made available via such mode of delivery.
An affidavit or certificate of making of any notice, payment or report in accordance with the provisions of this Section 17.1
executed by a member of the Board of Directors, the General Partner, the Transfer Agent or the mailing organization shall be prima
facie evidence of the giving or making of such notice, payment or report. If any notice, payment or report addressed to a Record
Holder at the address of such Record Holder appearing on the books and records of the Transfer Agent or the Partnership is returned
by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver it, such notice,
payment or report and any subsequent notices, payments and reports shall be deemed to have been duly given or made without further
mailing (until such time as such Record Holder or another Person notifies the Transfer Agent or the Partnership of a change in
his address) if they are available for the Partner at the principal office of the Partnership for a period of one year from the
date of the giving or making of such notice, payment or report to the other Partners. Any notice to the Partnership shall be deemed
given if received by the General Partner or the Board of Directors at the principal office of the Partnership designated pursuant
to Section 2.3. The General Partner and the Board of Directors may rely and shall be protected in relying on any notice
or other document from a Partner or other Person if believed by it to be genuine.

 

(b)          The
terms “in writing,” “written communications,” “written notice” and words of similar import
shall be deemed satisfied under this Agreement by use of e-mail and other forms of electronic communication.

 

    	 	88	 

     

    

 

Section 17.2         Further
Action. The parties shall execute and deliver all documents, provide all information and take
or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

 

Section 17.3         Binding
Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective heirs, executors, administrators, successors, legal representatives and permitted assigns.

 

Section 17.4         Integration.
This Agreement constitutes the entire agreement among the parties hereto pertaining to the subject matter hereof and supersedes
all prior agreements and understandings pertaining thereto, including the Prior Agreement.

 

Section 17.5         Creditors.
None of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership.

 

Section 17.6         Waiver.
No failure by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall constitute waiver of any such breach of any other covenant,
duty, agreement or condition.

 

Section 17.7         Counterparts.
This Agreement may be executed in counterparts, all of which together shall constitute an agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become
bound by this Agreement immediately upon affixing its signature hereto or, in the case of a Person acquiring a Limited Partner
Interest, pursuant to Section 10.2(a), immediately upon the acquisition of such Limited Partner Interests without execution
hereof.

 

Section 17.8         Applicable
Law; Forum, Venue and Jurisdiction.

 

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

 

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

 

    	 	89	 

     

    

 

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

 

(ii)         irrevocably
submits to the exclusive jurisdiction of the Court of Chancery of the State of Delaware (or, if such court does not have subject
matter jurisdiction thereof, any other court located in the State of Delaware with subject matter jurisdiction), unless otherwise
provided for by Marshall Islands law, in connection with any such claim, suit, action or proceeding;

 

(iii)        agrees
not to, and waives any right to, assert in any such claim, suit, action or proceeding that (A) it is not personally subject
to the jurisdiction of the Court of Chancery of the State of Delaware or of any other court to which proceedings in the Court of
Chancery of the State of Delaware may be appealed, (B) such claim, suit, action or proceeding is brought in an inconvenient
forum, or (C) the venue of such claim, suit, action or proceeding is improper;

 

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

 

(v)         consents
to process being served in any such claim, suit, action or proceeding by mailing, certified mail, return receipt requested, a copy
thereof to such party at the address in effect for notices hereunder, and agrees that such services shall constitute good and sufficient
service of process and notice thereof; provided, nothing in clause (v) hereof shall affect or limit any right
to serve process in any other manner permitted by law.

 

Section 17.9         Invalidity
of Provisions. If any provision or part of a provision of this Agreement is or becomes for any
reason, invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions
and part thereof contained herein shall not be affected thereby and this Agreement shall, to the fullest extent permitted by law,
be reformed and construed as if such invalid, illegal or unenforceable provision, or part of a provision, had never been contained
herein, and such provision or part reformed so that it would be valid, legal and enforceable to the maximum extent possible.

 

    	 	90	 

     

    

 

Section 17.10         Consent
of Partners. Each Partner hereby expressly consents and agrees that, whenever in this Agreement
it is specified that an action may be taken upon the affirmative vote or consent of less than all of the Partners (including any
amendment to this Agreement), such action may be so taken upon the concurrence of less than all of the Partners and each Partner
shall be bound by the results of such action (including any amendment to this Agreement).

 

Section 17.11         Facsimile
Signatures. The use of facsimile signatures affixed in the name and on behalf of the transfer
agent and registrar of the Partnership on certificates representing Common Units and the Series A Preferred Units is expressly
permitted by this Agreement.

 

Section 17.12         Third-Party
Beneficiaries. Each Partner agrees that any Indemnitee shall be entitled to assert rights and
remedies hereunder as a third party beneficiary hereto with respect to those provisions of this Agreement affording a right, benefit
or privilege to such Indemnitee.

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT
BLANK]

 

    	 	91	 

     

    

 

IN WITNESS WHEREOF,
the parties hereto have executed this Second Amended and Restated Agreement of Limited Partnership as a Deed as of the date first
written above.

 

	 	Höegh LNG GP LLC
	 	 	 
	 	By:	/s/ Sveinung Støhle
	 	 	Name: Sveinung Støhle
	 	 	Title: Director

 

	 	Höegh LNG Holdings Ltd.
	 	 	 
	 	By:	/s/ Camilla Nyhus-Møller
	 	 	Name: Camilla Nyhus-Møller
	 	 	Title: Attorney-in-fact

 

Signature
Page to

Second Amended and Restated

Agreement of Limited Partnership

 

     

     

    

 

Exhibit A

to the Second Amended and Restated

Agreement of Limited Partnership of

HÖEGH LNG PARTNERS LP

 

Certificate Evidencing Common Units

Representing Limited Partner Interests in

HÖEGH LNG PARTNERS LP

 

	No. _____________	__________ Common Units

 

In accordance with
Section 4.1 of the Second Amended and Restated Agreement of Limited Partnership of Höegh LNG Partners LP,
as amended, supplemented or restated from time to time (the “Partnership Agreement”), Höegh LNG
Partners LP, a Marshall Islands limited partnership (the “Partnership”), hereby certifies that                               
(the “Holder”) is the registered owner of the above designated number of Common Units representing limited
partner interests in the Partnership (the “Common Units”) transferable on the books of the Partnership,
in person or by duly authorized attorney, upon surrender of this Certificate properly endorsed. The rights, preferences and limitations
of the Common Units are set forth in, and this Certificate and the Common Units represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Partnership Agreement. Copies of the Partnership Agreement are on file
at, and will be furnished without charge on delivery of written request to the Partnership at, the principal office of the Partnership
located at Wessex House, 5th Floor, 45 Reid Street, Hamilton, HM 12, Bermuda. Capitalized terms used herein but not
defined shall have the meanings given them in the Partnership Agreement.

 

The Holder, by accepting
this Certificate, is deemed to have (a)  requested admission as, and agreed to become, a Limited Partner and to have agreed
to comply with and be bound by and to have executed the Partnership Agreement, (b) represented and warranted that the Holder
has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement and (c) made
the waivers and given the consents and approvals contained in the Partnership Agreement.

 

This Certificate shall
not be valid for any purpose unless it has been countersigned and registered by the Transfer Agent and Registrar. This Certificate
shall be governed by and construed in accordance with the laws of the Marshall Islands.

 

Dated: ___________________

 

	Countersigned and Registered by:	HÖEGH LNG PARTNERS LP

 

	 	 	By:	 
	as Transfer Agent and Registrar	 	 	Title:

 

	By:	 	 	By:	 
	 	Authorized Signature	 	 	Secretary

 

    	 	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

HÖEGH LNG 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 Höegh LNG 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 Second Amended and Restated

Agreement of Limited Partnership of

HÖEGH LNG PARTNERS LP

 

Certificate Evidencing Series A
Cumulative

Redeemable Preferred Units 

Representing Limited Partner Interests in

HÖEGH LNG PARTNERS LP

 

	No.                       	             Series A Preferred Units

 

In accordance with
Section 4.1 of the Second Amended and Restated Agreement of Limited Partnership of Höegh LNG Partners LP, as amended,
supplemented or restated from time to time (the “Partnership Agreement”), Höegh LNG Partners LP,
a Marshall Islands limited partnership (the “Partnership”), hereby certifies that                     (the
“Holder”) is the registered owner of the above designated number of 8.75% Series A Cumulative Redeemable
Preferred Units representing limited partner interests in the Partnership (the “Series A Preferred Units”)
transferable on the books of the Partnership, in person or by duly authorized attorney, upon surrender of this Certificate properly
endorsed. The rights, preferences and limitations of the Series A Preferred Units are set forth in, and this Certificate and
the Series A Preferred Units represented hereby are issued and shall in all respects be subject to the terms and provisions
of, the Partnership Agreement. Copies of the Partnership Agreement are on file at, and will be furnished without charge on delivery
of written request to the Partnership at, the principal office of the Partnership located at Wessex House, 5th Floor,
45 Reid Street, Hamilton, HM 12, Bermuda. Capitalized terms used herein but not defined shall have the meanings given them
in the Partnership Agreement.

 

The Holder, by accepting
this Certificate, is deemed to have (a) requested admission as, and agreed to become, a Limited Partner and to have agreed
to comply with and be bound by and to have executed the Partnership Agreement, (b) represented and warranted that the Holder
has all right, power and authority and, if an individual, the capacity necessary to enter into the Partnership Agreement, and (c) made
the waivers and given the consents and approvals contained in the Partnership Agreement.

 

This Certificate shall
not be valid for any purpose unless it has been countersigned and registered by the Transfer Agent and Registrar. This Certificate
will be governed by and construed in accordance with the laws of the Marshall Islands.

 

	Dated:  ____________	Höegh LNG Partners LP

 

	Countersigned and Registered by:	 

 

	 	 	By:	 
	as Transfer Agent and Registrar	 	 	Title:

 

	By:	 	 	By:	 
	Authorized Signature	 	 	Secretary

 

    	 	B-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 SERIES A PREFERRED
UNITS

in

HÖEGH LNG 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 the Partnership.

 

    	 	B-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 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-3Exhibit

EXECUTION COPY

LUCERNE-COMSTOCK MINE PROJECT  
OPTION AGREEMENT
This Option Agreement (this “Agreement”) is made as of October 3, 2017 (the “Execution Date”) by and among Comstock Mining Inc., a Nevada corporation (“Comstock”), the address of which is 1200 American Flat Toll Road, Virginia City, NV 89440, Comstock Mining LLC, a Nevada limited liability company (the “Project Holding Company”), with the same address of Comstock, and Tonogold Resources, Inc., a Delaware corporation (“Tonogold”), the address of which is 5666 La Jolla Boulevard, #315, La Jolla, CA 92037.
RECITALS
WHEREAS, Comstock and Tonogold want to participate in certain activities, including but not limited to, engineering, development, drilling and test-work, towards completing a technical and economic feasibility assessment on the Lucerne Property, and if all obligations and prerequisites are satisfied and subject to compliance with this Agreement, Comstock and Tonogold want to effect a joint venture for the future development and mining of mineral resources on the Lucerne Property; and
NOW THEREFORE, in consideration of the covenants and terms contained herein, Comstock and Tonogold agree that:
1.PURPOSES
1.1    General
Comstock, the Project Holding Company and Tonogold hereby enter into this Agreement to grant Tonogold (i) the right to undertake and complete those, engineering, development, drilling and test-work activities that are determined, on a commercially reasonable basis, to be necessary to complete a technical and economic feasibility assessment for commercially viable mining of gold, silver or other mineral resources on the Lucerne Property, which assessment will include a commercially viable mine plan, mine economics and production schedules, and (ii) if following completion of such assessment, mining operations as set forth therein would be commercially reasonable, the right, by virtue of the investment in these activities to acquire an interest in the Project Holding Company on the Funding Completion Date, in each case subject to the terms and conditions hereof, including Section 5.1.
1.2    Project Holding Company
Substantially all of the Properties are currently owned by the Project Holding Company. The Project Holding Company is a wholly-owned subsidiary of Comstock. 
To the extent that any Lucerne Property is not presently owned by the Project Holding Company, Comstock covenants and agrees to cause such Lucerne Property to be transferred to the Project Holding Company on or prior to the first anniversary of the Commencement Date, provided that Tonogold shall have the right to request that such transfer be made at an earlier date, in which 

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case Comstock covenants and agrees to cause such Lucerne Property to be transferred to the Project Holding Company on or prior to the ninetieth (90th) day after Tonogold requests such transfer to be made, at Tonogolds’s expense, with the expenses relating thereto constituting Project Costs. 
To the extent that the Project Holding Company owns or holds other assets or properties that are excluded from the Properties, Comstock covenants and agrees to cause such assets or property to be transferred from the Project Holding Company to Comstock or another designee of its choice, on or prior to the first anniversary of the Commencement Date, provided that Tonogold shall have the right to request that such transfer be made at an earlier date, in which case Comstock covenants and agrees to cause such assets or properties to be transferred from the Project Holding Company to Comstock or another designee of its choice, on or prior to the ninetieth (90th) day after Tonogold requests such transfer to be made, at Tonogolds’s expense, with the expenses relating thereto constituting Project Costs.
Tonogold has the right (but not the obligation) at any time during the term of this Agreement to give written notice to Comstock irrevocably notifying Comstock that Tonogold shall not exercise its option to purchase the American Flat PP&E pursuant to Section 8.9. If such notice is given by Tonogold, Comstock covenants and agrees to cause the American Flat PP&E to be transferred out of the Project Holding Company by the date which is the later of (a) first anniversary of the Commencement Date or (b) the earlier of (i) the ninetieth (90th) day after Tonogold advises that it will not be exercising the American Flat PP&E option or (ii) the expiry of the American Flat PP&E option pursuant to Section 8.9.
In the event that Tonogold exercises its option to acquire the American Flat PP&E pursuant to Section 8.9, and to the extent that any American Flat PP&E is not presently owned by the Project Holding Company, Comstock covenants and agrees to cause such American Flats PP&E to be transferred to the Project Holding Company on or prior to the ninetieth (90th) day after the date Tonogold gives notice of its decision to exercise the American Flat PP&E option pursuant to Section 8.9.
Tonogold and Comstock agree that Comstock shall have the right to incorporate the terms, conditions, provisions and protections included in this Agreement mutatis mutandis into the operating agreement of the Project Holding Company.
2.    INTERPRETATION 
2.1    Definitions
Unless the context otherwise requires, capitalized terms used in this Agreement shall have the meanings ascribed to such terms in Exhibit A annexed hereto or elsewhere in this Agreement. References to “herein,” “hereto” and the like mean this Agreement as a whole and not any particular provision hereof and to “representatives” of a person shall mean general partners, directors, officers, managers, trustees, employees, agents, representatives, consultants, advisors, counsel or nominees of such person and shall include Affiliates of such person when acting on 

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behalf of such person (and general partners, directors, officers, managers, trustees, employees, agents, representatives, consultants, advisors, counsel or nominees of such Affiliates).
2.2    Cross References
Cross-references in this Agreement to Sections, Subsections and Exhibits refer to Sections, Subsections and Exhibits of or annexed to this Agreement, unless specified otherwise.
2.3    Number and Gender
Wherever words used herein are in the singular, such words include the plural, and vice versa. Similarly, whenever the neuter, masculine or feminine is used, the others are included. The word “person” means an individual or an entity of any kind (including, without limitation, any association, trust, union, organization, government or judicial or regulatory body or authority of any kind).
2.4    Exhibits
Each of the Exhibits and Appendices annexed hereto is incorporated by reference into this Agreement and shall comprise an integral part hereof.
3.    REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1    Representations and Warranties of Tonogold
Tonogold hereby represents and warrants to Comstock, and acknowledges that Comstock is relying on such representations and warranties to enter into this Agreement, as follows:
(a)    Tonogold is a corporation duly incorporated and in good standing under the Laws of the State of Delaware;
(b)    Tonogold has been authorized by all necessary corporate action to enter this Agreement;
(c)    Tonogold has full corporate power, authority and capacity to enter into and to carry out its obligations under this Agreement and is fully qualified to carry on business in the State of Nevada and elsewhere where Tonogold carries on business;
(d)    Tonogold’s entry into this Agreement does not and will not conflict with, and does not and will not result in a breach of, any of the terms of its governing documents or any agreement or instrument that Tonogold is a party to;
(e)    Tonogold has obtained all approvals, consents and authorizations of its directors, shareholders and contracting parties (if any) and of all regulatory authorities required in connection with its entering into and carrying out its obligations under or contemplated by this Agreement;

