TORM plc (Form: 20-F, Received: 03/12/2019 17:22:39)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 20-F

(Mark One)

[ ]	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the fiscal year ended December 31, 2018

OR

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from _________________ to _________________

OR

[ ]	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	Date of event requiring this shell company report:

Commission file number: 001-38294

TORM plc

(Exact name of Registrant as specified in its charter)

(Translation of Registrant's name into English)

England and Wales

(Jurisdiction of incorporation or organization)

Birchin Court, 20 Birchin Lane, London, EC3V 9DU, United Kingdom

(Address of principal executive offices)

Jacob Meldgaard, Executive Director and Principal Executive Officer, Tuborg Havnevej 18, DK-2900 Hellerup, Denmark,

+45 39 17 92 00

(Name, Telephone, E-mail and/or Facsimile, and address of Company Contact Person)

Securities registered or to be registered pursuant to section 12(b) of the Act.

Title of each class		Name of each exchange on which registered
Class A common shares, par value $0.01 per share		Nasdaq Stock Market LLC

Securities registered or to be registered pursuant to section 12(g) of the Act.

NONE

(Title of class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

NONE

(Title of class)

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report: As of December 31, 2018 there were 74,218,846 of the Registrant's Class A common shares outstanding.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes

☐

☒

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes

☐

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes

☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth Company. See the definitions of "large accelerated filer," "accelerated filer" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

	Large accelerated filer ☐		Accelerated filer ☒

	Non-accelerated filer ☐		Emerging growth company ☒
	(Do not check if a smaller reporting company)

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

[ ]		U.S. GAAP
[X]		International Financial Reporting Standards as issued by the international Accounting Standards Board

[ ]		Other

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:

Item 17

☐

Item 18

☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

☐

☒

TABLE OF CONTENTS

Page

	PART I
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3.	KEY INFORMATION	1
ITEM 4.	INFORMATION ON THE COMPANY	36
ITEM 4A.	UNRESOLVED STAFF COMMENTS	54
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	54
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	75
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	80
ITEM 8.	FINANCIAL INFORMATION	82
ITEM 9.	THE OFFER AND LISTING	83
ITEM 10.	ADDITIONAL INFORMATION	83
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	99
ITEM 12.	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	99
	PART II
ITEM 13.	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	99
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	99
ITEM 15.	CONTROLS AND PROCEDURES	99
ITEM 16.	RESERVED	100
ITEM 16A.	AUDIT COMMITTEE FINANCIAL EXPERT.	100
ITEM 16B.	CODE OF ETHICS	100
ITEM 16C.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	100
ITEM 16D.	EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES	100
ITEM 16E.	PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS	101
ITEM 16F.	CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT	101
ITEM 16G.	CORPORATE GOVERNANCE	101
ITEM 16H.	MINE SAFETY DISCLOSURE	102
	PART III
ITEM 17.	FINANCIAL STATEMENTS	103
ITEM 18.	FINANCIAL STATEMENTS	103
ITEM 19.	EXHIBITS	103

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are statements other than statements of historical facts. We desire to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and are issuing this cautionary statement in connection therewith. Our disclosure and analysis in this annual report pertaining to our operations, cash flows and financial position, including, in particular, the likelihood of our success in developing and expanding our business, include forward-looking statements. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "intends," "plans," "believes," "estimates," "projects," "forecasts," "potential," "continue," "possible," "likely," "may," "should" and similar expressions are forward-looking statements.

All statements in this annual report that are not statements of either historical or current facts are forward-looking statements. These forward-looking statements are based on current expectations, estimates, assumptions and projections about the business and our future financial results and readers should not place undue reliance on them. Forward-looking statements include, but are not limited to, such matters as:

our future operating or financial results;

global and regional economic and political conditions, including piracy;

our pending vessel acquisitions, our business strategy and expected capital spending or operating expenses, including dry-docking and insurance costs;

statements about shipping market trends, including charter rates and factors affecting supply and demand;

our financial condition and liquidity, including our ability to obtain financing in the future to fund capital expenditures, acquisitions and other general corporate activities;

our ability to enter into time charters after our current charters expire and our ability to earn income in the spot market;

the price of our Class A common shares; and

our expectations of the availability of vessels to purchase, the time it may take to construct new vessels, and vessels' useful lives.

Many of these statements are based on our assumptions about factors that are beyond our ability to control or predict and are subject to risks and uncertainties that are described more fully in Item 3. "Key Information—D. Risk Factors." Any of these factors or a combination of these factors could materially affect our future results of operations and the ultimate accuracy of the forward-looking statements. Factors that might cause future results to differ include, but are not limited to, the following:

our future operating or financial results;

changes in governmental rules and regulations or actions taken by regulatory authorities;

fluctuations in interest rates and foreign exchange rates;

general domestic and international political conditions or events, including “trade wars”;

changes in economic and competitive conditions affecting our business, including market fluctuations in charter rates and charterers' abilities to perform under existing time charters;

potential liability from future litigation and potential costs due to environmental damage and vessel collisions;

the length and number of off-hire periods and dependence on third-party managers; and

other factors discussed in Item 3. "Key Information—D. Risk Factors" in this annual report.

You should not place undue reliance on forward-looking statements contained in this annual report because they are statements about events that are not certain to occur as described or at all. All forward-looking statements in this annual report are qualified in their entirety by the cautionary statements contained in this annual report. These forward-looking statements are made only as of the date of this report. These forward-looking statements are not guarantees of our future performance, and actual results and future developments may vary materially from those projected in the forward-looking statements.

Except to the extent required by applicable law or regulation, we undertake no obligation to release publicly any revisions or updates to these forward-looking statements to reflect events or circumstances after the date of this annual report or to reflect the occurrence of unanticipated events.

EXPLANATORY NOTE AND PRESENTATION OF OUR FINANCIAL AND OPERATING DATA

Throughout this annual report on Form 20-F, we incorporate information responsive to the items hereof by reference to our annual report for the year ended December 31, 2018, or the Annual Report 2018 , including our audited consolidated financial statements as of and for the years ended December 31, 2018, 2017 and 2016. Therefore, the information contained in this annual report should be read in conjunction with the Annual Report 2018 , which was furnished to the U.S. Securities and Exchange Commission, or the SEC, on Form 6-K on March 12, 2019. The content of quotations, websites and other sources contained in the sections of the Annual Report 2018 referenced herein are not incorporated by reference into this Form 20-F.

Unless otherwise indicated, the terms "TORM plc," "we," "us," "our," the "Company" and the "Group" refer to TORM plc and its consolidated subsidiaries, which includes TORM A/S and its consolidated subsidiaries, following the closing of the Exchange Offer (defined below). When used in this annual report to describe events prior to the closing of the Exchange Offer, the terms "TORM A/S," "we," "us," "our," the "Company" and the "Group" refer to TORM A/S and its consolidated subsidiaries before such time. References to "Former TORM A/S" refer to TORM A/S and its consolidated subsidiaries prior to the Combination (defined below).

Unless otherwise indicated, all information in this annual report gives effect to the 1,500:1 share consolidation that TORM A/S implemented with effect as of September 24, 2015. Unless otherwise indicated, all references to "U.S. dollars," "USD," "dollars," "US$" and "$" in this annual report are to the lawful currency of the United States of America, references to "Sterling", "£" and "GBP" are to the lawful currency of the United Kingdom, references to "Danish Kroner," and "DKK" are to the lawful currency of Denmark. We use the term deadweight ton, or dwt, in describing the size of vessels. Dwt, expressed in metric tons, each of which is equivalent to 1,000 kilograms, refers to the maximum weight of cargo and supplies that a vessel can carry.

In 2015, TORM A/S, a company organized under the laws of Denmark, entities affiliated with Oaktree Capital Management L.P., or Oaktree, and certain of TORM A/S' lenders entered into a restructuring agreement to recapitalize TORM A/S. The agreement provided for the cancellation of certain of TORM A/S' debt and required OCM Njord Holdings S.à r.l., or Njord Luxco, a subsidiary of Oaktree, to contribute OCM (Gibraltar) Njord Midco Ltd., or Njord, to TORM A/S in exchange for shares in TORM A/S. We refer to this transaction as the "Combination" and together with certain other transactions related to the restructuring as the "2015 Restructuring." We refer to the consummation of the 2015 Restructuring on July 13, 2015 as the Restructuring Completion Date.

In 2016, a new corporate structure was established, whereby TORM plc effectively acquired all of the outstanding securities of TORM A/S in exchange for TORM plc's securities. We refer to these transactions collectively as the "Exchange Offer." On April 19, 2016, upon the closing of the Exchange Offer and the listing of TORM plc's Class A common shares on Nasdaq Copenhagen A/S in Denmark, or Nasdaq Copenhagen, TORM plc became the Group's publicly-held parent company incorporated under the laws of England and Wales. We refer to this as the "Redomiciliation." The Redomiciliation was accounted for as an internal reorganization of entities under common control and, therefore, the assets and liabilities of TORM A/S were accounted for at their historical cost basis and not revalued in the transaction.

Our Class A common shares of TORM plc are issued and traded on Nasdaq Copenhagen under the symbol "TRMD A" and on the Nasdaq Stock Market LLC in New York, or Nasdaq New York, under the symbol "TRMD". All commercial and technical management of our fleet of product tankers is led out of the Denmark office of TORM A/S and our subsidiaries in India, the Philippines, the United States and Singapore. See Item 4. "Information on the Company."

We are therefore subject to the applicable corporate governance rules of Nasdaq New York, the UK Corporate Governance Code, the UKLA's Disclosure and Transparency Rules and the applicable rules and regulations applicable to companies admitted to trading and official listing on Nasdaq Copenhagen.

We report our consolidated financial results in U.S. dollars and in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB, which also comply with reporting requirements under English law.

Accordingly, this document includes the audited consolidated financial statements of TORM plc as of and for the years ended December 31, 2018, 2017 and 2016, which have been prepared in accordance with IFRS. The financial information for TORM plc also reflects the activities of Njord and Former TORM A/S from the date of the Combination, and the activities of TORM A/S only prior to the Combination, being a continuation of the financial statements of Njord (the accounting acquirer), with one adjustment, which is to adjust retroactively Njord's legal capital to reflect the legal capital of TORM A/S from the beginning of the earliest period presented.

Enforcement of Civil Liabilities

We are a public limited company incorporated under the laws of England and Wales, and substantially all of our directors and officers are non-residents of the United States. A substantial portion of our assets, including the subsidiaries of TORM plc, and our directors and executive officers are located outside the United States. As a result, it may be difficult for shareholders of TORM plc to effect service within the United States upon directors, officers and experts who are not residents of the United States or to enforce judgments in the United States. In addition, there can be no assurance as to the enforceability in the United Kingdom against us or our respective directors, officers and experts who are not residents of the United States, or in actions for enforcement of judgments of United States courts, of liabilities predicated solely upon the federal securities laws of the United States.

PART I

ITEM 1.

IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

A.	Directors and Senior Management

Not applicable.

ITEM 2.

OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3.

KEY INFORMATION

A.	Selected Financial Data

The following table presents, in each case for the periods and as of the dates indicated, the selected historical financial and operating data of TORM plc. The selected data is derived from our audited financial statements, which have been prepared in accordance with IFRS as issued by the IASB, and should be read in conjunction with our audited consolidated financial statements as of and for the years ended December 31, 2018, 2017 and 2016 and related notes, which are incorporated herein by reference to our Annual Report 2018 together with Item 5. "Operating and Financial Review and Prospects." Our audited consolidated financial statements as of and for the years ended December 31, 2014 and 2015 and the related notes are not included herein. In addition, see "Explanatory Note and Presentation of Our Financial and Operating Data" for further details on the presentation of the financial statements, the history of the Company and its formation.

	Year Ended December 31,
	2018			2017			2016			2015			2014
(USD million, except share data)
Consolidated income statement data:
Revenue		635.4			657.0			680.1			540.4			179.9
Port expenses, bunkers and commissions		(283.0	)		(259.9	)		(221.9	)		(169.6	)		(81.2	)
Charter hire		(2.5	)		(8.5	)		(21.5	)		(12.0	)		0.0
Operating expenses		(180.4	)		(188.4	)		(195.2	)		(122.9	)		(50.3	)
Profit from sale of vessels		0.7			2.8			0.0			0.0			0.0
Administrative expenses		(47.8	)		(45.0	)		(41.4	)		(19.5	)		(1.0	)
Other operating expenses		(2.0	)		(0.4	)		(0.3	)		(6.3	)		(6.5	)
Share of profit from joint ventures		0.2			0.0			0.2			0.2			0.0
Impairment losses on tangible and intangible assets		(3.3	)		(3.6	)		(185.0	)		0.0			0.0
Depreciation		(114.5	)		(114.5	)		(122.2	)		(67.3	)		(24.7	)
Operating profit/(loss)		2.8			39.5			(107.2	)		143.0			16.2
Financial income		3.3			4.3			2.8			0.9			0.0
Financial expenses		(39.3	)		(40.6	)		(37.3	)		(16.9	)		(3.6	)
Profit/(loss) before income tax		(33.2	)		3.2			(141.7	)		127.0			12.6
Tax expenses		(1.6	)		(0.8	)		(0.8	)		(1.0	)		0.0
Net profit/(loss) for the year		(34.8	)		2.4			(142.5	)		126.0			12.6

Other financial data:
Basic earnings/(loss) per share, EPS (USD)		(0.5	)		0.0			(2.3	)		2.4			0.4
Diluted earnings/(loss) per share, EPS (USD)		(0.5	)		0.0			(2.3	)		2.4			0.4
Dividends per share (USD)		0.00			0.02			0.40			0.00			0.00

(USD million)	As of December 31,
Consolidated balance sheet data:	2018		2017		2016		2015		2014
Total assets		1,714.4		1,646.6		1,571.3		1,867.4		625.9
Total non-current assets		1,445.1		1,385.1		1,390.0		1,578.8		536.9
Total liabilities		867.2		855.5		790.7		891.4		156.4
Total non-current liabilities		700.1		699.4		638.9		775.6		125.3
Equity/net assets		847.2		791.0		780.6		976.0		469.5
Share capital		0.7		0.6		0.6		0.6
Cash and cash equivalents		127.4		134.2		76.0		168.3		38.0
Number of shares (excluding treasury shares), end of period (million)		73.9		62.0		62.0		63.8		39.6
Number of shares (excluding treasury shares), average (million)		73.1		62.0		62.9		51.7		32.5

	Year Ended December 31,
Consolidated cash flow data	2018			2017			2016			2015			2014
(USD million)
From operating activities		70.7			109.8			171.1			214.0			17.3
Used in investing activities		(175.5	)		(113.7	)		(119.4	)		(158.8	)		(377.9	)
Thereof investment in tangible fixed assets		(202.4	)		(145.1	)		(119.4	)		(254.0	)		(377.9	)
(Used in)/from financing activities		96.0			62.7			(145.6	)		75.0			397.1
Total net cash flow		(8.9	)		58.8			(93.9	)		130.2			36.5

B.	Capitalization and Indebtedness

Not applicable.

C.	Reasons for the Offer and Use of Proceeds

Not applicable.

D.	Risk Factors

The following risks relate principally to the industry in which we operate and our business in general. The occurrence of any of the risk factors described herein could have a material adverse effect on our future performance, results of operations, cash flows and our financial position. We may also be subject to other material risks that as of the date of this annual report are not currently known to us or that we currently deem immaterial and which may significantly impair our business.

Risks Related to Our Business and Our Industry

The product tanker sector is cyclical and volatile, and this may lead to reductions and volatility in our charter rates when we re-charter our vessels, in vessel values and in our results of operations.

We are a pure-play product tanker company, meaning that substantially all of our revenues are generated from operating our product tanker fleet. The product tanker market is cyclical in nature, which leads to volatility in freight rates, vessel values and industry profitability. The freight rates among different types of product tankers are highly volatile. For example, product tanker freight rates declined from the historical highs reached in mid-2008 (TORM MR Time Charter Equivalent, or TCE, rates up to $/day 26,458) to a cyclical low period between 2009 and 2014 (TORM annual average MR TCE rates of approximately $/day 14,200 for the period). During 2017 we realized TCE rates of $/day 14,621 and this declined by 11% during 2018 to TCE rates $/day 12,982. The factors affecting the supply and demand for product tankers are beyond our control, and the nature, timing and degree of changes in industry conditions are unpredictable and we may not be able to correctly assess the nature, timing and degree of changes in industry conditions.

Factors affecting the supply and growth of product tanker capacity include:

the number of newbuildings on order and being delivered;

the number of vessels used for floating storage;

the number of vessels in lay-up;

the number of vessels recycled for obsolescence or subject to casualties;

prevailing and expected future freight and charter hire rates;

the number of product tankers trading with crude or "dirty" oil products;

costs of bunkers and fuel oil and their impact on vessel speed;

the efficiency and age of the world product tanker fleet;

shipyard capacity;

availability of financing;

port congestion and canal congestion;

technological developments, which affect the efficiency of vessels;

government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations; and

crew availability.

Demand for product tankers is primarily determined by the quantity of cargo to be transported and the distance from origin to destination. The demand is affected by a number of external factors including:

world and regional economic conditions;

demand for oil and other petroleum products;

product imbalances across regions (affecting the level of trading activity);

the regulatory environment;

environmental issues and concerns;

developments in international trade including refinery additions and closures;

climate;

competition from alternative energy sources;

political developments;

embargoes;

armed conflicts; and

availability of financing and changes in interest rates.

In addition to the prevailing and anticipated freight rates, factors that greatly affect our financial profitability will include newbuilding, recycling and laying-up prices, second-hand vessel values in relation to recycling prices, cost of bunkers, cost of crew, vessel availability, other operating costs, costs associated with classification society surveys, normal maintenance costs, insurance coverage costs and the efficiency and age profile of the existing product tanker fleet in the market.

We anticipate that the future demand for our vessels will be dependent upon economic growth in the world's economies, seasonal as well as regional changes in demand, changes in the capacity of the global product tanker fleet and the sources and supply of oil and petroleum products to be transported by sea. Adverse economic, political, social or other developments could have a material adverse effect on our business and operating results. The product tanker sector is cyclical and volatile, and this may lead to reductions and volatility in our charter rates when we employ our vessels, to volatility in vessel values and in our future performance, results of operations, cash flows and our financial position.

Our revenues are derived substantially from a single segment, the product tanker segment, which exposes us to adverse developments in the product tanker market and which may adversely affect our future performance, results of operations, cash flows and financial position.

Substantially all of our revenues are derived from a single market, the product tanker segment, and therefore, our financial results depend on the development and growth in this segment. External factors that affect the product tanker market will have a significant impact on our business. Freight rates and asset prices have been volatile. Any adverse development in the product tanker segment would have a material adverse impact on our future performance, results of operations, cash flows and financial position. Further, our lack of diversification makes us increasingly vulnerable to adverse developments in the international product tanker market, and this could have a greater material adverse impact on our future performance, results of operations, cash flows and financial position than it would if we maintained more diverse lines of business.

An oversupply of product tanker capacity may lead to a reduction in charter rates, vessel values and profitability.

The supply of product tankers is affected by a number of factors such as supply and demand for energy resources, including oil and petroleum products, supply and demand for seaborne transportation of such energy resources and the current and expected purchase orders for newbuildings. If the capacity of new product tankers delivered exceeds the capacity of product tankers being recycled and converted to non-trading tankers, overall industry capacity in the product tanker will increase. If the supply of product tanker capacity increases, and if the demand for product tanker capacity decreases or does not increase correspondingly, charter rates could materially decline, which may also negatively affect the value of our vessels. Since last year ended and as of December 31, 2018, the value of our product tanker fleet, based on independent broker quotes, decreased by approximately 5% (excluding vessels that we sold and/or acquired during 2018). A reduction in charter rates and the value of our vessels may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

In addition, product tankers may be "cleaned up" from "dirty/crude" trades and swapped back into the product tanker market, which would increase the available tanker tonnage able to transport refined oil products and which may affect the supply and demand balance for product tankers. This could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Our results of operations are subject to seasonal fluctuations, which may adversely affect our results of operations, cash flows and financial position.

We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, freight rates. This seasonality may result in quarter-to-quarter volatility in operating results. The product tanker segment is typically stronger in the fall and winter months in anticipation of increased consumption of oil and petroleum products in the northern hemisphere. As a result, revenues from product tankers may be weaker during the fiscal quarters ending June 30 and September 30, and, conversely, revenues may be stronger in fiscal quarters ending December 31 and March 31. This seasonality could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Variations in incoming cash flows due to the cyclical nature of the shipping industry may have a material adverse effect on our future performance, results of operations and financial position.

Due to the cyclical nature of the shipping industry and volatile freight rates, incoming cash flows may vary significantly from year to year, whereas outgoing operating and financing cash flows may not vary to the same extent and at the same time. Significant deviations between ingoing and outgoing cash flows can thus damage our financial position and could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

A shift in consumer demand from oil towards other energy sources or changes to trade patterns for refined oil products may have a material adverse effect on our business.

A significant portion of our earnings are related to the oil industry. A shift in or disruption of the consumer demand from oil towards other energy resources such as electricity, natural gas, LNG or hydrogen will potentially affect the demand for our product tankers. A shift from the use of internal combustion engine vehicles to electric vehicles may also reduce the demand for oil. These factors could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Seaborne trading and distribution patterns are primarily influenced by the relative advantage of the various sources of production, locations of consumption, pricing differentials and seasonality. Changes to the trade patterns of refined oil products may have a significant negative or positive impact on the ton-mile and therefore the demand for our product tankers. This could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Acts of piracy on ocean-going vessels could adversely affect our business.

Acts of piracy have historically affected ocean-going vessels. At present, most piracy and armed robbery incidents are recurrent in the Gulf of Aden region off the coast of Somalia, Gulf of Guinea region off Nigeria, South China Sea, Sulu Sea and Celebes Sea. Sporadic incidents of robbery are also reported in many parts of Asia. The political turmoil in the Middle East region may also lead to collateral damages in waters off Yemen. The current diplomatic crisis between Gulf Co-operation Council (GCC) countries may lead to an uncertain security situation in the Middle East region.

The security arrangements made for ship staff and vessels to counteract the ever-evolving security threat and to comply with Best Management Practices to Deter Piracy and Enhance Maritime Security in the Red Sea, Gulf of Aden, Indian Ocean and Arabian Sea add to the cost of operations of our ships.

The "war risks" areas are established by the Joint War Risks Committee. Our vessels often trade in “war risk” areas due to the nature of our business. Due to the above issues when vessels trade in such areas, the insurance premiums are increased significantly to cover for the additional risks.

The above factors could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Increase in frequency of immigrant salvage operations in the Mediterranean could adversely affect our business.

In recent years, the number of immigrants attempting to cross the Mediterranean from North Africa to Europe in unseaworthy vessels has increased significantly. Many of the vessels are in such a poor condition that they capsize and sink, incur engine problems or are otherwise incapacitated en route to Europe. As a result, commercial ships may, if witnessing an immigrant vessel in distress, deviate from the task and course and conduct a salvage operation. Such salvage operation may prove costly in terms of time and resources spent and can thus prove a substantial cost for the commercial vessel and may pose risks to the safety of the crew, vessel and cargo. If we are not able to mitigate this potential exposure, and dependent on the number of such salvage operations which must be carried out in the future, this could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Changes in fuel prices may adversely affect profits.

Fuel, including bunkers, is a significant expense in our shipping operations of our vessels, and changes in the price of fuel may adversely affect our profitability. The price and supply of fuel is unpredictable and fluctuates based on events beyond our control, including geopolitical developments, supply and demand for oil and gas, actions by the Organization of the Petroleum Exporting Countries, or OPEC, and other oil and gas producers, war and unrest in oil producing countries and regions, regional production patterns and environmental concerns. Further, fuel may become much more expensive in the future, including as a result of the expected implementation of low sulfur fuel requirements by the International Maritime Organization in 2020, which may reduce our profitability and have a material adverse effect on our future performance, results of operations, cash flows and financial position. See Item 4. "Information on the Company—B. Business Overview—Environmental and Other Regulations—The International Maritime Organization."

An economic slowdown or changes in the economic and political environment in the Asia Pacific region could have a material adverse effect on our business, financial condition and results of operations.

We anticipate a significant number of the port calls made by our vessels will continue to involve the loading or discharging of cargo in ports in the Asia Pacific region. As a result, any negative changes in economic conditions in any Asia Pacific country, particularly in China, may have a material adverse effect on our business, financial condition and results of operations, as well as our future prospects. Before the global economic financial crisis that began in 2008, China had one of the world's fastest growing economies in terms of gross domestic product, or GDP, which had a significant impact on shipping demand. The quarterly year-over-year growth rate of China's GDP was approximately 6.6% for the year ended December 31, 2018, as compared to approximately 6.9% for the year ended December 31, 2017, and continues to remain below pre-2008 levels. Furthermore, there is a rising threat of a Chinese financial crisis resulting from excessive personal and corporate indebtedness. The International Monetary Fund has warned that a trade war between the United States and China risks making the world a "poorer and more dangerous place". We cannot assure you that the Chinese economy will not experience a significant contraction in the future.

Although state-owned enterprises still account for a substantial portion of the Chinese industrial output, in general, the Chinese government is reducing the level of direct control that it exercises over the economy through state plans and other measures. There is an increasing level of freedom and autonomy in areas such as allocation of resources, production, pricing and management and a gradual shift in emphasis to a "market economy" and enterprise reform. Limited price reforms were undertaken with the result that prices for certain commodities are principally determined by market forces. Many of the reforms are unprecedented or experimental and may be subject to revision, change or abolition based upon the outcome of such experiments. If the Chinese government does not continue to pursue a policy of economic reform, the level of imports to and exports from China could be adversely affected by changes to these economic reforms by the Chinese government, as well as by changes in political, economic and social conditions or other relevant policies of the Chinese government, such as changes in laws, regulations or export and import restrictions. Notwithstanding economic reform, the Chinese government may adopt policies that favor domestic shipping companies and may hinder our ability to compete with them effectively. For example, China imposes a tax for non-resident international transportation enterprises engaged in the provision of services of passengers or cargo, among other items, in and out of China using their own, chartered or leased vessels. The regulation may subject international transportation companies to Chinese enterprise income tax on profits generated from international transportation services passing through Chinese ports. This tax or similar regulations, such as the recently promoted environmental taxes on coal, by China may result in an increase in the cost of raw materials imported to China and the risks associated with importing raw materials to China, as well as a decrease in any raw materials shipped from our charterers to China. This could have an adverse impact on our charterers' business, operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and to renew and increase the number of their time charters with us. Moreover, an economic slowdown in the economies of the European Union and other Asian countries may further adversely affect economic growth in China and elsewhere.

If economic conditions throughout the world deteriorate or become more volatile, it could have a negative impact on TORM’s earnings.

Our ability to secure funding is dependent on well-functioning capital markets and on an appetite to provide funding to the shipping industry. At present, capital markets are well-functioning and funding is available for the shipping industry. However, if global economic conditions worsen, or lenders for any reason decide not to provide debt financing to us, we may, among other things, not be able to secure additional financing to the extent required, on acceptable terms or at all. If additional financing is not available when needed, or is available only on unfavorable terms, we may be unable to meet our obligations as they come due, or we may be unable to enhance our existing business, complete additional vessel acquisitions or otherwise take advantage of business opportunities as they arise.

The world economy faces a number of challenges, including the effects of volatile oil prices, trade protectionism and political turmoil in several geographic areas. If one or more of the major national or regional economies should weaken, there is a substantial risk that such a downturn will impact the world economy. There has historically been a strong link between the development of the world economy and demand for energy, including oil and gas.

The recent sovereign debt crisis in certain Eurozone countries, such as Greece, and concerns over debt levels of certain other European Union member states and in other countries around the world, such as China (as discussed above) as well as concerns about international banks, have led to increased volatility in global credit and equity markets. The credit markets in the United States and Europe have experienced contraction, deleveraging and reduced liquidity since the financial crisis in 2008, and the United States federal and state governments and European authorities have implemented a broad variety of governmental action and/or new regulation of the financial markets and may implement additional regulations in the future. Securities and futures markets and the credit markets are subject to comprehensive statutes, regulations and other requirements. The U.S. Securities and Exchange Commission, or the SEC, other regulators, self-regulatory organizations and exchanges are authorized to take extraordinary actions in the event of market emergencies, and may effect changes in law or interpretations of existing laws. Global financial markets and economic conditions have been, and continue to be, severely disrupted and volatile. An extended period of deterioration in outlook for the world economy could reduce the overall demand for our services and could also adversely affect our ability to obtain financing on terms acceptable to us or at all.

In Europe, large sovereign debts and fiscal deficits, low growth prospects and high unemployment rates in a number of countries have contributed to the rise of Eurosceptic parties, which would like their countries to leave the Euro. The exit of the United Kingdom from the European Union, thereby leaving the internal market at risk of additional tariffs that may be implemented, and potential new trade policies in the United States, together increase the risk of additional trade protectionism.

While the recent developments in Europe and China have been without significant immediate impact on product tanker freight rates, an extended period of deterioration in the world economy could reduce the overall demand for oil and gas and for our services. Such changes could adversely affect our future performance, results of operations, cash flows and financial position.

Credit markets in the United States and Europe have in the past experienced significant contraction, de-leveraging and reduced liquidity, and there is a risk that the U.S. federal government and state governments and European authorities continue to implement a broad variety of governmental action and/or new regulation of the financial markets. Global financial markets and economic conditions have been, and continue to be, volatile.

We face risks attendant to changes in economic environments, changes in interest rates and instability in the banking and securities markets around the world, among other factors. We cannot predict how long the current market conditions will last. These recent and developing economic and governmental factors may have a material adverse effect on our results of operations and financial condition and may cause the price of our Class A common shares to decline.

Prospective investors should consider the potential impact, uncertainty and risk associated with the development in the wider global economy. Further economic downturn in any of these countries could have a material effect on our future performance, results of operations, cash flows and financial position.

We are subject to complex laws and regulations, including environmental laws and regulations that can adversely affect our results of operations, cash flows and financial position.

Our vessels operate worldwide and are thus subject to numerous international laws, rules, regulations, conventions and treaties. Moreover, our vessels are registered, flagged, and call in ports in multiple countries where the applicable flag and/or port state rules, regulations and laws can differ. This complex web of rules, regulations, conventions, treaties and laws can be dynamic and influence the cost of owning and operating our vessels.

The various requirements we might have to comply with are discussed throughout and include, but are not limited to:

International requirements such as those from the International Maritime Organization, or IMO, like the International Convention for the Safety of Life at Sea of 1974, or SOLAS, the International Ship and Port Facility Security Code, or the ISPS Code, and the International Convention for the Prevention of Pollution from Ships of 1973, as from time to time amended, or MARPOL, as well as those from the Maritime Labor Convention 2006, or the MLC 2006, adopted by the International Labour Organization, or ILO;

United States, or U.S., requirements such as the U.S. Oil Pollution Act of 1990, or OPA, the Comprehensive Environmental Response, Compensation and Liability Act, or CERCLA, and those enforced by the U.S. Environmental Protection Agency, or the EPA, and the U.S. Coast Guard, or the USCG; and

European Union, or EU, regulations regarding greenhouse gas emissions.

Some laws also impose strict liability for pollution incidents. To avoid liability in those cases, parties may have to show they fall into an exception and took all reasonable precautionary steps to prevent a pollution incident. Thus, for remediation of environmental damage, the liability can include fines, penalties, criminal liability and costs for natural resource damages. In our case, these could harm our reputation with current or potential charterers of our product tankers. Compliance with environmental laws and regulations, where applicable, may require installation of costly equipment or operational changes and may affect the resale value or useful lives of our vessels. We may also incur additional costs in order to comply with other existing and future regulatory obligations, including, but not limited to, costs relating to air emissions including greenhouse gases, sulfur emissions, the management of ballast waters, maintenance and inspection, development and implementation of emergency procedures and insurance coverage or other financial assurance of our ability to address pollution incidents.

We are required to satisfy insurance and financial responsibility requirements for potential oil (including marine fuel) spills and other pollution incidents. Although we arrange insurance to cover environmental risks, there can be no assurance that such insurance will be sufficient to cover all the risks or that any claims will not have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Developments in safety and environmental requirements relating to the recycling of vessels may result in escalated and unexpected costs.

The 2009 Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, or the Hong Kong Convention, aims to ensure ships, being recycled once they reach the end of their operational lives, do not pose any unnecessary risks to the environment, human health and safety. The Hong Kong Convention has yet to be ratified by the required number of countries to enter into force. Upon the Hong Kong Convention's entry into force, however, each ship sent for recycling will have to carry an inventory of its hazardous materials. The hazardous materials, whose use or installation are prohibited in certain circumstances, are listed in an appendix to the Hong Kong Convention. Ships will be required to have surveys to verify their inventory of hazardous materials initially, throughout their lives and prior to the ship being recycled.

On November 20, 2013, the European Parliament and the Council of the EU adopted the Ship Recycling Regulation, which retains the requirements of the Hong Kong Convention and which is currently open for accession by IMO Member States. The Hong Kong Convention will enter into force 24 months after the date on which 15 IMO Member States, representing 40% of world merchant shipping by gross tonnage, have ratified or approved accession. As of the date of this annual report, six countries have ratified the Hong Kong Convention. Upon implementation, certain commercial seagoing vessels flying the flag of an EU Member State may be recycled only in facilities included on the European list of permitted ship recycling facilities.

These regulatory developments, when implemented, may lead to cost escalation by shipyards, repair yards and recycling yards. This may then result in a decrease in the residual scrap value of a vessel, and a vessel could potentially not cover the cost to comply with latest requirements, which may have an adverse effect on our future performance, results of operations, cash flows and financial position.

We may incur additional costs to retrofit ballast water treatment systems in our vessels to comply with new regulations.

Vessels unload ballast water during passage by taking ballast water in one port and unloading it in another. This helps maintain safety and stability. However, the ballast water can contain local organisms and pathogens. When vessels unload ballast water, they can then release organisms and pathogens in new parts of the world, which can be invasive to that ecosystem. To avoid transfers of invasive species in ballast water, the IMO and the United States have regulations that require ballast water is treated prior to discharge.

In order to comply with IMO and U.S. ballast water regulations, we are required to install ballast water treatment plants on all vessels from December 2018 to September 2024. The cost of compliance per vessel for us is estimated to be between $1.0 and $1.3 million, depending on size of the vessel. There are uncertainties associated with installing the equipment both operationally and technically, which could have adverse effect on the cost. Significant investments in ballast water treatment systems may have a material adverse effect on our future performance, results of operations, cash flows and financial position. For more information on these regulations, see Item 4. "Information on the Company—B. Business Overview— Environmental and Other Regulations—The International Maritime Organization— Pollution Control and Liability Requirements."

Regulations relating to ballast water discharge coming into effect during September 2019 may adversely affect our revenues and profitability.

The IMO has imposed updated guidelines for ballast water management systems specifying the maximum amount of viable organisms allowed to be discharged from a vessel’s ballast water. Depending on the date of the IOPP renewal survey, existing vessels constructed before September 8, 2017 must comply with the updated D-2 standard on or after September 8, 2019. For most vessels, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ships constructed on or after September 8, 2017 are to comply with the D-2 standards on or after September 8, 2017. We currently have 60 vessels that do not comply with the updated guideline and costs of compliance may be substantial and adversely affect our revenues and profitability.

Furthermore, United States regulations are currently changing. Although the 2013 Vessel General Permit (“VGP”) program and U.S. National Invasive Species Act (“NISA”) are currently in effect to regulate ballast discharge, exchange and installation, the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December 4, 2018, requires that the U.S. Coast Guard develop implementation, compliance, and enforcement regulations regarding ballast water within two years. The new regulations could require the installation of new equipment, which may cause us to incur substantial costs.

Sulfur regulations to reduce air pollution from ships are likely to require retrofitting of vessels and may cause us to incur significant costs.

In October 2016, the IMO set January 1, 2020 as the implementation date for vessels to comply with its low sulfur fuel oil requirement, which cuts sulfur levels from 3.5% currently to 0.5%. The interpretation of "fuel oil used on board" includes use in main engine, auxiliary engines and boilers. Shipowners may comply with this regulation by (i) using 0.5% sulfur fuels on board, which is likely to be available around the world by 2020 but likely at a higher cost; (ii) installing scrubbers for cleaning of the exhaust gas; or (iii) by retrofitting vessels to be powered by liquefied natural gas (LNG), which may not be a viable option due to the lack of supply network and high costs involved in this process. In anticipation of the 2020 implementation, we have installed an exhaust gas scrubber on one of our LR2 and one of our MR product tankers, TORM Hilde and TORM Lene, as pilot projects. TORM has committed to install scrubbers on 21 vessels and potentially up to 39 vessels or roughly half of TORM’s fleet. The CAPEX related to the confirmed scrubber orders is on average estimated below $2 million per scrubber including installation costs. TORM expects to be able to obtain financing for a significant portion of this investment. Costs of compliance with these regulatory changes may be significant and may have a material adverse effect on our future performance, results of operations, cash flows and financial position. See Item 4. "Information on the Company—B. Business Overview— Environmental and Other Regulations—The International Maritime Organization".

Climate change and greenhouse gas restrictions may adversely impact our operations and markets.

Due to concern over the risk of climate change, a number of countries and the IMO have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions. These regulatory measures may include, among other things, adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives or mandates for renewable energy. In addition, although the emissions of greenhouse gases from international shipping currently are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, or the Paris Agreement, a new treaty may be adopted in the future that includes restrictions on shipping emissions. Compliance with changes in laws, regulations and obligations relating to climate change could increase our costs related to operating and maintaining our vessels and require us to install new emission controls, acquire allowances or pay taxes related to our greenhouse gas emissions or administer and manage a greenhouse gas emissions program. Revenue generation and strategic growth opportunities may also be adversely affected.

On June 29, 2017, the Global Industry Alliance, or the GIA, was officially inaugurated. The GIA is a program under the Global Environmental Facility-United Nations Development Program-IMO project, which supports shipping, and related industries, as they move towards a low carbon future. Organizations including, but not limited to, shipowners, operators, classification societies and oil companies signed to launch the GIA.

Adverse effects upon the oil and gas industry relating to climate change, including growing public concern about the environmental impact of climate change, may also adversely affect demand for our services. For example, increased regulation of greenhouse gases or other concerns relating to climate change may reduce the demand for oil and gas in the future or create greater incentives for use of alternative energy sources. Therefore, any long-term material adverse effect on the oil and gas industry could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

If we fail to comply with international safety regulations, we may be subject to increased liability, which may adversely affect our insurance coverage and may result in a denial of access to, or detention in, certain ports.

The operation of our vessels is affected by governmental regulations in the form of international conventions, national, state and local laws and regulations in force in the jurisdictions in which the vessels operate, as well as in the country or countries of their registration. As such, we are subject to the requirements set forth in the IMO's International Management Code for the Safe Operation of Ships and for Pollution Prevention, or the ISM Code. The ISM Code is promulgated by the IMO under SOLAS to provide an international standard for the safe management and operation of ships and for pollution prevention. The ISM Code requires the party with operational control of a vessel to develop and maintain an extensive safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for the safe operation, and describing procedures for dealing with emergencies, when operating vessels. We rely on the safety management system that has been developed for our vessels for compliance with the ISM Code.

The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel's management with code requirements for a safety management system. No vessel can obtain a certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the ISM Code. We have obtained documents of compliance for our offices and safety management certificates for all of our vessels for which the certificates are required by the ISM Code. These documents of compliance and safety management certificates are renewed as required.

Non-compliance with the ISM Code and other IMO regulations may subject the shipowner or bareboat charterer to increased liability, may lead to a reduction in, or invalidation of, available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and EU authorities have indicated that vessels not in compliance with the ISM Code will be prohibited from trading in U.S. and EU ports. This could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

A major incident on one of our vessels affecting the safety and health of the crew could disrupt completely or delay operations thereby having a negative impact on customer confidence and on our future performance, results of operations, cash flows and financial position.

Recent action by the IMO's Maritime Safety Committee and United States agencies indicate that cybersecurity regulations for the maritime industry are likely to be further developed in the near future in an attempt to combat cybersecurity threats. For example, cyberrisk management systems must be incorporated by shipowners and managers by 2021. This might cause companies to cultivate additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. The impact of such regulations is hard to predict at this time.

Declines in charter rates and other market deterioration could cause us to incur impairment charges.

In accordance with IFRS, we review the carrying amounts of assets on a quarterly basis to determine any indication of impairment either due to a significant decline in market value or in the cash flows generated by the vessels. In case of such indication, the recoverable amounts of the assets are estimated as the higher of the net realizable value and the value in use in accordance with the requirements of applicable accounting standards. The value in use is the present value of the future cash flows expected to derive from an asset. For the purpose of assessing net realizable values, our management estimates the market values of the individual vessels, for which the most important parameters are the vessels' tons deadweight, the shipyard they were built at and age. Management uses internal as well as external sources of information, including two internationally recognized shipbrokers' valuations. There may be deviations between the market value and the book value of the vessels.

Accordingly, the carrying values of our vessels may not represent their fair market value at any point in time because the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings. In 2018, the value of our product tanker fleet decreased by approximately 5% (when excluding vessels sold and/or acquired during 2018). As a result of further declines in charter rates or vessel values, we may in the future need to record impairment losses and loss from sale of vessels, which could have a material adverse effect on our future performance, results of operations, cash flows and financial position. Please see the consolidated financial statements as of and for the year ended December 31, 2018 and the accompanying notes included herewith for details on the impact of changes in charter rates and other key assumptions.

If our vessels suffer damage due to the inherent operational risks of the product tanker industry, we may experience unexpected dry-docking costs and delays or total loss of our vessels.

The operation of an ocean-going vessel carries inherent risks. Our vessels and their cargoes will be at risk of being damaged or lost because of events such as marine disasters, bad weather and other acts of God, business interruptions caused by mechanical failures, unexpected tank corrosion, grounding, fire, explosions and collisions, human error, war, terrorism, piracy and other circumstances or events. Changing economic, regulatory and political conditions in some countries, including political and military conflicts, have from time to time resulted in attacks on vessels, mining of waterways, piracy, terrorism, labor strikes and boycotts. These hazards may result in death or injury to persons, loss of revenue or property, environmental damage, higher insurance rates, damage to our customer relationships, delay or rerouting.

In addition, international shipping is subject to various security and customs inspection and related procedures in countries of origin and destination and trans-shipment points. Inspection procedures can result in the seizure of the cargo and/or our vessels, delays in the loading, offloading or delivery and the levying of customs duties, fines or other penalties against us. It is possible that changes to inspection procedures could impose additional financial and legal obligations on us. Furthermore, changes to inspection procedures could also impose additional costs and obligations on our customers and may, in certain cases, render the shipment of certain types of cargo uneconomical or impractical. Any such changes or developments may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

The protection & indemnity insurance coverage that we have arranged for our vessels covers the vessel owner's liabilities towards the owner of any damaged cargo, subject to standard international conventions limiting such liability. If our vessels suffer damage, they may need to be repaired at a dry-docking facility. The costs of dry-dock repairs are unpredictable and may be substantial. We may have to pay dry-docking costs that our insurance does not cover in full. The loss of earnings while these vessels are being repaired and repositioned as well as the actual cost of these repairs would decrease the Company's earnings. In addition, space at dry-docking facilities is sometimes limited and not all dry-docking facilities are conveniently located. We may be unable to find space at a suitable dry-docking facility or the vessels may be forced to travel to a dry-docking facility that is not conveniently located in relation to the vessels' positions. The loss of earnings while these vessels are forced to wait for space or to sail to more distant dry-docking facilities could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

If labor interruptions are not resolved in a timely manner, they could have a material adverse effect on our business, results of operations, cash flows and financial position.

We employ masters, officers and crews to man our vessels. We have in the past implemented and will potentially continue in the future to implement restructuring measures including divesting or closing down business activities, reducing our workforce and negotiating collective agreements with trade unions. Restructurings and other factors such as disagreements concerning ordinary or extraordinary collective bargaining may damage our reputation and the relationship with our employees and lead to labor disputes, including work stoppages, strikes and/or work disruptions. If not resolved in a timely and cost-effective manner, industrial action or other labor unrest could prevent or hinder our operations from being carried out as we expect and could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Political instability, terrorist attacks and international hostilities can affect the seaborne transportation industry, which could adversely affect our business.

We conduct most of our operations outside of the United States, and our business, results of operations, cash flows, financial condition and ability to pay dividends, if any, in the future may be adversely affected by changing economic, political and government conditions in the countries and regions where our vessels are employed or registered. Moreover, we operate in a sector of the economy that is likely to be adversely impacted by the effects of political conflicts, including the current political instability in the Middle East and the South China Sea region and other geographic countries and areas, geopolitical events such as the withdrawal of the U.K. from the European Union, or "Brexit," terrorist or other attacks, and war (or threatened war) or international hostilities, such as those between the United States and North Korea. Terrorist attacks such as those in New York on September 11, 2001, in London on July 7, 2005, in Mumbai on November 26, 2008 and in Paris on November 13, 2015, and the continuing response of the United States and others to these attacks, as well as the threat of future terrorist attacks around the world, continues to cause uncertainty in the world's financial markets and may affect our business, operating results and financial condition. Continuing conflicts and recent developments in the Middle East, and the presence of U.S. or other armed forces in Iraq, Syria, Afghanistan and various other regions, may lead to additional acts of terrorism and armed conflict around the world, which may contribute to further economic instability in the global financial markets. As a result of the above, insurers have increased premiums and reduced or restricted coverage for losses caused by terrorist acts generally. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all. Any of these occurrences could have a material adverse impact on our operating results, revenues and costs. Additionally, Brexit, or similar events in other jurisdictions, could impact global markets, including foreign exchange and securities markets; any resulting changes in currency exchange rates, tariffs, treaties and other regulatory matters could in turn adversely impact our business and operations.

Further, governments may turn to trade barriers to protect their domestic industries against foreign imports, thereby depressing shipping demand. In particular, leaders in the United States have indicated the United States may seek to implement more protective trade measures. President Trump was elected on a platform promoting trade protectionism. The results of the presidential election have thus created significant uncertainty about the future relationship between the United States, China and other exporting countries, including with respect to trade policies, treaties, government regulations and tariffs. For example, on January 23, 2017, President Trump signed an executive order withdrawing the United States from the Trans-Pacific Partnership, a global trade agreement intended to include the United States, Canada, Mexico, Peru and a number of Asian countries. In March 2018, President Trump announced tariffs on imported steel and aluminum into the United States that could have a negative impact on international trade generally. Most recently, in January 2019, the United States announced expanded sanctions against Venezuela, which may have an effect on its oil output and in turn affect global oil supply. Protectionist developments, or the perception they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade. Moreover, increasing trade protectionism may cause an increase in (a) the cost of goods exported from regions globally, (b) the length of time required to transport goods and (c) the risks associated with exporting goods. Such increases may significantly affect the quantity of goods to be shipped, shipping time schedules, voyage costs and other associated costs, which could have an adverse impact on our charterers' business, operating results and financial condition and could thereby affect their ability to make timely charter hire payments to us and to renew and increase the number of their time charters with us. This could have a material adverse effect on our business, results of operations, financial condition and our ability to pay any cash distributions to our stockholders.

In the past, political instability has also resulted in attacks on vessels, mining of waterways and other efforts to disrupt international shipping, particularly in the Arabian Gulf region. Acts of terrorism and piracy have also affected vessels trading in regions such as the South China Sea and the Gulf of Aden off the coast of Somalia. Any of these occurrences could have a material adverse impact on our future performance, results of operations, cash flows and financial position.

If our vessels call on ports located in countries that are subject to sanctions and embargoes imposed by the U.S. or other governments, that could adversely affect our reputation and the market for our Class A common shares.

The past few years have seen increased implementation of sanctions and embargoes imposed against trading with certain countries by in particular the United States, the European Union and the United Nations. Our operations are currently and may in the future become subject to various economic and trade sanctions and anti-bribery laws, including sanctions. Prior to having Oaktree as major shareholder, some of the vessels owned or operated by us called on ports located in countries subject to sanctions and embargoes imposed by the U.S. government and other authorities, and countries identified by the U.S. government as state sponsors of terrorism. In 2015, we revised our internal policies and procedures regarding vessel calls at ports located in countries subject to U.S. and other sanctions. Special internal procedures relating to Iran were added in January 2016 when the Office of Foreign Assets Control, or OFAC, issued “General License H” authorizing certain transactions relating to non-U.S. entities owned or controlled by a U.S. person. When the General License H was revoked in May 2018, our special procedures were revoked accordingly. With the exception of Sudan (and between January 2016 and May 2018, Iran), our vessels have not called on ports located in countries currently identified by the U.S. government as a state sponsor of terrorism since June 29, 2012. To our knowledge, the port calls made by our vessels in Sudan and Iran have not violated any sanctions regimes or embargoes to which we were subject at the time of the port calls. Sanctions and embargo laws and regulations vary in their application, as they do not all apply to the same covered persons or proscribe the same activities, and such sanctions and embargo laws and regulations may be amended or strengthened over time. In 2010, the U.S. enacted the Comprehensive Iran Sanctions Accountability and Divestment Act, or CISADA, which expanded the scope of the Iran Sanctions Act. Among other things, CISADA expands the application of the prohibitions on companies such as ours and introduces limits on the ability of companies and persons to do business or trade with Iran when such activities relate to the investment, supply or export of refined petroleum or petroleum products.

A significant part of our share capital is owned by entities managed by Oaktree, consequently we have U.S shareholders. Due to our ownership, our operations are subject to the regulations, executive orders and other sanctions administered by OFAC, which restricts or prohibits certain transactions, dealings and travel involving certain Sanctioned Persons and Sanctioned Countries, including Cuba, where we have historically been active, and Iran. As such, our operations in countries that are subject to sanctions and embargoes imposed by the United States government and/or identified by the United States government as state sponsors of terrorism have been restricted following the 2015 Restructuring. From time to time, vessels in our fleet have called on ports in Sudan. We believe these activities have not been subject to then applicable U.S. sanctions laws. Any violation of applicable sanctions could result in fines or other penalties and could result in some investors deciding, or being required, to divest their interest or not to invest in the Company. Further, our lenders may determine that any non-compliance with applicable sanctions and embargoes imposed, or, with respect of the DSF Facility (defined below), all sanctions imposed by the United Kingdom, the European Union, the United Nations or the United States constitute an event of default under current or future debt facility agreements, including the Term Facility 1 and the Working Capital Facility (defined below), which, together, we refer to as the "Restructuring Financing Agreements", and the DSF Facility. An event of default may lead to an acceleration of the repayment of debt under the facility in question and, due to the cross-default provisions, under all other facilities as well, which could have a material adverse effect on our future performance, results of operations, cash flows and financial position, and could lead to bankruptcy or other insolvency proceedings.

Further, charterers and other parties that we have previously entered into contracts with regarding our vessels may be affiliated with persons or entities that are now or may soon be the subject of sanctions imposed by the U.S. government and/or the European Union or other international bodies in response to recent events relating to Russia, Crimea and the Ukraine. If we determine that such sanctions require us to terminate existing contracts, or if we are found to be in violation of such sanctions, we may suffer reputational harm, which may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Although we believe that we have been in compliance with all applicable sanctions and embargo laws and regulations and intend to maintain in such compliance, there can be no assurance that we will be in compliance in the future, particularly as the scope of certain laws may be unclear and may be subject to changing interpretations. Any such violation could result in fines, penalties or other sanctions that could severely impact our ability to access U.S. capital markets and conduct our business and could result in some investors deciding, or being required, to divest their interest, or not to invest, in us. In addition, certain institutional investors may have investment policies or restrictions that prevent them from holding securities of companies that have contracts with countries identified by the U.S. government as state sponsors of terrorism. The determination by these investors not to invest in, or to divest from, our Class A common shares may adversely affect the price at which our Class A common shares trade. Additionally, some investors may decide to divest their interest, or not to invest, in our company simply because we do business with companies that do business in sanctioned countries. Moreover, our charterers may violate applicable sanctions and embargo laws and regulations as a result of actions that do not involve us or our vessels, and those violations could in turn negatively affect our reputation. In addition, our reputation and the market for our securities may be adversely affected if we engage in certain other activities such as entering into charters with individuals or entities in countries subject to U.S. sanctions and embargo laws that are not controlled by the governments of those countries, or engaging in operations associated with those countries pursuant to contracts with third-parties that are unrelated to those countries or entities controlled by their governments. Investor perception of the value of our Class A common shares may also be adversely affected by the consequences of war, the effects of terrorism, civil unrest and governmental actions in these and surrounding countries, which may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Maritime claimants could arrest our vessels, which would have a negative effect on our cash flows.

Crew members, suppliers of goods and services to a vessel, shippers of cargo, secured lenders, time charter-in counterparties and other parties may be entitled to a maritime lien against the relevant vessel for unsatisfied debts, claims or damages.

In many jurisdictions, a maritime lien holder may enforce its lien by arresting a vessel and commencing foreclosure proceedings. In addition, in some jurisdictions a claimant may arrest both the vessel which is subject to the claimant's maritime lien and any "associated" vessel owned or controlled by the same owner. Claimants could try to assert "sister ship" liability against one vessel in the fleet for claims relating to another of our vessels. The arrest or attachment of one or more of our vessels could under certain circumstances constitute an event of default under our financing agreements or interrupt operations and require us to pay a substantial sum of money to have the arrest lifted, which could result in a loss of earnings and have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Governments could requisition our vessels during a period of war or emergency, which may have an adverse effect on our future performance, results of operations, cash flows and financial position.

A government could requisition one or more of our vessels for title or hire. Requisition for title occurs when a government takes control of a vessel and becomes the owner. Also, a government could requisition our vessels for hire. Requisition for hire occurs when a government takes control of a vessel and effectively becomes the charterer at dictated charter rates. Generally, requisitions occur during a period of war or emergency. Although none of our vessels have been requisitioned by a government for title or hire, a government requisition of one or more of our vessels in the future may adversely affect our future performance, results of operations, cash flows and financial position.

Technological innovation and quality and efficiency requirements from our customers could reduce our charter hire income and the value of our vessels.

Our customers, in particular those in the oil industry, have a high and increasing focus on quality and compliance standards with their suppliers across the entire supply chain, including the shipping and transportation segment. Our continued compliance with these standards and quality requirements is vital for our operations. Charter hire rates and the value and operational life of a vessel are determined by a number of factors including the vessel's efficiency, operational flexibility and physical life. Efficiency includes speed, fuel economy and the ability to load and discharge cargo quickly. Flexibility includes the ability to enter harbors, utilize related docking facilities and pass through canals and straits. The length of a vessel's physical life is related to its original design and construction, its maintenance and the impact of the stress of operations. If new vessels are built that are more efficient or more flexible or have longer physical lives than our vessels, competition from these more technologically advanced vessels could adversely affect the amount of charter hire payments we receive for our vessels, and the resale value of our vessels could significantly decrease which may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.

We expect that our vessels will call on ports where smugglers may attempt to hide drugs and other contraband on vessels, with or without the knowledge of crew members. To the extent our vessels are found with contraband, whether inside or attached to the hull of our vessel and whether with or without the knowledge of any of our crew, we may face governmental or other regulatory claims which could have an adverse effect on our business, results of operations and financial condition.

Risks Related to Our Company

If we are unable to operate our vessels profitably, we may be unsuccessful in competing in the highly competitive international product tanker market, which would negatively affect our financial condition and our ability to expand our business.

Our ability to achieve positive cash flows is subject to freight rates, financial, regulatory, legal, technical and other factors, many of which are beyond our control. In addition, the operation of product tankers and transportation of petroleum products is extremely competitive, and reduced demand for transportation of oil and oil products could lead to increased competition. Competition arises primarily from other product tanker owners, including major oil companies as well as independent product tanker companies, some of whom have substantially greater resources than we do. Competition for the transportation of oil and oil products can be intense and depends on price, location, size, age, condition and the acceptability of the product tanker and its operators to the charterers. We will have to compete with other product tanker owners, including major oil companies as well as independent product tanker companies. Our ability to operate our vessels profitably depends on a variety of factors, including, but not limited to (i) loss or reduction in business from significant customers, (ii) unanticipated changes in demand for transportation of crude oil and petroleum products, (iii) changes in production of or demand for oil and petroleum products, generally or in particular regions, (iv) greater than anticipated levels of tanker newbuilding orders or lower than anticipated levels of tanker recylings, (v) increases in the cost of bunkers, and (vi) changes in rules and regulations applicable to the tanker industry, including legislation adopted by international organizations such as IMO and the EU or by individual countries. If we are unable to operate our vessels profitably, our financial condition and ability to expand our business would be negatively affected.

We are dependent on spot charters and any decrease in spot charter rates in the future may adversely affect our earnings.

We employ the majority of our vessels on spot voyage charters or short-term time charters and generate a significant portion of our revenue from the spot market. The spot charter market may fluctuate significantly based upon product tanker and oil supply and demand. The successful operation of our vessels in the competitive spot charter market depends on, among other things, obtaining profitable spot charters and minimizing, to the extent possible, time spent waiting for charters and time spent traveling ballast to pick up cargo. The spot market is very volatile, and, in the past, there have been periods when spot charter rates have declined below the operating cost of vessels. For example, over the past five years, MR spot market rates expressed as a time charter equivalent have ranged from a low of approximately $6,500 to a high of approximately $31,500 per day. During 2018, our product tanker fleet realized average spot TCE earnings of $12,982 per day. If future spot charter rates decline, we may be unable to operate our vessels trading in the spot market profitably, meet our obligations, including payments on indebtedness, or pay dividends in the future. Furthermore, as charter rates for spot charters are fixed for a single voyage, which may last up to several weeks, during periods in which spot charter rates are rising, we will generally experience delays in realizing the benefits from such increases, which may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

We are subject to certain risks with respect to entering into new time charter-in contracts due to our dependence on spot charters.

We have the opportunity to charter-in additional vessels for longer or shorter periods. Because we employ the majority of our vessels on spot voyage charters or short-term time charters, we may be exposed to changes in the freight rates that are significantly below the hire to be agreed in a time charter-in contract. This exposure could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

We are subject to certain risks with respect to our counterparties on contracts, and failure of such counterparties to meet their obligations could cause us to suffer losses or negatively impact our results of operations and cash flows.

We regularly enter into bunker hedging contracts, employ vessels on Contracts of Affreightment, or COAs, fixed rate time charters and voyage charters, and enter into newbuilding contracts with shipyards. Such agreements subject us to counterparty risks. The ability of each of our counterparties to perform its obligations under a contract with us will depend on a number of factors that are beyond our control and may include, among other things, general economic conditions, the condition of the maritime industry, the overall financial condition of the counterparty, charter rates received for specific types of vessels and various expenses. In addition, in depressed market conditions, our charterers and customers may no longer need a vessel that is currently under charter or contract or may be able to obtain a comparable vessel at lower rates. As a result, charterers and customers may seek to renegotiate the terms of their existing charter agreements or avoid their obligations under those contracts, and it may be difficult for us to secure substitute employment for such vessel. Furthermore, any new charter arrangements we secure in the spot market or on time charters may be at lower rates. Should a counterparty fail to honor its obligations under agreements with us, we could sustain significant losses, which could have a material adverse effect on our future performance, results of operations, cash flows and financial position. To reduce our counterparty risk, we perform a credit check on the prospective customers, however, we cannot guarantee that this process reveals the embedded default risk.

We are subject to certain risks with respect to our counterparties on our newbuilding construction contracts, and the failure of our counterparties to meet their obligations under our newbuilding contracts could cause us to suffer losses or otherwise adversely affect our business.

Timely delivery of GSI MR Vessels and the two LR1 Product Tanker Newbuildings (as such terms are defined herein), and any other newbuildings we may acquire in the future, is subject to our counterparties meeting their obligations. We are therefore exposed to the risk of failure, cost overruns, delayed delivery, technical problems, quality or engineering problems and other counterparty risks. A number of shipping construction companies have reportedly been experiencing financial challenges. Any such financial challenges may affect operations and the timely delivery of newbuildings. Furthermore, a cancellation due to financial difficulties or bankruptcy of the yard could imply that pre-delivery installments are not recovered or are recovered only after long arbitrations that can last occasionally several years.

Measures have been taken to supervise the quality of the work completed at the yard where our newbuildings are being constructed. We have obtained refund guarantees for the pre-delivery installments on each GSI MR Vessel from the Export-Import Bank of China or China CITIC bank as security for pre-delivery installment payments paid to Guangzhou Shipyard International Company Limited, or GSI. The refund guarantees are limited to an amount of approximately $6 million plus interest for each of the GSI MR Vessels, which corresponds to the maximum outstanding exposure we would have at any given time. We expect all but one of the GSI MR Vessels to be delivered to us during 2019, with the remaining GSI MR Vessel to be delivered in early 2020. In addition, we have obtained refund guarantees for the pre-delivery installments on each of the LR1 Product Tanker Newbuildings from China CITIC Bank as security for pre-delivery installment payments paid to GSI. The refund guarantees are limited to a maximum amount of $11,413,650 plus interest for each of the LR1 Product Tanker Newbuildings, which we expect to be delivered to us in 2019.

We can provide no assurance that these, or any other measures we may take, will fully mitigate these risks, and any failure by a counterparty to meet its obligations in relation to the newbuildings may result in delays or cancellations of the delivery of the newbuildings, renegotiation of terms, delayed renewal of our product tanker fleet and consequent deterioration of our competitive position, any of which may result in significant losses for us which could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

An inability to effectively time investments in and divestments of vessels could prevent the implementation of our business strategy and negatively impact our results of operations and financial condition.

Our strategy is to own and operate a fleet large enough to provide global coverage, but no larger than what the demand for our services can support over a longer period by both contracting newbuildings and through acquisitions and disposals in the second-hand market. Our business is greatly influenced by the timing of investments and/or divestments and contracting of newbuildings. If we are unable to identify the optimal timing of such investments, divestments or contracting of newbuildings in relation to the shipping value cycle due to capital restraints, this could have a material adverse effect on our competitive position, future performance, results of operations, cash flows and financial position.

An increase in operating costs would decrease our earnings and have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Our vessel operating expenses include the costs of crew, provisions, deck and engine stores, insurance, security measures and maintenance and repairs. Those expenses depend on a variety of factors, many of which are beyond our control and subject to development in the market of the respective input. Voyage expenses include bunkers (fuel), port and canal charges. If our vessels suffer damage, they may need to be repaired at a dry-docking facility. The costs of dry-dock repairs are unpredictable and can be substantial. Some of these costs, primarily relating to insurance, crewing and enhanced security measures, have been increasing on a relative basis and may increase further in the future. An increasing cost base may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

When purchasing and managing previously second-hand vessels, we are exposed to unforeseen operating costs and vessels off-hire. Second-hand vessels are typically acquired without a warranty period, and inspections prior to purchase may not fully reveal the condition of the vessel. We may therefore be required to perform repair and maintenance resulting in additional operating costs.

