Document:

Exhibit 10.2

 

OMNIBUS AGREEMENT

 

AMONG

 

EXMAR NV

 

EXMAR ENERGY PARTNERS LP

 

EXMAR GENERAL PARTNER LIMITED

 

AND

 

EXMAR ENERGY HONG KONG LTD.

 

 

TABLE OF CONTENTS

 

	
ARTICLE I
    
	
DEFINITIONS
    
	
 
    	
 
    	
 
    
	
Section 1.1
    	
Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    
	
FIVE-YEAR   VESSEL RESTRICTED BUSINESS OPPORTUNITIES
    
	
 
    	
 
    	
 
    
	
Section 2.1
    	
Five-Year Vessel Restricted Businesses
    	
5
    
	
Section 2.2
    	
Permitted Exceptions
    	
5
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    
	
NON-FIVE-YEAR   VESSEL RESTRICTED BUSINESS OPPORTUNITIES
    
	
 
    	
 
    	
 
    
	
Section 3.1
    	
Non-Five-Year Vessel Restricted Businesses
    	
6
    
	
Section 3.2
    	
Permitted Exceptions
    	
6
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    
	
BUSINESS   OPPORTUNITIES PROCEDURES
    
	
 
    	
 
    	
 
    
	
Section 4.1
    	
Procedures
    	
7
    
	
Section 4.2
    	
Scope of Prohibition
    	
9
    
	
Section 4.3
    	
Enforcement
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    
	
RIGHTS OF   FIRST OFFER
    
	
 
    	
 
    	
 
    
	
Section 5.1
    	
Rights of First Offer
    	
10
    
	
Section 5.2
    	
Procedures for Rights of First Offer
    	
10
    
	
 
    	
 
    	
 
    
	
ARTICLE VI
    
	
CARIBBEAN   FLNG INTERESTS PURCHASE OPTION
    
	
 
    	
 
    	
 
    
	
Section 6.1
    	
Option to Purchase the Caribbean FLNG Interests
    	
11
    
	
Section 6.2
    	
Procedures
    	
12
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    
	
EXCEL   INTERESTS PURCHASE OPTION
    
	
 
    	
 
    	
 
    
	
Section 7.1
    	
Option to Purchase the Excel Interests
    	
14
    
	
Section 7.2
    	
Procedures
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII
    
	
INDEMNIFICATION
    
	
 
    	
 
    	
 
    
	
Section 8.1
    	
Exmar Indemnification
    	
16
    
	
Section 8.2
    	
Indemnification Procedures
    	
16
    

 

i

 

	
ARTICLE IX
    
	
MISCELLANEOUS
    
	
 
    	
 
    	
 
    
	
Section 9.1
    	
Choice of Law; Submission To Jurisdiction
    	
17
    
	
Section 9.2
    	
Notice
    	
17
    
	
Section 9.3
    	
Entire Agreement
    	
18
    
	
Section 9.4
    	
Termination
    	
18
    
	
Section 9.5
    	
Waiver; Effect of Waiver or Consent
    	
18
    
	
Section 9.6
    	
Amendment or Modification
    	
18
    
	
Section 9.7
    	
Assignment
    	
18
    
	
Section 9.8
    	
Counterparts
    	
19
    
	
Section 9.9
    	
Severability
    	
19
    
	
Section 9.10
    	
Gender, Parts, Articles and Sections
    	
19
    
	
Section 9.11
    	
Further Assurances
    	
19
    
	
Section 9.12
    	
Withholding or Granting of Consent
    	
19
    
	
Section 9.13
    	
Laws and Regulations
    	
19
    
	
Section 9.14
    	
Negotiation of Rights of Exmar, Limited Partners, Assignees   and Third Parties
    	
19
    

 

ii

 

OMNIBUS AGREEMENT

 

THIS OMNIBUS AGREEMENT is entered into on, and effective as of, the Closing Date (as defined herein), among Exmar NV, a limited liability company organized under the laws of Belgium (the “Exmar”), Exmar Energy Partners LP, a limited partnership organized under the laws of the Republic of the Marshall Islands (the “MLP”), Exmar General Partner Limited, a limited liability company organized under the laws of Hong Kong and the general partner of the MLP (including any permitted successors and assigns under the MLP Agreement (as defined herein)) (the “General Partner”), and Exmar Energy Hong Kong Ltd., a limited company organized under the laws of Hong Kong (the “Operating Company”).

 

R E C I T A L S:

 

1.                                      The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Articles II and IV, with respect to (a) those business opportunities that the Exmar Entities (as defined herein) will not pursue during the term of this Agreement and (b) the procedures whereby such business opportunities are to be offered to the Partnership Group (as defined herein) and accepted or declined.

 

2.                                      The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Articles III and IV, with respect to (a) those business opportunities that the Partnership Group will not pursue during the term of this Agreement and (b) the procedures whereby such business opportunities are to be offered to Exmar and accepted or declined.

 

3.                                      The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Article V, with respect to (a) Exmar’s right of first offer relating to Five-Year Vessels (as defined herein) or Non-Five-Year Vessels (as defined herein) owned by the MLP and (b) the MLP’s right of first offer relating to Five-Year Vessels that Exmar might own.

 

4.                                      The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Articles VI and VII, with respect to the rights of the MLP to purchase the Caribbean FLNG Interests and the Excel Interests (each as defined herein).

 

5.                                      The Parties desire by their execution of this Agreement to evidence their understanding, as more fully set forth in Section 6.2(c)(ii), Section 7.2(c)(ii) and Article VIII, with respect to certain indemnification obligations of Exmar.

 

In consideration of the premises and the covenants, conditions, and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE I
 DEFINITIONS

 

Section 1.1                                    Definitions.  As used in this Agreement, the following terms shall have the respective meanings set forth below:

 

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“Acquiring Party” has the meaning given such term in Section 4.1.

 

“Affiliate” 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.

 

“Agreement” means this Omnibus Agreement, as it may be amended, modified, or supplemented from time to time in accordance with Section 9.6 hereof.

 

“Applicable Caribbean FLNG Interests” has the meaning given such term in Section 6.1(a).

 

“Board” means the Board of Directors of the MLP.

 

“Break-up Costs” means the aggregate amount of any and all additional taxes, flag administration, financing, hedging, legal and other similar costs (except with respect to Section 2.2(b) where Break-up Costs shall be deemed to include only administrative costs associated with transfer and re-flagging, including related legal costs) to (a) the Exmar Entities that would be required to transfer Five-Year Vessels acquired by the Exmar Entities as part of a larger transaction to a Partnership Group Member pursuant to Sections 2.2(b) or 2.2(d)(i), or (b) the Partnership Group that would be required to transfer Non-Five-Year Vessels acquired by the Partnership Group as part of a larger transaction to an Exmar Entity pursuant to Section 3.2(b)(i).

 

“Caribbean FLNG” means the newbuild FLNG that will operate under a 15-year contract (tolling agreement) with Pacific Rubiales Energy Corp., an independent oil and gas exploration company in Columbia, and will be located off the Colombian Caribbean coast.

 

“Caribbean FLNG Interests” means all of Exmar’s rights, title and interests in Caribbean FLNG Infrastructure Colombia S.A.S., a company organized under the laws of Hong Kong, and the owner of the Caribbean FLNG and interests in any other Exmar Entity holding interests in the Caribbean FLNG and including any charters or other agreements relating to the operation of the Caribbean FLNG then in effect.  For the avoidance of doubt, it is understood by the parties that Exmar has granted to Pacific Rubiales Energy Corp. an option to purchase up to 10% of Caribbean FLNG Infrastructure Colombia S.A.S., which option expires at delivery of the Caribbean FLNG in Colombia. For the purpose of this definition, “delivery” is understood to take place after full commissioning of the unit on location.

 

“Change of Control” means, with respect to any Person (the “Applicable Person”), any of the following events: (a) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the Applicable Person’s assets to any other Person, unless immediately following such sale, lease, exchange or other transfer such assets are owned, directly or indirectly, by the Applicable Person; (b) the consolidation or merger of the Applicable Person with or into another Person pursuant to a transaction in which the outstanding Voting Securities of the

 

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Applicable Person are changed into or exchanged for cash, securities or other property, other than any such transaction where (i) the outstanding Voting Securities of the Applicable Person are changed into or exchanged for Voting Securities of the surviving Person or its parent and (ii) the holders of the Voting Securities of the Applicable Person immediately prior to such transaction own, directly or indirectly, not less than a majority of the outstanding Voting Securities of the surviving Person or its parent immediately after such transaction; and (c) a “person” or “group” (within the meaning of Sections 13(d) or 14(d)(2) of the Exchange Act), other than Exmar and its Affiliates with respect to the General Partner, being or becoming the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of all of the then outstanding Voting Securities of the Applicable Person, except in a merger or consolidation which would not constitute a Change of Control under clause (b) above.

 

“Closing Date” means the date of the closing of the initial public offering of common units representing limited partner interests in the MLP.

 

“Conflicts Committee” means the Conflicts Committee of the Board of Directors.

 

“Contribution Assets” has the meaning given such term in Section 8.1.

 

“Excel” means the LNG carrier delivered in 2003 that is jointly owned with Mitsui O.S.K. Lines, Ltd.

 

“Excel Interests” means all of Exmar’s rights, title and interests in the Excel, including interests in any entity holding interests in the Excel and including any charters or other agreements relating to the operation of the Excel then in effect.

 

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

 

“Exmar Entities” means Exmar and any Person controlled, directly or indirectly, by Exmar, other than the Partnership Entities.

 

“Exmar Potential Transferee” has the meaning given such term in Section 5.2(b).

 

“Exmar Sale Assets” has the meaning given such term in Section 5.2(b).

 

“Exmar Transfer Notice” has the meaning given such term in Section 5.2(b).

 

“Exmar Transferring Party” has the meaning given such term in Section 5.2(b).

 

“First Offer Negotiation Period” has the meaning given such term in Section 5.2(c).

 

“Five-Year Vessel” means any floating LNG infrastructure asset operating under a charter with a firm term of five or more years, together with the related charter.  For the avoidance of doubt, any vessel that has not yet been built or contracted to be built that has, prior to the execution of any newbuilding contract, secured a charter with a firm term of five or more years, shall become a Five-Year Vessel upon commencement of its operations.

 

“FLNG” means a floating liquefied natural gas unit.

 

“General Partner” is defined in the introduction to this Agreement.

 

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“Losses” means losses, damages, liabilities, claims, demands, causes of action, judgments, settlements, fines, penalties, costs and expenses (including, without limitation, court costs and reasonable attorneys’ and experts’ fees) of any and every kind or character; provided, however, that such term shall not include any special, indirect, incidental or consequential damages.

 

“MLP” is defined in the introduction to this Agreement.

 

“MLP Agreement” means the First Amended and Restated Agreement of Limited Partnership of the MLP, dated as of                                                            , 2014, as such agreement is in effect on the Closing Date, to which reference is hereby made for all purposes of this Agreement.  No amendment or modification to the MLP Agreement subsequent to the Closing Date shall be given effect for purposes of this Agreement unless consented to by each of the Parties.

 

“Non-Five-Year Vessel” means any floating LNG infrastructure asset that is not a Five-Year Vessel.  For the avoidance of doubt, a Non-Five-Year Vessel shall include any vessel that has not yet been built or contracted to be built that has, prior to the execution of any newbuilding contract, secured a charter with a firm term of five or more years (and any such vessel shall be deemed to have been put under charter for five or more years at the time any such vessel commences operations).

 

“Offer” has the meaning given such term in Section 4.1.

 

“Offered Assets” has the meaning given such term in Section 4.1.

 

“Offeree” has the meaning given such term in Section 4.1.

 

“Offer Period” has the meaning given such term in Section 4.1.

 

“Parties” means the parties to this Agreement and their successors and permitted assigns.

 

“Partnership Entities” means the General Partner, the MLP and any Person controlled by any such entity.

 

“Partnership Group” means the MLP and any Person controlled by any such entity.

 

“Partnership Group Member” means any Person in the Partnership Group.

 

“Partnership Potential Transferee” has the meaning given such term in Section 5.2(a).

 

“Partnership Sale Assets” has the meaning given such term in Section 5.2(a).

 

“Partnership Transfer Notice” has the meaning given such term in Section 5.2(a).

 

“Partnership Transferring Party” has the meaning given such term in Section 5.2(a).

 

“Person” means an individual, corporation, partnership, joint venture, trust, limited liability company, unincorporated organization or any other entity.

 

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“Potential Transferee” has the meaning given such term in Section 5.2(b).

 

“Sale Assets” has the meaning given such term in Section 5.2(b).

 

“Transfer” means any transfer, assignment, sale or other disposition of any Non-Five-Year Vessel by an Exmar Entity or of any Five-Year Vessel or Non-Five-Year Vessel by a Partnership Group Member; provided, however, that such term shall not include: (a) transfers, assignments, sales or other dispositions from an Exmar Entity to another Exmar Entity, or from a Partnership Group Member to another Partnership Group Member; (b) transfers, assignments, sales or other dispositions pursuant to the terms of any related charter or other agreement with a charter party; (c) transfers, assignments, sales or other dispositions pursuant to the terms of any related joint venture agreement or other agreement with a joint venture partner; (d) transfers, assignments, sales or other dispositions pursuant to Articles II or III of this Agreement; or (e) grants of security interests in or mortgages or liens on such Five-Year Vessels or Non-Five-Year Vessels in favor of a bona fide third party lender and the foreclosing of any such security interest, mortgage or lien or other exercise of remedies by a bona fide third party lender.

 

“Transfer Notice” has the meaning given such term in Section 5.2(b).

 

“Transferring Party” has the meaning given such term in Section 5.2(b).

 

“UK Capital Lease” means the capital lease arrangement with respect to the Excalibur.

 

“Voting Securities” means securities of any class of Person entitling the holders thereof to vote in the election of members of the board of directors or other similar governing body of the Person.

 

ARTICLE II
 FIVE-YEAR VESSEL RESTRICTED BUSINESS OPPORTUNITIES

 

Section 2.1                                    Five-Year Vessel Restricted Businesses.  Subject to Section 9.4 and except as permitted by Section 2.2, each of the Exmar Entities shall be prohibited from acquiring, owning, operating or chartering Five-Year Vessels.