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(f)    no obligation of Tonogold in or contemplated by this Agreement conflicts with or shall result in the breach of any term in the articles of incorporation of Tonogold, any agreement or binding obligation of Tonogold, or any Laws or regulatory requirements applicable to Tonogold;
(g)    Tonogold has duly executed and delivered this Agreement, which binds Tonogold in accordance with the terms hereof; 
(h)    Tonogold has conducted its own independent investigation, review and analysis of the Project Holding Company and the Properties, and acknowledges that it has been provided adequate access to the personnel, assets, books and records of Comstock for such purpose. Tonogold acknowledges and agrees that: (i) in making its decision to enter into this Agreement and to consummate the transactions contemplated hereby, Tonogold has relied solely upon its own investigation and the express representations and warranties of Comstock set forth in this Agreement; and (ii) none of Comstock or its Affiliates or representatives or any other person has made any representation or warranty as to the Project Holding Company, the Properties or any other matter, except as expressly set forth in this Agreement;
(i)    except for the express representations and warranties of Comstock set forth in this Agreement, Tonogold acknowledges and agrees that (i) Comstock makes no representation or warranty, express or implied, as to any matter whatsoever relating to the Project Holding Company, the Properties or any other matter, including as to (A) merchantability or fitness for any particular use or purpose, (B) any proposed mining or other business or operations, (C) the likelihood of governmental authority or regulatory approval of any proposed mining or other business or operations or (D) the probable success or profitability of any proposed mining or other business or operations and (ii) neither Comstock nor any of its representatives or Affiliates will have or will be subject to any liability or obligation to Tonogold or any other person resulting from the distribution to Tonogold or any Affiliates or representatives of Tonogold, or its or their use of, any information relating to the Project Holding Company, the Properties or any other matter, including any technical reports, descriptive memoranda, summary business descriptions or other information, documents or material made available, whether orally or in writing, “data rooms,” management presentations, functional “break-out” discussions, responses to questions, due diligence reviews, or any other form in expectation of the transactions contemplated by this Agreement, or otherwise, including during the negotiations with respect to the transactions contemplated by this Agreement;
(j)    Tonogold has sufficient cash on hand or other sources of immediately available funds to enable it to make full and timely payment of the payments required on the date hereof and to consummate the transactions contemplated by this Agreement;
(k)    Tonogold acknowledges and agrees that, as provided in Section 3.2(p), to the knowledge of Comstock, the Properties do not have any proven or probable reserves and Tonogold acknowledges, understands and agrees that Comstock makes no representation or warranty as to the completeness, accuracy, materiality or validity of any mineral resource estimates or other scientific or technical information relating to the Properties, including, without limitation, that described in the Existing Data, and that nothing in this Agreement shall be deemed to be a 

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representation or a warranty by Comstock that any of the Properties contain any economically feasible, valuable or otherwise useful mineral resources or deposits; and
(l)    there are no lawsuits pending or threatened against Tonogold or its Affiliates or representatives relating to or affecting the Project Holding Company, the Properties or this Agreement and there are no proceedings pending for, and there is no basis for the institution of any proceedings leading to, the dissolution or winding-up of Tonogold or the placing of Tonogold into bankruptcy or subject to any other Laws governing the affairs or status of insolvent persons or corporations.
3.2    Representations and Warranties of Comstock
Comstock hereby represents and warrants to Tonogold, and acknowledges that Tonogold is relying on such representations and warranties to enter into this Agreement, as follows:
(a)    Comstock is a corporation duly incorporated and in good standing under the Laws of the State of Nevada;
(b)    the Project Holding Company is a limited liability company duly organized and in good standing under the Laws of the State of Nevada;
(c)    Comstock has full corporate power, authority and capacity to enter into and to carry out its obligations under this Agreement;
(d)    the Project Holding Company has full limited liability company power, authority and capacity to enter into and to carry out its obligations under this Agreement;
(e)    Comstock has obtained all approvals, consents and authorizations of its directors required in connection with entering into and carrying out its obligations under or contemplated by this Agreement;
(f)    the Project Holding Company has obtained all approvals, consents and authorizations of its sole member and manager required in connection with entering into and carrying out its obligations under or contemplated by this Agreement;
(g)    assuming compliance by the parties of their respective obligations hereunder, Comstock and the Project Holding Company have no obligation contemplated by this Agreement that conflicts with or shall result in the breach of (i) the articles of incorporation of Comstock or (ii) any agreement or binding obligation of Comstock or any Laws or regulatory requirement applicable to Comstock, other than those conflicts or breaches that would not have a material adverse effect on Tonogold, the Project, the Project Holding Company, Comstock or the consummation of the transactions contemplated by this Agreement;
(h)    Comstock and the Project Holding Company have duly executed and delivered this Agreement, which binds Comstock in accordance with the terms hereof;

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(i)    Comstock or the Project Holding Company is the legal or beneficial owner of one hundred percent (100%) of the mineral rights in the Properties and the Mining Parcels, free and clear of any liens or Encumbrances other than Permitted Encumbrances, royalties or Encumbrances described in Exhibit B, Exhibit F and Exhibit G annexed hereto;
(j)    Comstock or the Project Holding Company have paid all taxes and governmental, regulatory or contractual access, administration, assessment and other fees as are required to the date hereof to register, hold title to, maintain and transfer good title to the Properties, except for those that are being contested in good faith by appropriate means or proceedings or where the failure to have done so would not have a material adverse effect on Tonogold, the Project, the Project Holding Company, Comstock or the consummation of the transactions contemplated by this Agreement;
(k)    there are no material adverse claims or challenges against or to the ownership of or title to any of the Properties nor, to the knowledge of Comstock, is there any basis therefor, except for those that are being contested in good faith by appropriate means or proceedings as set forth on Exhibit B annexed hereto or where the claim or challenge, if successful, would not have a material adverse effect on Tonogold, the Project, the Project Holding Company, Comstock or the consummation of the transactions contemplated by this Agreement;
(l)    there are no outstanding agreements or options to acquire or purchase any interest in any of the Properties, to explore, develop or exploit any mineral claims, rights or interests comprising any of the Properties, or to receive any royalties, net profits or other proceeds from the production or exploitation of any minerals or products from any of the Properties other than those described in Exhibit B and Exhibit G annexed hereto;
(m)    Comstock and the Project Holding Company’s entry into this Agreement does not and will not conflict with, and does not and will not result in a breach of, any agreement or instrument to which Comstock is party, except for conflicts or breaches which would not have a material adverse effect on Tonogold, the Project, the Project Holding Company, Comstock or the consummation of the transactions contemplated by this Agreement, it being understood that the transactions contemplated by this Agreement are expressly permitted under the terms of the Debenture;
(n)    each of Comstock and the Project Holding Company has due and sufficient right and authority to transfer its right, title and interest in and to each of the Properties to which it has fee ownership in accordance with this Agreement, subject to any necessary governmental consents for the transfer of mining leases, concessions, licenses or other interests;
(o)    there are no lawsuits or legal proceedings pending or, to the knowledge of Comstock, threatened against Comstock or the Project Holding Company affecting the Properties, other than communications provided to Tonogold prior to the date hereof for which Tonogold has confirmed receipt;
(p)    Comstock has delivered to or made available for inspection by Tonogold all Existing Data in its possession or control that it reasonably believes to be material to the transactions contemplated hereby, and true and correct copies of all leases or other contracts relating to the Properties; to the knowledge of Comstock, the Properties do not have any proven or probable 

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reserves; notwithstanding the foregoing provisions of this Section 3.2, Tonogold understands that Comstock makes no representation or warranty as to the completeness, accuracy, materiality or validity of any mineral resource estimates or other scientific or technical information relating to the Properties, including, without limitation, that described in the Existing Data, and that nothing in this Subsection shall be deemed to be a representation or a warranty that any of the Properties contain any economically feasible, valuable or otherwise useful mineral resources or deposits; 
(q)    to the extent that any governmental or regulatory consents, waivers, approvals, authorizations, licenses or permits (collectively, “permits”) not presently possessed by Comstock or the Project Holding Company are required to conduct Exploration or other Operations on any of the Properties, such permits shall be the sole responsibility of Tonogold to obtain or facilitate obtaining them;
		
	(r)
	the Project Holding Company is a wholly-owned subsidiary of Comstock; and

(s)    neither entering into this Agreement nor Tonogold exercising the Option as contemplated herein, will adversely impact the various permits granted to either Comstock and/or the Project Holding Company, assuming Tonogold’s compliance with applicable Laws.
3.3    Covenants and Undertakings of Comstock
Comstock hereby covenants and agrees as follows:
(a)    Comstock shall act in a manner that is consistent with the requirements of this Agreement and shall cause the Project Holding Company to act in accordance with this Agreement;
(b)    Comstock shall make available to Tonogold and its representatives all records and files relating to the Properties or any of them and permit Tonogold and its representatives at Tonogold’s expense to take abstracts therefrom and make copies thereof and to provide all reasonable administrative support to Tonogold as required from time to time (subject to being reimbursed for such administrative support); 
(c)    Comstock shall promptly provide Tonogold with copies of any and all notices and correspondence received by Comstock from government agencies in respect of the Properties or any creditors in respect of any alleged event of default, including without limitation the creditors under the Debenture, or any other notice or correspondence received by Comstock related to any other matter that has resulted or would reasonably be expected to result in a material adverse effect on Tonogold, the Project, the Project Holding Company, Comstock or the consummation of the transactions contemplated by this Agreement; 
(d)    Comstock shall continue to satisfy the obligations under applicable Laws, including safety, health and environment obligations, relating to the Properties as described in Exhibit C annexed hereto, including the Special Use Permit No. 2000-222-A-4 of Comstock annexed hereto as Appendix A; and

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(e)    Comstock shall provide ongoing support for Operations in a manner consistent with applicable Laws, as described in Exhibit C annexed hereto, including the Special Use Permit No. 2000-222-A-4 of Comstock annexed hereto as Appendix A; provided, that Comstock is promptly paid or reimbursed for the fully absorbed cost of such support.
(f)     That during the term of this Agreement, Comstock shall not sell nor agree to sell, dispose or option any of its interest in the Project Holding Company (other than Permitted Encumbrances).
3.4    Covenants and Undertakings of Tonogold
Tonogold hereby covenants and agrees as follows:
(a)    Tonogold shall refrain from any action or activity contrary to or inconsistent with the terms of this Agreement;
(b)    Tonogold shall make available to Comstock and its representatives all records and files relating to the Operations, the Properties or any of them and permit Comstock and its representatives at Comstock’s expense to take abstracts therefrom and make copies thereof; 
(c)    Tonogold shall promptly provide Comstock with any and all notices and correspondence received by Tonogold from or sent by Tonogold to any regulatory or government authorities or bodies in respect of the Operations, the Properties or any of them; 
(d)    Tonogold shall observe and perform all Environmental and Mining Compliance and all other Continuing Obligations relating to any or all of the Operations or the Properties;
(e)    Tonogold shall observe, complete and satisfy all requirements related to the Operations under applicable Law, including, without limitation, obtaining all permits; 
(f)    Tonogold shall ensure that its employees, contractors, consultants and other representatives shall be aware of and familiarize themselves with Comstock’s policies and procedures while on the Properties and shall at all times strictly adhere to those policies and procedures, so long as those policies and procedures (which terms include instructions and directions) are reasonably designed to protect health, safety, the environment, the confidentiality of confidential, non-public material of proprietary information or to comply with obligations under applicable Law and Tonogold acknowledges the sole right of Comstock to refuse any person entry to site and/or remove any person from site that refuses to adhere to the policies and procedures of Comstock;
(g)    Tonogold shall not take any action or participate in any activity that is intended, or would reasonably be expected, to harm the reputation of Comstock; 
(h)    Except as otherwise permitted in this Agreement, Tonogold shall not, without the prior written approval of Comstock (such approval shall be at Comstock’s absolute discretion), directly or indirectly, either individually or on behalf of or through any person, for the period commencing on the Execution Date until the day being 30 months from the earlier of either (x) the termination of this Agreement or (y) the Funding Completion Date (whichever the earlier), in any capacity, (i) 

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locate, stake, lease, option, purchase or otherwise acquire or become entitled to acquire any interest, directly or indirectly, in any property, mineral rights, land rights, surface rights, water rights or other mining-related assets, or (ii) own, manage, stake, control, advise, operate, provide services to, consult with, receive remuneration from, be employed by any person engaged or proposing to engage in, or otherwise engage in any manner in the mining business (the activities described in the preceding clause (i) and clause (ii), collectively, “Appropriate”) property or rights within the Non-compete Area demarcated as on the map attached hereto as Exhibit B-1 (the “Non-Compete Area”), excluding those areas within the Area of Influence (as defined below);
(i)    Except as otherwise permitted in this Agreement, Tonogold shall not, directly or indirectly, either individually or on behalf of or through any person, for the period commencing on the Execution Date until the day being 30 months from the earlier of either (x) the termination of this Agreement or (y) the Funding Completion Date, in any capacity, Appropriate property or rights outside of the SUP Border Area and within the Area of Influence demarcated on the map attached hereto as Exhibit B-1 (the “Area of Influence”), unless Tonogold, in order of the sequence described: (i) first, provides Comstock with written notice that includes the details of the commercial terms for the arrangement with respect to such property within the Area of Influence; (ii) second, offers Comstock the opportunity to acquire a 49% interest of such property or rights being acquired (with Tonogold retaining a 51% interest) within the Area of Influence; and (iii) third, if and only if Comstock elects not to acquire 49% of such property or rights within the Area of Influence pursuant to clause (ii) above, Tonogold shall be permitted to acquire 100% of such property or rights within the Area of Influence.  If Comstock elects to acquire 49% of such property or rights pursuant to clause (ii) in the preceding sentence, a separate joint venture agreement to include Comstock and Tonogold shall be entered into which shall provide among other matters, (a) that each party shall bear their respective share of all costs (including the acquisition cost and project expenditure), (b) that decisions with respect to such joint venture shall be made in accordance with the governance provisions set forth in Section 7 of this Agreement, and (c) that Comstock and Tonogold agree that they shall contribute such property or rights to the Project Holding Company as of the Funding Completion Date. Comstock shall have sixty (60) days from the date that Tonogold provides written notice of the proposed arrangement involving the Area of Influence. If Comstock fails to provide notice to Tonogold within the 60-day period it will be deemed that Comstock has elected not to participate in the proposed transaction of such property or rights within the Area of Influence. For the sake of clarity, Comstock shall be entitled to Appropriate 100% of any property or rights situated within the Non-Compete Area or the Area of Influence from time to time or at any time. Comstock hereby agrees that if Comstock acquires property or rights within the Area of Influence, Comstock shall provide Tonogold with notice of such acquisition and offer to supplement Exhibit B to include such property or rights, in exchange for Tonogold reimbursing Comstock for 51% of the purchase price of acquiring such property or rights. 
(j)    Tonogold shall timely complete and satisfy all of its funding obligations contemplated by this Agreement; 
(k)    Tonogold shall cause its Affiliates and representatives to observe, complete and satisfy the obligations under Section 3.4 as if they were Tonogold;  

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(l)    Tonogold shall perform all work contemplated to be conducted by Tonogold under this Agreement with due diligence and in a professional and workmanlike manner in accordance with common industry practices; and
(m)    Tonogold shall conduct the Operations in a manner that is substantially consistent with the initial Program and Budget, it being understood that subsequently approved Programs and Budgets and supplementary Budgets may differ from the initial Program and Budget.
3.5    Recorded Title
The Project Holding Company shall remain the sole legal and beneficial owner of the Lucerne Property and title to the real and personal property included in the Lucerne Property shall remain vested and recorded solely in the name of the Project Holding Company. This Section 3.5 shall apply to the Lucerne Property held by Comstock after they are transferred to the Project Holding Company in accordance therewith.
Unless the option to purchase the American Flat PP&E pursuant to Section 8.9 lapses or is terminated or the Option is terminated, cancelled or expires, the Project Holding Company shall remain the sole legal and beneficial owner of the American Flat PP&E and title to the real and personal property included in the American Flat PP&E shall remain vested and recorded solely in the name of the Project Holding Company. This Section 3.5 shall apply to the American Flat PP&E held by Comstock after they are transferred to the Project Holding Company in accordance therewith.
3.6    Loss of Title
All costs of defending any claim or challenge to title to any of the Properties resulting from any actions, or a breach of this Agreement, by any Participant shall be borne by such Participant. Any other costs of maintaining or defending title to any of the Properties shall be borne by the Project Holding Company. Such Participant or the Project Holding Company, as the case may be, shall promptly reimburse the other Participant or the Project Holding Company for any such costs incurred by it. Notwithstanding anything contained herein to the contrary, the Project Holding Company shall manage or direct the management of any such defense or maintenance; provided, however, that, so long as Comstock is the beneficial owner of 50% or more of the equity or voting interests of the Project Holding Company, Comstock shall manage or direct the management of any such defense or maintenance.
3.7    Indemnities
(a)    As used herein, “Relevant Party” means a Participant or the Project Holding Company. Each Relevant Party (the “Indemnifying Party”) shall indemnify the other Relevant Parties and their respective directors, officers, employees, agents, accountants, attorneys and Affiliates and other representatives (each an “Indemnified Party”) against any loss, cost, expense, damage or liability (including legal fees and other expenses) arising out of or based on a breach by the Indemnifying Party of any representation, warranty, agreement or covenant contained in this Agreement.