A substantial portion of our revenues is derived from a limited number of customers, and the loss of any of these customers could result in a significant loss of revenues and cash flow.

We currently derive substantially all of our revenues from a limited number of customers. In 2018, twenty customers accounted for approximately 75% of our total revenues. The loss of any significant customer or a decline in the amount of services provided to a significant customer could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

We may not be able to meet our ongoing operations and working capital needs and may not be able to obtain additional financing in the future on acceptable terms or at all.

As of December 31, 2018, our available liquidity was approximately $406 million, which consisted of approximately $127 million in cash, approximately $233 million in undrawn credit facilities and $46 million in undrawn credit facilities subject to the completion of final documentation. As of December 31, 2018, outstanding capital expenditures relating to our order book excluding scrubber commitments amounted to $258 million.

If we do not generate sufficient cash flows from our operations to finance our ongoing operations and working capital needs, including funding for, among other things, our newbuilding commitments, we may need to procure additional funding in the future in the public or private equity or debt or capital markets. Adequate sources of funding may not be available when needed or may not be available on terms acceptable to us. Our ability to obtain such additional capital or financing will in part depend on prevailing market conditions as well as the financial position of our business and our operating results, which may affect our efforts to arrange additional financing on satisfactory terms. If new shares are issued, it may result in a dilution of the existing shareholders. There can be no assurance that we will be able to maintain or obtain required loan or equity financing to meet any additional working capital or capital investment needs.

In line with industry practice, our suppliers provide us with short-term credit, or short-term supply credits, to purchase, among other things, bunkers and other petroleum products. If our short-term supply credits are reduced or withdrawn, this could have a material adverse effect on our business, results of operations, cash flows and financial position.

In addition, if available and satisfactory funding is insufficient at any time in the future, we may be unable to respond to competitive pressures or customers' requirements regarding vessel maintenance and fleet age or take advantage of business opportunities. Failure to obtain additional financing could have a material adverse effect on our business, results of operations, cash flows and financial position and could lead to bankruptcy or other insolvency proceedings.

As our product tanker fleet ages, we are exposed to increased operating costs and decreased competitiveness, which could adversely affect our earnings, and the risks associated with older vessels could adversely affect our ability to obtain profitable charters.

Our owned vessels had an average age of 11 years as of December 31, 2018. The recent introduction of eco-designs for vessels emphasizes that there is a continuous need for us to focus on cost optimizing measures to remain competitive, which may require us to more rapidly upgrade our product tanker fleet in the future. We may not be able to fund or secure additional financing to complete the acquisition of new or second-hand vessels required to renew and upgrade our product tanker fleet, which may lead to deterioration of our product tanker fleet's performance.

In general, the costs to maintain a vessel in good operating condition increase with the age of the vessel, and the current age of our fleet means that we must spend substantial resources on maintenance. It is also difficult to estimate with certainty the maintenance and operating costs that will be incurred for an older vessel and there is a risk that these costs will exceed expectations. Further, older vessels are typically less fuel-efficient than more recently constructed vessels due to improvements in engine technology. This difference in fuel-efficiency is likely to be compounded in 2020 when the IMO expects to implement lower sulfur fuel requirements. Cargo insurance rates increase with the age of a vessel, as older vessels may be less desirable to charterers and may be restricted in the type of activities in which the vessels can engage. Some oil companies chartering our vessels have stricter compliance and maintenance requirements on vessels of 15 years of age or older and therefore such vessels’ tradability may decrease. Governmental regulations, safety or other equipment standards related to the age of vessels may require expenditures for alterations or the addition of new equipment to our vessels and may restrict the type of activities in which the vessels may engage. As our vessels age, market conditions may not justify those expenditures or enable us to operate our vessels profitably during the remainder of their useful lives.

While we have tried to strike a balanced portfolio of vessel types and age, the increasing average age of our product tanker fleet, the potential for more fuel-efficient vessels to enter the market, uncertainties regarding our maintenance costs going forward and our willingness or ability to renew our product tanker fleet could have a material adverse effect on our competitive position, future performance, results of operations, cash flows and financial position.

Our failure to pass vessel inspections by classification societies and other private and governmental entities and operate our vessels may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Our vessels are subject to inspections from government and private entities, and we are required to obtain permits, licenses and certificates for the operation of our vessels as well as vetting or other types of commercial and operational approvals. In addition, the hull and machinery of every commercial vessel must be classed by a classification society authorized by the vessel's country of registry. Classification societies are non-governmental, self-regulating organizations and certify that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel. A vessel must undergo various mandatory surveys. A vessel's machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. The Company's vessels are on survey cycles for hull inspection and continuous survey cycles for machinery inspection. Every vessel is subject to statutory annual, intermediate and special surveys in a five-year cycle, this will include two surveys of the vessels underwater areas. If any vessel fails any survey, the vessel may be unable to trade between ports and therefore be unemployable, which may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

If we cannot meet our customers' quality and compliance requirements, we may not be able to operate our vessels profitably.

Customers, and in particular those in the oil industry, have a high and increasing focus on quality and compliance standards with their suppliers across the entire value chain, including the shipping and transportation segment. Our continuous compliance with these standards and quality requirements is vital for the Company's operations. Related risks could materialize in multiple ways, including a sudden and unexpected breach in quality and/or compliance concerning one or more vessels, a continuous decrease in the quality concerning one or more vessels occurring over time. Moreover, continuously increasing requirements from oil industry constituents can further complicate our ability to meet the standards. Any non-compliance by the Company, either suddenly or over a period of time, on one or more vessels, or an increase in requirements by oil operators above and beyond what we deliver, may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Obligations associated with being a U.S.-listed public company require significant resources and management attention, and we will incur increased costs as a result of being a U.S.-listed public company.

We are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and the other rules and regulations of the SEC, including Sarbanes-Oxley, and the listing and other requirements of Nasdaq New York. The various financial and other reporting obligations will place significant demands on our management, administrative, operational and accounting resources and will cause us to incur significant legal, accounting and other expenses that we have not incurred in the past. We expect these rules and regulations to increase our legal and financial compliance costs and may divert management's attention to ensure compliance and to make some activities more time-consuming and costly. We may need to upgrade our systems or create new systems, implement additional financial and management controls, reporting systems and procedures, create or outsource an internal audit function and hire additional accounting and finance staff. If we are unable to accomplish these objectives in a timely and effective fashion, our ability to comply with the financial reporting requirements and other rules that apply to reporting companies could be impaired. We cannot accurately predict the amount of the additional costs we may incur, the timing of such costs or the degree of impact that our management's attention to these matters will have on our business.

Any failure to maintain effective internal control over financial reporting could have a material adverse effect on our business, prospects, liquidity, results of operations and financial condition. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our Class A common shares from Nasdaq New York and/or Nasdaq Copenhagen, fines, sanctions and other regulatory action.

Sarbanes-Oxley requires, among other things, that we maintain and periodically evaluate our internal control over financial reporting as well as disclosure controls and procedures. In particular, subject to certain phase-in periods that may be available to us as an emerging growth company, we will have to perform systems and process evaluation and testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of Sarbanes-Oxley. Compliance with Section 404 will require substantial accounting expenses and significant management efforts, and we may need to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge to satisfy ongoing compliance requirements. The costs of compliance with the foregoing requirements may have a material adverse effect on our future performance, results of operations, cash flows and financial condition.

We are currently undergoing a chief financial officer transition and this transition, along with the possibility that we may in the future be unable to retain and recruit qualified key executives, key employees or key consultants, may delay our development efforts or otherwise harm our business.

On December 4, 2018, we announced the resignation of Christian Søgaard-Christensen from his role as Chief Financial Officer of TORM A/S. As a result, we have commenced a recruitment process for a new replacement Chief Financial Officer with Mr. Søgaard-Christensen remaining in his position until the earlier of the appointment of a new Chief Financial Officer or November 2019. Our future development and prospects depend to a large degree on the experience, performance and continued service of our senior management team. Retention of these services or the identification of suitable replacements cannot be guaranteed. There can be no guarantee that the services of the current Directors and senior management team will be retained, or that suitably skilled and qualified individuals can be identified and employed, which may adversely impact our ability to commercial and financial performance. The loss of the services of any of the Directors or other members of the senior management team and the costs of recruiting replacements may have a material adverse effect on our commercial and financial performance as well. If we are unable to hire, train and retain such personnel in a timely manner, our operations could be delayed and our ability to grow our business will be impaired and the delay and inability may have a detrimental effect upon our performance.

Failure to obtain or retain highly skilled personnel could adversely affect our operations.

We require highly skilled personnel to operate our business. There can be no assurance that we will be able to attract and retain such employees on reasonable terms in the future. Our ability to attract and retain employees and management in the future may be affected by circumstances beyond our control. Competition for skilled and other labor required for our operations has increased in recent years as the number of ocean-going vessels in the worldwide fleet has increased. If this expansion continues and is coupled with improved demand for seaborne shipping services in general, shortages of qualified personnel could further create and intensify upward pressure on wages and make it more difficult for us to staff and service vessels. In addition, we employ staff and vessel crews in a number of countries, all of which are covered by international rules of employment. Changes are made on an ongoing basis to international rules of employment and this may have a material influence on our flexibility in manning our vessels.

Such developments could adversely affect our ability to attract and retain qualified employees and management on reasonable terms in the future and, in turn, could adversely affect our future performance, results of operations, cash flows and financial position.

U.S. tax authorities could treat us as a ''passive foreign investment company'', which could have adverse U.S. federal income tax consequences to U.S. shareholders.

A foreign corporation will be treated as a ''passive foreign investment company,'' or PFIC, for U.S. federal income tax purposes if either (1) at least 75% of its gross income for any taxable year consists of certain types of ''passive income'' or (2) at least 50% of the average value of the corporation's assets during such taxable year produce or are held for the production of those types of ''passive income''. For purposes of these tests, ''passive income'' includes dividends, interest and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. Income derived from the performance of services does not constitute ''passive income''. U.S. shareholders of a PFIC are subject to certain reporting obligations and a disadvantageous U.S. federal income tax regime with respect to the income derived by the PFIC, the distributions they receive from the PFIC and the gain, if any, they derive from the sale or other disposition of their shares in the PFIC.

Based on our current and anticipated method of operation, we do not believe that we are, nor do we expect to become, a PFIC with respect to any taxable year. In this regard, we intend to take the position that the gross income we derive or are deemed to derive from our time and voyage chartering activities constitutes services income rather than rental income. Accordingly, we believe that our income from our time and voyage chartering activities does not constitute ''passive income'', and the assets that we own and operate in connection with the production of that income (in particular, our vessels) do not constitute assets that produce or are held for the production of "passive income".

There is substantial legal authority supporting this position, consisting of the Code, legislative history, case law and United States Internal Revenue Service, or IRS, pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, it should be noted that there is no direct legal authority under the PFIC rules addressing our specific method of operation, and there is authority that characterizes time charter income as rental income rather than services income for other tax purposes. Accordingly, no assurance can be given that the IRS or a court of law will accept this position, and there is a risk that the IRS or a court of law could determine that we are a PFIC. Moreover, no assurance can be given that we would not constitute a PFIC for any future taxable year if the nature and extent of our operations or the composition of our income or assets change. If the IRS were to find that we are a PFIC for any taxable year, our U.S. shareholders will face adverse U.S. federal income tax consequences and will incur certain information reporting obligations that may be onerous. Under the PFIC rules, unless those shareholders make an election available under the Code (which election could itself have adverse tax consequences for such shareholders), such shareholders would be subject to U.S. federal income tax at the then prevailing income tax rates on ordinary income plus interest upon excess distributions and upon any gain from the disposition of our common shares, as if the excess distribution or gain had been recognized ratably over the shareholder's holding period of the common shares. Please see Item 10. "Additional Information—E. Taxation –U.S. Federal Income Taxation of U.S. Holders—Passive Foreign Investment Company Status and Significant U.S. Federal Income Tax Consequences" for a more comprehensive discussion.

We may have to pay tax on U.S. source income, which would reduce our earnings.

Under the U.S. Internal Revenue Code of 1986, or the Code, 50% of the gross shipping income of a vessel owning or chartering corporation, such as we and our subsidiaries, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States is characterized as U.S. source shipping income, and such income is subject to a 4% U.S. federal income tax without allowance for deduction, unless that corporation qualifies for exemption from tax under Section 883 of the Code or under the terms of a U.S. income tax treaty.

We do not believe that we or our subsidiaries will qualify for exemption from tax under Section 883, although we and our subsidiaries may qualify in the future if there is a change in our capital structure. See Item 10. " Additional Information—E. Taxation—United States Federal Income Taxation of the Company" for a more comprehensive discussion.

We and/or one or more of our subsidiaries (collectively referred to as "we" for purposes of this paragraph) may qualify for exemption from tax under the terms of the U.S.-U.K. Income Tax Treaty or the U.S.-Denmark Income Tax Treaty. Whether we so qualify depends, among other things, on whether we satisfy the Limitation on Benefits article of the applicable U.S. income tax treaty. In particular, we would generally satisfy the Limitation on Benefits article if we can establish that we are engaged in the active conduct of a trade or business in the U.K. or Denmark, whichever is applicable, our U.S. source shipping income is derived in connection with, or is incidental to, such trade or business, and such trade or business activity in the applicable treaty jurisdiction is substantial in relation to our trade or business activity in the United States. Given the legal and factual uncertainties in making the foregoing determination, there can be no assurance that we will be able to qualify for exemption from tax under a U.S. income tax treaty, or that the IRS or a court of law will agree with our determination in this regard.

If we or our subsidiaries are not entitled to the exemption under Section 883 of the Code or under the terms of a U.S. income tax treaty for any taxable year, we and our subsidiaries would be subject to a 4% U.S. federal income tax on gross U.S. source shipping income for such taxable year. The imposition of this taxation could have a negative effect on our business and result in decreased earnings available for distribution to our shareholders. For example, if the benefits of Section 883 and the applicable U.S. income tax treaties were unavailable for our taxable year ended December 31, 2018, we estimate that our U.S. federal income tax liability for such taxable year would have increased by approximately $4 million, although our U.S. federal income tax liability for future taxable years would vary depending upon the amount of U.S. source shipping income that we earn in each such year. See Item 10. " Additional Information—E. Taxation—United States Federal Income Taxation of the Company" for a more comprehensive discussion.

Changes to the tonnage tax or the corporate tax regimes applicable to us, or to the interpretation thereof, may impact our future operating results.

We are currently subject to tonnage tax schemes in Denmark and Singapore. If our participation in the tonnage tax schemes in these countries is abandoned, or if our level of investments and activities in these countries are significantly reduced, we may have to pay a deferred tax liability, which as of December 31, 2018 is $45 million.

Additional taxes may be payable as a result of a change in other tax laws of any country in which we operate or a change in complex tax laws that affect our international operations.

In the event that tonnage tax schemes or other tax laws are changed in the future, our overall tax burden could increase, which could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Insurance may be difficult to obtain, or if obtained, may not be adequate to cover our losses that may result from our operations due to the inherent operational risks of the product tanker industry.

The operation of ocean-going vessels represents a potential risk of significant losses and liabilities caused by adverse weather conditions, mechanical failures, human error, war, terrorism, piracy and other circumstances or events. In the course of the fleet's operation, various casualties, accidents and other incidents, including an oil spill or emission of other environmentally hazardous agents from a vessel, may occur that may result in significant financial losses and liabilities for us. An accident involving any of the fleet's vessels could result in death or injury to persons, loss of property, environmental damage, delays in delivery of cargo, loss of revenue from termination of contracts or unavailability of vessels, fines or penalties, higher insurance rates, litigation and damage to our reputation and customer relationships.

In order to reduce the exposure to these risks, we carry insurance to protect us against most of the accident-related risks involved in the conduct of our business, including marine hull and machinery insurance, cyber and crime insurance, protection and indemnity insurance, including pollution risks, crew insurance and war risk insurance. Incidents may occur where we may not have sufficient insurance coverage, and some claims may not be covered. Furthermore, insurance costs may increase as a consequence of unforeseen incidents or other events beyond our control. In addition, in the future particularly in adverse market conditions it may not be possible to procure adequate insurance coverage or only on commercially unacceptable terms.

Any significant loss or liability for which we have not or have not been able to take out adequate insurance, or events causing an increase of insurance costs could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

We may be subject to litigation that, if not resolved in our favor, could have a material adverse effect on us.

We and our activities are subject to both U.K. and foreign laws and regulations many of which include legal standards, which are subject to interpretation, and we are party to agreements and transactions, involving matters of assessment of interests of various stakeholders and valuation of assets, liabilities and contractual rights and obligations. Furthermore, we may be subject to the jurisdiction of courts or arbitration tribunals in many different jurisdictions.

Our counterparties and other stakeholders or authorities may dispute our compliance with laws and regulations or contractual undertakings or the assessments made by us in connection with our business and the entry into agreements or transactions. The outcome of any such dispute or legal proceedings is inherently uncertain and may include payment of substantial amounts in legal fees and damages or that a transaction or agreement is deemed invalid or voidable. Such proceedings or decisions could have a material adverse effect on our future performance, results of operations, cash flows and financial position. If cases or proceedings in which we may be involved are determined to our disadvantage, it may result in fines, default under our debt facilities, damages or reputational damage and could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Fluctuations in exchange rates and non-convertibility of currencies could result in losses to us.

As a result of our international operations, we are exposed to fluctuations in foreign exchange rates due to parts of our revenues being received and operating expenses paid in currencies other than United States dollars. We use United States dollars as the functional currency because the majority of the Company's transactions are denominated in United States dollars. Thus, the Company's exchange rate risk is related to cash flows not denominated in United States dollars. The primary risk relates to transactions denominated in Danish Krone or DKK, Euro or EUR, Indian Rupee or INR, Singapore Dollar or SGD, or other major currencies, which relate to administrative and operating expenses.

We have historically generated almost all revenues and incurred the majority part of our expenses also in United States dollars. The remaining balances were in DKK, EUR, INR, SGD and other major currencies. Accordingly, we may experience currency exchange losses if we have not fully hedged our exposure to a foreign currency. A change in exchange rates could have a material adverse impact on our future performance, results of operations, cash flows and financial position.

Investment in derivative instruments such as freight forward agreements could result in losses to us.

We use the derivative markets and take positions in derivative instruments, such as forward freight agreements, or FFAs, for the purposes of hedging our exposure to fluctuations in the charter market, interest rates, foreign exchange rates and bunker prices. Our financing agreements set forth limitations on the level of forward freight agreements exposure and prohibits speculation on interest rates, foreign exchange and bunker swaps. From time to time, we may take positions in such derivative instruments, and as a result we may incur derivative exposure that could have a material adverse effect on our future performance, results of operations, cash flows and financial position. If liquidity in these derivative markets decreases or disappears, it could make it difficult or more expensive for us to perform such hedging, which could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

U.S. and other non-U.K. holders of our Class A common shares may not be able to exercise pre-emptive subscription rights or participate in future offerings.

Holders of our Class A common shares have certain pre-emption rights with respect to certain of our issuances unless those rights are disapplied by virtue of a resolution of the shareholders at a general meeting. Securities laws of certain jurisdictions may restrict the ability for shareholders in such jurisdictions to participate in any future issuances of shares carried out on a pre-emptive basis. Shareholders residing or domiciled in the United States, as well as certain other countries, may not be able to exercise their pre-emption rights or participate in future capital increases or securities issuances, including in connection with an offering below market value, unless we decide to comply with local requirements and, in the case of the United States, unless a registration statement is effective, or an exemption from the registration requirements of the Securities Act of 1933, as amended, or the Securities Act, is available with respect to such rights.

In such cases, shareholders resident in such non-U.K. jurisdictions may experience a dilution of their shareholding, possibly without such dilution being offset by any compensation received in exchange for subscription rights. No assurance can be given that local requirements will be complied with or that any registration statement would be filed in the United States or other relevant jurisdictions, or that another exemption from the registration requirements of the Securities Act or laws of other relevant jurisdictions would apply, so as to enable the exercise of such holders' pre-emption rights or participation in any future securities issuances.

Because we are a non-U.S. corporation, you may not have the same rights that a creditor of a U.S. corporation may have, and it may be difficult to serve process on or enforce a U.S. judgment against us and our officers and directors.

We are an English company, and our executive offices are located outside of the United States. Our officers and the majority of our directors and some of the experts named in this document reside outside of the United States. In addition, substantially all of our assets and the assets of our officers, directors and experts are located outside of the United States. As a result, you may have difficulty serving legal process within the United States upon us or any of these persons or enforcing any judgments obtained in U.S. courts to the extent assets located in the United States are insufficient to satisfy the judgments. In addition, original actions or actions for the enforcement of judgments of U.S. courts with respect to civil liabilities solely under the federal securities laws of the United States may not be enforceable in England.

We may be exposed to fraudulent behavior, which may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

The risk of fraud is inherent in all industries and is not specific to the shipping industry. However, historically, the shipping industry has involved an increased risk of fraud and fraudulent behavior. Potential fraud risks include purposeful manipulation and misrepresentation of financial statements, misappropriation of tangible assets, intangible assets and proprietary business opportunities, corruption including bribery and kickbacks and cyberattacks. We have established a system of internal controls to prevent and detect fraud and fraudulent behavior, consisting of segregation of duties, authorizations for trading, purchase and approval, codes of ethics and conduct, close monitoring of our financial position and a whistleblower facility. Moreover, we have implemented a fraud awareness campaign and instituted additional fraud prevention processes in cooperation with leading fraud prevention specialists.

However, there can be no assurance that our fraud prevention measures are sufficient to prevent or mitigate our exposure to fraud or fraudulent behavior in the future, and any such behavior can have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Breakdowns in our information technology, including as a result of cyberattacks, may negatively impact our business, including our ability to service customers, and may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Our ability to operate our business and service our customers is dependent on the continued operation of our information technology, or IT, systems, including our IT systems that relate to, among other things, the location, operation, maintenance and employment of our vessels. Our IT systems may be compromised by a malicious third party, man-made or natural events, or the intentional or inadvertent actions or inactions by our employees or third-party service providers. If our IT systems experience a breakdown, including as a result of cyberattacks, our business information may be lost, destroyed, disclosed, misappropriated, altered or accessed without consent, and our IT systems, or those of our service providers, may be disrupted.

Cybercrime attacks could cause disclosure and destruction of business databases and could expose the Company to extortion by making business data temporarily unreadable. As cyberattacks become increasingly sophisticated, and as tools and resources become more readily available to malicious third parties, there can be no guarantee that our actions, security measures and controls designed to prevent, detect or respond to intrusion, to limit access to data, to prevent destruction or alteration of data or to limit the negative impact from such attacks, can provide absolute security against compromise.

Any breakdown in our IT systems, including breaches or other compromises of information security, whether or not involving a cyberattack, may lead to lost revenues resulting from a loss in competitive advantage due to the unauthorized disclosure, alteration, destruction or use of proprietary information, including intellectual property, the failure to retain or attract customers, the disruption of critical business processes or information technology systems and the diversion of management's attention and resources. In addition, such breakdown could result in significant remediation costs, including repairing system damage, engaging third-party experts, deploying additional personnel, training employees and compensation or incentives offered to third parties whose data has been compromised. We may also be subject to legal claims or legal proceedings, including regulatory investigations and actions, and the attendant legal fees as well as potential settlements, judgments and fines.

Even without actual breaches of information security, protection against increasingly sophisticated and prevalent cyberattacks may result in significant future prevention, detection, response and management costs, or other costs, including the deployment of additional cybersecurity technologies, engaging third-party experts, deploying additional personnel and training employees. Further, as cyberthreats are continually evolving, our controls and procedures may become inadequate, and we may be required to devote additional resources to modify or enhance our systems in the future. Such expenses could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Risks Relating to Our Indebtedness

We have a significant amount of financial debt, and servicing our current or future indebtedness limits funds available for other purposes.

As of December 31, 2018, we had an interest-bearing debt, which includes mortgage debt and bank loans, finance lease liabilities and net of amortized bank fees of $755 million and net interest-bearing debt, which includes interest-bearing debt net of cash and cash equivalents of $627 million.

We may also incur additional debt in the future. This level of debt could adversely affect our ability to obtain additional financing for working capital or other capital expenditures on favorable terms. Future creditors may subject us to certain limitations on our business and future financing activities as well as certain financial and operational covenants. Such restrictions may prevent us from taking actions that otherwise might be deemed to be in the best interest of us and our shareholders.

Debt service obligations require us and will require us in the future to dedicate a substantial portion of our cash flows from operations to payments on principal and interest on our interest-bearing debt, which could limit our ability to obtain additional financing, make capital expenditures and acquisitions and/or carry out other general corporate activities in the future. Any such obligations may also limit our flexibility in planning for, or reacting to, changes in our business and the industry where we operate or detract from our ability to successfully withstand a downturn in our business or the economy in general.

Our ability to service our debt will, among other things, depend on our future financial and operating performance, which will be affected by prevailing economic conditions as well as financial, business, regulatory, competitive, technical and other factors, some of which are beyond our control. If our cash flow is not sufficient to service our current or future indebtedness, we will be forced to take action such as reducing or delaying business activities, acquisitions or investments, selling assets, restructuring or seeking additional capital, which may not be available to us. We may not be able to affect any of these remedies on satisfactory terms, without the consent of our lenders or at all. Additionally, a default under any indebtedness or other financial agreement by a subsidiary may constitute an event of default under other borrowing arrangements pursuant to cross-default provisions. Our inability to service and repay our debt upon maturity could have a material adverse effect on our future performance, results of operations, cash flows and financial position and could lead to bankruptcy or other insolvency proceedings.

Our financial and operational flexibility is restricted by the covenants contained in our debt facilities, and we may be unable to comply with the restrictions and financial covenants imposed in such facilities.

Our current debt facilities impose restrictions on our financial and operational flexibility. Our debt facilities impose, and any future debt facility may impose, covenants and other operating and financial restrictions on our ability to, among other things, pay dividends, charter-in vessels, incur additional debt, sell vessels or refrain from procuring the timely release of arrested vessels. Our debt facilities require us to maintain various financial ratios, including a specified minimum liquidity requirement, a minimum equity requirement and a collateral maintenance requirement. Our ability to comply with these restrictions and covenants is dependent on our future performance and our ability to operate our fleet and may be affected by events beyond our control, including fluctuating vessel values. We may therefore need to seek permission from our lenders in order to engage in certain corporate actions.

Failure to comply with the covenants and financial and operational restrictions under our debt facilities may lead to an event of default under those agreements. An event of default may lead to an acceleration of the repayment of debt. In addition, any default or acceleration under our existing debt facilities or agreements governing our other existing or future indebtedness is likely to lead to an acceleration of the repayment of debt under any other debt instruments that contain cross-acceleration or cross-default provisions. If all or a part of our indebtedness is accelerated, we may not be able to repay that indebtedness or borrow sufficient funds to refinance that debt, which could have a material adverse effect on our future performance, results of operations, cash flows and financial position and could lead to bankruptcy or other insolvency proceedings.

Such restrictions may prevent us from taking actions that otherwise might be deemed to be in the best interest of the Company and our shareholders, and it may further affect our ability to operate our business moving forward, particularly our ability to incur debt, make capital expenditures or otherwise take advantage of potential business opportunities as they arise.

As of December 31, 2018, we were in compliance with the financial covenants contained in our debt facilities.

Change of control and mandatory repayment provisions contained in certain of our debt facilities may lead to a foreclosure of our fleet.

The terms of certain of our debt facilities require us to repay the outstanding borrowings thereunder in full if there is a change of control, which would occur if: (i) Njord Luxco or any funds solely managed by Oaktree ceases to be able through its appointees to our Board of Directors to control our Board of Directors or ceases to own or control at least 33.34% of the maximum number of votes eligible to be cast at a general meeting, or (ii) another person or group of persons acting in concert gains direct or indirect control of more than 50% of the shares or otherwise has the power to cast more than 50% of the votes at a general meeting of the Company, appoint or remove the chairman of our Board of Directors or the majority of the members of our Board of Directors direct our operating and financial policies with which our directors are obliged to comply. Such change of control may occur as a result of either a sale of shares by Njord Luxco or by a share capital increase resulting in a dilution of Njord Luxco's shareholding in the Company.

Njord Luxco is not restricted by us from selling their shares, and there can be no assurance that they will retain their holdings in us. We can give no assurance that Njord Luxco will continue to hold a significant interest in us. Any mandatory prepayment as a result of a change of control under certain of our debt facilities could lead to the foreclosure of all or a portion of our fleet and could have a material adverse effect on our future performance, result of operations, cash flows and financial position and could lead to bankruptcy or other insolvency proceedings.

We are exposed to volatility in the USD London Interbank Offered Rate, or LIBOR, which could affect our profitability, earnings and cash flow.

The amounts outstanding under certain of our debt facilities have been, and amounts under additional debt facilities that we may enter in the future will generally be, advanced at a floating rate based on LIBOR, which has been stable since 2009, but was volatile in prior years, and will affect the amount of interest payable on our debt, and which, in turn, could have an adverse effect on our earnings and cash flow. In addition, in recent years, LIBOR has been at relatively low levels and may rise in the future as the current low interest rate environment comes to an end.

LIBOR has historically been volatile, with the spread between LIBOR and the prime lending rate widening significantly at times. These conditions are the result of the disruptions in the international credit markets. Because the interest rates borne by our outstanding indebtedness fluctuate with changes in LIBOR, if this volatility were to occur, it would affect the amount of interest payable on our debt, which in turn, could have an adverse effect on our profitability, earnings and cash flow.

In order to manage our exposure to interest rate fluctuations, we may from time to time use interest rate derivatives to effectively fix some of our floating rate debt obligations. As of December 31, 2018, we had hedged the interest rate on approximately 50% of our outstanding interest-bearing debt at an interest rate of 2.16% plus margin. While we hedge parts of our exposure to floating rate interest rates via interest rate swaps, our financial condition could be materially adversely affected at any time that we have not entered into interest rate hedging arrangements to hedge our exposure to the interest rates applicable to our debt facilities and any other financing arrangements we may enter into in the future. No assurance can be given that the use of these derivative instruments , or any others that we may use in the future, will effectively protect us from adverse interest rate movements. The use of interest rate derivatives may affect our results through mark to market valuation of these derivatives. Also, adverse movements in interest rate derivatives may require us to post cash as collateral, which may impact our free cash position.

We are exposed to the proposed disappearance of USD London Interbank Offered Rate, or LIBOR, in 2021, which could affect our interest expenses.

LIBOR is the subject of recent national, international and other regulatory guidance and proposals for reform. These reforms and other pressures may cause LIBOR to be eliminated or to perform differently than in the past. The consequences of these developments cannot be entirely predicted, but could include an increase in the cost of our variable rate indebtedness and obligations.

The banks that submit loan rates are supposed to submit interest rates that they would pay for borrowing from other banks. But since there are few unsecured bank-to-bank lending transactions, they use “expert judgment” to provide most of their inputs for LIBOR calculation. The lack of transactions has led to increasing regulatory pressure to end the use of LIBOR altogether. In fact, the UK’s Financial Conduct Authority announced that after 2021, it will no longer “compel or persuade” banks to submit rates. The continuation of LIBOR beyond 2021 would then rely on voluntary submissions from the panel banks, which is far from certain.

In response to the potential discontinuation of LIBOR, working groups are converging on alternative reference rates. The Alternative Reference Rate Committee, a committee convened by the Federal Reserve that includes major market participants, has proposed an alternative rate to replace the U.S. Dollar LIBOR: the Secured Overnight Financing Rate, of "SOFR". However, SOFR and other alternatives are fundamentally different to LIBOR and to each other. This means a transition will be more than an administrative challenge.

The phasing out or discontinuation of LIBOR poses the risk that our loans and swaps would be forced to be anchored to a new benchmark rate, and that shift could have a substantial effect such as a sudden jump to higher interest rates on our loans. Our loan agreements contain an unavailability of screen rate clause in case LIBOR ceases to be provided. In this case LIBOR will be replaced by a reference bank rate defined as the interest rate at, which the relevant Reference Bank could borrow funds in the London interbank market in dollars for the relevant period. TORM’s interest rate hedging agreements only includes fallbacks which apply if the rate does not appear on the screen. These fallbacks were not generally drafted with permanent cessation in mind. The governing body ISDA published a benchmark supplement in September 2018, which incorporates definitions that apply in case of a permeant LIBOR cessation. TORM intends to incorporate such permeant LIBOR cessation clauses into the existing ISDA agreements. However, there is a risk that our loan agreements and interest rate swap agreements will be anchored to the same rates if the counterparties fail to agree to these clauses.

Risks Relating to an Investment in Our Class A common shares

The majority of our Class A common shares are held by a limited number of shareholders, which may create conflicts of interest.

As a result of the 2015 Restructuring, a large portion of our Class A common shares are beneficially held by a limited number of shareholders, including Njord Luxco, a company affiliated with Oaktree and its affiliates. Njord Luxco is our controlling shareholder. As of the date of this annual report and following our private placement of Class A common shares, or the Private Placement, which closed on January 26, 2018, and in which Oaktree purchased 8,214,548 of the offered Class A common shares, Oaktree owns approximately 47,600,172 Class A common shares, or approximately 64.1% of our issued and outstanding Class A common shares (assuming no Consideration Warrants (defined below) or Restricted Share Units (RSUs) are exercised). One or a limited number of shareholders may have the ability, either acting alone or together as a group, to influence or determine the outcome of specific matters submitted to our shareholders for approval, including the election and removal of directors and amendments to the Articles of Association such as changes to our issued share capital or any merger or acquisition. Our Articles of Association contain certain restrictions on us undertaking certain actions unless the approval by certain of our Directors and/or a particular majority of our shareholders is obtained. Such restrictions may hamper or impede our ability to take certain corporate actions in a timely manner or at all. Any changes to the composition of the Board of Directors may lead to material changes to our business going forward.

In its capacity as our controlling shareholder, Njord Luxco may also have interests that differ from those of other shareholders. In addition, Njord Luxco holds the Class C share, which has 350,000,000 votes at the general meetings on specified matters, including the election of members to the Board of Directors (including the Chairman but excluding the Deputy Chairman) and certain amendments to the Articles of Association proposed by the Board of Directors. When the votes carried by the Class C share are combined with the votes carried by the Class A common shares, each held by Njord Luxco, such votes would represent approximately 93.8% of the votes that may be cast on resolutions on which the Class C share may vote.

The Class C share votes may only be cast on resolutions in respect of the appointment or removal of directors (excluding the Deputy Chairman) and certain amendments to the Articles of Association proposed by the Board of Directors. The Class C share votes may not be cast on resolutions in respect of any amendments to reserved matters as specified in our Articles of Association (unless those reserved matters also constitute changes to our Articles of Association on which the Class C share is entitled to vote), pre-emptive rights of shareholders, rights attached to the Class B share and other minority protection rights provisions contained in our Articles of Association. Please see Item 10. "Additional Information—A. Share Capital —Our Shares—Class C Share". The Class C share will be automatically redeemed when Njord Luxco and its affiliates cease to beneficially own at least one third of our issued Class A common shares. The voting rights attached to the Class C share have the practical effect of allowing Njord Luxco to control our Board of Directors and to make amendments to the Articles of Association proposed by the Board of Directors, other than amendments to the minority protections, even when Njord Luxco holds only a third of our issued Class A common shares.

The interests of these shareholders may conflict with the interests of the other shareholders. In addition, conflicts of interest may exist or occur among the major shareholders themselves.

Further, Njord Luxco, companies affiliated with Njord Luxco and companies affiliated with Njord Luxco's indirect parent, Oaktree, hold substantial commercial and financial interests in other shipping companies, including companies that are active in the same markets as us, and with whom we might compete from time to time. Any material conflicts of interest between us and Njord Luxco, Oaktree and/or other shareholders may not be settled in our favor and may have a material adverse effect on our future performance, results of operations, cash flows and financial position.

An active and liquid market for our Class A common shares may not develop or be sustained.

TORM plc's Class A common shares commenced trading on Nasdaq New York on December 11, 2017, prior to which there had been no established trading market for those shares in the United States. Our Class A common shares now trade on both Nasdaq New York and Nasdaq Copenhagen. Active and liquid trading markets generally result in lower bid ask spreads and more efficient execution of buy and sell orders for market participants. Since the listing of our Class A common shares on Nasdaq New York, a limited number of our Class A common shares have traded on Nasdaq New York. If a more active trading market for our Class A common shares does not develop, the price of the Class A common shares may be more volatile, and it may be more difficult and time-consuming to complete a transaction in the Class A common shares, which could have an adverse effect on the realized price of the Class A common shares, or we could be delisted from Nasdaq New York. We cannot predict the price at which our Class A common shares will trade and cannot guarantee investors can sell their shares at or above the issuance price. There is no assurance that a more active and liquid trading market for our Class A common shares will develop or be sustained in the United States.

We are an "emerging growth company", and we cannot be certain that the reduced disclosure and other requirements applicable to emerging growth companies will make our Class A common shares less attractive to investors.

We are an "emerging growth company", as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting and other requirements that are applicable to other public companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of Sarbanes-Oxley for up to five years. We are now one year into the five-year period as an emerging growth company. Investors may find our Class A common shares and the price of our Class A common shares less attractive because we rely, or may rely, on these exemptions. If some investors find our Class A common shares less attractive as a result, there may be a less active trading market for our Class A common shares and the price of our Class A common shares may be more volatile.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We currently prepare our consolidated financial statements in accordance with IFRS as issued by the IASB, which do not have separate provisions for publicly traded and private companies. However, in the event we convert to U.S. GAAP while we are still an emerging growth company, we may be able to take advantage of the benefits of this extended transition period and, as a result, during such time that we delay the adoption of any new or revised accounting standards, our consolidated financial statements may not be comparable to other companies that comply with all public company accounting standards.

We could remain an emerging growth company until the last day of the fiscal year following the fifth anniversary of the date we first sell our common equity securities pursuant to an effective registration statement under the Securities Act, although a variety of circumstances could cause us to lose that status earlier. For as long as we take advantage of the reduced reporting obligations, the information that we provide to shareholders may be different from information provided by other public companies.

We cannot guarantee that our Board of Directors will declare dividends.

Our Board of Directors may, in its sole discretion, from time to time, declare and pay cash dividends in accordance with our Articles of Association, applicable law and in accordance with loan agreements. We can only distribute dividends to shareholders out of funds legally available for such payments. Our Board of Directors makes determinations regarding the payment of dividends in their sole discretion, and there is no guarantee that we will be able to or decide to pay dividends to shareholders in the future. In addition, our dividend policy provides that up to 50% of the net profit for the financial year, payable on a quarterly basis, may be distributed as a dividend. On May 12, 2016, we announced a new distribution policy, pursuant to which we intend to distribute 25-50% of our net income on a semi-annual basis. We did not declare any dividends or distributions in the 2018 fiscal year.

In addition, the markets in which we operate our vessels are volatile, and we cannot predict with certainty the amount of cash, if any, that will be available for distribution as dividends in any period. We may also incur expenses or liabilities or be subject to other circumstances in the future that reduce or eliminate the amount of cash that we have available for distribution as dividends, including as a result of the risks described herein. If additional financing is not available to us on acceptable terms, our Board of Directors may determine to finance or refinance acquisitions with cash from operations, which would reduce the amount of any cash available for the payment of dividends. See Item 8. "Financial Information—A. Consolidated Statements and Other Financial Information—Distribution Policy".

We may issue additional securities without shareholder approval, which may dilute ownership interests of existing shareholders and may depress the market of our securities.

We may issue additional securities of equal or senior rank to existing securities, without shareholder approval, in a number of circumstances. At the Company's 2016 Annual General Meeting of Shareholders, our Board of Directors was granted certain authorizations to increase our issued share capital, both with and without pre-emption rights to the existing shareholders. These share authorities expire on March 14, 2021.

The issuance by us of additional securities of equal or senior rank to existing securities may have the following effects:

our existing shareholders’ proportionate ownership interest in us may decrease;

the amount of cash available for dividends or interest payments may decrease;

the relative voting strength of previously issued outstanding securities may be diminished; and

the market price of our securities may decline.

In January 2018, we completed our Private Placement in which we issued 11,920,000 new Class A common shares. In addition, as of the date of this annual report, we had 4,711,953 warrants outstanding with each warrant being convertible into one Class A common share, par value $0.01 per share, against payment of a subscription price in cash to us of DKK 95.24. The warrants can be exercised until July 13, 2020. In accordance with our remuneration policy, our Board of Directors has, as part of the long-term incentive program, granted certain members of our management and employees Restricted Share Units, or RSUs, in the form of restricted stock options. The RSUs aim at incentivizing the employees to seek to improve the performance of the Company and thereby our share price for the mutual benefit of themselves and our shareholders. There were an aggregate of 2,726,131 RSUs outstanding as of the date of this annual report. Subject to vesting, each RSU entitles the holder to acquire one Class A common share. The RSUs will vest over a three to five-year period from the grant date with an exercise price for each Class A common share of DKK 93.6 and 53.7. The exercise price on the RSUs may be adjusted by the Board of Directors to reflect dividend payments made to shareholders. Assuming the exercise of all of our outstanding warrants and full vesting and exercise of our outstanding RSUs, this would result in the issuance of 7,438,084 additional Class A common shares representing approximately 10% of our issued and outstanding Class A common shares. Please see Item 10. "Additional Information—A. Share Capital—Warrants” and “—Restricted Share Units”.

Our share price may be highly volatile, and future sales of our Class A common shares could cause the market price of our Class A common shares to decline.

The market price of TORM A/S' and TORM plc's shares, as applicable, has historically fluctuated over a wide range and may continue to fluctuate significantly in response to many factors, such as actual or anticipated fluctuations in our operating results, changes in financial estimates by securities analysts, economic and regulatory trends, general market conditions, rumors and other factors, many of which are beyond our control. The stock market experiences extreme price and volume fluctuations. If the volatility in the market continues or worsens, it could have a material adverse effect on the market price of our Class A common shares and impact a potential sale price if holders of our Class A common shares decide to sell their shares.

In addition, a large proportion of our Class A common shares are held by a limited number of shareholders. A potentially limited free float due to shareholder concentration may have a negative impact on the liquidity of our Class A common shares and may result in a low trading volume, which could have an adverse effect on the market price and result in increased volatility.

Further, future sales or availability for sale of our Class A common shares may materially affect the price of our Class A common shares. Sales of substantial amounts of Class A common shares, including sales by Njord Luxco, or the perception that such sales could occur, may adversely affect the market price of our Class A common shares.

Future issues of new shares or other securities may be restricted.

According to our Articles of Association, certain issuances of shares, warrants, debt instruments or other securities convertible into or exchangeable for shares without giving effect to pre-emption rights require consent from shareholders representing 95% or more of the votes cast at the relevant general meeting. Further, certain reserved matters, as specified in our Articles of Association, require approval by either the majority of the members of the Board of Directors (including the Chairman and the Deputy Chairman (or their respective alternates) or, in circumstances where the Deputy Chairman (or his alternate) has either not voted in favor of any such matter or did not attend the meeting of the Board of Directors at which such matter was considered, or any such matter has been put to a shareholder vote, by shareholders representing at least 70% or 86% of our issued Class A common shares, as applicable. These restrictions may limit our financial and operational flexibility, including our ability to raise funds on the equity capital markets, and could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

Future issuances and sales of our Class A common shares could cause the market price of our Class A common shares to decline.

As of the date of this annual report, our issued (and fully paid up) share capital is $742,188.48, which is represented by 74,218,846 Class A common shares (which includes 312,871 treasury shares), one Class B share and one Class C share. Issuances and sales of a substantial number of Class A common shares in the public market, or the perception that these issuances or sales could occur, may depress the market price for our Class A common shares. Such sales could also impair our ability to raise additional capital through the sale of our equity securities in the future. Our shareholders may incur dilution from any future equity offering.

Risks Related to Being an English Company Listing Class A Common Shares

The rights of our shareholders may differ from the rights typically offered to shareholders of a U.S. corporation organized in Delaware.

We are incorporated under the laws of England and Wales. The rights of holders of our Class A common shares are governed by English law, including the provisions of the U.K. Companies Act 2006, or the U.K. Companies Act, and by our Articles of Association. These rights differ in certain respects from the rights of shareholders in typical U.S. corporations organized in Delaware. The principal differences are set forth in "Certain U.K. Company Considerations."

U.S. investors may have difficulty enforcing civil liabilities against the Company, our directors or members of senior management and the experts named in this annual report.

We are incorporated under the laws of England and Wales. Several of our directors reside outside the United States, and all or a substantial portion of the assets of such persons are located outside the United States. As a result, it may be difficult for you to serve legal process on us or our directors or have any of them appear in a U.S. court. The United States and the United Kingdom do not currently have a treaty providing for the recognition and enforcement of judgments, other than arbitration awards, in civil and commercial matters. The enforceability of any judgment of a U.S. federal or state court in the United Kingdom will depend on the laws and any treaties in effect at the time, including conflicts of laws principles (such as those bearing on the question of whether a U.K. court would recognize the basis on which a U.S. court had purported to exercise jurisdiction over a defendant). In this context, there is doubt as to the enforceability in the United Kingdom of civil liabilities based solely on the federal securities laws of the United States. In addition, awards for punitive damages in actions brought in the United States or elsewhere may be unenforceable in the United Kingdom. An award for monetary damages under the U.S. securities laws would likely be considered punitive if it did not seek to compensate the claimant for loss or damage suffered and was intended to punish the defendant.

Civil liabilities based upon the securities and other laws of the United States may not be enforceable in original actions instituted in England or in actions instituted in England to enforce judgments of U.S. courts. Actions for the enforcement of judgments of U.S. courts might be successful only if the English court confirms the jurisdiction of the U.S. court and is satisfied that:

the effect of the enforcement judgment is not manifestly incompatible with English public policy or natural justice;

the judgment was not obtained on the basis of fraud;

the judgment did not violate the human rights of the defendant;

the judgment is final and conclusive;

the judgment is not incompatible with a judgment rendered in England or with a subsequent judgment rendered abroad that might be enforced in England;

a claim was not filed outside England after the same claim was filed in England, while the claim filed in England is still pending;

the English courts did not have exclusive jurisdiction to rule on the matter; and

the judgment submitted to the English court is authentic.

English law and provisions in our Articles of Association may have anti-takeover effects that could discourage an acquisition of us by others, even if an acquisition would be beneficial to our shareholders, and may prevent attempts by our shareholders to replace or remove our current management.

Certain provisions of English law and our Articles of Association may have the effect of delaying or preventing a change in control of us or changes in our management. For example, English law and our Articles of Association include provisions that establish an advance notice procedure for shareholder approvals to be brought before a general meeting of our shareholders, including proposed nominations of persons for election to our Board of Directors. Such provisions could delay or prevent hostile takeovers and changes in control or changes in our management. In addition, these provisions may adversely affect the market price of our Class A common shares or inhibit fluctuations in the market price of our Class A common shares that could otherwise result from actual or rumored takeover attempts.

The U.K. City Code on Takeovers and Mergers, or the Takeover Code, applies to the Company. If at the time of a takeover offer the Takeover Code still applies, we would be subject to a number of rules and restrictions, including - but not limited to - the following: (i) our ability to enter into deal protection arrangements with a bidder would be extremely limited; (ii) we might not, without the approval of our shareholders, be able to perform certain actions that could have the effect of frustrating an offer, such as issuing shares or carrying out acquisitions or disposals; and (iii) we would be obliged to provide equality of information to all bona fide competing bidders.

Njord Luxco holds over 50% of our voting share capital, and therefore, if the Takeover Panel were to determine that we were subject to the Takeover Code, Njord Luxco would be able to increase its aggregate holding in us without triggering the requirement under Rule 9 of the Takeover Code to make a cash offer for the outstanding shares in the Company.

The United Kingdom has formally initiated the withdrawal process from the European Union, and the implications for the laws and regulations in the United Kingdom and the impact on the global economy are uncertain.

In June 2016, a majority of voters in the United Kingdom elected to withdraw from the European Union in a national referendum (informally known as Brexit). The referendum was advisory, and the terms of any withdrawal are subject to a negotiation period that could last two years after the government of the United Kingdom formally initiated the withdrawal process by invoking Article 50 of the Treaty on European Union on March 29, 2017. It is not clear what impact this will have on the conduct of cross-border business. The referendum result has created significant uncertainty about the future relationship between the United Kingdom and the European Union, including with respect to the laws and regulations that will apply to the United Kingdom in the event of a withdrawal. The UK's exit from the EU could materially change the regulatory and tax framework applicable to the Company. These developments have had and may continue to have a material adverse effect on global economic conditions. The withdrawal of the United Kingdom from the EU may lead to a downturn across the European economies, and there is a risk that other countries in the European Union will look to hold referendums on whether to stay in or leave the EU. In addition, there are increasing concerns that these events might push the UK, Eurozone and/or United States into an economic recession. Although it is too early to anticipate what these developments and impacts will be, the Group considers that the potential effects of Brexit could have unpredictable consequences for financial markets and may adversely affect our future performance, results of operations, cash flows and financial position.

We are subject to data protection laws under U.K. legislation, and any breaches of such legislation could adversely affect our business, reputation, results of operations and financial condition.

Our ability to obtain, retain and otherwise manage personal data is governed by data protection and privacy requirements and regulatory rules and guidance. In the UK, we must comply with the Data Protection Act 1998 in relation to processing certain personal data. The application of data privacy laws is often uncertain, and as business practices are challenged by regulators, private litigants and consumer protection agencies, it is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data protection practices. Additionally, under European data protection laws, distributing personal data into the United States may constitute an offense. Any breaches of such legislation could have a material adverse effect on our business, reputation, results of operations and financial condition.

Pre-emption rights for U.S. and other non-U.K. holders of shares may be unavailable.

In the case of certain increases in our issued share capital, under English law, existing holders of shares are entitled to pre-emption rights to subscribe for such shares, unless shareholders disapply such rights by a special resolution at a shareholders' meeting. These pre-emption rights have been disapplied by TORM plc's shareholders in respect of certain new issuances, see Item 10. "Additional Information—A. Share Capital", and we shall propose equivalent resolutions in the future once the initial period of disapplication has expired. In any event, U.S. holders of common shares in U.K. companies are customarily excluded from exercising any such pre-emption rights they may have, unless a registration statement under the Securities Act is effective with respect to those rights, or an exemption from the registration requirements thereunder is available. We do not intend to file any such registration statement, and we cannot assure prospective U.S. investors that any exemption from the registration requirements of the Securities Act or applicable non-U.S. securities laws would be available to enable U.S. or other non-U.K. holders to exercise such pre-emption rights or, if available, that we will utilize any such exemption.

We are and will be subject to the UK Bribery Act, the U.S. Foreign Corrupt Practices Act and other anti-corruption laws as well as export control laws, customs laws, sanctions laws and other laws governing our operations. If we fail to comply with these laws, we could be subject to civil or criminal penalties, other remedial measures and legal expenses, which could adversely affect our business, results of operations and financial condition.

Our operations are and will be subject to anti-corruption laws, including the UK Bribery Act 2010, or the Bribery Act, the U.S. Foreign Corrupt Practices Act, or the FCPA, and other anti-corruption laws that apply in countries where we do business. The Bribery Act, FCPA and these other laws generally prohibit us and our employees and intermediaries from bribing, being bribed or making other prohibited payments to government officials or other persons to obtain or retain business or gain some other business advantage. We and our commercial partners operate in a number of jurisdictions that may pose a risk of potential Bribery Act or FCPA violations, and we participate in collaborations and relationships with third parties whose actions could potentially subject us to liability under the Bribery Act, FCPA or local anti-corruption laws. In addition, we cannot predict the nature, scope or effect of future regulatory requirements to which our internal operations might be subject or the manner in which existing laws might be administered or interpreted.

We are also subject to other laws and regulations governing our international operations, including regulations administered by the governments of the United Kingdom and the United States, and authorities in the European Union, including applicable export controls, economic sanctions on countries or persons, customs requirements, anti-boycott requirements and currency exchange regulations (collectively, "Trade Control Laws").

While we maintain policies and procedures reasonably designed to ensure compliance with applicable anti-corruption laws and Trade Control Laws, there is no assurance that we will be completely effective in ensuring our compliance with all applicable anti-corruption laws, including the Bribery Act, the FCPA or other legal requirements, including Trade Control Laws. If we are not in compliance with the Bribery Act, the FCPA and other anti-corruption laws or Trade Control Laws, we may be subject to criminal and civil penalties, disgorgement and other sanctions, remedial measures and legal expenses, which could have an adverse impact on our business, financial condition, results of operations and liquidity. Likewise, any investigation of any potential violations of the Bribery Act, the FCPA, other anti-corruption laws or Trade Control Laws by UK, U.S. or other authorities could also have a material adverse impact on our reputation, our future performance, results of operations, cash flows and financial position.

Our tax liabilities may change in the future.

While we believe that being incorporated in England and Wales and resident for tax purposes in the United Kingdom should help us maintain a competitive worldwide effective corporate tax rate, we cannot give any assurance as to what our effective tax rate will be. This is, among other things, because of uncertainties regarding the tax policies of all the jurisdictions where we operate our business and uncertainties regarding the application to our structure, which is complex, of the tax laws of various jurisdictions, including, without limitation, Denmark, the United States and the United Kingdom. Because of this uncertainty, our actual effective tax rate may vary from our expectation and that variance could be material. The G20 and the Organization for Economic Co-Operation and Development are currently focused on the taxation of multinational corporations as part of the Base Erosion and Profit Shifting Project, or BEPS. The implementation of BEPS outcomes in the jurisdictions in which we operate may have an impact on our effective tax rate, which, in turn, could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

TORM plc and certain of its subsidiaries have entered and may in the future enter into internal agreements which must be at market value or on terms no more favorable than would have been agreed if the transaction was not conducted on an intra-group basis.

We have global operations, and the functions related to owning and operating a global scale product tanker fleet are spread across various subsidiaries, including crewing, technical maintenance, chartering and ownership of vessels. Cross-border business within our foreign subsidiaries and TORM plc can be complicated. We will likely enter into further agreements by and among our subsidiaries on the one hand and TORM plc on the other hand in the future. To ensure compliance with transfer pricing regulations, such transactions must in general be conducted on arm's length basis. We believe that these transactions are on arm's length terms, but no assurance can be given that we would not have been able to secure more favorable terms from third parties.

Regarding any cross-border transactions, we may face significant compliance challenges with the regulations and administrative requirements around transfer pricing, as they differ from country to country. Tax authorities are increasingly sophisticated in the way they operate and are focusing more closely on transfer pricing in companies that transact cross-border business.

Tax consequences related to the 2015 Restructuring could increase our tax burden and could have a material adverse effect on our financial position.

The debt write-down and conversion of debt that occurred as part of the 2015 Restructuring is considered a debt forgiveness for Danish tax purposes. The debt forgiveness will not result in taxes being payable by us provided that the debt forgiveness can be classified as a comprehensive agreement between us and our creditors, and provided that the debt forgiveness takes place on normal market terms as applied between unrelated parties.

If the debt forgiveness is classified as a comprehensive agreement, the gain on the debt forgiveness realized by us will not be taxable. If the debt forgiveness is classified as singular debt forgiveness, however, the gain on the debt forgiveness will be taxable to us. This classification determination is based on a number of factors, including the percentage of the creditors of the unsecured debt who participated in the debt forgiveness. Because the 2015 Restructuring was a complex transaction, the evaluation of whether it was entered into on normal market terms consequently requires judgment.

Management expects that the debt forgiveness will be classified as a comprehensive agreement between us and our creditors, and that it is entered into on normal market terms. In the event that this is not the case, it could increase our overall tax burden and could have a material adverse effect on our future performance, results of operations, cash flows and financial position.

The Danish Tax Authorities may challenge whether TORM plc is entitled to Danish withholding tax exemption on dividends from TORM A/S.

TORM plc is a tax resident of the United Kingdom and owns 100% of the shares of TORM A/S and should as a starting point be entitled to the benefits under the EU Parent/Subsidiary Directive (2011/96/EU) provided TORM plc is the beneficial owner of the dividends and is not subject to Danish anti-abuse rules. It is, however, not currently clear whether similar provisions would continue to apply following the United Kingdom's intended departure from the European Union.

However, TORM plc should be entitled to the benefit of the double tax treaty entered into between Denmark and the United Kingdom. The double tax treaty reduces dividend withholding tax to nil for wholly-owned subsidiaries (where the relevant conditions are satisfied), and its protection would, in principle, be available regardless of the United Kingdom's departure from the European Union. In order for the double tax treaty to apply, TORM plc must be considered the beneficial owner of the dividends and must not be subject to Danish anti-abuse rules. We believe that the group structure, the level of business activity carried out in the United Kingdom by TORM plc, the economic risk of TORM plc and TORM plc's right to dispose of dividends received justify that TORM plc is the beneficial owner of dividends received from TORM A/S, that TORM plc is not a conduit entity and that Danish anti-abuse rules should not apply.

Consequently, we believe that dividends distributed from TORM A/S to TORM plc should be exempt from Danish dividend withholding tax according to either the application of the EU Parent/Subsidiary Directive (2011/96/EU) or the double tax treaty entered into between Denmark and the United Kingdom (so long as a claim is made and the treaty relief is granted). If the provisions of the EU Parent/Subsidiary Directive (2011/96/EU) did not apply and not all of the applicable conditions in the double tax treaty between the United Kingdom and Denmark are fulfilled, Danish withholding taxes of 27% (potentially reduced to 22%) will be triggered on such dividend distributions.

ITEM 4.

INFORMATION ON THE COMPANY

A.	History and Development of the Company

TORM plc is a public limited company incorporated under the laws of England and Wales on October 12, 2015 under the name Anchor Admiral Limited with company number 09818726. Anchor Admiral Limited was renamed TORM Limited on November 26, 2015, and TORM Limited was renamed TORM plc on January 20, 2016. TORM plc's registered office is at Birchin Court, 20 Birchin Lane, London, EC3V 9DU, United Kingdom. Our telephone number at this address is +44 203 713 4560. Our main commercial and technical activities are managed out of our office at Tuborg Havnevej 18, DK-2900 Hellerup, Denmark. Our telephone number at that address is +45 39 17 92 00. We also have offices located in Mumbai (India), New Delhi (India), Manila (the Philippines), Cebu (the Philippines), Singapore (Singapore) and Houston (Texas, USA). Our website is www.torm.com.

We are one of the world's largest carriers of refined oil products. Our activities are primarily the transportation of clean petroleum products, such as gasoline, jet fuel, kerosene, naphtha and gas oil, and occasionally dirty petroleum products, such as fuel oil. We are active in all larger vessel segments of the product tanker market from Handysize to Long Range 2 (LR2) tankers. For an overview of the specifications of our fleet, reference is made to "TORM Fleet Overview" on pages 143-145 of our Annual Report 2018 . In addition, as of the date of this annual report, we have nine newbuildings, two LR1 vessels and seven MR vessels, currently under construction. See Item 4. "Information on the Company—B. Business Overview."

We have an extensive in-house operating and management platform which performs commercial, administrative and technical management for our vessels. Through this integrated platform, we handle the commercial management of all our vessels and the technical management of all our owned vessels, other than three vessels managed by an unaffiliated third party. In addition, we conduct all vessel sale and purchase activities in-house, leveraging relationships with shipbrokers, shipyards, financial institutions and other shipowners.

2015 Restructuring

In July 2015, TORM A/S completed a restructuring and recapitalization, which we refer to as the 2015 Restructuring, pursuant to a restructuring agreement between us, Oaktree Capital Management L.P., or Oaktree, and certain of our pre-2015 Restructuring lenders. The net result of the 2015 Restructuring was that (i) pre-2015 Restructuring lenders received approximately 99% of TORM A/S' share capital in consideration for the write-down of certain of our indebtedness (ii) the TORM Group acquired 25 product tankers and contracts for the construction of six MR product tanker newbuildings (subsequently delivered to us in 2015 and 2016), from Njord in exchange for TORM A/S shares, this part of the 2015 Restructuring referred to as the Combination and (iii) Njord Luxco became our majority shareholder.

Exchange Offer, Redomiciliation and Current Corporate Structure

In April 2016, TORM established a new corporate structure of the TORM Group including the insertion of a publicly-held parent company incorporated under the laws of England and Wales, TORM plc., which we refer to as the Redomiciliation.

To effect the Redomiciliation, we commenced an Exchange Offer, pursuant to which TORM plc effectively acquired all of the outstanding securities of TORM A/S in exchange for the securities of TORM plc. TORM plc’s Class A common shares were listed on Nasdaq Copenhagen on April 19, 2016, and TORM A/S’ Danish A shares were delisted from Nasdaq Copenhagen on April 26, 2016. For more information on our share capital, see Item 10. "Additional Information—A. Share Capital".

Listing on Nasdaq New York

In December 2017, we effected a direct listing of our Class A common shares on Nasdaq New York. Our Class A common shares commenced trading on Nasdaq New York under the symbol "TRMD" on December 11, 2017. As a result of our listing on Nasdaq New York, our Class A common shares may be traded on both Nasdaq New York and Nasdaq Copenhagen. All of our outstanding Class A common shares are identified by CUSIP G89479 102 and ISIN GB00BZ3CNK81. Reference is made to "Chairman’s Statement⸻US Listing and Sarbanes-Oxley Reporting" on page 6 of the Annual Report 2018 for a description of the U.S. listing.

Private Placement

In January 2018, we completed a private placement of 11,920,000 Class A common shares for gross proceeds of approximately $100 million, or the Private Placement. Njord Luxco fully backstopped this offering and purchased approximately $70 million of our Class A common shares in the Private Placement. Following the Private Placement and as of the date of this prospectus, Njord Luxco owns approximately 64.4% of our outstanding Class A common shares and our one outstanding C share, the voting rights associated with which relate to election and dismissal of members of the Board of Directors and certain amendments to our Articles of Association.

Recent and Other Developments

In the first quarter of 2019, TORM entered into an agreement to sell the MR vessel TORM Amazon (built in 2002). The vessel was delivered to the new owners during the first quarter of 2019.

B.	Business Overview

Our Fleet

The following table sets forth summary information regarding our fleet of owned product tankers, including the vessels that we charter in as of the date of this annual report.

