EX-10.7 16 d701161dex107.htm EX-10.7 EX-10.7

EXHIBIT 10.7

 

 

 

 

ADMINISTRATIVE SERVICES AGREEMENT

BETWEEN

HOEGH LNG SERVICES LTD

AND

HÖEGH LNG AS

 

 

 

 


TABLE OF CONTENTS

 

Section 1.

   Definitions     1   

Section 2.

   General     3   

Section 3.

   Subcontracting     3   

Section 4.

   Covenants     3   

Section 5.

   Exclusivity     4   

Section 6.

   Confidential Information     4   

Section 7.

   VAT     4   

Section 8.

   General Relationship Between the Parties     4   

Section 9.

   Indemnity     5   

Section 10.

   Term and Termination     5   

Section 11.

   Subcontractor Costs and Expenses Upon Termination     6   

Section 12.

   Surrender of Books and Records     6   

Section 13.

   Entire Agreement     6   

Section 14.

   Severability     6   

Section 15.

   Law and Arbitration     6   

Section 16.

   Notice     8   

Section 17.

   Variation     8   

Section 18.

   Waiver     8   

Section 19.

   Assignment     8   

Section 20.

   Third Parties     8   

Section 21.

   Counterparts     8   

Schedule A

  

—     Administrative Services

 

 

 

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ADMINISTRATIVE SERVICES AGREEMENT

THIS ADMINISTRATIVE SERVICES AGREEMENT is entered into on, and effective as of, 2 July, 2014 (this “Agreement”), between Höegh LNG Services Ltd, a company limited by shares registered in England and Wales with company number 9058496 and a wholly owned subsidiary of the Operating Company (as defined below) (“Höegh UK”), and Höegh LNG AS, a Norwegian private limited liability company (“Höegh Norway”), each a “Party” and collectively, the “Parties.”

R E C I T A L S:

 

1. Höegh LNG Partners LP, a Marshall Islands limited partnership whose common units representing limited partner interests in it will be listed and traded on the New York Stock Exchange (the “MLP”), and Höegh LNG Partners Operating LLC, a Marshall Islands limited liability company and wholly owned subsidiary of the MLP (the “Operating Company”), are holding entities that indirectly own interests in FSRUs and LNG carriers and requires certain administrative services in connection with the management of the group.

 

2. Pursuant to an Administrative Services Agreement, dated on or about the same date as this Agreement, among the MLP, the Operating Company and Höegh UK, as amended from time to time (the “MLP Administrative Services Agreement”), the MLP and the Operating Company have engaged Höegh UK to provide, or procure the provision of, administrative services to the MLP and the Operating Company.

 

3. Pursuant to the MLP Administrative Services Agreement, Höegh UK may, as authorized from time to time by the MLP and the Operating Company, subcontract to Höegh Norway the Administrative Services.

 

4. Höegh UK wishes to engage Höegh Norway to provide, or procure the provision of, the Administrative Services on the terms set out herein.

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:

Section 1. Definitions. As used in this Agreement, the following terms have the respective meanings set forth below:

Administrative Services” means the services described in Schedule A, as delegated to Höegh Norway from time to time.

Agreement” has the meaning given such term in the introduction to this Agreement.

Board” means the Board of Directors of the MLP.


Change of Control” means, with respect to any entity, an event in which securities of any class entitling the holders thereof to elect a majority of the members of the board of directors or other similar governing body of the entity are acquired, directly or indirectly, by a “person” or “group” (within the meaning of Section 13(d) or 14(d)(2) of the Securities Exchange Act of 1934, as amended), who did not immediately before such acquisition own securities of the entity entitling such person or group to elect such majority (and for the purpose of this definition, any such securities held by another person who is related to such person are deemed to be owned by such person).

Closing Date” means the closing date of the initial public offering of the MLP.

Dispute” has the meaning given such term in Section 15.

General Partner” means Höegh LNG GP LLC, a Marshall Islands limited liability company and the general partner of the MLP.

Höegh Norway” has the meaning given such term in the introduction to this Agreement.

Höegh UK” has the meaning given such term in the introduction to this Agreement.

LCIA” has the meaning given such term in Section 15.

LIBOR” means the London Interbank Offered Rate.

MLP” has the meaning given such term in the recitals to this Agreement.

MLP Agreement” means the First Amended and Restated Agreement of Limited Partnership of the MLP, dated as of the Closing Date, as from time to time amended.

Operating Company” means Höegh LNG Partners Operating LLC, a Marshall Islands limited liability company and wholly owned subsidiary of the MLP.

Partnership Group” means the MLP, the General Partner and the subsidiaries of the MLP.