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(b)    Comstock shall have no responsibility, obligation or liability whatsoever to Tonogold or its agents, employees or contractors, for any occurrence on or about the Properties or with respect to any property of Tonogold or its agents, employees or contractors, including, without limitation, any loss, injury or damage unless such loss, injury or damage is caused by the gross negligence or willful misconduct of Comstock or its agents, employees or contractors. Tonogold shall indemnify, defend and hold harmless Comstock and its officers, directors, shareholders, employees, agents, affiliates and successors, from and against any and all claims made or judicial or administrative actions filed (including, without limitation, reasonable attorneys’ fees) suffered or incurred by Comstock or any other of such Persons arising from or related to Tonogold’s drilling, geological assessment, inspections or other activities or omissions with respect to the Properties.
(c)    Tonogold acknowledges and agrees that, as provided in Section 3.2(p), to the knowledge of Comstock, the Properties do not have any proven or probable reserves and Tonogold acknowledges, understands and agrees that Comstock makes no representation or warranty as to the completeness, accuracy, materiality or validity of any mineral resource estimates or other scientific or technical information relating to the Properties, including, without limitation, that described in the Existing Data, and that nothing in this Agreement shall be deemed to be a representation or a warranty by Comstock that any of the Properties contain any economically feasible, valuable or otherwise useful mineral resources or deposits. Accordingly, Tonogold hereby irrevocably releases and forever discharges Comstock and its affiliates, predecessors, officers, directors, stockholders, agents, representatives, successors and assigns (individually, a “Releasee” and, collectively, the “Releasees”) from any and all actions, causes of action, claims, demands, damages, costs, losses, penalties, attorneys’ fees, obligations, judgments, expenses, compensation, rights and liabilities of any nature whatsoever, in law or equity, whether known or unknown, contingent or otherwise, which Tonogold now has, may ever have had in the past or may have in the future against any of the Releasees by reason of mineral resource estimates or other scientific or technical information relating to the Properties, including, without limitation, that described in the Existing Data, negotiating this Agreement or conducting due diligence related thereto.
(d)    If any third party claim or demand is asserted against an Indemnified Party in respect of which such Indemnified Party may be entitled to indemnification under this Agreement, written notice of such claim or demand shall promptly be given to the Indemnifying Party. The Indemnifying Party shall have the right, but not the obligation, by notifying the Indemnified Party within thirty (30) days after its receipt of the notice of the claim or demand, to assume the entire control of (subject to the right of the Indemnified Party, as the case may be, to participate, at the Indemnified Party's expense and with counsel of the Indemnified Party's choice, in) the defense, compromise or settlement of the claim or demand, including, at the Indemnifying Party's expense, employment of counsel of the Indemnifying Party's choice. Any settlement or compromise of the claim or demand by the Indemnifying Party shall include a full release of claims and causes of action against each Indemnified Party.
(e)    Each Participant shall hold the rights to indemnification in trust for each Indemnified Party who is a director, officer, employee, agent, accountant, attorney or Affiliate or representative of such Participant and shall do all such things as may be necessary or advisable to assert or enforce the rights of indemnification of such Indemnified Parties as herein provided.

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(f)    Notwithstanding anything contained herein to the contrary, if the breach by a Participant relates to the Properties or the Operations and the loss, damage or liability is borne primarily by the Project Holding Company, then all indemnification payments by such Participant shall be made to the Project Holding Company rather than the other Participant (provided, however, that this Subsection shall not limit indemnification payments due to the other Participant for its costs or expenses).
4.    RELATIONSHIP OF THE PARTICIPANTS
4.1    No Partnership
Nothing contained in this Agreement shall be deemed to constitute any Relevant Party to be a partner of any other Relevant Party, to create any fiduciary relationship among the Relevant Parties or, except as otherwise herein expressly provided, to constitute any Relevant Party to be an agent or legal representative of any other Relevant Party. The Participants do not intend to create, and this Agreement shall not be construed to create, any mining, commercial, tax or other partnership. No Relevant Party shall have any authority to act for or to assume any obligation or responsibility on behalf of any other Relevant Party, except as otherwise expressly provided herein. Except as expressly provided herein, the rights, duties, obligations and liabilities of the Relevant Parties shall be several and not joint or collective. Except as expressly provided herein, each Relevant Party shall be responsible only for its own obligations as herein set out and shall be liable only for its share of the costs and expenses of the other Relevant Parties as provided herein.
4.2    Other Business Opportunities
Except as expressly provided in this Agreement, each Relevant Party shall have the right independently to engage in and receive full benefits from business activities, as long as they do not violate the agreed upon non-compete clauses of this Agreement, without consulting any other Relevant Party. The doctrines of “corporate opportunity” and “business opportunity” shall not be applied to any other activity, venture or operation of any Relevant Party, and no Relevant Party shall have any obligation to any other Relevant Party with respect to any opportunity related to any property outside the Properties. Except as provided for in this Agreement or unless otherwise agreed in writing, no Participant shall have any obligation to mill, beneficiate or otherwise treat any other Participant's share of Products in any facility owned or controlled by such Participant.
4.3    No Royalty or Other Interests
Except as provided under this Agreement, no Participant shall be entitled or permitted to create any Encumbrance of any nature on all or any part of the Properties other than Permitted Encumbrances.
4.4    No Third Party Beneficiary Rights

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Except as expressly provided in Section 3.7, this Agreement shall be construed to benefit the Participants and their respective successors and permitted assigns only and shall not be construed to create third party beneficiary rights in any other person.
		
	4.5
	Permits

Notwithstanding anything contained herein to the contrary, so long as Comstock is the beneficial owner of 20% or more of the equity or voting interests of the Project Holding Company, if Tonogold, the Managing Director or any other person determines to obtain or facilitate the obtaining of any permit, whether necessary, expedient or otherwise, Tonogold and the Managing Director shall and shall cause such other person to consult with Comstock in advance in connection therewith and to take into account and give effect to commercially reasonable requests of Comstock.
		
	4.6
	The Project Holding Company

To the extent that this Agreement provides for the taking of any actions by, or the refrain from taking any actions by, the Project Holding Company, the Project Holding Company agrees to comply therewith. So long as Comstock is the beneficial owner of 20% or more of the equity or voting interests of the Project Holding Company, the Project Holding Company shall comply with and observe all policies and procedures of Comstock, including, without limitation, ethics, accounting, insider trading, health and safety, environmental, reporting and employment policies and procedures.
Upon, from and after the Funding Completion Date, the Project Holding Company shall, without any further liability or responsibility of or recourse to Comstock or its other Affiliates (other than in respect of a breach by Comstock), or any of its or their respective representatives, forever absolutely and irrevocably assume and be solely liable and responsible for any and all claims, liabilities, losses and taxes that are asserted against or incurred or sustained by them and that are or are alleged to be related to or associated with the ownership, use, possession, operation or conduct, occurring or relating to matters after the Execution Date, of the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) or any activities related thereto or conducted thereon.
		
	5.
	THE INTEREST, OPTION AND CONTRIBUTIONS BY PARTICIPANTS

5.1    The Option
(a)    Subject to the terms and conditions of this Agreement, Comstock hereby grants to Tonogold an exclusive, non-assignable and non-transferable option (the “Option”) to earn the membership interest in the Project Holding Company set forth in Section 6.1(a)(the “Interest”).
(b)    Subject to the terms and conditions of this Agreement, Comstock hereby grants to Tonogold the sole and exclusive right to undertake and complete those engineering, development, drilling and test-work activities that are determined by Tonogold, on a commercially reasonable basis, to be necessary to complete a technical and economic feasibility 

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assessment for commercially viable mining of gold, silver or other mineral resources on the Lucerne Property, which assessment will be in writing and include a commercially viable mine plan, mine economics and production schedules (the “Assessment”). Tonogold must deliver the Assessment to Comstock on or prior to the third (3rd) anniversary of the Commencement Date.
(c)    On the Execution Date, Tonogold shall deliver of an irrevocable, non-refundable wire payment of immediately available funds in the amount of two hundred sixty thousand dollars ($260,000) to Comstock, representing an option fee of $200,000 plus a $60,000 contribution to GF Comstock 2 LP’s legal costs pursuant to the definition of “Projects Costs” in Exhibit A.  On the Execution Date, Tonogold, Comstock and GF Comstock 2 LP shall execute and deliver a Subordination, Non-disturbance and Attornment Agreement in the form of Exhibit E annexed hereto and all of the conditions to the effectiveness of such agreement shall have been satisfied.  From the Execution Date until the close of business on April 3, 2018 (the “Continuance Deadline”), Tonogold shall make documented expenditures that shall constitute Phase One Project Funding (including timely payment, observation and performance of the Northern Comstock Funding (commencing in respect of the payment due in November 2017) and all Environmental and Mining Compliance and one hundred percent (100%) of all ongoing Project Costs). In the event that Tonogold does not elect to continue with this Agreement and therefore does not pay Comstock the payment described in Section 5.1(c)(i) prior to the Continuance Deadline, Tonogold shall be required to pay Comstock an amount equal to one million dollars ($1,000,000) less such documented Phase One Project Funding expenditures made prior to the Continuance Deadline.  The Option and all other rights granted to Tonogold under this Agreement are non-assignable, non-transferable and non-sublicenseable. The Option is exercisable after (but only after) (i) the Assessment has been completed and delivered to Comstock and Comstock shall have had ninety (90) days to review the Assessment and (ii) satisfaction of all of the following conditions:
(i)    Delivery of an irrevocable, non-refundable wire payment of immediately available funds in the amount of two million dollars ($2,000,000) to Comstock no later than the Continuance Deadline (the actual date that such payment is made by Tonogold, the “Commencement Date”); and
(ii)    Completion of the Phase One Project Funding (including timely payment, observation and performance of the Northern Comstock Funding and all Environmental and Mining Compliance and one hundred percent (100%) of all ongoing Project Costs), no later than the dates indicated in the following chart and in documented amounts no less than the cumulative amounts indicated as of such dates:

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	Cumulative Spending
	Deadline

	$300,000
	6 months after Commencement Date

	$600,000
	9 months after Commencement Date

	$900,000
	12 months after Commencement Date

	$1,200,000
	15 months after Commencement Date

	$7,000,000
	18 months after Commencement Date

For the purpose of clarity, each minimum amount listed in the above table shall not be deemed to be satisfied if the Northern Comstock Funding due and payable during such period has not been timely paid in full; and
(iii)    Delivery of written notice from two executive officers of Tonogold to Comstock certifying that the Phase One Project Funding has been completed on or prior to the date that is sixty (60) days after the completion of the Phase One Project Funding; and
(iv)    Completion of the Phase Two Project Funding (including timely payment, observation and performance of the Northern Comstock Funding and all Environmental and Mining Compliance and one hundred percent (100%) of all ongoing Project Costs), no later than the dates indicated in the following chart and in documented amounts no less than the cumulative amounts indicated as of such dates:
	
		
	Cumulative Spending
	Deadline

	$7,500,000
	21 months after Commencement Date

	$8,000,000
	24 months after Commencement Date

	$8,500,000
	27 months after Commencement Date

	$9,000,000
	30 months after Commencement Date

	$9,500,000
	33 months after Commencement Date

	$20,000,000
	36 months after Commencement Date

For the purpose of clarity, each minimum amount listed in the above table shall not be deemed to be satisfied if the Northern Comstock Funding due and payable during such period has not been timely paid in full; and
(v)    Delivery of written notice from two executive officers of Tonogold to Comstock certifying that the Phase Two Project Funding has been completed on or prior to the date that is sixty (60) days after the completion of the Phase Two Project Funding; and

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(vi)     Delivery of a written notice from Tonogold to Comstock indicating Tonogold’s desire to exercise the Option, on or prior to the date that is ninety (90) days after the date of Tonogold’s notice delivered pursuant to Section 5.1(c)(v); and
(vii)    To the extent that any Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) is not then presently owned by the Project Holding Company, Comstock shall have caused such Lucerne Property to be transferred to the Project Holding Company and to the extent that the Project Holding Company owns or holds other assets or properties that are excluded from the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised), such assets or properties shall have been transferred to Comstock or another designee of its choice.
So long as Tonogold shall not then be in material breach of this Agreement, the date upon which all of the conditions set forth under Sections 5.1(c)(i), 5.1(c)(ii), 5.1(c)(iii), 5.1(c)(iv), 5.1(c)(v), 5.1(c)(vi) and 5.1(c)(vii) have all been satisfied shall be defined in this Agreement as the “Funding Completion Date.”  If not timely exercised in accordance with Section 5.1(c)(vi), the Option shall automatically terminate, expire and be cancelled. If timely exercised, Tonogold shall be deemed to have acquired the Interest and become a member in the Project Holding Company, subject to the terms and conditions of this Agreement, and Comstock shall amend the operating agreement of the Project Holding Company to give effect thereto.
(d)    If at any time prior to the Funding Completion Date, Tonogold breaches any of the terms or conditions of this Agreement in any material respect, and such breach is not cured within the 30-day cure period provided in Section 5.3, or if Tonogold provides notice to Comstock thereby electing to cease making payments or fails to timely make any payment required pursuant to Section 5.1(c)(i), Section 5.1(c)(ii) or Section 5.1(c)(iv), then, on notice from Tonogold to Comstock or Comstock to Tonogold, (i) the Option shall automatically terminate, expire and be cancelled, (ii) all other rights granted to Tonogold under this Agreement and contemplated hereby shall automatically terminate, expire and be cancelled, (iii) Tonogold shall not be entitled to any return of or reimbursement or other compensation for any payments or expenditures made pursuant hereto or any return of capital by or distributions from Comstock or the Project Holding Company, (iv) Tonogold shall forfeit any and all rights or interest it may have had or could have earned in the Option, the Project Holding Company or the Properties and (v) Comstock, the Project Holding Company and their respective Affiliates and representatives shall be released from any and all obligations to Tonogold (other than Section 12.4). Upon termination of the Option, Tonogold shall thereafter be relieved of its payment obligations for Phase One Project Funding and/or Phase Two Project Funding, as the case may be. For the sake of clarity, Tonogold’s failure to timely make payments required pursuant to Section 5.1(c)(i), Section 5.1(c)(ii) or Section 5.1(c)(iv), shall not be deemed to be a breach or default of this Agreement by Tonogold, but shall entitle Comstock to terminate this Agreement as provided in the immediately preceding sentence. Tonogold’s failure to make the payments prior to the Continuance Deadline as contemplated by the first paragraph of Section 5.1(c) (prior to clauses (i)-(vii)) shall be deemed to be a breach and default of this Agreement, except as otherwise provided in such paragraph.