Vessel Name	Type	DWT	Year Built	Shipyard ⁽¹⁾
Owned On-the-Water Product Tankers
TORM Kristina	LR2	99,999	1999	Halla
TORM Gudrun	LR2	99,999	2000	Hyundai
TORM Ingeborg	LR2	99,999	2003	Samho
TORM Valborg	LR2	99,999	2003	Samho
TORM Marina	LR2	109,672	2007	Dalian New
TORM Maren	LR2	109,672	2008	Dalian New
TORM Mathilde	LR2	109,672	2008	Dalian New
TORM Herdis	LR2	114,000	2018	GSI
TORM Hermia	LR2	114,000	2018	GSI
TORM Hellerup	LR2	114,000	2018	GSI
TORM Hilde	LR2	114,000	2018	GSI
TORM Sara	LR1	72,718	2003	Samsung
TORM Estrid	LR1	74,999	2004	Hyundai
TORM Emilie	LR1	74,999	2004	Hyundai
TORM Ismini	LR1	74,999	2004	Hyundai
TORM Signe	LR1	72,718	2005	Samsung
TORM Sofia	LR1	72,660	2005	Samsung
TORM Venture	LR1	73,700	2007	New Century
TORM Gunhild	MR	44,999	1999	Halla
TORM Cecilie	MR	44,999	2001	STX
TORM San Jacinto	MR	47,038	2002	Onomichi
TORM Gertrud	MR	45,990	2002	STX
TORM Gerd	MR	45,960	2002	STX
TORM Caroline	MR	44,999	2002	STX
TORM Moselle	MR	47,024	2003	Onomichi
TORM Rosetta	MR	47,015	2003	Onomichi
TORM Carina	MR	46,219	2003	STX
TORM Freya	MR	45,990	2003	STX

TORM Thyra	MR	45,950	2003	STX
TORM Camilla	MR	44,990	2003	STX
TORM Horizon	MR	46,955	2004	Hyundai Mipo
TORM Resilience	MR	49,999	2005	STX
TORM Thames	MR	47,036	2005	Hyundai Mipo
TORM Helvig	MR	46,187	2005	STX
TORM Ragnhild	MR	46,187	2005	STX
TORM Eric	MR	44,999	2006	STX
TORM Platte	MR	46,959	2006	Hyundai Mipo
TORM Kansas	MR	46,955	2006	Hyundai Mipo
TORM Republican	MR	46,955	2006	Hyundai Mipo
TORM Loke	MR	51,372	2007	SLS
TORM Hardrada	MR	45,983	2007	Shin Kurushima
TORM Lene	MR	49,999	2008	GSI
TORM Laura	MR	49,999	2008	GSI
TORM Lotte	MR	49,999	2009	GSI
TORM Louise	MR	49,999	2009	GSI
TORM Lilly	MR	49,999	2009	GSI
TORM Alice	MR	49,999	2010	GSI
TORM Alexandra	MR	49,999	2010	GSI
TORM Aslaug	MR	49,999	2010	GSI
TORM Agnete	MR	49,999	2010	GSI
TORM Almena	MR	49,999	2010	GSI
TORM Atlantic	MR	49,999	2010	GSI
TORM Agnes	MR	49,999	2011	GSI
TORM Amalie	MR	49,999	2011	GSI
TORM Arawa	MR	49,999	2012	GSI
TORM Anabel	MR	49,999	2012	GSI
TORM Astrid	MR	49,999	2012	GSI
TORM Thor	MR	49,842	2015	Sungdong
TORM Timothy	MR	49,842	2015	Sungdong
TORM Thunder	MR	49,842	2015	Sungdong
TORM Titan	MR	49,842	2016	Sungdong
TORM Torino	MR	49,842	2016	Sungdong
TORM Troilus	MR	49,842	2016	Sungdong
TORM Sovereign	MR	50,000	2017	Hyundai Mipo
TORM Supreme	MR	50,000	2017	Hyundai Mipo
TORM Garonne	Handysize	37,178	2004	Hyundai Mipo
TORM Loire	Handysize	37,106	2004	Hyundai Mipo
TORM Saone	Handysize	36,986	2004	Hyundai Mipo
TORM Tevere	Handysize	37,383	2005	Hyundai Mipo
TORM Gyda	Handysize	36,207	2009	Hyundai Mipo

Chartered-in Product Tankers
TORM Helene ⁽²⁾	LR2	99,999	1997	Hyundai
TORM Vita ⁽²⁾	MR	46,350	2002	STX
TORM Mary ⁽²⁾	MR	46,350	2002	STX

Newbuildings
Hull no. 15121140	LR1	75,000	Exp. 2019	GSI
Hull no. 15121141	LR1	75,000	Exp. 2019	GSI
Hull no. 15121034	MR	49,999	Exp. 2019	GSI
Hull no. 15121035	MR	49,999	Exp. 2019	GSI
Hull no. 15121036	MR	49,999	Exp. 2019	GSI
Hull no. 15121037	MR	49,999	Exp. 2019	GSI
Hull no. 15121038	MR	49,999	Exp. 2019	GSI
Hull no. 15121039	MR	49,999	Exp. 2019	GSI
Hull no. 15121040	MR	49,999	Exp. 2020	GSI

_______________________

⁽¹⁾ As used in this annual report, Hyundai refers to Hyundai Heavy Industries Co. Ltd.; Halla refers to Halla Engineering & Heavy Industries, South Korea; Samho refers to Hyundai Samho Heavy Industries Co. Ltd.; Dalian New refers to Dalian Shipbuilding Industry, China; New Century refers to New Century Shipbuilding Co. Ltd.; Onomichi refers to Onomichi Dockyard, Japan; Daedong refers to Daedong Shipbuilding, South Korea; STX refers to STX Offshore and Shipbuilding Co. Ltd.; Hyundai Mipo refers to Hyundai Mipo Dockyard Co. Ltd.; Shin Kurushima refers to Shin Kurushima Dockyard Co. Ltd., Japan; SLS refers to SLS Shipbuilding Co. Ltd. Tongyeong, South Korea; and GSI refers to Guangzhou Shipyard International Co., Ltd.

⁽²⁾ Vessels were sold and leased back on bareboat charter with a contract expiration in 2022. We have a purchase option for the individual vessels. The vessels are accounted for as financial lease.

Fleet Development

Vessel Acquisitions

During 2018, we took delivery of four LR2 newbuildings, or the LR2 Product Tanker Newbuildings, and in connection with the delivery of these vessels we have incurred borrowing of $115 million under our secured term loan facility with the Export-Import Bank of China, or the CEXIM Facility. During 2018, we ordered an additional three MR vessels from GSI, bringing the total remaining newbuilding program to seven MR vessels, the MR Product Tanker Newbuildings, and two LR1 vessels, the LR1 Product Tanker Newbuildings, with expected deliveries during 2019 and the first quarter of 2020. To finance the LR1 Product Tanker Newbuildings, we entered into a new secured loan agreement with ABN AMRO for up to $70 million, and subject to documentation we have secured a loan with Kreditanstalt für Wiederaufbau, or KfW, for up to $46 million to finance two of the MR Product Tanker Newbuildings. All of the remaining newbuildings are being constructed with scrubbers, and as of December 31, 2018 we had a remaining CAPEX commitment of $258 million relating to these vessels.

We plan to finance the four MR Product Tanker Newbuildings that we ordered in 2017 under a new tranche of borrowings which will be consolidated with our existing facility with Danish Ship Finance A/S, or DSF (as amended and restated, the DSF Facility). In 2017, we agreed with Hyundai Mipo to acquire the construction contracts for two MR vessels then under construction at Hyundai Mipo, or the Hyundai Mipo MR Resale Vessels. We financed the purchase price of the Hyundai Mipo MR Resale Vessels, which were delivered to us in September 2017, with cash from operations and borrowings under our secured term loan facility with ING Bank NV, or the ING Facility.

For information about our financing agreements and the financing agreements into which we expect to enter, see Item 5. "Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Our Financing Agreements".

Vessel Dispositions

During 2017, we sold TORM Anne (built in 1999), TORM Madison (built in 2000), TORM Trinity (built in 2000), TORM Fox (built in 2005) and TORM Rhone (built in 2000). We sold these five vessels for aggregate proceeds of $39 million, and we delivered the first four vessels to their respective buyers in 2017 and the last vessel to its buyer in the first quarter of 2018.

In October 2018, TORM entered into an agreement to sell TORM Clara (built in 2000), and in the third quarter TORM entered into agreements to sell two other vessels: TORM Neches (built in 2000) and TORM Ohio (built in 2001). The three vessels were sold for a total consideration of approximately $20 million and the sale proceeds were used to repay approximately $12 million of indebtedness secured by these vessels. All three vessels have been delivered to the new owners. In December 2018, TORM entered into an agreement to sell TORM Charente (built in 2001), which was delivered to its buyer in the first quarter of 2019. In January 2019, entered into an agreement to sell TORM Amazon (built in 2002), which was delivered to the new owners in the first quarter of 2019.

Scrubber Investments

In the fourth quarter of 2018, TORM established a joint venture with ME Production, a leading scrubber manufacturer, and Guangzhou Shipyard International, which is part of the China State Shipbuilding Corporation group. The joint venture, named ME Production China, will manufacture scrubbers in China and deliver them to a range of maritime industry customers for both newbuildings and retrofitting. TORM holds an ownership stake of 27.5% in the new joint venture. In connection with the establishment of the joint venture, TORM has ordered a number of scrubbers from ME Production China. With these orders, TORM has committed to install scrubbers on 21 vessels and signed a letter of intent for installations up to a total of 39 vessels, or approximately half of TORM’s fleet.

Sale and Leaseback Transactions

During the first and second quarters of 2017, we entered into sale and leaseback agreements and bareboat charters for the LR2 tanker, TORM Helene , and two MR tankers, TORM Mary and TORM Vita, pursuant to which we sold the vessels to three buyers not affiliated with us from which we concurrently chartered-in the three vessels each for a period of 58 months from the delivery date plus 50 more days at our option. These three sale and leaseback transactions are treated as financial leases but have no purchase obligation attached. We have an option to purchase TORM Mary and TORM Helene at the expiration of their respective charter-in agreements at fixed option prices. We have the option to purchase TORM Vita at the fourth anniversary of its delivery date and again at the expiration of the charter-in agreement at fixed option prices.

For information about our financing agreements, see Item 5. "Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Our Financing Agreements".

Employment of Our Product Tanker Fleet

Our current strategy is to employ our vessels worldwide primarily in the spot market. We believe that this will enable us to take advantage of potential increases in product tanker hire rates in the near term. We may seek to employ some of our vessels on longer-term time charter contracts, if customer needs and expected returns make this more attractive. Employing vessels on longer-term contracts may provide us with the benefits of stable cash flows and high utilization rates. In addition, from time to time, we may employ our vessels on shorter-term charters and under COAs. Reference is made to the Glossary on page 146 of the Annual Report 2018 for the definitions of Spot Market, Time Charter, COA and Bareboat Charter.

Coverage

For information on the coverage of our Fleet, including the definitions of certain key terms related to the coverage of our Fleet, reference is made to "Outlook 2019" on pages 12-14 of the Annual Report 2018 and to the Glossary on page 146 of the Annual Report 2018.

Management of Our Fleet

For information on management of our fleet, reference is made to "Strategic Ambition and Business Model—One TORM—Strong Integrated Operating Platform" on page 19 of the Annual Report 2018 .

Customers

We generate revenue by charging customers for the transportation of refined oil products and crude oil. Many of our largest customers in the product tanker segment are companies operating in the oil industry such as major oil companies, state-owned oil companies and international trading houses.

Customer Concentration

During 2018, our 20 largest customers accounted for approximately 75% of our total revenue. None of our other customers accounted for more than 2% of our total revenues.

Our Business Strategy

For information on our business strategy, reference is made to "Strategic Ambition and Business Model" on pages 17-19 and "Value Chain in Oil Transportation" on page 21 of the Annual Report 2018 .

The Product Tanker Industry

For information on the product tanker industry, reference is made to "The Product Tanker Market" on pages 22-25 of the Annual Report 2018 . For information on the risks associated with operating within the product tanker market, see Item 3. "Key Information—D. Risk Factors— Risks Related to Our Business and Our Industry."

Environmental and Other Regulations in the Shipping Industry

Government regulation and laws significantly affect the ownership and operation of our fleet. We are subject to international conventions and treaties, national, state and local laws and regulations in force in the countries in which our vessels may operate or are registered relating to safety and health and environmental protection including the storage, handling, emission, transportation and discharge of hazardous and non-hazardous materials, and the remediation of contamination and liability for damage to natural resources. Compliance with such laws, regulations and other requirements entails significant expenses, including vessel modifications and implementation of certain operating procedures.

A variety of government and private entities subject our vessels to both scheduled and unscheduled inspections. These entities include the local port authorities (applicable national authorities such as the United States Coast Guard (“USCG”), harbor masters or equivalent), classification societies, flag state administrations (countries of registry) and charterers, particularly terminal operators. Certain of these entities require us to obtain permits, licenses, certificates and other authorizations for the operation of our vessels. Failure to maintain necessary permits or approvals could require us to incur substantial costs or result in the temporary suspension of the operation of one or more of the vessels in our product tanker fleet or lead to the invalidation or reduction of our insurance coverage. We believe that the heightened levels of environmental and quality concerns among insurance underwriters, regulators and charterers have led to greater inspection and safety requirements on all vessels and may accelerate the recycling of older vessels throughout the industry. Each of our vessels is inspected by a surveyor of the classification society in three surveys of varying frequency and thoroughness: every year for the annual survey, every two to three years for intermediate survey and every four to five years for special surveys. Should any defects be found, the classification surveyor generally issues a notation or recommendation for appropriate repairs, which have to be made by the shipowner within the time limit prescribed. Vessels may be required, as part of the annual and intermediate survey process, to be dry-docked for inspection of the underwater parts of the vessel and for necessary repair stemming from the inspection. Special surveys frequently require dry-docking.

Increasing environmental concerns have created a demand for product tankers that conform to the stricter environmental standards. We are required to maintain operating standards for all of our vessels that emphasize operational safety, quality maintenance, continuous training of our officers and crews and compliance with applicable local, national, and international regulations. We believe that the operation of our vessels is in substantial compliance with applicable environmental laws and regulations, and that our vessels have all material permits, licenses, certificates or other authorizations necessary for the conduct of our operations. However, because such laws and regulations frequently change and may impose increasingly stricter requirements, we cannot predict the ultimate cost of complying with these requirements, or the impact of these requirements on the resale value or useful lives of our vessels. In addition, a future serious marine incident that causes significant adverse environmental impact could result in additional legislation or regulation that could negatively affect our profitability.

International Maritime Organization

The IMO is a specialized agency of the United Nations responsible for setting global standards for the safety, security and environmental performance of vessels engaged in international shipping. The IMO's primary objective is to create a regulatory framework for the shipping industry that is fair and effective, and universally adopted and implemented. The IMO has adopted several international conventions that regulate the international shipping industry, including, but not limited to, the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocols in 1976, 1984 and 1992, and amended in 2000, or the CLC, the International Convention on Civil Liability for Bunker Oil Pollution Damage of 2001, or the Bunker Convention, the International Convention for the Prevention of Pollution from Ships, 1973, as modified by the Protocol of 1978 relating thereto, collectively referred to as MARPOL 73/78 and herein as “MARPOL,” adopted the International Convention for the Safety of Life at Sea of 1974 (“SOLAS Convention”), and the International Convention on Load Lines of 1966 (the “LL Convention”). MARPOL establishes environmental standards relating to oil leakage or spilling, garbage management, sewage, air emissions, handling and disposal of noxious liquids and the handling of harmful substances in packaged forms. MARPOL is applicable to dry bulk and LNG carriers as well as oil tankers, and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to oil leakage or spilling; Annexes II and III relate to harmful substances carried in bulk in liquid or in packaged form, respectively; Annexes IV and V relate to sewage and garbage management, respectively; and Annex VI, lastly, relates to air emissions. Annex VI was separately adopted by the IMO in September of 1997.

In 2013, the IMO’s Marine Environmental Protection Committee, or the “MEPC,” adopted a resolution amending MARPOL Annex I Condition Assessment Scheme, or “CAS.” These amendments became effective on October 1, 2014, and require compliance with the 2011 International Code on the Enhanced Programme of Inspections during Surveys of Bulk Carriers and Oil Tankers, or “ESP Code,” which provides for enhanced inspection programs. CAS is not applicable to our vessels. For ships older than 15 years we carry our voluntary CAP ( Condition Assessment program) rating along with ESP. We may need to make certain financial expenditures to maintain CAP Rating.

Air Emissions

In September 1997, the IMO adopted Annex VI to MARPOL to address air pollution from vessels. Effective May 2005, Annex VI sets limits on sulfur oxide and nitrogen oxide emissions from all commercial vessel exhausts and prohibits “deliberate emissions” of ozone depleting substances (such as halons and chlorofluorocarbons), emissions of volatile compounds from cargo tanks and the shipboard incineration of specific substances. Annex VI also includes a global cap on the sulfur content of fuel oil and allows for special areas to be established with more stringent controls on sulfur emissions, as explained below. Emissions of “volatile organic compounds” from certain tankers and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or PCBs), are also prohibited. We believe that all our vessels are currently compliant in all material respects with these regulations.

The MEPC adopted amendments to Annex VI regarding emissions of sulfur oxide, nitrogen oxide, particulate matter and ozone depleting substances, which entered into force on July 1, 2010. The amended Annex VI seeks to further reduce air pollution by, among other things, implementing a progressive reduction of the amount of sulfur contained in any fuel oil used on board ships. On October 27, 2016, at its 70th session, the MEPC agreed to implement a global 0.5% m/m sulfur oxide emissions limit (reduced from 3.50%) starting from January 1, 2020. This limitation can be met by using low-sulfur compliant fuel oil, alternative fuels or certain exhaust gas cleaning systems. Once the cap becomes effective, ships will be required to obtain bunker delivery notes and International Air Pollution Prevention (“IAPP”) Certificates from their flag states that specify sulfur content. Additionally, at MEPC 73, amendments to Annex VI to prohibit the carriage of bunkers above 0.5% sulfur on ships were adopted and will take effect on March 1, 2020. These regulations subject ocean-going vessels to stringent emissions controls and may cause us to incur substantial costs.

Sulfur content standards are even stricter within certain “Emission Control Areas,” or (“ECAs”). As of January 1, 2015, ships operating within an ECA were not permitted to use fuel with sulfur content in excess of 0.1%. Amended Annex VI establishes procedures for designating new ECAs. Currently, the IMO has designated four ECAs, including specified portions of the Baltic Sea area, North Sea area, North American area and United States Caribbean area. Ocean-going vessels in these areas will be subject to stringent emission controls and may cause us to incur additional costs. Other certain areas including areas in China that are subject to local regulations also impose stricter emission controls. If other ECAs are approved by the IMO, or other new or more stringent requirements relating to emissions from marine diesel engines or port operations by vessels are adopted by the U.S. Environmental Protection Agency (“EPA”) or the states where we operate, compliance with these regulations could entail significant capital expenditures or otherwise increase the costs of our operations.

Amended Annex VI also establishes new tiers of stringent nitrogen oxide emissions standards for marine diesel engines, depending on their date of installation. At the MEPC meeting held from March to April 2014, amendments to Annex VI were adopted which address the date on which Tier III Nitrogen Oxide (NOx) standards in ECAs will go into effect. Under the amendments, Tier III NOx standards apply to ships that operate in the North American and U.S. Caribbean Sea ECAs designed for the control of NOx with a marine diesel engine installed and constructed on or after January 1, 2016. Tier III requirements could apply to areas that will be designated for Tier III NOx in the future. At MEPC 70 and MEPC 71, the MEPC approved the North Sea and Baltic Sea as ECAs for nitrogen oxide for ships built after January 1, 2021. The EPA promulgated equivalent (and in some senses stricter) emissions standards in late 2009. As a result of these designations or similar future designations, we may be required to incur additional operating or other costs.

As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018 and requires ships above 5,000 gross tonnage to collect and report annual data on fuel oil consumption to an IMO database, with the first year of data collection commencing on January 1, 2019. The IMO intends to use such data as the first step in its roadmap (through 2023) for developing its strategy to reduce greenhouse gas emissions from ships, as discussed further below.

As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for ships. All ships are now required to develop and implement Ship Energy Efficiency Management Plans (“SEEMPS”), and new ships must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy-Efficiency Design Index (“EEDI”). Under these measures, by 2025, all new ships built will be 30% more energy efficient than those built in 2014.

We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.

Safety Management System Requirements

The SOLAS Convention was amended to address the safe manning of vessels and emergency training drills. The Convention of Limitation of Liability for Maritime Claims (the “LLMC”) sets limitations of liability for a loss of life or personal injury claim or a property claim against shipowners. We believe that our vessels are in substantial compliance with SOLAS and LL Convention standards.

Under Chapter IX of the SOLAS Convention, or the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (the “ISM Code”), our operations are also subject to environmental standards and requirements. The ISM Code requires the party with operational control of a vessel to develop an extensive safety management system that includes, among other things, the adoption of a safety and environmental protection policy setting forth instructions and procedures for operating its vessels safely and describing procedures for responding to emergencies. We rely upon the safety management system that we and our technical management team have developed for compliance with the ISM Code. The failure of a vessel owner or bareboat charterer to comply with the ISM Code may subject such party to increased liability, may decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports.

The ISM Code requires that vessel operators obtain a safety management certificate for each vessel they operate. This certificate evidences compliance by a vessel’s management with the ISM Code requirements for a safety management system. No vessel can obtain a safety management certificate unless its manager has been awarded a document of compliance, issued by each flag state, under the ISM Code. We have obtained applicable documents of compliance for our offices and safety management certificates for all of our vessels for which the certificates are required by the IMO. The document of compliance and safety management certificate are renewed as required.

Regulation II-1/3-10 of the SOLAS Convention governs ship construction and stipulates that ships over 150 meters in length must have adequate strength, integrity and stability to minimize risk of loss or pollution. Goal-based standards amendments in SOLAS regulation II-1/3-10 entered into force in 2012, with July 1, 2016 set for application to new oil tankers and bulk carriers. The SOLAS Convention regulation II-1/3-10 on goal-based ship construction standards for bulk carriers and oil tankers, which entered into force on January 1, 2012, requires that all oil tankers and bulk carriers of 150 meters in length and above, for which the building contract is placed on or after July 1, 2016, satisfy applicable structural requirements conforming to the functional requirements of the International Goal-based Ship Construction Standards for Bulk Carriers and Oil Tankers (GBS Standards). All our vessels comply with these requirements as applicable.

Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels to be in compliance with the International Maritime Dangerous Goods Code (“IMDG Code”). Effective January 1, 2018, the IMDG Code includes (1) updates to the provisions for radioactive material, reflecting the latest provisions from the International Atomic Energy Agency, (2) new marking, packing and classification requirements for dangerous goods, and (3) new mandatory training requirements.

The IMO has also adopted the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (“STCW”). As of February 2017, all seafarers are required to meet the STCW standards and to be in possession of a valid STCW certificate. Flag states that have ratified SOLAS and STCW generally employ the classification societies, which have incorporated SOLAS and STCW requirements into their class rules, to undertake surveys to confirm compliance.

Pollution Control and Liability Requirements

The IMO has negotiated international conventions that impose liability for pollution in international waters and the territorial waters of the signatories to such conventions. For example, the IMO adopted an International Convention for the Control and Management of Ships’ Ballast Water and Sediments (the “BWM Convention”) in 2004. The BWM Convention entered into force on September 9, 2017. The BWM Convention requires ships to manage their ballast water to remove, render harmless or avoid the uptake or discharge of new or invasive aquatic organisms and pathogens within ballast water and sediments. The BWM Convention’s implementing regulations call for a phased introduction of mandatory ballast water exchange requirements, to be replaced in time with mandatory concentration limits, and require all ships to carry a ballast water record book and an international ballast water management certificate.

On December 4, 2013, the IMO Assembly passed a resolution revising the application dates of the BWM Convention so that the dates are triggered by the entry into force date and not the dates originally in the BWM Convention. This, in effect, makes all vessels delivered before the entry into force date “existing vessels” and allows for the installation of ballast water management systems on such vessels at the first International Oil Pollution Prevention (IOPP) renewal survey following entry into force of the convention. The MEPC adopted updated guidelines for approval of ballast water management systems (G8) at MEPC 70. At MEPC 71, the schedule regarding the BWM Convention’s implementation dates was also discussed, and amendments were introduced to extend the date existing vessels are subject to certain ballast water standards. Ships over 400 gross tons generally must comply with a “D-1 standard,” requiring the exchange of ballast water only in open seas and away from coastal waters. The “D-2 standard” specifies the maximum amount of viable organisms allowed to be discharged, and compliance dates vary depending on the IOPP renewal dates. Depending on the date of the IOPP renewal survey, existing vessels must comply with the D-2 standard on or after September 8, 2019. For most ships, compliance with the D-2 standard will involve installing on-board systems to treat ballast water and eliminate unwanted organisms. Ballast water management systems, which include systems that make use of chemical, biocides, organisms or biological mechanisms, or which alter the chemical or physical characteristics of the ballast water, must be approved in accordance with IMO Guidelines (Regulation D-3). Costs of compliance with these regulations may be substantial.

Once mid-ocean ballast water exchange become mandatory under the BWM Convention, the cost of compliance could increase for ocean-going carriers, which may have a material effect on our operations. However, many countries already regulate the discharge of ballast water carried by vessels from country to country to prevent the introduction of invasive and harmful species via such discharges. The U.S., for example, requires vessels entering its waters from another country to conduct mid-ocean ballast water exchange, or undertake some alternate measure, and to comply with certain reporting requirements.

The IMO adopted the International Convention on Civil Liability for Oil Pollution Damage of 1969, as amended by different Protocols in 1976, 1984, and 1992, and amended in 2000 (“the CLC”). Under the CLC and depending on whether the country in which the damage results is a party to the 1992 Protocol to the CLC, a vessel’s registered owner may be strictly liable for pollution damage caused in the territorial waters of a contracting state by discharge of persistent oil, subject to certain exceptions. The 1992 Protocol changed certain limits on liability expressed using the International Monetary Fund currency unit, the Special Drawing Rights. The limits on liability have since been amended so that the compensation limits on liability were raised. The right to limit liability is forfeited under the CLC, where the spill is caused by the shipowner’s actual fault, and under the 1992 Protocol, where the spill is caused by the shipowner’s intentional or reckless act or omission, where the shipowner knew pollution damage would probably result. The CLC requires ships over 2,000 tons covered by it to maintain insurance covering the liability of the owner in a sum equivalent to an owner’s liability for a single incident. We have protection and indemnity insurance for environmental incidents. P&I Clubs in the International Group issue the required Bunkers Convention “Blue Cards” to enable signatory states to issue certificates. All of our vessels are in possession of a CLC State issued certificate attesting that the required insurance coverage is in force.

Ships are required to maintain a certificate attesting that they maintain adequate insurance to cover an incident. In jurisdictions, such as the United States, where the CLC or the Bunker Convention has not been adopted, various legislative schemes or common law govern, and liability is imposed either on the basis of fault or on a strict-liability basis.

In 1996, the IMO created the International Convention on Liability and Compensation for Damage in Connection with the Carriage of Hazardous and Noxious substances by Sea, or the HNS Convention. The HNS Convention aims to ensure adequate, prompt and effective compensation for damage that may result from shipping accidents involving hazardous and noxious substances. The HNS Convention has not yet entered into force, but if it does, compliance with the HNS Convention could entail additional capital expenditures or otherwise increase the costs of our operations. The HNS Convention will enter into effect 18 months after its ratification.

In November 2014 and May 2015, the IMO's Maritime Safety Committee and MEPC, respectively, each adopted relevant parts of the International Code for Ships Operating in Polar Water, or the Polar Code. The Polar Code entered into force on January 1, 2017. The Polar Code covers design, construction, equipment, operational, training, search and rescue as well as environmental protection matters relevant to ships operating in the waters surrounding the two poles. It also includes mandatory measures regarding safety and pollution prevention as well as recommendatory provisions. Ships intending to operate in the applicable areas must have a Polar Ship Certificate. This requires an assessment of operating in said waters and includes operational limitations, additional safety equipment and plans or procedures, necessary to respond to incidents involving possible safety or environmental consequences. A Polar Water Operational Manual is also needed on board the ship for the owner, operator, master, and crew to have sufficient information regarding the ship to assist in their decision-making process. The Polar Code applies to new ships constructed after January 1, 2017. After January 1, 2018, ships constructed before January 1, 2017 are required to meet the relevant requirements by the earlier of their first intermediate or renewal survey.

Anti‑Fouling Requirements

In 2001, the IMO adopted the International Convention on the Control of Harmful Anti‑fouling Systems on Ships, or the “Anti‑fouling Convention.” The Anti‑fouling Convention, which entered into force on September 17, 2008, prohibits the use of organotin compound coatings to prevent the attachment of mollusks and other sea life to the hulls of vessels. Vessels of over 400 gross tons engaged in international voyages will also be required to undergo an initial survey before the vessel is put into service or before an International Anti‑fouling System Certificate is issued for the first time; and subsequent surveys when the anti‑fouling systems are altered or replaced. We have obtained Anti‑fouling System Certificates for all of our vessels that are subject to the Anti‑fouling Convention.

Wreck Removal

The Nairobi Convention on the Removal of Wrecks, or the Wreck Removal Convention, entered into force on April 14, 2015 and contains obligations for shipowners to effectively remove wrecks located in a member state's exclusive economic zone or equivalent 200 nautical miles zone. The Wreck Removal Convention places strict liability, subject to certain exceptions, on a vessel owner for locating, marking and removing the wreck of any owned vessel deemed to be a hazard due to factors such as its proximity to shipping routes, traffic density and frequency, type of traffic and vulnerability of port facilities as well as environmental damage. It also makes government certification of insurance, or other form of financial security for such liability, compulsory for ships of 300 gross tonnage and above.

Member states may intervene in certain situations. They can remove, or have removed, wrecks that pose a danger or impediment to navigation or that may be expected to result in major harmful consequences to the marine environment, or damage to the coastline or related interests, of one or more member states. The same applies for a ship that is about, or may reasonably be expected, to sink or to strand as set forth in the Wreck Removal Convention. The cost of such removal and other measures falls on the vessel owner.

Should one of our vessels become a wreck subject to the Wreck Removal Convention, substantial costs may be incurred in addition to any losses suffered as a result of the loss of the vessel.

The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.

Compliance Enforcement

Non-compliance with the ISM Code or other IMO regulations may subject the shipowner or bareboat charterer to increased liability, may lead to decreases in available insurance coverage for affected vessels and may result in the denial of access to, or detention in, some ports. The USCG and European Union authorities have indicated that vessels not in compliance with the ISM Code by applicable deadlines will be prohibited from trading in U.S. and European Union ports, respectively. As of the date of this report, each of our vessels is ISM Code certified. However, there can be no assurance that such certificates will be maintained in the future . The IMO continues to review and introduce new regulations. It is impossible to predict what additional regulations, if any, may be passed by the IMO and what effect, if any, such regulations might have on our operations.

United States Regulations

The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act

OPA established an extensive regulatory and liability regime for the protection and clean-up of the environment from oil spills. OPA affects all “owners and operators” whose vessels trade or operate within the United States, its territories and possessions or whose vessels operate in United States waters, which includes the United States’ territorial sea and its 200 nautical mile exclusive economic zone around the United States. The United States has also enacted the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), which applies to the discharge of hazardous substances other than oil, except in limited circumstances, whether on land or at sea. OPA and CERCLA both define “owner and operator” in the case of a vessel as any person owning, operating or chartering by demise, the vessel. Both OPA and CERCLA impact our operations.

Under OPA, vessel owners and operators are “responsible parties” and are jointly, severally and strictly liable (unless the spill results solely from the act or omission of a third party, an act of God or an act of war) for all containment and clean-up costs and other damages arising from discharges or threatened discharges of oil from their vessels, including bunkers (fuel). OPA defines these other damages broadly to include:

(i) injury to, destruction or loss of, or loss of use of, natural resources and related assessment costs;

(ii) injury to, or economic losses resulting from, the destruction of real and personal property;

(iv) loss of subsistence use of natural resources that are injured, destroyed or lost;

(iii) net loss of taxes, royalties, rents, fees or net profit revenues resulting from injury, destruction or loss of real or personal property or natural resources;

(v) lost profits or impairment of earning capacity due to injury, destruction or loss of real or personal property or natural resources; and

(vi) net cost of increased or additional public services necessitated by removal activities following a discharge of oil, such as protection from fire, safety or health hazards, and loss of subsistence use of natural resources.

OPA contains statutory caps on liability and damages; such caps do not apply to direct clean-up costs. Effective December 21, 2015, the USCG adjusted the limits of OPA liability for an oil tanker, other than a single-hull oil tanker, over 3,000 gross tons liability to the greater of $2,200 per gross ton or $18,796,800 (subject to periodic adjustment for inflation). These limits of liability do not apply if an incident was proximately caused by the violation of an applicable U.S. federal safety, construction or operating regulation by a responsible party (or its agent, employee or a person acting pursuant to a contractual relationship), or a responsible party's gross negligence or willful misconduct. Similarly, the limitation on liability does not apply if the responsible party fails or refuses to (i) report the incident where the responsible party knows or has reason to know of the incident; (ii) reasonably cooperate and assist as requested in connection with oil removal activities; or (iii) without sufficient cause, comply with an order issued under the Federal Water Pollution Act (Section 311 (c), (e)) or the Intervention on the High Seas Act.

CERCLA contains a similar liability regime whereby owners and operators of vessels are liable for clean-up, removal and remedial costs as well as damages for injury to, or destruction or loss of, natural resources, including the reasonable costs associated with assessing same, and health assessments or health effects studies. There is no liability if the discharge of a hazardous substance results solely from the act or omission of a third party, an act of God or an act of war. Liability under CERCLA is limited to the greater of $300 per gross ton or $5.0 million for vessels carrying a hazardous substance as cargo and the greater of $300 per gross ton or $500,000 for any other vessel. These limits do not apply (rendering the responsible person liable for the total cost of response and damages) if the release or threat of release of a hazardous substance resulted from willful misconduct or negligence, or the primary cause of the release was a violation of applicable safety, construction or operating standards or regulations. The limitation on liability also does not apply if the responsible person fails or refused to provide all reasonable cooperation and assistance as requested in connection with response activities where the vessel is subject to OPA.

OPA and CERCLA each preserve the right to recover damages under existing law, including maritime tort law. OPA and CERCLA both require owners and operators of vessels to establish and maintain with the USCG evidence of financial responsibility sufficient to meet the maximum amount of liability to which the particular responsible person may be subject. Vessel owners and operators may satisfy their financial responsibility obligations by providing a proof of insurance, a surety bond, qualification as a self-insurer or a guarantee. We plan to comply with the USCG’s financial responsibility regulations by providing applicable certificates of financial responsibility.

The 2010 Deepwater Horizon oil spill in the Gulf of Mexico resulted in additional regulatory initiatives or statutes, including higher liability caps under OPA, new regulations regarding offshore oil and gas drilling and a pilot inspection program for offshore facilities. However, several of these initiatives and regulations have been or may be revised. For example, the U.S. Bureau of Safety and Environmental Enforcement’s (“BSEE”) revised Production Safety Systems Rule (“PSSR”), effective December 27, 2018, modified and relaxed certain environmental and safety protections under the 2016 PSSR. Additionally, the BSEE released proposed changes to the Well Control Rule, which could roll back certain reforms regarding the safety of drilling operations, and the U.S. President proposed leasing new sections of U.S. waters to oil and gas companies for offshore drilling, expanding the U.S. waters that are available for such activity over the next five years. The effects of these proposals are currently unknown. Compliance with any new requirements of OPA and future legislation or regulations applicable to the operation of our vessels could impact the cost of our operations and adversely affect our business.

OPA specifically permits individual states to impose their own liability regimes with regard to oil pollution incidents occurring within their boundaries, provided they accept, at a minimum, the levels of liability established under OPA, and some states have enacted legislation providing for unlimited liability for oil spills. Many U.S. states that border a navigable waterway have enacted environmental pollution laws that impose strict liability on a person for removal costs and damages resulting from a discharge of oil or a release of a hazardous substance. These laws may be more stringent than U.S. federal law. Moreover, some states have enacted legislation providing for unlimited liability for discharge of pollutants within their waters, although in some cases, states which have enacted this type of legislation have not yet issued implementing regulations defining tanker owners’ responsibilities under these laws. The Company intends to comply with all applicable state regulations in the ports that the Company’s vessels call.

We currently maintain pollution liability coverage insurance in the amount of $1 billion per incident for each of our vessels. If the damages from a catastrophic spill were to exceed our insurance coverage, it could have an adverse effect on our business and results of operation.

Other United States Environmental Initiatives

The U.S. Clean Air Act of 1970 (including its amendments of 1977 and 1990) (“CAA”) requires the EPA to promulgate standards applicable to emissions of volatile organic compounds and other air contaminants. Our vessels are subject to vapor control and recovery requirements for certain cargos when loading, unloading, ballasting, cleaning and conducting other operations in regulated port areas. The CAA also requires states to draft State Implementation Plans, or SIPs, designed to attain national health-based air quality standards in each state. Although state-specific SIPs may include regulations concerning emissions resulting from vessel loading and unloading operations by requiring the installation of vapor control equipment. Our vessels operating in such regulated port areas with restricted cargos are equipped with vapor recovery systems that satisfy these existing requirements.

The U.S. Clean Water Act (“CWA”) prohibits the discharge of oil, hazardous substances and ballast water in U.S. navigable waters, unless authorized by a duly-issued permit or exemption, and imposes strict liability in the form of penalties for any unauthorized discharges. The CWA also imposes substantial liability for the costs of removal, remediation and damages and complements the remedies available under OPA and CERCLA. In 2015, the EPA expanded the definition of “waters of the United States” (“WOTUS”), thereby expanding federal authority under the CWA. Following litigation on the revised WOTUS rule in December 2018, the EPA and Department of the Army proposed a revised, limited definition of “waters of the United States.” The agencies are accepting public comment on the proposal. The public comment period is expected to close on 15 April 2019.

The EPA and the USCG have also enacted rules relating to ballast water discharge, compliance with which requires the installation of equipment on our vessels to treat ballast water before it is discharged or the implementation of other port facility disposal arrangements or procedures at potentially substantial costs, and/or otherwise restrict our vessels from entering U.S. Waters. The EPA will regulate these ballast water discharges and other discharges incidental to the normal operation of certain vessels within United States waters pursuant to the Vessel Incidental Discharge Act (“VIDA”), which was signed into law on December 4, 2018 and will replace the 2013 Vessel General Permit (“VGP”) program (which authorizes discharges incidental to operations of commercial vessels and contains numeric ballast water discharge limits for most vessels to reduce the risk of invasive species in U.S. waters, stringent requirements for exhaust gas scrubbers, and requirements for the use of environmentally acceptable lubricants) and current Coast Guard ballast water management regulations adopted under the U.S. National Invasive Species Act (“NISA”), such as mid-ocean ballast water exchange programs and installation of approved USCG technology for all vessels equipped with ballast water tanks bound for U.S. ports or entering U.S. waters. VIDA establishes a new framework for the regulation of vessel incidental discharges under Clean Water Act (CWA), requires the EPA to develop performance standards for those discharges within two years of enactment and requires the U.S. Coast Guard to develop implementation, compliance and enforcement regulations within two years of EPA’s promulgation of standards. Under VIDA, all provisions of the 2013 VPG and USCG regulations regarding ballast water treatment remain in force and effect until the EPA and U.S. Coast Guard regulations are finalized. Non-military, non-recreational vessels greater than 79 feet in length must continue to comply with the requirements of the VGP, including submission of a Notice of Intent (“NOI”) or retention of a PARI form and submission of annual reports. We have submitted NOIs for our vessels where required. Compliance with the EPA, U.S. Coast Guard and state regulations could require the installation of ballast water treatment equipment on our vessels or the implementation of other port facility disposal procedures at potentially substantial cost or may otherwise restrict our vessels from entering U.S. waters.

In order to comply with IMO and USCG ballast water regulations, we are required to install ballast water treatment plants on all of our vessels from December 2018 to September 2024. The cost of compliance per vessel for us is estimated to be between $1.0 and $1.3 million, depending on size of the vessel. Significant investments in ballast water treatment systems may have a material adverse effect on our future performance, results of operations, cash flows and financial position. We have performed due diligence in this regard and have established a project group that is carrying out technical feasibility of the available plants. We are also carrying out pilot projects to minimize risks in the future implementation process for all vessels.

European Union Regulations

In October 2009, the European Union amended a directive to impose criminal sanctions for illicit ship-source discharges of polluting substances, including minor discharges, if committed with intent, recklessly or with serious negligence and the discharges individually or in the aggregate result in deterioration of the quality of water. Aiding and abetting the discharge of a polluting substance may also lead to criminal penalties. The directive applies to all types of vessels, irrespective of their flag, but certain exceptions apply to warships or where human safety or that of the ship is in danger. Criminal liability for pollution may result in substantial penalties or fines and increased civil liability claims. Regulation (EU) 2015/757 of the European Parliament and of the Council of 29 April 2015 (amending EU Directive 2009/16/EC) governs the monitoring, reporting and verification of carbon dioxide emissions from maritime transport and, subject to some exclusions, requires companies with ships over 5,000 gross tonnage to monitor and report carbon dioxide emissions annually starting on January 1, 2018, which may cause us to incur additional expenses.

The European Union has adopted several regulations and directives requiring, among other things, more frequent inspections of high-risk ships, as determined by type, age and flag as well as the number of times the ship has been detained. The European Union also adopted and extended a ban on substandard ships and enacted a minimum ban period and a definitive ban for repeated offenses. The regulation also provided the European Union with greater authority and control over classification societies, by imposing more requirements on classification societies and providing for fines or penalty payments for organizations that failed to comply. Furthermore, the EU has implemented regulations requiring vessels to use reduced sulfur content fuel for their main and auxiliary engines. The EU Directive 2005/33/EC (amending Directive 1999/32/EC) introduced requirements parallel to those in Annex VI relating to the sulfur content of marine fuels. In addition, the EU imposed a 0.1% maximum sulfur requirement for fuel used by ships at berth in EU ports.

Greenhouse Gas Regulations

Currently, the emissions of greenhouse gases from international shipping are not subject to the Kyoto Protocol to the United Nations Framework Convention on Climate Change, which entered into force in 2005, and pursuant to which adopting countries have been required to implement national programs to reduce greenhouse gas emissions with targets extended through 2020. International negotiations are continuing with respect to a successor to the Kyoto Protocol, and restrictions on shipping emissions may be included in any new treaty. In December 2009, more than 27 nations, including the U.S. and China, signed the Copenhagen Accord, which includes a non-binding commitment to reduce greenhouse gas emissions. The 2015 United Nations Climate Change Conference in Paris resulted in the Paris Agreement, which entered into force on November 4, 2016 and does not directly limit greenhouse gas emissions from ships. On June 1, 2017, the U.S. President announced that the United States intends to withdraw from the Paris Agreement. The timing and effect of such action has yet to be determined, but the Paris Agreement provides for a four-year exit process.

At MEPC 70 and MEPC 71, a draft outline of the structure of the initial strategy for developing a comprehensive IMO strategy on reduction of greenhouse gas emissions from ships was approved. In accordance with this roadmap, in April 2018, nations at the MEPC 72 adopted an initial strategy to reduce greenhouse gas emissions from ships. The initial strategy identifies “levels of ambition” to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from ships through implementation of further phases of the EEDI for new ships; (2) reducing carbon dioxide emissions per transport work, as an average across international shipping, by at least 40% by 2030, pursuing efforts towards 70% by 2050, compared to 2008; and (3) reducing the total annual greenhouse emissions by at least 50% by 2050 compared to 2008 while pursuing efforts towards phasing them out entirely. The initial strategy notes that technological innovation, alternative fuels and/or energy sources for international shipping will be integral to achieve the overall ambition. These regulations could cause us to incur additional substantial expenses.

The EU made a unilateral commitment to reduce overall greenhouse gas emissions from its member states from 20% of 1990 levels by 2020. The EU also committed to reduce its emissions by 20% under the Kyoto Protocol’s second period from 2013 to 2020. Starting in January 2018, large ships calling at EU ports are required to collect and publish data on carbon dioxide emissions and other information.

In the United States, the EPA issued a finding that greenhouse gases endanger the public health and safety, adopted regulations to limit greenhouse gas emissions from certain mobile sources and proposed regulations to limit greenhouse gas emissions from large stationary sources. However, in March 2017, the U.S. President signed an executive order to review and possibly eliminate the EPA’s plan to cut greenhouse gas emissions. The EPA or individual U.S. states could enact environmental regulations that would affect our operations.

Any passage of climate control legislation or other regulatory initiatives by the IMO, the EU, the U.S. or other countries where we operate, or any treaty adopted at the international level to succeed the Kyoto Protocol or Paris Agreement that restricts emissions of greenhouse gases could require us to make significant financial expenditures which we cannot predict with certainty at this time. Even in the absence of climate control legislation, our business may be indirectly affected to the extent that climate change may result in sea level changes or certain weather events.

Maritime Labor Convention

The ILO is a specialized agency of the UN with headquarters in Geneva, Switzerland. The ILO adopted the MLC 2006, which entered into force on August 20, 2013. A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance are required to ensure compliance with the MLC 2006 for all ships above 500 gross tons in international trade. These documents will provide prima facie evidence that the vessels are in compliance with the requirements of the MLC 2006. The Maritime Labor Certificate and Declaration of Maritime Labor Compliance will be subject to inspection by port state control when vessels enter the ports of other countries that have ratified the MLC 2006. In addition, vessels flying the flag of countries that have not ratified the MLC 2006 are also subject to inspection with respect to working and living conditions for seafarers when those vessels enter in port of countries where the MLC 2006 is in force. Amendments to MLC 2006 were adopted in 2014 and 2016.

There are costs associated with complying with the MLC 2006, and the methods to be used by port state control to check and ensure compliance are currently unclear. Given the uncertain interpretation of the MLC 2006 and the local legislation enacting it in various countries, there are risks associated with ensuring proper compliance.

Vessel Security Regulations

Since the terrorist attacks of September 11, 2001 in the United States, there have been a variety of initiatives intended to enhance vessel security such as the U.S. Maritime Transportation Security Act of 2002 (“MTSA”). To implement certain portions of the MTSA, the USCG issued regulations requiring the implementation of certain security requirements aboard vessels operating in waters subject to the jurisdiction of the United States and at certain ports and facilities, some of which are regulated by the EPA.

Similarly, Chapter XI-2 of the SOLAS Convention imposes detailed security obligations on vessels and port authorities and mandates compliance with the International Ship and Port Facilities Security Code (“the ISPS Code”). The ISPS Code is designed to enhance the security of ports and ships against terrorism. To trade internationally, a vessel must attain an International Ship Security Certificate (“ISSC”) from a recognized security organization approved by the vessel’s flag state. Ships operating without a valid certificate may be detained, expelled from or refused entry at port until they obtain an ISSC. The various requirements, some of which are found in the SOLAS Convention, include for example, on-board installation of automatic identification systems to provide a means for the automatic transmission of safety-related information from among similarly equipped ships and shore stations, including information on a ship’s identity, position, course, speed and navigational status; on-board installation of ship security alert systems, which do not sound on the vessel but only alert the authorities on shore; the development of vessel security plans; ship identification number to be permanently marked on a vessel’s hull; a continuous synopsis record kept onboard showing a vessel's history including the name of the ship, the state whose flag the ship is entitled to fly, the date on which the ship was registered with that state, the ship's identification number, the port at which the ship is registered and the name of the registered owner(s) and their registered address; and compliance with flag state security certification requirements.

The USCG regulations, intended to align with international maritime security standards, exempt non-U.S. vessels from MTSA vessel security measures, provided such vessels have on board a valid ISSC that attests to the vessel’s compliance with the SOLAS Convention security requirements and the ISPS Code. Future security measures could have a significant financial impact on us. We intend to comply with the various security measures addressed by MTSA, the SOLAS Convention and the ISPS Code.

Inspection by Classification Societies

Every seagoing vessel must be "classed" by a classification society. The classification society certifies that the vessel is "in-class,'' signifying that the vessel has been built and maintained in accordance with the rules of the classification society. In addition, where surveys are required by international conventions and corresponding laws and ordinances of a flag state, the classification society will undertake them on application or by official order, acting on behalf of the authorities concerned and will certify that such vessel complies with applicable rules and regulations of the vessel's country of registry and the international conventions of which that country is a member.

The classification society also undertakes on request other surveys and checks that are required by regulations and requirements of the flag state. These surveys are subject to agreements made in each individual case and/or to the regulations of the country concerned.

For maintenance of the class, regular and extraordinary surveys of hull, machinery, including the electrical plant, and any special equipment classed are required to be performed as follows:

Annual Surveys. For seagoing ships, annual surveys are conducted for the hull and the machinery, including the electrical plant, and where applicable for special equipment classed, within three months before or after each anniversary date of the date of commencement of the class period indicated in the certificate.

Intermediate Surveys. Extended annual surveys are referred to as intermediate surveys and are to be carried out either at or between the second and third Annual Surveys after Special Periodical Survey No. 1 and subsequent Special Periodical Surveys. Those items which are additional to the requirements of the Annual Surveys may be surveyed either at or between the second and third Annual Surveys. After the completion of the No. 3 Special Periodical Survey, the following Intermediate Surveys are of the same scope as the previous Special Periodical Survey.

Special Periodical Surveys (or Class Renewal Surveys). Class renewal surveys, also known as Special Periodical Surveys, are carried out for the ship's hull, machinery, including the electrical plant, and for any special equipment classed, and should be completed within five years after the date of build or after the crediting date of the previous Special Periodical Survey. At the special survey, the vessel is thoroughly examined, including ultrasonic-gauging to determine the thickness of the steel structures. Should the thickness be found to be less than the minimum class requirements, the classification society would prescribe steel renewals. A Special Periodical Survey may be commenced at the fourth Annual Survey and be continued with completion by the fifth anniversary date. Substantial amounts of money may have to be spent for steel renewals to pass a special survey if the vessel experiences excessive wear and tear.

As mentioned above, for vessels that are more than 15 years old, the Intermediate Survey may also have a considerable financial impact.

At an owner's application, the surveys required for class renewal (for tankers only the ones in relation to machinery and automation) may be split according to an agreed schedule to extend over the entire five-year period. This process is referred to as continuous survey system. All areas subject to survey as defined by the classification society are required to be surveyed at least once per class period, unless shorter intervals between surveys are prescribed elsewhere. The period between two subsequent surveys of each area must not exceed five years.

Most vessels are subject also to a minimum of two examinations of the outside of a vessel's bottom and related items during each five-year special survey period. Examinations of the outside of a vessel's bottom and related items are normally to be carried out with the vessel in dry-dock, but an alternative examination while the vessel is afloat by an approved underwater inspection may be considered. Such an examination is to be carried out in conjunction with the Special Periodical Survey, and in this case the vessel must be in dry-dock. For vessels older than 15 years (after the 3rd Special Periodical Survey), the bottom survey must always be in the dry-dock. In all cases, the interval between any two such examinations is not to exceed 36 months.

In general during the above surveys, if any defects are found, the classification surveyor will require immediate repairs or issue a ''recommendation'' which must be rectified by the shipowner within prescribed time limits.

Most insurance underwriters make it a condition for insurance coverage that a vessel be certified as "in-class" by a classification society which is a member of the International Association of Classification Societies, or IACS. All our vessels are certified as being "in-class" by American Bureau of Shipping, Lloyds Register or Bureau Veritas who are all members of IACS. All new and second-hand vessels that we purchase must be certified prior to their delivery under our standard purchase contracts and memoranda of agreement. If the vessel is not certified on the scheduled date of closing, we have no obligation to take delivery of the vessel.

Risk of Loss and Liability Insurance

General

The operation of any cargo vessel includes risks such as mechanical failure, physical damage, collision, property loss, cargo loss or damage and business interruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, there is always an inherent possibility of marine disaster, including oil spills and other environmental mishaps, and the liabilities arising from owning and operating vessels in international trade. OPA, which in certain circumstances imposes virtually unlimited liability upon shipowners, operators and bareboat charterers of any vessel trading in the exclusive economic zone of the United States for certain oil pollution accidents in the United States, has made liability insurance more expensive for shipowners and operators trading in the United States market. We carry insurance coverage as customary in the shipping industry. However, not all risks can be insured, specific claims may be rejected, and we might not be always able to obtain adequate insurance coverage at reasonable rates.

Marine and War Risks Insurance

We have in force marine hull and machinery and war risks insurance for all of our vessels. Our marine hull and machinery insurance covers risks of particular and general average and actual or constructive total loss from collision, fire, grounding, engine breakdown and other insured named perils up to an agreed amount per vessel. Our war risks insurance covers the risks of particular and general average and actual or constructive total loss from acts of war and civil war, terrorism, piracy, confiscation, seizure, capture, vandalism, sabotage and other war-related named perils. We have also arranged coverage for increased value for each vessel. Under this increased value coverage, in the event of total loss of a vessel, we will be able to recover amounts in excess of those recoverable under the hull and machinery policy in order to compensate for additional costs associated with replacement of the loss of the vessel. Each vessel is covered up to at least its fair market value at the time of the insurance attachment and subject to a fixed deductible per each single accident or occurrence, but excluding actual or constructive total loss.

Protection and Indemnity Insurance

Protection and indemnity insurance is provided by mutual protection and indemnity associations, or P&I Associations, and covers our third-party liabilities in connection with our shipping activities. This includes third-party liability and other related expenses of injury or death of crew, passengers and other third parties, loss or damage to cargo, damage to other third-party property, pollution arising from oil or other substances, and salvage, towing and other related costs, including wreck removal. Protection and indemnity insurance is a form of mutual indemnity insurance, extended by protection and indemnity from mutual associations, or “clubs.”

Our current protection and indemnity insurance coverage for pollution is $ 1 billion per vessel per incident. The 13 P&I Associations that comprise the International Group insure approximately 90% of the world’s commercial tonnage and have entered into a pooling agreement to reinsure each association’s liabilities. The International Group’s website states that the Pool provides a mechanism for sharing all claims in excess of US$ 10 million up to, currently, approximately US$ 8.2 billion. As a member of a P&I Association, which is a member of the International Group, we are subject to calls payable to the associations based on our claim records as well as the claim records of all other members of the individual associations and members of the shipping pool of P&I Associations comprising the International Group.

Permits and Authorizations

We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses and certificates with respect to our vessels. The permits, licenses and certificates that are required depend upon several factors, including the commodity transported, the waters in which the vessel operates, the nationality of the vessel's crew and the age of the vessel. We have obtained all permits, licenses and certificates currently required to permit our vessels to operate. Additional laws and regulations, environmental or otherwise, may be adopted, which could limit our ability to do business or increase the cost of us doing business.

Competition

We operate in markets that are highly competitive. We compete for charters on the basis of price, vessel location, size, age and condition of the product tankers as well as our reputation as an operator. We compete primarily with owners and operators of product tankers in the Handysize, MR, LR1 and LR2 fleets. We believe that the ownership of product tankers is fragmented and divided among major oil companies and independent product tanker owners. The fragmented competitive landscape can be illustrated by our market position. Although we have one of the largest owned fleets, according to industry sources, our owned fleet constitutes approximately 2% of the existing global product tanker fleet (in dwt terms).

C.	Organizational Structure

TORM plc (formerly Anchor Admiral Limited and TORM Limited) is a public limited company incorporated on October 12, 2015 under the laws of England and Wales under the name TORM Limited with company number 9818726. Anchor Admiral Limited was renamed TORM Limited on November 26, 2015 and TORM Limited was renamed TORM plc on January 20, 2016. Following the closing of the Exchange Offer (discussed herein) and the listing of TORM plc's Class A common shares on Nasdaq Copenhagen on April 19, 2016, TORM plc became the publicly listed parent company of TORM A/S, which is now our wholly-owned subsidiary. The Group is engaged in the business of owning and operating product tankers to transport refined petroleum products. We, TORM A/S and other subsidiaries, own each of the vessels in our product tanker fleet (including eight newbuildings and other than five vessels that we charter in) and expect to own each additional vessel that we acquire in the future, through separate wholly-owned subsidiaries. The management of our fleet, including vessels that we charter in, is performed by our wholly-owned subsidiaries. We have offices in the United Kingdom, Denmark, Mumbai (India), New Delhi (India), Manila (the Philippines), Cebu (the Philippines), Singapore (Singapore) and Houston (Texas, USA).

A list of our significant subsidiaries is filed herewith as Exhibit 8.1.

D.	Property, Plants and Equipment

We own no properties other than our vessels. We lease office space in various jurisdictions and had the following material leases in place as of December 31, 2018:

London, United Kingdom, located at Birchin Court 20, Birchin Lane, EC3V 9DU with 1 employee at this location;

Hellerup, Denmark, located at Tuborg Havnevej 18, with approximately 129 employees at this location;

Singapore, Singapore, located at 6 Battery Road #27-02, with approximately 14 employees at this location;

Houston, Texas, USA, located at Suite 710, 2500 City West Boulevard, with approximately 7 employees at this location;

Manila, the Philippines, located at 7th Floor Salcedo Towers, 169 HV dela Costa Street, with approximately 37 employees at this location;

Cebu, the Philippines, located at 5 ^th Floor Park Centrale Bld, Jose Maria del Mar St., Corner Abad St., with 2 employees at this location;

Mumbai, India, located at 2nd Floor, Leela Business Park, Andheri-Kurla Road, with approximately 116 employees at this location; and

New Delhi, India, located at 5 ^th Floor, Caddle Commercial Tower, Aerocity, with 3 employees at this location.

Patents, Licenses and Trademarks

We have no material patents and do not use any licenses other than ordinary information technology licenses.

We have trademark registered the rights to our Company's name (TORM) and logo (the TORM flag) in all relevant jurisdictions including Denmark, the European Union, Bahrain, Brazil, Singapore, the United Arab Emirates and the United States.

We have registered our primary domains: www.torm.com, www.torm.dk and www.torm.eu.

ITEM 4A.

UNRESOLVED STAFF COMMENTS

None.

ITEM 5.

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following presentation of management's discussion and analysis of results of operations and financial condition should be read in conjunction with our audited consolidated financial statements and related notes. You should also carefully read the following discussion with the sections of this annual report entitled “Cautionary Statement Regarding Forward-Looking Statements", "Explanatory Note and Presentation of Our Financial and Operating Data", Item 3. "Key Information—D. Risk Factors", Item 4. "Information on the Company—B. Business Overview". This discussion contains forward-looking statements that reflect our current views with respect to future events and financial performance. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors such as those set forth in Item 3. "Key Information—D. Risk Factors" and elsewhere in this annual report.

The audited consolidated financial statements as of and for the years ended December 31, 2018, 2017 and 2016 have been prepared in accordance with IFRS as issued by the IASB. The financial statements are presented in U.S. Dollar millions unless otherwise indicated.

Non-IFRS measures

Certain non-IFRS measures included in our financial and operating data have been derived from amounts calculated in accordance with IFRS but are not themselves IFRS measures. They should not be viewed in isolation as alternatives to the equivalent IFRS measure, rather they should be read in conjunction with the equivalent IFRS measure. These include Time Charter Equivalent or TCE earnings, Adjusted gross profit (net earnings from shipping), Adjusted EBITDA (earnings before financial income and expense, depreciation and amortization, taxes and impairments), loan-to-value ratio and net interest-bearing debt. The computation of Adjusted EBITDA includes an adjustment for financial income and expenses which we deem to be equivalent to "interest" for purposes of presenting Adjusted EBITDA. Financial expenses consist of interest on bank loans, losses on foreign exchange transactions and bank charges, and financial income consists of interest income and gains on foreign exchange transactions. The term Adjusted EBITDA as used in this annual report has the same meaning and corresponds to all references to the term EBITDA as used in our Annual Report 2018.

There are a number of non-IFRS measures included in the Annual Report 2018 on pages 148-151. Only those non-IFRS measures listed herein are considered to form part of the annual report on Form 20-F.

Management believes that these non-IFRS measures are both useful and necessary to present in our financial and operating data, because they are used by management for internal performance analysis, the presentation of these measures facilitates an element of comparability with other companies, although management's measures may not be calculated in the same way as similarly titled measures reported by other companies, and because these measures are useful in connection with discussions with the investment community.

	Year ended December 31,
	2018			2017			2016
Non-IFRS Financial Measures
(USD million)
Time charter equivalent (TCE) earnings		352.4			397.1			458.2
Adjusted gross profit (Net earnings from shipping activities)		169.5			200.2			241.5
Adjusted EBITDA		120.5			157.6			200.0
Net interest-bearing debt		627.3			619.7			609.2
Loan-to-value (LTV)		52.9	%		55.8	%		52.4	%

Time Charter Equivalent (TCE) earnings . We define TCE earnings, a performance measure, as revenue after port expenses, bunkers and commissions and freight and bunker derivatives. We report TCE earnings, a non-IFRS measure, because we believe it provides additional meaningful information to investors in conjunction with revenue, the most directly comparable IFRS measure, given it is a standard shipping industry performance measure used primarily to compare period-to-period changes in a shipping company's performance irrespective of changes in the mix of charter types (i.e. spot charters, time charters and bareboat charters) under which the vessels may be employed between the periods. Below is presented a reconciliation from revenue to TCE earnings.

	Year ended December 31,
	2018			2017			2016
Reconciliation to revenue
(USD million)
Revenue		635.4			657.0			680.1
Port expenses, bunkers and commissions		(283.0	)		(259.9	)		(221.9	)
Time charter equivalent (TCE) earnings		352.4			397.1			458.2

Adjusted gross profit (Net earnings from shipping activities) . We define Adjusted gross profit (net earnings from shipping activities) as operating profit/(loss) before depreciation, impairment losses on tangible and intangible assets, other operating expenses, administrative expenses and profit from sale of vessels. We report Adjusted gross profit (net earnings from shipping activities), a non-IFRS measure, because we believe it provides additional meaningful information to investors to assess our operating performance from our shipping activities. Adjusted gross profit is also provided as an operating performance measure in the internal management reporting.

	Year ended December 31,
	2018			2017			2016
Reconciliation to operating profit/(loss)
(USD million)
Operating profit/(loss)		2.8			39.5			(107.2	)
Depreciation		114.5			114.5			122.2
Impairment losses on tangible and intangible assets		3.2			3.6			185.0
Other operating expenses		2.0			0.4			0.3
Administrative expenses		47.8			45.0			41.4
Profit from sale of vessels		(0.8	)		(2.8	)		-
Share of profit from joint ventures		(0.2	)		0.0			(0.2	)
Adjusted gross profit (net earnings from shipping activities)		169.5			200.2			241.5

Adjusted EBITDA . We define Adjusted EBITDA as net profit/(loss) for the period before tax expense, financial income, financial expenses, depreciation and impairment losses on tangible and intangible assets. The computation of Adjusted EBITDA refers to financial income and expenses, which we deem to be equivalent to "interest" for purposes of presenting Adjusted EBITDA. Financial expenses consist of interest on bank loans, losses on foreign exchange transactions and bank charges. Financial income consists of interest income and gains on foreign exchange transactions.