 

Section 2.2                                    Permitted Exceptions.  Notwithstanding any provision of Section 2.1 to the contrary, the restrictions in this Agreement shall not prevent any Exmar Entity from:

 

(a)                                 acquiring, owning, operating or chartering any Non-Five-Year Vessel;

 

(b)                                 acquiring one or more Five-Year Vessels if such Exmar Entity offers to sell the vessel to the MLP for the acquisition price plus any Break-up Costs in accordance with the procedures set forth in Section 4.1;

 

(c)                                  putting a Non-Five-Year Vessel under charter for five or more years if such Exmar Entity offers to sell the vessel to the MLP for fair market value (x) after the time it becomes a Five-Year Vessel and (y) at each renewal or extension of that charter for five or more years, in each case in accordance with the procedures set forth in Section 4.1;

 

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(d)                                 acquiring one or more Five-Year Vessels as part of the acquisition of a controlling interest in a business or package of assets and owning, operating or chartering such Five-Year Vessel(s); provided, however, that:

 

(i)                                     if less than 50% of the value of the business or assets acquired is attributable to Five-Year Vessels, as determined in good faith by Exmar, the Exmar Entity must offer to sell such Five-Year Vessel(s) to the MLP for their fair market value plus any Break-up Costs in accordance with the procedures set forth in Section 4.1; and

 

(ii)                                  if 50% or more of the value of the business or assets acquired is attributable to Five-Year Vessels, as determined in good faith by Exmar, Exmar shall notify the MLP of the proposed acquisition in writing.  The MLP shall, not later than the 10th calendar day following receipt of such notice, notify Exmar if it or any other Partnership Group Member wishes to acquire any Five-Year Vessel forming part of that business or package of assets in cooperation and simultaneously with the Exmar Entity acquiring the Non-Five-Year Vessels forming part of that business or package of assets.  If the MLP does not notify Exmar of its intent to pursue the acquisition within such 10 calendar days, the Exmar Entity may proceed with the acquisition and then offer to sell such vessels to the MLP as provided in subsection (i) above;

 

(e)                                  acquiring a non-controlling interest in any company, business or pool of assets;

 

(f)                                   acquiring, owning, operating or chartering any Five-Year Vessel if the MLP does not fulfill its obligation to purchase such Five-Year Vessel in accordance with the terms of any existing or future agreement;

 

(g)                                  acquiring, owning, operating or chartering any Five-Year Vessel that is subject to an offer to purchase by a Partnership Group Member as described in paragraphs (b), (c) and (d) above, in each case pending the offer of such Five-Year Vessel to the MLP and the MLP’s determination pursuant to Section 4.1 whether to purchase the Five-Year Vessel and, if the MLP has determined to purchase or to cause any Partnership Group Member to purchase such Five-Year Vessel, pending the closing of such purchase;

 

(h)                                 providing management services relating to any vessel; or

 

(i)                                     acquiring, owning, operating or chartering any Five-Year Vessel if the MLP has previously advised Exmar that it consents to such acquisition, operation or charter.

 

ARTICLE III
 NON-FIVE-YEAR VESSEL RESTRICTED BUSINESS OPPORTUNITIES

 

Section 3.1                                    Non-Five-Year Vessel Restricted Businesses.  Subject to Section 9.4 and except as permitted by Section 3.2, each Partnership Group Member shall be prohibited from acquiring, owning, operating or chartering Non-Five-Year Vessels.

 

Section 3.2                                    Permitted Exceptions.  Notwithstanding any provision of Section 3.1 to the contrary, the restrictions in this Agreement shall not prevent any Partnership Group Member from:

 

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(a)                                 owning, operating or chartering any Non-Five-Year Vessel that was previously a Five-Year Vessel while owned by any Partnership Group Member;

 

(b)                                 acquiring one or more Non-Five-Year Vessels as part of the acquisition of a controlling interest in a business or package of assets and owning, operating or chartering those Non-Five-Year Vessels; provided, however, that:

 

(i)                                     if less than 50% of the value of the business or assets acquired is attributable to Non-Five-Year Vessels, as determined in good faith by the Board, such Partnership Group Member must offer to sell such Non-Five-Year Vessels to Exmar for their fair market value plus any applicable Break-up Costs in accordance with the procedures set forth in Section 4.1; and

 

(ii)                                  if 50% or more of the value of the business or assets acquired is attributable to Non-Five-Year Vessels, as determined in good faith by the Board, the MLP shall notify Exmar of the proposed acquisition in writing.  Exmar shall, not later than the 10th calendar day following receipt of such notice, notify the MLP if it or any other Exmar Entity wishes to acquire any Non-Five-Year Vessel forming part of that business or package of assets in cooperation and simultaneously with the Partnership Group Member acquiring the Five-Year Vessels forming part of that business or package of assets.  If Exmar does not notify the MLP of its intent to pursue the acquisition within such 10 calendar days, the Partnership Group Member may proceed with the acquisition and then offer to sell such Non-Five-Year Vessels to Exmar as provided in subsection (i) above;

 

(c)                                  acquiring, owning, operating or chartering any Non-Five-Year Vessel that is subject to an offer to purchase by an Exmar Entity as described in paragraph (b) above pending the offer of such Non-Five-Year Vessel to Exmar and Exmar’s determination pursuant to Section 4.1 whether to purchase the Five-Year Vessel and, if Exmar has determined to purchase or cause any Exmar Entity to purchase such Five-Year Vessel, pending the closing of such purchase; or

 

(d)                                 acquiring, owning, operating or chartering Non-Five-Year Vessels if Exmar has previously advised the MLP that it consents to such acquisition, ownership, operation or charter.

 

ARTICLE IV
 BUSINESS OPPORTUNITIES PROCEDURES

 

Section 4.1                                    Procedures.  In the event that (x) a Partnership Group Member acquires, operates or puts under charter Non-Five-Year Vessels in accordance with Section 3.2(b)(i), or (y) an Exmar Entity acquires, operates or puts under charter Five-Year Vessels in accordance with Sections 2.2(b), 2.2(c) or 2.2(d)(i), then simultaneously or in any event not later than 30 calendar days after the consummation of the acquisition or the commencement of operations or charter, such acquiring Party (the “Acquiring Party”) shall notify (1) Exmar, in the case of an acquisition by a Partnership Group Member or (2) the Board, in the case of an acquisition by an Exmar Entity and offer such party to be notified (each an “Offeree”) the opportunity for any Exmar Entity or Partnership Group Member, as applicable, to purchase such Non-Five-Year Vessels or

 

7

 

Five-Year Vessels, as applicable (the “Offered Assets”), for their fair market value (or, in the case of an acquisition in accordance with Section 2.2(b), the acquisition price) plus, in the case of an acquisition in accordance with Sections 2.2(b), 2.2(d)(i) or 3.2(b)(i), any applicable Break-up Costs, in each case on commercially reasonable terms in accordance with this Section 4.1 (the “Offer”).  The Offer shall set forth the Acquiring Party’s proposed terms relating to the purchase of the Offered Assets by the applicable Exmar Entity or Partnership Group Member, including any liabilities to be assumed by the applicable Exmar Entity or Partnership Group Member as part of the Offer.  As soon as practicable after the Offer is made, the Acquiring Party will deliver to the Offeree all information prepared by or on behalf of or in the possession of such Acquiring Party relating to the Offered Assets and reasonably requested by the Offeree.  As soon as practicable, but in any event, within 30 calendar days after receipt of the Offer, the Offeree shall notify the Acquiring Party in writing that either:

 

(a)                                 Exmar has elected not to purchase (or not to cause any of its permitted Affiliates to purchase) or the Board has elected not to cause any Partnership Group Member to purchase, as applicable, such Offered Assets, in which event the Acquiring Party and its Affiliates shall, subject to the other terms of this Agreement (including Section 2.2(b)), be forever free, subject to the provisions of this Agreement, to continue to own, operate and charter such Offered Assets; or

 

(b)                                 Exmar has elected to purchase (or to cause any of its permitted Affiliates to purchase) or the Board has elected to cause any Partnership Group Member to purchase, as applicable, such Offered Assets, in which event the following procedures shall be followed:

 

(i)                                     After the receipt of the Offer by the Offeree, the Acquiring Party and the Offeree shall negotiate in good faith regarding the fair market value (and any applicable Break-up Costs) of the Offered Assets that are subject to the Offer and the other terms of the Offer on which the Offered Assets will be sold to the applicable Exmar Entity or Partnership Group Member.  If the Acquiring Party and the Offeree agree on the fair market value (and any applicable Break-up Costs) of the Offered Assets that are subject to the Offer and the other terms of the Offer during the 30-day period (the “Offer Period”) after receipt by the Acquiring Party of Exmar’s election to purchase (or election to cause any of its permitted Affiliates to purchase) or of the Board’s election to cause any Partnership Group Member to purchase, as applicable, the Offered Assets, Exmar shall purchase (or cause any of its permitted Affiliates to purchase) or the Board shall cause any Partnership Group Member to purchase, as applicable, the Offered Assets on such terms as soon as commercially practicable after such agreement has been reached.

 

(ii)                                  If the Acquiring Party and the Offeree are unable to agree on the fair market value (and any applicable Break-up Costs) of the Offered Assets that are subject to the Offer or on any other terms of the Offer during the Offer Period, the Acquiring Party and the Offeree will engage a mutually-agreed-upon investment banking firm, ship broker or other expert advisor prior to the end of the Offer Period to determine the fair market value of the Offered Assets and/or the other terms on which the Acquiring Party and the Offeree are unable to agree.  In determining the fair market value of the Offered Assets and other terms on which the Offered Assets are to be sold, the investment banking firm, ship broker or other expert advisor, as applicable, will have

 

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access to the proposed sale and purchase values and terms for the Offer submitted by the Acquiring Party and the Offeree, respectively, and to all information prepared by or on behalf of the Acquiring Party relating to the Offered Assets and reasonably requested by such investment banking firm, ship broker or other expert advisor.  Such investment banking firm, ship broker or other expert advisor will determine the fair market value (and any applicable Break-up Costs) of the Offered Assets and/or the other terms on which the Acquiring Party and the Offeree are unable to agree within 30 calendar days of its engagement and furnish the Acquiring Party and the Offeree its determination.  The fees and expenses of the investment banking firm, ship broker or other expert advisor, as applicable, will be divided equally between the Acquiring Party and the Offeree.  Upon receipt of such determination, the Offeree will have the option, but not the obligation:

 

(A)                               in the case that the Offeree is Exmar, to purchase or cause any of its permitted Affiliates to purchase, or in the case that the Offeree is the Board, to cause any Partnership Group Member to purchase the Offered Assets for the fair market value (and any applicable Break-up Costs), and on the other terms determined by the ship broker or investment banking firm, as soon as commercially practicable after determinations have been made; or

 

(B)                               in the case that the Offeree is Exmar, to elect not to cause any of its permitted Affiliates to purchase, or in the case that the Offeree is the Board, not to cause any Partnership Group Member to purchase such Offered Assets, in which event the Acquiring Party and its Affiliates shall, subject to the other terms of this Agreement, be forever free to continue to own and operate such Offered Assets.

 

Section 4.2                                    Scope of Prohibition.  If any Party or its Affiliates engages in the ownership or operation of Five-Year Vessels in the case of an Exmar Entity, or Non-Five-Year Vessels in the case of a Partnership Group Member, pursuant to any of the exceptions described in Sections 2.2 or 3.2, as applicable, the Party and its Affiliates may not subsequently expand that portion of their business other than pursuant to the exceptions contained in such Sections 2.2 or 3.2.  Except as otherwise provided in this Agreement or the MLP Agreement, each Party and its Affiliates shall be free to engage in any business activity whatsoever, including those that may be in direct competition with the Exmar Entities or the Partnership Group Members.

 

Section 4.3                                    Enforcement.  Each Party agrees and acknowledges that the other Parties do not have an adequate remedy at law for the breach by any such Party of its covenants and agreements set forth in this Article IV, and that any breach by any such Party of its covenants and agreements set forth in this Article IV would result in irreparable injury to such other Parties.  Each Party further agrees and acknowledges that any other Party may, in addition to the other remedies which may be available to such other Party, file a suit in equity to enjoin such Party from such breach, and consent to the issuance of injunctive relief to enforce the provisions of Article IV of this Agreement.

 

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ARTICLE V
 RIGHTS OF FIRST OFFER

 

Section 5.1                                    Rights of First Offer.

 

(a)                                 The Partnership Group hereby grants Exmar a right of first offer on any proposed Transfer by any Partnership Group Member of any Five-Year Vessels or any Non-Five-Year Vessels owned or acquired by any Partnership Group Member.  With respect to any such proposed Transfer, the Partnership Group need not offer any particular Five-Year Vessel or Non-Five-Year Vessel to Exmar if Exmar has previously advised the MLP that it does not wish to acquire such vessel.  Such right of first offer is subject to applicable rights of the MLP’s joint venture partners under applicable joint venture agreements.

 

(b)                                 The Exmar Entities hereby grant the MLP a right of first offer on any proposed Transfer of any Five-Year Vessels owned or acquired by any Exmar Entity.  With respect to any such proposed Transfer, the Exmar Entities need not offer any particular Five-Year Vessel to the MLP if the MLP has previously advised the Exmar Entities that it does not wish to acquire such vessel.  Such right of first offer is subject to applicable rights of the Exmar Entities’ joint venture partners under applicable joint venture agreements.

 

(c)                                  The Parties acknowledge that all potential Transfers of Five-Year Vessels or Non-Five-Year Vessels pursuant to this Article V are subject to obtaining any and all written consents of governmental authorities and other non-affiliated third parties (including, without limitation, lenders and other providers of financing) and to the terms of all agreements (including, without limitation, debt and other financing arrangements) in respect of such Five-Year Vessels or Non-Five-Year Vessels, as applicable.

 

Section 5.2                                    Procedures for Rights of First Offer.

 

(a)                                 In the event that a Partnership Group Member (a “Partnership Transferring Party”) proposes to Transfer any Five-Year Vessel or any Non-Five-Year Vessels (the “Partnership Sale Assets”), prior to engaging in any negotiation for such Transfer with any non-affiliated third party or otherwise offering to Transfer the Partnership Sale Assets to any non-affiliated third party, such Partnership Transferring Party shall give Exmar (a “Partnership Potential Transferee”), written notice setting forth all material terms and conditions (including, without limitation, the purchase price or the terms of the charter agreement and a description of the Partnership Sale Asset(s) on which such Partnership Transferring Party desires to Transfer the Partnership Sale Assets) (a “Partnership Transfer Notice”).