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(e)    Commencing on the Execution Date, Tonogold shall keep and make available for the examination and audit by Comstock, or Comstock’s authorized employees, agents or representatives during normal business hours, all data, materials and information, including but not limited to records of all receipts, costs and disbursements made by Tonogold with respect to the Phase One Project Funding and the Phase Two Project Funding, and all books, accounts, memoranda, files and all or any other documents indicating, documenting, verifying or substantiating the cost and appropriateness of any and all costs, expenditures and receipts relating to the Project. Comstock shall have the right to conduct such examination and audit, at Comstock’s cost, no more than three (3) times per calendar year, as part of an examination and audit.
(f)    Notwithstanding Section 5.1(c), at any time prior to the Funding Completion Date, subject to the terms and conditions of this Section 5.1(f), Tonogold may accelerate its acquisition of the Interest and become a member in the Project Holding Company, by irrevocably depositing funds in an escrow account for the sole benefit of the Project Holding Company, in the amount of the Phase One Project Funding and/or the Phase Two Project Funding yet to be funded in accordance with Section 5.1(c). Such notice shall be accompanied by an irrevocable notice by Tonogold to exercise its option to purchase the American Flat PP&E pursuant to Section 8.9 or, alternatively, Tonogold’s irrevocable election to terminate such option, in order to allow Comstock time to comply with Section 1.2. Tonogold’s right to acquire the Interest under this Section 5.1(f) shall be subject to and conditioned upon Tonogold’s satisfaction of all of the following conditions: (i) Tonogold shall not have breached any of the terms or conditions of this Agreement in any material respect and failed to cure such breach within the 30-day cure period provided in Section 5.3; (ii) funding from the escrow account of the remaining Phase One Project Funding and/or the Phase Two Project Funding, as the case may be, as and when due under Section 5.1(c); and (iii) Tonogold shall execute and deliver an irrevocable agreement, power of attorney and assignment of the Interest to Comstock (to be held in escrow by legal counsel designated in writing by Comstock) that irrevocably acknowledges and agrees that Tonogold shall automatically assign the Interest to Comstock if Tonogold shall not satisfy the Phase One Project Funding and the Phase Two Project Funding from the escrow account within the time frames indicated in Section 5.1(c)(ii) and 5.1(c)(iv), respectively, which agreement, power of attorney and assignment shall terminate and be released by Comstock’s designated legal counsel upon joint instructions from Comstock and Tonogold indicating that that the Phase One Project Funding and the Phase Two Project Funding have each been satisfied within the time frames indicated in Section 5.1(c)(ii) and 5.1(c)(iv), respectively. If at any time prior to the Funding Completion Date, Tonogold fails to make payments from the escrow account as and when due under Section 5.1(c)(ii) or Section 5.1(c)(iv), respectively, for any reason (including Tonogold’s voluntary election to cease making such payments under this Agreement), then (i) the Option shall automatically terminate, expire and be cancelled as provided in Section 5.1(d) and (ii) Tonogold and Comstock agree that they will provide joint instructions to the escrow agent directing that any funds remaining in escrow, less a deduction for any accrued but unpaid expenses payable by Tonogold hereunder, be delivered to Tonogold. 
(g)    From the Execution Date until the Funding Completion Date, Tonogold shall be entitled to appoint one individual who shall be invited to attend and observe all meetings of the Comstock’s board of directors or audit committee called by such governing body for the purpose of monitoring 

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the liquidity and budget planning of Comstock; provided, however, that such board observer agrees to hold in confidence and trust, to act in a fiduciary manner with respect to and not to disclose any information provided to or learned by the board observer acting in such capacity. Notwithstanding the provisions of this Section, Comstock reserves the right to exclude the board observer from portions of any meeting where and to the extent that Comstock reasonably believes, based on the advice of counsel, that excluding the board observer from attending such portion of the meeting is reasonably necessary (i) to preserve attorney-client, work product or similar privilege with respect to any matter, (ii) to comply with the terms and conditions of confidentiality agreements with third parties, or (iii) because Comstock has determined, in good faith, that there exists, with respect to the subject of such deliberation or such information, an actual or potential conflict of interest between the Participants. Furthermore, the members of the board of directors or audit committee shall be entitled to hold reasonable executive sessions which the board observer may not be invited to attend. Each board observer shall use the same degree of care to protect Comstock’s confidential and proprietary information as Tonogold uses to protect its own confidential and proprietary information of like nature, but in no circumstances with less than reasonable care. Tonogold acknowledges and agrees that any information received as a board observer may be deemed to be material non-public information, and, accordingly, Tonogold covenants and agrees not to purchase or sell the securities of Comstock during the term of this Agreement.
5.2    Right of Entry
Comstock and its employees, agents, independent contractors, accountants, attorneys and other representatives shall continue to have the unfettered and absolute right to access the Lucerne Property and to conduct metallurgical processing and testing, maintenance, reclamation, extraction of metals from new science and associated activities on any or all of the Lucerne Property at any time and from time to time so long as such activities do not unreasonably interfere with the work programs or operations being conducted by Tonogold. Furthermore, at any time after the execution of this Agreement and continuing until completion of the exercise of the Option or until the termination of this Agreement, whichever first occurs, Comstock and its employees, agents, independent contractors, accountants, attorneys and other representatives shall, subject to the terms and conditions of this Agreement, continue to have the right and option to (subject to such activities not unreasonably interfering with the work programs and operations being conducted by Tonogold):
(a)    enter upon any or all of the Lucerne Property;
(b)    retain legal possession of any or all of the Lucerne Property in an open and conspicuous manner to defeat any claims or allegations of adverse possession;
(c)    undertake any activities on any or all of the Lucerne Property required under applicable Laws; and
		
	(d)
	on a reasonable basis, remove from any or all of the Lucerne Property samples for metallurgical processing and testing, development and exploration related activities.

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Tonogold acknowledges and agrees that it presently intends that Comstock shall be a preferred provider for toll processing in the Merrill Crowe and leaching facilities on commercial terms, if Tonogold, at its absolute election, decides to seek toll treatment opportunities.  
5.3    Cure Periods
If Tonogold breaches this Agreement, including failure to fulfill its covenants and commitments or complete its obligations as set out in this Agreement, Comstock shall not have the right to terminate this Agreement unless Comstock shall have notified Tonogold of the breach and Tonogold has not cured the breach within thirty (30) days after the date of such notice.
6.    PARTICIPATING INTERESTS
6.1    Participating Interests
(a)    Initial Participating Interests. Commencing on the Funding Completion Date, the Participants shall have the following initial Participating Interests in the Project Holding Company:
(i)    Tonogold – a Participating Interest equal to fifty one percent (51%), and
(ii)    Comstock – a Participating Interest equal to forty nine percent (49%),
(b)    Changes in Participating Interests. Commencing on the Funding Completion Date, a Participant's Participating Interest shall only be changed as follows:
(iii)    upon an election or deemed election by a Participant not to contribute or to continue to contribute to an approved Budget or to contribute less than the percentage reflected by its Participating Interest;
(iv)    elimination of a minority interest as provided in Section 6.3;
(v)    pursuant to a transfer by a Participant of all or a portion of its Participating Interest approved in accordance with this Agreement; or
(vi)    upon the acquisition by either Participant of part or all of the Participating Interest of the other Participant, however occurring.
6.2    Capital Accounts; Voluntary Reduction in Participation; Dilution
(a)    The initial capital contribution (the “Initial Contribution”) of each of the Participants to the Project Holding Company as of the Funding Completion Date shall be deemed to be as follows:
(vii)    the Initial Contribution of Tonogold shall be $20,000,000 (or such other amount that the Participants mutually agree upon that is equal to 51% of the total capital contributions made to the Project Holding Company); and

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(viii)    the Initial Contribution of Comstock shall be $19,215,862 (or such other amount that the Participants mutually agree upon that is equal to 49% of the total capital contributions made to the Project Holding Company).
For the sake of clarity, neither the Phase One Project Funding nor the Phase Two Project Funding shall be deemed to be capital contributions made to, or investments in, the Project Holding Company, prior to the Funding Completion Date. Accordingly, Tonogold shall not be a member or equity holder of the Project Holding Company and shall not have any capital account or equity ownership in the Project Holding Company at all if the Funding Completion Date does not occur.
(b)    If at any time after the Funding Completion Date an approved Budget contemplates the contribution of additional amounts to the capital of the Project Holding Company by the Participants to fund an approved Program, each Participant shall have the right to contribute its pro rata amount (based on its respective Participating Interest) of the aggregate amount to be so contributed. Notwithstanding the foregoing, a Participant may elect to:
(ix)    contribute some lesser amount than its respective pro rata amount; or
(x)    to not contribute at all,
and, in either such case, such electing Participant is hereinafter referred to as a “Diluted Participant” and any other Participant is hereinafter referred to as a “Non-Diluted Participant.” 
(c)    Each Participant shall use reasonable best efforts to make such Participant’s election as soon as practicable, subject to a maximum period of ninety (90) days to make such Participant’s election after each Budget that is presented to the Participants in accordance with Section 9.2, along with a proof of funds demonstrating such Participants wherewithal to satisfy its funding obligations. Any related Capital Calls must adhere to the procedures and timing described in Section 9.7. Any such election must be made by written notice to the Managing Director and to the other Participant. 
(d)    If one Participant elects not to contribute its pro rata share of the Budget, the other Participant shall have the right to elect to fund the shortfall. Such Participant electing to fund the shortfall shall advise the Managing Director and the other Participant within one hundred (100) days of receipt of the Budget.
(e)        If 100% of the originally proposed Budget has not been committed to by the Participants following the procedures established under clause 6.2(c) and 6.2(d), the Managing Director shall, in consultation with the Board/Manager and the Participants prepare an amended Budget for presentation to the Participants. Any such amended Budget shall be presented to the Participants for review and the election of the Participants in the same manner and under the same procedures described under clause 6.2(c) and 6.2(d) above.
(f)        Once a Budget has received the approval by the Participants and 100% funding commitment thereof, each Party shall be committed to meeting its agreed share and any failure to do so shall be regarded as a breach of this Agreement, subject to Section 9.7(d).

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(g)    If the amounts to be contributed to the capital of the Project Holding Company by the Participants pursuant to such approved Budget is decreased by mutual agreement of the Participants after the approval of such Budget, each Participant shall again have the right to reconsider its election and make a new election so long as the percent of the new commitment is not less than that of its original commitment. Each Participant shall have a period of thirty (30) days after each such change is approved to make a new election.
(h)    Supplementary Budgets can be proposed from time to time or at any time after the Funding Completion Date, in the same manner and under the same procedures described under clause 6.2(c) and 6.2(d) above; provided, that any related Capital Calls must adhere to the procedures and timing described in Section 9.7. 
(i)    If a Non-Diluted Participant elects to make, and actually makes, the contributions that would have been made by the Diluted Participant, the Participating Interest of the Diluted Participant shall be recalculated at the time of such actual contribution by: dividing (i) the sum of a + b + c for the Diluted Participant by (ii) the sum of a + b + c for all Participants; and multiplying the result by 100, where:
a = the value of the Initial Contribution of the applicable Participant as defined in Section 6.2(a),
b = the total of all of the contributions of the applicable Participant after the Funding Completion Date through the time of such actual contribution, and
c = the amount that the applicable Participant actually contributes pursuant to such approved Budget (but not more than the amount provided for in such Budget).
The Participating Interest of the Non-Diluted Participant shall thereupon be recalculated in the same manner.
Except as otherwise provided in this Agreement, a Diluted Participant shall retain all of its rights and obligations under this Agreement, including the right to make future contributions to the capital of the Project Holding Company on the basis of its recalculated Participating Interest at the applicable time.
This Section 6.2 shall be subject to Section 9.4.
6.3    Elimination of Minority Interest
(a)    At any time after the Funding Completion Date, in the event that any Participant’s Participating Interest dilutes to an amount which is less than five percent (5%) of the aggregate of all of the Participating Interests in the Project Holding Company, such Participant’s Participating Interest in the Project Holding Company shall be cancelled, free and clear of any Encumbrances, in exchange for a net smelter royalty (the “NSR Royalty”), based upon two and one-half percent (2.5%) of the net revenue (direct or indirect) earned by the Project Holding Company from the sale of metal or non-metal products less transportation and refining costs. The Participant receiving the 

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NSR Royalty shall be deemed to have withdrawn from the Project Holding Company and relinquished its entire Participating Interest in exchange for the NSR Royalty.
(b)    On conversion of a Participating Interest into the NSR Royalty pursuant to this Section 6.3, the Relevant Parties covenant and agree to execute and deliver a mutually acceptable net smelter royalty agreement.
(c)    If a Participant relinquishes its Participating Interest pursuant to this Section 6.3, the other Participant and the Project Holding Company shall have the unfettered right to make all decisions regarding the Lucerne Property and, in the case that the American Flat PP&E option is exercised pursuant to Section 8.9, to the American Flat PP&E, and the Operations, including any decisions at any time or from time to time to suspend, curtail or terminate any production as they, in their sole discretion, may determine. Except as otherwise provided in this Agreement, this Agreement shall terminate on conversion of a Participant’s Participating Interest into the NSR Royalty.
(d)    For the purposes of this Section 6.3 and the calculation of a Participant’s Participating Interest for the exchange thereof for the NSR Royalty:
(xi)    Comstock and any and all assignees of Comstock’s Participating Interest, in whole or in part, shall be aggregated into one combined Participating Interest; and
(xii)    Tonogold and any and all assignees of Tonogold’s Participating Interest, in whole or in part, shall be aggregated into one combined Participating Interest, and,
as a result, there shall only be one NSR Royalty aggregating two and a half percent (2.5%), which shall be allocated ratably among the exchanging Participant and its assignees (except as they may otherwise agree).
6.4    Continuing Liabilities Upon Adjustments of the Participating Interests
Any withdrawal of a Participant from the Project Holding Company or any reduction of a Participant's Participating Interest under this Agreement shall not relieve such Participant of its share of any liability arising out of Operations conducted prior to such withdrawal or reduction, including, without limitation, Environmental and Mining Compliance and other Continuing Obligations. 
6.5    Subordination of Interests
Each Participant shall, from time to time, take all necessary actions, including the execution of appropriate agreements, to pledge and subordinate its Participating Interest, any liens it may hold which are created under this Agreement and any other right or interest it holds with respect to the Lucerne Property (other than an NSR Royalty created pursuant to Section 6.3) and, in the case that the American Flat PP&E option is exercised pursuant to Section 8.9, to the American Flat PP&E, to any secured borrowings of the Project Holding Company for Operations approved by the Board/Manager in accordance herewith.