Adjusted EBITDA is used as a supplemental financial measure by management and external users of financial statements, such as our lenders, to assess our operating performance as well as our compliance with the financial covenants and restrictions contained in our financing agreements. We believe that Adjusted EBITDA assists our management and investors by increasing comparability of our performance from period to period. This increased comparability is achieved by excluding the potentially disparate effects between periods of interest, depreciation, amortization and taxes, which items are affected by various and possibly changing financing methods, capital structure and historical cost basis, which items may significantly affect results of operations between periods. We believe that including Adjusted EBITDA as an operating measure benefits investors in (a) selecting between investing in us or other investment alternatives and (b) monitoring our ongoing operational strength in assessing whether to continue to hold common units.

Adjusted EBITDA excludes some, but not all, items that affect profit/(loss), and these measures may vary among other companies. Therefore, Adjusted EBITDA as presented below may not be comparable to similarly titled measures of other companies. The following table reconciles Adjusted EBITDA to net profit/(loss), the most directly comparable IFRS financial measure, for the periods presented:

	Year ended December 31,
	2018			2017			2016
Reconciliation to net profit/(loss)
(USD million)
Net profit/(loss) for the year		(34.8	)		2.4			(142.5	)
Tax expense		1.5			0.8			0.8
Financial expenses		39.3			40.6			37.3
Financial income		(3.3	)		(4.3	)		(2.8	)
Depreciation		114.5			114.5			122.2
Impairment losses on tangible and intangible assets		3.2			3.6			185.0
Adjusted EBITDA		120.5			157.6			200.0

Net interest-bearing debt . Net interest-bearing debt is defined as mortgage debt and bank loans (current and non-current), finance lease liabilities (current and non-current), amortized bank fees, less cash and cash equivalents. Net interest-bearing debt depicts the net capital resources, which cause net interest expenditure and interest rate risk and which, together with equity, are used to finance our investments. As such, we believe that net interest-bearing debt is a relevant measure, which management uses to measure the overall development of our use of financing, other than equity. Such measure may not be comparable to similarly titled measures of other companies. Net interest-bearing debt is calculated as follows:

	Year ended December 31,
	2018			2017			2016
Net interest-bearing debt
(USD million)
Mortgage debt and bank loans (current and non-current)		724.3			720.9			669.6
Finance lease liabilities (current and non-current)		25.3			28.2			13.6
Amortized bank fees		5.1			4.8			2.0
Cash and cash equivalents		(127.4	)		(134.2	)		(76.0	)
Net interest-bearing debt		627.3			619.7			609.2

Loan-to-value (LTV) ratio. Loan-to-value (LTV) ratio is defined as vessel values divided by net borrowings of the vessels. LTV describes the net debt ratio of our vessels and is used by us to describe the financial situation, the liquidity risk as well as to express the future possibilities to raise new capital by new loan facilities.

	Year ended December 31,
	2018			2017			2016
Loan-to-value (LTV)
(USD million)
Vessel values, including newbuildings (broker values)		1,675.1			1,661.1			1,445.8
Total (value)		1,675.1			1,661.1			1,445.8
Outstanding debt		754.7			753.9			685.2
Committed CAPEX on newbuildings		258.0			306.9			148.8
Cash and cash equivalents		(127.4	)		(134.2	)		(76.0	)
Total (loan)		885.3			926.6			758.0
Loan-to-value (LTV) ratio		52.9	%		55.8	%		52.4	%

A.	Operating Results

Primary Factors Affecting Results of Operations

Reference is made to "Financial Review 2018⸻Primary Factors Affecting Results of Operations" on pages 51-52 of our Annual Report 2018 .

Other Important Financial and Operational Terms and Concepts of TORM plc

The Company uses a variety of other financial and operational terms and concepts. These include the following:

Voyage expenses. Voyage expenses are all expenses related to a particular voyage, including any bunker fuel expenses, port expenses, cargo loading and unloading expenses, canal tolls and agency fees. These expenses are subtracted from shipping revenues to calculate Time Charter Equivalent Rates.

Vessel operating costs . Vessel operating costs include crewing, repairs and maintenance (excluding capitalized dry-docking), insurance, consumable stores, lube oils, communication expenses and technical management fees. The largest components of our vessel operating costs are generally crewing and repairs & maintenance. Expenses for repairs & maintenance tend to fluctuate from period to period because most repairs & maintenance typically occur during periodic dry-dockings. We expect these expenses to increase as our fleet matures and to the extent that it expands.

Charter hire . Charter hire consists of (i) money paid to the vessel owner by a charterer for the use of a vessel under a time charter or bareboat charter and (ii) amortization of the fair value of time charter contracts acquired. Such payments to vessel owners are usually made during the course of the charter every 30 days in advance or in arrears by multiplying the daily charter rate by the number of days and, under a time charter only, subtracting any time the vessel was deemed to be off-hire. Under a bareboat charter such payments are usually made monthly and are calculated on a 360 or 365-day calendar year basis.

Dry-docking . We must periodically dry-dock each of our vessels for inspection and any modifications to comply with industry certification or regulatory requirements. Generally, each vessel is dry-docked every 30-60 months.

Depreciation . Depreciation expenses typically consist of charges related to the depreciation of the historical cost of our fleet (less an estimated residual value and any impairment losses recognized) over the estimated useful lives of the vessels and charges related to the depreciation of upgrades to vessels which are depreciated over the shorter of the vessel's remaining useful life or the life of the renewal or upgrade. Dry-docking costs are capitalized and depreciated on a straight-line basis over the estimated period until the next dry-docking.

Factors You Should Consider When Evaluating the Results of TORM plc

The Company faces a number of risks associated with our industry and must overcome a variety of challenges to utilize our competitive strengths in order to profitably implement our business strategy. These risks include, among other things: the highly cyclical tanker industry, dependence on spot market voyage charters, fluctuating charter values, increase in fuel prices, changing economic, political and governmental conditions affecting our industry and business, international sanctions, embargoes, import and export restrictions, nationalizations and wars, material changes in applicable laws and regulations, full performance by counterparties, particularly charterers, maintaining customer relationships, delay in deliveries or non-deliveries from shipyards, piracy attacks, maintaining sufficient liquidity, financing availability and terms and management turnover. See Item 3. "Key Information—D. Risk Factors".

Results of Operations of TORM plc

We operate within one segment, the product tanker segment, and thus the analysis has not been broken out into segments.

The financial highlights for TORM plc for the years ended December 31, 2018, 2017 and 2016 in this section have been extracted or derived from TORM plc's audited consolidated financial statements as of and for the years ended December 31, 2018, 2017 and 2016. As such, the information below should be read in conjunction with TORM plc's audited consolidated financial statements as of and for the years ended December 31, 2018, 2017 and 2016 and section of this annual report entitled "Explanatory Note and Presentation of Our Financial and Operating Data". Some of the information contained in this section, including information about TORM plc's plans and strategies for our business and our expected sources of financing, contains forward-looking statements that involve risks and uncertainties. Potential investors should read Item 3. "Key Information—D. Risk Factors" for information on certain factors that may have a material adverse effect on TORM plc's future performance, results of operations, cash flows and financial position.

TORM plc operates in a global industry where, among other things, freight rates are denominated and settled in United States dollars, and a majority of the cost base of TORM plc is denominated and settled in United States dollars. Consequently, TORM plc's financial reporting is in United States dollars.

Financial highlights for TORM plc

Reference is made to "Key Figures" on page 7 and "Highlights" on pages 9-11 of our Annual Report 2018 .

Consolidated financial statements as of and for the years ended December 31, 2018, 2017 and 2016

Income statement

The table below presents financial information derived from TORM plc's income statement for the years ended December 31, 2018, 2017 and 2016, which reflects a continuation of the historical financial information of Njord.

Income statement for TORM plc for the years ended December 31, 2018, 2017 and 2016

	Year ended December 31,
	2018			2017			2016
(USD million)
Revenue		635.4			657.0			680.1
Port expenses, bunkers and commissions		(283.0	)		(259.9	)		(221.9	)
TCE earnings		352.4			397.1			458.2
Adjusted gross profit (net earnings from shipping activities)		169.5			200.2			241.5
Adjusted EBITDA		120.5			157.6			200.0
Operating profit/(loss)		2.8			39.5			(107.2	)
Profit/(loss) before tax		(33.2	)		3.2			(141.7	)
Net profit/(loss) for the year		(34.8	)		2.4			(142.5	)

Total revenue for the year ended December 31, 2018 was $635 million, which represents a decrease of $22 million compared to the year ended December 31, 2017. This decrease in revenue is primarily due to a decrease in the freight rates in the spot market.

Total port expenses, bunkers and commissions for the year ended December 31, 2018 were $283 million, which represents an increase of $23 million compared to the year ended December 31, 2017. Bunkers amounted to 61%, port expenses to 32%, and commissions and other voyage expenses to 7% respectively of the total port expenses, bunkers and commissions for the year ended December 31, 2018. Bunkers amounted to 55%, port expenses to 37%, and commissions and other voyage expenses to 8% of the total port expenses, bunkers and commissions for the year ended December 31, 2017. The increase in port expenses, bunkers and commissions was primarily due to increased bunker prices during the year.

TCE earnings for the year ended December 31, 2018 were $352 million corresponding to a decrease of $45 million compared to the year ended December 31, 2017. The decrease in TCE earnings was primarily due to a decrease in freight rates equating to a decrease in earnings of $48 million. This was mainly due to lower freight rates for the year ended December 31, 2018, compared with the year ended December 31, 2017.

Adjusted gross profit (net earnings from shipping activities) and Adjusted EBITDA were $169 million and $121 million, respectively, for the year ended December 31, 2018 compared to an Adjusted gross profit (net earnings from shipping activities) and Adjusted EBITDA of $200 million and $158 million, respectively, for the year ended December 31, 2017. The decrease was mainly driven by the lower freight rates for the year ended December 31, 2018 compared to the year ended December 31, 2017.

Operating profit was $3 million for the year ended December 31, 2018 compared to an operating profit of $40 million for the year ended December 31, 2017. The decrease was mainly driven by the lower freight rates for the year ended December 31, 2018 compared to the year ended December 31, 2017.

TORM plc reported a net loss for the year ended December 31, 2018 of $35 million, compared to a net profit of $2 million for the year ended December 31, 2018, a decrease of $37 million.

Total revenue for the year ended December 31, 2017 was $657 million, which represents a decrease of $23 million compared to the year ended December 31, 2016. This decrease in revenue is primarily due to a decrease in the number of available earning days as well as a decrease in freight rates.

Total port expenses, bunkers and commissions for the year ended December 31, 2017 were $260 million, which represents an increase of $38 million compared to the year ended December 31, 2016. Bunkers amounted to 55%, port expenses to 37%, commissions and other voyage expenses to 8% respectively of the total port expenses, bunkers and commissions for the year ended December 31, 2017. Bunkers amounted to 50%, port expenses to 40%, commissions and other voyage expenses to 10% of the total port expenses, bunkers and commissions for the year ended December 31, 2016. The increase in port expenses, bunkers and commissions was primarily due to a 31% increase in bunker expenses as a result of the increased bunker prices during the year.

TCE earnings for the year ended December 31, 2017 were $397 million corresponding to a decrease of $61 million compared to the year ended December 31, 2016. The decrease in TCE earnings was primarily due to a decrease in freight rates equating to a decrease in earnings of $41 million. This was mainly due to lower freight rates for the year ended December 31, 2017, compared with the year ended December 31, 2016.

Adjusted gross profit (net earnings from shipping activities) and Adjusted EBITDA were $200 million and $158 million, respectively, for the year ended December 31, 2017 compared to an adjusted gross profit (net earnings from shipping activities) and Adjusted EBITDA of $242 million and $200 million, respectively, for the year ended December 31, 2016. The decrease was mainly driven by the decrease in available earning days combined with lower freight rates for the year ended December 31, 2017 compared to the year ended December 31, 2016.

Operating profit was $40 million for the year ended December 31, 2017 compared to an operating loss of $107 million for the year ended December 31, 2016. The increase in operating profit was primarily due to an impairment charge of $185 million in the year ended December 31, 2016.

TORM plc reported a net profit for the year ended December 31, 2017 of $2 million compared to a net loss of $143 million for the year ended December 31, 2016, an increase of $145 million.

Revenue and port expenses, bunkers and commission (TCE earnings)

TCE earnings for TORM plc for the years ended December 31, 2018 and 2017

	LR2			LR1			MR			Handy			Total
Year-end 2017
Available TCE earning days		3,419			2,483			17,995			3,263			27,160
TCE earnings per earning day, USD		16,304			13,771			14,850			12,239			14,621
TCE earnings, USD million		55.8			34.2			267.2			39.9			397.1

Year-end 2018
Available TCE earning days		4,027			2,484			18,182			2,450			27,141
Change		18	%		0	%		1	%		(25	%)		0	%
TCE earnings per earning day, USD		15,425			12,982			12,847			9,970			12,982
Change		(5	%)		(6	%)		(13	%)		(19	%)		(11	%)

Effect on TCE earnings from change in the available TCE earning days, USD million		9.9			0.0			2.8			(10.0	)		2.7
Effect on TCE earnings from change in TCE earnings per earning day, USD million		(3.5	)		(2.0	)		(36.4	)		(5.6	)		(47.5	)
TCE earnings, USD million		62.2			32.2			233.6			24.3			352.3

The majority of 2018 was challenging for the product tanker segment, although the year ended with a significant recovery across the broader tanker market.

During the first half of the year, product tanker freight rates remained at a level similar to the rates seen in the same period in 2017. The year started out with healthy trading volumes. Exports from the US Gulf showed particularly strong growth, supported by increasing demand from Mexico and South America. Nevertheless, the positive impact of higher trading volumes was offset by shorter trading distances, partly as a result of the continued stock draw in some of the key importing regions.

In addition, an increasing number of newbuilt crude tankers opted for a clean cargo on their maiden voyage, reducing demand for product tankers in the East. Crude cannibalization intensified in the second quarter, driven by a depressed crude tanker market.

In the third quarter, product tanker freight rates declined further, and some of the benchmarks reached historically low levels, as higher oil prices and weaker currencies in several emerging market economies weighed negatively on oil demand and reduced trading volumes. Crude cannibalization continued at a high level in the third quarter. On top of the pressure from crude tankers, a backwardated oil price structure favored shorter hauls throughout the first three quarters of the year.

From the middle of the fourth quarter, product tanker freight rates started to pick up and reached levels not seen since late 2015/early 2016. Key interregional product arbitrage spreads, which had been closed for most of the year, widened and lifted demand for product tankers. Both the price spreads for gasoline and naphtha between West and East as well as spreads for diesel and jet fuel between East and West became supportive for product flows.

Product prices also turned from backwardation into contango, incentivizing floating storage of products. In addition, a stronger crude tanker market led to lower market cannibalization and encouraged a significant number of LR2s to shift from the clean market to the dirty market, effectively reducing tonnage supply.

According to industry sources, asset prices on second-hand product tankers remained relatively flat during 2018 but saw an increase towards the end of the year. The end-of-year increase in asset prices was mainly driven by a combination of improved freight rates, a relatively low supply of vessels for sale and a shrinking order book. The value of TORM's fleet measured by broker values decreased by 4% during 2018 (when excluding vessels acquired and sold during 2018).

In 2018, TORM achieved a gross profit of $169 million (2017: $200 million) with the reduction from 2017 driven by lower freight rates. TORM’s product tanker fleet realized TCE earnings of $/day 12,982, down 11% year on year, with the LR2 class at $/day 15,425, the LR1 class at $/day 12,982, the MR class at USD/day 12,847 and the Handysize class at $/day 9,970.

During 2018, TORM took delivery of four LR2 vessels from GSI with the last of the four vessels being equipped with a scrubber. During 2018, TORM ordered an additional three MR vessels from GSI, thereby bringing the total newbuilding program to nine vessels covering seven MR and two LR1 vessels. The newbuildings are expected to be delivered through 2019 and the first quarter of 2020.

At the end of 2018, TORM operated a fleet of 75 vessels on the water of which 72 are fully owned and three are financial leasebacks.

For the LR2 fleet, the number of available earning days increased by 18% from the year ended December 31, 2017 and ended at 4,027 earning days for the year ended December 31, 2018. The increase was driven by the four newbuildings being delivered during 2018. The average LR2 freight rate for the year ended December 31, 2018 was $15,425 per day resulting in earnings of $62 million.

For the LR1 fleet, the number of available earning days were unchanged from the year ended December 31, 2017 compared to the year ended December 31, 2018, both years at 2,483 earning days. The average LR1 freight rates for the year ended December 31, 2018 were $12,982 per day resulting in earnings of $32 million.

TORM plc sold two MR vessels during 2018. The number of available earning days for the MR fleet remained at the same level from the year ended December 31, 2017 to the year ended December 31, 2018, by increasing 1%, because TORM plc took delivery of 2 MR vessels in the summer 2017 thereby offsetting the effect of the two sales. The average MR freight rate for the year ended December 31, 2018 was $12,847 per day resulting in earnings of $234 million.

TORM plc sold two Handysize vessels during 2018. Accordingly, the number of available earning days for the Handysize fleet decreased by 25% from the year ended December 31, 2017 to the year ended December 31, 2018 resulting in an increase in earnings to a total of $24 million.

TCE earnings for TORM plc for the years ended December 31, 2017 and 2016

	LR2			LR1			MR			Handy			Not Allocated			Total
Year-end 2016
Available TCE earning days		3,490			2,557			18,659			3,850			-			28,556
TCE earnings per earning day, USD		21,106			18,800			15,462			12,490			-			16,049
TCE earnings, USD million		73.6			48.0			288.4			48.0			0.3			458.3

Year-end 2017
Available TCE earning days		3,419			2,483			17,995			3,263			-			27,160
Change		(2	%)		(3	%)		(4	%)		(15	%)		-			(5	%)
TCE earnings per earning day, USD		16,304			13,771			14,850			12,239			-			14,621
Change		(23	%)		(27	%)		(4	%)		(2	%)		-			(9	%)

Effect on TCE earnings from change in the available TCE earning days, USD million		(1.5	)		(1.4	)		(10.3	)		(7.3	)		-			(20.5	)
Effect on TCE earnings from change in TCE earnings per earning day, USD million		(16.4	)		(12.5	)		(11.0	)		(0.8	)		-			(40.7	)
Effect on TCE earnings from other		0.1			0.1			0.1			-			(0.3	)		-
TCE earnings, USD million		55.8			34.2			267.2			39.9			-			397.1

Despite a healthy consumer-driven demand for refined oil products, the record high clean petroleum product inventory levels globally that were built up during 2015 and the first part of 2016 had a negative impact on the product tanker market in 2017.

During the majority of 2017, the general product tanker freight market was challenged, as local production and stocks could satisfy demand for clean petroleum products in most of the world. Global clean petroleum product stocks decreased by a volume equivalent to a loss of potential trade of 5%. Despite the overall inventory drawdown trend, every quarter had its own regional spike in freight rates showing that the market for product tankers improved instantly when inventory levels retracted locally.

During the first half of 2017, product tanker freight rates remained at weak levels, similar to the fourth quarter of 2016. The exception was two freight rate spikes in March and June, primarily driven by increased demand for clean petroleum products in the western markets.

The second half of 2017 started out soft until late August where freight rates for transatlantic MR cargos spiked sharply following Hurricane Harvey's arrival on the U.S. Gulf Coast. However, the spike proved temporary and lasted approximately one week.

More importantly, the transatlantic spike was followed by a significant increase in transpacific voyages. The strengthening in the transpacific market proved more robust than the initial transatlantic spike and carried a positive momentum into the fourth quarter.

Despite positive demand for LR vessels, the overall freight market for larger vessels in the second half of 2017 was negatively impacted by an increased supply of product tanker and crude tanker newbuildings.

For the LR2 fleet, the number of available earning days decreased by 2% from the year ended December 31, 2016 and ended at 3,419 earning days for the year ended December 31, 2017. The average LR2 freight rates for the year ended December 31, 2017 were $16,304 per day resulting in earnings of $56 million.

For the LR1 fleet, the number of available earning days decreased by 3% from the year ended December 31, 2016 and ended at 2,483 earning days for the year ended December 31, 2017. The average LR1 freight rates for the year ended December 31, 2017 were $13,771 per day resulting in earnings of $34 million.

TORM plc sold 3 Handysize vessels during 2017. Accordingly, the number of available earning days for the Handysize fleet decreased 15% from the year ended December 31, 2016 to the year ended December 31, 2017, resulting in an increase in earnings to a total of $40 million.

Adjusted gross profit (net earnings from shipping activities)

	Year ended December 31, 2018			Year ended December 31, 2017			Year ended December 31, 2016
(USD million)
TCE earnings		352.3			397.1			458.2
Charter hire		(2.5	)		(8.5	)		(21.5	)
Operating expenses		(180.4	)		(188.4	)		(195.2	)
Adjusted gross profit (net earnings from shipping activities)		169.5			200.2			241.5

TORM plc's Adjusted gross profit (net earnings from shipping activities) for the year ended December 31, 2018 was $169 million compared to $200 million for the year ended December 31, 2017 corresponding to a decrease of $31 million.

Total costs related to charter hire decreased by $6 million for the year ended December 31, 2018 compared to the year ended December 31, 2017 mainly due to the redelivery of two remaining vessels in 2018.

In 2018, operating expenses for vessels decreased by $8 million to $180. Average operating expenses per day ended at $6,389 for the year ended December 31, 2018 compared to $6,673 for the year ended December 31, 2017 reflecting a decrease of 4%.

TORM plc's Adjusted gross profit (net earnings from shipping activities) for the year ended December 31, 2017 was $200 million compared to $242 million for the year ended December 31, 2016 corresponding to a decrease of $42 million.

Total costs related to charter hire decreased by $13 million for the year ended December 31, 2017 compared to the year ended December 31, 2016 mainly due to the redelivery of two vessels in the beginning of 2017.

In 2017, operating expenses for vessels decreased by $7 million to $188million primarily due to an decrease in the number of operating days of 5%. Average operating expenses per day ended at $6,673 for the year ended December 31, 2017 compared to $6,772 for the year ended December 31, 2016 reflecting a decrease of 1%.

Adjusted EBITDA

	Year ended December 31, 2018			Year ended December 31, 2017			Year ended December 31, 2016
(USD million)
Adjusted gross profit (net earnings from shipping activities)		169.6			200.2			241.5
Administrative expenses		(47.8	)		(45.0	)		(41.4	)
Other operating expenses		(2.0	)		(0.4	)		(0.3	)
Profit from sale of vessels		0.8			2.8			-
Share of profit from joint ventures		0.2			0.0			0.2
Adjusted EBITDA		120.5			157.6			200.0

TORM plc's Adjusted EBITDA for the year ended December 31, 2018 was $121 million compared to $158 million for the year ended December 31, 2017 corresponding to a decrease of $37 million.

Total administrative expenses and other operating expenses increased from $45 million for the year ended December 31, 2017 to $50 million for the year ended December 31, 2018 because of a higher number of FTEs.

TORM plc's Adjusted EBITDA for the year ended December 31, 2017 was $158 million compared to $200 million for the year ended December 31, 2016 corresponding to a decrease of $42 million.

Total administrative expenses and other operating expenses increased from $42 million for the year ended December 31, 2016 to $45 million for the year ended December 31, 2017 because of a higher number of FTEs.

Operating profit/(loss)

	Year ended December 31, 2018			Year ended December 31, 2017			Year ended December 31, 2016
(USD million)
Adjusted EBITDA		120.5			157.6			200.0
Impairment charges		(3.3	)		(3.6	)		(185.0	)
Depreciation		(114.5	)		(114.5	)		(122.2	)
Operating profit/(loss)		2.8			39.5			(107.2	)

TORM plc's operating profit for the year ended December 31, 2018 was $3 million compared to an operating loss of $40 million for the year ended December 31, 2017 corresponding to a decrease of $37 million.

The impairment charge amounted to $3 million for the year ended December 31, 2018 compared to $4 million for the year ended December 31, 2017 and was related to impairments regarding vessels sold during the year.

Depreciation amounted to $115 million for both the year ended December 31, 2018 and the year ended December 31, 2017.

TORM plc's operating profit for the year ended December 31, 2017 was $40 million compared to an operating loss of $107 million for the year ended December 31, 2016 corresponding to an increase of $147 million.

The impairment charge amounted to $4 million for the year ended December 31, 2017 and was related to impairments regarding vessels sold during the year. In comparison, the impairments amounted to $185 million for the year ended December 31, 2016 due to an impairment of the tanker segment and related goodwill in the fourth quarter of 2016. See Note 8 and Note 23 to the audited consolidated financial statements of TORM plc for the year ended December 31, 2017.

Depreciation amounted to $115 million for the year ended December 31, 2017 compared to $122 million for the year ended December 31, 2016 driven by a slightly smaller fleet on average for the year ended December 31, 2017 compared with the year ended December 31, 2016.

Profit/(loss) before tax

	Year ended December 31, 2018			Year ended December 31, 2017			Year ended December 31, 2016
(USD million)
Operating profit/(loss)		2.8			39.5			(107.2	)
Financial income		3.3			4.3			2.8
Financial expenses		(39.3	)		(40.6	)		(37.3	)
Profit/(loss) before tax		(33.2	)		3.2			(141.7	)

TORM plc's loss before tax for the year ended December 31, 2018 was $33 million compared to a profit of $3 million for the year ended December 31, 2017 corresponding to a decrease of $36 million.

Financial expenses for the year ended December 31, 2018 decreased to $39 million from $41 million for the year ended December 31, 2017. Financial income for the year ended December 31, 2018 decreased to $3 million from $4 million for the year ended December 31, 2017.

TORM plc's profit before tax for the year ended December 31, 2017 was $3 million compared to a loss of $142 million for the year ended December 31, 2016 corresponding to an increase of $145 million.

Financial expenses for the year ended December 31, 2017 increased to $41 million from $37 million for the year ended December 31, 2016. This was mainly due to the new loan agreements entered into during the year. Financial income for the year ended December 31, 2017 increased to $4 million from $3 million for the year ended December 31, 2016.

Balance sheet

Total assets as of December 31, 2018 were $1,714 million corresponding to an increase of $67 million compared to December 31, 2017.

The increase in total assets from December 31, 2017 to December 31, 2018 was primarily driven by an increase in vessels and capitalized dry-docking of $102 million offset by a decrease in prepayments on vessels of $43 million related to the delivery of the vessels.

The carrying value of vessels, newbuildings, capitalized dry-docking and prepayments on vessels as of December 31, 2018 amounted to $1,442 million compared to $1,382 million as of December 31, 2017. In total, the investments for 2018 amounted to $202 million compared to $148 million for 2017. Depreciation on the fleet amounted to $114 million for 2018 compared to $114 million for 2017. No impairment charges were recognized in 2018.

Total equity as of December 31, 2018 was $847 million corresponding to an increase of $56 million compared to December 31, 2017. The increase in equity was mainly due to the Private Placement completed in January 2018 and the offsetting effect of the net loss for the year 2018. For more information about the Private Placement, please see Item 7. "Major Shareholders and Related Party Transactions—B. Related Party Transactions."

TORM plc's liabilities increased by $11 million from $856 million as of December 31, 2017 to $867 million as of December 31, 2018. The increase in liabilities was mainly attributable to minor fluctuations in the current liabilities.

Total assets as of December 31, 2017 were $1,647 million corresponding to an increase of $76 million compared to December 31, 2016.

The increase in total assets from December 31, 2016 to December 31, 2017 was primarily driven by an increase in cash and cash equivalents of $58 million and an increase in prepayments on vessels of $44 million.

The carrying value of vessels, newbuildings, capitalized dry-docking and prepayments on vessels as of December 31, 2017 amounted to $1,383 million compared to $1,388 million as of December 31, 2016. In total, the investments for 2017 amounted to $148 million compared to $117 million for 2016. Depreciation on the fleet amounted to $114 million for 2017 compared to $120 million for 2016. No impairment charges were recognized in 2017.

Total equity as of December 31, 2017 was $791 million corresponding to an increase of $10 million compared to December 31, 2016. The increase in equity was mainly due to the net profit from 2017 and changes in fair values of hedges used as hedge accounting.

TORM plc's liabilities increased by $66 million from $790 million as of December 31, 2016 to $856 million as at December 31, 2017. The increase in liabilities was mainly attributable to new mortgage debt and bank loan facilities, primarily in connection with obtaining the new Term Facility 2 (defined below).

Critical Accounting Estimates and Judgments of TORM plc

The preparation of financial statements in conformity with IFRS requires estimates and assumptions that influence the value of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the value of revenue and expenses during the reporting period. These estimates and assumptions are affected by the accounting policies applied. An accounting estimate is considered critical if the estimate requires the executive management's position on matters that are subject to significant uncertainty, if different estimates could reasonably have been applied, or if changes in the estimate that would have a material impact on the financial position or results of operations are reasonably likely to occur from financial period to financial period. Our management believes that the accounting estimates employed for the historical financial statements for TORM plc are appropriate and the resulting balance sheet items are reasonable. However, future results of TORM plc could differ from original estimates requiring adjustments to balance sheet items in future periods.

Our management believes that the most significant accounting estimates and judgments relate to the assessment of whether vessels are impaired. Management changed their method of estimating one of the key assumptions utilized in the impairment assessment during the year ended December 31, 2018.

Reference is made to "Financial Review 2018—Assessment of Impairment of Assets", Note 1—" Accounting policies, critical accounting estimates and judgements" and Note 7—"Impairment Testing" in the Annual Report 2018 .

Implications of Being an Emerging Growth Company

We had less than $1 billion in revenue during our last fiscal year, which means that we are an "emerging growth company" as defined in the Jumpstart Our Business Startups Act, or JOBS Act. An emerging growth company may take advantage of specified reduced public company reporting requirements that are otherwise applicable generally to public companies. These provisions include:

exemption from the auditor attestation requirement of management's assessment of the effectiveness of the emerging growth company's internal controls over financial reporting pursuant to Section 404(b) of Sarbanes-Oxley; and

exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board, or the PCAOB, requiring mandatory audit firm rotation or a supplement to the auditor's report in which the auditor would be required to provide additional information about the audit and financial statements.

We may choose to take advantage of some or all of these reduced reporting requirements. We may take advantage of these provisions until the end of the fiscal year following the fifth anniversary of the date we first sell our common equity securities pursuant to an effective registration statement under the Securities Act or such earlier time that we are no longer an emerging growth company. We will cease to be an emerging growth company if we have more than $1 billion in "total annual gross revenues" during our most recently completed fiscal year, if we become a "large accelerated filer" with a public float of more than $700 million, or as of any date on which we have issued more than $1 billion in non-convertible debt over the three-year period prior to such date. For as long as we take advantage of the reduced reporting obligations, the information that we provide to shareholders may be different from information provided by other public companies.

In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We currently prepare our consolidated financial statements in accordance with IFRS, as issued by the IASB, which do not have separate provisions for publicly traded and private companies. However, in the event we convert to accounting principles generally accepted in the United States while we are still an emerging growth company, we may be able to take advantage of the benefits of this extended transition period and, as a result, during such time that we delay the adoption of any new or revised accounting standards, our consolidated financial statements may not be comparable to other companies that comply with all public company accounting standards. See Item 3. "Key Information—D. Risk Factors— We are an "emerging growth company" and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our Class A common shares less attractive to investors."

B.	Liquidity and Capital Resources

Overview

Our primary application of cash relates to operating expenses, financial expenses (interest payment and debt repayment) and capital expenditures, primarily investments in ships. Payment of amounts outstanding under our Financing Agreements (more fully discussed below) along with payment of charter hire for chartered-in vessels and all other commitments that we have entered into are made from the cash available to us. Our primary sources of cash are cash flows from operations, our Financing Agreements (more fully discussed below), new debt or equity financings and sale of vessels.

As of December 31, 2018, the Group had available liquidity in the form of cash and cash equivalents of $127 million and the undrawn Working Capital Facility of $75 million (discussed below). All of our credit facilities carry variable interest rates. The credit facilities are dedicated to the ongoing financing of the operation of existing vessels. The Company uses interest rate swaps to hedge parts of the variable interest rate risk associated with the credit facilities. As of December 31, 2018, we had hedged the interest rate on approximately 50% of our outstanding interest-bearing debt at an interest rate of 2.04% plus margin.

As of December 31, 2018, we had no short-term loans other than any short-term part of the facilities included in the table entitled below. See "ITEM 5— B. Liquidity and Capital Resources—Our Financing Agreements" for a description of the repayment schedule. As part of our day-to-day operations, we have accounts payables.

We plan to fund our operations as well as aggregate capital expenditures of $357 million, as of December 31, 2018, from internally generated cash flow and our borrowing under our Financing Agreements. The capital expenditures are primarily related to our obligations under the newbuilding contracts for the construction of product tanker newbuildings as well as purchase and installation of scrubbers and ballast water treatment systems.

We are of the opinion that our working capital is adequate to meet our present requirements for the next twelve months following the date of this annual report.

The table below gives an overview of our long-term bank loans and finance leases.

Financing Agreements, including long-term and short-term mortgage debt, bank loans and finance leases as of December 31, 2018 of TORM plc.

Facility ⁽¹⁾	Lenders	Maturity	Total Outstanding Debt as of December 31, 2018 (USD millions)	Undrawn Amount as of December 31, 2018 (USD millions)
Term Facility 1	Danske Bank 36.5% HSH Nordbank 33.1% SEB 13.9% DBS 9.7% HSBC 6.8%	July 13, 2021	331.3	N/A
Working Capital Facility	Danske Bank 46.2% HSH Nordbank 24.3% SEB 13.3% DBS 11.1% HSBC 5.1%	July 13, 2021	0.0	75.0
CEXIM Facility	CEXIM	November 26, 2030	111.7	N/A
Term Facility 2	Danske Bank 25.0% ABN Amro 25.0% ING 25.0% DVB 25.0%	March 31, 2022	103.7	N/A
DSF Facility	DSF	June 15, 2026	140.7	87.8
ING Facility	ING	September 8, 2024	42.0	N/A
ABN Facility	ABN AMRO	December 31, 2024	0.0	70.0
Total debt under the Debt Agreements			729.4	232.8

Finance lease - TORM Helene	Flora Co., Ltd.	March 22, 2022	7.0	N/A
Finance lease - TORM Mary	Grange Co., Ltd.	March 22, 2022	9.1	N/A
Finance lease - TORM Vita	Jellicoe Co., Ltd.	April 26, 2022	9.2	N/A
Total debt under the Debt Agreements and finance leases			754.7	232.8

⁽¹⁾ As of December 31, 2018, we had secured commitment, subject to loan documentation, for borrowings of up to $46 million from KfW, which we expect to use to partially finance the purchase price of the MR Product Tanker Newbuildings. This amount is not reflected in this table.

Our Financing Agreements

The DSF Facility

In April 2014, certain of TORM plc's vessel-owning subsidiaries, as borrowers, entered into a $150 million secured credit facility, or the DSF Facility, with Danish Ship Finance A/S, or DSF, to partially finance the purchase price of 13 of the Njord Acquisition Vessels, or the DSF Vessels (Tranche 1). The DSF Facility was amended and restated in September 2015 to increase the aggregate loan amount available to the borrower to $196 million in order to finance three of the OCM Newbuildings (Tranche 2) and again in November 2016 to increase the aggregate loan amount to $207 million to partially finance two of our MR tankers, TORM Loke and TORM Troilus (Tranche 3). On September 20, 2017, we amended and restated the DSF Facility for additional borrowings of up to $81 million to partially finance the aggregate purchase of the GSI MR Resale Newbuildings (Tranche 4), which will serve as additional collateral vessels under the facility agreement, as amended and restated. On July 20, 2018, the DSF Facility was further amended and restated to include additional borrowings of up to $7 million to finance the purchase and installation of scrubbers on the GSI MR Resale Newbuildings.

On January 5, 2018, the maturity of Tranche 1 was extended from June 2019 to December 2021.

Interest under the DSF Facility is payable quarterly in arrears at the aggregate of the applicable margin (2.5% per annum in respect of the Tranche 1 and Tranche 2; 2.6% per annum in respect of the Tranche 3; 2.35% per annum in respect of Tranche 4) and LIBOR. The DSF Facility matures in June 2026, and the loan principal is expected, as of December 31, 2018, to have the following repayment profile: 2019: $24 million; 2020: $22 million; 2021: $90 million; 2022: $22 million; 2023: $5 million; 2024: $5 million; 2025: $5 million; 2026: $55 million.

The DSF Facility is secured by:

first priority mortgages over the (i) nine Njord Acquisition Vessels (four of the initial 13 have since been sold), (ii) three OCM Newbuildings, which were delivered to us between October and November 2015, (iii) TORM Loke and TORM Troilus, and (iv) the GSI MR Resale Newbuildings ((i)-(iv) together, the DSF Collateral Vessels);

a joint and several guarantee from the vessel-owning subsidiaries of the DSF Collateral Vessels and certain related parties;

assignment of the insurances, earnings, charters and requisition compensation of the DSF Collateral Vessels;

an account security agreement in respect of all amounts standing to the credit of the deposit accounts and reserve account opened in the name of the borrower;

charges of all the issued shares of the vessel-owning subsidiaries of the DSF Collateral Vessels;

assignment and subordination of any inter-company indebtedness between the relevant obligors under the DSF Facility.

The DSF Facility contains, among other things, the following financial and other covenants:

Loan-to-value . If at any time the aggregate market value of the vessels and the value of any additional security is less than 133% of the loan amount less amounts on credit in the deposit accounts and reserve account and the value of any additional security, the borrower and guarantors shall, within 30 days of a written request, post additional security or prepay the loan to reduce the excess to zero.

Free Liquidity . Minimum unencumbered cash and cash equivalents and, for so long as the availability period under the Working Capital Facility ends at least six months after the calculation date, the undrawn commitments under the Working Capital Facility that are available for utilization, of the higher of $75 million and 5% of our total debt, of which $40 million is required to be unencumbered cash and cash equivalents.

Equity Ratio . The ratio of market value adjusted shareholders' equity to total market value adjusted assets shall be at least 25%.

Dividends . We are restricted from making any distributions, including payment of dividends and repayments of shareholders loans, except those distributions made after the first half of each of its financial years, of up to 75% of the borrower's net income (based on our June 30 or year-end financial statements, as the case may be) for that half year period, provided that, after giving effect to such distributions, the Company would not be in breach of its financial covenants contained in the DSF Facility agreement and would not cause an event of default otherwise under the facility agreement. The restrictions on dividends cease to apply at any time (i) the Group's loan-to-value ratio of the sum of the Group's borrowings less cash and cash equivalents to the aggregate market value of the Company's fleet is 50% or below.

The DSF Facility provides for voluntary prepayment, certain mandatory prepayment events and representations, general covenants and events of default provisions, including the following:

Mandatory Prepayment. The DSF Facility provides for mandatory prepayment following certain events including a change of control, TORM plc being delisted from Nasdaq Copenhagen or a sale or total loss of vessels.

Events of default. The DSF Facility contains certain events of default, including, among other things (i) non-payment of principal and interest (subject to a three-business-day grace period), (ii) breach of financial covenants, certain insurance and security undertakings and certain mandatory prepayment provisions, (iii) breach of other obligations (subject to a 10 business-day grace period if the breach is deemed capable of remedy), (iv) default of the borrower, any guarantor or any other security party on any financial indebtedness (subject to a $10 million aggregate default threshold), (v) any expropriation, attachment, sequestration, distress or execution affects the assets of the borrower, any guarantor or any other security party with an aggregate value of $10 million, (vi) change in ownership or control of a guarantor, (vii) reduction of capital in a guarantor and (viii) material adverse change. After the occurrence of an event of default which is continuing, the agent under the DSF Facility may, and shall if so directed by 66 2/3% of the lenders by notice cancel the loan commitments, declare all amounts outstanding immediately due and payable and/or exercise its rights under the security documents.

The Term Facility 1

On July 13, 2015, or the Restructuring Completion Date, we entered into a $561 million six-year term loan facility with the Participating Lenders, certain other lenders and Danske Bank as agent and security agent, or the Term Facility 1. This facility provides for quarterly fixed amortizations and matures in July 2021 with an expected payment profile as of December 31, 2018: 2019: $48 million; 2020: $48 million; and 2021: $235 million.

This facility bears interest at LIBOR plus a margin of 2.5% per annum .

In January 2016, we received consent from our lenders to amend this facility in accordance with the terms of an amendment and waiver letter. See "—Amendments to the Term Facility 1 and the Working Capital Facility", below.

The Working Capital Facility

On the Restructuring Completion Date, we entered into the Working Capital Facility with certain Participating Lenders to obtain financing for general corporate purposes. This $75 million facility has an initial term of six years. This facility bears interest at LIBOR plus a margin of 2.50% per annum . The Working Capital Facility is secured by the same assets as the Term Facility I but ranks ahead of the Term Facility I with respect to the collateral proceeds. For a description of the Term Facility security, see "—Our Financing Agreements—Term Facility 1". A commitment fee equal to 40% of the margin is payable by us with respect to any unutilized amounts under the facility and any accrued commitment fee will be payable quarterly in arrears.

The Term Facility 1 and the Working Capital Facility, which we refer to collectively as the "Restructuring Financing Agreements", are secured by:

mortgages over 41 vessels in our fleet, or the security vessels;

guarantees from each of the entities that own the vessels securing this facility and their holding companies, which we refer to collectively as the "NTF Guarantors";

first priority charges of all the issued shares of the entities that own the vessels and certain Danish holding companies;

first priority assignment of the insurances, earnings and requisition compensation relating to the security vessels.

The Restructuring Financing Agreements have, among other things, financial covenants, which are tested on a semi-annual basis:

Minimum liquidity requirement . Minimum liquidity of the higher of $75 million and, on and after six months following the Restructuring Completion Date, 5.0% of our total debt in available cash of which $20 million is required to be cash-on-hand;

Minimum leverage ratio . The ratio of market value adjusted shareholders' equity to total market value adjusted assets shall be at least 25%; and

Minimum collateral maintenance requirements . The aggregate fair market value of the secured vessels shall be at least 125% of all outstanding debt under the Restructuring Financing Agreements. The borrower and guarantors shall, within 30 days of a written request, post additional security or prepay the loan to reduce the excess to zero. The fair market value of the secured vessels shall be determined to be the average of two recent appraisals from Approved Brokers based on an arm's length charter-free transaction between a willing and able buyer and a seller not under duress.

The Restructuring Financing Agreements also contain the following covenants and default provisions including, among other things:

Mandatory prepayment . The Restructuring Financing Agreements provide for mandatory prepayment following certain events including a change of control, sale or total loss of vessels;

Events of default. The agreed events of default, which we consider to be standard for facilities of this type and nature, include (i) non-payment, (ii) breach of covenant, (iii) cross-default (subject to a $10 million threshold), (iv) insolvency or bankruptcy, (v) arrest and detention of a mortgaged vessel for a period of more than 30 days, (vi) misrepresentation, (vii) breach of a material contract, (viii) cessation of business and (ix) material adverse change. After the occurrence of an event of default which is continuing, the agents may, and shall if so directed by the 66.67% or more of the lenders cancel the loan commitments, declare all amounts outstanding immediately due and payable and/or exercise its rights under the security documents.

The Restructuring Financing Agreements also restrict our ability to:

Charter-in vessels. Our aggregate exposure for chartering-in vessels (including exposure under FFAs entered into for speculative purposes) for a remaining term that exceeds six months shall not exceed an amount equal to a charter-in day rate of $25,000 payable on 50% of all vessels owned by us for a period of 24 months (for example, if we time chartered-in vessels at an average rate of $25,000 per day over a 24-month period, we would be able to charter-in 38 vessels, including the MR Acquisition Vessels and the OCM Newbuildings); and

In January 2016, we obtained the consent of the applicable lenders under the Term Facility 1 and the Working Capital Facility to amend certain provisions in the facilities to permit, among other things: (i) the non-mandatory transfer by Njord Luxco of its current stake in TORM A/S to TORM plc in advance of completion of the Exchange Offer, (ii) the completion of the Exchange Offer, (iii) the subsequent delisting of TORM A/S from Nasdaq Copenhagen, conditioned upon the listing of TORM plc on Nasdaq Copenhagen, (iv) the transfer by TORM A/S to TORM plc of the three unencumbered newbuilding contracts of TORM A/S and six unencumbered vessels either by way of a direct transfer or indirectly via a transfer of the relevant TORM A/S subsidiary owning such vessel, (v) the payment of dividends, subject to the satisfaction of certain conditions, including notice to the facility agent under such facilities and the repayment of pre-agreed amount under the Term Facility 1 and (vi) applicable amendments to the two facilities to reflect, among other things, (i) through (v), above. We refer to these amendments, collectively, as the "Facility Amendments".

In connection with the Facility Amendments, the borrowings under the Term Facility 1 provided to us by certain lenders that did not consent to the Facility Amendments, or the Objecting Lenders, were transferred to Danske Bank under the Term Facility 1, and the Objecting Lenders were repaid in full in the amount of $21 million by Danske Bank. In connection with this transaction, we repaid $21 million of our outstanding borrowings under our $27 million facility with Danske Bank, or the Danske Bank Facility, on January 13, 2016. The purpose of this was to keep our outstanding borrowings under the Term Facility 1 unchanged and to reduce our outstanding borrowings under the Danske Bank Facility by $21 million, which we repaid in full on June 30, 2016.

In August 2016, we obtained the consent of the applicable lenders under the Restructuring Financing Agreements to amend certain provisions therein to reflect a permitted intercompany reorganization, which did not constitute a sale of any vessels mortgaged thereunder, pursuant to which Njord ceased to be a guarantor under the Restructuring Financing Agreements.

The CEXIM Facility

On July 8, 2016, one of our vessel-owning subsidiaries, as borrower, entered into a $115 million secured term loan facility with the Export-Import Bank of China, or the CEXIM Facility, which provides us with borrowings of up to $29 million per vessel to finance the purchase price of each of the LR2 Product Tankers Newbuildings under contract with GSI, which are expected to be delivered in the first half of 2018. The CEXIM Facility is guaranteed by TORM A/S and TORM plc and bears interest at a rate of LIBOR plus a margin of 2.25% per annum . Borrowings under each of the four vessel tranches are repayable in 48 equal consecutive quarterly installments and a balloon payment on November 26, 2030. The CEXIM Facility is secured by a first priority fleet mortgage over each of the LR2 Product Tanker Newbuildings, first priority share security in the shares of our vessel-owning subsidiary, account security over the earnings accounts of the borrower, charter assignments and charterer's assignments and undertakings in favor of the security agent relating to the LR2 Product Tanker Newbuildings.

The CEXIM Facility has the following financial covenants tested on a semi-annual basis which require us to maintain, among other things:

Equity Ratio. A ratio of equity to total assets of no less than 25%; and

Minimum liquidity requirement . A minimum liquidity greater than or equal to the higher of $75 million and 5% of the Group's total debt, of which at least $20 million of such liquidity shall, at all times, consist of the Group's cash and cash equivalents.

The Term Facility 2

On January 6, 2017, we entered into a $130 million syndicated term loan facility, or the Term Facility 2, with Danske Bank A/S as Agent and Security Agent and ABN AMRO NV, DVB Bank SE and ING Bank NV as arrangers and lenders. TORM plc is the borrower under this facility, which is guaranteed by TORM A/S and VesselCo 10 Pte. Ltd., our wholly-owned subsidiary and owner of the nine of our MR product tanker vessels which serve as collateral under the facility. The Term Facility 2 was entered into to partially refinance nine MR product tanker collateral vessels and for general corporate purposes. The Term Facility 2 is secured by first priority mortgages over the nine MR collateral vessels as well as first priority assignments in respect of each of the vessel's insurances, earnings, requisition compensation, bareboat charters, share security in the shares of our vessel-owning subsidiary, hedging contract assignments and intra-group loan assignments. The facility bears interest at a rate of LIBOR plus a margin of 2.75% per annum and matures on March 31, 2022. The Term Facility 2 was fully utilized on January 27, 2017, when we drew down $126 million. Borrowings under each of the nine vessel tranches are repayable in 20 equal consecutive quarterly installments of $3 million each with a balloon payment of $70 million due on the maturity date.

The facility has the following financial covenants tested on a semi-annual basis which require us to maintain, among other things:

Equity Ratio . A ratio of equity to total assets of no less than 25%; and

Minimum liquidity requirement . A minimum liquidity greater than or equal to the higher of $75 million and 5% of our total debt, of which cash and cash equivalents shall make up the greater of $40 million or 5% of our total debt.

ING Facility

On September 8, 2017, we entered into a secured term loan facility with ING Bank NV, or the ING Facility, which provides us with borrowings of up to $47 million which we have used to finance the purchase of the Hyundai Mipo MR Resale Newbuildings, or the Newbuilding Tranche, and to partially refinance outstanding indebtedness of our 2002-built MR product tanker TORM Amazon, or the Refinancing Tranche. TORM plc is the borrower under the ING Facility, and TORM A/S and our wholly-owned subsidiary which owns the security vessels serve as guarantors. The ING Facility has a term of seven years, bears interest at a rate of LIBOR plus a margin of 2.05% per annum and is repayable in quarterly installments and a balloon payment on September 4, 2024. The ING Facility is secured by first priority mortgages over the security vessels as well as first priority assignments in respect of each of the vessel's insurances, earnings and accounts, share security in the shares of our vessel-owning subsidiary and irrevocable joint and several guarantees from the guarantors. The ING Facility contains substantially the same financial covenants, default provisions, undertakings and restrictions as contained in the Term Facility 2, described above.

ABN Facility

On May 7, 2018, we entered into a secured term loan facility with ABN AMRO Bank NV, or the ABN Facility, which provides us with borrowings of up to $70 million to finance the purchase of the two LR1 Product Tankers Newbuildings and one MR Product Tanker Newbuilding under contract with GSI. The three newbuildings are expected to be delivered in the second half of 2019. TORM plc is the borrower under the ABN Facility, and TORM A/S and our wholly-owned subsidiary which owns the security vessels serve as guarantors. The ABN Facility has a term of five years, bears interest at a rate of LIBOR plus a margin of 2.10% per annum and is repayable in quarterly installments and three balloon payments five years after the drawdown on each tranche. The ABN Facility is secured by first priority mortgages over the security vessel, as well as first priority assignments in respect of each of the vessel's insurances, earnings and accounts, share security in the shares of our vessel-owning subsidiary and irrevocable joint and several guarantees from the guarantors. The ABN Facility contains substantially the same financial covenants, default provisions, undertakings and restrictions as contained in the Term Facility 2, described above.

Finance Leases

During the first and second quarters of 2017, we entered into sale and leaseback agreements and bareboat charters for the LR2 tanker, TORM Helene, and two MR tankers, TORM Mary and TORM Vita, pursuant to which we sold the vessels to Flora Co., Ltd., Grange Co Pte. Ltd, Singapore and Jellicoe Co., Ltd., respectively, and concurrently we chartered in the three vessels each for a period of 58 months from the delivery date plus 50 more days at our option. These three sale and leaseback transactions are treated as financial leases but have no purchase obligation attached. We have the option to purchase TORM Mary and TORM Helene at fixed option prices upon the expiration of the charter-in agreements on January 23, 2022 (assuming no exercise of our option to extend the charter-in period by 50 days), provided we give the respective owners prior written notice on or before November 15, 2021. We have an option to purchase TORM Vita at a fixed option price at the fourth anniversary of the delivery date, upon prior written notice on or before January 17, 2021, and again at the expiration of the charter-in period, upon prior written notice to the owner on or before January 12, 2022.

As of December 31, 2018, we were in compliance with the financial covenants contained in our debt facilities.

Cash flow

Consolidated cash flow for the years ended December 31, 2018, 2017 and 2016

For a discussion of cash flows for the year ended December 31, 2018 compared to December 31, 2017, reference is made to "Financial Review 2018⸻Liquidity and Cash Flow" on page 47 and to our Consolidated Cash Flow Statement for the Year Ended December 31, 2018 and 2017 on page 95 of our Annual Report 2018 .

For a discussion of cash flows for the year ended December 31, 2017 compared to December 31, 2016, reference is made to "Financial Review 2017 – "Liquidity and Cash Flow" on page 47 and to our Consolidated Cash Flow Statement for the Year Ended December 31, 2017 and 2016 on page 94 of our Annual Report 2017 .

There are no material restrictions on the ability of subsidiaries with material cash amounts to transfer funds to TORM plc.

Capital Expenditures of TORM plc

The table below presents our capital expenditures for the years ended December 31, 2018, 2017 and 2016.

Capital Expenditures

	Year ended December 31,
	2018		2017		2016
Capital Expenditures
(USD million)
Acquisition of vessels and capitalized dry-docking		162.7		103.1		40.8
Prepayments on newbuildings		38.9		44.3		76.9
Total		201.6		147.4		117.7

Capital expenditures for the years ended December 31, 2018, 2017 and 2016 consisted primarily of investments in vessels and capitalized dry-docking and newbuildings. For the year ended December 31, 2018, TORM's prepayments on newbuildings amounted to $45 million compared to $88 and $44 million for the years ended December 31, 2017 and 2016, respectively. For 2018, TORM plc's investments related to vessels and capitalized dry-docking amounted to $163 million compared to $103 and $41 million in 2017 and 2016, respectively. TORM invested a total of $202 million during 2018 compared to $147 and $118 million invested during 2017 and 2016, respectively.

C.	Research and Development, Patents and Licenses, etc.

Not applicable.

D.	Trend Information

Reference is made to "The Product Tanker Market" on pages 22-25 of the Annual Report 2018 and to Item 3. "Key Information—D. Risk Factors— Risks Related to Our Business and Our Industry".

E.	Off-Balance Sheet Arrangements

As of December 31, 2018, other than the ones described in "Contractual Obligations" below, we have no off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity or capital resources.

F.	Tabular Disclosure of Contractual Obligations

Reference is made to Note 17 — "Contractual Obligations" in our Annual Report 2018 .

ITEM 6.

DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.	Directors and Senior Management

Set forth below are the names, ages and positions of the Directors, Board Observers and Senior Management Team of TORM plc. Except for the B Director, who is appointed by the holder of our Class B share and is not subject to annual re-election, and who may be replaced at any time by the trustee acting on the instructions of the holders of our Class A common shares (other than Njord Luxco and its affiliates), each Director holds office for a two-year term or until his successor has been duly elected and qualified, except in the event of his death, resignation, removal or the earlier termination of his term of office. At the end of the two-year term, a Director may seek re-election.

The business address of each of our Directors and Senior Management is TORM plc, Birchin Court, 20 Birchin Lane, London, EC3V 9DU, United Kingdom.

Name	Age	Position	Date of expiry of current term (for Directors)
Christopher Helmut Boehringer	48	Chairman	2020 Annual General Meeting
David Neil Weinstein	59	Deputy Chairman (appointed by the holder of the B Share)	Serves until removed by the B shareholder
Torben Janholt	72	Board Member	2020 Annual General Meeting
Pär Göran Trapp	57	Board Member	2020 Annual General Meeting
Rasmus Johannes Skaun Hoffman	41	Board Observer (Employee Representative) ⁽¹⁾
Lars Bjørn Rasmussen	53	Board Observer (Employee Representative) ⁽¹⁾
Jeffrey Scott Stein	49	Minority B Share Board Observer ⁽¹⁾	Serves until removed by the B shareholder
Jacob Balslev Meldgaard	50	Executive Director and Chief Executive Officer of TORM A/S
Christian Søgaard-Christensen ⁽²⁾	40	Chief Financial Officer of TORM A/S
Lars Christensen	52	Senior Vice President and Head of Projects of TORM A/S
Jesper Søndergaard Jensen	49	Senior Vice President and Head of Technical Division of TORM A/S

⁽¹⁾ Board Observers are appointed by the Company's Directors and may be removed by the Directors at any time for any reason. Board Observers can attend and speak at meetings of the Board of Directors but cannot vote.

⁽²⁾ In the fourth quarter of 2018, Christian Søgaard-Christensen resigned as Chief Financial Officer of TORM A/S and principal financial officer of TORM. Mr. Søgaard-Christensen will continue his normal duties as Chief Financial Officer for a period ending no later than November 2019. TORM plans to initiate a recruitment process for a new Chief Financial Officer.

Biographical information concerning the Directors and our Senior Management Team is set forth below.

Christopher Helmut Boehringer serves and has served as Chairman of our Board of Directors since August 2015. In addition, Mr. Boehringer is Chairman of TORM’s Nomination Committee and the Remuneration Committee and a member of the Risk Committee. Mr. Boehringer is also Managing Director of Oaktree Capital Management (Intl) Limited and has held various executive positions within Oaktree since 2006. Mr. Boehringer also serves as a member of the Board of Directors of, Life Company Consolidation Group Limited and Eolia Renovables de Inversiones. Mr. Boehringer holds a Bachelor of Arts in Economics from Harvard University and a Masters of Business Administration from INSEAD.

David Neil Weinstein serves and has served as a member and Deputy Chairman of our Board of Directors since August 2015. Mr. Weinstein is in addition a member of TORM’s Audit Committee, Nomination Committee and Remuneration Committee. Mr. Weinstein is a capital markets, governance and reorganization specialist. Mr. Weinstein has had a number of Board leadership positions in inter alia Seadrill Ltd., The Oneida Group, Horizon Lines, Inc., Interstate Bakeries Corporation, Pioneer Companies, Inc. and York Research Corporation and has served as Managing Director of Calyon Securities Inc., BNP Paribas, Bank of Boston and Chase Securities Inc. Other Board directorships: Pacific Drilling S.A. Mr. Weinstein holds a Bachelor of Arts in Economics from Brandeis University and a Juris Doctor from Columbia University School of Law.

Torben Janholt serves and has served as a member of our Board of Directors since August 2015. In addition, Mr. Janholt is a member of TORM’s Audit Committee, Risk Committee and Remuneration Committee. Mr. Janholt also serves as chief executive officer of Pioneer Marine Inc., chief executive officer of Pioneer Marine Hellas S.A., chief executive officer of Just Water ApS, chairman of the board of directors of Otto Suenson & Co. A/S, and member of the board of directors of Pioneer Marine Inc. Singapore, Pioneer Marine Hellas S.A., A/S United Shipping & Trading Company, Bunker Holding A/S, Uni-Chartering A/S and Uni-Tankers A/S. Mr. Janholt has served as chairman of the board of directors of Lauritzen Tankers A/S, Lauritzen Ship Owner A/S, LB Ship Owner A/S, LK Ship Owner A/S, Shipinvest A/S, Lauritzen Offshore Services A/S and LT Ship Owner A/S and member of the board of directors of KRK 4 ApS, Shipping Holding A/S, A/S Dan-bunkering Ltd., Shipping.dk Chartering A/S, Ship-ping.dk A/S, Shipping.dk Køge A/S, Grenå Stevedore- og Pakhusforretning ApS, Fin-Trans A/S, A/S Global Risk Management Ltd., Sønderjyllands-Terminalen A/S, Bunker Holding Estate A/S, Jyllands-Terminalen A/S, Shipping.dk Aabenraa A/S, CVR: 87137511, Brilliant Maritime Services S.A. ApS, Lauritzen Tankers Ship Owner A/S, Axis Offshore A/S, Shipping.dk Road Division A/S, Lauritzen Reefers A/S, CVR nr.: 15251549, Shipping.dk Middelfart A/S, Outforce A/S, Shipping.dk Kalundborg A/S, LB Ship Owner II A/S, KPI Bridge Oil A/S and Lloyd Copenhagen ApS. In addition, Mr. Janholt has served as a member of the executive management of KRK 4 ApS, Axis Offshore A/S, Lauritzen Reefers A/S, CVR: 15251549, LB Ship Owner II A/S, Lauritzen Offshore Services A/S and J. Lauritzen A/S. Mr. Janholt holds a Certificate in Business Administration from Niels Brock Business College, Denmark and has attended Executive Management Programs at IESE in Spain, Harvard Board education course in Copenhagen, IMD in Switzerland and CEDEP/INSEAD Management School in France.

Pär Göran Trapp serves and has served as a member of our Board of Directors since August 2015. In addition Mr. Trapp is Chairman of TORM’s Audit Committee and Risk Committee. Mr. Trapp was with Morgan Stanley from 1992 to 2013 where he started as crude oil trader, then became Head of Oil Products Trading Europe & Asia, Global Head of Oil Trading and Head of Commodities EMEA. Prior to joining Morgan Stanley, Mr. Trapp was crude oil trader at Statoil. Other Board directorships: Chairman of Madrague Capital Partners AB, Board member of Energex Partners Ltd. Mr. Trapp holds a Master of Science degree in Economics and Business Administration from the Stockholm School of Economics.

Rasmus Johannes Skaun Hoffmann is and has been a Board Observer since April 2016 and before that time served as a member of our Board of Directors since April 2011. Mr. Hoffman has been employed with us since 2003 and serves as chief engineer. Mr. Hoffman also serves on the Board of Directors of TORM A/S.

Lars Bjørn Rasmussen is and has been a Board Observer since July 2017. Mr. Rasmussen has been employed with us since 1999 and serves as chief engineer. Mr. Rasmussen also serves on the Board of Directors of TORM A/S.

Jeffrey Scott Stein is and has been a Board Observer since November 2015. Mr. Stein is the founder of Stein Advisors LLC where he has served as Managing Partner since 2010. Prior to 2010, Mr. Stein co-founded and served as a Principal at Durham Asset Management LLC, as a Managing Director and Co-Director of Research at The Delaware Bay Company, Inc. and as an Associate/Assistant Vice President at Shearson Lehman Brothers. Mr. Stein also serves as the Chairman of Ambac Financial Group, Inc and as a board member of Dynegy Inc. and Westmoreland Coal Company. Mr. Stein holds a Bachelor of Arts in Economics from Brandeis University and a Masters of Business Administration from New York University, Stern School of Business in the United States.

Jacob Balslev Meldgaard serves and has served as the Chief Executive Officer of TORM A/S since April 2010. Prior to joining the Company, Meldgaard served as executive vice president and as a member of the executive management of Dampskibsselskabet NORDEN A/S. Mr. Meldgaard is also a member of the Board of Directors of the Danish Shipping, Danish Ship Finance A/S, Syfoglomad Limited and the TORM Foundation. Mr. Meldgaard holds a Bachelor of Commerce degree in international trade from Copenhagen Business School, Denmark and attended the Advanced Management Program at Wharton Business School and Harvard Business School in the United States.