 

(b)                                 In the event that an Exmar Entity (an “Exmar Transferring Party” and, together with a Partnership Transferring Party, a “Transferring Party”) proposes to Transfer any Five-Year Vessels (the “Exmar Sale Assets” and, together with the Partnership Sale Assets, the “Sale Assets”), prior to engaging in any negotiation for such Transfer with any non-affiliated third party or otherwise offering to Transfer the Exmar Sale Assets to any non-affiliated third party, such Exmar Transferring Party shall give the MLP (an “Exmar Potential Transferee” and, together with a Partnership Potential Transferee, a “Potential Transferee”), written notice setting forth all material terms and conditions (including, without limitation, the purchase price or the

 

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terms of the charter agreement and a description of the Exmar Sale Asset(s) on which such Exmar Transferring Party desires to Transfer the Exmar Sale Assets) (an “Exmar Transfer Notice” and, together with a Partnership Transfer Notice, each a “Transfer Notice”).

 

(c)                                  After delivery of a Transfer Notice, the Transferring Party then shall be obligated to negotiate in good faith for a 30-day period following the delivery by the Transferring Party of the Transfer Notice (the “First Offer Negotiation Period”) to reach an agreement for the Transfer of such Sale Assets to the Potential Transferee or any of its Affiliates on the terms and conditions set forth in the Transfer Notice.  If no such agreement with respect to the Sale Assets is reached during the First Offer Negotiation Period, and the Transferring Party has not Transferred, or agreed in writing to Transfer, such Sale Assets to a third party within 180 calendar days after the end of the First Offer Negotiation Period on terms generally no less favorable to the Transferring Party than those included in the Transfer Notice, then the Transferring Party shall not thereafter Transfer any of the Sale Assets without first offering such assets to the applicable Potential Transferee in the manner provided above.

 

ARTICLE VI
 CARIBBEAN FLNG INTERESTS PURCHASE OPTION

 

Section 6.1                                    Option to Purchase the Caribbean FLNG Interests.

 

(a)                                 Exmar hereby grants to the Partnership Group the right and option to purchase, in one or more transactions and subject to no condition, other than as set forth in Section 6.1(b), for fair market value at any time within 24 months following the commencement of the operations of the Caribbean FLNG with Pacific Rubiales Energy Corp., all or a portion of the Caribbean FLNG Interests (such interests, the “Applicable Caribbean FLNG Interests”).  For the avoidance of doubt, if the Partnership Group purchases a portion, but not all, of the Caribbean FLNG Interests in accordance with this Article VI, the Partnership Group has the right and option to purchase, in one or more transactions and subject to no condition other than as set forth in Section 6.1(b), for fair market value at any time within 24 months following the commencement of the operations of the Caribbean FLNG with Pacific Rubiales Energy Corp., all or a portion of the remaining Caribbean FLNG Interests.

 

(b)                                 The Parties acknowledge that the potential transfer of the Applicable Caribbean FLNG Interests pursuant to this Article VI is subject to obtaining any and all written consents of governmental authorities and other third parties including providers of financing and other holders of security interests in the Applicable Caribbean FLNG Interests, and to the terms of all agreements in respect of the Applicable Caribbean FLNG Interests including, without limitation, (i) any rights of first refusal of the parties to such agreements to purchase the Applicable Caribbean FLNG Interests and (ii) any rights of lenders or other providers of financing.  Exmar hereby covenants and agrees to use its reasonable efforts to obtain any such consents required to be obtained by it in connection with the transfer of the Applicable Caribbean FLNG Interests pursuant to this Article VI.

 

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Section 6.2                                    Procedures.

 

(a)                                 Not later than 30 calendar days after the date on which the Caribbean FLNG commences operation with Pacific Rubiales Energy Corp., Exmar shall notify the Board and offer the Board the opportunity to cause any Partnership Group Member to purchase the Applicable Caribbean FLNG Interests for their fair market value pursuant to Section 6.1(a).

 

(b)                                 If a Partnership Group Member decides to exercise the option to purchase the Applicable Caribbean FLNG Interests, it will provide, within 30 days of receipt of notice pursuant to Section 6.2(a), written notice to Exmar of such exercise, the fair market value it proposes to pay for the Applicable Caribbean FLNG Interests, and the other material terms of the purchase.  The decision to purchase the Applicable Caribbean FLNG Interests, the fair market value to be paid for the Applicable Caribbean FLNG Interests, and the other terms of the purchase shall be approved by the Conflicts Committee.  If the Partnership Group Member and Exmar are unable to agree on the fair market value of the Applicable Caribbean FLNG Interests and/or the other material terms, the Partnership Group Member and Exmar shall engage a mutually-agreed-upon investment banking firm, ship broker or other expert advisor to determine the fair market value of the Applicable Caribbean FLNG Interests and/or the other material terms on which the Partnership Group Member and Exmar are unable to agree.  In determining the fair market value of the Applicable Caribbean FLNG Interests and/or the other material terms on which the Applicable Caribbean FLNG Interests are to be sold, the investment banking firm, ship broker or other expert advisor, as applicable, will have access to the proposed sale and purchase values and terms for the offer submitted by the Partnership Group Member and Exmar, respectively, and to all information prepared by or on behalf of the Partnership Group Member and Exmar with respect to the Applicable Caribbean FLNG Interests and reasonably requested by such investment banking firm, ship broker or other expert advisor.  Such investment banking firm, ship broker or other expert advisor will determine the fair market value of the Applicable Caribbean FLNG Interests and/or the other terms on which the Partnership Group Member and Exmar are unable to agree within 30 calendar days of its engagement and furnish the Partnership Group Member and Exmar its determination.  The fees and expenses of the investment banking firm, ship broker or other expert advisor, as applicable, will be divided equally between the Partnership Group Member and Exmar.  Upon receipt of such determination, the Partnership Group Member will have the option, but not the obligation to purchase the Applicable Caribbean FLNG Interests for the fair market value and on the other terms, which include those specified in Section 6.2(c)(i) through Section 6.2(c)(vi), as determined by the investment banking firm, ship broker or other expert advisor, as soon as commercially practicable after determinations have been made.

 

(c)                                  If a Partnership Group Member chooses to exercise its option to purchase the Applicable Caribbean FLNG Interests under Section 6.2(a), the applicable parties shall enter into a purchase and sale agreement for the purchase and sale of the Applicable Caribbean FLNG Interests pursuant to which Exmar shall be obligated to sell the Applicable Caribbean FLNG Interests to the Partnership Group Member and the Partnership Group Member shall be obligated to purchase the Applicable Caribbean FLNG Interests from Exmar.  The terms of the purchase and sale agreement will include the following:

 

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(i)                                     the Partnership Group Member will deliver a cash purchase price (unless the Partnership Group Member and Exmar agree that the consideration will be paid by means of equity of the MLP, an interest-bearing promissory note or other form of consideration);

 

(ii)                                  the Partnership Group will be entitled to the benefit of the indemnification contained in Article VIII of this Agreement for the remaining term of such indemnification with respect to events or conditions associated with the operation of the Caribbean FLNG and occurring before the date of acquisition of the Caribbean FLNG Interests by the Partnership Group Member; provided, however, that the remaining term of any such indemnification with respect to the Caribbean FLNG shall be deemed to be not less than three (3) years from the closing date of the acquisition of the Applicable Caribbean FLNG Interests by the Partnership Group Member;

 

(iii)                               Exmar will provide customary representations and warranties with respect to title to the Caribbean FLNG Interests and any other such matters as the Partnership Group Member may approve, which approval will not be unreasonably withheld;

 

(iv)                              Exmar will grant to the Partnership Group Member the right, exercisable at the Partnership Group Member’s risk and expense, to make such surveys, tests and inspections of the Caribbean FLNG as the Partnership Group Member may deem desirable, so long as such surveys, tests or inspections do not damage the Caribbean FLNG or interfere with the activities of the Exmar Entities or Pacific Rubiales Energy Corp. thereon and so long as the Partnership Group Member has furnished Exmar with evidence that adequate liability insurance is in full force and effect;

 

(v)                                 the Partnership Group Member will have the right to terminate its obligation to purchase the Applicable Caribbean FLNG Interests under this Article VI and the related purchase and sale agreement if the results of any searches, surveys, tests or inspections conducted pursuant to paragraph (iv) above are, in the reasonable opinion of the Partnership Group, unsatisfactory; and

 

(vi)                              neither Exmar nor the applicable Partnership Group Member shall have any obligation to sell or buy the Applicable Caribbean FLNG Interests if any of the consents referred to in Section 6.1(b) above have not been obtained.

 

(d)                                 If the Board, on behalf of a Partnership Group Member, chooses or is deemed to have chosen not to exercise its option to purchase all of the Caribbean FLNG Interests within 24 months following the commencement of the operations of the Caribbean FLNG with Pacific Rubiales Energy Corp., all future rights to purchase any of the Caribbean FLNG Interests by the Partnership Group will be extinguished.

 

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ARTICLE VII
 EXCEL INTERESTS PURCHASE OPTION

 

Section 7.1                                    Option to Purchase the Excel Interests.

 

(a)                                 Exmar hereby grants to the Partnership Group the unconditional right and option to purchase for fair market value at any time within 24 months following the commencement of a charter for the Excel with an initial term of five or more years, the Excel Interests.

 

(b)                                 The Parties acknowledge that the potential transfer of the Excel Interests pursuant to this Article VII is subject to obtaining any and all written consents of governmental authorities and other third parties and to the terms of all agreements existing as of the date hereof in respect of the Excel Interests including, without limitation, any rights of first refusal of the parties to such agreements to purchase the Excel Interests.  Exmar hereby covenants and agrees to use its reasonable efforts to obtain any such consents required to be obtained by it in connection with the transfer of the Excel Interests pursuant to this Article VII.

 

Section 7.2                                    Procedures.

 

(a)                                 Not later than 30 calendar days after the date on which the Excel commences operations under a charter with an initial term of five or more years, Exmar shall notify the Board and offer the Board the opportunity to cause any Partnership Group Member to purchase the Excel Interests for its fair market value pursuant to Section 7.1(a).

 

(b)                                 If a Partnership Group Member decides to exercise the option to purchase the Excel Interests, it will provide, within 30 days of receipt of notice pursuant to Section 7.2(a), written notice to Exmar of such exercise, the fair market value it proposes to pay for the Excel Interests, and the other material terms of the purchase.  The decision to purchase the Excel Interests, the fair market value to be paid for the Excel Interests, and the other terms of the purchase shall be approved by the Conflicts Committee.  If the Partnership Group Member and Exmar are unable to agree on the fair market value of the Excel Interests and/or the other material terms, the Partnership Group Member and Exmar shall engage a mutually-agreed-upon investment banking firm, ship broker or other expert advisor to determine the fair market value of the Excel Interests and/or the other material terms on which the Partnership Group Member and Exmar are unable to agree.  In determining the fair market value of the Excel Interests and/or the other material terms on which the Excel Interests are to be sold, the investment banking firm, ship broker or other expert advisor, as applicable, will have access to the proposed sale and purchase values and terms for the offer submitted by the Partnership Group Member and Exmar, respectively, and to all information prepared by or on behalf of the Partnership Group Member and Exmar with respect to the Excel Interests and reasonably requested by such investment banking firm, ship broker or other expert advisor.  Such investment banking firm, ship broker or other expert advisor will determine the fair market value of the Excel Interests and/or the other terms on which the Partnership Group Member and Exmar are unable to agree within 30 calendar days of its engagement and furnish the Partnership Group Member and Exmar its determination.  The fees and expenses of the investment banking firm, ship broker or other expert advisor, as applicable, will be divided equally between the Partnership Group Member and Exmar.  Upon receipt of such determination, the Partnership Group Member will have the

 

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option, but not the obligation in to purchase the Excel Interests for the fair market value and on the other terms, including those specified in Section 7.2(c)(i) through Section 7.2(c)(vi), as determined by the investment banking firm, ship broker or other expert advisor, as soon as commercially practicable after determinations have been made.

 

(c)                                  If a Partnership Group Member chooses to exercise its option to purchase the Excel Interests under Section 7.2(b), the applicable parties shall enter into a purchase and sale agreement for the purchase and sale of the Excel Interests pursuant to which Exmar shall be obligated to sell the Excel Interests to the Partnership Group Member and the Partnership Group Member shall be obligated to purchase the Excel Interests from Exmar.  The terms of the purchase and sale agreement will include the following:

 

(i)                                     the Partnership Group Member will deliver a cash purchase price (unless the Partnership Group Member and Exmar agree that the consideration will be paid by means of equity of the MLP, an interest-bearing promissory note or other form of consideration);

 

(ii)                                  the Partnership Group will be entitled to the benefit of the indemnification contained in Article VIII of this Agreement for the remaining term of such indemnification with respect to events or conditions associated with the operation of the Excel and occurring before the date of acquisition of the Excel Interests by the Partnership Group Member; provided, however, that the remaining term of any such indemnification with respect to the Excel shall be deemed to be not less than three (3) years from the closing date of the acquisition of the Excel Interests by the Partnership Group Member;

 

(iii)                               Exmar will provide customary representations and warranties with respect to title to the Excel Interests and any other such matters as the Partnership Group Member may approve, which approval will not be unreasonably withheld;

 

(iv)                              Exmar will grant to the Partnership Group Member the right, exercisable at the Partnership Group Member’s risk and expense, to make such surveys, tests and inspections of the Excel as the Partnership Group Member may deem desirable, so long as such surveys, tests or inspections do not damage the Excel or interfere with the activities of the Exmar Entities or the charterer of the Excel thereon and so long as the Partnership Group Member has furnished Exmar with evidence that adequate liability insurance is in full force and effect;

 

(v)                                 the Partnership Group Member will have the right to terminate its obligation to purchase the Excel Interests under this Article VII and the related purchase and sale agreement if the results of any searches, surveys, tests or inspections conducted pursuant to paragraph (iii) above are, in the reasonable opinion of the Partnership Group, unsatisfactory; and

 

(vi)                              neither Exmar nor the applicable Partnership Group Member shall have any obligation to sell or buy the Excel Interests if any of the consents referred to in Section 7.1(b) above have not been obtained.

 

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(d)                                 If the Board, on behalf of a Partnership Group Member, chooses or is deemed to have chosen not to exercise its option to purchase the Excel Interests at the price determined by the investment banking firm, ship broker or other expert advisor under Section 7.2(b), all future rights to purchase any of the Excel Interests by the Partnership Group will be extinguished.