Party” or “Parties” has the meaning given such term in the introduction to this Agreement.

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

Subcontractor Costs and Expenses” has the meaning given such term in Section 3(b).

Subcontractor Due Date” has the meaning given such term in Section 3(e).

Subcontractor Services Fees” has the meaning given such term in Section 3(c).

 

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Tribunal” has the meaning given such term in Section 15.

Unitholders” means holders of common units representing limited partnership interests in the MLP.

VAT” means value added, goods, sales or any similar tax.

Section 2. General. Höegh Norway shall provide, or procure the provision of, the Administrative Services to Höegh UK (acting reasonably) and subject to the supervision of the board of directors of Höegh UK. Höegh Norway may not subcontract all or part of the Administrative Services, save that it may subcontract all or such portion of the Administrative Services as it deems advisable or appropriate in its sole discretion, with the prior written consent of Höegh UK, to any other Person.

Section 3. Subcontracting. If Höegh UK and Höegh Norway agree that Höegh Norway shall perform certain of the Administrative Services, the terms of such subcontracting arrangement will be as follows:

(a) Höegh Norway shall comply with the covenants set out in Section 4, Section 5 and Section 12;

(b) Höegh UK shall reimburse Höegh Norway on a monthly basis in arrears for all costs and expenses reasonably incurred by Höegh Norway (the “Subcontractor Costs and Expenses”) in connection with the provision of the Administrative Services for the preceding month;

(c) Höegh UK shall pay to Höegh Norway on a monthly basis in arrears a services fee equal to 5.00% of the Subcontractor Costs and Expenses for the preceding month (the “Subcontractor Services Fees”);

(d) within 20 days after the end of each calendar month, Höegh Norway shall submit to Höegh UK for payment an invoice covering the Subcontractor Costs and Expenses and the Subcontractor Services Fees. Each invoice will contain such supporting detail as may be reasonably required to validate such amounts due; and

(e) Höegh UK shall make payment owed pursuant to this Section 2 within 45 days of the date of each invoice (any such day on which a payment is due, a “Subcontractor Due Date”). All invoices for the Subcontractor Costs and Expenses and the Subcontractor Services Fees will be submitted in and paid in U.S. Dollars. All amounts not paid within 10 days after the Subcontractor Due Date bear interest at the rate of 3.00% per annum above the three-month US$ LIBOR rate as at the Subcontractor Due Date from such Subcontractor Due Date until the date payment is received in full by Höegh Norway.

Section 4. Covenants. During the term of this Agreement, Höegh Norway shall:

(a) perform, or procure the performance of, the Administrative Services in a diligent manner;

 

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(b) retain, or procure at all times the retention by any Person to whom performance of the Administrative Services is subcontracted from time to time of, sufficiently qualified staff to provide the Administrative Services;

(c) keep, and procure the keeping by any Person to whom performance of the Administrative Services is subcontracted of, full and proper books, records and accounts showing clearly all transactions relating to the provision of the Administrative Services in accordance with established general commercial practices and in accordance with U.S. generally accepted accounting principles, and provide or procure access to Höegh UK and its representatives to audit and examine such books, records and accounts at any time during customary business hours; and

(d) comply, and procure the compliance by any Person to whom performance of the Administrative Services is subcontracted, with all laws and regulations applicable to the Parties, including, but not limited to, the U.S. Foreign Corrupt Practices Act 1977 and the U.K. Bribery Act 2010 and any other anti-corruption legislation.

Section 5. Exclusivity. Höegh Norway and its employees shall not, without the prior written consent of Höegh UK (not to be unreasonably withheld or delayed), provide services of a nature similar to the Administrative Services to any other Person other than Höegh LNG Holdings Ltd. or its subsidiaries.

Section 6. Confidential Information. Höegh Norway shall, and shall procure that any Person to whom performance of any of the Administrative Services is subcontracted, keep confidential, all information it has acquired or developed in the course of providing the Administrative Services.

Section 7. VAT.

(a) All amounts payable under this Agreement are deemed to be exclusive of VAT, which will be payable upon receipt of a valid VAT invoice, if subject to VAT.

(b) Where this Agreement requires one Party to reimburse another for any costs or expenses, the payer shall, at the same time, pay the payee all VAT incurred by the payee in respect of those costs or expenses. The amount payable will be the amount that the payee reasonably determines is the amount that neither it, nor any other member of any group of which it is a member for VAT purposes, is entitled to recover from the relevant tax authority in respect of the VAT.