Christian Søgaard-Christensen serves and has served as the Chief Financial Officer of TORM A/S since May 2016. Mr. Søgaard-Christensen joined TORM in March 2010 and before serving as Chief Financial Officer he served as Senior Vice President and Head of Corporate Support. Prior to joining the Company, Mr. Søgaard-Christensen served as a consultant at McKinsey & Company. Mr. Søgaard-Christensen also serves as the Chairman of the board of directors of TORM A/S and is a member of the board of directors of Intertec Africa Limited. Mr. Søgaard-Christensen holds a Bachelor of Science in Philosophy and Business Administration from Copenhagen Business School, Denmark, a Master of Science in International Business from Copenhagen Business School, Denmark and has attended Executive Management Programs at London Business School, England and Harvard Law School in the United States. In December 2018, Mr. Søgaard-Christensen tendered his resignation as Chief Financial Officer in TORM A/S; however, he will continue his normal duties during a transition period.

Lars Christensen serves and has served as the Senior Vice President and Head of Projects of TORM A/S since May 2011. Prior to joining the Company, Mr. Christensen served as Managing Director of Navitaship, Vice President of Maersk Broker, Manager at Maersk K.K and Shipbroker at EA Gibson Shipbrokers. Mr. Christensen holds a Certificate in international trade from Copenhagen Business School in Denmark, a Masters of Business Administration from IMD in Switzerland and attended the Executive Management Program at Columbia Business School in the United States.

Jesper Søndergaard Jensen serves and has served as the Senior Vice President and Head of Technical Division of TORM A/S since September 2014. Prior to joining the Company, Mr. Jensen served as Senior Vice President and Technical Manager at Clipper Group and Fleet Group Manager, Manager and Chief Engineer at Maersk Group. Mr. Jensen holds a Bachelor of Technology Management degree in Marine Engineering from the Maritime and Polytechnic College in Denmark and an Executive Masters of Business Administration from Henley Business School in the United Kingdom.

B.	Compensation

At the general meeting held on April 12, 2018, our shareholders approved an updated remuneration policy, with effect from the date of the meeting, which includes overall guidelines for incentive pay for the Board of Directors and our Senior Management Team (defined below). The Company is required, under the UK Companies Act 2006, to prepare a Remuneration Report for each financial year.

For information about compensation to our non-executive directors, reference is made to page 77 of the "Annual Report on Remuneration" in the Annual Report 2018 .

Executive Management Compensation

Our Senior Management Team, which is comprised of Jacob Meldgaard, our Executive Director and principal executive officer of TORM plc and the Chief Executive Officer of TORM A/S, Christian Søgaard-Christensen, our principal financial officer and the Chief Financial Officer of TORM A/S, Jesper Jensen, the Head of the Technical Division of TORM A/S and Lars Christensen, the Head of Projects of TORM A/S, receive compensation consisting of a fixed base salary, cash-based bonus incentives paid out in 2018 under our performance bonus program, discussed below, and customary executive fringe benefits. We have not granted loans, issued guarantees or undertaken similar obligations to or on behalf of members of our Senior Management Team. Christian Søgaard-Christensen tendered his resignation as Chief Financial Officer (CFO) in TORM A/S, however, he will continue his normal duties as CFO during a transition period.

In 2018, the aggregate compensation paid by the Group to Jacob Meldgaard for his role as Executive Director and principal executive officer of TORM plc and as the Chief Executive Officer of TORM A/S amounted to $ 1,535,000, which includes the fee payable to Mr. Meldgaard for his service on the Board of Directors. We have not allocated funds to provide pension, retirement or similar benefits to Mr. Meldgaard.

In 2018, the aggregate compensation paid by the Group to the other members of our Senior Management Team (excluding Mr. Meldgaard) was $ 2,186,679, which includes an aggregate of $ 125,959 allocated for pensions for these individuals.

Incentive Schemes

Compensation of our Senior Management Team includes the eligibility to participate in a variable incentive-based pay with a combination of share options, restricted share units and other share-based awards. We have in place a Long-Term Incentive Plan, or the LTIP, pursuant to which our Board of Directors may grant certain employees and executive officers share options, restricted share units, or RSUs, in the form of restricted stock options, or other share-based awards. See Item 10. "Additional Information".

For information on RSUs granted to Mr. Meldgaard pursuant to the LTIP, reference is made to the "Annual Report on Remuneration—Long-Term Incentive Plan—Restricted Share Units Granted" on page 76 of the Annual Report 2018 .

During 2018, the members of our Senior Management Team other than Mr. Meldgaard were granted an aggregate of 340,267 RSUs as part of each executive's annual grant. Each RSU entitles the other members of our Senior Management Team to acquire one Class A common share, subject to a three-year vesting period, with one third of the grant amount vesting at each anniversary date. Vested RSUs may be exercised at a price of DKK 53.7 per Class A common share for a period of twelve months after the vesting date. Assuming 100% vesting and based on the Black-Scholes model, the aggregate RSU grant in 2018 to the other members of our Senior Management Team would be approximately $ 606,564.

Performance Bonus Program 2018

For information on the cash performance bonus received by Mr. Meldgaard for the financial year 2018, reference is made to the "Annual Report on Remuneration—Performance Bonus 2018" on page 75 of the Annual Report 2018 .

During the financial year 2018, the members of our Senior Management Team other than Mr. Meldgaard received cash performance bonuses in an aggregate amount of $714,940 which is directly linked to the fulfillment of specific performance metrics, which include developments in the price of our shares and our cost base (up to 50% of the base salary of each executive).

C.	Board Practices

Our Board of Directors maintains overall responsibility for the Company and its strategy and is entrusted with various tasks including appointment and supervision of our Executive Director, Mr. Jacob Meldgaard, and establishment of strategic, accounting, organizational and financial policies.

Our Board of Directors has delegated the day-to-day management of our business to our Executive Director. This includes our operational development and responsibility for implementing the strategies and overall decisions approved by the Board of Directors. The Executive Director also serves the position as Chief Executive Officer of TORM A/S, our largest subsidiary. Transactions of an unusual nature or of major importance may only be effected by our Executive Director on the basis of a special authorization granted by our Board of Directors. In the event that certain transactions cannot await approval by our Board of Directors, taking into consideration the best interests of the Company, our Executive Director, to the extent possible, shall obtain the approval of the Chairman of our Board of Directors and ensure that the Board of Directors is subsequently given notice of such transactions passed. Transactions of an unusual nature or of major importance are defined in our board guidelines for our Board of Directors and include, among other things, the acquisition and disposal of vessels.

For a description and terms of reference of the committees of our Board of Directors, reference is made to "Corporate Governance—Board Committees" on page 57 and the individual reports of our Audit Committee, Risk Committee, Nomination Committee and Remuneration Committee on pages 61-80 of our Annual Report 2018 .

Employment Agreements

Mr. Jacob Meldgaard

We may dismiss Mr. Meldgaard with twelve months' notice to the end of a month, and Mr. Meldgaard may terminate his contract with six months' notice to the end of a month. Mr. Meldgaard is not entitled to other kinds of remuneration resulting from a retirement from the Company other than performance bonuses earned, if any.

Mr. Meldgaard is subject to global non-competition and non-solicitation clauses for a period of twelve months. For the effective period of these clauses, Mr. Meldgaard is entitled to a monthly compensation corresponding to 100% of his base salary. The non-competition clause may be terminated with one month's notice. However, whether one or both of the non-competition and non-solicitation clauses are effective, the compensation only becomes payable once.

In case of a change of control, as further defined in Mr. Meldgaard's service agreement, Mr. Meldgaard may, within three months from the date of the change, terminate his employment with six months' notice, in which case certain non-competition and non-solicitation clauses will be shortened.

Under mandatory Danish law, non-competition clauses cannot be enforced after expiry of the notice period if the termination is effected by the Company without Mr. Meldgaard having given reasonable cause for the dismissal.

Other Members of the Senior Management Team

We may dismiss the other members of the Senior Management Team (excluding Mr. Meldgaard) with nine to twelve months' notice (varying length depending on position and seniority) to the end of a month. Each of these executives may all terminate his contract with four to six months' notice (varying length depending on position) to the end of a month.

Based on the current seniority, these current members of our Senior Management Team are not entitled to other kinds of remuneration upon retirement from the Company, other than performance bonuses earned, if any.

These other members of the Senior Management Team are subject to global non-competition clauses for a period of up to twelve months (depending on position). For the effective period of the clauses, these other members of the Senior Management Team are entitled to a monthly compensation corresponding to 100% of their respective base salary.

The non-competition clauses may be terminated. Under mandatory Danish law, non-competition clauses cannot be enforced after expiry of the notice period if the termination is effected by the Company without the members of the Senior Management Team having given reasonable cause for their dismissal.

Employees

As of December 31, 2018, we employed approximately 307 people in our offices in Denmark, India, the Philippines, Singapore and the United States, excluding seafarers, who work on our vessels.

E.	Share Ownership

The table below shows, in relation to each of our directors and members of our Senior Management Team, the total number of shares owned and the total number of Restricted Share Units, or RSUs, held as of March 5, 2019. The RSUs granted to our Executive Director, Jacob Meldgaard, were received for his role as Chief Executive Officer of TORM A/S.

Directors and Executive officers	Class A Common shares held		Unvested RSUs		Vested RSUs
Christopher H. Boehringer		21,204		0
David Weinstein		0		0
Göran Trapp		12,820		0
Torben Janholt		26		0
Jacob Meldgaard		66		510,690		255,345
All other executive officers in the aggregate		*		333,178		297,734

*Our remaining executive officers individually each own less than 1% of our outstanding shares.

ITEM 7.

MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.	Major Shareholders

The following table sets forth the beneficial ownership of our Class A common shares, par value $0.01 per share, as of the date of this annual report, by beneficial owners of 5% or more of the common shares. All of our shareholders, including the shareholders listed in the table below, are entitled to one vote for each share held (excluding the B share and the C share).

	Class A Common Shares Beneficially Owned
Name	Number		Percentage ⁽¹⁾
Njord Luxco ^(2)(4)(5)		47,600,172		64.4	%
DW Partners, LP ⁽³⁾⁽⁴⁾		4,177,652		5.7	%

_________________________

(1)	Calculated based on 73,905,975 common shares (excluding treasury shares) outstanding as of December 31, 2018 (and assuming no Consideration Warrants or Restricted Share Units (RSUs) are exercised).

(2)

According to the Schedule 13D filed with the SEC on February 5, 2018, the business address of Njord Luxco is OCM Njord Holdings S.à.r.l, 26A, Boulevard Royal L-2449, Luxembourg, Luxembourg. The majority shareholder of Njord Holdings is OCM Luxembourg OPPS IX S.à.r.l. The majority shareholder of OCM Luxembourg OPPS IX S.à.r.l is Oaktree Opportunities Fund IX, L.P. The general partner of Oaktree Opportunities Fund IX, L.P. is Oaktree Opportunities Fund IX GP, L.P. The general partner of Oaktree Opportunities Fund IX GP, L.P. is Oaktree Opportunities Fund IX GP, Ltd. The sole director of Oaktree Opportunities Fund IX GP, Ltd. is Oaktree Capital Management, L.P. The general partner of Oaktree Capital Management, L.P. is Oaktree Holdings, Inc. The sole shareholder of Oaktree Holdings, Inc. is Oaktree Capital Group, LLC. The duly appointed manager of Oaktree Capital Group LLC is Oaktree Capital Group Holdings GP, LLC. The members of the executive committee of Oaktree Capital Group Holdings GP, LLC are Howard S. Marks, Bruce A. Karsh, Jay S. Wintrob, John B. Frank and Sheldon M. Stone who, by virtue of their membership on the executive committee, may be deemed to share voting and dispositive power with respect to the shares of TORM plc held by Njord Holdings. The address for all of the entities and individuals identified above is c/o Oaktree Capital Management, L.P., 333 S. Grand Avenue, 28th Floor, Los Angeles, California 90071.

(3)

According to the Schedule 13G filed with the SEC on February 14, 2019, DW Partners, LP (“DW”) and DW Investment Partners, LLC, the general partner of DW (“DWIP”) beneficially own 4,177,652 Class A common shares. DW, as the investment adviser to the ultimate beneficial owners of such common shares (the “Funds”), may direct the voting and disposition of the 4,177,652 common shares held by the Funds. DWIP, as the general partner of DW, may direct DW as to the voting and disposition of the 4,177,652 Common Shares held by the Funds. The business address of DW and DWIP is 590 Madison Avenue, 13th Floor, New York, NY 10022.

(4)

Njord Luxco is the holder of the sole outstanding Class C share. The Class C share has 350,000,000 votes at the general meeting in respect of specified matters, including election of members to our Board of Directors (other than the Deputy Chairman) and certain amendments to the Articles of Association. See Item 10. "Additional Information—A. Share Capital —Our Shares—Class C Share".

As of December 31, 2018, we had 4,711,953 warrants outstanding with each warrant being convertible into one Class A common share, par value $0.01 per share, and which can be exercised until July 13, 2020. As of December 31, 2018, we have a total of 2,719,042 RSUs outstanding. Subject to vesting, each RSU entitles the holder to acquire one Class A common share. Assuming the exercise of all of our outstanding warrants and full vesting and exercise of our outstanding RSUs, this would result in the issuance of 7,430,995 additional Class A common shares representing approximately 9% of our issued and outstanding Class A common shares.

The sole outstanding B share is held by a trustee on behalf of non-Oaktree shareholders to provide certain minority protections. The B Share has one vote at the general meeting and the right to elect the Deputy Chairman of our Board of Directors and one Board Observer, both of which have been elected. See Item 10. "Additional Information—A. Share Capital —Our Shares—Class B Share".

B.	Related Party Transactions

Remuneration of our directors and executive management is disclosed in Item 6. "Directors, Senior Management and Employees—B. Compensation".

Mr. Boehringer is a partner and a managing director of Oaktree Capital Management (U.K.) LLP. Oaktree affiliates manage (indirectly) the Company's controlling shareholder, Njord Luxco. Oaktree has interests in numerous businesses, including businesses which may compete directly or indirectly with the group. Mr. Boehringer may from time to time be involved in influencing the business or strategy of such businesses.

On January 26, 2018, we completed a Private Placement of 11,920,000 Class A common shares for gross proceeds of approximately $100 million. The Private Placement was fully backstopped by Njord Luxco, which purchased approximately $70 million of our Class A common shares in the Private Placement. Following the Private Placement and as of the date of this annual report, Njord Luxco owns approximately 64.4% of our outstanding Class A Common Shares.

In connection with the $100 million equity raise completed in January 2018, Oaktree Capital Management, an entity affiliated with TORM’s largest shareholder, OCM Njord Holdings S.à r.l., received a fee of $1.25 million from us in return for fully backstopping the transaction.

To our knowledge, there have been no other transactions with related parties during the periods required to be presented.

C.	Interest of Experts and Counsel

Not applicable.

ITEM 8.

FINANCIAL INFORMATION

A.	Consolidated Statements and other Financial Information

Please see the section of this annual report on Form 20-F entitled Item 18 – "Financial Statements".

Legal Proceedings

We are from time to time and currently a party to various legal proceedings arising in the ordinary course of business. We seek to maintain commercial liability insurance for such cases, and to the extent that we find that a specific claim is covered by insurance, our policy is to make no reservations in our accounts except for other related costs such as deductibles payable by us under the insurance policies.

The Group is involved in some legal proceedings and disputes. It is management's opinion that the outcome of these proceedings and disputes should not have any material impact on the Group's financial position, results of operations and cash flows.

Distribution Policy

Reference is made to "Investor Information—Distribution Policy" on page 81 of our Annual Report 2018 .

Our Board of Directors may, in its sole discretion, from time to time, declare and distribute dividends in accordance with our Articles of Association and applicable law. Any decision to distribute dividends will be at the sole discretion of the Board of Directors. Dividends which are declared as interim dividends do not need to be approved by the shareholders at our annual general meeting.

We can give no assurance that dividends will be declared and paid in the future or the amount of such dividends if declared and paid. For a discussion of certain risk factors that may affect our ability to pay dividends, see Item 3. "Key Information—A. Risk Factors". For a description of the restrictions on the payment of dividends contained in our financing agreements, see Item 5. "Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Our Financing Agreements". For a discussion of the material tax consequences regarding the receipt of dividends we may declare, see Item 10. "Additional Information— E. "Taxation".

B.	Significant Changes

Not applicable.

ITEM 9.

THE OFFER AND LISTING

A.	Offer and Listing Details

Share History and Markets

Our Class A common shares currently trade on Nasdaq Copenhagen A/S under the symbol "TRMD A" and on Nasdaq New York under the symbol "TRMD". The B share, C share and warrants are not listed for trading on any exchange. See Item 10. "Additional Information".

B.	Plan of Distribution

Not applicable.

Markets

Our Class A common shares currently trade on Nasdaq Copenhagen A/S under the symbol "TRMD A" and on Nasdaq New York under the symbol "TRMD".

D.	Selling Shareholders

Not applicable.

Dilution

Not applicable.

F.	Expenses of the Issue

Not applicable.

ITEM 10.

ADDITIONAL INFORMATION

A.	Share Capital

Issued and Authorized Capitalization

As of December 31, 2018 and as of the date of this annual report, our share capital consists of 74,218,846 Class A common shares, par value $0.01 per share, one Class B share, par value $0.01 per share, and one Class C share, par value $0.01 per share. As of the date of this annual report, we have 312,871 treasury shares.

At the Company's 2016 Annual General Meeting of Shareholders, the Board of Directors was granted certain authorizations to increase our issued share capital, both with and without pre-emption rights to the existing shareholders. These share authorities expire on March 14, 2021. The Board of Directors did not seek new authorities at the Company's 2017 Annual General Meeting, which took place on April 4, 2017. For a description of the share authorities granted to our Board of Directors, reference is made to "Director's Report—Share Capital" on pages 84-86 of our Annual Report 2018.

Our Shares

Class A common shares. Each outstanding Class A common share, par value $0.01 per share, has (i) on a poll, one (1) vote on all matters at the general meeting (other than the election or removal of the Deputy Chairman), (ii) pre-emption rights upon any new issue of equity securities (including Class A common shares) for cash (unless otherwise provided by the UK Companies Act or our Articles of Association or as disapplied by the relevant shareholders' resolution) and (iii) the right to receive dividends, as well as liquidation proceeds and other distributions, that we may declare from time to time. The Class A common shares are not redeemable, either in full or in part.

Class B share. The one outstanding Class B share, par value $0.01, is held by a trustee on behalf of our minority shareholders (the Class A common shareholders other than Njord Luxco or its affiliates) pursuant to the terms of a minority trust deed, which is filed as Exhibit 2.2 to this annual report. The Class B share has (i) one vote at our general meetings, (ii) no pre-emptive subscription rights in relation to any issue of new shares of other classes and (iii) effectively carries no right to receive dividends, liquidation proceeds or other distributions from us. The holder of the Class B share has the right to elect one member to our Board of Directors (the Deputy Chairman) as well as appoint one Board Observer. Currently, David Weinstein serves as the Class B share elected director, and Jeffrey Stein is the appointed Board Observer. The Class B share may not be transferred or pledged, except for a transfer to a replacement trustee or a redemption by us. The Class B share is required to be redeemed when the Class C share is redeemed. The trustee is required to exercise its rights as holder of the Class B share at the direction of such minority shareholders. Such minority shareholders are able to direct the trustee as the holder of the Class B share by responding to a directions request distributed to such minority shareholders in accordance with the terms of the minority trust deed.

Class C share. The one outstanding Class C share, par value $0.01, is held by Njord Luxco. The holder of the Class C share has 350,000,000 votes at our general meetings on specified matters, described below. Based on Njord Luxco's share ownership as of the date of this annual report of 47,600,172 Class A common shares and the C share, Njord Luxco has 397,600,172 votes.

The Class C share has no pre-emption rights in relation to any issue of new shares of other classes and effectively carries no right to receive dividends, liquidation proceeds or other distributions from us. The Class C share may not be transferred or pledged, except to an affiliate of Njord Luxco or pursuant to redemption by us. The Class C will be automatically redeemed when Njord Luxco and its affiliates cease to beneficially own at least one third of our issued Class A common shares. The voting rights attached to the Class C share have the practical effect of allowing Njord Luxco to control the Board of Directors of TORM plc and to make amendments to the Articles of Association proposed by the Board of Directors, other than amendments to the minority protections. Even when Njord Luxco holds only a third of the issued Class A common shares, the votes cast by Njord Luxco would represent approximately 88.3% of the votes that may be cast on resolutions on which the Class C share may vote.

The reserved matters set forth in our Articles of Association require either the approval of a majority of our Board including our Chairman and Deputy Chairman or the approval of a resolution approved by at least 70% or 86% of the votes capable of being cast. Please see Item. 10. "Additional Information— B. Memorandum and Articles of Association".

Our Share History

Reference is made to "Investor Information—Changes to the Share Capital" on page 81 of the Annual Report 2018.

Treasury Shares

As of December 31, 2018, we have 312,871 treasury shares.

Warrants

As part of the 2015 Restructuring, TORM A/S issued 7,181,578,089 Consideration Warrants each entitling the holder thereof to subscribe for one new Danish A share, par value DKK 0.01, without pre-emption rights for TORM A/S' existing shareholders. Those Consideration Warrants were consolidated on a 1,500 for one basis with effect as of September 24, 2015. On closing of the Exchange Offer, each Consideration Warrant that was assented to the Exchange Offer was exchanged for an equivalent warrant in TORM plc. Exchanged Consideration Warrants in TORM A/S were cancelled. As part of the Exchange Offer, the Consideration Warrants could be exchanged on a one-for-one basis for an equivalent TORM plc warrant or, if unexercised during the four weeks following the closing of the Exchange Offer, the Consideration Warrants lapsed automatically without compensation. As of December 31, 2018, there were 4,711,953 warrants outstanding with each warrant being convertible into one Class A common share, par value $0.01 per share, against payment of a subscription price of DKK 95.2.

Following the Private Placement in January 2018 and pursuant to the terms of the instrument governing our warrants, the number and subscription price of the warrants were adjusted. As of the date of this annual report, there are 4,711,953 warrants outstanding with each warrant being convertible into one Class A common share, par value $0.01 per share, against payment of a subscription price of DKK 95.24. The warrants can be exercised until July 13, 2020.

Restricted Share Units

In accordance with TORM’s Remuneration Policy, the Board of Directors has, as part of the Long-Term Incentive Program (LTIP), granted certain employees Restricted Share Units (RSUs) in the form of restricted stock options. The RSUs aim at retaining and incentivizing the employees to seek to improve the performance of TORM and thereby the TORM share price for the mutual benefit of themselves and the shareholders of TORM. Each RSU granted under the LTIP entitles its holder to acquire one Class A common share, subject to vesting.

In 2016, the Board agreed to grant a total of 850,667 RSUs to other members of management and an additional 1,276,725 RSUs to the Executive Director. The RSUs to other members of management were subject to a three-year vesting period, with one-third of the grant amount vesting at each anniversary date beginning on January 1, 2017. The exercise price of each vested RSU, following certain adjustments for dividends, is DKK 93.6 and they have an exercise period of six months. For the Executive Director, the grant was subject to a five-year vesting period and the exercise period was one year with the remaining terms being similar to the RSUs granted to the other members of management.

In 2017, the Board agreed to grant a total of 866,617 RSUs to other members of management on similar terms as the 2016 grant with a three-year vesting period, an exercise price of DKK 93.6 and an exercise period of six months.

In 2018 the Board agreed to grant a total of 944,468 RSUs to other members of management and an additional 766,035 RSUs to the Executive Director. The RSUs to both other management and the Executive Director were subject to a three-year vesting period, with one-third of the grant amount vesting at each anniversary date beginning on January 1, 2019. The exercise price of each vested RSU is DKK 53.7, which corresponds to the daily average closing price on Nasdaq Copenhagen across the 90-calendar day period before the date of the General Meeting on April 12, 2018 plus a premium of 15%. Vested RSUs may be exercised for a period of 360 days after each vesting date. The grant to the Executive Director represented the unvested portion, or approximately 60%, of the RSUs that he was granted in 2016, which were subject to a five-year vesting period, and which he has agreed not to exercise.

As of 31 December 2018, 2,719,042 RSUs were outstanding and zero of the 2016, 2017 and 2018 RSUs have been exercised. Based on the Black-Scholes model, the theoretical market value of the RSU allocations in 2016, 2017 and 2018, around the time of issuance, was calculated at $5.0 million, $1.0 million, $2.3 million, respectively. See Item 6. "Directors, Senior Management and Employees—B. Compensation" and "—E. Share Ownership".

B.	Memorandum and Articles of Association

The description of TORM plc's Memorandum and Articles of Association is incorporated by reference to our Registration Statement on Form 20-F (Registration No. 001-38294), as amended, which was filed with the Securities and Exchange Commission on November 24, 2017, and which we refer to as the 20-F Registration Statement. The Company's Articles of Association were filed as Exhibit 1.1 to the 20-F Registration Statement and are hereby incorporated by reference into this annual report.

C.	Material Contracts

Attached as exhibits to this annual report are the contracts we consider to be both material and outside the ordinary course of business. Descriptions are included within Item 5. "Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Our Financing Agreements" with respect to our credit facilities, and Item 7. “Major Shareholders and Related Party Transactions—B. Related Party Transactions” with respect to our related party transactions. Other than these contracts, we have no other material contracts, other than contracts entered into in the ordinary course of business, to which we are a party.

D.	Exchange Controls

Under U.K. law, there are currently no restrictions on the export or import of capital, including foreign exchange controls or restrictions, that affect the remittance of dividends, interest or other payments to non-resident holders of our common shares.

Taxation

U.S. Federal Income Tax Considerations

The following are the material U.S. federal income tax consequences to us and our U.S. Holders and Non-U.S. Holders, each as defined below, of our activities and the ownership and disposition of our common shares. This discussion does not purport to deal with the tax consequences of owning common shares relevant to all categories of investors, some of which, such as banks, insurance companies, real estate investment trusts, regulated investment companies, grantor trusts, tax-exempt organizations, dealers in securities or currencies, traders in securities that elect the mark-to-market method of accounting for their securities, investors whose functional currency is not the U.S. dollar, investors that are or own our common shares through partnerships or other pass-through entities, investors that own, actually or under applicable constructive ownership rules, 10% or more of our common shares, persons that will hold the common shares as part of a hedging transaction, "straddle" or "conversion transaction," persons who are deemed to sell the common shares under constructive sale rules, persons required to recognize income for U.S. federal income tax purposes no later than the taxable year in which such income is included on an “applicable financial statement” and persons who are liable for the alternative minimum tax may be subject to special rules. The following discussion of United States federal income tax matters is based on the U.S. Internal Revenue Code of 1986, as amended, or the Code, judicial decisions, administrative pronouncements, and existing and proposed regulations issued by the United States Department of the Treasury, or the Treasury Regulations, all as in effect or in existence on the date of this annual report, and all of which are subject to change, possibly with retroactive effect. This discussion does not address any aspect of state, local or any U.S. federal tax considerations other than income taxation, such as estate or gift taxation or unearned income Medicare contribution taxation. This discussion deals only with holders who purchase common shares in connection with this offering and hold the common shares as a capital asset. The discussion below is based, in part, on the description of our business as described in this annual report and assumes that we conduct our business as described in this annual report. Unless otherwise noted, references in the following discussion to the "Company," "we," "our," and "us" are to TORM plc and its subsidiaries on a consolidated basis.

United States Federal Income Taxation of the Company

Taxation of Operating Income: In General

We anticipate that substantially all of our gross income will be derived from the use and operation of vessels in international commerce, and that this income will principally consist of freights from the transportation of cargos, hire or lease income from voyage or time charters and the performance of services directly related thereto, which we refer to as "shipping income". Unless exempt from U.S. federal income taxation under Section 883 of the Code, under Article 8 of the U.S.-United Kingdom Income Tax Treaty or under Article 8 of the U.S.-Denmark Income Tax Treaty, we will be subject to U.S. federal income taxation, in the manner discussed below, to the extent our shipping income is considered for U.S. federal income tax purposes to be derived from sources within the United States.

Shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States will be considered for U.S. federal income tax purposes to be 50% derived from sources within the United States. Shipping income attributable to transportation that both begins and ends in the United States will be considered to be 100% derived from sources within the United States. We are not permitted by law to engage in transportation that gives rise to 100% U.S. source shipping income.

Shipping income attributable to transportation exclusively between non-U.S. ports will be considered to be 100% derived from sources outside the United States. Shipping income derived from sources outside the United States will not be subject to any U.S. federal income tax.

We do not believe that we or our subsidiaries will qualify for exemption from tax under Section 883, although we and our subsidiaries may qualify in the future if there is a change in our capital structure. See below for a discussion of the requirements for qualification under Section 883.

We and/or one or more of our subsidiaries (collectively referred to as "we" for purposes of this paragraph) may qualify for exemption from tax under the terms of the U.S.-UK Income Tax Treaty or U.S.-Denmark Income Tax Treaty. Whether we so qualify depends, among other things, on whether we satisfy the Limitation on Benefits article of the applicable U.S. income tax treaty. In particular, we would generally satisfy the Limitation on Benefits article if we can establish that we are engaged in the active conduct of a trade or business in the UK or Denmark, whichever is applicable, our U.S. source shipping income is derived in connection with, or is incidental to, such trade or business, and such trade or business activity in the applicable treaty jurisdiction is substantial in relation to our trade or business activity in the United States. Additionally, we may also be able to satisfy the Limitation on Benefits article of the U.S.-Denmark Income Tax Treaty if we can establish that our principal class of shares is regularly traded on a recognized stock exchange, such as Nasdaq Copenhagen. For this purpose, our Class A Common Shares would generally be considered our primary class of shares if the Class A Common Shares represent more than 50% of the voting power and value of the Company. Additionally for this purpose, our Class A Common Shares would be treated as regularly traded if the Class A Common Shares are traded in more than de minimis quantities each quarter, and if the aggregate number of Class A Common Shares traded during the prior taxable year is at least 6% of the average number of Class A Common Shares during such prior taxable year. Given the legal and factual uncertainties in making the foregoing determination, there can be no assurance that we will qualify for exemption from tax under a U.S. income tax treaty, or that the IRS or a court of law will agree with our determination in this regard.

Exemption Under Section 883 of the Code

Under Section 883 of the Code and the Treasury Regulations promulgated thereunder, or "Section 883," we and each of our subsidiaries that derives U.S. source shipping income will qualify for exemption from U.S. federal income tax under Section 883 in respect of such shipping income if, in relevant part:

we and each such subsidiary is organized in a "qualified foreign country" which, as defined, is a foreign country that grants an equivalent exemption from tax to corporations organized in the United States in respect of the shipping income for which exemption is being claimed under Section 883, which we refer to as the "country of organization requirement"; and either

more than 50% of the value of our stock is owned actually or constructively under specified attribution rules by "qualified shareholders" (which as defined includes, among other things, individuals who are "residents" of qualified foreign countries and corporations that are organized in qualified foreign countries and meet the Publicly-Traded Test discussed immediately below), which we refer to as the "50% Ownership Test," or

our stock is "primarily" and "regularly" traded on an "established securities market" in our country of organization, in another country that grants an "equivalent exemption" to U.S. corporations or in the United States, which we refer to as the "Publicly-Traded Test".

As the IRS has recognized the United Kingdom, our country of incorporation, and each of the countries of incorporation of our subsidiaries, including Denmark, as a qualified foreign country in respect of the shipping income for which exemption is being claimed under Section 883, we and each of our subsidiaries satisfy the country of organization requirement. Therefore, we and each of our subsidiaries will be exempt from U.S. federal income tax with respect to our U.S. source shipping income if we and each of our subsidiaries satisfy either the "50% Ownership Test" or the "Publicly-Traded Test" and certain substantiation and reporting requirements are met. We do not anticipate satisfying the 50% Ownership Test. Our ability to satisfy the Publicly-Traded Test is discussed below.

The Treasury Regulations provide, in pertinent part, that a class of stock of a foreign corporation will be considered to be "primarily traded" on an established securities market in a country (such as Nasdaq Copenhagen) if the exchange is designated under a Limitations on Benefits article in a United States income tax treaty, and if the number of shares of such class of stock that are traded during any taxable year on all established securities markets in that country exceeds the number of shares of such class that are traded during that taxable year on established securities markets in any other single country. Currently, our shares are primarily traded on Nasdaq Copenhagen for purposes of the “primarily traded” test, although this may change in future years.

The Treasury Regulations provide further that stock of a foreign corporation will be considered to be "regularly traded" on an established securities market only if: (i) one or more classes of stock of the corporation that, in the aggregate, represents more than 50% of the stock of the corporation, by voting power and value, is listed on such established securities market, (ii) each such class of stock is traded on such established securities market, other than in de minimis quantities, on at least 60 days during the taxable year, and (iii) the aggregate number of shares of such stock traded on such established securities market is at least 10% of the average number of shares of such stock outstanding during such taxable year. Even if this were not the case, the Treasury Regulations provide that the trading frequency and trading volume tests will be deemed satisfied with respect to a class of stock that is traded on an established securities market in the United States if such stock is regularly quoted by dealers making a market in such stock. We have a single class of stock that is listed on the Nasdaq New York, an established securities market in the United States. Although we do not anticipate satisfying the requirement that our stock be "regularly traded" on an established securities market under the quantitative testing rules, our common stock is deemed to be “regularly traded” on an established securities market for purposes of satisfying the Publicly-Traded Test.

The Treasury Regulations provide, in pertinent part, that a class of stock of a foreign corporation will not be considered to be "regularly traded" on an established securities market for any taxable year in which 50% or more of the vote and value of the outstanding shares of such class of stock are owned, within the meaning of the Treasury Regulations, on more than half the days during such taxable year by persons who each own 5% or more of the vote and value of the outstanding shares of such class of stock, which persons we refer to as "5% shareholders" and rule as the "5% override rule".

For purposes of identifying our 5% shareholders, we are permitted to rely on Schedule 13G and Schedule 13D filings with the SEC.

In the event the 5% override rule were triggered with respect to any class of stock for any taxable year, the Treasury Regulations provide that the 5% override rule will nevertheless not apply to such class of stock for such taxable year if the foreign corporation can establish that among the closely-held group of 5% shareholders, which we refer to as the "5% closely-held group," there are sufficient 5% shareholders that are considered to be qualified shareholders (for purposes of Section 883) to preclude non-qualified 5% shareholders in the 5% closely-held group from owning 50% or more of the total value of the shares of such class for more than half the number of days during such taxable year. In order to establish this, a sufficient number of 5% shareholders that are qualified shareholders would have to comply with certain documentation and certification requirements designed to substantiate their identity as qualified shareholders. These requirements are onerous, and there is no assurance that we would be able to satisfy them. Currently, OCM Njord Holdings S.à.r.l. through its wholly-owned subsidiary, Njord Luxco, owns approximately 64.4% of our outstanding Class A Common Shares. As such, we expect the 5% override rule to be triggered, and that we would not be able to rely on Section 883 for exemption from United States federal income taxation on our U.S. source shipping income. Therefore, if we cannot qualify for benefits under an applicable U.S. income tax treaty, we would be subject to United States taxation on our U.S. source shipping income.

U.S. Federal Income Taxation in the Absence of Section 883 or Treaty Exemption

4% Gross Basis Tax Regime. To the extent the benefits of Section 883 or an applicable U.S. income tax treaty are unavailable, our U.S. source shipping income which is not considered to be "effectively connected" with the conduct of a U.S. trade or business, as discussed below, would be subject to a 4% U.S. federal income tax imposed by Section 887 of the Code on a gross basis, without the benefit of deductions, which we refer to as the "4% gross basis tax regime". As under the sourcing rules described above, no more than 50% of our shipping income would be treated as derived from U.S. sources, the maximum effective rate of U.S. federal income tax on our shipping income should never exceed 2% under the 4% gross basis tax regime.

Net Basis and Branch Tax Regimes. To the extent the benefits of Section 883 or an applicable U.S. income tax treaty are unavailable and our U.S. source shipping income is considered to be "effectively connected" with the conduct of a U.S. trade or business, as discussed below, any such "effectively connected" U.S. source shipping income, net of applicable deductions, would be subject to the U.S. federal income tax currently imposed at the corporate rate of 21%. In addition, we may be subject to the U.S. branch profits tax, at a rate of 30% or such lower rate as may be provided by an applicable U.S. income tax treaty, on earnings "effectively connected" with the conduct of such U.S. trade or business, as determined after allowance for certain adjustments, and on certain interest paid or deemed paid attributable to the conduct of their U.S. trade or business.

Our U.S. source shipping income will be considered "effectively connected" with the conduct of a U.S. trade or business only if:

we have, or are considered to have, a fixed place of business in the United States involved in the earning of shipping income; and

substantially all of our U.S. source shipping income is attributable to regularly scheduled transportation, such as the operation of a vessel that follows a published schedule with repeated sailings at regular intervals between the same points for voyages that begin or end in the United States.

We do not intend to have, or permit circumstances that would result in having, substantially all of our U.S. source shipping income be attributable to regularly scheduled transportation. Based on the foregoing and on the expected mode of our shipping operations, we believe that none of our U.S. source shipping income will be "effectively connected" with the conduct of a U.S. trade or business.

U.S. Taxation of Gain on Sale of Vessels.

Regardless of whether we qualify for exemption under Section 883 of the Code or the applicable U.S. income tax treaty, we do not expect to be subject to U.S. federal income taxation with respect to gain realized on a sale of a vessel, provided the sale is considered to occur outside of the United States under U.S. federal income tax principles. In general, a sale of a vessel will be considered to occur outside of the United States for this purpose if title to the vessel, and risk of loss with respect to the vessel, pass to the buyer outside of the United States. It is expected that any sale of a vessel by us will be considered to occur outside of the United States.

U.S. Federal Income Taxation of U.S. Holders

As used herein, the term "U.S. Holder" means a beneficial owner of our common shares that is a U.S. citizen or resident, a U.S. corporation or other U.S. entity taxable as a corporation, an estate, the income of which is subject to U.S. federal income taxation regardless of its source, or a trust if (i) a court within the United States is able to exercise primary jurisdiction over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust or (ii) the trust has a valid election in effect to be treated as a U.S. person.

If a partnership holds our common shares, the U.S. federal income tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner in a partnership holding our common shares, you are encouraged to consult your own tax advisor.

Distributions

Subject to the discussion of passive foreign investment companies below, any distributions made by us with respect to our common shares to a U.S. Holder will generally constitute dividends to the extent of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles.

Dividends paid with respect to our common shares to a U.S. Holder that is an individual, trust or estate, which we refer to as a "U.S. Individual Holder", may be eligible for preferential U.S. federal income tax rates provided that (1) we are a "qualified foreign corporation", (2) the U.S. Individual Holder has owned our common shares for more than 60 days during the 121-day period beginning 60 days before the date on which our common shares become ex-dividend, (3) we are not a passive foreign investment company for the taxable year of the dividend or the immediately preceding taxable year (which we do not believe we are, have been or will be) and (4) the U.S. Individual Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property.

We will be treated as a "qualified foreign corporation" if we qualify for benefits of a comprehensive income tax treaty to which the United States is a party, such as the U.S.-UK Income Tax Treaty or the U.S.-Denmark Income Tax Treaty, or if our common shares are readily tradable on an established securities market in the United States. Prior to the effectiveness of this annual report, we believe we qualify for the benefits of the U.S.-UK Income Tax Treaty or the U.S.-Denmark Income Tax Treaty, both of which are comprehensive income tax treaties. After the effectiveness of this annual report, our common shares will qualify as readily tradable on an established securities market in the United States because they will be listed on Nasdaq New York. Therefore, we believe that any dividends paid by us to a U.S. Individual Holder on our common shares should be eligible for these preferential rates. However, certain limitations may apply to any "extraordinary dividends" (generally, a dividend with respect to a common share that is equal to or exceeds 10% of a shareholder's adjusted tax basis (or fair market value upon the shareholder's election) or dividends received within a one year period that, in the aggregate, equal or exceed 20% of a shareholder's adjusted tax basis (or fair market value upon the shareholder's election) in such common share) paid by us. Any dividends paid by us which are not eligible for these preferential rates will be taxed as ordinary income to a U.S. Holder.

Distributions in excess of our current and accumulated earnings and profits will be treated first as a non-taxable return of capital to the extent of the U.S. Holder's tax basis in its common shares on a dollar-for-dollar basis and thereafter as capital gain. U.S. Holders that are corporations will generally not be entitled to claim a dividend received deduction with respect to any distributions they receive from us. Dividends paid on our common shares will generally be treated as "passive category income" or, in the case of certain types of U.S. Holders, "general category income", for purposes of computing allowable foreign tax credits for U.S. foreign tax credit purposes.

Special rules may apply to any “extraordinary dividend” — generally, a dividend in an amount which is equal to or in excess of 10% of a shareholder’s adjusted basis (or fair market value in certain circumstances) in a share of our common stock — paid by us. If we pay an “extraordinary dividend” on our common shares that is treated as “qualified dividend income”, then any loss derived by a non-corporate U.S. holder from the sale or exchange of such common shares will be treated as long-term capital loss to the extent of such dividend.

Dividends will be generally included in the income of U.S. Holders at the U.S. dollar amount of the dividend (including any non-U.S. taxes withheld therefrom), based upon the exchange rate in effect on the date of the distribution. In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss. However, an individual whose realized foreign exchange gain does not exceed U.S. $200 will not recognize that gain, to the extent that there are not expenses associated with the transaction that meet the requirement for deductibility as a trade or business expense (other than travel expenses in connection with a business trip or as an expense for the production of income).

Sale, Exchange or other Disposition of Our Common Shares

Subject to the discussion of passive foreign investment company status below, a U.S. Holder will generally recognize taxable gain or loss upon a sale, exchange or other disposition of our common shares in an amount equal to the difference between the amount realized by the U.S. Holder from such sale, exchange or other disposition and the U.S. Holder's adjusted tax basis in the common shares. A U.S. Holder's adjusted tax basis in its common shares generally will be the U.S. Holder's purchase price for the common shares, reduced (but not below zero) by the amount of any distribution on such common shares that was treated as a nontaxable return of capital to such U.S. Holder. Such gain or loss will be capital gain or loss and will be treated as long-term capital gain or loss if the U.S. Holder's holding period in the common shares is greater than one year at the time of the sale, exchange or other disposition. Such capital gain or loss will generally be treated as U.S.-source income or loss, as applicable, for U.S. foreign tax credit purposes. A U.S. Holder's ability to deduct capital losses is subject to certain limitations.

Passive Foreign Investment Company Status and Significant U.S. Federal Income Tax Consequences

Special U.S. federal income tax rules apply to a U.S. Holder that holds stock in a foreign corporation classified as a passive foreign investment company, or "PFIC", for U.S. federal income tax purposes. In general, a foreign corporation will be treated as a PFIC with respect to a U.S. shareholder in such foreign corporation if, for any taxable year in which such shareholder holds stock in such foreign corporation, either:

at least 75% of the corporation's gross income for such taxable year consists of passive income (for example dividends, interest, capital gains and rents derived from other than in the active conduct of a rental business), or

at least 50% of the average value of the assets held by the corporation during such taxable year produces, or is held for the production of, passive income, which we refer to as "passive assets".

For purposes of determining whether we are a PFIC, cash will be treated as an asset held for the production of passive income. Income earned or deemed earned by us in connection with the performance of services would not constitute passive income. By contrast, rental income would generally constitute passive income unless we are treated under specific rules as deriving the rental income in the active conduct of a rental business. Also, for purposes of determining whether we are a PFIC, we will be treated as owning our proportionate share of the assets and as receiving directly our proportionate share of the income of any corporation in which we own at least 25% by value of the stock of such corporation.

Based on our current operations and future projections, we do not believe that we are, nor do we expect to become, a PFIC with respect to any taxable year. Although there is no legal authority directly on point, our belief is based principally on the position that, for purposes of determining whether we are a PFIC, the gross income we derive or are deemed to derive from the time chartering and voyage chartering activities of us and our subsidiaries should constitute active income from the performance of services rather than passive, rental income. Correspondingly, such income should not constitute passive income, and the assets that we or our subsidiaries own and operate in connection with the production of such income, in particular the vessels, should not constitute passive assets for purposes of determining whether we are a PFIC. We anticipate that substantially all of our gross income will be derived from time and voyage charters and the performance of services directly related thereto, and that substantially all of the vessels in our fleet will be engaged in such activities.

We believe there is substantial legal authority supporting our position consisting of the Code, legislative history, case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. However, there is no direct legal authority under the PFIC rules addressing our specific method of operation, and there is authority which characterizes time charter income as rental income rather than services income for other tax purposes. In the absence of any legal authority specifically relating to the statutory provisions governing PFICs, the IRS or a court could disagree with our position. In addition, although we intend to conduct our affairs in a manner to avoid being classified as a PFIC with respect to any taxable year, we cannot assure you that the nature or extent of our operations, or the composition of our income or assets, will not change and that we will not become a PFIC in the future.

As discussed more fully below, if we were to be treated as a PFIC for any taxable year, a U.S. Holder would be subject to different U.S. federal income taxation rules depending on whether the U.S. Holder makes an election to treat us as a "Qualified Electing Fund", which election we refer to as a "QEF election". As an alternative to making a QEF election, a U.S. Holder should be able to make a "mark-to-market" election with respect to our common shares, as discussed below.

If we were to be treated as a PFIC for any taxable year, a U.S. Holder would also be subject to special U.S. federal income tax rules in respect of such U.S. Holder's indirect interest in any of our subsidiaries that are also treated as PFICs. Such a U.S. Holder would be permitted to make a QEF election in respect of any such subsidiary, as long as we timely provide the information necessary for such election, which we currently intend to do in such circumstances, but such a U.S. Holder would not be permitted to make a mark-to-market election in respect of such U.S. Holder's indirect interest in any such subsidiary. In addition, if we were to be treated as a PFIC for any taxable year, and a U.S. Holder actually or constructively own common shares that exceed certain thresholds, a U.S. Holder would be required to file a Form 8621 with its U.S. federal income tax return for that year with respect to such Holder's common shares. Substantial penalties apply to any failure to timely file a Form 8621, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Also, in the event that a U.S. Holder is required to file a Form 8621 and does not do so, the statute of limitations on the assessment and collection of U.S. federal income taxes for such person for the related tax year may not close until three years after the date that the Form 8621 is filed. The application of the PFIC rules is complicated, and U.S. Holders are encouraged to consult with their tax advisors regarding the application of such rules in their circumstances.

U.S. Federal Income Taxation of U.S. Holders Making a Timely QEF Election

If a U.S. Holder makes a timely QEF election, which U.S. Holder we refer to as an "Electing Holder", the Electing Holder must report each year for U.S. federal income tax purposes his pro rata share of our ordinary earnings and net capital gain, if any, for our taxable year that ends with or within the taxable year of the Electing Holder, regardless of whether or not distributions were received by the Electing Holder with respect to its commons shares. No portion of such inclusions of ordinary earnings will be entitled to the preferential U.S. federal income tax rates applicable to certain dividends discussed above. Net capital gain inclusions of certain non-corporate U.S. holders may be eligible for preferential capital gains rates. The Electing Holder's adjusted tax basis in the common shares will be increased to reflect taxed but undistributed earnings and profits. Distributions of earnings and profits that had been previously taxed will result in a corresponding reduction in the adjusted tax basis in the common shares and will not be taxed again once distributed. An Electing Holder would not, however, be entitled to a deduction for its pro rata share of any losses that we incur with respect to any taxable year. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of our common shares. A U.S. Holder would make a QEF election with respect to any taxable year that our company is a PFIC by filing an IRS Form 8621 with his U.S. federal income tax return. If we became aware that we were to be treated as a PFIC for any taxable year, we would provide each U.S. Holder with all necessary information in order to make the QEF election described above. A U.S. Holder who is treated as constructively owning shares in any of our subsidiaries which are treated as PFICs would be required to make a separate QEF election with respect to each such subsidiary.

U.S. Federal Income Taxation of U.S. Holders Making a "Mark-to-Market" Election

Alternatively, if we were to be treated as a PFIC for any taxable year and our common shares are treated as "marketable stock", as we believe will be the case, a U.S. Holder would be allowed to make a "mark-to-market" election with respect to our common shares, provided the U.S. Holder completes and files an IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations. If that election is made, the U.S. Holder would generally include as ordinary income in each taxable year the excess, if any, of the fair market value of the common shares at the end of the taxable year over such Holder's adjusted tax basis in the common shares. The U.S. Holder would also be permitted an ordinary loss in respect of the excess, if any, of the U.S. Holder's adjusted tax basis in the common shares over its fair value at the end of the taxable year, but only to the extent of the net amount previously included in income as a result of the mark-to-market election. A U.S. Holder's tax basis in its common shares would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of our common shares would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the common shares would be treated as ordinary loss to the extent that such loss does not exceed the net mark-to-market gains previously included in income by the U.S. Holder. A mark-to-market election would likely not be available for any of our subsidiaries that are treated as PFICs.

U.S. Federal Income Taxation of U.S. Holders Not Making a Timely QEF or Mark-to-Market Election

Finally, if we were to be treated as a PFIC for any taxable year, a U.S. Holder who does not make either a QEF election or a "mark-to-market" election for that year, whom we refer to as a "Non-Electing Holder," would be subject to special rules with respect to (1) any excess distribution (i.e. the portion of any distributions received by the Non-Electing Holder on our common shares in a taxable year in excess of 125% of the average annual distributions received by the Non-Electing Holder in the three preceding taxable years, or, if shorter, the Non-Electing Holder's holding period for the common shares) and (2) any gain realized on the sale, exchange or other disposition of our common shares. Under these special rules:

the excess distribution or gain would be allocated ratably over the Non-Electing Holder's aggregate holding period for the common shares;

the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income and would not be entitled to the preferential U.S. federal income tax rates applicable to certain dividends discussed above; and

the amount allocated to each of the other taxable years would be subject to tax at the highest rate in effect for the applicable class of taxpayer for that year, and an interest charge for the deemed tax deferral benefit would be imposed with respect to the resulting tax attributable to each such other taxable year.

These adverse U.S. federal income tax consequences would not apply to a pension or profit sharing trust or other tax-exempt organization that did not borrow funds or otherwise utilize leverage in connection with its acquisition of our common shares. If a Non-Electing Holder who is an individual dies while owning our common shares, such Holder's successor would generally not receive a step-up in tax basis with respect to such common shares.

U.S. Federal Income Taxation of "Non-U.S. Holders"

A beneficial owner of our common shares that is not a U.S. Holder (and not an entity treated as a partnership) is referred to herein as a "Non-U.S. Holder".

Distributions

Non-U.S. Holders will generally not be subject to U.S. federal income tax or withholding tax on dividends received with respect to our common shares, unless the dividends are "effectively connected" with the Non-U.S. Holder's conduct of a trade or business in the United States or, if the Non-U.S. Holder is entitled to the benefits of an applicable U.S. income tax treaty with respect to those dividends, those dividends are attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.

Sale, Exchange or Other Disposition of Common Shares

Non-U.S. Holders will generally not be subject to U.S. federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our common shares unless: (i) the gain is "effectively connected" with the Non-U.S. Holder's conduct of a trade or business in the United States or, if the Non-U.S. Holder is entitled to the benefits of an applicable U.S. income tax treaty with respect to that gain, that gain is attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States or (ii) the Non-U.S. Holder is an individual who is present in the United States for 183 days or more during the taxable year of disposition and other conditions are met.

If the Non-U.S. Holder is engaged in a U.S. trade or business for U.S. federal income tax purposes, the income from the common shares, including dividends on the underlying common shares and the gain from the sale, exchange or other disposition of the common shares that is "effectively connected" with the conduct of that U.S. trade or business, will generally be subject to U.S. federal income tax in the same manner as discussed in the previous section relating to the U.S. federal income taxation of U.S. Holders. In addition, in the case of a corporate Non-U.S. Holder, such Non-U.S. Holder's earnings and profits that are attributable to the "effectively connected" income, subject to certain adjustments, may be subject to an additional U.S. federal branch profits tax at a rate of 30% or at a lower rate as may be specified by an applicable U.S. income tax treaty.

Backup Withholding and Information Reporting

In general, dividend payments, or other taxable distributions, and payment of the gross proceeds on a sale or other disposition of our common shares, made within the United States to you will be subject to information reporting requirements. In addition, such payments will be subject to "backup withholding" if you are a non-corporate U.S. Holder and you:

fail to provide an accurate taxpayer identification number;

are notified by the IRS that you have failed to report all interest or dividends required to be shown on your U.S. federal income tax returns; or

in certain circumstances, fail to comply with applicable certification requirements.

Non-U.S. Holders may be required to establish their exemption from information reporting and backup withholding by certifying their status on an appropriate IRS Form W-8.

If you sell your common shares to or through a U.S. office of a broker, the payment of the proceeds is subject to both U.S. backup withholding and information reporting unless you certify that you are a non-U.S. person, under penalties of perjury, or you otherwise establish an exemption. If you sell your common shares through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to you outside the United States, then information reporting and backup withholding will generally not apply to that payment. However, U.S. information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, including a payment made to you outside the United States, if you sell your common shares through a non-U.S. office of a broker that is a U.S. person or has some other contacts with the United States.

Backup withholding is not an additional tax. Rather, you may generally obtain a refund of any amounts withheld under backup withholding rules that exceed your U.S. federal income tax liability by filing a refund claim with the IRS.

Individuals who are U.S. Holders (and to the extent specified in the applicable Treasury Regulations, certain individuals who are Non-U.S. Holders and certain U.S. entities) who hold "specified foreign financial assets" (as defined in Section 6038D of the Code and the applicable Treasury Regulations) are required to file an IRS Form 8938 (Statement of Specified Foreign Financial Assets) with information relating to each such asset for each taxable year in which the aggregate value of all such assets exceeds $75,000 at any time during the taxable year or $50,000 on the last day of the taxable year. Substantial penalties apply to any failure to timely file an IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, the statute of limitations on the assessment and collection of U.S. federal income tax with respect to a taxable year for which the filing of an IRS Form 8938 is required may not close until three years after the date on which the IRS Form 8938 is filed. Specified foreign financial assets would generally include our common shares, unless the common shares are held in an account maintained by a U.S. "financial institution" (as defined in Section 6038D of the Code). U.S. Holders (including U.S. entities) and Non-U.S. Holders are encouraged to consult their own tax advisors regarding their reporting obligations under Section 6038D of the Code.

Danish Tax Considerations

The following is a summary of certain Danish tax considerations relating to an investment in TORM plc. The summary describes the Danish tax implications pertaining to dividends paid from TORM A/S to TORM plc, and a sale of Class A common shares by TORM plc.

The summary does not purport to constitute exhaustive tax or legal advice. It is specifically to be noted that the summary does not address all possible tax consequences relating to an investment in the shares of TORM plc. The summary is based solely upon the tax laws of Denmark in effect on the date of this annual report. Danish tax laws may be subject to changes, possibly with retroactive effect.

Thus, in the case an entity transfers shares in a group-related entity to another group-related entity and the proceeds consist wholly or partly of anything other than shares in the purchasing entity or group-related entities, the non-share based part of the proceeds (i.e. cash) is considered a dividend payment. However, if TORM plc receives tax-exempt dividends from TORM A/S as described in the section below, the Danish anti-avoidance rules should not apply.

Sale of Class A common shares by TORM plc

Shareholders not resident in Denmark will normally not be subject to Danish tax on gains realized on the sale of shares, irrespective of the ownership period and equity interest. However, Danish anti-avoidance rules should be observed as these rules may, if certain conditions are met, result in a requalification of tax-exempt capital gains into dividends, which could trigger Danish withholding taxes. These rules could apply in a number of situations, such as in connection with a related party sale of shares against cash and in unrelated third party transactions in connection with the transfer of shares to a new holding company (controlled by a third party) against shares and cash. For example, this could be the case, if dividends from TORM A/S cannot be received tax exempt by TORM plc. The rules should only apply to intra-group transactions as well as situations where TORM plc receives an ownership share in the group acquiring the shares in TORM A/S.

Dividends distributed to the holders of Class A common shares of TORM A/S to TORM plc

Under Danish tax law, dividends paid on shares in a Danish company to a foreign company are normally subject to dividend withholding tax of 27%. However, the foreign company receiving the dividends will as a main rule be subject to a final Danish withholding tax of 22% provided the recipient reclaims the excess tax from the Danish tax authorities.

Dividends paid on shares in a Danish company are as a starting point exempt from Danish withholding tax when the foreign receiving company owns at least 10% of the Danish distributing company, the foreign receiving company is tax resident within the EU or a state which has a tax treaty with Denmark, and the Danish taxation should be reduced or eliminated in accordance with the EU Parent/Subsidiary Directive (2011/96/EU) or in accordance with a tax treaty between Denmark and the state in which the receiving company is domiciled.

When considering whether the EU Parent/Subsidiary Directive (2011/96/EU) or a tax treaty can be applied (thereby enabling exemption from Danish withholding taxes on dividend distributions), the Danish tax authorities do consider a number of other criteria, including whether the foreign receiving company is the beneficial owner, and whether the structure can be challenged based on general anti-avoidance rules introduced in 2015.

If these conditions for exemption are not fulfilled, Danish withholding tax of 27% (potentially reduced to 22%) will be triggered on such dividend distributions.

Share transfer tax and stamp duties

No Danish share transfer tax or stamp duties are payable on direct or indirect transfer of the shares of TORM A/S.

United Kingdom Tax Considerations

The following statements do not constitute tax advice and are intended only as a general guide to current United Kingdom law and HM Revenue and Customs ("HMRC") published practice, which may not be binding on HMRC, as at the date of this document (which are both subject to change at any time, possibly with retrospective effect). They relate only to certain limited aspects of the United Kingdom tax treatment of the beneficial owners of the Class A common shares. They are intended to apply only to shareholders who are resident only in the United Kingdom for United Kingdom tax purposes (unless the context requires otherwise) and, if individuals, who are domiciled in the United Kingdom and to whom split-year treatment does not apply. The statements below only relate to persons who are and will be the absolute beneficial owners of the Class A common shares and who hold, and will hold, the Class A common shares through the Depository Trust Company as investments (and not as securities to be realized in the course of a trade). The statements below are not exhaustive and may not apply to certain shareholders, such as dealers in securities, broker dealers, insurance companies and collective investment schemes, shareholders who are exempt from taxation, shareholders who hold their shares through an Individual Savings Account or a Self-Invested Personal Pension and shareholders who have (or are deemed to have) acquired the Class A common shares by virtue of an office or employment. Such persons may be subject to special rules. This summary does not address any inheritance tax considerations.

Prospective purchasers of the Class A common shares who are in any doubt as to their tax position should consult an appropriate professional adviser.

Taxation of Dividends

General

TORM plc is not required to make any withholding or deduction for or on account of United Kingdom tax in respect of dividends on the Class A common shares, irrespective of whether the shareholder receiving the dividend is resident in or outside the United Kingdom.

Individual Shareholders

United Kingdom resident individual Shareholders may be subject to income tax on dividends they receive from the Company. The first £5,000 of dividend income that the United Kingdom resident individuals receive in each tax year is taxed at a rate of 0% (the "Nil Rate Amount"). The United Kingdom Government has announced that this Nil Rate Amount will be reduced to £2,000 with effect from April 2018 (although the legislation effecting this change is currently in draft form).

Dividend income that is within the Nil Rate Amount counts towards an individual's basic or higher rate limits – and will therefore affect the taxation of other income received and any capital gains realized by the individual in the tax year. It may also affect the level of savings allowance to which they are entitled (as this is different for basic and higher rate taxpayers). In calculating into which tax band any dividend income over the Nil Rate Amount falls, dividend income is treated as the "top slice" of an individual's income.

Any dividend income received by a UK resident individual Shareholder in excess of the Nil Rate Amount will be subject to income tax at a rate of 7.5%, to the extent that it is within the basic rate band, 32.5%, to the extent that it is within the higher rate band and 38.1%, to the extent that it is within the additional rate band.

Corporate Shareholders

Shareholders within the charge to United Kingdom corporation tax which are "small companies" (for the purposes of United Kingdom taxation of dividends) will generally not expect to be subject to tax on dividends from the Company.

Other shareholders within the charge to United Kingdom corporation tax will not be subject to tax on dividends from the Company as long as the dividends fall within an exempt class and certain conditions are met. For example: dividends paid to companies holding less than 10% of the issued share capital of the payer (or any class of that share capital) are generally dividends that fall within an exemption in respect of "portfolio holdings" (subject to the application of relevant anti-avoidance rules). Other exemptions may also apply.

Shareholders Resident outside the United Kingdom

Where a shareholder resident for tax purposes outside the United Kingdom carries on a trade, profession or vocation in the United Kingdom and the dividends are a receipt of that trade or, in the case of corporation tax, the Class A common shares are held by or for a United Kingdom permanent establishment through which a trade is carried on, the shareholder may be liable to United Kingdom tax on dividends paid by the Company.

Taxation of Chargeable Gains

Individual Shareholders

A disposal of the Class A common shares may give rise to a chargeable gain (or allowable loss) for the purposes of United Kingdom capital gains tax, depending on the circumstances and subject to any available exemption or relief. The rate of capital gains tax in respect of shareholdings is 10% for individuals who are subject to income tax at the basic rate and 20% to the extent that an individual's chargeable gains, when aggregated with his or her income chargeable to income tax, exceed the basic rate band for income tax purposes. An individual shareholder is entitled to realize an exempt amount of gains (£11,300 in the 2017/18 tax year) in each tax year without being liable to tax.

A shareholder who is an individual and who has ceased to be resident in the United Kingdom for taxation purposes (or has become treated as resident outside the United Kingdom for the purposes of a double tax treaty (''Treaty non-resident'') for a period of five years or less, and who disposes of the Class A common shares during that period may in some circumstances also be liable, on his or her return to the United Kingdom, to United Kingdom capital gains tax on that gain, subject to any available exemptions or reliefs.

Corporate Shareholders

Where a shareholder is within the charge to United Kingdom corporation tax, including cases where it is not resident (for tax purposes) in the United Kingdom, a disposal of the Class A common shares may give rise to a chargeable gain (or allowable loss) for the purposes of United Kingdom corporation tax, depending on the circumstances and subject to any available exemption or relief. Indexation allowance may reduce the amount of chargeable gain that is subject to corporation tax, but may not create or increase any allowable loss.