 

ARTICLE VIII
 INDEMNIFICATION

 

Section 8.1                                    Exmar Indemnification.  Subject to the provisions of Section 8.2, Exmar shall indemnify, defend and hold harmless the Partnership Group from and against: (a) Losses to the Partnership Group arising from (i) the failure of the Partnership Group, immediately after the Closing Date, to be the owner of such valid leasehold interests or fee ownership interests in and to the assets contributed by the Exmar Entities to the Partnership Group prior to or on the Closing Date (the “Contribution Assets”) as are necessary to enable the Partnership Entities to own and operate the Contribution Assets in substantially the same manner that the Contribution Assets were owned and operated by the Exmar Entities immediately prior to the respective dates on which each such Contribution Asset was acquired by the Partnership Entities or (ii) the failure of the Partnership Entities to have by the Closing Date any consent or governmental permit necessary to allow the Partnership Entities to own or operate the Contribution Assets in substantially the same manner that the Contribution Assets were owned and operated by the Exmar Entities immediately prior to the respective dates on which each such Contribution Asset was acquired by the Partnership Entities, in each of clauses (i) and (ii) above, to the extent that Exmar is notified by the MLP of such Losses within three (3) years after the Closing Date; (b) all federal, state, foreign and local income tax liabilities attributable to the operation of the Contribution Assets prior to the Closing Date, including any such income tax liabilities of the Exmar Entities that may result from the consummation of the formation transactions for the Partnership Group and the MLP, but excluding any federal, state, foreign and local income taxes reserved on the books of the Partnership Group on the Closing Date; and (c) any costs incurred as a result of early termination of the UK Capital Lease.

 

Section 8.2                                    Indemnification Procedures.

 

(a)                                 The Partnership Group Members agree that within a reasonable period of time after they become aware of facts giving rise to a claim for indemnification pursuant to Section 8.1, they will provide notice thereof in writing to Exmar specifying the nature of and specific basis for such claim.

 

(b)                                 Exmar shall have the right to control all aspects of the defense of (and any counterclaims with respect to) any claims brought against the Partnership Group that are covered by the indemnification set forth in Section 8.1, including, without limitation, the selection of counsel, determination of whether to appeal any decision of any court and the settling of any such matter or any issues relating thereto; provided, however, that no such settlement shall be entered into without the consent (which consent shall not be unreasonably withheld) of the Partnership Group unless it includes a full release of the Partnership Group from such matter or issues, as the case may be.

 

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(c)                                  The Partnership Group Members agree to cooperate fully with Exmar with respect to all aspects of the defense of any claims covered by the indemnification set forth in Section 8.1, including, without limitation, the prompt furnishing to Exmar of any correspondence or other notice relating thereto that the Partnership Group may receive, permitting the names of the members of the Partnership Group to be utilized in connection with such defense, the making available to Exmar of any files, records or other information of the Partnership Group that Exmar considers relevant to such defense and the making available to Exmar of any employees of the Partnership Group; provided, however, that in connection therewith Exmar agrees to use reasonable efforts to minimize the impact thereof on the operations of the Partnership Group and further agrees to maintain the confidentiality of all files, records and other information furnished by a Partnership Group Member pursuant to this Section 8.2.  In no event shall the obligation of the Partnership Group to cooperate with Exmar as set forth in the immediately preceding sentence be construed as imposing upon the Partnership Group an obligation to hire and pay for counsel in connection with the defense of any claims covered by the indemnification set forth in this Article VIII; provided, however, that the Partnership Group Members may, at their own option, cost and expense, hire and pay for counsel in connection with any such defense.  Exmar agrees to keep any such counsel hired by the Partnership Group reasonably informed as to the status of any such defense (including providing such counsel with such information related to any such defense as such counsel may reasonably request) but Exmar shall have the right to retain sole control over such defense.

 

In determining the amount of any Loss for which any of the members of the Partnership Group is entitled to indemnification under this Agreement, the gross amount of the indemnification will be reduced by (i) any insurance proceeds realized by the Partnership Group, and such correlative insurance benefit shall be net of any incremental insurance premium that becomes due and payable by the Partnership Group as a result of such claim, and (ii) all amounts recovered by the Partnership Group under contractual indemnities from third Persons.  The Partnership Group hereby agrees to use commercially reasonable efforts to realize any applicable insurance proceeds or amounts recoverable under such contractual indemnities; provided, however, that the costs and expenses (including, without limitation, court costs and reasonable attorneys’ fees) of the Partnership Group in connection with such efforts shall be promptly reimbursed by Exmar in advance of any determination of whether such insurance proceeds or other amounts will be recoverable.

 

ARTICLE IX
 MISCELLANEOUS

 

Section 9.1                                    Choice of Law; Submission To Jurisdiction.  This Agreement shall be subject to and governed by the laws of the State of New York.  Each party hereby submits to the jurisdiction of the state and federal courts located in the State of New York and to venue in New York, New York.

 

Section 9.2                                    Notice.  All notices, requests or consents provided for or permitted to be given pursuant to this Agreement must be in writing and must be given by depositing the same in the mail, addressed to the Person to be notified, postpaid, and registered or certified with return receipt requested or by delivering such notice in person or by private-courier, prepaid, or by telecopier to such party.  Notice given by personal delivery or mail shall be effective upon actual

 

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receipt.  Couriered notices shall be deemed delivered on the date the courier represents that delivery will occur.  Notice given by telecopier shall be effective upon actual receipt if received during the recipient’s normal business hours, or at the beginning of the recipient’s next business day after receipt if not received during the recipient’s normal business hours.  All notices to be sent to a party pursuant to this Agreement shall be sent to or made at the address set forth below such party’s signature to this Agreement, or at such other address as such party may stipulate to the other parties in the manner provided in this Section 9.2.

 

Section 9.3                                    Entire Agreement.  This Agreement constitutes the entire agreement of the parties relating to the matters contained herein, superseding all prior contracts or agreements, whether oral or written, relating to the matters contained herein.

 

Section 9.4                                    Termination.  Upon a Change of Control of the General Partner or of the MLP, the provisions of Articles II, III, IV and V of this Agreement and Section 8.1 shall terminate immediately.  Upon a Change of Control of Exmar, the provisions of Articles II, III, IV and V of this Agreement applicable to Exmar shall terminate at the time that is the later of (i) the date on which all of the MLP’s outstanding subordinated units have converted to common units of the MLP and (ii) the date of the Change of Control of Exmar. On the date on which a majority of the MLP’s directors ceases to consist of directors that were (i) appointed by the General Partner prior to the first annual meeting of unitholders of the MLP and (ii) recommended for election to the board of directors of the MLP by a majority of the MLP’s Appointed Directors (as defined in the MLP Agreement), the provisions of Articles II, Article VI and Article VII and, to the extent applicable to any Exmar Entities, Sections Section 5.1(b) and Section 5.2(b) shall terminate immediately.

 

Section 9.5                                    Waiver; Effect of Waiver or Consent.  Any party hereto may (a) extend the time for the performance of any obligation or other act of any other party hereto or (b) waive compliance with any agreement or condition contained herein.  Except as otherwise specifically provided herein, any such extension or waiver shall be valid only if set forth in a written instrument duly executed by the party or parties to be bound thereby; provided, however, that the MLP may not, without the prior approval of the Conflicts Committee, agree to any extension or waiver of this Agreement that, in the reasonable discretion of the Board, will adversely affect the holders of common units of the MLP.  No waiver or consent, express or implied, by any party of or to any breach or default by any Person in the performance by such Person of its obligations hereunder shall be deemed or construed to be a waiver or consent of or to any other breach or default in the performance by such Person of the same or any other obligations of such Person hereunder.  Failure on the part of a party to complain of any act of any Person or to declare any Person in default, irrespective of how long such failure continues, shall not constitute a waiver by such party of its rights hereunder until the applicable statute of limitations period has run.

 

Section 9.6                                    Amendment or Modification.  This Agreement may be amended or modified from time to time only by the written agreement of all the parties hereto; provided, however, that the MLP may not, without the prior approval of the Conflicts Committee, agree to any amendment or modification of this Agreement that, in the reasonable discretion of the Board, will adversely affect the holders of common units of the MLP.

 

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Section 9.7                                    Assignment.  No party shall have the right to assign its rights or obligations under this Agreement without the consent of the other parties hereto.

 

Section 9.8                                    Counterparts.  This Agreement may be executed in any number of counterparts with the same effect as if all signatory parties had signed the same document.  All counterparts shall be construed together and shall constitute one and the same instrument.

 

Section 9.9                                    Severability.  If any provision of this Agreement or the application thereof to any Person or circumstance shall be held invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

 

Section 9.10                             Gender, Parts, Articles and Sections.  Whenever the context requires, the gender of all words used in this Agreement shall include the masculine, feminine and neuter, and the number of all words shall include the singular and plural.  All references to Article numbers and Section numbers refer to Articles and Sections of this Agreement.

 

Section 9.11                             Further Assurances.  In connection with this Agreement and all transactions contemplated by this Agreement, each signatory party hereto agrees to execute and deliver such additional documents and instruments and to perform such additional acts as may be necessary or appropriate to effectuate, carry out and perform all of the terms, provisions and conditions of this Agreement and all such transactions.

 

Section 9.12                             Withholding or Granting of Consent.  Each party may, with respect to any consent or approval that it is entitled to grant pursuant to this Agreement, grant or withhold such consent or approval in its sole and uncontrolled discretion, with or without cause, and subject to such conditions as it shall deem appropriate.

 

Section 9.13                             Laws and Regulations.  Notwithstanding any provision of this Agreement to the contrary, no party to this Agreement shall be required to take any act, or fail to take any act, under this Agreement if the effect thereof would be to cause such party to be in violation of any applicable law, statute, rule or regulation.

 

Section 9.14                             Negotiation of Rights of Exmar, Limited Partners, Assignees and Third Parties.  The provisions of this Agreement are enforceable solely by the parties to this Agreement, and no shareholder of Exmar and no limited partner, member, assignee or other Person of the MLP shall have the right, separate and apart from Exmar or the MLP, as applicable, to enforce any provision of this Agreement or to compel any party to this Agreement to comply with the terms of this Agreement.  Exmar is entitled to enforce the rights on behalf of any Exmar Entity, and the MLP is entitled to enforce the rights on behalf of any Partnership Group Member.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the Closing Date.

 

	
 
    	
EXMAR   NV
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
De   Gerlachekaai 20
    
	
 
    	
2000,   Antwerpen, Belgium
    
	
 
    	
Phone:
    	
+32   3 247 5611
    
	
 
    	
Fax:
    	
+32   3 248 2740
    
	
 
    	
Attention:   [·]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EXMAR   ENERGY PARTNERS LP
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
Room 3206,   32nd Floor
    
	
 
    	
Lippo   Center, Tower Two
    
	
 
    	
N°   89 Queensway
    
	
 
    	
Hong   Kong
    
	
 
    	
Phone:
    	
+852   2861 9668
    
	
 
    	
Fax:
    	
[·]
    
	
 
    	
Attention:   [·]
    

 

[Signature Page to Omnibus Agreement]

 

 

	
 
    	
EXMAR   GENERAL PARTNER LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
Room 3206,   32nd Floor
    
	
 
    	
Lippo   Center, Tower Two
    
	
 
    	
N°   89 Queensway
    
	
 
    	
Hong   Kong
    
	
 
    	
Phone:
    	
+852   2861 9668
    
	
 
    	
Fax:
    	
[·]
    
	
 
    	
Attention:   [·]
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EXMAR   ENERGY HONG KONG LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
Address   for Notice:
    
	
 
    	
Room 3206,   32nd Floor
    
	
 
    	
Lippo   Center, Tower Two
    
	
 
    	
N°   89 Queensway
    
	
 
    	
Hong   Kong
    
	
 
    	
Phone:
    	
+852   2861 9668
    
	
 
    	
Fax:
    	
[·]
    
	
 
    	
Attention:   [·]
    

 

[Signature Page to Omnibus Agreement]Exhibit 10.3

 

Vessel Option Agreement January 2014

 

VESSEL OPTION AGREEMENT

 

THIS VESSEL OPTION AGREEMENT (the “Agreement”), is made and entered into this 24 day of January, 2014 (the “Effective Date”), by and among:

 

EXMAR NV, a limited liability company (naamloze vennootschap/société anonyme) incorporated under the laws of Belgium, having its registered office at De Gerlachekaai 20, 2000 Antwerp, Belgium, registered with the Crossroad Bank for Enterprises under number 0860.409.202 (RLE Antwerp) (“Exmar”);

 

EXCELERATE NV, a limited liability company (naamloze vennootschap/société anonyme) incorporated under the laws of Belgium, having its registered office at De Gerlachekaai 20, 2000 Antwerp, Belgium, registered with the Crossroad Bank for Enterprises under number 0870.910.441 (RLE Antwerp) (“Excelerate NV”); and

 

EXCELERATE ENERGY LIMITED PARTNERSHIP, a Delaware limited partnership having its registered office at 1209 Orange Street, Wilmington, Delaware 19801, registered with The Corporation Trust Company (“EE”).

 

Exmar, Excelerate NV, and EE are hereinafter sometimes referred to individually as “Party” and collectively as “Parties.”

 

RECITALS

 

WHEREAS, Exmar has indicated to EE that it intends to form a master limited partnership (the “MLP”) and to publicly offer interests in the MLP (the “IPO”);

 

WHEREAS, Exmar and EE have entered into a confidentiality agreement dated January 24, 2014 (the “Confidentiality Agreement”) and an indemnification agreement dated January 24, 2014 (the “Indemnification Agreement”) in connection with the proposed IPO;

 

WHEREAS, Excelerate NV is the owner of that certain Belgian flagged 138,000 cubic meter storage capacity LNG regasification vessel named “Excelerate” (the “Excelerate”), Exmar and EE (via DSME 2237 ApS) each currently own half (50%) of the shares representing the share capital of Excelerate NV, and Exmar has indicated to EE that it intends to transfer the shares it now owns in Excelerate NV to the MLP or an Affiliate thereof;

 

WHEREAS, Explorer NV, a limited liability company (naamloze vennootschap/société anonyme) incorporated under the laws of Belgium, having its registered office at De Gerlachekaai 20, 2000 Antwerp, Belgium, registered with the Crossroad Bank for Enterprises under number 0874.766.289 (RLE Antwerp) (“Explorer NV”), is the owner of that certain Belgian flagged 150,900 cubic meter storage capacity LNG regasification vessel named “Explorer” (the “Explorer”), Exmar and EE (via DSME 2237 ApS) each currently own half (50%) of the shares representing the share capital of Explorer NV, and Exmar has indicated to EE that it intends to transfer the shares it now owns in Explorer NV to the MLP or an Affiliate thereof;

 

 

WHEREAS, Express NV, a limited liability company (naamloze vennootschap/société anonyme) incorporated under the laws of Belgium, having its registered office at De Gerlachekaai 20, 2000 Antwerp, Belgium, registered with the Crossroad Bank for Enterprises under number 0878.453.279 (RLE Antwerp) (“Express NV;” “Express NV, Explorer NV and Excelerate NV being each an “Option Vessel Owner” and collectively the “Option Vessel Owners”), is the owner of that certain Belgian flagged 150,900 cubic meter storage capacity LNG regasification vessel named “Express” (the “Express;” the Express, the Explorer and the Excelerate being each an “Option Vessel,” and collectively, the “Option Vessels”), Exmar and EE (via DSME 2237ApS) each currently own half (50%) of the shares representing the share capital of Express NV, and Exmar has indicated to BE that it intends to transfer the shares it now owns in Express NV to the MLP or an Affiliate thereof;

 

WHEREAS, the Parties wish to facilitate EE’s commercial business by granting EE the right to offer for sale or grant purchase options for, on and subject to the terms and conditions set forth below, each Option Vessel; and

 

WHEREAS, the Parties agree that this Agreement shall go into immediate effect upon execution and that the completion of the proposed IPO is not a condition precedent or subsequent to the effectiveness of this Agreement;

 

NOW THEREFORE, in consideration of the mutual covenants set forth herein and of other good and valuable consideration the receipt of which is hereby acknowledged, the Parties agree as follows:

 

1.                                      Definitions.

 

“Agreement” has the meaning given to it in the introduction.