Section 8. General Relationship Between the Parties. Höegh Norway and any subcontractors shall perform the Administrative Services as independent contractors and the Parties do not intend, and nothing herein will be interpreted so as, to create a partnership or joint venture relationship or agency relationship between Höegh Norway and any one or more of the MLP, the Operating Company, the General Partner or any other member of the Partnership Group. Nothing in this Agreement creates any employment relationship between the MLP, on the one hand, and any other Person performing the Administrative Services, on the other.

 

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Section 9. Indemnity. Höegh UK shall indemnify and hold harmless any Person to whom provision of the Administrative Services is subcontracted in accordance with the terms of this Agreement (including any subcontractors of Höegh Norway) and their officers, employees and agents against all actions, proceedings, claims, demands or liabilities that may be brought against them due to the performance of the Administrative Services, including, without limitation, all actions, proceedings, claims, demands or liabilities brought under the environmental laws of any jurisdiction, and against and in respect of all costs and expenses (including legal costs and expenses on a full indemnity basis) they may suffer or incur due to defending or settling same; provided, however, that such indemnity excludes any or all losses, actions, proceedings, claims, demands, costs, damages, expenses and liabilities whatsoever to the extent that they are caused by or due to the fraud, willful misconduct or gross negligence of such subcontractor or its officers, employees or agents. Any such subcontractor and each of its officers, employees and agents may enforce the provisions of this Section 9 in accordance with the provisions of the Contracts (Rights of Third Parties) Act 1999.

Section 10. Term and Termination. This Agreement terminates on the fifth anniversary of the date at the head of this Agreement or if terminated:

(a) by the board of directors of Höegh UK upon 90 days’ written notice for any reason in its sole discretion; or

(b) by the board of directors of Höegh Norway upon 90 days’ written notice if:

(i) there is a Change of Control of the MLP or the General Partner;

(ii) a receiver is appointed for all or substantially all of the property of the MLP;

(iii) an order is made to wind up the MLP;

(iv) a final judgment, order or decree that materially and adversely affects the ability of the MLP or the Operating Company to perform under the MLP Administrative Services Agreement will have been obtained or entered against the MLP or the Operating Company, and such judgment, order or decree will not have been vacated, discharged or stayed;

(v) the MLP or the Operating Company makes a general assignment for the benefit of its creditors, files a petition in bankruptcy or for liquidation, is adjudged insolvent or bankrupt, commences any proceeding for a reorganization or arrangement of debts, dissolution or liquidation under any law or statute or of any jurisdiction applicable thereto or if any such proceeding is commenced;

(vi) a final judgment, order or decree that materially and adversely affects the ability of Höegh UK to perform under this

 

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Agreement will have been obtained or entered against Höegh UK, and such judgment, order or decree will not have been vacated, discharged or stayed; or

(vii) Höegh UK makes a general assignment for the benefit of its creditors, files a petition in bankruptcy or for liquidation, is adjudged insolvent or bankrupt, commences any proceeding for a reorganization or arrangement of debts, dissolution or liquidation under any law or statute or of any jurisdiction applicable thereto or if any such proceeding is commenced.

Any termination of this Agreement is without prejudice to any accrued rights and liabilities of any Party subsisting as at the date of termination. Notwithstanding the termination of this Agreement, the provisions of Section 6, Section 9, Section 10, Section 11, Section 12, Section 13, Section 14, Section 15, Section 17, Section 18 and Section 19 shall survive the termination and will remain in force and binding on the Parties.

Section 11. Subcontractor Costs and Expenses Upon Termination. Upon termination of this Agreement in accordance with Section 10, Höegh UK shall be obligated to pay any and all amounts payable pursuant to Section 3 for the applicable Administrative Services provided prior to the time of termination.

Section 12. Surrender of Books and Records. Upon termination of this Agreement, Höegh Norway shall forthwith surrender to Höegh UK, or procure the surrender to Höegh UK, of any and all books, records, documents and other property relating to this Agreement and to the business, finance, technology, trademarks or affairs of the MLP and any member of the Partnership Group (including Höegh UK) and, except as required by law, shall not retain any copies of same.

Section 13. 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 14. Severability. If any provision of this Agreement or the application thereof to any Person or circumstance is held invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provision to other Persons or circumstances will not be affected thereby and will be enforced to the greatest extent permitted by law.

Section 15. Law and Arbitration. This Agreement (including the agreement as to arbitration contained herein) and any dispute or claim arising out of or in connection with it (including disputes as to regarding its existence, validity or termination) or its subject matter or formation (including non-contractual disputes or claims) (a “Dispute”) will be governed by, and construed in accordance with, the substantive laws of England and Wales without reference to any choice of law principle that would result in the application of any other law.