Shareholders Resident outside the United Kingdom

A shareholder that is not resident in the United Kingdom (and, in the case of an individual, is not temporarily non-resident) for United Kingdom tax purposes, and whose Class A common shares are not held in connection with carrying on a trade, profession or vocation in the United Kingdom will generally not be subject to United Kingdom tax on chargeable gains on the disposal of the Class A common shares.

Stamp Duty and Stamp Duty Reserve Tax ("SDRT")

The comments in this section relating to stamp duty and SDRT apply whether or not a shareholder is resident or domiciled in the United Kingdom. Special rules may apply to shareholders such as market makers, brokers, dealers and intermediaries.

Following the European Court of Justice decision in HSBC Holdings Plc and Vidacos Nominees Ltd v The Commissioners for Her Majesty's Revenue & Customs (C-569/07) and the First-tier Tax Tribunal decision in HSBC Holdings Plc and The Bank of New York Mellon Corporation v The Commissioners for Her Majesty's Revenue & Customs (TC/2009/16584), HMRC has confirmed that 1.5% SDRT is no longer payable to a clearance service or depositary receipt system, when new shares are issued. However, it is currently unclear whether this will remain the case following the United Kingdom's intended departure from the European Union.

No stamp duty should be payable on the acquisition or transfer of the beneficial ownership of the Class A common shares held by a nominee for a person whose business is or includes the provision of clearance services where that acquisition or transfer is settled within the clearance service and there is no physical instrument of transfer. An agreement for the transfer of such Class A common shares will also not give rise to a SDRT liability, provided that no election has been made under section 97A of the United Kingdom Finance Act 1986 which is applicable to such Class A common shares. We understand that no such election has been made by the Depository Trust Company as respects the Class A common shares.

Any instrument of transfer of the Class A common shares that are not held by a nominee for a person whose business is or includes the provision of clearance services will generally attract stamp duty at a rate of 0.5% of the amount or value of the consideration for the transfer (rounded up, if necessary, to the next multiple of £5). No stamp duty is chargeable on an instrument transferring shares where the amount or value of the consideration is £1,000 or less, and it is certified on the instrument that the transaction effected by the instrument does not form part of a larger transaction or series of transactions for which the aggregate consideration exceeds £1,000. An unconditional agreement for such transfer, or a conditional agreement which subsequently becomes unconditional, will also generally be liable to SDRT at the rate of 0.5% of the amount or value of the consideration for the transfer, but such liability will be cancelled if the agreement is completed by a duly stamped instrument of transfer within six years of the date of the agreement, or if the agreement was conditional, the date the agreement became unconditional. Where stamp duty is paid, any SDRT previously paid should be repaid on the making of an appropriate claim generally with interest.

Therefore, a transfer of title in the Class A common shares or an agreement to transfer such shares from within the Depository Trust Company system out of the Depository Trust Company system, and any subsequent transfers or agreements to transfer outside the Depository Trust Company system, will generally attract a charge to United Kingdom stamp duty and/or United Kingdom SDRT at a rate of 0.5% of any consideration. Shareholders should note in particular that a redeposit of the Class A common shares into the Depository Trust Company system, including by means of a transfer into a depositary receipt system, will generally attract United Kingdom stamp duty and/or United Kingdom SDRT at the higher rate of 1.5%.

F.	Dividends and Paying Agents

Not applicable.

G.	Statement by Experts

Not applicable.

H.	Documents on Display

We file reports and other information with the SEC. These materials, including this annual report and the accompanying exhibits, may be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, NE, Room 1580, Washington, D.C. 20549. You may obtain information on the operation of the public reference room by calling 1 (800) SEC-0330, and you may obtain copies at prescribed rates from the Public Reference Section of the SEC at its principal office in Washington, D.C. The SEC maintains a website (http://www.sec.gov.) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC. In addition, our filings will be available on our website www.torm.com. This web address is provided as an inactive textual reference only.

Shareholders may also request a copy of our filings at no cost by writing or telephoning us at the following address:

TORM plc

Tuborg Havnevej 18

DK-2900 Hellerup, Denmark

Tel: 45 39 17 92 00

I.	Subsidiary Information

Not applicable.

ITEM 11.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Reference is made to Note 19—"Risks Associated with TORM's Activities" on pages 121-124 of our Annual Report 2018

ITEM 12.

DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

ITEM 13.

DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14.

MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15.

CONTROLS AND PROCEDURES

A.	Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Our controls and procedures are designed to provide reasonable assurance of achieving their objectives.

We carried out an evaluation under the supervision, and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15e under the Securities Act of 1934) as of December 31, 2018. Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of December 31, 2018 to provide reasonable assurance that (1) information required to be disclosed by us in the reports that we file under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (2) that such information is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives.

B.	Management's Annual Report on Internal Control Over Financial Reporting

In accordance with Rule 13a-15(f) of the Exchange Act, the management of the Company is responsible for the establishment and maintenance of adequate internal controls over financial reporting for the Company. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company's system of internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposal of the Company's assets that could have a material effect on the financial statements. Management has performed an assessment of the effectiveness of the Company's internal controls over financial reporting as of December 31, 2018 based on the provisions of Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in 2013. Based on our assessment, management determined that the Company's internal controls over financial reporting were effective as of December 31, 2018 based on the criteria in Internal Control—Integrated Framework issued by COSO (2013).

C.	Attestation Report of the Registered Public Accounting Firm

This annual report does not include an attestation report of the Company's registered public accounting firm because we are an emerging growth company.

D.	Changes in Internal Control Over Financial Reporting

There were no changes in the Company's internal control over financial reporting that occurred during the year ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

ITEM 16.

RESERVED

ITEM 16A.

AUDIT COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined that Mr. Göran Trapp, who serves as the Chairman of our Audit Committee, qualifies as an "audit committee financial expert" and that he is "independent" in accordance with SEC rules.

ITEM 16B.

CODE OF ETHICS

We have adopted a code of ethics, which we refer to as our Business Principles, which applies to all entities in the TORM Group and its employees (both shore-based and at sea), directors and officers. A copy of the Business Principles is filed herewith as Exhibit 11.1. We have also posted a copy of our Business Principles on our website at www.torm.com. We will provide any person, free of charge with a copy of our Business Principles upon written request to our offices at: Tuborg Havnevej 18, DK-2900 Hellerup, Denmark.

ITEM 16C.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Reference is made to Note 4 —"Remuneration to Auditors Appointed at the Parent Company's Annual General Meeting" on page 108 of our Annual Report 2018 and to the "Audit Committee Report" on pages 61-65 of our Annual Report 2018 .

ITEM 16D.

EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not applicable.

100

ITEM 16E.

PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Name	Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans	(d) Maximum Number of Shares that May Yet Be Purchased under the Plan
OCM Njord Holdings S.à r.l	January 2018	8,214,548	$8.39	N/A	N/A

During the year ended December 31, 2018, no other issuer or affiliate purchases of our equity securities were made.

ITEM 16F.

CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT

Not applicable.

ITEM 16G.

CORPORATE GOVERNANCE

Pursuant to an exception under Nasdaq New York listing standards available to foreign private issuers, we are not required to comply with many of the corporate governance practices followed by U.S. companies under the Nasdaq New York listing standards. Accordingly, we are exempt from many of Nasdaq New York's corporate governance practices other than the requirements regarding the disclosure of a going concern audit opinion, submission of a listing agreement, notification of material non-compliance with Nasdaq New York corporate governance practices and the establishment and composition of an audit committee and a formal written audit committee charter. In connection with the listing of our Class A common shares on Nasdaq New York, we will certify to Nasdaq New York that our corporate governance practices are in compliance with, and are not prohibited by, English Law. Set forth below is a list of the significant differences between our current or potential corporate governance practices and Nasdaq New York standards applicable to listed U.S. companies.

Independence of Directors. Nasdaq New York requires that a U.S.-listed company maintain a majority of independent directors. Our Board of Directors consists of five directors, three of which are considered "independent" under Rule 10A-3 promulgated under the Exchange Act and under the rules of Nasdaq New York. Under English law and our Articles of Association, our Board of Directors is not required to consist of a majority of independent directors. Under the UK Corporate Governance Code, to which we are subject, a majority of our Board is required to be independent. However, the determination of independence is different from Nasdaq New York standards, and we may choose to deviate from this requirement in the future as long as we explain why we have done so in our annual report.

Remuneration Committee. Nasdaq New York requires that a listed U.S. company have a remuneration committee consisting only of independent directors. Under English law and our Articles of Association, our Remuneration Committee is not required to consist entirely of independent directors. The UK Corporate Governance Code requires this committee to be comprised of independent directors and that the chairman of the Board of Directors not chair the Remuneration Committee, but we may choose to deviate from these requirements in the future as long as we explain why in our annual report.

Audit Committee . Nasdaq New York requires, among other things, that a listed U.S. company have an audit committee comprised of three entirely independent directors. The UK Corporate Governance Code requires an audit committee to be comprised of three, or in the case of smaller companies, two, independent directors, but we may choose to deviate from this requirement in the future as long as we explain why in our annual report.

101

Executive Sessions . Nasdaq New York requires that the independent directors of a U.S. listed company have regularly scheduled meetings at which only independent directors are present, or executive sessions. The UK Corporate Governance Code requires that our Chairman hold meetings with non-executive directors without the executives present and that, led by the senior independent director, the non-executive directors meet without the Chairman present at least annually to appraise the Chairman's performance and on such other occasions as are deemed appropriate.

Shareholder Approval of Securities Issuances . Nasdaq New York requires that a listed U.S. company obtain the approval of its shareholders prior to issuances of securities under certain circumstances. In lieu of this requirement, we have elected to follow applicable practices of England and Wales for authorizing issuances of securities, which generally require (i) shareholder approval (a) by ordinary resolution to grant the directors authority to allot shares and (b) by special resolution to grant the directors authority to allot shares free of pre-emption rights (which approvals have already been granted by shareholders pursuant to the Company’s shareholders resolutions dated 15 March 2016); (ii) board approval and, in addition, (iii) particular board approval in certain circumstances specific to the Company including pursuant to articles 8 and 131 of the Company’s articles of association, but these practices do not follow additional corporate governance guidelines that would apply to companies listed on the Main Board of the London Stock Exchange .

Shareholder Approval of Equity Compensation Plans . Nasdaq New York requires that shareholders be given the opportunity to vote on all equity-compensation plans and material amendments thereto, with limited exceptions for inducement awards, certain grants, plans and amendments in the context of mergers and acquisitions, and specific types of plans. In lieu of this requirement, we have elected to follow the applicable practices of England and Wales for authorizing such plans, which do not generally require shareholder approval (except (i) in certain circumstances not applicable to the Company or (ii) where the issue of shares, or right to subscribe for or agreement to issue shares, requires further shareholder approval pursuant to applicable law beyond the shareholder approvals currently existing pursuant to the Company’s shareholder resolutions dated 15 March 2016). Certain plans also require certain special director approval requirements to be met pursuant to articles 131.3 and 131.4.4 of the Company’s articles of association.

Corporate Governance Guidelines . Nasdaq New York requires U.S. companies to adopt and disclose corporate governance guidelines. The guidelines must address, among other things: director qualification standards, director responsibilities, director access to management and independent advisers, director compensation, director orientation and continuing education, management succession and an annual performance evaluation. The UK Corporate Governance Code requires the Company to report on its compliance with the UK Corporate Governance Code in accordance with the "comply or explain" principle. The Company's position with respect to compliance (or non-compliance) with the individual recommendations of the UK Corporate Governance Code is required to be disclosed in the Company's Annual Report and Accounts. In addition, the Company includes on its website a detailed analysis of its compliance (or non-compliance) with the UK Corporate Governance Code in its corporate governance statement.

Directors' Remuneration Reports . Under Section 420(1) of the UK Companies Act, we are required to produce a directors' remuneration report for each fiscal year. The Directors' remuneration reports must include (i) a directors' remuneration policy, which is subject to a binding shareholder vote at least once every three years and (ii) an annual report on remuneration in the financial year being reported on, and on how the current policy will be implemented in the next financial year, which is subject to an annual advisory shareholder vote. The UK Companies Act requires that remuneration payments to directors of the Company and payments to them for loss of office must be consistent with the approved directors' remuneration policy or, if not, must be specifically approved by the shareholders at a general meeting.

ITEM 16H.

MINE SAFETY DISCLOSURE

Not applicable.

102

PART III

ITEM 17.

FINANCIAL STATEMENTS

See Item 18.

ITEM 18.

FINANCIAL STATEMENTS

The financial statements required by this item accompany this annual report in the form of our Annual Report 2018 (see Item 19).

ITEM 19.

EXHIBITS

Annual Report

The following pages from our Annual Report 2018 , furnished to the SEC on Form 6-K, dated March 12, 2019, are incorporated by reference into this annual report on Form 20-F. The content of quotations, websites and other sources referenced on these pages of the Annual Report 2018 are not incorporated by reference into this Form 20-F.

Section		Page(s) in the Annual Report 2018

Key Figures		7

Highlights		9-11

Outlook 2019		12-14

Strategic Ambition and Business Model		17-19

TORM Fleet Overview		143-145

Value Chain in Oil Transportation		21

The Product Tanker Market		22-25

Chairman’s Statement⸻US Listing and Sarbanes-Oxley Reporting		6

Financial Review 2018—Liquidity and Cash Flow; Assessment of Impairment of Assets; Primary Factors Affecting Results of Operations		47, 51

Corporate Governance—Board Committees		57

Board of Director Committee Reports		61-80

Investor Information—Changes to the Share Capital; Distribution Policy		81

Remuneration Committee Report— Annual Report on Remuneration—Performance Bonus 2018; Long-Term Incentive Plan—Restricted Share Units Granted; 2018 Remuneration Table Non-Executive Directors		75, 76, 77

Directors' Report—Share Capital		84-86

Glossary		146-147

Alternative Performance Measures		148-151

103

Index to Audited Consolidated Financial Statements

Section		Page(s) in the Annual Report 2018

Consolidated Income Statement for the years ended December 31, 2018, 2017 and 2016		91

Consolidated Statements of Comprehensive Income for the years ended December 31, 2018, 2017 and 2016		91

Consolidated Balance Sheet as of December 31, 2018 and 2017		92

Consolidated Statements of Changes in Equity as of December 31, 2018, 2017 and 2016		93-94

Consolidated Cash Flow Statement for the years ended December 31, 2018, 2017 and 2016		95

Notes to the Consolidated Financial Statements		96-129

104

List of Exhibits

1.1	Memorandum and Articles of Association(1)

2.1	Form of Class A Common Share Certificate(1)

2.2	B Share Minority Trust Deed, dated May 30, 2016(1)

2.3	Equity Warrant Instrument, dated March 15, 2016(1)

4.1	The Working Capital Facility, dated July 13, 2015(1)

4.2	Term Facility 1, dated July 13, 2015(1)

4.3	DSF Facility, dated July 20, 2018

4.5	CEXIM Facility, dated July 8, 2016(1)

4.6	Term Facility 2, dated January 6, 2017(1)

4.7	TORM plc 2017 Management Long-Term Incentive Plan(1)

4.8	TORM plc 2018 Management Long-Term Incentive Plan

4.9	ING Facility, dated September 8, 2017(1)

4.10	Amendment and Waiver Letter to Working Capital Facility and Term Facility 1, dated December 21, 2015(1)

4.11	Amendment and Waiver Letter to Working Capital Facility and Term Facility 1, dated August 23, 2016(1)

4.12	ABN AMRO Facility, dated May 7, 2018

8.1	List of Subsidiaries

11.1	TORM's Business Principles(2)

12.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer

12.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer

13.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

13.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

15.1	Consent of Independent Registered Public Accounting Firm

101.INS	XBRL Instance Document

101.SCH	XBRL Taxonomy Extension Schema

101.CAL	XBRL Taxonomy Extension Schema Calculation Linkbase

101.DEF	XBRL Taxonomy Extension Schema Definition Linkbase

101.LAB	XBRL Taxonomy Extension Schema Label Linkbase

101.PRE	XBRL Taxonomy Extension Schema Presentation Linkbase

(1) Filed as an exhibit to the Company's Registration Statement on Form 20-F (Registration No. 001-38294) on November 24, 2017, as amended, and incorporated by reference herein.

(2) Filed as an exhibit to the Company’s Annual Report filed on Form 20-F on March 8, 2018, and incorporated by reference herein.

105

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the shareholders and the Board of Directors of TORM plc

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of TORM plc and subsidiaries (the "Company") as of December 31, 2018 and 2017, the related consolidated income statements, statements of comprehensive income, statements of changes in equity and cash flow for each of the three years in the period ended December 31, 2018, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Deloitte

Statsautoriseret Revisionspartnerselskab

CVR no: 33963556

/s/ Max Damborg

State Authorised

Public Accountant

Copenhagen, Denmark

March 12, 2019

We have served as the Company's auditor since 1994.

106

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and has duly caused and authorized the undersigned to sign this annual report on its behalf.

	TORM PLC
	By:	/s/ Jacob Meldgaard
		Name: Jacob Meldgaard
		Title: Executive Director and Principal Executive Officer

Date: March 12, 2019

Fifth Supplemental Agreement to Secured Loan Agreement dated 10 April 2014, as supplemented by a side letter dated 10 April 2014 and as amended pursuant to amendment letters dated 30 April 2014, 12 June 2014, 18 June 2014, 29 May 2015, 19 February 2016 and 5 January 2018 and as amended and restated pursuant to a first supplemental agreement dated 30 September 2015, a second supplemental agreement dated 30 December 2015, a third supplemental agreement dated 29 November 2016 and a fourth supplemental agreement dated 20 September 2017

Dated 20 July 2018
Between

(1)	TORM A/S (as Borrower A)

(2)	TORM PLC (as Borrower B)

(3)

TORM PLC

(as Guarantor A)

(4)

TORM A/S

(as Guarantor B)

(5)	VesselCo 8 Pte. Ltd. (as Owner A)

(6)	VesselCo 11 Pte. Ltd. (as Owner B)

(7)	VesselCo 5 K/S (as Owner C)

(8)

TORM A/S

(as Manager and Bareboat Charterer)

(9)

TORM PLC

(as HeadBareboat Charterer)

(10)	The Financial Institutions

listed in Schedule 1

(as Original Lenders)

(11)	Danmarks Skibskredit A/S (formerly known as Danish Ship Finance A/S) (as Agent)

(12)	Danmarks Skibskredit A/S (formerly known as Danish Ship Finance A/S) (as Security Agent)

Contents		Page
1	Interpretation	3
2	Conditions to the Effective Date	5
3	Amendments to the Loan Agreement on the Effective Date	7
4	Representations and warranties	7
5	Confirmation and undertaking	7
6	Miscellaneous	8
7	Communications, counterparts, governing law and enforcement	8
Schedule 1	The Original Lenders	9
Schedule 2	Effective Date Confirmation	10
Schedule 3	Amended and Restated Loan Agreement	11

Supplemental Agreement

Dated 20 July 2018
Between:

(1)	TORM A/S a company incorporated under the laws of Denmark with its registered office at Tuborg Havnevej 18, DK-2900 Hellerup, Denmark and CVR number 22460218 (in that capacity, " Borrower A "); and

(2)	TORM PLC , a company incorporated under the laws of England and Wales with company number 09818726 with its registered office at Birchin Court, 20 Birchin Lane, London, EC3V 9DU, United Kingdom (in that capacity, " Borrower B " and together with Borrower A, the " Borrowers "); and

(3)	TORM PLC , a company incorporated under the laws of England and Wales with company number 09818726 with its registered office at Birchin Court, 20 Birchin Lane, London, EC3V 9DU, United Kingdom (in that capacity, " Guarantor A "); and

(4)	TORM A/S a company incorporated under the laws of Denmark with its registered office at Tuborg Havnevej 18, DK-2900 Hellerup, Denmark and CVR number 22460218 (in that capacity, " Guarantor B " and together with Guarantor A, the " Guarantors "); and

(5)	VesselCo 8 Pte. Ltd. , a company incorporated under the laws of Singapore with its registered office at 6 Battery Road, #27-02, Singapore 049909 (" Owner A "); and

(6)	VesselCo 11 Pte. Ltd. , a company incorporated under the laws of Singapore with its registered office at 6 Battery Road, #27-02, Singapore 049909 (" Owner B "); and

(7)	VesselCo 5 K/S , a company incorporated under the laws of Denmark with its registered office at c/o TORM A/S, Tuborg Havnevej 18, DK-2900 Hellerup, Denmark and CVR number 38911538 (" Owner C " and together with Owner A and Owner B, the " Owners ")

(8)	TORM A/S a company incorporated under the laws of Denmark with its registered office at Tuborg Havnevej 18, DK-2900 Hellerup, Denmark with CVR number 22460218 (in that capacity, the " Bareboat Charterer " and the " Manager "); and

(9)	TORM PLC , a company incorporated under the laws of England and Wales with company number 09818726 with its registered office at Birchin Court, 20 Birchin Lane, London, EC3V 9DU, United Kingdom (in that capacity, the " Head Bareboat Charterer "); and

(10)	The Financial Institutions listed in Schedule 1 ( The Original Lenders ), each acting through its Facility Office (together the " Original Lenders " and each an " Original Lender "); and

(11)	Danmarks Skibskredit A/S (formerly known as Danish Ship Finance A/S) , acting as agent through its office at Sankt Annae Plads 3, DK-1250 Copenhagen K, Denmark with CVR number 27492649 (in that capacity, the " Agent "); and

Page 2

(12)	Danmarks Skibskredit A/S (formerly known as Danish Ship Finance A/S) , acting as security agent through its office at Sankt Annae Plads 3, DK-1250. Copenhagen K, Denmark with CVR number 27492649 (in that capacity, the " Security Agent ").

Supplemental to a secured loan agreement dated 10 April 2014, as supplemented by a side letter dated 10 April 2014 and as amended pursuant to amendment letters dated 30 April 2014, 12 June 2014, 18 June 2014, 29 May 2015, 19 February 2016 and 5 January 2018 and as amended and restated pursuant to a first supplemental agreement dated 30 September 2015, a second supplemental agreement dated 30 December 2015, a third supplemental agreement dated 29 November 2016 and a fourth supplemental agreement dated 20 September 2017 (the " Loan Agreement ") made between the Borrowers as borrowers, the Guarantors as guarantors, the Lenders, the Agent and the Security Agent on the terms and subject to the conditions of which each of the Lenders agreed to advance to the Borrowers its respective Commitment of an aggregate amount not exceeding USD 246,533,763.87.

Whereas :

(A)

The Borrowers have requested an increase to the Maximum Loan Amount to two hundred and thirty six million nine hundred and thirty six thousand one hundred and ninety one dollars 35/100 (USD 236,936,191.35) to be split into (i) Existing Tranche A, Existing Tranche B and Existing Tranche C to assist the Borrowers to finance the Existing Vessels and (ii) the New Tranche which shall be advanced to Borrower B, in order to assist Owner C to finance the New Vessels (the " Request ").

(B)	The Finance Parties have agreed to give their consent to the Request, subject to and upon the terms and conditions contained in this Supplemental Agreement.

(C)	The parties to this Supplemental Agreement have agreed to amend and restate the Loan Agreement on the terms and subject to the conditions set out in this Supplemental Agreement.

It is agreed that:

1	Interpretation

1.1	In this Supplemental Agreement:

" Building Contracts " means the 4 shipbuilding contracts each dated 24 July 2017 and entered into between Borrower A as buyer and China Shipbuilding Trading Company Limited and Guangzhou Shipyard International Company Limited as sellers, each for the construction of a New Vessel.

" Effective Date " means the date and time at which the Agent confirms in writing that all of the conditions referred to in Clause 2 have been satisfied, which confirmation the Agent shall be under no obligation to give if an Event of Default shall have occurred.

" Existing Tranche " means the aggregate of Existing Tranche A, Existing Tranche B and Existing Tranche C.

Page 3

" Existing Tranche A " means an amount made available to the Borrower A of which sixty nine million one hundred and eighty thousand eight hundred and ninety seven 75/100 Dollars (USD 69,180,897.75) remains outstanding.

" Existing Tranche B " means an amount made available to Borrower A of which fifty four million four hundred and twenty three thousand six hundred and six 30/100 Dollars (USD 54,423,606.30) remains outstanding.

" Existing Tranche C " means an amount made available to Borrower B of which twenty five million five hundred and thirty one six hundred and eighty seven 30/100 Dollars (USD 25,531,687.30) remains outstanding.

" New Tranche " means an amount made or to be made available to Borrower B of up to (i) eighty million and six hundred thousand Dollars (USD 80,600,000) plus (ii) the New Tranche Increase.

" New Tranche Increase " means an amount made or to be made available to Borrower B of up to seven million and two hundred thousand Dollars (USD 7,200,000).

" New Vessels " means:

Hull No. 15121034 under the construction at Guangzhou Shipyard International Company Limited;

hull No. 15121035 under the construction at Guangzhou Shipyard International Company Limited;

hull No. 15121036 under the construction at Guangzhou Shipyard International Company Limited; and

hull No. 15121037 under the construction at Guangzhou Shipyard International Company Limited pursuant to the Building Contracts.

" Security Confirmations " means each confirmation of the Security set out in:

clause 5 ( Further Amendments, Increases or Additions of Facilities, Loans and Margins ) of the deed of confirmation relating to a deed of charge over shares in Owner A dated 27 December 2017 between Borrower A as chargor and the Agent as security agent;

clause 5 ( Further Amendments, Increases or Additions of Facilities, Loans and Margins ) of the deed of confirmation relating to a deed of charge over shares in Owner B dated 27 December 2017 between Borrower B as chargor and the Agent as security agent;

clause 4 ( Further Amendments, Increases or Additions of Facilities, Loans and Margins ) of the deed of confirmation relating to deeds of covenanats dated 28 December 2017 between Owner A and Owner B as owners and the Agent as mortgagee; and

Page 4

clause 4 ( Further Amendments, Increases or Additions of Facilities, Loans and Margins ) of the deed of confirmation relating to a deed of charge over shares dated 4 January 2018 between Borrower A, Owner A and Owner B as assignors and the Agent as security agent.

" Security Parties " means all parties to this Supplemental Agreement other than the Finance Parties and " Security Party " means any one of them.

" Upfront Fee " means the non-refundable upfront fee of 0.90% of the New Tranche Increase.

1.2	All words and expressions defined in the Amended and Restated Loan Agreement shall have the same meaning when used in this Supplemental Agreement as if it is set out in full.

1.3	All obligations, representations, warranties, covenants and undertakings of the Security Parties under or pursuant to this Supplemental Agreement shall, unless otherwise expressly provided, be entered into, made or given by them jointly and severally.

1.4	Any reference to an amount outstanding under any of the Existing Tranches are references to the amounts outstanding on 29 June 2018 and do not account for the instalments paid after such date.

2	Conditions to the Effective Date

As conditions to the effectiveness of Clause 3, the Security Parties shall deliver or cause to be delivered to or to the order of the Agent the following documents and evidence no later than 60 days after the date of this Supplemental Agreement:

2.1	Corporate Documentation

2.1.1

a copy, certified by the relevant Security Party as true, complete, accurate and unamended, of the constitutional documents of that Security Party;

2.1.2

a copy, certified by the relevant Security Party as true, complete and accurate and neither amended nor revoked, of a resolution of the directors and (if applicable) a resolution of the shareholders of that Security Party (together, where appropriate, with signed waivers of notice of any directors' or (if applicable) shareholders' meetings) approving, and authorising or ratifying the execution of, this Supplemental Agreement and any document to be executed by that Security Party pursuant to this Supplemental Agreement;

2.1.3

a power of attorney of each Security Party under which this Supplemental Agreement and any documents required pursuant to it are to be executed by that Security Party;

2.1.4

an original certificate of a duly authorised officer of each Security Party:

(a)

certifying that each copy document relating to it specified in Clauses 2.1.1 to 2.1.3 is correct, complete and in full force and effect;

Page 5

(b)

setting out the names of the directors, officers and shareholders of that Security Party and the proportion of shares held by each shareholder; and

(c)

confirming that borrowing or guaranteeing or securing, as appropriate, the Loan would not cause any borrowing, guarantee, security or similar limit binding on that Security Party to be exceeded.

2.2	Finance Documents

2.2.1

This Supplemental Agreement;

2.3	Legal Opinion

2.3.1

A legal opinion of Allen & Gledhill as to Singapore law addressed to the Agent, the Security Agent and the Lenders and capable of being relied upon by any persons who become Lenders pursuant to the primary syndication of the Loan or confirmation satisfactory to the Agent that such opinions will be given, substantially in the form distributed to the Lenders prior to the Effective Date.

2.4	Other documents and evidence

2.4.1

Evidence that the Upfront Fee has been paid.

2.4.2

Confirmation that no event or circumstance has occurred which would or is reasonably likely to affect the ability of any Security Party to perform its payment obligations under any Finance Document as they fall due.

2.4.3

Such information and documentation as the Agent may deem to be necessary or advisable in order to comply with applicable "know your customer" rules and regulations (including any law/or regulation regarding money laundering and/or financing of terrorist activities) and including, without limitation, disclosure of the corporate structure of the Security Parties, disclosure of the addresses and civil registration numbers, if applicable, of, and copies of passports of, all persons signing any of this Supplemental Agreement or the New Security Documents for and on behalf of the each of the Security Parties, together with a duly completed form entitled "Documentation Requests" from each person acting as agent or attorney-in-fact of any party.

2.4.4

A copy of any other Authorisation or other document, opinion or assurance which the Agent, acting reasonably, considers to be necessary or desirable (if it has notified the Borrowers accordingly) in connection with the entry into and performance of the transactions contemplated by this Supplemental Agreement or any documents required pursuant to it or for the validity and enforceability of this Supplemental Agreement or any documents required pursuant to it.

Page 6

3	Amendments to the Loan Agreement on the Effective Date

3.1	With effect from the Effective Date the Loan Agreement shall be amended and restated in the form set out in Schedule 3 ( Amended and Restated Loan Agreement ) (the " Amended and Restated Loan Agreement ") and each party shall be bound by the terms thereof.

3.2

In the event that the Effective Date does not occur within 60 days after the date of this Supplemental Agreement Clause 3.1 shall not apply provided, however, that the Borrower shall in such event on the date falling 60 days after the date of this Supplemental Agreement pay to the Agent a Commitment Fee calculated in accordance with clause 11.1 ( Commitment Fee ) of the Amended and Restated Loan Agreement.

3.3	The Borrower shall pay the Upfront Fee to the Agent no later than the date of this Supplemental Agreement.

4	Representations and warranties

4.1	Each of the representations and warranties contained in clause 19 of the Loan Agreement:

4.1.1

shall be deemed repeated by the Borrowers and Guarantors respectively at the date of this Supplemental Agreement; and

4.1.2

shall be deemed made at the Effective Date by each Security Party,

by reference to the facts and circumstances then pertaining, as if references to the Finance Documents included this Supplemental Agreement.

5	Confirmation and undertaking

5.1	Each Security Party confirms :

5.1.1

its knowledge and acceptance of the Amended and Restated Loan Agreement in either case with effect from the Effective Date; and

5.1.2

that, notwithstanding the increase of the Maximum Loan Amount and the other amendments effected by this Supplemental Agreement and consistent with the Security Confirmations:

(a)

the security interests created under the Security Documents is hereby ratified, will remain, valid, binding and in full force and effect and will continue to constitute the legal, valid and binding obligations of the relevant Security Parties enforceable in accordance with their terms; and

(b)

each of the security interests created by the Security Documents will continue to be valid, binding and in full force and effect and any guarantee given by the Guarantors in the Finance Documents will continue to be valid, binding and in full force and effect as security for, or guarantees of, the Indebtedness and all other present and future obligations and liabilities specified in the Security Documents or the other Finance Documents, in each case as amended,

Page 7

increased and/or extended pursuant to this Supplemental Agreement (including in particular, the increase in the Maximum Loan Amount) and any future amendments, amendments and restatements, supplements or other modifications of such Finance Documents and in each case for the benefit of each Secured Party.

5.2	The definition of any term defined in any of the Finance Documents shall, to the extent necessary, be modified to reflect the amendments to the Loan Agreement made in or pursuant to this Supplemental Agreement.

6	Miscellaneous

All documents and evidence delivered to the Agent pursuant to this Supplemental Agreement shall:

6.1	be in form and substance reasonably acceptable to the Agent;

6.2	be accompanied, if required by the Agent, by translations into the English language, certified in a manner acceptable to the Agent; and

6.3	if required for registration purposes or by law, be certified, notarised, legalised or attested in a manner acceptable to the Agent.

7	Communications, counterparts, governing law and enforcement

The provisions of clauses 31 ( Notices ), 38 ( Counterparts ), 40 ( Governing Law ) and 41 ( Enforcement ) of the Loan Agreement shall apply to this Supplemental Agreement as if they were set out in full and as if references to the Loan Agreement were references to this Supplemental Agreement.

Page 8

Schedule 1

The Original Lenders

Name of Original Lender

Danmarks Skibskredit A/S

Page 9

Schedule 2

Effective Date Confirmation

To:	TORM A/S
	TORM PLC
	VesselCo 11 Pte. Ltd.
	VesselCo 8 Pte. Ltd.
	VesselCo 5 K/S

We, Danmarks Skibskredit A/S , refer to the supplemental agreement dated ________________ 2018 (the " Supplemental Agreement ") relating to a secured loan agreement dated 10 April 2014, as supplemented by a side letter dated 10 April 2014 and as amended pursuant to amendment letters dated 30 April 2014, 12 June 2014, 18 June 2014, 29 May 2015, 19 February 2016 and 5 January 2018 and as amended and restated pursuant to a first supplemental agreement dated 30 September 2015, a second supplemental agreement dated 30 December 2015, a third supplemental agreement dated 29 November 2016 and a fourth supplemental agreement dated 20 September 2017 (the " Loan Agreement ") made between you, the banks listed in it as the original lenders, ourselves as the agent and ourselves as the security agent.

We hereby confirm that all conditions precedent referred to in clauses [2.1] to [2.4] of the Supplemental Agreement have been satisfied. In accordance with clauses 1.1 and 3 of the Supplemental Agreement the Effective Date (as defined in the Supplemental Agreement) is [ : ][a.m][p.m.][CET][GMT] on the date of this confirmation and the amendments to the Loan Agreement are now effective.

Dated 2018

Signed: _________________________

For and on behalf of

Danmarks Skibskredit A/S

(as agent)

Page 10

Schedule 3 Amended and Restated Loan Agreement

Page 11

SECURED LOAN AGREEMENT

Dated 10 April 2014 as supplemented by a side letter dated 10 April 2014 and as amended pursuant to amendment letters dated 30 April 2014, 12 June 2014, 18 June 2014 , 29 May 2015, 19 February 2016 and 5 January 2018 and as amended and restated by a first Supplemental agreement dated 30 September 2015 and a second supplemental agreement dated 30 December 2015, a third supplemental agreement dated 29 November 2016, a fourth supplemental agreement dated 20 September 2017 and a fifth supplemental agreement dated 20 July 2018

(1)

TORM PLC

TORM A/S

(as Borrowers)

(2)

TORM PLC

TORM A/S

VesselCo 8 Pte. Ltd

VesselCo 11 Pte. Ltd

VesselCo 5 K/S

(as Guarantors)

(3)	The Financial Institutions

listed in Schedule 1

(as Original Lenders)

(4)	Danmarks Skibskredit A/S (as Agent)

(5)	Danmarks Skibskredit A/S (as Security Agent)

Contents		Page
1	Definitions and Interpretation	2
2	The Loan	30
3	Purpose	30
4	Conditions of Utilisation	31
5	Advance	33
6	Repayment	35
7	Illegality, Prepayment and Cancellation	35
8	Interest	40
9	Interest Periods	40
10	Changes to the Calculation of Interest	41
11	Fees	42
12	Tax Gross Up and Indemnities	43
13	Increased Costs	48
14	Other Indemnities	49
15	Mitigation by the Lenders	52
16	Costs and Expenses	52
17	Security Documents and Application of Moneys	54
18	Guarantee and Indemnity	57
19	Representations	63
20	Information Undertakings	68
21	Financial Covenants	71
22	General Undertakings	72
23	Events of Default	81
24	Changes to the Lenders	88
25	Changes to the Security Parties	93
26	Role of the Agent and the Security Agent	94
27	Conduct of Business by the Finance Parties	105
28	Sharing among the Finance Parties	106

29	Payment Mechanics	108
30	Set-Off	111
31	Notices	112
32	Calculations and Certificates	113
33	Partial Invalidity	114
34	Remedies and Waivers	114
35	Amendments and Waivers	114
36	Confidentiality	119
37	Disclosure of Lender Details by Agent	123
38	Counterparts	125
39	Joint and Several Liability	125
40	Governing Law	127
41	Enforcement	127
Schedule 1	The Original Lenders	128
Schedule 2	Part I Conditions Precedent to Execution of this Agreement	129
Part III	Conditions Subsequent	134
Part IV	Conditions Precedent to Re-flagging under an Approved Flag	135
Schedule 3	Drawdown Request	136
Schedule 4	Form of Transfer Certificate	137
Schedule 5	Form of Assignment Agreement	140
Schedule 6	Form of Compliance Certificate	143
Schedule 7	Vessels/Owners/Flags/Current Managers	144
Schedule 8	Supplementary Agreement	146
Schedule 9	Repayment Profile / Drawings	147
Schedule 10	Approved Brokers	148

Loan Agreement

Dated 10 April 2014 as supplemented by a side letter dated 10 April 2014 and as amended pursuant to amendment letters dated 30 April 2014, 12 June 2014, 18 June 2014, 29 May 2015, 19 February 2016 and 5 January 2018 as amended and restated by a first supplemental agreement dated 30 September 2015 and a second supplemental agreement dated 30 December 2015, a third supplemental agreement dated 29 November 2016, a fourth supplemental agreement dated 20 September 2017 and a fifth supplemental agreement dated 20 July 2018

Between:

(1)	TORM A/S a company incorporated under the laws of Denmark with its registered office at Tuborg Havnevej 18, DK-2900 Hellerup, Denmark with CVR number 22460218 (in that capacity, " Borrower A "); and

(2)	TORM PLC a company incorporated under the laws of England and Wales with company number 09818726 with its registered office at Birchin Court, 20 Birchin Lane, London, EC3V 9DU, United Kingdom (in that capacity, " Borrower B " and together with Borrower A, the " Borrowers ");

(3)	TORM PLC a company incorporated under the laws of England and Wales with company number 09818726 with its registered office at Birchin Court, 20 Birchin Lane, London, EC3V 9DU, United Kingdom (in that capacity, " Guarantor A ");

(4)	TORM A/S a company incorporated under the laws of Denmark with its registered office at Tuborg Havnevej 18, DK-2900 Hellerup, Denmark with CVR number 22460218 (in that capacity, " Guarantor B " and together with Guarantor A and the Owners, the " Guarantors ");

(5)	VesselCo 8 Pte. Ltd (" Owner A "), VesselCo 11 Pte. Ltd (" Owner B ") each being a company incorporated under the laws of Singapore with its registered office at 6 Battery Road #27-02 Singapore 049909;

(6)	VesselCo 5 K/S a limited partnership organised under the laws of Denmark with its registered office at c/o TORM AS/, Tuborg Havnevej 18, DK-2900 Hellerup, Denmark, and CVR number 38911538 (" Owner C " and together with Owner A and Owner B, the " Owners ");

(7)	The Financial Institutions listed in Schedule 1 ( The Original Lenders ), each acting through its Facility Office (together the " Original Lenders " and each an " Original Lender "); and

(8)	Danmarks Skibskredit A/S , acting as agent through its office at Sankt Annae Plads 3, DK-1250 Copenhagen K, Denmark and with CVR number 27492649 (in that capacity, the " Agent "); and

(9)	Danmarks Skibskredit A/S , acting as security agent through its office at Sankt Annae Plads 3, DK-1250. Copenhagen K, Denmark and with CVR number 27492649 (in that capacity, the " Security Agent ").

Preliminary

Page 1

Each of the Original Lenders has agreed to advance to the relevant Borrower its Commitment (aggregating, with all the other Commitments up to USD 236,936,191.35) as set out in Schedule 1 and Schedule 9 to assist each Owner with the financing of the relevant Vessels.

It is agreed as follows:

Section 1

Interpretation

1	Definitions and Interpretation

1.1	Definitions In this Agreement:

" Acceptable Bank " means Nordea Bank AB, Danske Bank A/S or any of their Affiliates.

" Administration " has the meaning given to it in paragraph 1.1.3 of the ISM Code.

" Affiliate " means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.

" Annex VI " means Annex VI (Regulations for the Prevention of Air Pollution from Ships) to the International Convention for the Prevention of Pollution from Ships 1973 (as modified in 1978 and 1997).

" Appropriate Amount " means in relation to a Vessel an amount equal to the product of

(a)

the then total outstanding principal amount of the Loan (less any amount standing to the credit of the Reserve Account) multiplied by

(b)

the fraction, the numerator of which is the Market Value (as determined by the most recent valuation provided to the Agent pursuant to Clause 20.2.3) of the relevant Vessel and the denominator of which is the aggregate Market Value (as determined by the most recent valuation provided to the Agent pursuant to Clause 20.2.3) of all Vessels (including the relevant Vessel) and the value of any additional security for the time being provided to the Security Agent under Clause 17.5 (Additional Security).

" Approved Classification Society " means each of American Bureau of Shipping, Bureau Veritas, DNV- GL, Lloyds Register, Nippon Kaiji, Polish Register of Shipping and Registro Italiano Navale.

" Approved Flag " means Singapore, Denmark, Norway, the United Kingdom, Isle of Man, Bahamas, Bermuda, Panama, Malta, Marshall Islands, Cyprus, Hong Kong and Liberia.

" Approved Shipbroker " means each of the shipbrokers listed in Schedule 10 and any other shipbrokers acceptable to the Security Agent (acting reasonably) at the request of the Borrowers.

" Assignments " means all the forms of assignment referred to in Clause 17.1.2 ( Security Documents ).

Page 2

" Authorisation " means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

" Availability Period " means for the part of the New Tranche available to finance a New Vessel as set out in Clause 2.2, a period commencing on the date of this Agreement and ending on the earlier of (i) the date falling 7 Business Days after the delivery of such New Vessel under the relevant Building Contract and (ii) 30 April 2020 or such later date as the Lenders may agree.

" Bareboat Charter " means the bareboat charter contract between an Owner and the Bareboat Charterer relating to a Vessel, in form and substance reasonably satisfactory to the Agent.

" Bareboat Charterer " means TORM A/S.

" Break Funding Costs " means, in relation to DSF, the present value as per the relevant prepayment or cancellation date (using the applicable zero coupon swap rate on the relevant prepayment or cancellation date as the discount rate, and the relevant Interest Payment Dates under the remaining relevant Interest Periods at the relevant point in time to discount the below cash flows) of any positive amount constituting:

(a)

in respect of the Existing Tranche A,

(i)

(i) DSF’s cost of funding its participation of the Loan or any relevant part thereof as of the date of the signed facility offer, being 26 February 2014, in dollars based on a spread above LIBOR (being 0.57 per cent per annum for the period until 15 June 2019 and 0.70 per cent per annum for the period thereafter), calculated for the remaining Interest Periods for the relevant part of the Loan taking into account the amount, tenor and repayment profile of the prepaid or cancelled part of the Loan;

less:

(ii)

DSF’s cost of funding its participation of such prepaid or cancelled part of the Loan at the time of prepayment or cancellation on the basis of an identical tenor and repayment profile as that of the prepaid or cancelled part of the Loan as determined by DSF in its sole discretion in dollars based on a spread above LIBOR calculated for the remaining Interest Periods for the relevant part of the Loan taking into account the amount and the repayment profile of the prepaid or cancelled part of the Loan; and

(b)

in respect of the Existing Tranche B,

(i)

DSF’s cost of funding its participation of the Loan or any relevant part thereof, in dollars based on a spread above LIBOR, being 1.03 per cent per annum, calculated for the

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remaining Interest Periods for the relevant part of the Loan taking into account the amount, tenor and repayment profile of the prepaid or cancelled part of the Loan;

less:

(ii)

(c)

in respect of the Existing Tranche C,

(i)

DSF’s cost of funding its participation of the Loan or any relevant part thereof, in dollars based on a spread above LIBOR, being 1.08 per cent per annum, calculated for the remaining Interest Periods for the relevant part of the Loan taking into account the amount, tenor and repayment profile of the prepaid or cancelled part of the Loan;

less:

(ii)

(d)

in respect of the New Tranche,

(i)

DSF’s cost of funding its participation of the Loan or any relevant part thereof, in dollars based on a spread above LIBOR, being 1.12 per cent per annum, calculated for the remaining Interest Periods for the relevant part of the Loan taking into account the amount, tenor and repayment profile of the prepaid or cancelled part of the Loan;

less:

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(ii)

" Break Gains " means all gains realised by a Lender as a result of its receiving any prepayment of all or any part of a Tranche pursuant to Clause 7 (Illegality, Prepayment and Cancellation) on a day other than the last day of an Interest Period for the applicable Tranche or relevant part of that Tranche.

" Business Day " means a day (other than a Saturday or Sunday) on which banks are open for general business in Denmark, New York and London.

" Cash Equivalents " means at any time:

(a)

certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank;

(b)

any investment in marketable debt obligations issued or guaranteed by the government of the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State or any other country having a credit rating of Baa2 or higher by Standard & Poor’s Rating Services or BBB or higher by Moody’s Investors Service Limited or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security;

(c)

commercial paper not convertible or exchangeable to any other security:

(i)

for which a recognised trading market exists;

(ii)

issued by an issuer incorporated in the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State or any other country having a credit rating of Baa2 or higher by Standard & Poor’s Rating Services or BBB or higher by Moody’s Investors Service Limited;

(iii)

which matures within one year after the relevant date of calculation; and

(iv)

which has a credit rating of either Baa2 or higher by S&P or BBB or higher by Moody’s, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term

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unsecured and non-credit enhanced debt obligations, an equivalent rating;

(d)

any investment in money market funds which (i) has a credit rating of either Baa2 or higher by S&P or BBB or higher by Moody’s, (ii) which invest substantially all their assets in securities of the types described in paragraphs (a) to (c) above and (iii) can be turned into cash on not more than five (5) days’ notice; or

(e)

any other debt security approved by the Agent (on behalf of the Majority Lenders),

in each case, to which any member of the Group is alone (or together with other members of the Group) beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Encumbrance created by or pursuant to any of the Finance Documents.

"Change of Control" means either:

(a)

any person or group of persons acting in concert gains direct or indirect control of Borrower B where:

(i)

" control " of Borrower B means:

(A)

the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

(1)

cast, or control the casting of, more than 50 per cent (50%). of the maximum number of votes that might be cast at a general meeting of Borrower B; or

(2)

appoint or remove the chairman of the board of directors or the majority of the directors or other equivalent officers of Borrower B; or

(3)

give directions with respect to the operating and financial policies of Borrower B with which the directors or other equivalent officers of Borrower B are obliged to comply; and/or

(B)

the holding beneficially of more than 50 per cent. (50%) of the issued share capital of Borrower B (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); and

(ii)

" acting in concert " means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in Borrower B, either directly or indirectly, to obtain or consolidate control of Borrower B, provided that for the avoidance of doubt no action by the Lenders (in any capacity) shall result in

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those Lenders being deemed to be acting in concert for this purpose; or

(b)

the Sponsor, directly or indirectly, either:

(i)

ceases to be able through its appointees to Borrower B's board of directors (including the chairman (who shall have the casting vote)) to control the board of directors of Borrower B; or

(ii)

ceases to own or control at least 33.34 per cent. (33.34%) of the maximum number of votes that might be cast at a general meeting of Borrower B.

" Charged Property " means all of the assets of the Security Parties which from time to time are, or are expressed to be, the subject of the Security Documents.

" Chargor A " means TORM A/S in its capacity as chargor of Owner A.

" Chargor B " means TORM PLC in its capacity as chargor of Owner B.

" Chargor C " means DK VESSEL HOLDCO K/S acting in its capacity as chargor of the limited partnership shares in Owner C and Borrower A in its capacity as chargor of the shares in VesselCo E ApS, the general partner of Owner C.

" Chargor " means each of Chargor A, Chargor B and Chargor C.

" Charters" means together the Bareboat Charters and the Time Charters and

" Charter" means any one of them.

" Charterer " means the party to any Charter, other than an Owner.

" Code " means the US Internal Revenue Code of 1986.

" Commercial Manager " means, in relation to the commercial management of a Vessel:

(a)

the company whose name is set opposite the name of that Vessel under "Commercial Manager" in Schedule 7; or

(b)

such other commercial manager of any Vessel nominated by the relevant Owner from time to time, subject to the Agent’s written consent (such consent not to be unreasonably withheld).

" Commitment " means:

(a)

in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in Schedule 1 ( The Original Lenders ) and the amount of any other Commitment transferred to it under this Agreement; and

(b)

in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

to the extent not cancelled, reduced or transferred by it under this Agreement.

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" Compliance Certificate " means a certificate substantially in the form set out in Schedule 6 ( Form of Compliance Certificate ).

" Confidential Information " means all information relating to any Security Party, the Finance Documents or the Loan of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Loan from either:

(a)

any Security Party, or any of its advisers; or

(b)

another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Security Party, or any of its advisers,

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:

(i)

is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 36 ( Confidentiality ); or

(ii)

is identified in writing at the time of delivery as non-confidential by any Security Party, or any of its advisers; or

(iii)

is known by that Finance Party before the date the information is disclosed to it in accordance with (a) or (b) or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with any Security Party and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.

" Confidentiality Undertaking " means a confidentiality undertaking substantially in a recommended form of the Loan Market Association at the relevant time.

“ Danish Capital Markets Act ” means the Danish Consolidated Act No. 12 of 8 January 2018 on capital markets (in Danish: lov om kapitalmarkeder) and any executive orders issued pursuant thereto, all as amended from time to time.

" Debt Purchase Transaction " means, in relation to a person, a transaction where such person:

(a)

purchases by way of assignment or transfer;

(b)

enters into any sub-participation in respect of; or

(c)

enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of;

any Commitment or amount outstanding under this Agreement.

" Default " means an Event of Default or any event or circumstance which would (with the expiry of a grace period, the giving of notice, the making of any reasonable determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

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" Defaulting Lender " means any Lender:

(a)

which has failed to make its participation in a Drawing available (or has notified the Agent or the Borrowers (which have notified the Agent) that it will not make its participation in a Drawing available) by the Drawdown Date of that Drawing in accordance with Clause 5.3 ( Lenders' participation ); or

(b)

which has otherwise rescinded or repudiated a Finance Document; or

(c)

with respect to which an Insolvency Event has occurred and is continuing, unless,

in the case of (a):

(i)

its failure to pay is caused by:

(A)

administrative or technical error; or

(B)

a Disruption Event; and

payment is made within three Business Days of its due date; or

(ii)

the Lender is disputing in good faith whether it is contractually obliged to make the payment in question.

" Delegate " means any delegate, agent, attorney or co-trustee appointed by the Security Agent.

" Delivery Date " means the date on which a New Vessel is delivered to Owner C pursuant to the relevant Building Contract.

" Disruption Event " means either or both of:

(a)

a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Loan (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

(a)

the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

(i)

from performing its payment obligations under the Finance Documents; or

(ii)

from communicating with other Parties in accordance with the terms of the Finance Documents,

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

" DOC " means, in relation to the ISM Company, a valid Document of Compliance issued for the ISM Company by the Administration under paragraph 13.2 of the ISM Code.

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" Drawdown Date " means the date on which the relevant Drawing is advanced under Clause 5 ( Advance ).

" Drawdown Request " means a notice substantially in the form set out in Schedule 3 ( Drawdown Request ).

" Drawing " means any part of the Loan advanced or to be advanced pursuant to a Drawdown Request or, where the context permits, that part of the Loan advanced and for the time being outstanding in respect of a Vessel and " Drawings " means more than one of them.

“DSF” means Danmarks Skibskredit A/S with CVR number 27492649 in its capacity as Lender.

" Earnings " means all hires, freights, pool income and other sums payable to or for the account of an Owner or the Bareboat Charterer in respect of a Vessel including (without limitation) all remuneration for salvage and towage services, demurrage and detention moneys, contributions in general average, compensation in respect of any requisition for hire, and damages and other payments (whether awarded by any court or arbitral tribunal or by agreement or otherwise) for breach, termination or variation of any contract for the operation, employment or use of a Vessel but excluding amounts payable by the Bareboat Charterer to an Owner pursuant to a Bareboat Charter.

" Encumbrance " means a mortgage, charge, assignment, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

" Environmental Approval " means any present or future permit, ruling, variance or other Authorisation required under Environmental Laws.

" Environmental Claim " means any claim, proceeding, formal notice or investigation by any governmental, judicial or regulatory authority or any other person which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law and, for this purpose, "claim" includes a claim for damages, compensation, contribution, injury, fines, losses and penalties or any other payment of any kind, including in relation to clean-up and removal, whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.

"Environmental Incident" means:

(a)

any release, emission, spill or discharge into a Vessel or into or upon the air, sea, land or soils (including the seabed) or surface water of Environmentally Sensitive Material within or from a Vessel; or

(b)

any incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water from a vessel other than a Vessel and which involves a collision between a Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection

Page 10

with which a Vessel is actually or potentially liable to be arrested, attached, detained or injuncted and/or a Vessel and/or any Security Party and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action; or

(c)

any other incident in which Environmentally Sensitive Material is released, emitted, spilled or discharged into or upon the air, sea, land or soils (including the seabed) or surface water otherwise than from a Vessel and in connection with which a Vessel is actually or potentially liable to be arrested and/or where any Security Party and/or any operator or manager of a Vessel is at fault or allegedly at fault or otherwise liable to any legal or administrative action, other than in accordance with an Environmental Approval.

" Environmental Law " means any present or future law or regulation relating to pollution or protection of human health or the environment, to conditions in the workplace, to the carriage, generation, handling, storage, use, release or spillage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.

" Environmentally Sensitive Material " means and includes all contaminants, oil, oil products, toxic substances and any other substance (including any chemical, gas or other hazardous or noxious substance) which is (or is capable of being or becoming) polluting, toxic or hazardous.

" Equity " means, on any date, the value of the aggregate capital and reserves of the Group (on a consolidated basis) determined in accordance with GAAP and adjusted to reflect the fair market value of the Fleet Vessels (including the Market Value of each Vessel) based on the valuations to be delivered to the Agent pursuant to Clause 20.2.1.

" Equity Ratio " means the ratio of the Group's Equity to Total Assets.

" Event of Default " means any event or circumstance specified as such in Clause 23 ( Events of Default ).

" Existing Tranche " means Existing Tranche A, Existing Tranche B and Existing Tranche C together.

" Existing Tranche A " means the tranche drawn to finance Vessel 1 to Vessel 13 inclusive (as set out in Schedule 7), currently in an amount of sixty nine million one hundred and eighty thousand eight hundred and ninety seven 75/100 Dollars (USD 69,180,897.75).

" Existing Tranche B " means the tranche drawn to finance Vessel 14 to Vessel 16 inclusive (as set out in Schedule 7), currently in an amount of fifty four million four hundred and twenty three thousand six hundred and six 30/100 Dollars (USD 54,423,606.30).

" Existing Tranche C " means the tranche drawn to finance Vessel 17 and Vessel 18 (as set out in Schedule 7) currently in an amount of twenty five million five hundred and thirty one six hundred and eighty seven 30/100 Dollars (USD 25,531,687.30).

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" Existing Vessels " means Vessel 2, Vessel 3, Vessel 4, Vessel 5, Vessel 7, Vessel 8, Vessel 9, Vessel 11, Vessel 12, Vessel 14, Vessel 15, Vessel 16, Vessel 17 and Vessel 18 as set out in Schedule 7.

" Facility Office " means the office or offices notified by a Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement.

" Facility Period " means the period beginning on the date of this Agreement and ending on the date when the whole of the Indebtedness has been paid in full and the Security Parties have ceased to be under any further actual or contingent liability to the Finance Parties under or in connection with the Finance Documents.

" FATCA " means:

(a)

sections 1471 to 1474 of the Code or any associated regulations or other official guidance;

(b)

any treaty, law, regulation or other official guidance enacted in any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of (a); or

(c)

any agreement pursuant to the implementation of (a) or (b) with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

"FATCA Application Date" means:

(a)

in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

(b)

in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

(c)

in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within (a) or (b), 1 January 2017,

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

" FATCA Deduction " means a deduction or withholding from a payment under a Finance Document required by FATCA.

" FATCA Exempt Party " means a Party that is entitled to receive payments free from any FATCA Deduction.

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" FATCA FFI " means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if any Finance Party is not a FATCA Exempt Party, could be required to make a FATCA Deduction.

" Finance Documents " means this Agreement, the Security Documents, the Supplemental Agreement and any other document designated as such by the Agent and the Borrowers and " Finance Document " means any one of them.

" Finance Parties " means the Agent, the Security Agent, and the Lenders and " Finance Party " means any one of them.

" Financial Indebtedness " means any indebtedness for or in respect of:

(a)

moneys borrowed and debit balances at banks or other financial institutions;

(b)

any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);

(c)

any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

(d)

the amount of any liability in respect of any finance or capital lease;

(e)

receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

(f)

any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Treasury Transaction, that amount) shall be taken into account);

(g)

any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of (i) an underlying liability of an entity which is not a Security Party which liability would fall within one of the other sections of this definition or (ii) any liabilities of any Security Party relating to any post-retirement benefit scheme;

(h)

any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Termination Date or are otherwise classified as borrowings under GAAP;

(i)

any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 60 days after the date of supply;

(j)

any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under GAAP; and

Page 13

(k)

the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in (a) to (j).

" Fleet Vessels " means each Vessel and each other vessel owned by any member of the Group.

" Free Liquidity " means the aggregate of unencumbered (other than pursuant to a Security Document) cash and Cash Equivalents to which any member of the Group has free, immediate and direct access without netting and set-off arrangements (other than with the Lenders) and which (for the avoidance of doubt) shall not include any additional security given or cash paid to the Security Agent pursuant to Clause 17.5 or any sums standing to the credit of the Reserve Account.

" GAAP" means International Financial Reporting Standards (as adopted by the European Union) and related interpretations as amended, supplemented, issued or adopted from time to time by the International Accounting Standards Board to the extent applicable to the relevant financial statements in respect of Borrower B and otherwise generally accepted accounting principles of the jurisdiction of incorporation of such party consistently applied.

" Group " means Borrower B and each of its Subsidiaries for the time being.

" Group Debt " means, on any date, the aggregate amount of all obligations of all members of the Group for or in respect of Financial Indebtedness but excluding any Inter-company Indebtedness.

" Guarantee " means the joint and several guarantee and indemnity of the Guarantors contained in Clause 18 ( Guarantee and Indemnity ) and referred to in Clause 17.1.3 ( Security Documents ).

" Holding Company " means, in relation to a person, any other person in respect of which it is a Subsidiary.

" IAPPC " means a valid international air pollution prevention certificate for a Vessel issued under Annex VI.

" Impaired Agent " means the Agent at any time when:

(a)

it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;

(b)

the Agent otherwise rescinds or repudiates a Finance Document;

(c)

(if the Agent is also a Lender) it is a Defaulting Lender under (a) or (b) of the definition of "Defaulting Lender"; or

(d)

an Insolvency Event has occurred and is continuing with respect to the Agent;

unless, in the case of (a):

(i)

its failure to pay is caused by:

Page 14

(A)

administrative or technical error; or

(B)

a Disruption Event; and

payment is made within three Business Days of its due date; or

(ii)

the Agent is disputing in good faith whether it is contractually obliged to make the payment in question.

" Indebtedness " means the aggregate from time to time of: the amount of the Loan outstanding; all accrued and unpaid interest on the Loan; all Interest Break Costs and Break Funding Costs and all other sums of any nature (together with all accrued and unpaid interest on any of those sums) payable to any of the Finance Parties under all or any of the Finance Documents.

" Insolvency Event " in relation to an entity means that the entity:

(a)

is dissolved (other than pursuant to a consolidation, amalgamation or merger);

(b)

becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;

(c)

makes a general assignment, arrangement or composition with or for the benefit of its creditors;

(d)

institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;

(e)

has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in (d) and:

(i)

results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or

(ii)

is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;

(f)

has exercised in respect of it one or more of the stabilisation powers pursuant to Part 1 of the Banking Act 2009 and/or has instituted against it a bank insolvency proceeding pursuant to Part 2 of the Banking Act 2009 or a bank administration proceeding pursuant to Part 3 of the Banking Act 2009;

Page 15

(g)

has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);

(h)

seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made, or is made, by a person or entity described in (d));

(i)

has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;

(j)

causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in (a) to (i); or

takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

" Insurances " means all policies and contracts of insurance (including all entries in protection and indemnity or war risks associations) required by the terms of the Finance Documents and which are from time to time taken out or entered into in respect of or in connection with a Vessel or her increased value and (where the context permits) all benefits under such contracts and policies, including all claims of any nature and returns of premium.

" Interest Break Costs " means the amount (if any) by which:

(a)

the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or an Unpaid Sum to the last day of the current Interest Period in respect of the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

(b)

the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

" Interest Payment Date " means each date for the payment of interest in accordance with Clause 8.2 ( Payment of interest ).

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" Interest Period " means each period determined in accordance with Clause 9 ( Interest Periods ) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 ( Default interest ).

" Inter-company Indebtedness " means any obligation related to Financial Indebtedness owed by one Security Party to another Security Party.

" Inter-company Indebtedness Assignment " means any deed of assignment and subordination in respect of Inter-company Indebtedness entered into pursuant to Clause 22.30 and referred to in Clause 17.1.7 ( Security Documents ) and to be in a form acceptable to the Agent.

" Interpolated Screen Rate " means, in relation to LIBOR, the rate which results from interpolating on a linear basis between:

(a)

the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the relevant Interest Period; and

(b)

the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the relevant Interest Period,

each as of 11.00 a.m. on the Quotation Day for dollars.

" ISM Code " means the International Management Code for the Safe Operation of Ships and for Pollution Prevention.

" ISM Company " means, at any given time, the company responsible for a Vessel's compliance with the ISM Code under paragraph 1.1.2 of the ISM Code.

" ISPS Code " means the International Ship and Port Facility Security Code.

" ISSC " means a valid international ship security certificate for a Vessel issued under the ISPS Code.

" Joint Venture " means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity.

" Legal Opinion " means any legal opinion delivered to the Agent under Clause 4.1 ( Initial conditions precedent ) or Clause 4.3 ( Conditions subsequent ) or under any other Finance Document

"Legal Reservations" means:

(a)

the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;

(b)

the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim;

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(c)

similar principles, rights and defences under the laws of any Relevant Jurisdiction; and

(d)

any other matters which are set out as qualifications or reservations as to matters of law of general application in the Legal Opinions.