 

“Affiliate” of a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, such Person. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

 

“Business Day” means any day when banks are open in Houston, Texas, New York, NY, London, UK, and Antwerp, Belgium.

 

“Closing Date” has the meaning given to it in Section 3(a).

 

“Closing Date FMV” means the Fair Market Value of a given Option Vessel on the applicable Closing Date.

 

“Closing Date Notice” has the meaning given to it in Section 3(a).

 

“Confidentiality Agreement” has the meaning given to it in the Recitals.

 

“Courts” has the meaning given to it in Section 7(a).

 

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“Customer” means any Person to which FE charters an Option Vessel or provides regasification services utilizing an Option Vessel, in either case pursuant to an agreement with an initial term of five years or more (without regard to any extensions or options). For avoidance of doubt, the term “Customer” shall include any Affiliate of a Customer designated by it to purchase or receive title to an Option Vessel, but shall not include BE or any of its Affiliates.

 

“DCF Plus Residual FMV” means:

 

(a)                                 for the Excelerate, the sum of

 

(i)                                     the net Present Value of the remaining hire payments owing by EE for the remaining duration of the Original Period (as such term is defined in the Excelerate TCP);

 

(ii)                                  the net Present Value of the remaining hire payments owing by BE for the remaining duration of the First Extension Phase (as such term is defined in the Excelerate TCP) if BE gave an Extension Notice (as such term is defined in the Excelerate TCP) in respect of the First Extension Phase prior to the Closing Date;

 

(iii)                               the net Present Value of the remaining hire payments owing by BE for the remaining duration of the Second Extension Phase (as such term is defined in the Excelerate TCP) if EE gave an Extension Notice in respect of the Second Extension Phase prior to the Closing Date; and

 

(iv)                              the Fair Market Value on the applicable Residual Value Date, discounted to Present Value;

 

(b)                                 for the Explorer or the Express, the sum of

 

(i)                                     the net Present Value of the aggregate of the remaining TCP payments owed in respect of the Exmar Loan 2 (as defined in Schedule III of the applicable TCP) for the remaining duration of the Original Period for the applicable Option Vessel;

 

(ii)                                  the aggregate of the amounts outstanding in respect of the Exmar Loan 1, the Excelerate Loan and the Prepaid Hire (each as defined in Schedule III of the TCP);

 

(iii)                               the net Present Value of the remaining hire payments owing by EE for the remaining duration of the Extension Period (as such term is defined in the applicable TCP) if EE gave the Extension Notice (as such term is defined in the applicable TCP) prior to the Closing Date; and

 

(iv)                              the Fair Market Value of the applicable Option Vessel on the applicable Residual Value Date, discounted to Present Value.

 

“EE” has the meaning given to it in the introduction, and shall include each Affiliate of EE.

 

“Effective Date” has the meaning given to it in the introduction.

 

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“Excelerate” has the meaning given to it in the Recitals.

 

“Excelerate NV” has the meaning given to it in the introduction.

 

“Excelerate TCP” means the LNG Regasification Vessel Time Charter Party between Excelerate Energy Limited Partnership and Exmar Marine NV dated the 29th of June, 2004, assigned and novated to Excelerate NV with effect from the 30th of December, 2004, as amended.

 

“Exmar” has the meaning given to it in the introduction, and shall include each Affiliate of Exmar.

 

“Exmar Explorer Debt” has the meaning given to it in Section 4(b).

 

“Exmar Express Debt” has the meaning given to it in Section 4(b).

 

“Expert” means a consulting firm or ship broker of international reputation appearing in the list of approved experts attached as Exhibit A to this Agreement or any amendment thereto approved by the Parties, and any other consulting firm or ship broker of international reputation that regularly appraises LNG vessels and provides reports on the fair market values of such vessels to customers.

 

“Explorer” has the meaning given to it in the Recitals.

 

“Explorer NV” has the meaning given to it in the Recitals.

 

“Explorer TCP” means the LNG Regasification Vessel Time Charter Party between Excelerate Energy Limited Partnership and Explorer NV dated the 1st of July, 2005, as amended and restated on the 10th of January, 2006.

 

“Express” has the meaning given to it in the Recitals.

 

“Express NV” has the meaning given to it in the Recitals.

 

“Express TCP” means the LNG Regasification Vessel Time Charter Party between Excelerate Energy Limited Partnership and Express NV dated the 10th of January, 2006.

 

“Fair Market Value” means the price that could reasonably be expected to be paid for an Option Vessel (determined as of the applicable date being the Closing Date or the Residual Value Date as the case may be) assuming the Option Vessel to be in good working order and in such condition which is to be expected of a vessel of her age, size and type, with her class fully maintained and with valid certificates, and free from all conditions, free of charter obligations and cargo, and further assuming that each buyer would purchase the Option Vessel entirely for cash paid on the closing date of such acquisition.

 

“Indemnification Agreement” has the meaning given to it in the Recitals.

 

“IPO” has the meaning given to it in the Recitals.

 

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“MLP” has the meaning given to it in the Recitals.

 

“MOA” has the meaning given to it in Section 2(a).

 

“Option Vessel” and “Option Vessels” have the meanings given to them in the Recitals.

 

“Option Vessel Owner” and “Option Vessel Owners” have the meanings given to it in the Recitals.

 

“Party” and “Parties” have the meanings given to them in the introduction.

 

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

 

“Present Value” means the value of a given sum or stream of cash flows, discounted at a rate of 6.5% per annum to the applicable Closing Date.

 

“Pricing Elements” has the meaning given to it in Section 3(a).

 

“Proceeds” means the purchase price payable by the purchaser of an Option Vessel.

 

“Purchase Option” means, in respect of any Option Vessel, a binding commitment of EE to sell such Option Vessel to the Customer employing that Option Vessel or an Affiliate of such Customer, or the grant by EE to such Customer or an Affiliate of such Customer of an option to purchase such Option Vessel.

 

“Residual Value Date” means the date on which the Original Period or the Extension Period, both as defined in the applicable TCP, as may be applicable, terminates.

 

“TCP” means any or all of the Excelerate TCP, the Explorer TCP, and the Express TCP.

 

“Term” means the period commencing on the Effective Date and ending on the date on which this Agreement shall terminate as provided in Section 6 below.

 

“Transfer Costs” means those costs incurred by EE (whether for itself or on behalf of the applicable Option Vessel Owner) that are, under the MOA for the transfer of the applicable Option Vessel, allocated to the seller of such vessel.

 

“Vessel Value” means the (a) greatest of (i) Closing Date FMV, (ii) DCF Plus Residual FMV, and (iii) Proceeds, less (b) Transfer Costs.

 

2.                                      Authority to Offer and Commit the Option Vessels.

 

(a)                                 Authority to Offer.  The Parties agree that EE shall have, and hereby grant to EE, the right from time to time during the Term to (i) offer to and commit to sell to any Customer the Option Vessel employed by that Customer, or (ii) offer to and grant options to purchase to any Customer the Option Vessel employed by that

 

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Customer, in each case against payment of a purchase price and for delivery at a time and place to be agreed between EE and the Customer and on such other terms and conditions as provided in the form of memorandum of agreement (“MOA”) attached hereto as Exhibit B.

 

The terms and conditions of the MOA shall include that the obligation of the Option Vessel Owner to deliver the Option Vessel to the Customer shall be subject to:

 

(i)                                     no Charterer Event of Default (as defined in the applicable TCP) in respect of the Option Vessel being purchased having occurred, been declared and be continuing;

 

(ii)                                  the applicable TCP not having been terminated by EE;

 

(iii)                               the Customer releasing and/or paying the Proceeds on the Closing Date, to the account designated by the Option Vessel Owner, subject to the terms of Section 3(c)(iv) below; and

 

(iv)                              if the Proceeds are less than the Vessel Value, the difference being paid by EE to the account designated by the Option Vessel Owner on the Closing Date, subject to any further adjustments pursuant to Section 3(c)(iv).

 

The Parties further agree that, subject to Section 2(c) below, EE shall have no obligation to notify any other Party, any Option Vessel Owner or any lender to such Option Vessel Owner or holder, directly or indirectly, of any securities issued by an Option Vessel Owner or security interest in any Option Vessel, of EE’s exercise of the rights granted to it in this Section 2, including without limitation the making of any offer to sell or to grant an option to purchase any Option Vessel or the status of any negotiations with respect to any such offer. Notwithstanding the foregoing, EE shall have an obligation to notify Exmar of any amendments EE wishes to make to the form of MOA attached as Exhibit B and obtain Exmar’s consent to such amendments, which consent shall not be unreasonably withheld or delayed.

 

In no event may a Purchase Option created by EE pursuant to this Agreement provide for or require the transfer of an Option Vessel by an Option Vessel Owner before January 1, 2024.

 

(b)                                 Authority to Commit.  If at any time during the Term, EE shall, pursuant to the authority granted it in Section 2(a) above, enter into a binding commitment to sell an Option Vessel to a Customer, or if a Customer shall exercise an option granted to it by EE to purchase an Option Vessel, each Party agrees that it shall, at the written request of EE, exercise every right, power and authority that it now holds or may at any time during the Term hold in respect of the applicable Option Vessel, and cause each of its Affiliates to exercise every right, power and authority such Affiliate now holds or may at any time during the Term hold in respect of the applicable Option Vessel, to facilitate and effectuate the transfer of

 

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the applicable Option Vessel to such Customer on the terms and conditions for such transfer contained in this Agreement.

 

(c)                                  Purchase Option Notices.  EE will provide written notice to the Parties promptly but in each case within 10 Business Days of (i) the creation by EE of a Purchase Option, (ii) the cancelation or material amendment of any Purchase Option, and (iii) receipt by EE of any notice from a Customer of a Customer’s exercise or firm commitment to exercise a Purchase Option, EE will apprise the Parties of any changes in a Customer’s election within 10 Business Days of being apprised by the Customer of such change, subject to the provisions of Section 3(a) below setting a minimum number of days for advance delivery of a Closing Date Notice. Each notice provided by EE pursuant to this Section 2(e) will include (V) the name of the subject Option Vessel, (W) the name and place of business of the Customer, and (X) the date or range of dates, as applicable, on which the Purchase Option would or may close, (Y) the date or range of dates, as applicable, when the Option Vessel is to be delivered, and (Z) the price or formula for the calculation of the price, in each case in United States Dollars, payable by the Customer for the purchase of the relevant Option Vessel.

 

3.                                      Closing of a Purchase Option; Transfer of an Option Vessel.

 

(a)                                 Notice of Closing Date.  Promptly following the satisfaction of all conditions to a transfer of an Option Vessel to a Customer pursuant to a Purchase Option (other than conditions to be satisfied only upon delivery of an Option Vessel or at closing), but in no event less than 90 days in advance of such transfer, EE shall give the Parties notice (a “Closing Date Notice”) of the closing date for a transfer of an Option Vessel pursuant to a Purchase Option (the “Closing Date”). The Closing Date Notice shall include (i) the Closing Date, (ii) the name of the applicable Option Vessel, (iii) the location at which the Option Vessel is to be delivered to the transferee of the Option Vessel, (iv) the name of the transferee of the Option Vessel, (v) EE’s good faith estimate of the Transfer Costs, and (vi) EE’s good faith estimate of the Closing Date FMV and the DCF Plus Residual FMV (EE’s good faith estimate of the Closing Date FMV and the DCF Plus Residual FMV together, the “Pricing Elements”) of the applicable Option Vessel. EE may amend or withdraw a Closing Date Notice at any time for any reason prior to a Closing Date subject to Section 3(b).

 

(b)                                 Indemnity.  EE undertakes to indemnify the Parties and the Option Vessel Owners against any claim, liability, loss, damage or expense arising out of or in connection with EE amending, withdrawing or failing to give a Closing Date Notice or any dispute, proceedings or actions between EE and Customer or their Affiliates concerning any Purchase Option granted by ER to a Customer to purchase an Option Vessel. EE shall also indemnify the Option Vessel Owner against any claims, liability, fines, loss, damage or expense arising out of or in connection with EE giving a Purchase Option to a Customer and the giving of such Purchase Option is a breach of US, UN and/or EU sanctions.

 

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(c)                                  Transfer of an Option Vessel.  Upon receipt of a Closing Date Notice from ER, each Party will take all reasonable actions requested by EE within the power of such Party to authorize, approve and effect the transfer of an Option Vessel on the terms contained in such Closing Date Notice, in the MOA, and in this Agreement, including without limitation all power, as the case may be, as the owner of the applicable Option Vessel or as an owner of any equity interests in the applicable Option Vessel Owner. Without limiting the generality of the foregoing:

 

(i)                                     The Parties will cause the Option Vessel Owner of the applicable Option Vessel to deliver to the transferee on the Closing Date a Bill of Sale substantially in the form attached hereto as Exhibit C, with such modifications thereto as the transferee may reasonably request;

 

(ii)                                  The Parties will cause the Option Vessel Owner of the applicable Option Vessel to deliver to the transferee an MOA in the form of the Norwegian Sales Form 2012 as attached hereto as Exhibit B, or as amended in accordance with Section 2(a);

 

(iii)                               Subject to the provisions of Section 2(a), the Option Vessel Owner will convey to the transferee full marketable title to the Option Vessel, free and clear of all liens and encumbrances other than those expressly agreed to by EE; and

 

(iv)                              The Parties will cause the Option Vessel Owner, to the extent requested by the transferee of such Option Vessel, to deliver to such transferee such additional documents, certificates and assurances regarding such transfer as the transferee may reasonably request.