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7.    GOVERNANCE
7.1    Organization and Composition
Upon the Execution Date, the Participants shall establish a steering committee (the “Steering Committee”). 
Until the Funding Completion Date, the Steering Committee shall solely exist to steer activities of the actions of the Project Managing Director under this Agreement and shall not act or deemed to be elected in any management or board capacity or any other supervisory or other affiliation with respect to the Project Holding Company. For the sake of clarification, during the period from the Execution Date until the Funding Completion Date, the Steering Committee shall have the power to approve Programs and Budgets for the Project. 
After the Funding Completion Date, the Steering Committee (or their replacements designated by Tonogold or Comstock, as the case may be) shall be replaced with a governing body elected to act as such for the Project Holding Company in accordance with this Agreement (such governing body, the “Board/Manager”). The Board/Manager shall be bestowed with all of the rights, duties and obligations of a “Manager” of a limited liability company as defined in NRS 86.071. 
The Steering Committee or the Board/Manager, as the case may be, shall be comprised of five (5) members, three (3) of whom shall be appointed by Tonogold and two (2) of whom shall be appointed by Comstock (except that, if Tonogold and its Affiliates cease to own fifty-one percent (51%) of the Participating Interests after the Funding Completion Date, then three (3) of whom shall be appointed by Comstock and two (2) of whom shall be appointed by Tonogold). 
Subject to and without limiting the rights and obligations of the Relevant Parties hereunder, after the Funding Completion Date, the Board/Manager shall manage or direct the management of the Project Holding Company in accordance with this Agreement (including, without limitation Exhibit D annexed hereto). 
Quorum for meetings of the Steering Committee or the Board/Manager (as the case may be) shall be five (5). Decisions of the Steering Committee and the Board/Manager shall be made by majority vote and approval, except that decisions related to the following matters shall require the unanimous vote and approval (the “Special Approval Vote”): 
		
	(a)
	sale, disposal or transfer of the Lucerne Property and, in the case that the American Flat PP&E option is exercised pursuant to Section 8.9, the American Flat PP&E;

		
	(b)
	change of the name of the Project Holding Company;

		
	(c)
	change in scope of the business of the Project Holding Company;

		
	(d)
	investments outside the scope of the business of the Project Holding Company or investments by the Project Holding Company in excess of approved Budgets;

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	(e)
	creation of subsidiaries of the Project Holding Company;

		
	(f)
	admission of new members to the Project Holding Company or issuance of equity by the Project Holding Company;

		
	(g)
	incurrence of debt or grant of Encumbrances or guarantees by the Project Holding Company or any incurrence of debt by either Participant secured by an Encumbrance on equity interests in the Project Holding Company (other than Permitted Encumbrances) or the Lucerne Property (other than Permitted Encumbrances) and, in the case that the American Flat PP&E option is exercised pursuant to Section 8.9, the American Flat PP&E (other than Permitted Encumbrances);

		
	(h)
	payment of dividends or other distributions or return of capital by the Project Holding Company;

		
	(i)
	amendments, supplements, restatements or other modifications of the operating agreement for the Project Holding Company or the articles of formation of the Project Holding Company;

		
	(j)
	filing for bankruptcy protection or reorganization or other insolvency-related actions;

		
	(k)
	contracts, not entered into in the ordinary course of business, (i) for value in excess of $2,000,000, (ii) with competitors, (iii) that are not terminable on 30 days’ notice without payment or penalty or (iv) that contain change of control termination or penalty provisions;

		
	(l)
	capital expenditures not contemplated in a Budget or supplementary Budget (as prescribed under clause 6.2(h)) previously approved by the Steering Committee or the Board/Manager;

		
	(m)
	acquisitions, investments in third parties, strategic alliances or partnerships;

		
	(n)
	settlement, commencement or significant decision relating to litigation, arbitration or administrative or investigative proceedings;

		
	(o)
	activities or Programs by the Project Holding Company outside the scope of the purpose of this Agreement described in Section 1.1;

		
	(p)
	disparagement of either of the Participants or their respective nor any of their products, services, officers, employees, directors, investors, agents or customers, and any other activities (including unprofessional conduct or violation of confidentiality provisions of this Agreement) that could reasonably be expected to adversely affect the reputation of any such products, services or persons, the mining industry or the Comstock District; and

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	(q)
	reorganizations, amalgamations, mergers, consolidations, recapitalizations, restructurings or other significant transactions involving the Project Holding Company.

7.2    Governance 
Tonogold, in its capacity as Project Managing Director of the Project or as Managing Director of the Project Holding Company, as the case may be, shall at all times remain subject to the direction of the Steering Committee or the Board/Manager, as the case may be, and the rights of Comstock hereunder. The Steering Committee and the Board/Manager, as the case may be, shall act in a manner that is consistent with the requirements of this Agreement and shall cause the Project Holding Company to act in accordance with this Agreement. The Relevant Parties agree that Exhibit D sets forth the initial Program and Budget, including all anticipated staffing needs and compensation and capital spending involved in the Phase One Project Funding and the Phase Two Project Funding, and approve the same.
7.3    Meetings
The Steering Committee and the Board/Manager, as the case may be, shall hold regular meetings at least quarterly in Storey County, Nevada or at other places mutually agreed by the Participants. The Managing Director or Project Managing Director, as the case may be, shall give not less than sixty (60) days’ notice to the Participants of such regular meetings (unless such notice is waived by the Participants). Additionally, any Participant may call a special meeting upon not less than twenty (20) Business Days’ notice to the Managing Director (or Project Managing Director) and the other Participant (unless such notice is waived by the Managing Director and the other Participant). Each notice of a meeting shall include an itemized agenda prepared by the Managing Director (or Project Managing Director) in the case of a regular meeting, or by the Participant calling the meeting in the case of a special meeting, but any matter may be considered with the consent of all Participants. The Managing Director (or Project Managing Director) shall prepare minutes of all meetings and shall distribute copies of such minutes to the Participants within thirty (30) days after the meeting. The Participants shall have thirty (30) days after receipt to sign and return such copies or to provide any written comments on such minutes to the Managing Director (or Project Managing Director). If a Participant timely submits written comments on such minutes, the Steering Committee or the Board/Manager, as the case may be, shall seek, for a period not to exceed thirty (30) days, to agree upon minutes of such meeting acceptable to the Participants. At the end of such period, failing agreement by the Participants on revised minutes, the minutes of the meeting shall be the original minutes as prepared by the Managing Director (or Project Managing Director), together with the comments on the minutes made by the Participants. Both of these documents shall be placed in the minute book for the Project Holding Company maintained by the Managing Director (or Project Managing Director). If personnel employed in Operations are required to attend a Steering Committee or Board/Manager meeting, reasonable costs incurred in connection with such attendance shall be a Project Cost. All other costs associated with Steering Committee and Board/Manager meetings shall be paid for by the Participants individually.
7.4    Action Without Meeting

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In lieu of meetings, the Steering Committee or Board/Manager may: (i) hold telephone conferences, so long as all members participating can hear each other simultaneously and minutes are prepared in accordance with Section 7.3; or (ii) act by consent in writing signed by all members.
8.    PROJECT MANAGING DIRECTOR AND MANAGING DIRECTOR 
8.1    Appointment
(a)    On the Execution Date, Comstock hereby appoints Tonogold as managing director of the Project (the “Project Managing Director”) with overall management responsibility for Operations prior to the Funding Completion Date as provided under this Agreement. Subject to and conditioned upon the Funding Completion Date and Tonogold exercising the Option, Tonogold shall be appointed as the Managing Director of the Project (the “Managing Director”). The Managing Director shall act as such only on an informed basis in good faith on behalf and for the benefit of the Project.
(b)    If appointed as Managing Director in accordance with Section 8.1(a), Tonogold shall remain as Managing Director:
(xiii)    until it resigns or is deemed to have resigned pursuant to Section 8.4; 
(xiv)    this Agreement is terminated; or
(xv)    until its Participating Interest ceases to be greater than fifty percent (50%) after the Funding Completion Date,
in which event the Participants shall appoint a new Managing Director by unanimous consent.
8.2    Powers and Duties of Project Managing Director Prior to Option Exercise
Subject to the terms and conditions of this Agreement and to the direction of the Steering Committee, prior to the Funding Completion Date, the Project Managing Director shall have the following powers and duties:
(a)    the Project Managing Director shall manage, direct and control Operations, in a manner that is substantially consistent with the initial Program and Budget annexed hereto as Exhibit D and any subsequent approved Program and Budget;
(b)    the Project Managing Director shall implement the decisions of the Steering Committee, shall make all expenditures necessary to carry out approved Programs;
(c)    the Project Managing Director shall use reasonable efforts to:
(xvi)    purchase or otherwise acquire all material, supplies, equipment, water, utility and transportation services required for Operations, such purchases and acquisitions to be made on the best terms available, taking into account all of the circumstances;

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(xvii)    obtain such customary warranties and guarantees as are available in connection with such purchases and acquisitions; and
(xviii)    keep the Lucerne Property free and clear of all Encumbrances, except for:
(A)    Permitted Encumbrances; or
(B)    other Encumbrances specifically authorized by the Steering Committee;
(d)    the Project Managing Director shall:
(xix)    make or arrange for all payments required by concessions, leases, permits, contracts and other agreements resulting from or relating to Operations; 
(xx)    reimburse Comstock within five (5) days following the end of the month the invoice was received by the Project Managing Director for any and all support, services, goods and investment made on behalf or in furtherance of Operations and other activities associated with exploring, assessing, engineering or developing the Lucerne Property, it being understood that such reimbursements will only be made with respect to expenses incurred on behalf of the Project that are specifically included as part of the approved Program and Budget and will apply toward the Phase One Project Funding or Phase Two Project Funding, as the case may be;
(xxi)    pay assessments and like charges resulting from Operations; and
(xxii)    do all other acts reasonably necessary to maintain the Lucerne Property;
(e)    the Project Managing Director shall:
(xxiii)    apply for all additional, necessary permits;
(xxiv)    comply with all applicable Laws;
(xxv)    notify promptly the Steering Committee of any allegations of substantial violation of any such permits or Laws;
(xxvi)    prepare and file all reports or notices required for Operations; and
(xxvii)    in the event of any violation of permits or Laws, timely use reasonable commercial efforts to cure or resolve such violations;
(f)    the Project Managing Director shall notify the Participants promptly of any litigation, arbitration or administrative or investigative proceeding commenced against Tonogold, Comstock, the Project Holding Company or affecting Operations or the Lucerne Property;
(g)    the Project Managing Director shall have the right to carry out its responsibilities as such hereunder through agents or independent contractors or, subject to Section 8.7, Affiliates;

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(h)    the Project Managing Director shall keep and maintain all required accounting and financial records in accordance with U.S. generally accepted accounting procedures consistently applied;
(i)    the Project Managing Director shall keep the Steering Committee advised of all Operations by submitting in writing to the Steering Committee:
(xxviii)    monthly progress reports, which include statements of expenditures and comparisons of such expenditures to the approved Budget;
(xxix)    periodic summaries of data acquired;
(xxx)    copies of reports concerning Operations;
(xxxi)    a detailed final report within sixty (60) days after completion of each Program and Budget, which shall include comparisons between actual and budgeted expenditures; and
(xxxii)    such other reports as the Steering Committee or any Participant may reasonably request;
(i)    at all reasonable times, the Project Managing Director shall provide the Steering Committee or the representative of any Participant, upon the request of any member of the Steering Committee, access to, and the right to inspect and copy, all information acquired in Operations, including but not limited to maps, drill logs, core tests, reports, surveys, assays, analyses, production reports, operations data, technical data and accounting and financial records;
(j)    the Project Managing Director shall allow Comstock, at Comstock’s sole risk and expense, and subject to reasonable safety regulations, to inspect the Lucerne Property and Operations at all reasonable times, so long as Comstock does not unreasonably interfere with Operations;
(a)    the Project Managing Director shall have the right to perform the assessment work required hereunder pursuant to a common plan of exploration on other properties;
(b)    the Project Managing Director shall timely record and file with the appropriate governmental office any required affidavits, notices of intent to hold and other documents in proper form attesting to the payment of Government Fees and the performance of assessment work, in each case in sufficient detail to reflect compliance with the applicable requirements;
(c)    if authorized by the Steering Committee, the Project Managing Director may apply for patents or mining leases or other forms of mineral tenure for any such claims;
(d)    the Project Managing Director shall prepare a plan for Environmental and Mining Compliance for all Operations consistent with the requirements of any applicable Laws or contractual obligations and shall include in each Program and Budget sufficient funding to implement the plan and to satisfy the financial assurance requirements of any applicable Law or 

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contractual obligation pertaining to Environmental and Mining Compliance (which plan, to the extent practicable, shall incorporate concurrent reclamation of any parts of the Lucerne Property disturbed by Operations and conform with the conditions present in the existing Storey County, Nevada, Special Use Permit authorizing mining and exploration activities); and
(e)    the Project Managing Director shall undertake all other activities reasonably necessary to fulfill the foregoing.
8.3    Powers and Duties of Managing Director After Option Exercise
Subject to the terms and conditions of this Agreement and to the direction of the Board/Manager, on and after the Funding Completion Date, the Managing Director shall have the following powers and duties:
(a)    the Managing Director shall manage, direct and control Operations, in accordance with the Program and Budget approved by the Board/Manager, and shall prepare and present to the Board/Manager proposed Programs and Budgets;
(b)    the Managing Director shall implement the decisions of the Board/Manager, shall make all expenditures necessary to carry out approved Programs, and shall promptly advise the Board/Manager if the Project Holding Company lacks sufficient funds to carry out the approved Programs and Budgets;
(c)    the Managing Director shall use reasonable efforts to:
(i)    purchase or otherwise acquire all material, supplies, equipment, water, utility and transportation services required for Operations, such purchases and acquisitions to be made on the best terms available, taking into account all of the circumstances;
(ii)    obtain such customary warranties and guarantees as are available in connection with such purchases and acquisitions; and
(iii)    keep the Lucerne Property and, in the case that the American Flat PP&E option is exercised pursuant to Section 8.9, the American Flat PP&E, free and clear of all Encumbrances, except for:
(A)    Permitted Encumbrances; or
(B)    other Encumbrances specifically authorized by the Board/Manager;
(d)    the Managing Director shall act as the principal operating manager of the Project Holding Company, as is customary for that role in an industrial mining company, including but not limited to the following:
(i)    make or arrange for all payments required by concessions, leases, permits, contracts and other agreements related to the Lucerne Property and, in the case that the American Flat PP&E option is exercised pursuant to Section 8.9, to the American Flat PP&E;

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(ii)    pay all taxes, assessments and like charges on the Operations and the Lucerne Property and, in the case that the American Flat PP&E option is exercised pursuant to Section 8.9, to the American Flat PP&E except taxes determined or measured by a Participant’s sales revenue or net income and, if authorized by the Board/Manager, the Managing Director shall have the right to contest, in the courts or otherwise, the validity or amount of any taxes, assessments or charges if the Managing Director deems them to be unlawful, unjust, unequal or excessive, or to undertake such other steps or proceedings as the Managing Director may deem reasonably necessary to secure a cancellation, reduction, readjustment or equalization thereof before the Managing Director shall be required to pay them, but in no event shall the Managing Director permit or allow title to the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) to be lost as the result of the non-payment of any taxes, assessments or like charges; and
(iii)    do all other acts reasonably necessary to maintain the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised);
(e)    the Managing Director shall:
(i)    apply for and maintain all necessary permits;
(ii)    comply with all applicable Laws;
(iii)    notify promptly the Board/Manager of any allegations of substantial violation of any such permits or Laws;
(iv)    prepare and file all reports or notices required for Operations; and
(v)    in the event of any violation of permits or Laws, timely use reasonable commercial efforts to cure or resolve such violations;
(f)    the Managing Director shall notify the Participants promptly of any litigation, arbitration or administrative or investigative proceeding commenced against the Project Holding Company or affecting Operations or the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised);
(g)    the Managing Director shall prosecute and defend, but shall not initiate without consent of the Board/Manager, any and all litigation, arbitration or administrative or investigative proceeding arising out of Operations (it being understood that the non-managing Participant shall have the right to participate, at its own expense, in such litigation, arbitration or administrative or investigative proceeding and that approval of the Board/Manager shall be required in advance of any settlement involving payments, commitments or obligations in excess of one hundred thousand dollars ($100,000) in cash or value;