" Lender " means:

(a)

any Original Lender; and

(b)

any bank, financial institution, trust, fund or other entity which has become a Party as a Lender in accordance with Clause 24 ( Changes to the Lenders ),

which in each case has not ceased to be a Lender in accordance with the terms of this Agreement.

" LIBOR " means:

(a)

the applicable Screen Rate; or

(b)

(if no Screen Rate is available for the relevant Interest Period) the Interpolated Screen Rate; or

(c)

(if (i) no Screen Rate is available for the currency of the Loan or (ii) no Screen Rate is available for the relevant Interest Period and it is not possible to calculate the Interpolated Screen Rate) the Reference Bank Rate,

as of 11.00 a.m. on the Quotation Day for dollars and for a period equal in length to the relevant Interest Period and, if that rate is less than zero, LIBOR shall be deemed to be zero.

" Loan " means the aggregate amount advanced or to be advanced by the Lenders to each Borrower under Clause 2 ( The Loan ) and being the aggregate of the Existing Tranche and the New Tranche or, where the context permits, the principal amount advanced and for the time being outstanding.

" LTV Coverage " has the meaning set out in Clause 17.5.

" Majority Lenders " means a Lender or Lenders whose Commitments aggregate more than 66 ² / ₃ % of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66 ² / ₃ % of the Total Commitments immediately prior to the reduction).

" Management Agreements " means:

(a)

the agreements from time to time in force for the commercial management of the relevant Vessels between the relevant Owner and the relevant Commercial Manager; and

(b)

the agreements from time to time in force for the technical management of the relevant Vessels between the relevant Owner and the relevant Technical Manager.

" Managers " means:

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(a)

in relation to the commercial management of a Vessel, the Commercial Manager; and

(b)

in relation to the technical management of a Vessel, the Technical Manager.

" Managers' Undertakings " means the written undertakings of the Managers (other than a Manager within the Group) whereby (to the extent that the relevant Manager is prepared so to agree following the Owner's reasonable efforts), while they are appointed by an Owner:

(a)

they will remain the commercial or technical managers of the Vessels (as the case may be); and

(b)

they will not, without the prior written consent of the Agent, subcontract or delegate the commercial or technical management of the Vessels (as the case may be) to any third party; and

(c)

the interests of the Managers (if any) in the Insurances (other than indemnity insurances) will be assigned to the Security Agent with first priority but subject to the Managers’ right to receive any indemnity moneys; and

(d)

following the occurrence of an Event of Default, all claims of the Managers against the Owners shall be coordinated with the claims of the Finance Parties under the Finance Documents and, at the request of the Agent, the Managers shall remain the commercial and technical managers of the Vessels on the terms and conditions of the relevant Management Agreements, subject to receiving payment of amounts from time to time due (including their fees) pursuant to such Management Agreements.

" Margin " means

(a)

in respect of Existing Tranche A and Existing Tranche B 2.5 per cent per annum;

(b)

in respect of Existing Tranche C, 2.6 per cent per annum; and

(c)

in respect of the New Tranche, 2.35 per cent per annum.

" Market Value " means the average value of a Vessel conclusively determined by two Approved Shipbrokers appointed by the Borrowers on the basis of a charter-free sale for prompt delivery for cash at arm's length on normal commercial terms as between a willing seller and a willing buyer and evidenced by a valuation from each such Approved Shipbroker of that Vessel certifying a value for that Vessel.

" Material Adverse Effect " means in the reasonable opinion of the Majority Lenders a material adverse effect on:

(a)

the business, or financial condition of the Group taken as a whole; or

(b)

the ability of any Security Party to perform its obligations under any Finance Document as they fall due; or

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(c)

the validity or enforceability of, or the effectiveness or ranking of any Encumbrance granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.

" Maximum Loan Amount " means two hundred and thirty six million nine hundred and thirty six thousand one hundred and ninety one 35/100 Dollars (USD 236,936,191.35).

" Mortgages " means the first preferred or first priority mortgages (as applicable) and the second preferred or second priority mortgages as applicable and, if applicable, collateral deeds of covenant, referred to in Clause 17.1.1 ( Security Documents ) (as amended from time to time) and " Mortgage " means any of them.

" New Lender " has the meaning given to that term in Clause 24.1 ( Assignments and transfers by the Lenders ).

" New Tranche " means the tranche available to finance the New Vessels in an amount of up to eighty million and six hundred thousand Dollars (USD 80,600,000) plus the New Tranche Increase.

" New Tranche Increase " means an amount made or to be made available to Borrower B of up to seven million and two hundred thousand Dollars (USD 7,200,000).

" New Vessels " means Vessel 19, Vessel 20, Vessel 21 and Vessel 22 as set out in Schedule 7.

" Non-Consenting Lender " has the meaning given to that term in Clause 35.4.4 ( Replacement of Lender ).

" Original Budget " means the detailed, forward-looking consolidated budgets of the Guarantors and the Borrowers in respect of the first twenty four months following the date of this Agreement showing profit and loss statements, balance sheets and cash flow statements, as well as written assumptions.

" Original Jurisdiction " means, in relation to a Security Party, the jurisdiction under whose laws that Security Party is incorporated as at the date of this Agreement.

" Owner " means each of Owner A, Owner B and Owner C.

" Participating Member State " means any member state of the European Community that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.

" Payment Date " means each of 15 ^th March, 15 ^th June, 15 ^th September and 15 ^th December.

"Party " means a party to this Agreement.

" Permitted Disposal " means any sale, lease, licence, transfer or other disposal which is on arm's length terms:

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(a)

of trading stock or cash made by any Security Party in the ordinary course of trading of the disposing entity;

(b)

of any asset by any Security Party (the " Disposing Company ") to any other Security Party (the " Acquiring Company "), but if:

(i)

the Disposing Company is a Security Party, the Acquiring Company must also be a Security Party;

(ii)

the Disposing Company had given any Encumbrance over the asset, the Acquiring Company must give an equivalent Encumbrance over that asset; and

(iii)

the Disposing Company is a Guarantor, the Acquiring Company must guarantee at all times an amount no less than that guaranteed by the Disposing Company;

(c)

of assets in exchange for other assets comparable or superior as to type, value and quality;

(d)

of obsolete or redundant vehicles, plant and equipment for cash; and

(e)

arising as a result of any Permitted Encumbrance.

"Permitted Encumbrance" means:

(a)

any Encumbrance which has the prior written approval of the Agent;

(b)

any Encumbrance arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by a Security Party;

(c)

any quasi-security arising as a result of a disposal which is a Permitted Disposal; or

(d)

any liens for current crews' wages and salvage and liens incurred in the ordinary course of trading a Vessel up to an aggregate amount at any time not exceeding USD 500,000 per Owner.

" Permitted Transaction " means:

(a)

any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Encumbrance given, or other transaction arising, under the Finance Documents; or

(b)

transactions (other than (i) any sale, lease, license, transfer or other disposal and (ii) the granting or creation of any Encumbrance or the incurring or permitting to subsist of Financial Indebtedness) conducted in the ordinary course of trading on arm's length terms and for fair market value.

" Quotation Day " means, in relation to any period for which an interest rate is to be determined two Business Days before the first day of that period unless market practice differs in the Relevant Interbank Market, in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant

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Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).

" RCF Facility Agreement " means the working capital facility agreement comprising a USD 75,000,000 revolving credit facility made between (inter alia) Borrower A (as borrower) and Danske Bank A/S (as agent) dated on or about 13 July 2015 and any refinancing of such agreement on similar terms and giving a minimum of 12 months availability at any relevant time.

" Receiver " means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.

" Reference Bank Rate " means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in dollars and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in dollars and for that period.

" Reference Banks " means, in relation to LIBOR, the principal London offices of Nordea Bank AB, Danske Bank A/S and HSBC Bank plc or such other banks as may be appointed by the Agent in consultation with the Borrowers.

“ Relevant Affiliate ” means, in relation to any Obligor or Group Member:

(a)

a Subsidiary of that Obligor or Group Member; or

(b)

a Holding Company of that Obligor or Group Member; or

(c)

any other Subsidiary of that Holding Company,

but in each case excluding the Sponsor and excluding any Affiliate of the Sponsor which is not a Group Member.

" Relevant Documents " means the Finance Documents, the Charters, and the Management Agreements.

" Relevant Interbank Market " means the London interbank market. " Relevant Jurisdiction " means, in relation to a Security Party:

(a)

its Original Jurisdiction;

(b)

any jurisdiction where any asset subject to or intended to be subject to a Security Document to be executed by it is situated;

(c)

any jurisdiction where it conducts its business; and

the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.

" Repayment Date " means the date for payment of any Repayment Instalment in accordance with Clause 6 ( Repayment ).

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" Repayment Instalment " means any instalment of the Loan to be repaid by the Borrowers under Clause 6 ( Repayment ).

" Repeating Representations " means each of the representations set out in Clause 19.1.1 ( Status ) to Clause 19.1.6 ( Governing law and enforcement ), Clause 19.1.10 ( No default ) to Clause 19.1.19 ( Pari passu ranking ) and Clause 19.1.25 ( Sanctions ).

" Requisition Compensation " means all compensation or other money which may from time to time be payable to an Owner and/or the Charterer as a result of a Vessel being requisitioned for title or in any other way compulsorily acquired (other than by way of requisition for hire).

" Reserve Account " means the bank account nominated in USD opened or to be opened in the name of Borrower A into which any cash deposit is made pursuant to Clause 7.11 ( Vessel Substitution ) or Clause 17.5 ( Additional Security ) with account number 3238002435 and IBAN number DK7830003238002435.

" Reserve Account Pledge " means the account pledge agreement to be entered into by Borrower A in favour of the Security Agent in respect of all amounts from time to time standing to the credit of the Reserve Account.

“ Restricted Party ” means a person:

(a)

that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person) or otherwise is a target of Sanctions Laws;

(b)

that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of any country or territory that is the target of comprehensive, country- or territory-wide Sanctions Laws;

(c)

that is directly or indirectly owned or controlled by a person referred to in (a) and/or (b) above; or

(d)

with which any national of a Sanctions Authority is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws.

“ Sanctions Authority ” means (a) the United Nations, the European Union, the member states of the European Union, the US or any country to which any Borrower or Guarantor, or any other member of the Group or any Relevant Affiliate or any of them is bound or (b) the respective governmental institutions and agencies of any of the foregoing, including, without limitation, the Office of Foreign Assets Control of the US Department of Treasury (“OFAC”), the United States Department of State and Her Majesty’s Treasury.

“ Sanctions Laws ” means the economic or financial sanctions laws and/or regulations, trade embargoes, prohibitions, restrictive measures, decisions, executive orders or notices from regulators implemented, adopted, imposed, administered, enacted and/or enforced by any Sanctions Authority.

“ Sanctions List ” means any list of persons or entities published in connection with Sanctions Laws, by or on behalf of any Sanctions Authority.

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" Screen Rate " means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period displayed on pages LIBOR01 or LIBOR02 of the Reuters screen (or any replacement Reuters page which displays that rate) or, on the appropriate page of such other information service which publishes that rate from time to time in place of Reuters. If such page or the service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrowers.

" Scrubber " means a system, e.g. an emissions abatement plant for combustion machinery or an exhaust gas cleaning systems, to control the exhaust emission of NOx, SOx in accordance with the IMO 2020 regulations.

" Secured Parties " means each Finance Party from time to time party to this Agreement and any Receiver or Delegate.

" Security Documents " means the Mortgages, the Assignments, the Guarantee, the Reserve Account Pledge, the Share Charges, the Managers' Undertakings, any Inter-company Indebtedness Assignment or (where the context permits) any one or more of them, and any other agreement or document which may at any time be executed by any person as security for the payment of all or any part of the Indebtedness and " Security Document " means any one of them.

" Security Parties " means each Borrower, each Guarantor, each Chargor, and any other person (other than a Manager or Charterer) who may at any time during the Facility Period be liable for, or provide security for, all or any part of the Indebtedness, and " Security Party " means any one of them.

" Share Charges " means the charges of the issued share capital of the Owners and the general partner of Owner C, VesselCo E ApS referred to in Clause 17.1.5 ( Security Documents ).

" SMC " means a valid safety management certificate issued for a Vessel by or on behalf of the Administration under paragraph 13.7 of the ISM Code.

" Sponsor " means Oaktree Capital Management L.P. and any fund or funds solely managed by Oaktree Capital Management L.P..

" Subsidiary " means a subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006.

" Supplemental Agreement " means a supplemental agreement to this Agreement dated 20 July 2018 entered into between, among others, the parties to this Agreement.

" Tax " means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

" Technical Manager " means, in relation to the technical management of a Vessel:

(a)

the company whose name is set opposite the name of that Vessel under "Technical Manager" in Schedule 7; or

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(b)

such other technical manager of any Vessel nominated by the Owners from time to time, subject to the Agent’s written consent (such consent not to be unreasonably withheld).

"Termination Date" means

(i)

in respect of Existing Tranche A, 15 December 2021;

(ii)

in respect of Existing Tranche B, 15 December 2021;

(iii)

in respect of Existing Tranche C, 15 December 2022; and

(iv)

in respect of the New Tranche, 15 June 2026.

" Time Charters " means any time charter capable of exceeding 13 months' duration (inclusive of extensions) on the terms and subject to the conditions of which the Owners or the Bareboat Charterer respectively may time charter the Vessels to a Charterer and " Time Charter " means any one of them.

" Total Assets " means, on any date, the value of the total assets of the Group (on a consolidated basis) determined in accordance with GAAP and adjusted to reflect the Market Value of the Fleet Vessels (including the Market Value of each Vessel) based on the valuations to be delivered to the Agent pursuant to Clause 20.2.1 on or around 30 June and 31 December.

" Total Commitments " means the aggregate of the Commitments.

" Total Loss " means:

(a)

an actual, constructive, arranged, agreed or compromised total loss of a Vessel; or

(b)

the requisition for title or compulsory acquisition of a Vessel by any government or other competent authority (other than by way of requisition for hire for a fixed period not exceeding one (1) year without any right to extension); or

" Tranche " means the Existing Tranches and the New Tranche.

" Transfer Certificate " means a certificate substantially in the form set out in Schedule 4 ( Form of Transfer Certificate ) or any other form agreed between the Agent and the Borrowers.

" Transfer Date " means, in relation to an assignment or a transfer, the later of:

(a)

the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

(b)

the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate.

" Treasury Transactions " means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.

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" Trust Property " means:

(a)

all benefits derived by the Security Agent from Clause 17 ( Security and Application of Moneys ); and

(b)

all benefits arising under (including, without limitation, all proceeds of the enforcement of) each of the Security Documents,

with the exception of any benefits arising solely for the benefit of the Security Agent.

" Unpaid Sum " means any sum due and payable but unpaid by any Security Party under the Finance Documents.

" US Tax Obligor " means:

(a)

a Security Party which is resident for tax purposes in the United States of America; or

(b)

a Security Party some or all of whose payments under the Finance Documents are from sources within the United States for US federal income tax purposes.

" VAT " means:

(a)

any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

(b)

any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in (a), or imposed elsewhere.

" Vessels " means the Existing Vessels and the New Vessels and any other vessels accepted by the Security Agent as additional security for the Loan and " Vessel " means any one of them, provided that a Mortgage has been registered on such vessel and that the Mortgage(s) over such Vessel has not been released.

1.2	Construction Unless a contrary indication appears, any reference in this Agreement to:

1.2.1

any " Lender ", any " Borrower ", any " Guarantor ", the " Agent ", any " Secured Party ", the " Security Agent ", any " Finance Party " or any " Party " shall be construed so as to include its successors in title, permitted assignees and permitted transferees;

1.2.2

a document in " agreed form " is a document which is previously agreed in writing by or on behalf of the Borrowers and the Agent or, if not so agreed, is in the form specified by the Agent;

1.2.3

" assets " includes present and future properties, revenues and rights of every description;

1.2.4

a " Finance Document ", a " Security Document ", a " Relevant Document " or any other document is a reference to that Finance

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Document, Security Document, Relevant Document or other document as amended, novated, supplemented, extended or restated from time to time;

1.2.5

a " group of Lenders " includes all the Lenders;

1.2.6

" indebtedness " includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

1.2.7

a " person " includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership or other entity (whether or not having separate legal personality);

1.2.8

a " regulation " includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;

1.2.9

a provision of law is a reference to that provision as amended or re-enacted from time to time; and

1.2.10

a time of day (unless otherwise specified) is a reference to Copenhagen time.

1.3	Headings Section, Clause and Schedule headings are for ease of reference only.

1.4	Defined terms Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

1.5	Default A Default (other than an Event of Default) is "continuing" if it has not been remedied or waived and an Event of Default is "continuing" if it has not been waived.

1.6	Currency symbols and definitions " $ ", " USD " and " dollars " denote the lawful currency of the United States of America.

1.7	Third party rights A person who is not a Party has no right to enforce or to enjoy the benefit of any term of this Agreement.

1.8	Offer letter This Agreement supersedes the terms and conditions contained in any correspondence relating to the subject matter of this Agreement exchanged between any Finance Party and the Borrowers or their representatives before the date of this Agreement.

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1.9	Amounts Any reference to an amount outstanding under any of the Existing Tranches arer eferences to the amounts outstanding on 29 June 2018 and do not account for the instalments paid after such date.

1.10	Contractual recognition of bail-in

1.10.1

In this Clause 1.9:

" Bail-In Action " means the exercise of any Write-down and Conversion Powers.

" Bail-In Legislation " means:

(a)

in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

(b)

in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.

" EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.

" EU Bail-In Legislation Schedule " means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

" Resolution Authority " means any body which has authority to exercise any Write-down and Conversion Powers.

" Write-down and Conversion Powers " means:

(a)

in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and

(b)

in relation to any other applicable Bail-In Legislation:

(i)

any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or

Page 28

instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

(ii)

any similar or analogous powers under that Bail-In Legislation.

1.10.2

Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:

(a)

any Bail-In Action in relation to any such liability, including (without limitation):

(i)

a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

(ii)

a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

(iii)

a cancellation of any such liability; and

(b)

a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

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Section 2

The Loan

2.1	Amount Subject to the terms of this Agreement, the Lenders agree to make available to:

2.1.1

Borrower A, a term loan in an aggregate amount of up to USD 137,911,701.61; and

2.1.2

Borrower B, a term loan in an aggregate amount of up to USD 115,822,062.26

in accordance with the Commitments as set out in Schedule 1; and

2.2	Availablity of the New Tranche

2.2.1

If Scrubbers are installed on a New Vessel, a part of the New Tranche in the amount of twenty one million and nine hundred and fifty thousand Dollars (USD 21,950,000) shall be available for the financing of each New Vessel during the Availablity Period applicable to such part of the New Tranche.

2.2.2

If no Scrubbers are installed on a New Vessel, a part of the New Tranche in the amount of twenty million and one hundred and fifty thousand Dollars (USD 20,150,000) shall be available for the financing of such New Vessel during the Availablity Period applicable to such part of the New Tranche and USD 1,800,000 of the New Tranche shall be cancelled on such date as Borrower B informs the Agent that no Scrubbers will be installed on the relevant New Vessel.

2.3	Finance Parties' rights and obligations

2.3.1

The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

2.3.2

The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from a Security Party shall be a separate and independent debt.

2.3.3

A Finance Party may with the consent of the Majority Lenders and except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

Purpose

3.1	Purpose The Borrowers shall apply the Loan for the purposes referred to in the Preliminary.

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3.2	Monitoring No Finance Party is bound to monitor or verify the application of any amount borrowed under this Agreement.

4	Conditions of Utilisation

4.1	Initial conditions precedent

4.1.1

The Borrowers undertake to deliver or to cause to be delivered to the Agent on the date of this Agreement the documents and evidence listed in Part I of Schedule 2 ( Conditions Precedent to Execution of this Agreement ) in form and substance satisfactory to the Agent. The Agent shall notify the Borrowers and the Lenders promptly upon being so satisfied

4.1.2

The Lenders will only be obliged to comply with Clause 5.3 ( Lenders' participation ) in relation to the advance of a Drawing under the New Tranche if:

(a)

three Business Days prior to the relevant Drawdown Date (including the date for any prepositioning of funds as set out in Clause 5.5 ( Prepositioning of funds )), the Agent has received drafts of the documents listed as item 2a(v) and (vi), item 2(c) and item 2(e) of Schedule 2 Part II ( Conditions Precedent to each Drawing ); and

(b)

on or before the relevant Drawdown Date (or the release of any prepositioned funds pursuant to Clause 5.5 ( Prepositioning of funds )), the Agent has received all of the documents and other evidence listed in Part II of Schedule 2 ( Conditions Precedent to each Drawing ) in form and substance satisfactory to the Agent, (acting reasonably)

where all references in Section 2 of that Part II to "the Vessel" or to any person or document relating to a Vessel shall be deemed to relate solely to the New Vessel specified in the relevant Drawdown Request or to any person or document relating to that New Vessel respectively. The Agent shall notify the Borrowers and the Lenders promptly upon being so satisfied.

4.1.3

Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in Clauses 4.1.1 and 4.1.2, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable to the Lenders for any damages, costs or losses whatsoever as a result of giving any such notification.

4.2	Further conditions precedent

4.2.1

The Lenders will only be obliged to advance a Drawing (including any prepositioning of funds pursuant to Clause 5.5 ( Prepositioning of funds )) if on the date of the relevant Drawdown Request and on the proposed Drawdown Date:

(a)

no Default is continuing or would result from the advance of that Drawing; and

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(b)

the representations made by each Borrower and each Guarantor under Clause 19 ( Representations ) are true.

4.2.2

The Lenders will only be obliged to advance a Drawing if that Drawing will not increase the Loan to a sum in excess of the Maximum Loan Amount.

4.3

Conditions subsequent Subject to any time period specifically set out in relation to a condition subsequent listed in Part III of Schedule 2 ( Conditions Subsequent ), the Borrowers undertake to deliver or to cause to be delivered to the Agent as soon as practicable after the relevant Drawdown Date the additional documents and other evidence listed in Part III of Schedule 2 ( Conditions Subsequent ), where the references in that Part III to "the Vessel" or to any person or document relating to a Vessel shall be deemed to relate solely to the Vessel specified in the relevant Drawdown Request or to any person or document relating to that Vessel respectively.

4.4

No waiver If the Lenders in their sole discretion agree to advance a Drawing to the Borrowers before all of the documents and evidence required by Clause 4.1 ( Initial conditions precedent ) have been delivered to or to the order of the Agent, the Borrowers undertake to deliver all outstanding documents and evidence to or to the order of the Agent as soon as practicable after the relevant Drawdown Date or such other date specified by the Agent (acting on the instructions of all the Lenders).

The advance of a Drawing under this Clause 4.4 shall not be taken as a waiver of the Lenders' right to require production of all the documents and evidence required by Clause 4.1 ( Initial conditions precedent ).

4.5

Re-flagging conditions precedent The Borrowers undertake to deliver or to cause to be delivered to the Agent on or before the re-flagging of a Vessel under an Approved Flag the documents and evidence listed in Part IV of Schedule 2 ( Conditions Precedent to Re-flagging under an Approved Flag ) in form and substance satisfactory to the Agent. The Agent shall notify the Borrowers and the Lenders promptly upon being so satisfied.

4.6	Form and content All documents and evidence delivered to the Agent under this Clause shall:

4.6.1

be in form and substance acceptable to the Agent (acting reasonably); and

4.6.2

if required by the Agent, be certified, notarised, legalised or attested in a manner acceptable to the Agent.

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Section 3

Utilisation

Advance

5.1	Delivery of a Drawdown Request The Borrowers may request a Drawing to be advanced by delivery to the Agent of a duly completed Drawdown Request not more than ten and not fewer than three Business Days before the proposed Drawdown Date.

5.2	Completion of a Drawdown Request A Drawdown Request is irrevocable and will not be regarded as having been duly completed unless:

5.2.1

it is signed by an authorised signatory of each Borrower; 5.2.2 it specifies the Vessel being financed by the relevant Drawing;

5.2.3

the proposed Drawdown Date is a Business Day within the Availability Period; and

5.2.4

the proposed Interest Period complies with Clause 9 ( Interest Periods ).

5.3	Lenders' participation

5.3.1

Subject to Clauses 2 ( The Loan ), 3 ( Purpose ) and 4 ( Conditions of Utilisation ), each Lender shall make its participation in any Drawing available by the relevant Drawdown Date through its Facility Office.

5.3.2

The amount of each Lender's participation in any Drawing will be equal to the proportion borne by its Commitment to the Total Commitments.

5.4	Cancellation of Undrawn Commitments

If the New Tranche (or a part thereof) is not fully utilised by the end of the Availability Period for the New Tranche (or the relevant part thereof), the relevant Commitments will be cancelled at the end of the Availability Period for the New Tranche (or the relevant part thereof) to the extent that they are unutilised at that time, unless otherwise agreed between the Borrowers and the Agent.

5.5

Prepositioning of funds If requested by a Borrower in the Drawdown Request for a New Vessel, the Agent (on account of the Lenders) shall, three (3) Business Days before the Delivery Date, preposition the relevant Drawing under the New Tranche by making payment of such amounts requested in the relevant Drawdown Request:

5.5.1

to such account in such bank (the " Prepositioning Bank ") as the relevant Borrower may have agreed with the Agent in advance of the Delivery Date and as specified in the Drawdown Request; and

5.5.2

on terms that:

(a)

the Prepositioning Bank is acceptable to the Agent;

(b)

such amounts shall be held to the order of the Agent until it is released to the Prepositioning Bank according to a separate SWIFT instruction agreed between the Agent and the relevant Borrower

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(for the avoidance of doubt the Agent shall in its sole discretion decide if it finds the wording of the SWIFT instruction acceptable);

(c)

such prepositioning shall constitute the making of the Drawing and the relevant Borrower shall at that time become indebted, as principal and direct obligor, to the Lenders in an amount equal to the prepositioned funds; and

(d)

the date on which the Drawing is prepositioned shall constitute the Drawdown Date.

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Section 4

Repayment, Prepayment and Cancellation

Repayment

6.1	Repayment of Loan

6.1.1

Borrower A agrees to repay the Existing Tranche A and the Existing Tranche B;

6.1.2

Borrower B agrees to repay the Existing Tranche C and the New Tranche, for the account of the Lenders in the amounts set out in Schedule 9.

After each Drawing in respect of the New Tranche, Schedule 9 shall be adjusted by the Agent to reflect that:

(a)

each Drawing under the New Tranche shall be repaid in 28 quarterly instalments of USD 322,793 each and a balloon payment of the remaining outstanding amount of such Drawing which shall be paid together with the last of the 28 instalments; and

(b)

the first instalment in respect of a Drawing under the New Tranche shall fall due on the first Payment Date which falls at least three calendar months after the Drawdown Date of that Drawing and subsequent instalments falling due at consecutive Payment Dates thereafter and the final instalment and the balloon instalment in respect of that Drawing (as set out in Schedule 9) falling due on the Termination Date of the New Tranche.

6.1.3

Notwhitstanding Clause 6.1.2 above, each Tranche shall be repaid in full no later than on the Termination Date applicable to the relevant Tranche.

6.2

Reduction of Repayment Instalments If the aggregate amount advanced to Borrower B is less than the Commitment in respect of the New Tranche, the amount of each Repayment Instalment in respect of the New Tranche (including the balloon instalment) shall be reduced pro rata to the amount actually advanced.

6.3	Reborrowing The Borrowers may not reborrow any part of the Loan which is repaid or prepaid or cancelled.

7	Illegality, Prepayment and Cancellation

7.1	Illegality If it becomes unlawful in any jurisdiction (including, without limitation, under applicable Sanctions Laws) for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in the Loan:

7.1.1

that Lender shall promptly notify the Agent upon becoming aware of that event;

7.1.2

upon the Agent notifying the Borrowers, the Commitment of that Lender will be immediately cancelled; and

7.1.3

the Borrowers shall repay that Lender's participation within ninety (90) days of demand.

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7.2

Voluntary cancellation Each Borrower may, if they give the Agent not less than 10 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of USD 1,000,000 of the undrawn amount of the relevant Tranche). Any cancellation under this Clause 7.2 shall reduce the Commitments of the Lenders rateably.

7.3	Voluntary prepayment of Loan The Borrowers may prepay the whole or any part of the Loan but, if in part, being an amount that reduces the Loan by a minimum amount of USD 1,000,000 subject as follows:

7.3.1

the Borrowers give the Agent not less than 10 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice;

7.3.2

the prepayment under this Clause 7.3 shall be applied against such Tranche as the Borrowers select; and

7.3.3

any prepayment under this Clause 7.3 shall satisfy the obligations under Clause 6.1 ( Repayment of Loan ) pro-rata across maturities for the Tranche or Tranches against which such prepayment is applied in accordance with Clause 7.3.2 above.

7.4	[DELIBERATELY NOT USED]

7.5	Right of cancellation and prepayment in relation to a single Lender

7.5.1 If:

(a) any sum payable to any Lender by the Borrowers is required to be increased under Clause 12.2.2 ( Tax gross-up );

(b) any Lender claims indemnification from the Borrowers under Clause 12.3 ( Tax indemnity ) or Clause 13.1 ( Increased costs );

the Borrowers may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment(s) of that Lender and their intention to procure the repayment of that Lender's participation in the Loan.

7.5.2

On receipt of a notice referred to in Clause 7.5.1 in relation to a Lender, the Commitment(s) of that Lender shall immediately be reduced to zero.

7.5.3

On the last day of the Interest Period which ends after the Borrowers have given notice under Clause 7.5.1 in relation to a Lender (or, if earlier, the date specified by the Borrowers in that notice), the Borrowers shall repay that Lender's participation in the Loan together with all interest and other amounts accrued under the Finance Documents.

7.6	Mandatory prepayment on sale or Total Loss

7.6.1

If a Vessel is sold by an Owner, the Borrowers shall, simultaneously with any such sale, prepay the Loan with an amount equal to the Appropriate Amount for such Vessel immediately prior to completion of such sale. Any such prepayment shall be applied first against the Tranche made available to finance that Vessel (and reduce the instalments of such

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Tranche (including any balloon payment) on a pro rata basis) and secondly in prepayment of such other Tranche and reduce the instalments of such other Tranche (including any balloon payment) on a pro rata basis) as determined by the Borrowers. Any balance shall, unless a Default has occurred and is continuing, be at the free disposal of the Borrowers. If a Default or an Event of Default has occurred, all proceeds from a sale of a Vessel shall be applied towards prepayment of the Loan.

7.6.2

If a Vessel becomes a Total Loss, the Borrowers shall on the earlier of (i) 30 days after the date of the Total Loss if the Agent believes, acting reasonably, that the relevant insurer has rightfully refused to meet or rightfully disputes the claim in respect of a Total Loss; (ii) the date falling 180 days after any such Total Loss (which the Agent may extend by a further 180 days if it is satisfied, acting reasonably, that the insurers have accepted liability) and (iii) the date on which the proceeds of any such Total Loss are realised, make a prepayment of the Loan to the extent necessary in an amount equal to the Appropriate Amount for such Vessel immediately prior to such Total Loss. Any such prepayment shall be applied first against the Tranche made available to finance that Vessel (and reduce the instalments of such Tranche (including any balloon payment) on a pro rata basis) and secondly in prepayment of such other Tranche and reduce the instalments of such Tranche (including any balloon payment) on a pro rata basis) as determined by the Borrowers. Any balance shall, unless a Default has occurred and is continuing, be at the free disposal of the Borrowers. If a Default has occurred, all insurance proceeds from a Total Loss of a Vessel shall be applied towards prepayment of the Loan.

7.6.3

The Borrowers shall promptly notify the Agent in writing if a Vessel becomes a Total Loss.

7.6.4

The Borrowers shall promptly notify the Agent in writing if they are notified that the relevant insurer refuses to meet or disputes a claim in respect of a Total Loss.

7.7

Right of cancellation in relation to a Defaulting Lender If any Lender becomes a Defaulting Lender, the Borrowers may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent 10 Business Days' notice of cancellation of the Commitment of that Lender. On that notice becoming effective, the Commitment of the Defaulting Lender shall immediately be reduced to zero. The Agent shall as soon as practicable after receipt of that notice notify all the Lenders.

7.8	Mandatory prepayment on Change of Control If there is a Change of Control or Borrower B is delisted from NASDAQ OMX Copenhagen A/S:

7.8.1

the relevant Borrower shall promptly notify the Agent of such Change of Control or delisting as soon as it becomes aware of it;

7.8.2

upon the Lenders becoming aware of such Change in Control or delisting and unless the Lenders agree otherwise in writing, the Commitments will immediately be cancelled and each Borrower shall repay its relevant

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Tranche (to the extent already advanced prior to the Change of Control) within 7 days of notice from the Agent.

7.9

Restrictions Any notice of prepayment or cancellation given under this Clause 7 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant prepayment or cancellation is to be made and the amount of that prepayment or cancellation.

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Interest Break Costs (in respect of which Clause 10.4 applies) and any Break Funding Costs (in respect of which Clause 7.10 applies) without premium or penalty.

The Borrowers shall not repay, prepay or cancel all or any part of the Loan except at the times and in the manner expressly provided for in this Agreement.

No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

If the Agent receives a notice under this Clause 7 it shall promptly forward a copy of that notice to the Borrowers or the affected Lender, as appropriate.

7.10	Break Funding Costs

7.10.1

The Borrowers shall, within three Business Days of demand by DSF, pay to DSF its Break Funding Costs attributable to any prepayment of the Loan.

7.10.2

The Break Funding Costs shall be determined by DSF and shall be binding on the Borrowers save for manifest errors. If the Break Funding Costs are less than zero, the Break Funding Costs shall be deemed to be zero.

7.10.3

For the avoidance of doubt, any Break Funding Costs shall be in addition to and not in substitution of any Interest Break Costs.

7.11	Vessel Substitution

7.11.1

In circumstance contemplated by Clause 7.6, and provided no Default is then in existence, the Borrowers may elect to propose a substitute vessel by the procedure set out in this Clause 7.11.

7.11.2

Instead of making the prepayment in the amount and at the time specified in Clause 7.6, the Borrowers shall place an equivalent amount in the Reserve Account on or before the date the prepayment would otherwise have fallen due (the " Deposit ").

7.11.3

The Borrowers may nominate a substitute vessel which shall be a product tanker (LR1, LR2, MR or handy size) of the same age or younger than the Vessel that was sold or declared a Total Loss, and with at least an equivalent Market Value, no less than 10 Business Days prior to the proposed date of substitution.

7.11.4

The Agent, on the instruction of the Majority Lenders acting reasonably, shall give notice to the Borrowers as soon as practicable as to whether or

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not the nominated substitute vessel is acceptable and fulfils the requirements set out in Clause 7.11.3.

7.11.5

If such nomination is accepted, then the relevant owner shall enter into a guarantee on the same terms as the Guarantee, and other Security Documents relating to the substitute vessel in the same form as the equivalent documents relating to the Vessel which was sold or became a Total loss.

7.11.6

The Agent will specify other conditions precedent to the substitution (to include but not be limited to corporate authorities, legal opinions, evidence of class, evidence of adequate insurance coverage and payment of a fee of USD 25,000, and a pledge over the shares in the relevant owner in favour of the Security Agent and to be broadly similar to the conditions precedent relating to other drawdowns), and on satisfaction of such conditions the Deposit shall be released.

7.11.7

If the Borrowers elect not to propose a substitute vessel, they may at any time use the Deposit as a prepayment hereunder, to be applied in accordance with Clause 7.6 ( Mandatory prepayment on sale or Total Loss ).

7.12	Break Gains for Interest Periods in excess of six months If:

7.12.1

the Agent (acting on the instructions of the Lenders) has agreed to an Interest Period in respect of a Tranche being for a duration of more than six (6) months in accordance with Clause 9.1.1 (Duration of Interest Periods); and

7.12.2

a Borrower prepays all or part of the relevant Tranche in accordance with this Clause 7 ( Illegality , Prepayment and Cancellation ),

that Borrower shall be entitled to be credited with any Break Gains resulting from such prepayment.

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Section 5

Costs of Utilisation

Interest

8.1	Calculation of interest The rate of interest on the Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:

8.1.1

the relevant Margin; and

8.1.2

LIBOR.

8.2	Payment of interest

8.2.1

Borrower A shall pay accrued interest on Existing Tranche A and Existing Tranche B; and

8.2.2

Borrower B shall pay accrued interest on Existing Tranche C and the New Tranche,

quarterly in arrears on each Payment Date for the period since the relevant Drawing or the previous due date for the period of interest.

8.3

Default interest If either Borrower fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which is two per cent higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted the Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 8.3 shall be immediately payable by the Borrowers on demand by the Agent.

Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

8.4	Notification of rates of interest The Agent shall promptly notify the Borrowers of the determination of a rate of interest under this Agreement.

9	Interest Periods

9.1	Duration of Interest Periods

9.1.1

Each Interest Period relating to the Existing Tranche A shall be three (3) calendar months or six (6) calendar months (at the option of Borrower A), each Interest Period relating to the Existing Tranche B shall be three (3) calendar months and each Interest Period relating to the Existing Tranche C or the New Tranche (save the first) shall be three (3) or six (6) calendar months (at the option of Borrower B) or in either case any other period agreed between the Borrowers and the Agent (acting on the instructions of the Lenders).

9.1.2

An Interest Period shall end on a Payment Date and shall not extend beyond the Termination Date for the relevant Tranche.

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9.1.3

The first Interest Period in respect of each Drawing shall start on the Drawdown Date of that Drawing and shall end on the following Payment Date; and each subsequent Interest Period in respect of such Drawing shall start on the last day of the preceding Interest Period and end on the Payment Date which falls three (3) or six (6) calendar months (if it relates to Existing Tranche A), three (3) calendar months (if it relates to Existing Tranche B) or three (3) or six (6) calendar months (if it relates to Existing Tranche C or the New Tranche) after the last day of the preceding Interest Period.

9.1.4

If Borrower B at any time fails to select an Interest Period for Existing Tranche C or the New Tranche in accordance with Clause 9.1.1 by the date falling three (3) Business Days prior to the commencement of an Interest Period, then the interest rate applicable shall be based on an Interest Period of three (3) months.

9.2	Non-Business Days If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

10	Changes to the Calculation of Interest

10.1

Absence of quotations Subject to Clause 10.2 ( Market disruption ), if LIBOR is to be determined by reference to the Reference Banks but a Reference Bank does not supply a quotation by 11.00 am on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Reference Banks.

10.2	Market disruption If a Market Disruption Event occurs for any Interest Period, then, subject to Clause 11.3, the rate of interest on each Lender's share of the Loan for that Interest Period shall be the percentage rate per annum which is the sum of:

10.2.1

the Margin; and

10.2.2

the rate notified to the Agent by that Lender as soon as practicable, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select.

10.2.3

In this Agreement " Market Disruption Event " means:

(a)

at or about noon on the Quotation Day for the relevant Interest Period LIBOR is to be determined by reference to the Reference Banks and no Reference Banks supplies a rate to the Agent to determine LIBOR for dollars and the relevant Interest Period; or

(b)

before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders that the cost to it of funding its participation in the Loan from whatever source it may reasonably select would be in excess of LIBOR.

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10.3	Alternative basis of interest or funding

10.3.1

If a Market Disruption Event occurs and the Agent or the Borrowers so require, the Agent and the Borrowers shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.

10.3.2

Any alternative basis agreed pursuant to Clause 10.3.1 shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.

10.4

Interest Break Costs The Borrowers shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Interest Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrowers on a day other than the last day of an Interest Period for the Loan or Unpaid Sum.

Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Interest Break Costs for any Interest Period in which they accrue.

Fees

11.1	Commitment fee

(a)

Borrower B shall pay to the Agent (for the account of the Lenders in proportion to their Commitments) a fee computed at the rate of 35 per cent of the rate specified in the definition of "Margin" on the undrawn amount of the New Tranche from 25 July 2017.

(b)

the accrued commitment fee is payable on the last day of each successive period of three months which ends during the Availability Period, on the last day of the Availability Period, on each Drawdown Date, on each Payment Date and (on the cancelled amount of the relevant Lender's Commitment) at the time the cancellation is effective.

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Section 6

Additional Payment Obligations

12	Tax Gross Up and Indemnities

12.1	Definitions In this Agreement:

" Protected Party " means a Finance Party which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

" Tax Credit " means a credit against, relief or remission for, or repayment of any Tax.

" Tax Deduction " means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.

" Tax Payment " means either the increase in a payment made by a Security Party to a Finance Party under Clause 12.2 ( Tax gross-up ) or a payment under Clause 12.3 ( Tax indemnity ).

Unless a contrary indication appears, in this Clause 12 a reference to "determines" or "determined" means a determination made in the discretion of the person making the determination (acting reasonably).

12.2	Tax gross-up Each Borrower shall (and shall procure that each other Security Party shall) make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law, subject as follows:

12.2.1

a Borrower shall promptly upon becoming aware that it or any other Security Party must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower and any such other Security Party;

12.2.2

if a Tax Deduction is required by law to be made by the Borrower or any other Security Party, the amount of the payment due from the Borrower or that other Security Party shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required;

12.2.3

if a Borrower or any other Security Party is required to make a Tax Deduction, that Borrower shall (and shall procure that such other Security Party shall) make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law;

12.2.4

within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Borrower making that Tax Deduction shall (and shall procure that such other Security Party shall) deliver to the Agent for the Finance Party entitled to the payment

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evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority;

12.3	Tax indemnity

12.3.1

Each Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

12.3.2

Clause 12.3.1 shall not apply:

(a)

with respect to any Tax assessed on a Finance Party:

(i)

under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or

(ii)

under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or

(b)

to the extent a loss, liability or cost:

(i)

is compensated for by an increased payment under Clause 12.2 ( Tax gross-up ),; or

(ii)

relates to a FATCA Deduction required to be made by a Party.

12.3.3

A Protected Party making, or intending to make a claim under Clause 12.3.1 shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrowers.

12.3.4

A Protected Party shall, on receiving a payment from a Borrower under this Clause 12.3, notify the Agent.

12.4	Tax Credit If a Borrower or any other Security Party makes a Tax Payment and the relevant Finance Party determines that:

12.4.1

a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and

12.4.2

that Finance Party has obtained and utilised that Tax Credit,

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that Finance Party shall pay an amount to that Borrower or to that other Security Party which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been made by that Borrower or that other Security Party.

12.5	Stamp taxes The Borrowers shall pay and, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

12.6

VAT

12.6.1

All amounts expressed to be payable under a Finance Document by any Party or any Security Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to Clause 12.6.2, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party or any Security Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party or Security Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to the Borrowers).

12.6.2

If VAT is or becomes chargeable on any supply made by any Finance Party (the " Supplier ") to any other Finance Party (the " Recipient ") under a Finance Document, and any Party other than the Recipient (the " Relevant Party ") is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

(a)

(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this Clause 12.6.2(a) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

(b)

(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

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12.6.3

Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

12.6.4

Any reference in this Clause 12.6 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the English Value Added Tax Act 1994).

12.6.5

In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply.

12.7	FATCA information

12.7.1

Subject to Clause 12.7.3, each Party shall, within ten Business Days of a reasonable request by another Party:

(a)

confirm to that other Party whether it is:

(i)

a FATCA Exempt Party; or

(ii)

not a FATCA Exempt Party; and

(b)

supply to that other Party such forms, documentation and other information relating to its status under FATCA (including its applicable "passthru payment percentage" or other information required under the US Treasury Regulations or other official guidance including intergovernmental agreements) as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA.

12.7.2

If a Party confirms to another Party pursuant to Clause 13.8.1(a)(i) that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

12.7.3

Clause 12.7.1 shall not oblige any Finance Party to do anything which would or might in its reasonable opinion constitute a breach of:

(a)

any law or regulation;

(b)

any fiduciary duty; or

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(c)

any duty of confidentiality.

12.7.4

If a Party fails to confirm its status or to supply forms, documentation or other information requested in accordance with Clause 12.7.1 (including, for the avoidance of doubt, where Clause 12.7.3 applies), then:

(a)

if that Party failed to confirm whether it is (and/or remains) a FATCA Exempt Party then such Party shall be treated for the purposes of the Finance Documents as if it is not a FATCA Exempt Party; and

(b)

if that Party failed to confirm its applicable "passthru payment percentage" then such Party shall be treated for the purposes of the Finance Documents (and payments made thereunder) as if its applicable "passthru payment percentage" is 100%,

until (in each case) such time as the Party in question provides the requested confirmation, forms, documentation or other information.

12.7.5

If a Borrower is a US Tax Obligor, or where the Agent reasonably believes that its obligations under FATCA require it, each Lender shall, within ten Business Days of:

(a)

where a Borrower is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement;

(b)

where a Borrower is a US Tax Obligor and the relevant Lender is a New Lender, the relevant Transfer Date;

(c)

where a Borrower is not a US Tax Obligor, the date of a request from the Agent,

supply to the Agent:

(d)

a withholding certificate on Form W-8 or Form W-9 (or any successor form) (as applicable); or

(e)

any withholding statement and other documentation, authorisations and waivers as the Agent may require to certify or establish the status of such Lender under FATCA.

The Agent shall provide any withholding certificate, withholding statement, documentation, authorisations and waivers it receives from a Lender pursuant to this Clause 12.7.5 to the Borrowers and shall be entitled to rely on any such withholding certificate, withholding statement, documentation, authorisations and waivers provided without further verification. The Agent shall not be liable for any action taken by it under or in connection with this Clause 12.7.5.

12.7.6

Each Lender agrees that if any withholding certificate, withholding statement, documentation, authorisations and waivers provided to the Agent pursuant to Clause 12.7.5 is or becomes materially inaccurate or incomplete, it shall promptly update such withholding certificate,

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withholding statement, documentation, authorisations and waivers or promptly notify the Agent in writing of its legal inability to do so. The Agent shall provide any such updated withholding certificate, withholding statement, documentation, authorisations and waivers to the Borrowers. The Agent shall not be liable for any action taken by it under or in connection with this Clause 12.7.6.

12.8	FATCA Deduction

12.8.1

Each Finance Party may make any FATCA Deduction it is required by FATCA to make, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

12.8.2

The Agent shall promptly upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction) notify the Party to whom it is making the payment and, in addition, shall notify the Borrowers, the Agent and the other Finance Parties.

13	Increased Costs

13.1

Increased costs Subject to Clause 13.3 ( Exceptions ) the Borrowers shall, within three Business Days of a demand by the Agent, pay to the Agent for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation or any request from or requirement of any central bank or other fiscal, monetary or other authority made after the date of this Agreement (including Basel III (as defined in Clause 13.3) and any other which relates to capital adequacy or liquidity controls or which affects the manner in which that Finance Party allocates capital resources to obligations under this Agreement) or (iii) any change in the risk weight allocated by that Finance Party to the Borrowers after the date of this Agreement.

In this Agreement " Increased Costs " means:

(a)

a reduction in the rate of return from the Loan or on a Finance Party's (or its Affiliate's) overall capital;

(b)

an additional or increased cost; or

(c)

a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into any Finance Document or funding or performing its obligations under any Finance Document.

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13.2	Increased cost claims

13.2.1

A Finance Party intending to make a claim pursuant to Clause 13.1 ( Increased costs ) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrowers.

13.2.2

Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.

13.3	Exceptions Clause 13.1 ( Increased costs ) does not apply to the extent any Increased Cost is:

13.3.1

attributable to a FATCA Deduction required to be made by a Party;

13.3.2

compensated for by Clause 12.3 ( Tax indemnity ) (or would have been compensated for under Clause 12.3 but was not so compensated solely because any of the exclusions in Clause 12.3 applied);

13.3.3

attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation; or

13.3.4

attributable to the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) (" Basel II ") or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).

In this Clause 13.3, a reference to a " Tax Deduction " has the same meaning given to the term in Clause 12.1 ( Definitions ) and " Basel III " means (i) the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated, (ii) the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011 and (iii) any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".

14	Other Indemnities

14.1

Currency indemnity If any sum due from a Borrower or a Guarantor under the Finance Documents (a " Sum "), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the " First Currency ") in which that Sum is payable into another currency (the " Second Currency ") for the purpose of:

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14.1.1

making or filing a claim or proof against that Borrower or that Guarantor (as the case may be), or

14.1.2

obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

that Borrower or that Guarantor (as the case may be) shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (i) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (ii) the rate or rates of exchange available to that Finance Party at the time of its receipt of that Sum.

That Borrower and that Guarantor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

14.2	Other indemnities

14.2.1

The Borrower shall, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:

(a)

the occurrence of any Event of Default;

(b)

a failure by a Borrower to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 28 ( Sharing among the Finance Parties );

(c)

funding, or making arrangements to fund, a Drawing following delivery by the Borrowers of a Drawdown Request but that Drawing not being advanced by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by a Finance Party alone); or

(d)

the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrowers.

14.2.2

The Borrowers shall promptly indemnify each Finance Party and each officer or employee of a Finance Party (each such person for the purposes of this Clause 14.2 an " Indemnified Person ") against any cost, loss or liability incurred by that Indemnified Person pursuant to or in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents, having the benefit of any Encumbrance constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, a Vessel, unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Indemnified Person.

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14.2.3

Subject to any limitations set out in Clause 14.2.2, the indemnity in that Clause shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:

(a)

arising or asserted under or in connection with any law relating to safety at sea, the ISM Code, any Environmental Law or any Sanctions Laws; or

(b)

in connection with any Environmental Claim.

14.3	Indemnity to the Agent The Borrowers shall promptly indemnify the Agent against:

14.3.1

any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:

(a)

investigating any event which it reasonably believes is a Default; or

(b)

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or

(c)

instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; and

14.3.2

any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise than by reason of the Agent's gross negligence or wilful misconduct) in acting as Agent under the Finance Documents.

14.4	Indemnity to the Security Agent The Borrowers and the Guarantors shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:

14.4.1

any failure by the Borrowers to comply with their obligations under Clause 16 ( Costs and Expenses );

14.4.2

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;

14.4.3

the taking, holding, protection or enforcement of the Security Documents;

14.4.4

the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law;

14.4.5

any default by any Security Party in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or

14.4.6

acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Charged Property

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(otherwise, in each case, than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct).

14.5	Indemnity survival The indemnities contained in this Agreement shall survive repayment of the Loan.

15	Mitigation by the Lenders

15.1

Mitigation Each Finance Party shall, in consultation with the Borrowers take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to any of Clause 7.1 ( Illegality ), Clause 12 ( Tax Gross Up and Indemnities ) or Clause 13 ( Increased Costs ) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office. The above does not in any way limit the obligations of any Security Party under the Finance Documents.

15.2

Limitation of liability The Borrowers shall promptly indemnify each Finance Party for all reasonable costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 ( Mitigation ). A Finance Party is not obliged to take any steps under Clause 15.1 if, in its opinion (acting reasonably), to do so might be prejudicial to it.

16	Costs and Expenses

16.1	Transaction expenses The Borrowers shall promptly on demand pay the Agent and the Security Agent the amount of all reasonable costs and expenses (including legal fees) reasonably incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with:

16.1.1

the negotiation, preparation, printing, execution, syndication and perfection of this Agreement and any other documents referred to in this Agreement;

16.1.2

the negotiation, preparation, printing, execution and perfection of any other Finance Documents executed after the date of this Agreement;

16.1.3

any other document which may at any time be required by a Finance Party to give effect to any Finance Document or which a Finance Party is entitled to call for or obtain under any Finance Document (including, without limitation, any valuation of a Vessel); and

16.1.4

any discharge, release or reassignment of any of the Security Documents.

16.2

Amendment costs If (i) a Security Party requests an amendment, waiver or consent or (ii) an amendment is required under Clause 29.11 ( Change of currency ), the Borrowers shall, within three Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all reasonable costs and expenses (including legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.

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16.3

Enforcement and preservation costs The Borrowers shall, within three Business Days of demand, pay to each Finance Party and each other Secured Party the amount of all reasonable costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Security Documents or enforcing those rights including (without limitation) any losses, costs and expenses which that Finance Party or other Secured Party may from time to time sustain, incur or become liable for by reason of that Finance Party or other Secured Party being mortgagee of a Vessel and/or a lender to a Borrower, or by reason of that Finance Party or other Secured Party being deemed by any court or authority to be an operator or controller, or in any way concerned in the operation or control, of a Vessel.

16.4

Other costs The Borrowers shall, within three Business Days of demand, pay to each Finance Party and each other Secured Party the amount of all sums which that Finance Party or other Secured Party may pay or become actually or contingently liable for on account of a Borrower in connection with a Vessel (whether alone or jointly or jointly and severally with any other person) including (without limitation) all sums which that Finance Party or other Secured Party may pay or guarantees which it may give in respect of the Insurances, any expenses reasonably incurred by that Finance Party or other Secured Party in connection with the maintenance or repair of a Vessel or in discharging any lien, bond or other claim relating in any way to a Vessel, and any sums which that Finance Party or other Secured Party may pay or guarantees which it may give to procure the release of a Vessel from arrest or detention.

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Section 7

Security and Application of Moneys

17	Security Documents and Application of Moneys

17.1

Security Documents As security for the payment of the Indebtedness, the Borrowers shall execute and deliver to the Security Agent or cause to be executed and delivered to the Security Agent the following documents in such forms and containing such terms and conditions as the Security Agent shall require:

17.1.1

first preferred or first priority and second priority mortgages over the Vessels and, if applicable, collateral deeds of covenant;

17.1.2

first priority deeds of assignment of the Insurances, Earnings, Charters and Requisition Compensation of the Vessels from the relevant Owner and the Bareboat Charterer; and the first priority assignments of Insurances (if any) from the Managers contained in the Managers' Undertakings;

17.1.3

a joint and several guarantee and indemnity from each Guarantor;

17.1.4

a first priority account security agreement in respect of all amounts from time to time standing to the credit the Reserve Account;

17.1.5

first priority and second priority charges of all the issued shares of each Owner and the general partner of Owner C, VesselCo E ApS;

17.1.6

the Managers' Undertakings; and

17.1.7

a first priority assignment and subordination of any Inter-company Indebtedness;

17.2

Application after acceleration From and after the giving of notice to the Borrowers by the Agent under Clause 23.2 ( Acceleration ), the Borrowers shall procure that all sums from time to time standing to the credit of the Reserve Account are immediately transferred to the Security Agent or any Receiver or Delegate for application in accordance with Clause 17.3 ( Application of moneys by Security Agent ) and the Borrowers irrevocably authorise the Security Agent to instruct the Agent (as account holder) to make those transfers.

17.3	Application of moneys by Security Agent The Borrowers and the Finance Parties irrevocably authorise the Security Agent or any Receiver or Delegate to apply all moneys which it receives and is entitled to receive:

17.3.1

pursuant to a sale or other disposition of a Vessel or any right, title or interest in a Vessel; or

17.3.2

by way of payment of any sum in respect of the Insurances, Earnings or Requisition Compensation; or

17.3.3

by way of transfer of any sum from the Reserve Account; or

17.3.4

otherwise under or in connection with any Security Document,

in or towards satisfaction of the Indebtedness in the following order:

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17.3.5

first, any unpaid fees, costs, expenses and default interest due to the Agent and the Security Agent (and, in the case of the Security Agent, to any Receiver or Delegate) under all or any of the Finance Documents, such application to be apportioned between the Agent and the Security Agent pro rata to the aggregate amount of such items due to each of them;

17.3.6

second, any unpaid fees, costs, expenses (including any sums paid by the Lenders under Clause 26.10 ( Indemnity )) of the Lenders due under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such items due to each of them;

17.3.7

third, any accrued but unpaid default interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such default interest due to each of them;

17.3.8

fourth, any other accrued but unpaid interest due to the Lenders under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such interest due to each of them;

17.3.9

fifth, any principal of the Loan due and payable but unpaid under this Agreement, such application to be apportioned between the Lenders pro rata to the aggregate amount of such principal due to each of them; and

17.3.10

sixth, any other sum due and payable to any Finance Party but unpaid under all or any of the Finance Documents, such application to be apportioned between the Finance Parties pro rata to the aggregate amount of any such sum due to each of them; and

17.3.11

Seventh, the balance if any, in payment to the Borrowers,

Provided that the balance (if any) of the moneys received shall be paid to the Security Parties from whom or from whose assets those sums were received or recovered or to any other person entitled to them.

17.4

Retention on account Moneys to be applied by the Security Agent or any Receiver or Delegate under Clause 17.3 ( Application of moneys by Security Agent ) shall be applied as soon as practicable after the relevant moneys are received by it, or otherwise become available to it, save that (without prejudice to any other provisions contained in any of the Security Documents) the Security Agent or any Receiver or Delegate may retain any such moneys by crediting them to a suspense account for so long and in such manner as the Security Agent or such Receiver or Delegate may from time to time determine with a view to preserving the rights of the Finance Parties or any of them to prove for the whole of the Indebtedness (or any relevant part) against the Borrowers or any other person liable.

17.5

Additional security If at any time the aggregate of the Market Value of the Existing Vessels and the New Vessels (which shall be calculated on a semi-annual basis on or around 30 June and 31 December each year by two valuations from Approved Shipbrokers appointed by the Borrower) and the value of any additional security for the time being provided to the Security Agent under this Clause 17.5,

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such value to be the face amount of any deposit (in the case of cash), to be determined conclusively by appropriate advisors (acting reasonably) appointed by the Agent (in the case of other charged assets) and determined by the Agent in its discretion acting reasonably (in all other cases) is less than 133% of the Loan then outstanding less any amount standing to the credit of the Reserve Account and the value of any additional security for the time being provided to the Security Agent under this Clause 17.5 (the " LTV Coverage "), the Borrowers shall, within 30 days of the Agent’s written request and at the Borrowers' option:

17.5.1

pay into the Reserve Account a cash deposit in such amount as when deducted from the Loan reduces the excess to zero to be secured in favour of the Security Agent as additional security for the payment of the Indebtedness; or

17.5.2

give to the Security Agent other additional security in amount and form acceptable to the Security Agent in its discretion acting reasonably to provide security for such excess, it being agreed that any LR1, LR2, MR or handy size product tanker of less than 15 years old shall be acceptable; or

17.5.3

prepay the Loan in such amount as when deducted from the Loan reduces the excess to zero.

Clauses 6.3 ( Reborrowing ), 7.3 ( Voluntary prepayment of Loan ) and 7.9 ( Restrictions ) shall apply, mutatis mutandis , to any prepayment made under this Clause 17.5 except that the minimum threshold in Clause 7.3 ( Voluntary prepayment of Loan ) shall not apply.

The Agent may, at any time during the Facility Period, test the LTV Coverage by obtaining valuations from any two Approved Shipbrokers appointed by it (in which case the average of the of the vauations shall form the basis for determining the compliance with this Clause) with any such valuations being at the cost of the Agent unless an Event of Default is continuing in which case they shall be at the cost of the Borrowers.

Any additional security granted and/or cash deposit made pursuant to this Clause 17.5 shall be discharged or released (in whole or in part) by the Security Agent (at the Borrowers' cost) in the event that the LTV Coverage (without relying on such part of the additional security granted and/or cash deposit made as is to be released) is complied with on the next day of testing, or is again complied with as evidenced by two valuations from the same Approved Shipbrokers as gave the immediately preceding valuations, appointed by the Borrowers. This shall be without prejudice to the Agent's right to make any request under this Clause 17.5 should the value of the remaining security (as evidenced by updated valuations from the same two Approved Shipbrokers) subsequently merit it.

If and for so long as the Borrowers fails to satisfy the obligations arising from the Agent's request under this Clause 17.5 the Borrowers shall, if so demanded by the Agent, compensate the Lenders for the increased risk in relation to the Loan by paying interest on the Loan at a rate calculated in accordance with Clause 8.3 ( Default interest ) as if the whole of the outstanding Loan were an overdue amount. Any such interest shall accrue

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in accordance with Clause 32.3 ( Day count convention ) and be payable by the Borrowers in accordance with Clause 8.2 ( Payment of interest ) and shall be without prejudice to any other right or remedy any Finance Party may have under Clause 13 ( Increased Costs ) or Clause 22.34.1 ( Events of Default ).

A Vessel shall not be included in the calculation of the LTV Coverage unless a Mortgage has been registered and remain registered against such Vessel.

17.6	Release of Mortgages

If:

17.6.1

the Borrowers make a voluntary prepayment in accordance with Clause 7.2 (Voluntary Prepayment of Loan) in respect of a certain Tranche; or

17.6.2

the Borrowers make a balloon payment on the Termination Date in respect of a certain Tranche in accordance with Schedule 9,

(each a " Payment ") the Borrowers may require that the Mortgage(s) over one or more of the Vessels financed by that Tranche and the other Security Documents in respect of such Vessel(s) (but not any Vessels financed by other Tranches) be released after such Payment, provided that

(a)

the Borrowers notify the Agent of such requirement no later than 10 Business Days prior to the such Payment;

(b)

the LTV Coverage after such Payment and such release is not less than the LTV Coverage immediately prior to such payment and release;

(c)

the LTV Coverage exceeds 133% after such Payment and release;

(d)

the LTV Coverage for the purpose of this Clause shall be calculated on the basis of the Market Value of the Vessels (as determined by the most recent valuation provided to the Agent pursuant to Clause 20.2.3); and

(e)

no Default has occurred and is continuing.

18	Guarantee and Indemnity

18.1	Guarantee and indemnity

18.1.1

Guarantor A irrevocably and unconditionally:

(a)

guarantees to each Finance Party punctual performance by each other Security Party of all that Security Party's obligations under the Finance Documents (insofar as those obligations relate to the Existing Tranche A and the Existing Tranche B);

(b)

undertakes with each Finance Party that whenever another Security Party does not pay any amount when due under or in connection with any Finance Document (insofar as such payment relates to the Existing Tranche A and the Existing Tranche B), Guarantor A shall

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immediately on demand pay that amount as if it was the principal obligor; and

(c)

agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal (insofar as the obligation relates to the Existing Tranche A and the Existing Tranche B), it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of a Security Party not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by Guarantor A under this indemnity will not exceed the amount it would have had to pay under this Clause 18 if the amount claimed had been recoverable on the basis of a guarantee.

18.1.2

Guarantor B irrevocably and unconditionally:

(a)

(b)

undertakes with each Finance Party that whenever another Security Party does not pay any amount when due under or in connection with any Finance Document insofar as such payment relates to Existing Tranche C and the New Tranche), Guarantor B shall immediately on demand pay that amount as if it was the principal obligor; and

(c)

agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal (insofar as the obligation relates to Existing Tranche C and the New Tranche), it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of a Security Party not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by Guarantor B under this indemnity will not exceed the amount it would have had to pay under this Clause 18 if the amount claimed had been recoverable on the basis of a guarantee.