 

(d)                                 EE Payments in Connection with a Transferred Option Vessel.  For avoidance of doubt, the Parties agree and acknowledge that obligations of EE to cause the transferee of an Option Vessel to make payments for such Option Vessel to the applicable Option Vessel Owner, or to make payments under this Agreement, shall not modify, limit or affect its or its Affiliates rights under applicable loan and shareholders agreements to receive, directly or indirectly, the benefits of any such payment made by EE to an Option Vessel Owner as a lender to or shareholder of such Option Vessel Owner.

 

(e)                                  Determining Vessel Value.

 

(i)                                     Upon EE’s delivery of a Closing Date Notice, Exmar will have a period of 20 days in which to evaluate EE’s calculation of the Pricing Elements of the applicable Option Vessel. To assist Exmar in this evaluation, EE will provide Exmar with all relevant information used by EE to make this calculation, including any reports of any Expert that EE obtained to make the calculation, subject to customary confidentiality and non-disclosure covenants by Exmar. During this period, Exmar and EE may also negotiate the Vessel Value of the applicable Option Vessel, and should

 

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they reach agreement during this period the value they agree upon shall be the Vessel Value for such Option Vessel.

 

(ii)                                  If by the 20th day following EE’s delivery of a Closing Date Notice, (A) Exmar has not accepted in writing EE’s calculation of the Pricing Elements of the applicable Option Vessel or (B) Exmar and EE have not agreed in writing on the Vessel Value of the applicable Option Vessel, then either of such Parties may, on written notice to the other, commence the third party valuation process described in (iii) below. The commencement of that process (or the delivery of the Experts’ report pursuant to that process) notwithstanding, Exmar and EE may at any time agree in writing on the Vessel Value of an Option Vessel for which EE has delivered a Closing Date Notice, and such agreement shall be binding on the Parties. If Exmar and BE agree on the Vessel Value after a third party valuation process has been commenced, the Parties will promptly terminate the third party valuation.

 

(iii)                               As provided in (ii) above, either EE or Exmar may, upon the expiration of 20 days following EE’s delivery of a Closing Notice, notify the other Party in writing of its election to commence a third party valuation process on the applicable Option Vessel. Each of EE and Exmar shall propose an Expert to determine the Pricing Elements of the applicable Option Vessel within 10 days of delivery of such notice. The two proposed Experts shall within 10 days of being selected agree upon and select a third Expert. The three Experts selected in accordance with this Section 3(d)(iii), acting as experts and not as arbitrators, shall each evaluate and report to Exmar and EE their opinion on the Pricing Elements of the applicable Option Vessel no later than 15 days prior to the Closing Date. Each Pricing Element shall be the average of the opinions of the three Experts, provided such opinions are received not later than 15 days prior to the Closing Date. Any Expert opinion not received by a date that is 15 days prior to the Closing Date shall be disregarded for purposes of calculating the Pricing Elements, and only the opinions delivered as of such date shall be included in the calculation of the average. In determining the Pricing Elements, the Experts will have access to the applicable Option Vessel and to the Pricing Elements proposed by each of EE and Exmar and to all information prepared by or on behalf of each of them relating to the Option Vessel and reasonably requested by the Experts. Each of Exmar and Excelerate shall cooperate with any reasonable information requests from the Experts. The fees and expenses of the Experts will be divided equally between EE and Exmar.

 

(iv)                              EE will have full authority to fund, and shall fund, all Transfer Costs that are incurred before the applicable Closing Date in connection with the transfer of an Option Vessel. The payment made to the applicable Option Vessel Owner shall be made calculating Vessel Value based on EE’s final good faith estimate of Transfer Costs. Within 30 days after a Closing Date,

 

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EE shall provide Exmar with a statement of actual Transfer Costs and BE shall pay the Option Vessel Owner (if actual Transfer Costs are less than the final estimate) or the Option Vessel Owner shall pay EE (if actual Transfer Costs are greater than the final estimate) the difference between the final estimate and actual Transfer Costs.

 

(f)                                   Further Assurances.  The Parties, for themselves and their successors and assigns, hereby covenant and agree that, at any time and from time to time on EE’s or an Option Vessel transferee’s written request, they will do, execute, acknowledge and deliver or cause to be done, executed, acknowledged and delivered, all such further acts, deeds, assignments, transfers, conveyances, powers of attorney and assurances as may be reasonably required by EE or such transferee (including amendments to the TCPs or the Option Vessel Owners’ shareholder agreements) in order to facilitate a Purchase Option and the consummation of transfers pursuant to it, and to assign, transfer, set over, convey, assure and confirm unto and vest in EE or such transferee, as the case may be, title to the Option Vessel being sold, conveyed and transferred.

 

(g)                                  Termination of Related Agreements.  The Parties hereby agree that in connection with the closing of a sale of an Option Vessel, the applicable TCP between EE and the relevant Option Vessel Owner shall terminate upon successful closing of the sale, and, for avoidance of doubt, the transferee of the Option Vessel may terminate its ship management agreement with Exmar (if such agreement has not terminated in accordance with its terms).

 

4.                                      Certain Covenants.

 

(a)                                 For avoidance of doubt, the Parties agree that any Vessel Value received by an Option Vessel Owner shall be used by such Option Vessel Owner to satisfy all liabilities of such Option Vessel Owner (including shareholder loans), and any remaining balance shall be distributed to the shareholders in liquidation of their shares.

 

(b)                                 Exmar shall cause Explorer NV and Express NV to obtain the consent of any third party lenders in respect of the currently outstanding funded debt of Exmar secured directly or indirectly by the Explorer or the Express, or owed by any other Person but secured in whole or in part by liens on Explorer or Express or on the rights of Explorer NV or Express NV to receive TCP payments from EE (the “Exmar Explorer Debt” and “Exmar Express Debt,” respectively) to the rights granted to EE pursuant to Sections 2(a) and 2(b) and the transactions contemplated by this Agreement, upon the earlier of (i) the date on which the Exmar Explorer Debt or Exmar Express Debt, as applicable, is repaid in full, amended, modified, or refinanced, or (ii) May 11th, 2021.

 

(c)                                  EE shall not claim any off-hire or damages from the relevant Option Vessel Owner or any Party to this Agreement for time lost and/or fuel or gas consumed as a result of an Option Vessel Owner complying with an obligation to make the

 

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applicable Option Vessel available for inspection in accordance with clauses 4 and/or 6 of the MOA.

 

5.                                      Representation and Warranties.  Each Party represents and warrants to each other Party hereto as follows:

 

(a)                                 Due Existence. Such Party is duly organized, validly existing, and in good standing under the laws of the jurisdiction of its formation.

 

(b)                                 Authorization.  Such Party has the right and authority to bind itself to the terms of this Agreement.

 

(c)                                  Binding Agreement.  This Agreement is a binding obligation of such Party, enforceable against it in accordance with its terms.

 

(d)                                 Absence of Conflicts.  Neither the execution and delivery of this Agreement, nor the performance of any actions contemplated hereunder, will conflict with, result in a breach of, constitute a default under, result in the acceleration of, create in any party the right to accelerate, terminate, modify, or cancel, or require any notice under any agreement, contract, lease, license, instrument, or other arrangement to which such Party is a party, or by which it is bound or to which any of its assets is subject.

 

6.                                      Term.  This Agreement shall remain in effect as to each Option Vessel from the Effective Date until the date EE ceases to be the charterer of such Option Vessel.

 

7.                                      General.

 

(a)                                 Governing Law; Venue.  This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York. The federal and state courts located in Harris County, Texas (the “Courts”) shall have exclusive jurisdiction to hear and decide any suit, action or proceedings, and to settle any disputes, which may arise out of or in connection with this Agreement and, for these purposes, each Party irrevocably submits to the jurisdiction of the Courts. The Parties agree that they are subject to the personal jurisdiction of the Courts, and acknowledged that they have conducted business in the State of Texas, and have purposefully availed themselves of the benefits of doing business in the State of Texas. Each Party hereby waives, to the fullest extent permitted by law, any right it may have to a trial by jury.

 

(b)                                 Remedies.  Without prejudice to the rights and remedies otherwise available to any Party, each Party shall be entitled to equitable relief by way of specific performance or otherwise in order to enforce another Party’s obligations under this Agreement, including the obligation to timely deliver an Option Vessel, and the non-performing Party shall not plead in defense thereto that there would be an adequate remedy at law. In any action brought by a Party to enforce the obligations of any other Party, the prevailing Party shall be entitled to collect from the opposing Party to such action such Party’s reasonable litigation costs and

 

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attorneys’ fees and expenses (including court costs, reasonable fees of accountants and experts, and other expenses incidental to the litigation).

 

(c)                                  Notices.  All notices or advices required or permitted to be given by or pursuant to this Agreement, shall be given in writing. All such notices and advices shall be (i) delivered personally, (ii) delivered by facsimile, (iii) delivered by U.S. Registered or Certified Mail, Return Receipt Requested mail, or (iv) delivered for overnight delivery by a nationally recognized overnight courier service. Such notices and advices shall be deemed to have been given (i) the first Business Day following the date of delivery if delivered personally or by facsimile, (ii) on the third Business Day following the date of mailing if mailed by U.S. Registered or Certified Mail, Return Receipt Requested, or (iii) on the date of receipt if delivered for overnight delivery by a nationally recognized overnight courier service. All such notices and advices and all other communications related to this Agreement shall be given as follows:

 

	
If   to EE:
    	
Edward   Scott, Chief Operating Officer
    
	
 
    	
Excelerate   Energy Limited Partnership
    
	
 
    	
1450   Lake Robbins Drive, Suite 200
    
	
 
    	
The   Woodlands, TX 77380
    
	
 
    	
832-813-7634   – Telephone
    
	
 
    	
832-813-7103   – Facsimile
    
	
 
    	
 
    
	
With   copy to:
    	
H.   Steven Walton
    
	
 
    	
Frederic   Dorwart, Lawyers
    
	
 
    	
Old   City Hall
    
	
 
    	
124   East Fourth Street
    
	
 
    	
Tulsa,   OK 74103
    
	
 
    	
(918)   583-9920 – Telephone
    
	
 
    	
(918)   584-2729 – Facsimile
    
	
 
    	
 
    
	
If   to Exmar:
    	
Exmar   NV
    
	
 
    	
De   Gerlachekaai 20
    
	
 
    	
2000   Antwerpen, Belgium
    
	
 
    	
+32   3 247 5611 – Telephone
    
	
 
    	
+32   3 248 2740 – Facsimile
    
	
 
    	
 
    
	
If   to Excelerate NV:
    	
Excelerate   NV
    
	
 
    	
De   Gerlachekaai 20
    
	
 
    	
2000   Antwerp
    
	
 
    	
Register   of Enterprises (RPR) 0870910441
    

 

or to such other address as the Party may have furnished to the other Parties in accordance herewith, except that notice of change of addresses shall be effective only upon receipt.

 

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(d)                                 Successors.  This Agreement, including without limitation the obligations contained in Section 3(b), shall be binding upon any transferee of equity interests in an Option Vessel Owner or an Option Vessel and any successors or assigns of a Party (including a successor or assign by way of merger, consolidation, in liquidation or otherwise by operation of law). Without limiting the generality of the foregoing, Exmar agrees that, should it transfer to the MLP or an Affiliate of the MLP any interest in an Option Vessel or an Option Vessel Owner, Exmar shall only effect such transfer if the MLP and each such Affiliate agree, in connection with such transfer, to be bound by the terms of this Agreement in all respects, and that EE shall be an intended third party beneficiary of such agreement.

 

(e)                                  Amendments.  No amendments, changes or modifications to this Agreement shall be valid except if the same are in writing and signed by a duly authorized representative of each of the Parties.

 

(f)                                   Waivers.  No waiver by any Party of any provision of this Agreement or any default, misrepresentation, or breach of warranty or covenant hereunder, whether intentional or not, shall be valid unless the same shall be in writing and signed by the Party making such waiver, nor shall such waiver be deemed to extend to any prior or subsequent default, misrepresentation, or breach of warranty or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent such occurrence.

 

(g)                                  Entire Agreement.  This Agreement comprises the full and complete agreement of the Parties with respect the subject matter hereof and supersedes and cancels all prior communications, understandings and agreements between the Parties relating to same; provided, however, that nothing in this Agreement is intended to or shall modify any term, condition, right or obligation contained in the Confidentiality Agreement or the Indemnification Agreement; provided further, however, that it shall not be a breach of any obligation of confidentiality under the Confidentiality Agreement or the TCPs or otherwise for EE to provide a copy of this Agreement to a potential Customer.

 

(h)                                 Disclosure.  For the avoidance of doubt the Parties hereby agree that Exmar and its Affiliates are expressly permitted to file this Agreement, including any Exhibits thereto, with the U.S. Securities and Exchange Commission in connection with the IPO.

 

(i)                                     Counterparts.  This Agreement may be executed in one or more counterparts (including by means of facsimile), each of which shall be deemed an original but all of which together will constitute one and the same instrument.

 

(j)                                    Headings.  The section headings contained in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

 

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(k)                                 Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction shall not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.

 

14

 

IN WITNESS WHEREOF, the duly authorized representatives of the Parties have caused this Agreement to be executed on the date first written above.

 

	
EXCELERATE   ENERGY LIMITED
    	
EXMAR   NV
    
	
PARTNERSHIP
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/   Edward Scott
    	
 
    	
By:
    	
/s/   P. de Brabandere 
    	
/s/   M. de Potter
    
	
 
    	
Name:   Edward Scott
    	
 
    	
Name:   
    	
P.   de Brabandere 
    	
M.   de Potter
    
	
 
    	
Title:   Chief Operating Officer
    	
 
    	
Title:
    	
Director   - COO 
    	
CFO
    
	
 
    	
 
    
	
 
    	
 
    
	
EXCELERATE   NV
    	
 
    
	
 
    	
 
    
	
By:   :
    	
/s/   P. de Brabandere
    	
/s/   M. de Potter
    	
 
    	
 
    
	
 
    	
Name:   P. de Brabandere 
    	
M.   de Potter
    	
 
    	
 
    
	
 
    	
Title:   Director
    	
Director
    	
 
    	
 
    

 

15

 

Exhibit A—

 

List of Approved Experts

 

Clarksons

Barry Rogliano Salles

Gibson Shipbrokers

Fearnleys

Inge Steensland AS

Lorentzen & Stemoco

Joachim Grieg & Co

RS Platou

Braemar Seascope

Poten & Partners

 

16

 

Exhibit B
 Form of Memorandum of Agreement: (MOA)

 

17

 

Copyright Norwegian Shipbrokers’ Association, Oslo, Published by Norwegian Shipbroker’s Association, Oslo and BIMCO, Copenhagen

 

	
EXHIBIT B:
    	
Norwegian Shipbrokers’ Association’s Memorandum of Agreement for sale   and purchase of ships. Adopted by BIMCO in 1956.
    