The Parties specifically acknowledge that the terms of this Agreement represent their sole and express intent, to the exclusion of any other intent, and they specifically disclaim the application of any provision of the applicable law, legal doctrine or principle that would permit variance or avoidance of these terms.

 

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Any Dispute will be referred to and finally resolved by arbitration under the rules of arbitration of the London Court of International Arbitration (the “LCIA”), which rules are deemed to be incorporated herein. The seat (or legal place) of arbitration will be London, England. The language of the arbitration will be English.

The tribunal (the “Tribunal”) will consist of one arbitrator. The Parties shall jointly nominate the sole arbitrator within 30 days of the request for arbitration. If the Parties fail to agree on the sole arbitrator within such time, the LCIA court shall appoint the arbitrator on an expedited basis.

Any award will be final and binding on the Parties and may be confirmed in, and judgment upon the award entered by, any court having jurisdiction. The Parties hereby waive any reference to the courts under Sections 45 and 69 of the Arbitration Act 1996.

The Tribunal shall render a final award in any arbitration within six months of the appointment of the Tribunal by the LCIA court. This time limit may only be extended with the consent of the Parties or by the Tribunal for good cause shown, provided, that no award will be invalid even if it is not rendered within the time period herein specified, or not rendered within any extended period. At the earliest opportunity, the Tribunal shall, in consultation with the Parties, set out a procedural timetable for the service of pleadings and evidence. Any pleading or evidence served otherwise than in compliance with such timetable will be struck out by the Tribunal, unless the submitting Party shows good cause for the deviation and has been granted an appropriate extension by the Tribunal (ahead of the expiration of the relevant deadline), bearing in mind the effect such extension will or may have on the case timetable.

The Parties agree that there will be a presumption that there will be no disclosure or discovery of documents, save for the documents that each Party intends to rely upon. To the extent that the Tribunal considers that it may be appropriate to order any document production beyond this, it will be guided by the IBA Rules of the Taking of Evidence in International Commercial Arbitration in doing so.

The Parties agree that, if any provision of this Agreement is not performed in accordance with its terms, irreparable damage may occur and, notwithstanding this Section 15, the Party affected thereby is entitled to apply to the courts of England and Wales for an interim injunction to prevent such breach, or continuing breach, of this Agreement and/or specific performance of the provisions hereof, in addition to any other remedy available under English law, including those prescribed by Section 44 of the Arbitration Act 1996. The Parties agree that any application to the courts of England and Wales made hereunder is one of urgency, and legal proceedings may be immediately commenced in the English courts, notwithstanding that the arbitration procedure prescribed in this Section 15 has not yet been initiated. Any injunction or order so issued will be enforceable in any court having jurisdiction over any Party.

 

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Section 16. Notice. Notice under this Agreement will be given (via hand delivery or facsimile) as follows:

If to Höegh UK:

Attn: Richard Tyrrell

Hoegh LNG Services Ltd

150 Minories

London, England, United Kingdom

EC3N 1LS

Telephone: +44 207 347 5396

Fax: +44 207 347 5405

If to Höegh Norway:

Attn: Vida Beemer

Höegh LNG AS

Drammensveien 134

0277 Oslo, Norway

Telephone: + 47 97 55 74 00

Fax: +47 97 55 74 01

Section 17. Variation. Any variation to this Agreement will not be effective unless it is made in writing and signed by all of the Parties; provided, however, that any amendment to Schedule A must also be approved by the MLP.

Section 18. Waiver. The failure of either Party to enforce any term of this Agreement does not act as a waiver. Any waiver must be specifically stated as such in writing.

Section 19. Assignment. No Party is permitted to assign or otherwise dispose of the benefit of this Agreement without the prior written consent of the other Parties. This Agreement is binding upon and inure to the benefit of the Parties’ successors and assigns.

Section 20. Third Parties. Save as expressly provided by this Agreement, a Person who is not a Party has no right to enforce or to receive the benefit of this Agreement under the Contracts (Rights of Third Parties) Act 1999. Notwithstanding the foregoing, the Parties may terminate, rescind or agree to any variation, waiver or settlement under this Agreement without the consent of any other Person.

Section 21. 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 are to be construed together and constitute one and the same instrument.

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IN WITNESS WHEREOF, the Parties have executed this Agreement on, and effective as of, the date first above written.