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(h)    the Managing Director shall have the right to carry out its responsibilities as such hereunder through agents or independent contractors or, with prior notice to the Participants and subject to Section 8.7, Affiliates;
(i)    the Managing Director shall keep and maintain all required accounting and financial records in accordance with U.S. generally accepted accounting procedures consistently applied;
(j)    the Managing Director shall select and employ at competitive rates all supervision and labor necessary or appropriate to all Operations (it being understood that all persons so employed, the number thereof, their hours of labor and their compensation shall be determined by the Managing Director and they shall be employees of the Managing Director; provided, that compensation for any employee or consultant earning more than fifty thousand ($50,000) per year must be approved by the Board/Manager);
(k)    the Managing Director shall keep the Board/Manager advised of all Operations by submitting in writing to the Board/Manager:
(i)    monthly progress reports, which include statements of expenditures and comparisons of such expenditures to the approved Budget;
(ii)    periodic summaries of data acquired;
(iii)    copies of reports concerning Operations;
(iv)    a detailed final report within sixty (60) days after completion of each Program and Budget, which shall include comparisons between actual and budgeted expenditures; and
(v)    such other reports as the Board/Manager or any Participant may reasonably request;
(l)    at all reasonable times, the Managing Director shall provide the Board/Manager or the representative of any Participant, upon the request of any member of the Board/Manager, access to, and the right to inspect and copy, all information acquired in Operations, including but not limited to maps, drill logs, core tests, reports, surveys, assays, analyses, production reports, operations data, technical data and accounting and financial records;
(m)    the Managing Director shall allow the non-managing Participant, at its sole risk and expense, and subject to reasonable safety regulations, to inspect the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) and Operations at all reasonable times, so long as the inspecting Participant does not unreasonably interfere with Operations;
(n)    the Managing Director shall maintain insurance for the benefit of the Project Holding Company and the Participants, in such amounts and of such nature as the Managing Director deems necessary or advisable to protect the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) and Operations;

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(o)    the Managing Director shall perform or cause to be performed all assessment and other work, and shall pay all Government Fees required by Law in order to maintain in good standing all mining leases, surface leases, claims and other tenures included within the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised). The Managing Director shall have the right to perform the assessment work required hereunder pursuant to a common plan of exploration on other properties;
(p)    the Managing Director shall timely record and file with the appropriate governmental office any required affidavits, notices of intent to hold and other documents in proper form attesting to the payment of Government Fees and the performance of assessment work, in each case in sufficient detail to reflect compliance with the applicable requirements;
(q)    if authorized by the Board/Manager, the Managing Director may:
(i)    locate, amend or relocate any mining claim;
(ii)    locate any fractions resulting from such amendment or relocation; and
(iii)    apply for patents or mining leases or other forms of mineral tenure for any such claims;
(r)    the Managing Director shall direct the Project Holding Company (with expenses relating thereto to be reimbursed by the Managing Director) from time to time to prepare a plan for Environmental and Mining Compliance for all Operations consistent with the requirements of any applicable Laws or contractual obligations and shall include in each Program and Budget sufficient funding to implement the plan and to satisfy the financial assurance requirements of any applicable Law or contractual obligation pertaining to Environmental and Mining Compliance (which plan, to the extent practicable, shall incorporate concurrent reclamation of any parts of the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised)  disturbed by Operations);
(s)    with the authorization of the Participants and approval of the Board/Manager, the Managing Director may enter into future contracts, forward sales, trading inputs, calls, options or any similar hedging, price protection or marketing mechanisms (collectively, “Hedging Contracts”) for such length of time and on such terms as may be so consented to and approved; and
(t)    the Managing Director shall undertake all other activities reasonably necessary to fulfill the foregoing.
8.4    Standard of Care
Each of the Project Managing Director and Managing Director shall discharge its duties under Section 8.2 or Section 8.3, as case may be, and conduct all Operations in a good and workmanlike manner, in accordance with sound mining and other applicable industry standards and practices, and in material compliance with the terms and provisions of concessions, leases, 

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permits, contracts and other agreements pertaining to the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised). The Managing Director as such shall not be liable to the non-managing Participant for any act or omission resulting in damage, loss, cost, penalty or fine to the Project Holding Company, except to the extent caused by or attributable to the Managing Director’s breach of this Agreement (or the operating agreement for the Project Holding Company), bad faith, fraud, willful misconduct or gross negligence. The Managing Director shall not be in default of its duties under this Agreement if its inability to perform results from the failure of a non-managing Participant to perform acts or to contribute amounts required of it pursuant to this Agreement.
8.5    Resignation; Deemed Offer to Resign
Each of the Project Managing Director and the Managing Director may resign as such upon thirty (30) days’ prior written notice to the Steering Committee or the Board/Manager, as the case may be. If any of the following shall occur, the Project Managing Director or the Managing Director, as the case may be, shall be deemed to have offered to resign:
(a)    the aggregate Participating Interest of the Managing Director and its Affiliates ceases to be the highest among the Participants and their respective Affiliates after the Funding Completion Date;
(b)    the Managing Director or the Project Managing Director fails to perform a material obligation imposed upon it under this Agreement and such failure continues for a period of sixty (60) days after notice from the other Participant;
(c)    subject to availability of funds in the accounts of the Project Holding Company , the Managing Director fails to pay bills pertaining to Operations within ninety (90) days after they are due, unless the Managing Director is contesting such unpaid bills in good faith;
(d)    the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for or over a substantial part of the Project Managing Director’s or the Managing Director's assets, which appointment is neither made ineffective nor discharged within thirty (30) days after the making thereof, or such appointment is consented to, requested by or acquiesced in by the Managing Director;
(e)    the Managing Director or the Project Managing Director commences a voluntary case under any applicable bankruptcy, insolvency or similar law now or hereafter in effect, consents to the entry of an order for relief in an involuntary case under any such law, makes a general assignment for the benefit of creditors or takes corporate or other action in furtherance of any of the foregoing;
(f)    if Tonogold is the Managing Director, a material breach hereof by Tonogold and such breach continues for a period of thirty (30) days after notice from the other Participant; or

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(g)    entry is made against the Managing Director of a judgment, decree or order for relief affecting its ability to serve as manager of the Project Holding Company or affecting its Participating Interest or a material portion of other assets by a court of competent jurisdiction.
The Managing Director or the Project Managing Director shall immediate written notice to the other Participant of any events which would give rise to any such deemed offer as well as of the occurrence of any such deemed offer. Any such offer may be accepted by the other Participant at any time prior to the expiration of ninety (90) days following such notice. If more than one event occurs that would constitute a deemed offer, such deemed offer shall occur upon each such event. In the event of any resignation of deemed offer to reign which is accepted, the other Participant may elect to become the new Managing Director by notice to the Board/Manager within thirty (30) days after such notice of resignation. If the other Participant does not so elect, the new Managing Director shall be determined by mutual agreement of the Participants.
8.6    Payments to Managing Director/Project Managing Director
Neither the Project Managing Director nor the Managing Director shall be remunerated in its capacity as such unless such remuneration is unanimously approved in writing by the Steering Committee. However the Project Managing Director and the Managing Director shall be entitled to monthly reimbursement of the prorated actual costs of the reasonable time of the employees of the Project Managing Director or the Managing Director that is spent on the approved Programs and evidenced by monthly timesheets at industry standard rates preapproved by Tonogold and Comstock.
8.7    Transactions with Affiliates
(a)    If the Managing Director engages an Affiliate of the Managing Director to provide services hereunder, the Managing Director shall do so on terms no less favorable to the Project Holding Company than would be available from unrelated persons in arm’s-length transactions, but in all events on terms not less favorable to the Project Holding Company than fair terms.
(b)    Subject to Section 10, the Managing Director shall be permitted to sell Products from the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) in the form of raw ore, concentrates or derivatives to each of the Participants or their Affiliates, provided that Comstock shall have a right of first refusal to purchase any or all such Products so long as Comstock is willing to purchase at prices and on terms no less favorable to the Project Holding Company than those which would be available from unrelated persons in arm’s-length transactions.
8.8    Independent Contractor
The Managing Director is and shall act as an independent contractor and not as the agent of the other Participant. The Managing Director shall maintain complete control over its employees and other representatives and all of its consultants, contractors and subcontractors with respect to performance of Operations. Nothing contained in this Agreement or any contract or subcontract 

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awarded by the Managing Director shall create any contractual relationship between any such consultant, contractor or subcontractor and the other Participant.
8.9    Option to Purchase American Flats Properties
Starting on the date that Tonogold has delivered notice pursuant to Section 5.1(c)(v) and ending on the Funding Completion Date, Tonogold, on behalf, and for the benefit, of the Project Holding Company, shall have an option to purchase all (but not less than all) of the assets described on Exhibit G annexed hereto (collectively, the “American Flat PP&E”) for a total purchase price of $25,000,000 (as adjusted pursuant to the formula set forth below in this Section 8.9).  For the sake of clarity, subject to the provisions of this Section 8.9, Comstock shall not have any obligation to retain ownership of all or any portion of the American Flat PP&E. If Tonogold exercises its right to purchase the American Flat PP&E under this Section 8.9 (which shall be contributed to the Project Holding Company in exchange for nil consideration), then Comstock and Tonogold agree that the purchase price may be paid pursuant to the terms of the Joint Venture Promissory Note (with the principal payments proportionally adjusted to reflect a change in the purchase price, if applicable, in accordance with the formula set forth below in this Section 8.9. The purchase price payable by Tonogold shall be adjusted in accordance with the following formula:
Adjusted purchase price = [($49,000,000 - P - PT) * 51%] - (PT * 49%), where
“PT” is the cumulative amounts paid by Tonogold for the purchase of American Flat PP&E under Section 8.10(a) during the term of this Agreement
“P” is the cumulative net proceeds received by Comstock from third parties for the purchase of American Flat PP&E during the term of this Agreement 
Comstock covenants and agrees that during the term of this Agreement, Comstock shall (i) update Exhibit G for changes in the assets included among the American Flat PP&E and provide such updated Exhibit G to Tonogold and (ii) be prohibited from selling any further parts of the American Flat PP&E if (a) the proceeds from the sale of the American Flat PP&E to Tonogold and third parties would exceed $25,000,000 (unless and until this Agreement is terminated or the American Flat PP&E option lapses pursuant to this Section 8.9) or (b) in the event that Tonogold exercises its American Flat PP&E option pursuant to this Section 8.9. 
8.10    Rights of First Refusal 
(a)    Starting on the Execution Date and ending on the earlier to occur of (i) the termination of this Agreement or (ii) the Funding Completion Date, Tonogold, on behalf, and for the benefit, of the Project Holding Company, shall have a right of first refusal to purchase all or a portion of the American Flat PP&E, if Comstock determines to sell any the American Flat PP&E in Comstock's sole discretion. For the sake of clarity, Comstock shall not have any obligation to retain ownership or sell the American Flat PP&E.  In the event that Comstock receives an offer to purchase any of the American Flat PP&E and Comstock in its sole discretion determines to accept such offer, Comstock will notify Tonogold of such offer and the terms of such offer in writing within five (5) days of Comstock’s determination to accept such offer. Tonogold shall then have thirty (30) days 

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to exercise its right of first refusal to purchase such American Flat PP&E at the same price and on the same terms as contained in such offer (the “AF Offer Terms”).  If Tonogold elects not to exercise its rights under this Section 8.10(a) to purchase the American Flat PP&E, Comstock may sell the American Flat PP&E to the offering party on the AF Offer Terms. In the event the offering party does not purchase the American Flat PP&E on the AF Offer Terms then Tonogold’s right of first refusal pursuant to this Section 8.10(a) shall continue to apply to the American Flat PP&E. In the event that the American Flat PP&E option lapses or is terminated by Tonogold pursuant to Section 1.2, any American Flat PP&E assets acquired by Tonogold by virtue of this Section 8.10(a) shall be removed from Comstock’s property by Tonogold no later than six (6) months following such event.
(b)    Starting on the Execution Date and ending on the earlier to occur of (i) the termination of this Agreement or (ii) the Funding Completion Date, Tonogold shall have a right of first refusal to purchase all of Comstock’s Dayton mining parcels, as described on Exhibit F annexed hereto (the “Mining Parcels”), if Comstock determines to sell the Mining Parcels, in Comstock’s sole discretion. For the sake of clarity, Comstock shall not have any obligation to retain ownership or sell the Mining Parcels.  In the event that Comstock receives an offer to purchase the Mining Parcels and Comstock in its sole discretion determines to accept such offer, Comstock will notify Tonogold of such offer and the terms of such offer in writing within five (5) days of Comstock’s determination to accept such offer. Tonogold shall then have thirty (30) days to exercise its right of first refusal to purchase the Mining Parcels at the same price and on the same terms as contained in such offer (the “Offer Terms”). If Tonogold elects not to exercise its rights under this Section 8.10(b) to purchase the Mining Parcels, Comstock may sell the Mining Parcels to the offering party on the Offer Terms. In the event the offering party does not purchase the Mining Parcels on the Offer Terms then Tonogold’s right of first refusal pursuant to this Section 8.10(b) shall continue to apply to the Mining Parcels.
9.    PROGRAMS AND BUDGETS
9.1    Operations Pursuant to Programs and Budgets
From and after the Funding Completion Date, Operations shall be conducted, expenses shall be incurred and additional assets shall be acquired only pursuant to Programs and Budgets approved pursuant to Section 9.2 and 9.3. Every Program and Budget approved pursuant to this Agreement shall provide for accrual of reasonably anticipated expenses for Environmental and Mining Compliance.
9.2    Presentation of Programs and Budgets
From and after the Funding Completion Date, proposed Programs and Budgets shall be prepared by the Managing Director and shall generally be for one (1) calendar year, broken down by month, with a forecast of the subsequent two (2) years shown quarterly. Each approved Program and Budget, regardless of length, shall be reviewed at least quarterly at the meetings of the Board/Manager. Each Participant shall have the right (but no obligation) to fund its pro rata share of an approved annual Budget. If a Participant agrees to fund any portion of an approved Budget (such agreed upon portion, an “Authorized Allocation”), such Participant shall be obligated to 

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fund such Authorized Allocation when a Capital Call is made in accordance with Section 9.7 below. The election of either Participant to fund less than its pro rata share of an approved annual Budget may result in dilution in accordance with Section 6.2.
9.3    Adoption of Proposed Programs and Budgets
At the annual meeting, the Board/Manager shall consider and vote on the proposed Program and Budget. 
9.4    Budget Overruns; Program Changes
The Managing Director shall immediately notify the Board/Manager of any material departure from an approved Program and Budget. If the departure exceeds the total of an approved Budget by more than fifteen percent (15%), then the excess over fifteen percent (15%), except to the extent:
(i)    directly caused by an emergency, unexpected expenditure made pursuant to Section 9.5 or a change in the metal price assumptions; or
(j)    authorized or ratified unanimously by the Board/Manager,
shall be for the sole account of the Managing Director. Contributions to capital of the Project Holding Company by the Managing Director or its Affiliates to fund such excess (whether or not greater fifteen percent (15%)) than shall not be included in the calculations of or result in a change in the Participating Interests.
9.5    Emergency Expenditures
In case of emergency, the Managing Director may take any action that it deems necessary to protect health, safety, the environment or property, to protect the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) or to comply with Law. The Managing Director may also make reasonable expenditures on behalf of the Project Holding Company for sudden unexpected events that are beyond its reasonable control. In the case of an emergency or unexpected expenditure, the Managing Director shall promptly notify the Participants of the emergency or expenditure, and the Managing Director shall be reimbursed therefor first by the Project Holding Company and, to the extent it has insufficient funds therefor, by the Participants in proportion to their respective Participating Interests at the time at which the emergency or unexpected expenditure is incurred.
9.6    Fiscal Year; Audits
(a)    The fiscal year of the Project Holding Company shall be the calendar year.
(b)    Unless waived by all Participants prior to the end of any particular calendar year, within ninety (90) days following the end of each calendar year, the Managing Director shall provide audited financial statements for the Project Holding Company for such calendar year prepared in accordance with U.S. generally accepted accounting principles consistently applied. Prior to the 