	
 

See Explanatory Note below
    
	
 
    	
Code-name
    
	
 
    	
SALEFORM 2012
    
	
 
    	
Revised 1966, 1983 and 1988/87, 1893 and 2012
    

 

MEMORANDUM OF AGREEMENT

 

Dated: #

 

[The Option Vessel Owner as directed by EXCELERATE ENERGY LIMITED PARTNERSHIP pursuant to the Vessel Option Agreement] (Name of sellers), hereinafter called the “Sellers” have agreed to sell,
 and

 

[The Customer as defined by the Vessel Option Agreement]-(Name of buyers), hereinafter called the “Buyers” have agreed to by:

 

Name of vessel: [Option Vessel(s) as defined in the Vessel Option Agreement]

 

IMO Number:

 

Classification Society:

 

Class Notation:

 

	
Year of Build:
    	
Builder/Yard:
    	
 
    
	
 
    	
 
    	
 
    
	
Flag:
    	
Place of Registration:
    	
GT/NT:
    
						

 

hereinafter called the “Vessel”, on the following terms and conditions:

 

Definitions

 

“Banking Days” are days on which banks are open both in the country of the currency stipulated for the Purchase Price in Clause 1 (Purchase Price) and in the place of closing stipulated in Clause 8 (Documentation) and # (add additional jurisdictions as appropriate).

 

“Buyers’ Nominated Flag State” means # (state flag state).

 

“Class” means the class notation referred to above.

 

“Classification Society” means the Society referred to above.

 

“Deposit” shall have the meaning given in Clause 2 (Deposit).

 

“Deposit Holder” means # (state name and location of Deposit Holder) or, if left blank, the Sellers’ Bank, which shall hold and release the Deposit in accordance with this Agreement.

 

“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a registered letter, e-mail or telefax.

 

“Parties” means the Sellers and the Buyers.

 

“Purchase Price” means the price for the Vessel as stated in Clause 1 (Purchase Price).

 

“Sellers’ Account” means # (state details of bank account) at the Sellers’ Bank.

 

“Sellers’ Bank” means # (state name of bank, branch and details) or, if left blank, the bank notified by the Sellers to the Buyers for receipt of the balance of the Purchase Price.

 

1.                                 Purchase Price

 

The Purchase Price is # (# United States Dollars) (state currency and amount both in words and figures).

 

This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

 

 

2.                                 Deposit

 

As security for the correct fulfilment of this Agreement the Buyers shall lodge a deposit of # % (# per cent) or, if left blank, 10% (ten per cent), of the Purchase Price (the “Deposit”) in an interest bearing account for the Parties with the Deposit Holder within three (3) Banking Days after the date that:

 

(i)                                         this Agreement has been signed by the Parties and exchanged in original or by e-mail or telefax; and

 

(ii)                                     the Deposit Holder has confirmed in writing to the Parties that the account has been opened.

 

The Deposit shall be released in accordance with joint written instructions of the Parties.  Interest, if any, shall be credited to the Buyers. Any fee charged for holding and releasing the Deposit shall be borne equally by the Parties. The Parties shall provide to the Deposit Holder all necessary documentation to open and maintain the account without delay.

 

3.                                 Payment

 

On delivery of the Vessel, but not later than three (3) Banking Days after the date that Notice of Readiness has been given in accordance with Clause 5 (Time and place of delivery and notices):

 

(i)                                         the Deposit shall be released to the Sellers; and

 

(ii)                                     the balance of the Purchase Price and all other sums payable on delivery by the Buyers to the Sellers under this Agreement shall be paid in full free of bank charges to the Sellers’ Account.

 

4.                                 Inspection

 

(a)*                               The Buyers have inspected and accepted the Vessel’s classification records.  They Buyers have also inspected the Vessel at/in # (state place) on # (state date) and have accepted the Vessel following this inspection and the sale is outright and definite, subject only to the terms and conditions of this Agreement.

 

(b)*                               The Buyers shall have the right to inspect the Vessel’s classification records and to declare whether same are accepted or not within # (state date/period).

 

The Sellers shall make the Vessel available for inspection at/in # (state place/range) within # (state date/period).

 

The Buyers shall undertake the inspection without undue delay to the Vessel. Should the Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred.

 

The Buyers shall inspect the Vessel without opening up and without cost to the Sellers.

 

During the inspection, the Vessel’s deck and engine log books shall be made available for examination by the Buyers.

 

The sale shall become outright and definite, subject only to the terms and conditions of this Agreement provided that the Sellers receive written notice of acceptance of the Vessel from the Buyers within seventy-two (72) hours after completion of such inspection or after the date/last day of the period stated in Line 59, whichever is earlier.

 

Should the Buyers fail to undertake the inspection as scheduled and/or notice of acceptance of the Vessel’s classification records and/or of the Vessel not be received by the Sellers as aforesaid, the Deposit together with interest earned, if any, shall be released immediately to the Buyers, whereafter this Agreement shall be null and void.

 

*4(a) and 4(b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 4(a) shall apply.

 

5.                                 Time and place of delivery and notices

 

(a) The Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or anchorage at/in # (state place/range) in the Sellers’ option.

 

Notice of Readiness shall not be tendered before: #(date)

 

Cancelling Date (see Clauses 5(c), 6(a)(i), 6(a)(iii) and 14): #

 

(b) The Sellers shall provide the Buyers with twenty (20), ten (10), five (5) and three (3) days’ notice of the date the Sellers intend to tender Notice of Readiness and of the intended place of delivery.

 

When the Vessel is at the place of delivery and physically ready for delivery in accordance with this Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery.

 

 

(c) If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the Vessel will not be ready for delivery by the Cancelling Date they may notify the Buyers in writing stating the date when they anticipate that the Vessel will be ready for delivery and proposing a new Cancelling Date, Upon receipt of such notification the Buyers shall have the option of either cancelling this Agreement in accordance with Clause 14 (Sellers’ Default) within three (3) Banking Days of receipt of the notice or of accepting the new date as the new Cancelling Date.  If the Buyers have not declared their option within three (3) Banking Days of receipt of the Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’ notification shall be deemed to be the new Cancelling Date and shall be substituted for the Cancelling Date stipulated in line 79.

 

If this Agreement is maintained with the new Cancelling Date all other terms and conditions hereof including those contained in Clauses 5(b) and 5(d) shall remain unaltered and in full force and effect.

 

(d) Cancellation, failure to cancel or acceptance of the new Cancelling Date shall be entirely without prejudice to any claim for damages the Buyers may have under Clause 14 (Sellers’ Default) for the Vessel not being ready by the original Cancelling Date.

 

(e) Should the Vessel become an actual, constructive or compromised total loss before delivery the Deposit together with interest earned, if any, shall be released immediately to the Buyers whereafter this Agreement shall be null and void.

 

6.                                 Divers Inspection / Drydocking

 

(a)*

 

(i)                               The Buyers shall have the option at their cost and expense to arrange for an underwater inspection by a diver approved by the Classification Society prior to the delivery of the Vessel. Such option shall be declared latest nine (9) days prior to the Vessel’s intended date of readiness for delivery as notified by the Sellers pursuant to Clause 5(b) of this Agreement. The Sellers shall at their cost and expense make the Vessel available for such inspection. This inspection shall be carried out without undue delay and in the presence of a Classification Society surveyor arranged for by the Sellers and paid for by the Buyers.  The Buyers’ representative(s) shall have the right to be present at the diver’s inspection as observer(s) only without interfering with the work or decisions of the Classification Society surveyor. The extent of the inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society. If the conditions at the place of delivery are unsuitable for such inspection, the Sellers shall at their cost and expense make the Vessel available at a suitable alternative place near to the delivery port, in which event the Cancelling Date shall be extended by the additional time required for such positioning and the subsequent re-positioning. The Sellers may not tender Notice of Readiness prior to completion of the underwater inspection.

 

(ii)                           If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, then (1) unless repairs can be carried out afloat to the satisfaction of the Classification Society, the Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules (2) such defects shall be made good by the Sellers at their cost and expense to the satisfaction of the Classification Society without condition/recommendation** and (3) the Sellers shall pay for the underwater inspection and the Classification Society’s attendance.

 

Notwithstanding anything to the contrary in this Agreement, if the Classification Society do not require the aforementioned defects to be rectified before the next class drydocking survey, the Sellers shall be entitled to deliver the Vessel with these defects against a deduction from the Purchase Price of the estimated direct cost (of labour and materials) of carrying out the repairs to the satisfaction of the Classification Society, whereafter the Buyers shall have no further rights whatsoever in respect of the defects and/or repairs. The estimated direct cost of the repairs shall be the average of quotes for the repair work obtained from two reputable independent shipyards at or in the vicinity of the port of delivery, one to be obtained by each of the Parties within two (2) Banking Days from the date of the imposition of the condition/recommendation, unless the Parties agree otherwise. Should either of the Parties fail to obtain such a quote within the stipulated time then the quote duly obtained by the other Party shall be the sole basis for the estimate of the direct repair costs. The Sellers may not tender Notice of Readiness prior to such estimate having been established.

 

 

(iii)                       If the Vessel is to be drydocked pursuant to Clause 6(a)(ii) and no suitable dry-docking facilities are available at the port of delivery, the Sellers shall take the Vessel to a port where suitable drydocking facilities are available, whether within or outside the delivery range as per Clause 5(a). Once drydocking has taken place the Sellers shall deliver the Vessel at a port within the delivery range as per Clause 5(a) which shall, for the purpose of this Clause, become the new port of delivery. In such event the Cancelling Date shall be extended by the additional time required for the drydocking and extra steaming, but limited to a maximum of fourteen (14) days.

 

(b)* The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, such defects shall be made good at the Sellers’ cost and expense to the satisfaction of the Classification Society without condition/recommendation**. In such event the Sellers are also to pay for the costs and expenses in connection with putting the Vessel in and taking her out of drydock, including the drydock dues and the Classification Society’s fees. The Sellers shall also pay for these costs and expenses if parts of the tailshaft system are condemned or found defective or broken so as to affect the Vessel’s class. In all other cases, the Buyers shall pay the aforesaid costs and expenses, dues and fees.

 

(c) if the Vessel is drydocked pursuant to Clause 6(a)(ii) or 6(b) above:

 

(i)                               The Classification Society may require survey of the tailshaft system, the extent of the survey being to the satisfaction of the Classification surveyor. If such survey is not required by the Classification Society, the Buyers shall have the option to require the tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey being in accordance with the Classification Society’s rules for tailshaft survey and consistent with the current stage of the Vessel’s survey cycle. The Buyers shall declare whether they require the tailshaft to be drawn and surveyed not later than by the completion of the inspection by the Classification Society. The drawing and refitting of the tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be condemned or found defective so as to affect the Vessel’s class, those parts shall be renewed or made good at the Sellers’ cost and expense to the satisfaction of Classification Society without condition/recommendation**.

 

(ii)                           The costs and expenses relating to the survey of the tailshaft system shall be borne by the Buyers unless the Classification Society requires such survey to be carried out or if parts of the system are condemned or found defective or broken so as to affect the Vessel’s class, in which case the Sellers shall pay these costs and expenses.

 

(iii)                       The Buyers’ representative(s) shall have the right to be present in the drydock, as observer(s) only without interfering with the work or decisions of the Classification Society surveyor.

 

(iv)                        The Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their risk, cost and expense without interfering with the Sellers’ or the Classification Society surveyor’s work, if any, and without affecting the Vessel’s timely delivery. If, however, the Buyers’ work in drydock is still in progress when the Sellers have completed the work which the Sellers are required to do, the additional docking time needed to complete the Buyers’ work shall be for the Buyers’ risk, cost and expense. In the event that the Buyers’ work requires such additional time, the Sellers may upon completion of the Sellers’ work tender Notice of Readiness for delivery whilst the Vessel is still in drydock and, notwithstanding Clause 5(a), the Buyers shall be obliged to take delivery in accordance with Clause 3 (Payment), whether the Vessel is in drydock or not.

 

*6 (a) and 6 (b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 6 (a) shall apply.

 

**Notes or memoranda, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account.

 

7.                                 Spares, bunkers and other items

 

The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on shore. All spare parts and spare equipment including spare tail-end shaft(s) and/or spare propeller(s)/propeller blade(s), if any, belonging to the Vessel at the time of inspection used or unused, whether on board or not shall become the Buyers’ property, but spares on order are excluded. Forwarding charges, if any, shall be for the Buyers’ account. The Sellers are not required to replace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to

 

 

delivery, but the replaced items shall be the property of the Buyers. Unused stores and provisions shall be included in the sale and be taken over by the Buyers without extra payment.

 

Library and forms exclusively for use in the Sellers’ vessel(s) and captain’s, officers’ and crew’s personal belongings including the slop chest are excluded from the sale without compensation, as well as the following additional items:               (include list)

 

Items on board which are on hire or owned by third parties, listed as follows, are excluded from the sale without compensation:               (include list)

 

Items on board at the time of inspection which are on hire or owned by third parties, not listed above, shall be replaced or procured by the Sellers prior to delivery at their cost and expense.

 

The Buyers shall take over remaining bunkers and unused lubricating and hydraulic oils and greases in storage tanks and unopened drums and pay either:

 

(a)* the actual net Sellers’ last purchase price (less all discount expenses, but excluding barging expenses) as evidenced by invoices or vouchers; or

 

for the quantities taken over.

 

Payment under this Clause shall be made at the same time and place and in the same currency as the Purchase Price.

 

“inspection” in this Clause 7, shall mean the Buyers’ inspection according to Clause 4(a) or 4(b) (Inspection), if applicable. If the Vessel is taken over without inspection, the date of this Agreement shall be the relevant date.

 

*(a) and (b) are alternatives, delete whichever is not applicable. In the absence of deletions alternative (a) shall apply.