 

HOEGH LNG SERVICES LTD
By:  

/S/    RICHARD TYRRELL

  Name: Richard Tyrrell
  Title:   Director
HÖEGH LNG AS
By:  

/S/    S. STØHLE

  Name:
  Title:

SIGNATURE PAGE TO THE

ADMINISTRATIVE SERVICES AGREEMENT

BETWEEN HÖEGH UK AND HÖEGH NORWAY


SCHEDULE A

ADMINISTRATIVE SERVICES

Höegh Norway shall provide, or subcontract the provision of, such of the following administrative services (the “Administrative Services”) to Höegh UK, as the board of directors of Höegh UK may from time to time request and direct Höegh Norway to provide pursuant to this Agreement:

(a) Keep and maintain at all times books, records and accounts that contain particulars of receipts and disbursements relating to the assets and liabilities of the MLP, the Operating Company and Höegh UK, and such books, records and accounts will be kept pursuant to normal commercial practices that permit the MLP and the Operating Company to prepare or cause to be prepared financial statements in accordance with U.S. generally accepted accounting principles and in each case will also be in accordance with those financial statements required to be kept by the MLP under applicable federal securities laws and regulations in the United States and as the MLP and the Operating Company is required to keep and file under applicable foreign taxing regulations and the U.S. Internal Revenue Code of 1986, as amended, and the regulations applicable with respect thereto, all as amended from time to time, provided that any register of members of the MLP shall be kept outside the United Kingdom;

(b) Assist in preparing all such returns, filings and documents, for review and approval by the MLP and the Operating Company as may be required under the MLP Agreement, as well as such other returns, filings, documents and instruments as may from time to time be requested or instructed by the MLP and the Operating Company, and assist in filing such documents, as applicable, as directed by the MLP and the Operating Company with the relevant authority, except that such returns, filings and documents may not be approved by Höegh Norway;

(c) Assist in providing, or arranging for the provision of, advisory services to the MLP with respect to the MLP’s obligations under applicable securities laws and regulations in the United States and assist in arranging for compliance by the MLP with continuous disclosure obligations under applicable securities laws and regulations and the rules and regulations of the New York Stock Exchange, the U.S. Securities and Exchange Commission and the Sarbanes–Oxley Act of 2002 and any other securities exchange upon which the MLP’s securities are listed, including to assist in the preparation for review, approval and filing by the MLP of reports and other documents with all applicable regulatory authorities, provided, that nothing herein permits or authorizes Höegh Norway to act for or on behalf of the MLP in its relationship with regulatory authorities, except to the extent that specific authorization may from time to time be given by the MLP;

(d) Assist in providing, or arranging for the provision of, or secure sufficient and necessary office space, equipment and personnel, including all accounting, clerical, secretarial, corporate, administrative and information technology services, as may be reasonably necessary for the performance of the MLP and the Operating Company’s business (outside the United Kingdom) (if any);

 

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(e) Assist in arranging for the provision of such audit, accounting, legal, insurance and other professional services as are reasonably required by the MLP and the Operating Company from time to time in connection with the discharge of its responsibilities under the MLP Agreement (including the review of quarterly and annual reports), to the extent such advice and analysis can be reasonably provided or arranged by Höegh Norway, provided, that nothing herein permits or authorizes Höegh Norway to select the auditor of the MLP and the Operating Company, which will be selected in accordance with the provisions for the appointment of the auditor pursuant to the MLP Agreement or as otherwise required by law governing the MLP, or to communicate with the auditor other than in the ordinary course of making such books and records available for review as the auditor may require and to respond to queries from the auditor with respect to the accounts and statements that Höegh Norway has assisted to prepare or arrange, and in particular Höegh Norway shall not have any of the authorities, rights or responsibilities of the audit committee of the Board, but shall assist to provide, or arrange for the provision of, information to such committee as may from time to time be required or requested, and provided further, that nothing herein entitles Höegh Norway to retain legal counsel for the MLP unless such selection is specifically approved by the Board;

(f) Assist in providing, or arranging for the provision of, such administrative and clerical services as may be required by the MLP and the Operating Company to support and assist the MLP in considering any future acquisitions or divestments of assets of the MLP and for the integration of any businesses or assets acquired by the MLP (other than acquisitions from Höegh LNG Holdings Ltd. and its subsidiaries), all in accordance with the direction and under the supervision of Höegh UK;

(g) Assist in providing technical information, describing business cases, drafting information memoranda and performing calculations for the purpose of the financing of possible investments, and such other assistance as may be required from time to time of similar nature or in project development; and

(h) Assist in providing consultancy on insurance matters, both in respect of arranging suitable cover and settling claims, and coordinating legal services.

For the avoidance of doubt, no other services may be subcontracted by Höegh UK to Höegh Norway save as set out in this Schedule A.

 

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