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Funding Completion Date, the audits shall be conducted by Comstock’s independent registered public accounting firm and, thereafter, by the firm selected by the Board/Manager.
(c)    In addition, each Participant shall have the right to conduct an independent audit of all books, records and accounts of the Project Holding Company and, in relation to the Project Holding Company and Operations, the Managing Director, at the expense of such Participant.
9.7    Capital Contributions.
(a)     If the Project Holding Company has funding needs under an approved Program and Budget that cannot be met by cash flow from Operations, the Board/Manager may determine to request that the Participants make capital contributions to the Project Holding Company for the periods indicated in the approved Program and Budget (each, a “Capital Contribution”).
(b)    If the Board/Manager determines to request that the Participants make Capital Contributions to the Company, the Board/Manager shall issue a written request (a “Capital Call”) to each of the Participants for the making of such Capital Contributions.  The Capital Call shall specify (i) the total amount of Capital Contributions requested from all Participants, (ii) the stated purpose for such Capital Contributions that was previously identified in the approved Program and Budget and (iii) the date that such funding is required.
(c)    Unless the Participants have otherwise mutually agreed to a different allocation of funding obligations during the approval of the Program and Budget, each Participant’s proportionate share of the total amount of Capital Contributions shall be determined based on the Participating Interests of each Participant immediately prior to the Capital Call. Each Participant acknowledges that by declining to make a Capital Contribution pursuant to a Capital Call in the full amount of such Participant’s proportionate share, its Participating Interest may be diluted in accordance with the terms of Section 6.2, unless otherwise agreed by the Parties. 
(d)    Capital Contributions shall be due and payable on the due date indicated on each Capital Call. Each Participant shall provide written notice to the Board/Manager as soon as practicable to the extent that such Participant does not intend to fund its Authorized Allocation (as defined in Section 9.2 above) in full. The failure of a Participant to fund such Participant’s Authorized Allocation shall be deemed to be a breach of this Agreement. In the event of a breach of either Participant to fund such Participant’s Authorized Allocation, the non-breaching Participant may seek compensation for damages (including actual, consequential, special, indirect or incidental damages, if any), as may be available under applicable Law; provided, that the maximum damages that either Participant may be assessed shall be capped at the amount of such Participant’s capital account. For the sake of clarity, the maximum liability that either Participant shall have under this Agreement is the reduction of such Participant’s capital account and, accordingly, such Participant’s Participating Interest, however, such reduction shall not eliminate any Participant’s right to the NSR Royalty under Section 6.3. Each Participant hereby covenants and agrees that it shall use commercially reasonable efforts to mitigate damages for which the other Participant would be liable under this Section 9.7(d).

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(e)    Within five (5) Business Days following the receipt of all Capital Contributions, the Board/Manager shall give written notice to each Participant specifying the amount of Capital Contributions actually received from each Participant and any change in Participating Interests resulting therefrom.   
10.    TERMINATION
10.1    Term and Termination
The term of this Agreement shall commence on the Execution Date and shall continue until the earliest to occur of:
(a)    termination of this Agreement in accordance with the provisions of this Agreement;
(b)    expiration of the Option in accordance with the provisions of this Agreement; or
(c)    mutual agreement of the Participants to terminate this Agreement.

10.2    Continuing Obligations
The representations and warranties of the Participants set forth herein shall survive the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby for a period of two years following the termination hereof. The covenants and agreements of the Relevant Parties set forth in this Agreement shall survive until the later of the expiration of two years following the termination hereof or the date by which such covenants or agreements, by their terms, are to be fully performed or satisfied. Termination of this Agreement shall not release a Relevant Party from any liability for breach prior to such termination or from any liability for breach of covenants or agreements, which, by their terms, are to be performed after such termination.
10.3    Disposition of Assets on Termination
Promptly after adoption by the Project Holding Company of a plan of dissolution and liquidation, unless otherwise agreed by the Participants, the Managing Director shall take all action necessary to wind up the activities of the Project Holding Company, and all costs and expenses incurred in connection therewith shall be expenses chargeable to the Project Holding Company. 
10.4    Right to Data After Termination
After termination hereof other than for breach, each Participant shall be entitled to copies of all information of the other Participant acquired hereunder up to and including the date of termination and not previously furnished to it; provided, that the Participant requesting such 

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information pays for the cost of such copying and such information and agrees to hold such information confidentially.
10.5    Continuing Authority
Promptly after adoption by the Project Holding Company of a plan of dissolution and liquidation, unless otherwise agreed by the Participants, the Managing Director shall have the power and authority to do all things on behalf of the Project Holding Company, which are reasonably necessary or convenient to:
(a)    wind-up Operations; and
(b)    complete any transaction and satisfy any obligation, unfinished or unsatisfied at the time of such termination or withdrawal, if the transaction or obligation arises out of Operations prior to such termination or withdrawal.
10.6    Survival of Ingress and Egress After Termination
After termination hereof, the Participants shall continue to have rights of reasonable ingress and egress to the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) for purposes of monitoring Environmental and Mining Compliance.
11.    TRANSFER OF INTEREST 
11.1    No transfers 
No Participant shall transfer to any third party all or any part of its Participating Interest without the prior written consent of the other Participant (other than pursuant to Section 6.5); provided, however, that each of the Participants shall have the right to transfer its Participating Interest if such transfer occurs as a result of a the change of control of such Participant. For the purposes of this Section 11, the word “transfer” shall mean to convey, sell, assign, grant an option on, create an Encumbrance (other than a Permitted Encumbrance) on or in any other manner transfer or alienate (including by operation of Law, by merger, consolidation, amalgamation, combination or other similar action, or by transfer of record holder of such Participating Interest, directly or indirectly). For the purpose of this Section 11, the phrase “change of control” shall mean the sale of all or substantially all the assets of a Participant; any merger, consolidation or acquisition of a Participant with, by or into another corporation, entity or person; or any change in the ownership of more than fifty percent (50%) of the voting capital stock of a Participant in one or more related transactions.
12.    GENERAL PROVISIONS
12.1    Notices
Any notice required or permitted to be given hereunder shall be in writing and may be given by delivering such notice by hand, registered mail or paid courier service, in each case to the 

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addresses including in the preamble to this Agreement (which may be changed by notice to the other Participant). The date of receipt of any notice hereunder shall be (i) the date of delivery if delivered prior to 4:00 p.m. (local time for the recipient) on a Business Day and on the next following Business Day if delivered after 4:00 p.m. (local time for the recipient) on a Business Day or on a day that is not a Business Day or (ii) if given by registered mail, the date on which the notice is actually received by the addressee.
12.2    Waiver
The failure of a Participant to insist on the strict performance of any provision of this Agreement or to exercise any right, power or remedy upon a breach hereof shall not constitute a waiver of any provision of this Agreement or limit the Participant’s right thereafter to enforce any provision or exercise any right. A waiver is only valid if provided in writing and if given in respect of any specific instance shall not be interpreted as a continuing waiver in other instances unless expressly stated otherwise.
12.3    Modification
No modification of this Agreement shall be valid unless made in writing and duly executed by each of the Participants. No modification of the operating agreement of the Project Holding Company that is duly adopted in accordance with the terms of this Agreement after the Funding Completion Date, shall be valid unless made in writing and duly executed by each of the Participants.
12.4    Confidentiality and Public Statements
Except as otherwise provided in this Section 12.4, the terms and conditions of this Agreement, and all data, reports, records and other information of any kind whatsoever developed or acquired by a Relevant Party from another Relevant Party in connection with this Agreement (“Confidential Information”) shall be treated by the Relevant Parties as confidential and no Relevant Party shall reveal or otherwise disclose such Confidential Information to third parties without the prior written consent of the other Relevant Party. Confidential Information that is available or that becomes available in the public domain, other than through a breach of this provision by a Relevant Party, shall no longer be treated as Confidential Information.
The foregoing restrictions shall not apply to the disclosure of Confidential Information (i) by Comstock or Tonogold as required by applicable securities Laws and listing rules, (ii) by any Relevant Party to any Affiliate, to any public or private financing source, to any contractors or subcontractors which the Relevant Parties may engage or seek to engage, to employees and legal, accounting and other professional advisors and consultants of the Relevant Party or to any third party to which the Relevant Party contemplates the transfer of its Participating Interest and the assignment hereof or with which the Relevant Party contemplates a merger, amalgamation or other corporate reorganization, provided, however, that in any such case only such Confidential Information as such third party shall have a legitimate business need to know shall be disclosed and the person to whom disclosure is made shall first undertake in writing to protect the confidential nature of such information at least to the same extent as the parties are obligated 

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under this Section 12.4, and (iii) required by Law to any government or regulator or to or by any court or tribunal.
In the event that a Relevant Party is required to disclose Confidential Information to any government or regulator or to or by any court or tribunal, the Relevant Party so required shall immediately notify the other Relevant Party of such requirement and the terms thereof and the proposed form and content of the disclosure prior to such submission (unless such notice is prohibited by Law or there is insufficient time afforded under Law). The other Relevant Party shall have the right to review and comment upon the form and content of the disclosure and to object to such disclosure to the court, government, tribunal or regulator concerned and to seek confidential treatment of any Confidential Information to be disclosed on such terms as such Relevant Party shall, in its sole discretion, determine.
12.5    Entire Agreement: Successors and Permitted Assigns
This Agreement contains the entire understanding of the parties hereto and supersedes all prior negotiations, representations, offers, agreements and understandings, whether written or oral, between or among the parties hereto relating to the subject matter hereof. There are no conditions, covenants, representations, warranties or other agreements in connection with the subject matter hereof except as specifically set forth herein.
This Agreement and the obligations and rights created herein shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the Participants. No Relevant Party shall assign any of its rights or delegate any of its duties under this Agreement (other than in connection with a transfer permitted under Section 11) without the prior written consent of the other Relevant Parties.  Any assignment of rights or delegation of duties under this Agreement without such prior written consent shall be void.
All parties hereto have participated substantially in the negotiation and drafting of this Agreement, and no ambiguity herein shall be construed against the draftsman.
12.6    Further Assurances
Each Participant agrees that it shall, from time to time and without additional consideration, execute all such additional documents and instruments and do all such acts and things which are within its powers as may be reasonably necessary, advisable or convenient to implement and carry out the intent and purpose of this Agreement.
Except for indemnification hereunder or damages for breach described in Section 9.7(d), in no event shall any party hereto be liable for consequential, special, indirect or incidental damages arising out of a breach of or default under this Agreement, even if informed of the possibility of such damages in advance.
In any proceeding brought to enforce the rights and obligations set forth in this Agreement, the prevailing party shall be entitled to reimbursement of reasonable fees, expenses and costs 

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(including reasonable fees and expenses of counsel, experts and witnesses) incurred by it in such proceeding.
The Relevant Parties acknowledge that money damages and other damages at law for a breach or threatened breach hereof by it or any of its Affiliates or any of its or their respective representatives is unlikely to be calculable, that such a breach or threatened breach is likely to cause irreparable harm to each non-breaching Relevant Parties and that remedies at law are likely to be inadequate and insufficient to protect each non-breaching Relevant Party against any such actual or threatened breach.  Accordingly, each Relevant Party, on behalf of itself and its Affiliates and its and their respective representatives, agrees to the granting of specific performance, injunctive relief and other equitable remedies in favor of the other Relevant Parties in the event of any such breach or threatened breach, without proof of actual damages and without the requirement to post any bond or other security.  Such performance, relief and remedies shall not be the exclusive remedy for a breach or threatened breach, but (subject to the second paragraph of this Section 12.6) shall be in addition to all other rights and remedies available at law, in equity or otherwise.
12.7    Headings
The headings to the Sections of this Agreement and the Exhibits are inserted for convenience only and shall not affect the construction or interpretation hereof or thereof.
12.8    Severability
If any provision of this Agreement shall hereafter be held to be invalid, unenforceable or illegal, in whole or in part, in any jurisdiction under any circumstances for any reason, (a) such provision shall be reformed to the minimum extent necessary to cause such provision to be valid, enforceable and legal while preserving the original intent of the parties hereto as expressed in, and the benefits and burdens provided by, this Agreement or (b) if such provision cannot be so reformed, such provision shall be severed from this Agreement and an equitable adjustment shall be made to this Agreement (including addition of necessary further provisions to this Agreement) so as to give effect to the intent so expressed and the benefits and burdens so intended.  Such holding shall not affect or impair the validity, enforceability or legality of such provision in any other jurisdiction or under any other circumstances.  Neither such holding nor such reformation nor severance shall affect or impair the legality, validity or enforceability of any other provision of this Agreement.
12.9    Taxes
Each Participant shall be directly responsible for and shall directly pay all taxes applicable to revenues or income received by the Participant through Operations under this Agreement. In particular, each Participant shall individually file its tax returns with the proper authorities and independently file claims for and recover any income tax credits. A Participant's decision with respect to such tax matters shall not have any binding effect on the course of actions taken by the other Participants. All costs of Operations incurred hereunder shall be for the account of the Participant or Participants making or incurring the same and, if more than one, then in proportion 

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to their respective Participating Interests, and each Participant on whose behalf any costs have been so incurred shall be entitled to claim all tax benefits, write-offs and deductions with respect thereto.
12.10    Partition
Each of the Participants waives any right to partition of the Properties or the Mining Parcels (or any part thereof and no party shall seek or be entitled to partition of any of the Properties or the Mining Parcels, whether by way of physical partition, judicial sale or otherwise, in each case during or after the term of this Agreement.
12.11    Governing Law
This Agreement shall be governed by, interpreted and enforced in accordance with the laws of the State of Nevada, without regard to its conflicts of laws and provisions.
12.12    Professional Costs
Except as otherwise provided herein, each party hereto shall be responsible for its own legal and professional fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby.
12.13    Counterparts
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which taken together shall be deemed to constitute one and the same instrument. Counterparts may be executed either in original or faxed form and may be transmitted electronically and the parties hereto adopt any signatures received by a receiving fax machine or electronically as original signatures of the parties hereto.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
COMSTOCK MINING INC.
By:    _______________________________
Name:    Corrado DeGasperis
Title:     Chief Executive Officer
TONOGOLD RESOURCES, INC.
By: ________________________________
Name:    Mark Ashley 
Title:    Chief Executive Officer
Accepted and agreed:
COMSTOCK MINING LLC
By: its Manager, Comstock Mining Inc.