 

8.                                 Documentation

 

The place of closing: #

 

(a) In exchange for payment of the Purchase Price the Sellers shall provide the Buyer with the following delivery documents:

 

(i)                               Legal Bill(s) of Sale in the British form recordable in the Buyers’ Nominated Flag State, transferring title of the Vessel and stating that the Vessel is free from all mortgages, encumbrances and maritime liens or any other debts whatsoever, duly notarily attested and legalized or apostilled, as required by the Buyers’ Nominated Flag State;

 

(ii)                           Evidence that all necessary corporate, shareholder and other action has been taken by the Sellers to authorise the execution, delivery and performance of this Agreement;

 

(iii)                       Power of Attorney of the Sellers appointing one or more representatives to act on behalf of the Sellers in the performance of this Agreement, duly notarially attested and legalised or apostilled (as appropriate);

 

(iv)                        Certificate or Transcript of Registry issued by the competent authorities of the flag state on the date of delivery evidencing the Sellers’ ownership of the Vessel and that the Vessel is free from registered encumbrances and mortgages, to be faxed or e-mailed by such authority to the closing meeting with the original to be sent to the Buyers as soon as possible after delivery of the Vessel;

 

(v)                            Declaration of Class or (depending on the Classification Society) a Class Maintenance Certificate issued within three (3) Banking Days prior to delivery confirming that the Vessel is in Class free of overdue condition/recommendation;

 

(vi)                        Certificate of Deletion of the Vessel from the Vessel’s registry or other official evidence of deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel’s registry forthwith and provide a certificate or other official evidence of deletion to the Buyers promptly and latest within four (4) weeks after the Purchase Price has been paid and the Vessel has been delivered;

 

(vii)                    A copy of the Vessel’s Continuous Synopsis Record certifying the date on which the Vessel ceased to be registered with the Vessel’s registry, or, in the event that the registry does not as a matter of practice issue such certificate immediately, a written undertaking from the Sellers to provide the copy of this certificate promptly upon it being issued together with evidence of submission by the

 

 

Sellers of a duly executed Form 2 stating the date on which the Vessel shall cease to be registered with the Vessel’s registry;

 

(viii)                Commercial Invoice for the Vessel;

 

(ix)                        Commercial Invoice(s) for bunkers, lubricating and hydraulic oils and greases;

 

(x)                            A copy of the Sellers’ letter to their satellite communication provider cancelling the Vessel’s communications contract which is to be sent immediately after delivery of the Vessel;

 

(xi)                        Any additional documents as may reasonably be required by the competent authorities of the Buyers’ Nominated Flag State for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such documents as soon as possible after the date of this Agreement; and

 

(xii)                    The Sellers’ letter of confirmation that to the best of their knowledge, the Vessel is not black listed by any nation or international organisation.

 

(b) At the time of delivery the Buyers shall provide the Sellers with:

 

(i)                               Evidence that all necessary corporate, shareholder and other action has been taken by the Buyers to authorise the execution, delivery and performance of this Agreement; and

 

(ii)                           Power of Attorney of the Buyers appointing one or representatives to act on behalf of the Buyers in the performance of this Agreement, duly notarially attested and legalised or apostilled (as appropriate).

 

(c) If any of the documents listed in Sub-clauses (a) and (b) above are not in the English language they shall be accompanied by an English translation by an authorised translator or certified by a lawyer qualified to practice in the country of the translated language.

 

(d) The Parties shall to the extent possible exchange copies, drafts or samples of the documents listed in Sub-clause (a) and Sub-clause (b) above for review and comment by the other party not later than                (state number of days), or if left blank, nine (9) days prior to the Vessel’s intended date of readiness for delivery as notified by the Sellers pursuant to Clause 5(b) of this Agreement.

 

(e) Concurrent with the exchange of documents in Sub-clause (a) and Sub-clause (b) above, the Sellers shall also hand to the Buyers the classification certificate(s) as well as all plans, drawings and manuals, (excluding ISM/ISPS manuals), which are on board the Vessel.  Other certificates which are on board the Vessel shall also be handed over to the Buyers unless the Sellers are required to retain same, in which case the Buyers have the right to take copies.

 

(f) Other technical documentation which may be in the Sellers’ possession shall promptly after delivery be forwarded to the Buyers at their expense, if they so request. The Sellers may keep the Vessel’s log books but the Buyers have the right to take copies of same.

 

(g) The Parties shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the Buyers.

 

9.                                 Encumbrances

 

The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances, mortgages and maritime liens or any other debts whatsoever, and is not subject to Port State or other administrative detentions. The Sellers hereby undertake to indemnify the Buyers against all consequences of claims made against the Vessel which have been incurred prior to the time of delivery.

 

10.                          Taxes, fees and expenses

 

Any taxes, fees and expenses in connection with the purchase and registration in the Buyers’ Nominated Flag State shall be for the Buyers’ account, whereas similar charges in connection with the closing of the Sellers’ register shall be for the Sellers’ account.

 

11.                          Condition on delivery

 

The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken over as she was at the time of inspection, fair wear and tear excepted.

 

However, the Vessel shall be delivered free of cargo and free of stowaways with her Class maintained without overdue condition/recommendation*, free of average damage affecting Vessel’s class, and with her classification certificates and national certificates, as well as all other certificates the Vessel had at the time

 

 

of inspection, valid and unextended without overdue condition/recommendation* by the Classification Society or the relevant authorities at the time of delivery.

 

“inspection” in this Clause 11, shall mean the Buyers’ inspection according to Clause 4(a) or 4(b) (Inspections), if applicable. If the Vessel is taken over without inspection, the date of this Agreement shall be the relevant date.

 

*Notes and memoranda, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account.

 

12.                          Name/markings

 

Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings.

 

13.                          Buyers’ default

 

Should the Deposit not be lodged in accordance with Clause 2 (Deposit), the Sellers have the right to cancel this Agreement, and they shall be entitled to claim compensation for their losses and for all expenses incurred together with interest.

 

Should the Purchase Price not be paid in accordance with Clause 3 (Payment), the Sellers have the right to cancel this Agreement, in which case the Deposit, together with interest earned, if any, shall be released to the Sellers. If the Deposit does not cover their loss, the Sellers shall be entitled to claim further compensation for their losses and for all expenses incurred together with interest.

 

14.                          Sellers’ default

 

Should the Sellers fail to give Notice of Readiness in accordance with Clause 5(b) or fail to be ready to validly complete a legal transfer by the Cancelling Date the Buyers shall have the option of cancelling this Agreement. If after Notice of Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not made physically ready again by the Cancelling Date and new Notice of Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this Agreement, the Deposit together with interest earned, if any, shall be released to them immediately.

 

Should the Sellers fail to give Notice of Readiness by the Cancelling Date or fail to be ready to validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for their loss and for all expenses together with interest if their failure is due to proven negligence and whether or not the Buyers cancel this Agreement.

 

15.                          Buyers’ representatives

 

After this Agreement has been signed by the Parties and the Deposit has been lodged, the Buyers have the right to place two (2) representatives on board the Vessel at their sole risk and expense.

 

These representatives are on board for the purpose of familiarisation and in the capacity of observers only, and they shall not interfere in any respect with the operation of the Vessel. The Buyers and the Buyers’ representatives shall sign the Sellers’ P&I Club’s standard letter of indemnity prior to their embarkation.

 

16.                          Law and Arbitration

 

(a)* This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause.

 

The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced.

 

The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other party to appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both Parties as if the sole arbitrator had been appointed by agreement.

 

 

In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration proceedings are commenced.

 

*16(a), 16(b) and 16(c) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 16(a) shall apply.

 

17.                          Notices

 

All notices to be provided under this Agreement shall be in writing:

 

Contact details for recipients of notices are as follows:

 

For the Buyers: #

 

For the Sellers: Edward Scott, Chief Operating Officer

Excelerate Energy Limited Partnership

1450 Lake Robbins Drive, Suite 200

The Woodlands, TX 77380 ,

+1-832-813-7634 - Telephone

+1-832-813-7103 - Facsimile

 

18.                          Entire Agreement

 

The written terms of this Agreement comprise the entire agreement between the Buyers and the Sellers in relation to the sale and purchase of the Vessel and supersede all previous agreements whether oral or written between the Parties in relation thereto.

 

Each of the Parties acknowledges that in entering into this Agreement it has not relied on and shall have no right or remedy in respect of any statement, representation, assurance or warranty (whether or not made negligently) other than as is expressly set out in this Agreement.

 

Any terms implied into this Agreement by any applicable statute or law are hereby excluded to the extent that such exclusion can legally be made. Nothing in this Clause shall limit or exclude any liability for fraud.

 

19.                          Further Conditions of Delivery

 

The obligation of the Sellers to deliver the Vessel to the Buyers shall further be conditional upon the satisfaction of the following conditions:-

 

(i) that in respect of the Vessel there has not occurred, been declared or be continuing any Charterer Event of Default as defined in the Relevant TCP; and

 

(ii) that the Relevant TCP has not been terminated by Excelerate Energy LP (“EE”); and

 

(iii) that there is paid by the Buyers to the Sellers on the date of delivery to the Sellers’ Account the Purchase Price; and

 

(iv) that the Sellers shall further receive from EE such amount as shall represent, as the case may be, the difference between the Purchase Price and the Vessel Value, at the date of delivery of the Vessel, in the event that the Purchase Price is less than the Vessel Value. The term Vessel Value shall be as defined in the Vessel Option Agreement between Exmar NV, Excelerate NV and EE dated    . January 2014.

 

For the purpose of this Clause 19, the term Relevant TCP means the LNG Regasification Vessel Timecharterparty relating to the Vessel, being one of those of defined as the EXCELERATE TCP, the EXPLORER TCP and the EXPRESS TCP in the said Vessel Option Agreement.

 

20.                          BIMCO Designated Entities Clause for Sale and Purchase Agreements

 

(a) In this Agreement, the following provisions shall apply where any sanction, prohibition or restriction is imposed on any specified persons, entities or bodies including the designation of any specified vessels or fleets under United Nations Resolutions or trade or economic sanctions, laws or regulations of the European Union or United States of America.

 

(b) Buyers and Sellers each warrant that at the date of entering into this Agreement and continuing until the Buyers have paid the purchase price in full and taken possession of the Vessel on delivery by the Sellers:

 

(i) neither party is subject to any of the sanctions, prohibitions, restrictions, or designation referred to in sub-clause (a) which prohibit or render unlawful any performance under this Agreement;

 

 

(ii) the Sellers are selling and the Buyers are purchasing the Vessel as principals and not as agent, trustee or nominee of any person with whom transactions are prohibited or restricted under sub-clause (a);

 

(iii) The Sellers further warrant that the Vessel is not a designated vessel and is not and will not be chartered to any entity or transport any cargo contrary to the restrictions or prohibitions in sub-clause (a).

 

(c) If at any time during the performance of this Agreement either party becomes aware that the other party is in breach of warranty as aforesaid, the party not in breach shall comply with the laws and regulations of any Government to which that party of the Vessel is subject and follow any orders or directions which may be given by any regulatory or administrative body, acting with powers to compel compliance. In the absence of any such orders, directions, laws or regulations, the party not in breach may terminate this Agreement forthwith.

 

(d) Notwithstanding anything in this Clause to the contrary, Buyers and Sellers shall not be required to do anything which constitutes a violation of the laws and regulations of any State to which either of them is subject.

 

(e) Buyers and Sellers shall be liable to indemnify the other party against any and all claims, including return of any deposit or all or any part of the purchase price, losses, damage, costs and fines whatsoever suffered by the other party resulting from any breach of warranty as aforesaid and in accordance with this Agreement.

 

	
For and on behalf of the Sellers
    	
For and on behalf of the Buyers
    
	
 
    	
 
    
	
Name:
    	
          
    	
 
    	
 
    	
Name:
    	
        
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
            
    	
 
    	
 
    	
Title:
    	
          
    	
 
    

 

EXPLANATORY NOTE:

 

The foregoing document is the form of the Memorandum of Agreement for the sale of an OPTION VESSEL agreed by the parties to the Vessel Option Agreement dated ... January 2014 (the “VOA”) and which is referred to as EXHIBIT B in Clause 2(a) of the said Agreement and defined therein as THE MOA. It is the understanding and agreement of the parties to the VOA that in making offers and commitments to sell an Option Vessel to any Customer or in offering and granting options to purchase an Option Vessel to any Customer as permitted by Clause 2(a) of the VOA, EE shall have the right, without restriction or any requirement to first consult with either Exmar or the relevant Option Vessel Owner, in the context of such sale or grant of option, to agree and confirm with such Customer on the terms of the form of MOA set out above. It being further understood and agreed that in agreeing such terms, EE shall, where the form of MOA permits the selection of alternative provisions (in particular concerning the payment of a Deposit (Clause 2); Inspection (Clause 4); Divers Inspection/Drydocking (Clause 6); Documentation / place of closing / documentation generally (Clause 8) and Law and Arbitration (Clause 16)); have the right to agree with the relevant counterparty such alternative as provided by the MOA as it shall in its sole discretion decide.

 

It is agreed and understood that with respect to the agreement of dates and time limits, and all matters concerning the current particulars of the Vessel and its appurtenances (eg. spares and stores) these shall require the prior consultation of and confirmation by Exmar as contemplated by Clause 2(a) of the MOA, any such confirmation on the part of Exmar not to be unreasonably withheld or delayed.

 

 

Exhibit C - Form of Bill of Sale

 

	
IMO
   Number
    	
 
    	
Official
   Number
    	
 
    	
Name of Ship
    	
 
    	
Country of registry
    	
 
    	
Whether a sailing, steam or
   Motor ship
    	
 
    	
Horsepower of
   engines (if any)
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Number of tons
    
	
 
    	
 
    	
 
    	
 
    	
M
    	
 
    	
Cms
    	
 
    	
Gross
    	
 
    	
Register
    
	
Length
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Breadth
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Depth
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

We, [  ] having our principal place of business at [   ] (hereinafter called “the transferors”) in consideration of the sum of US$[   ] (United States Dollars [   ]) paid to us by [   ] (hereinafter called “the transferees”) the receipt whereof is hereby acknowledged, transfer the Ship above particularly described, to the said transferees.

 

Furthermore, we, the said transferors for ourselves and our successors covenant with the said transferees and their assigns, that we have power to transfer in manner aforesaid the premises hereinbefore expressed to be transferred, and that the same are free from encumbrances mortgages and maritime liens or any debts or claims whatsoever.

 

In witness whereof we have caused this Bill of Sale to be executed on this [   ] day of [   ] 20[  ].

 

EXECUTED for and on behalf of [   ]

 

By [   ] its duly authorised [director/attorney]:

 

27

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