By:    _______________________________
Name:    Corrado DeGasperis
Title:     Chief Executive Officer 

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EXHIBIT A -  
DEFINITIONS
Except as the context may otherwise require, the following words and terms shall have the meanings ascribed to them below:
(a)     “Affiliate” of a Participant means an entity or individual that Controls, is Controlled by, or is under common Control with the Participant.
(b)    “Agreement” includes any amendments hereto and modifications hereof and all Exhibits annexed hereto.
(c)    “American Flat PP&E” has the meaning ascribed thereto in Section 8.9.
(d)    “Assessment” has the meaning ascribed thereto in Section 5.1(b).
(e)     “Authorized Allocation” has the meaning ascribed thereto in Section 9.2
(f)    “Board/Manager” has the meaning ascribed thereto in Section 7.1
(g)    “Budget” means a detailed estimate of all costs to be incurred with respect to a Program and, with respect to Programs to be undertaken after the Funding Completion Date, a schedule of cash advances to be made by the Participants in respect thereof.
(h)    “Business Day” means any day which is not a Saturday, Sunday or statutory holiday in the State of Nevada.
(i)    “Capital Call” has the meaning ascribed thereto in Section 9.7(b).
(j)    “Capital Contribution” has the meaning ascribed thereto in Section 9.7(a).
(k)    “Commencement Date” has the meaning ascribed thereto in Section 5.1(c)(i).
(l)    “Continuance Deadline” has the meaning ascribed thereto in Section 5.1(c).
(m)    “Continuing Obligations” means obligations or responsibilities under applicable Law that are reasonably expected to continue or arise after Operations on a particular area of the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) have ceased or are suspended, including, but not limited to, Environmental Compliance.
(n)    “Contribution Option Period” has the meaning ascribed thereto in Section 9.7(d).
(o)    “Control” used as a verb means, when used with respect to an entity, the ability, directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity through: 

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(i)    the legal or beneficial ownership of voting securities or membership interests;
(ii)    the right to appoint managers, directors or corporate management;
(iii)    contract;
(iv)    operating agreement;
(v)    voting trust; or
(vi)    otherwise,
and, when used with respect to an individual, means the actual or legal ability to control the actions of that individual, through family relationship, agency, contract or otherwise; and “Control” used as a noun means an interest which gives the holder the ability to exercise any of the foregoing powers.
(p)    “Debenture” means Comstock’s 11% Senior Secured Debenture due 2021, issued to GF Comstock 2, LP, as amended, restated or otherwise modified from time to time.
(q)    “Development” means commercially reasonable activities directed toward the preparation (other than Exploration) for the removal and recovery of Products, including, without limitation, the construction or installation of a mill or any other improvements to be used for the mining, handling, milling, concentrating, beneficiation or other processing of Products.
(r)    “Diluted Participant” has the meaning ascribed thereto in Section 6.2(b).
(s)    “Encumbrance” or “Encumbrances” means mortgages, deeds of trust, easement, right of way, security interests, pledges, liens, net profits interests, royalties or overriding royalty interests, other payments out of production, or other burdens of any nature, excluding any assessment or work required by Law.
(t)    “Environmental and Mining Compliance” means taking all actions required to comply with, and refraining from taking any actions prohibited or not permitted under, (i) any Environmental Law or Mining Law, (ii) permits, consents, approvals, waivers, licenses and authority regulation of any governmental or regulatory authority under any Environmental Law or Mining Law or (iii) any provision of any lease, contract, agreement, deed or other instrument relating to taking, or refraining from taking, any action described in clause (i) or (ii) of this sentence, in each case relating to any of the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised), the Operations or the Project Holding Company and in each case whether existing now or in the future.
(u)    “Environmental Laws” means Laws aimed at: reclamation or restoration of properties, including the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised); abatement of pollution; protection of the environment; monitoring environmental conditions; protection of wildlife, including endangered species; ensuring public safety from environmental hazards; protection of cultural or historic 

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resources; management, storage or control of hazardous materials and substances; releases or threatened releases of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances into the environment; and all other Laws relating to the manufacturing, processing, distribution, use, treatment, storage, disposal, handling or transport of pollutants, contaminants, chemicals or industrial, toxic or hazardous substances or wastes.
(v)    “Environmental Liabilities” means any and all claims, actions, causes of action, damages, losses, liabilities, obligations, penalties, judgments, amounts paid in settlement, assessments, costs, disbursements or expenses (including, without limitation, legal fees and costs, experts' fees and costs, and consultants' fees and costs) of any kind or of any nature whatsoever that are asserted against any Participant, by any person other than any of the other Participants, alleging liability (including, without limitation, liability for studies, testing or investigatory costs, cleanup costs, response costs, removal costs, remediation costs, containment costs, restoration costs, corrective action costs, closure costs, reclamation costs, natural resource damages, property damages, business losses, personal injuries, penalties or fines) arising out of, based on or resulting from: (i) the presence, release, threatened release, discharge or emission into the environment of any hazardous materials or substances (A) existing or arising on, beneath or above any of the Lucerne Property or (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) and (B) emanating or migrating or threatening to emanate or migrate from any of the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) to off-site properties; (ii) physical disturbance of the environment caused by Operations; or (iii) the violation or alleged violation of any Environmental Laws arising from or relating to Operations.
(w)    “Execution Date” being the date both Parties execute this Agreement
(x)    “Existing Data” means maps, drill logs and other drilling data, core tests, core samples, pulps, reports, surveys, assays, analyses, production reports, operations, technical, scientific and other material or information relating to any of the Properties.
(y)    “Exploration” means commercially reasonably activities directed toward ascertaining the existence, location, quantity, quality or commercial value of deposits of Products. 
(z)    “Funding Completion Date” has the meaning ascribed thereto in Section 5.1(c).
(aa)    “Government Fees” means all rentals, holding fees, location fees, maintenance payments or other payments required by any Law to be paid to a federal, state, municipal, or territorial government or governmental or regulation authority, in order to locate or maintain any mineral, mining or surface leases, claims, rights or other tenures included in the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised).
(bb)    “Hedging Contract” has the meaning ascribed thereto in Section 8.3(s).
(cc)    “Indemnified Party” has the meaning ascribed thereto in Section 3.7(a).

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(dd)    “Indemnifying Party” has the meaning ascribed thereto in Section 3.7(a).
(ee)    “Initial Contribution” has the meaning ascribed thereto in Section 6.2(a).
(ff)    “Interest” has the meaning ascribed thereto in Section 5.1(a).
(gg)    “Joint Venture Promissory Note” means the senior secured promissory note in the form attached hereto as Appendix B, payable to Comstock by Tonogold in the event that Tonogold elects to purchase the American Flat PP&E pursuant to Section 8.9, on behalf, and for the benefit of, the Project Holding Company, in the principal amount of twenty five million dollars ($25,000,000), as such principal amount may be adjusted in accordance with Section 8.9, plus accrued interest required to complete the purchase of the American Flat PP&E. Interest shall accrue on the unpaid principal amount of the Joint Venture Promissory Note, from the closing date of the purchase of the American Flat PP&E until the date that the Joint Venture Promissory Note is paid in full, at the rate of five percent (5%) per annum. Interest shall be calculated on the basis of a 360-day year and actual days elapsed. Accrued but unpaid interest shall be compounded monthly. The Joint Venture Promissory Note shall be paid in accordance and may be financed in accordance with the following terms. A down payment of no less than 25% of the principal amount of the Joint Venture Promissory Note shall be paid on the closing date for the purchase of the American Flat PP&E (“Down Payment”). No later than the date of first anniversary of the closing date for the purchase of the American Flat PP&E, a second payment shall be due in an amount equal to 50% of the principal amount of the Joint Venture Promissory Note, plus accrued and unpaid interest (“Second Note Payment”). The remaining principal amount of the Joint Venture Promissory Note plus accrued and unpaid interest shall be due on the date that is five hundred forty (540) days after the closing date for the purchase of the American Flat PP&E (“Final Note Payment”). The Joint Venture Promissory Note shall be conditioned upon all of Tonogold’s Participating Interests and the American Flat PP&E serving as collateral for the payment of the Joint Venture Promissory Note until it is paid in full.
(hh)    “Law” or “Laws” means all federal, state, territorial and local laws (statutory or common), rules, ordinances, regulations, grants, concessions, franchises, licenses, orders, directives, judgements, decrees and other governmental restrictions, including permits and other similar requirements, whether legislative, municipal, administrative or judicial in nature, including Environmental Laws, which are applicable to the Properties or the Operations, regardless of whether or not in existence as at the Execution Date or enacted or adopted hereafter; provided, however, that nothing in this definition is intended to make laws applicable to the parties during periods when such laws are not applicable by their terms or the timing of their enactment.
(ii)    “Lucerne Property” means, collectively, the mineral mining and exploration rights and real properties described in Exhibit B annexed hereto. 
(jj)    “Managing Director” means the person appointed as such under Section 8, including any successor Managing Director so appointed.

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(kk)    “Mining” means the mining, extracting, producing, handling, milling, concentrating or other processing of Products, but does not include such operations in small quantities conducted solely for testing purposes.
(ll)    “Mining Laws” means Laws (other than Environmental Laws) aimed at Mining (with regard to the exclusion in the definition thereof relating to operations for testing purposes) or mineral resource discovery, development, recovery or production, including, without limitation, exploration, engineering, drilling, property disturbance, nuisance, waste, transportation, handling, disposal and reclamation related thereto or arising therefrom.
(mm)    “Mining Parcels” has the meaning ascribed thereto in Section 8.10(b).
(nn)    “Non-Diluted Participant” has the meaning ascribed thereto in Section 6.2(b).
(oo)    “Northern Comstock Funding” means the capital contribution requirements of Comstock pursuant to the Northern Comstock Operating Agreement, which for the sake of clarity are comprised of monthly cash payments of $30,000 on the 15th day of each month (other than August), commencing on November 15, 2017 and a cash payment of $482,500 on August 28th of each year. For the sake of clarification, Comstock has paid or will pay the capital contributions under the Northern Comstock Operating Agreement up to and including the amount due on October 15, 2017. The Northern Comstock Operating Agreement provides that Comstock has, under certain circumstances, the right to settle the $482,500 annual capital contribution due in August of each year by issuing common shares of Comstock. Comstock shall maintain this right and shall notify Tonogold in writing on or before August 14th of each year that it has elected to issue common shares, with reasonable evidence that such shares have been issued. Following receipt of such notice, Tonogold shall pay $482,500 in cash directly to Comstock on or before August 28th and such cash payment shall be deemed to constitute a Project Cost. The Northern Comstock Operating Agreement provides that under certain circumstances (defined thereunder as a “One Payment Liquidity Surplus Event” and a “Two Payment Liquidity Surplus Event”), one-time accelerated capital contributions will be required with such amount being applied against future scheduled capital contributions in reverse chronological order. If accelerated capital contributions are triggered under such circumstances, Comstock shall promptly notify Tonogold in writing of such occurrence. The payment of any accelerated capital contribution shall be Comstock’s sole responsibility, however, Tonogold shall pay Comstock the amount of such accelerated capital contributions that would have been required to be paid at the time(s) that they would have been due had an accelerated capital contribution not been triggered. If Tonogold fails to pay Comstock for such capital contributions when due, such amounts that are not paid on a timely basis shall be deemed to be debt secured by Tonogold’s Participating Interest and shall accrue interest at a rate of six percent (6%) per annum. Interest on untimely capital contributions shall be calculated on the basis of a 360-day year and actual days elapsed until paid. Accrued but unpaid interest shall be compounded monthly.    
(pp)    “Northern Comstock Operating Agreement” means that certain Limited Liability Company Operating Agreement of Northern Comstock LLC, dated October 19, 2010, as amended on July 29, 2015, and as amended on September 28, 2015, as further amended, supplemented, restated or otherwise modified from time to time.

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(qq)    “NSR Royalty” has the meaning ascribed thereto in Section 6.3(a)
(rr)    “Operations” means the activities relating to Exploration, Development, Mining and Environmental and Mining Compliance carried out under this Agreement and other activities incidental or ancillary thereto.
(ss)    “Option” has the meaning ascribed thereto in 5.1(a)
(tt)     “Participant” and “Participants” mean Comstock and Tonogold and their respective successors and permitted assigns.
(uu)    “Participating Interest” means the percentage ownership interest of a Participant in the Project Holding Company, as such interest may from time to time be adjusted hereunder. Participating Interests shall be calculated to three (3) decimal places and rounded to two (2) decimal places (e.g., 1.519% shall be rounded to 1.52% and 1.521% shall be rounded to 1.52%). Decimal fractions of 0.005 or more shall be rounded up; decimal fractions of less than 0.005 shall be rounded down. The initial Participating Interests of the Participants are set forth in Section 6.1(a). Tonogold’s Participating Interest shall be zero at all times prior to the Funding Completion Date.
(vv)    “Permitted Encumbrances” means all Encumbrances arising from or related to the Northern Comstock Operating Agreement and the Debenture and any other Encumbrances as may be (i) approved by all of the Participants, (ii) created pursuant to the provisions of this Agreement, (iii) arise by operation of law other than due to a breach hereof or (iv) royalties listed on Exhibit B or Exhibit G to this Agreement.
(ww)    “Phase One Project Funding” means funding the Project Costs paid for by Tonogold in accordance with Section 5.1(c)(ii) of this Agreement; provided, however, that in no event shall amount of Phase One Project Funding be deemed to exceed $7,000,000 in the aggregate (even if actual expenditures shall have exceeded such amount, with such additional expenditures forming part of Phase Two Project Funding) and, to the extent that such expenditures are less than $7,000,000 in the aggregate, Tonogold shall have the right to pay to Comstock an amount equal to such deficit in order to meet the Project One Funding requirement. For the sake of clarity, the failure of Tonogold to make such payments as and when due under Section 5.1(c)(ii) for any reason (including Tonogold’s voluntary election to cease making such payments under this Agreement), the Option shall automatically terminate, expire and be cancelled as provided in Section 5.1(d).
(xx)    “Phase Two Project Funding” means the Project Costs paid for by Tonogold in accordance with Section 5.1(c)(iv) of this Agreement; provided, however, that in no event shall amount of Phase Two Project Funding be deemed to exceed $20,000,000 in the aggregate (even if actual expenditures shall have exceeded such amount) and, to the extent that such expenditures are less than $20,000,000 in the aggregate, Tonogold shall have the right to pay to Comstock an amount equal to such deficit in order to meet the Project Two Funding requirement . For the sake of clarity, the failure of Tonogold to make such payments as and when due under Section 5.1(c)(iv) for any reason (including Tonogold’s voluntary election to cease make such payments under this Agreement), the Option shall automatically terminate, expire and be cancelled as provided in Section 5.1(d).

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(yy)    “Products” means all metals, ores, concentrates, minerals and mineral resources, including materials derived from the foregoing, produced from the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) pursuant to this Agreement.
(zz)    “Program” means the description in reasonable detail of Operations, for a specified period of time or to achieve a specified objective, to be conducted on the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised) that will be managed by the Project Managing Director and upon exercise of the Option, the Managing Director.
([[)    “Project” means a mining project established on the Lucerne Property (and the American Flat PP&E, if the option to purchase the American Flat PP&E under Section 8.9 has been exercised), a description of which is included in the Program.
(aaa)    “Project Cost” means the actual cost of the Operations, including, but not limited to, (i) payments and/or reimbursements for Comstock-provided support and services, (ii) payments made in respect of the Northern Comstock Operating Agreement, (iii) a payment of $60,000 made by Tonogold to Comstock in respect of GF Comstock 2, LP’s legal costs and (iv) up to $5,000,000 set aside in an escrow account for the benefit of the Project Holding Company for the sole purpose of facilities construction, expansion or improvement and equipment as part of the Phase Two Project Funding. 
(bbb)     “Project Managing Director” means the person appointed as such under Section 8, including any successor Project Managing Director so appointed.
(ccc)    “Properties” means the Lucerne Property and the American Flat PP&E. 
(ddd)    “Releasee” has the meaning ascribed thereto in Section 3.7(c).
(eee)    “Relevant Party” has the meaning ascribed thereto in Section 3.7(a).
(fff)    “Steering Committee” has the meaning ascribed thereto in Section 7.1
(ggg)    “Subsidiary” means, with respect to any entity, each other entity in which such entity (i) owns or controls, directly or indirectly, share capital or other equity interests representing more than fifty percent (50%) of the outstanding voting shares or other equity interests, (ii) holds the rights to more than fifty percent (50%) of the economic interest of such other entity or (iii) has a relationship such that the financial statements of the other person may be consolidated into the financial statements of such entity under applicable accounting conventions.

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EXHIBIT B –
LUCERNE PROPERTIES, ENCUMBRANCES, ADVERSE CLAIMS, AGREEMENTS

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EXHIBIT C – 
COMSTOCK AND TONOGOLD OBLIGATION SUMMARY

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EXHIBIT D – 
INITIAL PROGRAM AND BUDGET

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EXHIBIT E – 
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT

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EXHIBIT F – 
MINING PARCELS SUBJECT TO RIGHT OF FIRST REFUSAL

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EXHIBIT G – 
DESCRIPTION OF AMERICAN FLAT PP&E SUBJECT TO OPTION TO PURCHASE

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APPENDIX A – 
SPECIAL USE PERMIT

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APPENDIX B – 
JOINT VENTURE PROMISSORY NOTE

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