18.1.3

The Owners (in their capacity as guarantors) each jointly and severally irrevocably and unconditionally:

(a)

guarantees to each Finance Party punctual performance by each other Security Party of all that Security Party's obligations under the Finance Documents;

(b)

undertakes with each Finance Party that whenever another Security Party does not pay any amount when due under or in connection

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with any Finance Document, the Owners (in their capacity as guarantors) shall immediately on demand pay that amount as if it was the principal obligor; and

(c)

agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of a Security Party not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by the Owners (in their capacity as guarantors) under this indemnity will not exceed the amount it would have had to pay under this Clause 18 if the amount claimed had been recoverable on the basis of a guarantee.

18.2	Continuing Guarantee This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Security Party under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

18.3	No limit on demands There shall be no limit on the number of demands which a Finance Party may make against a Guarantor in accordance with Clause 18.1 ( Guarantee and indemnity ).

18.4

Reinstatement If any discharge, release or arrangement (whether in respect of the obligations of any Security Party or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Guarantors under this Clause 18 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

18.5

Waiver of defences The obligations of the Guarantors under this Clause 18 will not be affected by an act, omission, matter or thing which, but for this Clause 18, would reduce, release or prejudice any of its obligations under this Clause 18 (without limitation and whether or not known to it or any Finance Party) including:

18.5.1

any time, waiver or consent granted to, or composition with, any Security Party or other person;

18.5.2

the release of any other Security Party or any other person under the terms of any composition or arrangement with any creditor of any Security Party;

18.5.3

the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Security Party or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

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18.5.4

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of a Security Party or any other person;

18.5.5

any amendment, novation, supplement, extension restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or increase in any facility or the addition of any new facility under any Finance Document or other document or security;

18.5.6

any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

18.5.7

any insolvency or similar proceedings.

18.6

Guarantors intent Without prejudice to the generality of Clause 18.5 ( Waiver of defences ), the Guarantors expressly confirm that they intend that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

18.7

Immediate recourse The Guarantors waive any right they may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantors under this Clause 18. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

18.8	Appropriations Until all amounts which may be or become payable by the Security Parties under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

18.8.1

refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantors shall not be entitled to the benefit of the same; and

18.8.2

hold in an interest-bearing suspense account any moneys received from the Guarantors or on account of the Guarantors' liability under this Clause 18.

18.9	Deferral of Guarantors’ rights Until all amounts which may be or become payable by the Security Parties under or in connection with the Finance Documents

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have been irrevocably paid in full and unless the Agent otherwise directs, the Guarantors will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 18:

18.9.1

to be indemnified by a Security Party;

18.9.2

to claim any contribution from any other guarantor of any Security Party's obligations under the Finance Documents;

18.9.3

to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;

18.9.4

to bring legal or other proceedings for an order requiring any Security Party to make any payment, or perform any obligation, in respect of which the Guarantors have given a guarantee, undertaking or indemnity under Clause 18.1 ( Guarantee and indemnity );

18.9.5

to exercise any right of set-off against any Security Party; and/or

18.9.6

to claim or prove as a creditor of any Security Party in competition with any Finance Party.

If the Guarantors receive any benefit, payment or distribution in relation to such rights they shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Security Parties under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 29 ( Payment mechanics ).

18.10

Additional security This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

18.11

Cash collateral If an Event of Default has occurred and is continuing, the Agent (acting on the instructions of the Majority Lenders), without prejudice to any other rights or remedies available under the Finance Documents or otherwise under law, shall be entitled to call immediately an amount equal to the Indebtedness from the Guarantors and hold the proceeds in escrow as cash collateral in respect of the Borrowers' performance under the Finance Documents.

18.12

Subordination Each Borrower and each Guarantor agrees and undertakes with the Finance Parties that all claims of whatsoever nature which it has or may have at any time against any other Security Party or any of their respective property or assets shall rank after and be in all respects subordinate to any and all claims, whether actual or contingent, which the Finance Parties have or may have at any time against such other Security Party or any of its property or assets and that if an Event of Default has occurred and is continuing it will not without the prior written consent of the Agent (acting on the instructions of the Majority Lenders):

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18.12.1

demand or accept payment in whole or in part of any moneys owing to it by any other Security Party;

18.12.2

take any steps to enforce its rights to recover any moneys owing to it by any other Security Party and more particularly (but without limitation) take or issue any judicial or other legal proceedings against any other Security Party or any of their respective property or assets; or

18.12.3

prove in the liquidation or other dissolution of any other Security Party in competition with a Finance Party.

18.13

Guarantors incorporated in Singapore Notwithstanding any provision of this Clause 18 or of any other Finance Document, the obligations of any Guarantor incorporated in Singapore (a " Singaporean Guarantor ") under this Clause 18 and under any Finance Document, the obligations of any Singaporean Guarantor under this Guarantee shall be limited to an amount equivalent to the higher of:

18.13.1

the Equity of the Singaporean Guarantor at the date of this Guarantee;

18.13.2

the Equity of the Singaporean Guarantor at the time Singaporean Guarantor is request to make a payment under this Guarantee; and

18.13.3

with respect to a Singaporean Guarantor which is an Owner, the aggregate fair market value at any time of the Vessels owned by such Singaporean Guarantor.

For the purposes of this Clause 18.13 only, " Equity " shall mean the equity of the Singaporean Guarantor in question calculated in accordance with GAAP at the relevant time, however, adjusted if and to the extent any book value is not equal to the market value. The calculation of Equity shall not include the guarantee obligations pursuant to this guarantee.

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Section 8

Representations, Undertakings and Events of Default

19	Representations

19.1	Representations Each Borrower and each Guarantor make the representations and warranties set out in this Clause 19 to each Finance Party.

19.1.1

Status Each of the Security Parties:

(a)

is a limited liability corporation, duly incorporated and validly existing under the law of its Original Jurisdiction; and

(b)

has the power to own its assets and carry on its business as it is being conducted.

19.1.2

Binding obligations Subject to the Legal Reservations:

(a)

the obligations expressed to be assumed by each of the Security Parties in each of the Relevant Documents to which it is a party are legal, valid, binding and enforceable obligations; and

(b)

(without limiting the generality of Clause 19.1.2(a)) each Security Document to which it is a party creates the security interests which that Security Document purports to create and those security interests are valid and effective.

19.1.3

Non-conflict with other obligations The entry into and performance by each of the Security Parties of, and the transactions contemplated by, the Relevant Documents do not conflict with:

(a)

any law or regulation applicable to such Security Party;

(b)

the constitutional documents of such Security Party; or

(c)

any agreement or instrument binding upon such Security Party or any of such Security Party's assets or constitute a default or termination event (however described) under any such agreement or instrument.

19.1.4

Power and authority

(a)

Each of the Security Parties has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Relevant Documents to which it is or will be a party and the transactions contemplated by those Relevant Documents.

(b)

No limit on the powers of any Security Party will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Relevant Documents to which it is a party.

19.1.5

Validity and admissibility in evidence All Authorisations required or desirable:

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(a)

to enable each of the Security Parties lawfully to enter into, exercise its rights and comply with its obligations in the Relevant Documents to which it is a party or to enable each Finance Party to enforce and exercise all its rights under the Relevant Documents; and

(b)

to make the Relevant Documents to which any Security Party is a party admissible in evidence in its Relevant Jurisdictions,

have been obtained or effected and are in full force and effect, with the exception only of the registrations referred to in Part III of Schedule 2 ( Conditions Subsequent ).

19.1.6

Governing law and enforcement

Subject to the Legal Reservations:

(a)

the choice of governing law of any Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Security Party; and

(b)

any judgment obtained in relation to any Finance Document in the jurisdiction of the governing law of that Finance Document will be recognised and enforced in the Relevant Jurisdictions of each relevant Security Party, save that judgements from countries outside the European Union may not be enforceable in Denmark.

19.1.7

Insolvency No corporate action, legal proceeding or insolvency proceedings or creditors' process described in Clause 23.1.7 ( Creditors' process ) has been taken or, to the knowledge of any Borrower or the Guarantor, threatened in relation to a Security Party; and none of the circumstances described in Clause 23.1.6 ( Insolvency ) applies to a Security Party.

19.1.8

No filing or stamp taxes Under the laws of the Relevant Jurisdictions of each relevant Security Party it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in any of those jurisdictions or that any stamp, registration, notarial or similar tax or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents except:

(a)

registration of particulars of those Finance Documents at the Companies Registry of the relevant Security Party as detailed in the legal opinions obtained by the Agent in connection with this Agreement and payment of associated fees;

(b)

registration of each Mortgage at the Ships Registry where title to a Vessel is registered in the relevant Owner and payments of associated fees; and

(c)

stamping of the share charges in relation to Owner A and Owner B,

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which registrations, filing, taxes and fees will be made and paid promptly after the date of the relevant Finance Document.

19.1.9

Deduction of Tax None of the Security Parties is required under the law of its jurisdiction of incorporation to make any deduction for or on account of Tax from any payment it may make under any Finance Document to a Lender.

19.1.10

No default

(a)

No Event of Default and, on the date of this Agreement and each Drawdown Date, no Default is continuing or is reasonably likely to result from the advance of the Loan or the entry into, the performance of, or any transaction contemplated by, any of the Relevant Documents.

(b)

No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (howsoever described) under any other agreement or instrument which is binding on any of the Security Parties or to which its assets are subject which has or is reasonably likely to have a Material Adverse Effect.

19.1.11

No misleading information Save as disclosed in writing to the Agent prior to the date of this Agreement:

(a)

all material information provided to a Finance Party by or on behalf of any of the Security Parties on or before the date of this Agreement and not superseded before that date is accurate and not misleading in any material respect and all projections provided to any Finance Party on or before the date of this Agreement have been prepared in good faith on the basis of assumptions which were reasonable at the time at which they were prepared and supplied; and

(b)

all other written information provided by any of the Security Parties (including its advisers) to a Finance Party was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect.

19.1.12

Financial statements

(a)

The most recent financial statements of the Group delivered pursuant to Clause 20.1 ( Financial statements ):

(i)

have been prepared in accordance with GAAP; and

(ii)

give a true and fair view of (if audited) or fairly represent (if unaudited) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate.

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(b)

Since the date of the most recent financial statements delivered pursuant to Clause 20.1 ( Financial statements ) there has been no material adverse change in the business, assets or financial condition of any of the Security Parties.

19.1.13

No proceedings pending or threatened No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, are reasonably likely to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against any of the Security Parties.

19.1.14

No breach of laws None of the Security Parties has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.

19.1.15

Environmental laws

(a)

Each of the Security Parties is in compliance with Clause 22.4 ( Environmental compliance ) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect.

(b)

No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry) is threatened against any of the Security Parties where that claim has or is reasonably likely, if determined against that Security Party to have a Material Adverse Effect.

19.1.16

Taxation

(a)

None of the Security Parties is materially overdue in the filing of any Tax returns or is overdue in the payment of any amount in respect of Tax, the consequence of which is likely to have a Material Adverse Effect.

(b)

No claims or investigations are being, or are reasonably likely to be, made or conducted against any of the Security Parties with respect to Taxes, which if adversely determined is reasonably likely to have a Material Adverse Effect.

19.1.17

Anti-corruption law Each of the Security Parties has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.

19.1.18

No Encumbrance or Financial Indebtedness

(a)

No Encumbrance exists over all or any of the present or future assets of any of the Owners, other than Permitted Encumbrances.

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(b)

None of the Owners has any Financial Indebtedness outstanding other than as permitted by this Agreement and as notified in writing to the Agent prior to the date of this Agreement.

19.1.19

Pari passu ranking The payment obligations of each of the Security Parties under the Finance Documents to which it is a party rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

19.1.20

No adverse consequences

(a)

It is not necessary under the laws of the Relevant Jurisdictions of any of the Security Parties:

(i)

in order to enable any Finance Party to enforce its rights under any Finance Document; or

(ii)

by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document,

that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of the Relevant Jurisdictions of any of the Security Parties.

(b)

No Finance Party is or will be deemed to be resident, domiciled or carrying on business in any of the Relevant Jurisdictions of any of the Security Parties by reason only of the execution, performance and/or enforcement of any Finance Document.

19.1.21

No Disclosure of material facts No Borrower or Guarantor is aware of any material facts or circumstances which have not been disclosed to the Agent and which would, if disclosed, have adversely affected the decision of a person considering whether or not to make loan facilities of the nature contemplated by this Agreement available to the Borrowers.

19.1.22

Completeness of Relevant Documents The copies of any Relevant Documents provided or to be provided by the Borrowers to the Agent in accordance with Clause 4 ( Conditions of Utilisation ) are, or will be, true and accurate copies of the originals and represent, or will represent, the full agreement between the parties to those Relevant Documents in relation to the subject matter of those Relevant Documents and there are no commissions, rebates, premiums or other payments due or to become due in connection with the subject matter of those Relevant Documents other than in the ordinary course of business or as disclosed to, and approved in writing by, the Agent

19.1.23

No Immunity No Security Party or any of its assets is immune to any legal action or proceeding.

19.1.24

Money laundering Any borrowing by a Borrower under this Agreement, and the performance of its obligations under this Agreement

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and under the other Finance Documents, will be for its own account and will not involve any breach by it of any law or regulatory measure relating to " money laundering " as defined in Article 1 of the Directive (2005/EC/60) of the European Parliament and of the Council of the European Communities.

19.1.25

Sanctions

(a)

Each Borrower and each Guarantor and their respective directors, officers, joint ventures and employees and, to the best knowledge of each Borrower and each Guarantor, their respective agents and representatives (each acting in the capacity as agent or, as the case may be, representative for a Borrower or a Guarantor) has been and is in compliance with Sanctions Laws applicable to it.

(b)

No Borrower and no Guarantor nor any other member of the Group or any Relevant Affiliate of any of them or their respective directors, officers, joint ventures or employees and, to the best knowledge of each Borrower and Guarantor, their respective agents and representatives (each acting in the capacity as agent or, as the case may be, representative for a Borrower or a Guarantor):

(i)

is a Restricted Party, or is involved in any transaction through which it is likely to become a Restricted Party or acts directly or indirectly on behalf of a Restricted Party; or

(ii)

is subject to or involved in any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws by any Sanctions Authority.

19.2	Repetition Each Repeating Representation is deemed to be repeated by each Borrower and each Guarantor by reference to the facts and circumstances then existing of each Drawdown Date and (save for those contained in Clause 19.1.11 ( No Misleading Information ) on each Interest Payment Date.

20	Information Undertakings

The undertakings in this Clause 20 remain in force for the duration of the Facility Period.

20.1	Financial statements Borrower B shall supply to the Agent in sufficient copies for all of the Lenders:

20.1.1

as soon as the same become available, but in any event within 150 days after the end of each financial year the audited consolidated financial statements of the Group for that financial year; and

20.1.2

as soon as the same become available, but in any event within 60 days after the end of each quarter during each of its financial years, the unaudited quarterly financial statements of the Group (including profit and loss statements, balance sheet and cash flow statements for that quarter; and

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20.1.3

as soon as the same become available but in any event no later than the 1st December of each financial year and each time the same are revised or amended, detailed consolidated forward-looking budgets for the next twelve (12) months (showing, without limitation, profit and loss statements, balance sheet, cash flow statements and written assumptions) including all revisions and amendments thereto (the " Annual Budgets "); and

20.1.4

if requested by the Agent, audited annual financial statements of any Subsidiary of Borrower B; and

20.1.5

promptly, details of any defaults by an member of the Group relating to Financial Indebtedness in excess of ten million dollars (USD 10,000,000) or any material litigation relating to a member of the Group; and

20.1.6

within 7 days of demand, such other information as the Agent may reasonably require.

20.2	Compliance Certificate and valuations of the Fleet Vessels

20.2.1

Borrower B shall supply to the Agent throughout the Facility Period, with its annual financial statements delivered pursuant to Clause 20.1 ( Financial statements ) and its quarterly financial statements delivered pursuant to Clause 20.1 ( Financial statements ) or Clause 17.5 ( Additional Security ) for the quarters ending 30 June and 31 December, a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 21 ( Financial Covenants ) as at the date as at which those financial statements were drawn up and attaching supporting schedules.

20.2.2

The Compliance Certificate shall be signed by:

(a)

A director of Borrower B which is a member of the top management of the Group; or

(b)

the Chief Financial Officer or the Head of Treasury of Borrower A pursuant to a power of attorney from a director of Borrower B which is a member of the top management of the Group.

20.2.3

Borrower B shall within 10 Business Days after the end of each financial quarter provide the Agent with two independent valuations of the fair market value of the Fleet Vessels as of the relevant quarter from the Approved Shipbrokers addressed to Borrower B and determined in the same manner as the Market Value of the Vessels.

20.3	Requirements as to financial statements

Each set of financial statements delivered by a Borrower or a Guarantor under Clause 20.1 ( Financial statements ):

20.3.1

shall be certified by the relevant company as giving a true and fair view of (in the case of annual financial statements), or fairly representing (in

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other cases), its financial condition as at the date as at which those financial statements were drawn up; and

20.3.2

shall be prepared using GAAP, accounting practices and financial reference periods unless, in relation to any set of financial statements, it notifies the Agent that there has been a change in GAAP, the accounting practices or reference periods and its auditors deliver to the Agent:

(a)

a description of any change necessary for those financial

statements to reflect the GAAP, accounting practices and reference periods upon which the earlier financial statements were prepared; and

(b)

sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Agent to determine whether Clause 21 ( Financial Covenants ) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and the earlier financial statements.

If Borrower B updates or changes the financial statements or the Annual Budgets in any material respect, it shall deliver to the Agent such updated or changed financial statements or Annual Budgets and a written explanation of the main changes in those financial statements or Annual Budgets, together with the next Compliance Certificate delivered pursuant to Clause 20.2.

20.4	Information: miscellaneous Each Borrower and each Guarantor shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):

20.4.1

At the same time as they are dispatched (and only if the Agent so requests), copies of all documents dispatched by a Borrower or any other Security Party to its creditors generally (or any class of them);

20.4.2

promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any Security Party and which, if adversely determined, are reasonably likely to have a Material Adverse Effect;

20.4.3

promptly, such information as the Security Agent may reasonably require about the Charged Property and compliance of the Security Parties with the terms of any Security Documents including without limitation cash flow analyses and details of the operating costs of any Vessel; and

20.4.4

promptly on request, such further information regarding the financial condition, assets and operations of any Security Party (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Security Party under this Agreement) as any Finance Party through the Agent may reasonably request.

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20.5	Notification of default

20.5.1

Each Borrower and each Guarantor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence.

20.5.2

Promptly upon a request by the Agent, each Borrower shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).

20.6	"Know your customer" checks

20.6.1

If:

(a)

the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

(b)

any change in the status of a Security Party or the Sponsor after the date of this Agreement; or

(c)

a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

obliges the Agent or any Lender (or, in the case of Clause 20.6.1(c), any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Borrower shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in Clause 20.6.1(c), on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in Clause 20.6.1(c), any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

20.6.2

Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

21	Financial Covenants

21.1	Borrower B shall maintain (on a consolidated basis):

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21.1.1

Free Liquidity and, for so long as the availability period under the RCF Facility Agreement ends at least six months after any calculation date, the aggregate amount of undrawn commitments under the RCF Facility Agreement which are available for utilisation at such date, of the greater of seventy five million dollars (USD 75,000,000) and 5% of Group Debt at all times provided that at all times, the Free Liquidity shall be at least the greater of forty million Dollars (USD 40,000,000) and 5% of the Group Debt; and

21.1.2

an Equity Ratio of at least 25%.

21.2

If the Borrowers or any other member of the Group enter into a loan agreement or any other financial arrangement having similar effect or a guarantee, or amends, modifies or supplements an existing loan agreement, any other financial arrangement or guarantee, which includes Financial Covenants in respect of the Borrowers that are more beneficial to that lender or credit provider than the Financial Covenants of the Borrowers set out herein (the " New Financial Covenants ") then the Borrowers shall promptly deliver a notice in writing to the Agent (a " Most Favoured Notice ") which shall include a reasonably detailed description of the more favourable New Financial Covenants (together with a copy of the relevant New Financial Covenant).

Following the delivery of a Most Favoured Notice, the Agreement shall if requested by the Agent be amended to include the New Financial Coveants within 15 Business Days after the Agent's request in a form acceptable to the Agent.

In this Clause 21.2:

"Financial Covenants" means any financial covenant including but not limited to minimum liquidity requirements and/or requirements as to the ratio of equity to total assets and/or limitations on dividends, in each case related to Borrower B and its Subsidiaries, save for limitations on dividends which shall only relate to Borrower B.

22	General Undertakings

The undertakings in this Clause 22 remain in force for the duration of the Facility Period.

22.1	The Owners undertakes to comply with all undertakings contained in Schedule 11 ( Vessel and Insurance Undertakings ) of this Agreement.

In the event of any discrepancies between the ship covenants and the insurance covenants in the Mortgages and the undertakings set out in Schedule 11 ( Vessel and Insurance Undertakings ) hereto, the undertakings in Schedule 11 ( Vessel and Insurance Undertakings ) hereto shall take precedent.

22.2	Authorisations Each Borrower shall promptly:

22.2.1

obtain, comply with and do all that is necessary to maintain in full force and effect; and

22.2.2

supply certified copies to the Agent of,

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any Authorisation required under any law or regulation of a Relevant Jurisdiction to:

(a)

enable any Security Party to perform its obligations under the Finance Documents to which it is a party;

(b)

ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and

(c)

enable any Security Party to carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect.

22.3	Compliance with laws

22.3.1

Each Borrower and each Guarantor shall comply in all respects with all laws to which it may be subject, if (except as regards Sanctions Laws, to which Clause 22.3.2 applies, and anti-corruption laws, to which Clause 22.6 applies) failure so to comply has or is reasonably likely to have a Material Adverse Effect.

22.3.2

Each Borrower and each Guarantor shall comply (and shall procure that each other Security Party, shall comply) in all respects with all Sanctions Laws.

22.4	Environmental compliance

Each Borrower and each Guarantor shall:

22.4.1

comply with all Environmental Laws;

22.4.2

obtain, maintain and ensure compliance with all requisite Environmental Approvals; and

22.4.3

implement procedures to monitor compliance with and to prevent liability under any Environmental Law,

where failure to do so has or is reasonably likely to have a Material Adverse Effect.

22.5	Environmental Claims

Each Borrower and each Guarantor shall promptly upon becoming aware of the same, inform the Agent in writing of:

22.5.1

any Environmental Claim against any of the Security Parties which is current, pending or threatened; and

22.5.2

any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any of the Security Parties.

where the claim, if determined against that Security Party has or is reasonably likely to have a Material Adverse Effect.

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22.6	Anti-corruption law

22.6.1

Each Borrower and each Guarantor shall not (and shall procure that no other Security Party will) directly or indirectly use the proceeds of the Loan for any purpose which would breach the English Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.

22.6.2

Each Borrower and each Guarantor shall (and shall procure that each other Security Party shall):

(a)

conduct its businesses in compliance with applicable anti-corruption laws; and

(b)

maintain policies and procedures designed to promote and achieve compliance with such laws.

22.6.3

Sanctions

(a)

Each Borrower and each Guarantor shall ensure that none of them, or any of their respective directors, officers or employees is or will become a Restricted Party.

(b)

Each Borrower and each Guarantor shall, and shall procure that each other member of the Group and each Relevant Affiliate of any of them shall, not use any revenue or benefit derived from any activity or dealing with a Restricted Party in discharging any obligation due or owing to the Finance Parties, to the extent such discharge with such revenue or benefit would be prohibited by Sanctions Laws or would otherwise cause any Finance Party to be in breach of Sanctions Laws.

(c)

Each Borrower and each Guarantor shall procure that no proceeds from any activity or dealing with a Restricted Party are credited to any bank account held with any Finance Party in its name or in the name of any other member of the Group or any Relevant Affiliate of any of them, to the extent such provision of proceeds would be prohibited by Sanctions Laws or would otherwise cause any Finance Party to be in breach of Sanctions Laws.

(d)

Each Borrower and each Guarantor shall, and shall procure that each other member of the Group shall, to the extent permitted by law promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions Laws by any Sanctions Authority.

(e)

No Borrower or Guarantor shall permit or authorise and each Borrower and each Guarantor shall prevent any Vessel being used directly or indirectly:

(i)

by or for the benefit of any Restricted Party in violation of Sanctions Laws or in any manner which would otherwise

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cause any Finance Party to be in breach of Sanctions Laws; and/or

(ii)

in any trade which is reasonably likely to expose the Vessel, any Finance Party, any manager, crew or insurers to enforcement proceedings or any other consequences whatsoever arising from Sanctions Laws.

22.7

Taxation

22.7.1

Each Borrower and each Guarantor shall (and shall procure that each other Security Party shall) generally pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

(a)

such payment is being contested in good faith;

(b)

adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under Clause 20.1 ( Financial statements ); and

(c)

such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.

22.7.2

Neither any Borrower nor any Guarantor may change its residence for Tax purposes without the consent of the Security Agent (such consent not to be unreasonably withheld).

22.8	Evidence of good standing Each Borrower will from time to time if requested by the Agent provide the Agent with evidence in form and substance satisfactory to the Agent that the Security Parties and all corporate shareholders of any of the Security Parties remain in good standing.

22.9

Pari passu ranking Each Borrower and each Guarantor shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.

22.10

Negative pledge

The Borrowers and the Guarantors shall not (and shall procure that no other Security Party will) create nor permit to subsist any Encumbrance or other third party rights over the Vessels, or other Charged Property during the Facility Period, save for Permitted Encumbrances.

22.11

Disposals

22.11.1

Except as permitted under Clause 22.11.2, no Owner shall enter into a single transaction or a series of transactions (whether related or not) and

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whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.

22.11.2

Clause 22.11.1 does not apply to any sale, lease, transfer or other disposal which is a Permitted Disposal or a Permitted Transaction. Clause 22.11.1 shall not apply to any sale or other disposal of a Vessel for market value in circumstances where the relevant repayment (as provided in Clause 7.6) shall be made on completion of such sale.

22.12

Arm's length basis

22.12.1

Any transactions or agreements entered into between (i) any Borrower or any Guarantor and (ii) any Guarantor or the Sponsor or the Managers or any of their respective Affiliates shall be on arm's length terms and for fair market value and shall be subject to full disclosure to the Agent.

22.12.2

The following transactions shall not be a breach of this Clause 22.12:

(a)

fees, costs and expenses payable under the Relevant Documents in the amounts set out in the Relevant Documents delivered to the Agent under Clause 4.1 ( Initial conditions precedent ) or agreed by the Agent; and

(b)

any Permitted Transaction.

22.13

Merger Neither any Borrower nor any Guarantor shall enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction without the prior written consent of the Agent.

22.14

Change of business Neither any Borrower nor any Guarantor shall make any change to the general nature of its business from that carried on at the date of this Agreement it being agreed that Borrower A may discontinue its dry bulk business and Borrower B may dispose of all of its vessels and continue business as a holding company without breaching this covenant.

22.15

No other business No Owner shall engage in any business other than the ownership, operation, chartering and management of the relevant Vessel.

22.16

No acquisitions No Owner shall acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) or incorporate a company, without the prior consent of the Agent.

22.17

No Joint Ventures No Owner shall:

22.17.1

enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or

22.17.2

transfer any assets or lend to or guarantee or give an indemnity for or give security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing).

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22.18

No borrowings No Owner shall incur or allow to remain outstanding any Financial Indebtedness (except for the Loan) other than the Inter-company Indebtedness which is subject to the Inter-company Indebtedness Assignment.

22.19

No substantial liabilities Except in the ordinary course of business, no Owner shall incur any liability to any third party which is in the Agent's opinion (acting reasonably) of a substantial nature other than the Inter-company Indebtedness which is subject to the Inter-company Indebtedness Assignment.

22.20

No loans or credit No Owner shall be a creditor in respect of any Financial Indebtedness unless it is a loan made in the ordinary course of business in connection with the chartering, operation or repair of the relevant Vessel or a Permitted Transaction.

22.21

No guarantees or indemnities No Owner shall incur or allow to remain outstanding any guarantee in respect of any obligation of any person unless it is a Permitted Transaction.

22.22

Dividend Payment

22.22.1

Except as permitted under Clause 22.22.2 below, Borrower B shall not:

(a)

declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or kind) on or in respect of its share capital (or any class of its share capital);

(b)

repay or distribute any dividend or share premium reserve;

(c)

pay or allow the payment by any other member of the Group of any management, advisory or other fee to or to the order of any of the shareholders of Borrower B;

(d)

redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so; or

(e)

make any payment or repayment or allow any other member of the Group to make a payment or repayment under any Financial Indebtedness owed to a shareholder of Borrower B or a member of the Group which is not a Borrower or a Guarantor;

each of the above being referred to herein as a "Distribution".

22.22.2

Clause 22.22.1 above does not apply to any direct or indirect Distributions by Borrower B after the expiry of each half of each of its financial years, of up to 75% of its Net Income (as defined below) for that half year period; provided that:

(a)

any such Distributions are declared and made when no Default is continuing or would occur immediately after the declaration or making of such payments; and

(b)

after giving effect to any such payments, Borrower B is not in breach of any of the provisions of Clause 21 (Financial Covenants).

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For this purpose, "Net Income" shall mean the net income determined based on Borrower B's financial statements as at 30 June or its annual audited financial statements, as the case may be. Any amount available for distribution based on Net Income for a financial year and that is not distributed shall not be carried forward.

22.22.3

This Clause 22.22 shall cease to apply at any time:

(a)

at which the Group LTV is equal to or less than fifty per cent. (50%) and would continue to be equal to or less than fifty per cent. (50%) following the Distribution; or

(b)

the Borrower is listed on the New York Stock Exchange or Nasdaq New York.

22.22.4

For this purpose "Group LTV" means the ratio of (y) the sum of the Group's Financial Indebtedness less cash and Cash Equivalents to (z) the aggregate Market Value of the Fleet Vessels determined in the same manner as Market Value in respect of the Vessels as evidenced by the valuations to be provided by Borrower B to the Agent pursuant to Clause 20.2.1.

22.23

Inspection of records Each Borrower and each Guarantor will permit the inspection of its financial records and accounts from time to time by the Agent or its nominee.

22.24

Further assurance

22.24.1

Each Borrower and each Guarantor shall (and shall procure that each other Security Party shall) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):

(a)

to perfect any Encumbrance created or intended to be created under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other Encumbrance over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law;

(b)

to confer on the Security Agent or confer on the Finance Parties an Encumbrance over any property and assets of that Security Party located in any jurisdiction equivalent or similar to the Encumbrance intended to be conferred by or pursuant to the Security Documents; and/or

(c)

to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents.

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22.24.2

Each Borrower and each Guarantor shall (and shall procure that each other Security Party shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Encumbrance conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents.

22.25

Change of Manager

22.25.1

The Borrowers shall procure that:

(a)

if a Management Agreement is terminated, cancelled or otherwise ceases to remain in full force and effect at any time prior to its contractual expiry date, such Management Agreement is replaced by a similar agreement in form and substance satisfactory to the Majority Lenders (acting reasonably); and

(b)

any new Manager provides the Agent with a Manager's Undertaking immediately upon of its appointment on terms acceptable to the Agent (acting reasonably); and

(c)

if a Bareboat Charter is terminated, cancelled or otherwise ceases to remain in full force and effect, Borrower A (acting as Manager) and the relevant Owner shall, unless otherwise agreed by the Agent, execute a management agreement in respect of the commercial and technical management of the relevant Vessel.

22.25.2

Each Borrower and each relevant Owner shall procure that each vessel owned by the Group shall be managed commercially by Borrower A or another company approved by the Agent (acting reasonably).

22.26

Building Contracts The Owners undertake not to agree or to permit any changes to the Building Contracts which are likely have an adverse effect on the Market Value of the New Vessels or otherwise materially alter the Vessels, including any change in class notation.

22.27

Change of flag or classification society

22.27.1

The Owners shall maintain the registration of their respective Vessels under an Approved Flag for the duration of the Facility Period. Re-flagging of a Vessel under an Approved Flag is permitted, subject always to (i) the provisions of Clauses 4.5 ( Conditions Precedent to Re-flagging under an Approved Flag ) and (ii) provision of prior written notice to the Agent by the relevant Owner (setting out in full the relevant details in respect of the proposed re-flagging) at least 15 Business Days before the proposed re-flagging, provided always that the Agent (acting in its reasonable discretion) may at any time withdraw its approval in respect of an Approved Flag.

22.27.2

The Owners shall maintain their respective Vessels under an Approved Classification Society for the duration of the Facility Period provided always that the Agent (acting in its reasonable discretion) may at any

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time withdraw its approval in respect of an Approved Classification Society.

22.28

No change of control in respect of the Guarantors

22.28.1

Borrower B shall retain throughout the Facility Period the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

(a)

cast, or control the casting of 100% of the votes that might be cast at a general meeting of Guarantor B and of each Owner;

(b)

appoint or remove all of the directors or other equivalent officers of Guarantor B and of each Owner; and

(c)

give directions with respect to the management policies of Guarantor B and of each Owner; and

22.28.2

Borrower B shall retain throughout the Facility Period the legal and beneficial ownership (directly or indirectly) of 100% of the issued share capital of Guarantor B and of each Owner.

22.29

Chartering

22.29.1

Neither the Borrowers nor any Owner nor the Bareboat Charterer shall enter into any Charter for a Vessel (except for a Bareboat Charter) which is a bareboat or demise charter or passes possession and operational control of such Vessel to another person.

22.29.2

All Charters of the Vessels shall be on terms as to payment or amount of hire which are not materially less beneficial to the Borrowers or any Owner than the terms which at that time could reasonably be expected to be obtained on the open market for vessels of the same age and type as such Vessel under charter commitments of a similar type and period.

22.29.3

The Borrowers shall promptly notify the Agent of any Charter made for a period which is longer than thirteen (13) months (including any optional or automatic extension periods) and shall deliver to the Agent, upon the Agent's reasonable request, a summary of all Charters to which the Vessels are subject, including the identity of the charterers.

22.29.4

The Borrowers and/or the relevant Owner shall give notice of the assignments contained in the Assignments for each Vessel to the charterer under any Charter for such Vessel longer than thirteen (13) months (including any optional or automatic extension periods) immediately upon entry into the Assignment (or, if later, the date of entry into such Charter) and shall ensure that the Agent receives a copy of that notice, provided that, prior to the occurrence and continuance of an Event of Default, no notice shall be required to be given if that Borrower demonstrates sound commercial reasons to refrain from giving such notice.

22.29.5

The Bareboat Charterer shall not do anything which would or might prevent the Borrowers complying with this Clause 22 or the operation

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and insurance provisions contained in any Mortgage or collateral deed of covenants, or fail to do anything required by the Bareboat Charter where failure to do so would or might have such an effect.

22.29.6

No Owner shall charter-in any vessels.

22.30

Assignment and Subordination Any Inter-company Indebtedness shall be unsecured and shall be (i) assigned to the Security Agent pursuant to an Inter-company Indebtedness Assignment and (ii) subordinated to the Loan on terms acceptable to the Agent.

22.31

[DELIBERATELY NOT USED]

22.32

Delivery of Vessels The Owners undertake to use all reasonable endeavours to take delivery of all Vessels within the Availability Period.

22.33

[DELIBERATELY NOT USED]

22.34

Subordination

22.34.1

Borrower A (in its capacity as Bareboat Charterer) acknowledges that each of the Security Agent's rights and powers arising out of or pursuant to the relevant Mortgage shall in all respects and at all times have precedence and priority over the rights and powers of the Bareboat Charterer arising out of or pursuant to the Bareboat Charter.

22.34.2

Borrower A (in its capacity as Bareboat Charterer) undertakes for the duration of the Bareboat Charter not to create, or permit to subsist, any Encumbrance (other than pursuant to the Security Documents) over all or any part of the relevant Vessel other than a Permitted Encumbrance.

22.34.3

Borrower A (in its capacity as Bareboat Charterer) undertakes for the duration of the Bareboat Charter to perform all of the relevant Owner's obligations contained in Schedule 11 ( Vessel and Insurance Undertakings ) of this Agreement jointly and severally with the Owner.

22.34.4

Borrower A (in its capacity as Bareboat Charterer) agrees that, should an Event of Default occur and the Security Agent wish to take and enter into possession of the relevant Vessel pursuant to its rights under the relevant Mortgage, the Bareboat Charterer will immediately on the demand of the Security Agent surrender possession of the relevant Vessel to or to the order of the Security Agent free of the Bareboat Charter.

22.34.5

Borrower A (in its capacity as Bareboat Charterer) agrees that, should an Event of Default occur and be continuing unremedied and unwaived and the Security Agent wishes to sell the relevant Vessel pursuant to its rights under the relevant Mortgage, such sale may be made free of the Bareboat Charter and any claim for loss of the same shall be made against the relevant Owner or the balance (if any) of the proceeds of sale in the hands of the Security Agent after payment of the Indebtedness unless the Security Agent is obliged by law to apply such balance in favour of parties other than the Bareboat Charterer.

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22.34.6

Borrower A (in its capacity as Bareboat Charterer) agrees that, should an Event of Default occur and the Security Agent wishes to take and enter into possession of the relevant Vessel and/or to sell the relevant Vessel pursuant to its rights under the relevant Mortgage, the Bareboat Charter will immediately on the demand of the Security Agent be terminated.

23	Events of Default

23.1	Events of Default Each of the events or circumstances set out in this Clause 23.1 is an Event of Default.

23.1.1

Non-payment A Security Party does not pay on the due date any amount payable by it under a Finance Document at the place at and in the currency in which it is expressed to be payable unless:

(a)

its failure to pay is caused by:

(i)

administrative or technical error; or

(ii)

a Disruption Event; and

(b)

payment is made within three Business Days of its due date.

23.1.2

Other specific obligations

(a)

Any requirement of Clause 21 ( Financial Covenants ) is not satisfied.

(b)

A Security Party does not comply with any obligation in a Finance Document relating to the Insurances or with Clause 17.5 ( Additional security ).

(c)

The Borrowers do not comply with Clauses 7.6.1 or 7.6.2 ( Mandatory prepayment on sale or Total Loss )

23.1.3

Other obligations

(a)

A Security Party does not comply with any provision of a Finance Document (other than those referred to in Clause 23.1.1 ( Non-payment ) and Clause 23.1.2 ( Other specific obligations ).

(b)

No Event of Default under this Clause 23.1.3 will occur if the failure to comply is capable of remedy and is remedied within ten Business Days of the earlier of (i) the Agent giving notice to the Borrowers and (ii) the Borrowers becoming aware of the failure to comply.

23.1.4

Misrepresentation Any representation or statement made or deemed to be repeated by a Security Party in any Finance Document or any other document delivered by or on behalf of a Security Party under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made.

23.1.5

Cross default

(a)

Any Financial Indebtedness of a Security Party:

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(i)

is not paid when due nor within any originally applicable grace period; or

(ii)

is declared to be, or otherwise becomes, due and payable prior to its specified maturity as a result of an event of default (however described).

(b)

Any commitment for any Financial Indebtedness of any Security Party is cancelled or suspended by a creditor of that Security Party as a result of an event of default (however described).

No Event of Default will occur under this Clause 23.1.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within (c)(f) to (c) is less than USD 10,000,000 (or its equivalent in any other currency or currencies).

23.1.6

Insolvency

An Insolvency Event occurs in respect of any Security Party.

23.1.7

Creditors' process Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Security Party having an aggregate value of USD 10,000,000.

23.1.8

Unlawfulness and invalidity

(a)

It is or becomes unlawful for a Security Party to perform any of its obligations under the Finance Documents or any Encumbrance created or expressed to be created or evidenced by the Security Documents ceases to be effective.

(b)

Any obligation or obligations of any Security Party under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents.

(c)

Any Finance Document ceases to be in full force and effect or any Encumbrance created or expressed to be created or evidenced by the Security Documents ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Finance Party) to be ineffective.

23.1.9

Cessation of business A Security Party other than Borrower B, which may dispose of all of its vessels and continue business as a holding company, ceases, or threatens to cease, to carry on all or a substantial part of its business.

23.1.10

Change in ownership or control of a Guarantor There is any breach of Clause 22.28.2.

23.1.11

Expropriation The authority or ability of a Security Party to conduct its business is limited or wholly or substantially curtailed by any seizure,

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expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to a Security Party or any of its assets.

23.1.12

Repudiation and rescission of agreements

(a)

A Security Party rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or repudiate a Finance Document.

(b)

Any of the Management Agreements is terminated, cancelled or otherwise ceases to remain in full force and effect at any time prior to its contractual expiry date and is not promptly replaced by a similar agreement in form and substance satisfactory to the Majority Lenders (acting reasonably).

23.1.13

Conditions subsequent Any of the conditions referred to in Clause 4.3 ( Conditions subsequent ) is not satisfied within the time reasonably required by the Agent.

23.1.14

Revocation or modification of Authorisation Any Authorisation of any governmental, judicial or other public body or authority which is now, or which at any time during the Facility Period becomes, necessary to enable any of the Security Parties or any other person (except a Finance Party) to comply with any of their obligations under any Relevant Document is not obtained, is revoked, suspended, withdrawn or withheld, or is modified in a manner which the Agent considers is, or may be, materially prejudicial to the interests of any Finance Party, or ceases to remain in full force and effect.

23.1.15

Reduction of capital A Guarantor reduces its authorised or issued or subscribed capital.

23.1.16

Challenge to registration The registration of a Vessel or a Mortgage is contested or becomes void or voidable or liable to cancellation or termination, or the validity or priority of a Mortgage is contested.

23.1.17

War The country of registration of a Vessel becomes involved in war (whether or not declared) or civil war or is occupied by any other power and the Agent in its discretion (acting reasonably) considers that, as a result, the security conferred by any of the Security Documents is materially prejudiced.

23.1.18

Notice of determination A Guarantor gives notice to the Security Agent to determine any obligations under the relevant Guarantee.

23.1.19

Litigation Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the Relevant Documents (other than the Charters or the Management Agreements) or the transactions contemplated in the Relevant Documents or against a Security Party or

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its assets which have or are reasonably likely to have a Material Adverse Effect.

23.1.20

Material Adverse Change Any event of circumstance set out in Clause 23.1.21 ( Sanctions ) occurs in relation to any member of the Group or an Affiliate of any of them or any member of the Group or an Affiliate of any of them acts in a way contrary to the obligations set out in Clauses 22.3 ( Environmental Compliance ), 22.5 ( Anti-corruption law ) and 22.6.1 ( Taxation ) and the Majority Lenders reasonably believe that such event or actions have or are reasonably likely to have a Material Adverse Effect.

23.2	Acceleration On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders:

23.2.1

by notice to the Borrowers cancel the Total Commitments, at which time they shall immediately be cancelled;

23.2.2

by notice to the Borrowers declare that the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents are immediately due and payable, at which time they shall become immediately due and payable;

23.2.3

by notice to the Borrowers declare that the Loan is payable on demand, at which time it shall immediately become payable on demand made by the Agent on the instructions of the Majority Lenders; and/or

23.2.4

exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

23.2.5

by notice to the Borrowers amend or select such Interest Periods for the Loan and/or convert the Indebtedness into such other currency as the Agent may determine; and/or

23.2.6

take any other action, exercise any other right or pursue any other remedy conferred upon the Agent by this Agreement and/or by all or any of the Security Documents or by any applicable Regulation or otherwise as a consequence of such Event of Default; and/or

23.2.7

enforce any and all statutory rights under any applicable law, including the Danish Administration of Justice Act; and/or

23.2.8

recover from the Security Parties on demand all expenses incurred or paid by the Agent or the Security Agent in connection with the exercise of the powers referred to in this Clause 23.2.

23.3	Security Agent's Powers

23.3.1

If an Event of Default shall occur, and the Agent shall demand payment of all or any part of the Indebtedness, the security constituted by each Mortgage and this Agreement shall become immediately enforceable and the Security Agent shall be entitled to exercise all or any of the rights, powers, discretions and remedies vested in the Security Agent by this Clause without any requirement for any court order or declaration that an

Page 85

Event of Default has occurred. The Security Agent's right to exercise those rights, powers, discretions and remedies shall be in addition to and without prejudice to all other rights, powers, discretions and remedies to which it may be entitled, whether by statute or otherwise. The Security Agent shall be entitled to exercise its rights, powers, discretions and remedies despite any rule of law or equity to the contrary, and whether or not any previous default shall have been waived, and in particular without the limitations contained in Section 103 of the English Law of Property Act 1925 or any statutory provision which the Security Agent considers analogous to that section under the law of any other relevant jurisdiction.

23.3.2

In the circumstances described in Clause 23.3.1, the Security Agent shall be entitled (but not obliged) to in respect of each Vessel:

(a)

take possession of the Vessel wherever she may be; and/or

(b)

discharge the master and crew of the Vessel and employ a new master and crew; and/or

(c)

navigate the Vessel to such places as the Security Agent may decide or detain or lay up the Vessel; and/or

(d)

in the name of the Security Agent or the name of the relevant Owner, demand, sue for, receive and give a good receipt for all sums due to the relevant Owner in connection with the Vessel and, in the name of the Security Agent or the name of the relevant Owner or the name of the Vessel, commence such legal proceedings as it may consider appropriate, or conduct the defence of any legal proceedings commenced against the Vessel or the relevant Owner in its capacity as owner of the Vessel; and/or

(e)

sell or dispose of all or any shares in the Vessel either by private treaty or auction, on such terms as the Security Agent shall think fit (including deferred payment terms and with or without the benefit of any charterparty or other contract of employment), with the power to make a loan on such terms as the Security Agent may decide to any prospective purchaser to assist in the purchase of the Vessel, and the power to postpone any sale, without being liable for any loss caused by any such sale or the postponement of any such sale; and/or

(f)

replace, maintain or repair any part of the Vessel or alter her to suit the Security Agent's requirements and put her through all appropriate surveys; and/or

(g)

employ agents, servants and others (including, without limitation, any commercial and/or technical manager in respect of the relevant Vessel) on such terms as the Security Agent may in its discretion determine; and/or

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(h)

charter or load the Vessel on such terms and for the carriage of such cargoes as the Security Agent may in its discretion determine.

23.3.3

For the avoidance of doubt, if the Security Agent takes any action or enters into or completes any transaction pursuant to Clause 23.3.2 after an Event of Default has been remedied, that action or transaction shall not be affected by the remedying of the Event of Default.

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Section 9

Changes to Parties

24	Changes to the Lenders

24.1	Assignments and transfers by the Lenders Subject to this Clause 24, a Lender (the " Existing Lender ") may:

24.1.1

assign any of its rights; or

24.1.2

transfer by novation any of its rights and obligations; or

24.1.3

sub-participate any of its rights and obligations,

under any Finance Document to another bank or financial institution or other entity which is regularly engaged in or established for the purpose of making, purchasing, or investing in loans, securities or other financial assets (other than any hedge fund, opportunity fund or private equity investor) (the " New Lender ").

24.2	Conditions of assignment or transfer

24.2.1

An Existing Lender must consult with the Borrowers for no more than 15 Business Days before it may make an assignment or transfer or sub-participation in accordance with Clause 24.1 ( Assignments and transfers by the Lenders ) unless the assignment or transfer is:

(a)

to another Lender or an Affiliate of a Lender (falling within the definition of a “New Lender”); or

(b)

made at a time when an Event of Default is continuing.

24.2.2

The consent of the Borrowers to an assignment or transfer or sub-participation must not be unreasonably withheld or delayed. The Borrowers will be deemed to have given their consent 15 Business Days after the Lender has requested it unless consent is expressly refused by the Borrowers within that time.

24.2.3

An assignment will only be effective on:

(a)

receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was an Original Lender; and

(b)

performance by the Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender; and

(c)

it is for a minimum amount of ten million dollars (USD 10,000,000).

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24.2.4

A transfer will only be effective if the procedure set out in Clause 24.4 ( Procedure for transfer ) is complied with.

24.2.5

If:

(a)

a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

(b)

as a result of circumstances existing at the date the assignment, transfer or change occurs, a Borrower would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 ( Tax Gross Up and Indemnities ) or Clause 13 ( Increased Costs ),

then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred. This Clause 24.2.5 shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Loan.

24.2.6

Each New Lender confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.

24.3	Limitation of responsibility of Existing Lenders

24.3.1

Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

(a)

the legality, validity, effectiveness, adequacy or enforceability of the Relevant Documents or any other documents;

(b)

the financial condition of any Security Party;

(c)

the performance and observance by any Security Party of its obligations under the Relevant Documents or any other documents; or

(d)

the accuracy of any statements (whether written or oral) made in or in connection with any of the Relevant Documents or any other document,

and any representations or warranties implied by law are excluded.

24.3.2

Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

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(a)

has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Security Party and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any of the Relevant Documents; and

(b)

will continue to make its own independent appraisal of the creditworthiness of each Security Party and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

24.3.3

Nothing in any Finance Document obliges an Existing Lender to:

(a)

accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 24; or

(b)

support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Security Party of its obligations under the Relevant Documents or otherwise.

24.4	Procedure for transfer

24.4.1

Subject to the conditions set out in Clause 24.2 (Conditions of assignment or transfer) a transfer is effected in accordance with Clause 24.4.3 when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 24.2.3(b), as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.

24.4.2

The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

24.4.3

On the Transfer Date:

(a)

to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each Borrower and each Guarantor and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another shall be cancelled (being the " Discharged Rights and Obligations ");

(b)

each Borrower and each Guarantor and the New Lender shall assume obligations towards one another and/or acquire rights

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against one another which differ from the Discharged Rights and Obligations only insofar as that Borrower and the Guarantors and the New Lender have assumed and/or acquired the same in place of that Borrower and the Guarantors and the Existing Lender;

(c)

the Agent, the Security Agent, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Security Agent, and the Existing Lender shall each be released from further obligations to each other under this Agreement; and

(d)

the New Lender shall become a Party as a "Lender".

24.5	Procedure for assignment

24.5.1

Subject to the conditions set out in Clause 24.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with Clause 24.5.3 when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 24.5.2, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.

24.5.2

The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary "know your customer" or similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.

24.5.3

On the Transfer Date:

(a)

the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents and expressed to be the subject of the assignment in the Assignment Agreement;

(b)

the Existing Lender will be released from the obligations (the " Relevant Obligations ") expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents); and

(c)

the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.

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24.5.4

Lenders may utilise procedures other than those set out in this Clause 24.5 to assign their rights under the Finance Documents (but not, without the consent of the relevant Security Party or unless in accordance with Clause 24.4 ( Procedure for transfer ), to obtain a release by that Security Party from the obligations owed to that Security Party by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 24.2 ( Conditions of assignment or transfer ).

24.6	Copy of Transfer Certificate or Assignment Agreement to Borrowers The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrowers a copy of that Transfer Certificate or Assignment Agreement.

24.7

Security over Lenders' rights In addition to the other rights provided to Lenders under this Clause 24, each Lender may without consulting with or obtaining consent from any Security Party, at any time charge, assign or otherwise create Encumbrances in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

24.7.1

any charge, assignment or other Encumbrance to secure obligations to a federal reserve or central bank; and

24.7.2

in the case of any Lender which is a fund, any charge, assignment or other Encumbrance granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,

except that no such charge, assignment or Encumbrance shall:

(a)

release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Encumbrance for the Lender as a party to any of the Finance Documents; or

(b)

require any payments to be made by a Security Party other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

24.8	Fee The New Lender shall, on the date on which the transfer, assignment or sub-participation becomes effective, pay to the Agent (for its own account) a fee of five thousand Dollars (USD 5,000).

24.9

Restriction on Debt Purchase Transaction No Security Party shall, and the Borrowers shall procure that no member of the Group shall, enter into any Debt Purchase Transaction or beneficially own all or any part of the share capital of a company that is a Lender or a party to a Debt Purchase Transaction of the type referred to in paragraphs (b) and (c) of the definition of Debt Purchase Transaction.

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25	Changes to the Security Parties

25.1	No assignment or transfer by Security Parties No Security Party may assign any of its rights or transfer any of its rights or obligations under the Finance Documents, without the prior written consent of the Agent.

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Section 10

The Finance Parties

26	Role of the Agent and the Security Agent

26.1	Appointment of the Agent

26.1.1

Each of the Lenders appoints the Agent to act as its agent under and in connection with the Finance Documents and each of the Lenders and the Agent appoints the Security Agent to act as its security agent under and in respect of the Security Documents.

26.1.2

Each of the Lenders authorises the Agent and each of the Lenders and the Agent authorises the Security Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent or the Security Agent (as the case may be) under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

26.1.3

Except in Clause 26.13 ( Replacement of the Agent ) or where the context otherwise requires, references in this Clause 26 to the " Agent " shall mean the Agent and the Security Agent individually and collectively.

26.1.4

The Reserve Account Pledge, the Inter-company Indebtedness Assignment and any other Danish law Security Documents shall be granted by the relevant parties to the Security Agent as security agent (in Danish: fuldmægtig ) for the Finance Parties in accordance with Section 18 of the Danish Capital Markets Act (in Danish: lov om kapitalmarkeder ) (as amended from time to time) (in Danish: værdipapirhandelsloven ). Each of the Finance Parties appoints the Security Agent as security agent (in Danish: fuldmægtig ) to receive and hold the Reserve Account Pledge, the Inter-company Indebtedness Assignment and any other Danish law Security Documents on behalf of and for the benefit of the Finance Parties and the Security Agent agrees to receive and hold the Reserve Account Pledge, the Inter-company Indebtedness Assignment and the other Danish law Security Documents accordingly.

26.2	Instructions

26.2.1

The Agent shall:

(a)

unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by:

(i)

all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

(ii)

in all other cases, the Majority Lenders; and

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(b)

not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with Clause 26.2.1(a).

26.2.2

The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Agent may refrain from acting unless and until it receives those instructions or that clarification.

26.2.3

Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties save for the Security Agent.

26.2.4

The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.

26.2.5

In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.

26.2.6

The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document. This Clause 26.2.6 shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Finance Documents or the enforcement of the Finance Documents.

26.3	Duties of the Agent

26.3.1

The Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

26.3.2

Subject to Clause 26.3.3, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.

26.3.3

Without prejudice to Clause 24.6 ( Copy of Transfer Certificate or Assignment Agreement to Borrower ), Clause 26.3.1 shall not apply to any Transfer Certificate or any Assignment Agreement.

26.3.4

Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

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26.3.5

If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the Finance Parties.

26.3.6

If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or the Security Agent) under this Agreement it shall promptly notify the other Finance Parties.

26.3.7

The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

26.4	No fiduciary duties

26.4.1

Subject to Clause 26.11 ( Trust ) which relates to the Security Agent only, nothing in any Finance Document constitutes the Agent as a trustee or fiduciary of any other person.

26.4.2

The Agent shall not be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

26.5	Business with Security Parties and the Group The Agent may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Borrower any other Security Party or its Affiliate and any other member of the Group.

26.6	Rights and discretions of the Agent

26.6.1

The Agent may:

(a)

rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

(b)

assume that:

(i)

any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and

(ii)

unless it has received notice of revocation, that those instructions have not been revoked; and

(iii)

rely on a certificate from any person:

(A)

as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

(B)

to the effect that such person approves of any particular dealing, transaction, step, action or thing,

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as sufficient evidence that that is the case and, in the case of (A), may assume the truth and accuracy of that certificate.

26.6.2

The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders or security agent for the Finance Parties (as the case may be)) that:

(a)

no Default has occurred (unless it has actual knowledge of a Default arising under Clause 23.1 ( Events of Default ));

(b)

any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised; and

(c)

any notice or request made by the Borrowers (other than a Drawdown Request) is made on behalf of and with the consent and knowledge of all the Security Parties.

26.6.3

The Agent may engage and pay for the advice or services of any lawyers, accountants, surveyors or other experts.

26.6.4

Without prejudice to the generality of Clause 26.6.3 or Clause 26.6.5, the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be desirable.

26.6.5

The Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

26.6.6

The Agent may act in relation to the Finance Documents through its officers, employees and agents and the Agent shall not:

(a)

be liable for any error of judgment made by any such person; or

(b)

be bound to supervise, or be in any way responsible for any loss incurred by reason of misconduct, omission or default on the part, of any such person,

unless such error or such loss was directly caused by the Agent's gross negligence or wilful misconduct.

26.6.7

Unless a Finance Document expressly provides otherwise the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

26.6.8

Without prejudice to the generality of Clause 26.6.7, the Agent:

(a)

may disclose; and

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(b)

on the written request of the Borrowers or the Majority Lenders shall, as soon as reasonably practicable, disclose,

the identity of a Defaulting Lender to the Borrowers and to the other Finance Parties.

26.6.9

Notwithstanding any other provision of any Finance Document to the contrary, the Agent is not obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

26.6.10

The Agent is not obliged to disclose to any Finance Party any details of the rate notified to the Agent by any Lender or the identity of any such Lender for the purpose of Clause 10.2.2 ( Market Disruption ).

26.6.11

Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

26.7	Responsibility for documentation The Agent is not responsible or liable for:

26.7.1

the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, a Security Party or any other person given in or in connection with any Relevant Document or the transactions contemplated in the Finance Documents;

26.7.2

the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Relevant Document; or

26.7.3

any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

26.8	No duty to monitor The Agent shall not be bound to enquire: 26.8.1 whether or not any Default has occurred;

26.8.2

as to the performance, default or any breach by any Party of its obligations under any Finance Document; or

26.8.3

whether any other event specified in any Finance Document has occurred.

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26.9	Exclusion of liability

26.9.1

Without limiting Clause 26.9.2 (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent) the Agent shall not be liable for:

(a)

any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents, unless directly caused by its gross negligence or wilful misconduct;

(b)

exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, any Encumbrance created or expressed to be created or evidenced by the Security Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents;

(c)

any shortfall which arises on the enforcement or realisation of the Trust Property; or

(d)

without prejudice to the generality of Clauses 26.9.1(a), 26.9.1(b) and 26.9.1(c), any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

(i)

any act, event or circumstance not reasonably within its control; or

(ii)

the general risks of investment in, or the holding of assets in, any jurisdiction,

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

26.9.2

No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Relevant Document and any officer, employee or agent of the Agent may rely on this Clause.

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26.9.3

The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.

26.9.4

Nothing in this Agreement shall oblige the Agent to carry out:

(a)

any "know your customer" or other checks in relation to any person;

(b)

any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender,

on behalf of any Lender and each Lender confirms to the Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent.

26.9.5

Without prejudice to any provision of any Finance Document excluding or limiting the Agent's liability, any liability of the Agent arising under or in connection with any Finance Document or any Encumbrance created or expressed to be created or evidenced by the Security Documents shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss. In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages.

26.10

Lenders' indemnity to the Agent

26.10.1

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent and every Receiver and Delegate, within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason of the relevant Agent's, Receiver's or Delegate's gross negligence or wilful misconduct) in acting as Agent, Receiver or Delegate under, or exercising any authority conferred under, under the Finance Documents (unless the relevant Agent, Receiver or Delegate has been reimbursed by a Security Party pursuant to a Finance Document).

26.10.2

Subject to Clause 26.10.3, the Borrowers shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent pursuant to Clause 26.10.1

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26.10.3

Clause 26.10.2 shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Agent to a Security Party.

26.11

Trust The Security Agent agrees and declares, and each of the other Finance Parties acknowledges, that, subject to the terms and conditions of this Clause 26.11, the Security Agent holds the Trust Property on trust for the Finance Parties absolutely. Each of the other Finance Parties agrees that the obligations, rights and benefits vested in the Security Agent shall be performed and exercised in accordance with this Clause 26.11. The Security Agent shall have the benefit of all of the provisions of this Agreement benefiting it in its capacity as security agent for the Finance Parties, and all the powers and discretions conferred on trustees by the English Trustee Act 1925 (to the extent not inconsistent with this Agreement). In addition:

26.11.1

the Security Agent and any Delegate may indemnify itself or himself out of the Trust Property against all liabilities, costs, fees, damages, charges, losses and expenses sustained or incurred by it or him in relation to the taking or holding of any of the Trust Property or in connection with the exercise or purported exercise of the rights, trusts, powers and discretions vested in the Security Agent or any Delegate by or pursuant to the Security Documents or in respect of anything else done or omitted to be done in any way relating to the Security Documents;

26.11.2

the other Finance Parties acknowledge that the Security Agent shall be under no obligation to insure any property nor to require any other person to insure any property and shall not be responsible for any loss which may be suffered by any person as a result of the lack or insufficiency of any insurance;

26.11.3

the Finance Parties agree that the perpetuity period applicable to the trusts declared by this Agreement shall be the period of 125 years from the date of this Agreement;

26.11.4

the Security Agent shall not be liable for any failure, omission, or defect in perfecting the security constituted or created by any Finance Document including, without limitation, any failure to register the same in accordance with the provisions of any of the documents of title of any Security Party to any of the assets thereby charged or effect or procure registration of or otherwise protect the security created by any Security Document under any registration laws in any jurisdiction and may accept without enquiry such title as any Security Party may have to any asset;

26.11.5

the Security Agent shall not be under any obligation to hold any title deed, Finance Document or any other documents in connection with the Finance Documents or any other documents in connection with the property charged by any Finance Document or any other such security in its own possession or to take any steps to protect or preserve the same, and may permit any Security Party to retain all such title deeds, Finance Documents and other documents in its possession; and

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26.11.6

save as otherwise provided in the Finance Documents, all moneys which under the trusts therein contained are received by the Security Agent may be invested in the name of or under the control of the Security Agent in any investment for the time being authorised by English law for the investment by trustees of trust money or in any other investments which may be selected by the Security Agent, and the same may be placed on deposit in the name of or under the control of the Security Agent at such bank or institution (including the Security Agent) and upon such terms as the Security Agent may think fit.

The provisions of Part I of the English Trustee Act 2000 shall not apply to the Security Agent or the Trust Property.

26.12

Resignation of the Agent

26.12.1

The Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrowers.

26.12.2

Alternatively the Agent may resign by giving 30 days' notice to the other Finance Parties and the Borrowers, in which case the Majority Lenders (after consultation with the Borrowers) may appoint a successor Agent.

26.12.3

If the Majority Lenders have not appointed a successor Agent in accordance with Clause 26.12.2 within 20 days after notice of resignation was given, the retiring Agent (after consultation with the Borrowers) may appoint a successor Agent.

26.12.4

If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate (for reasons not related to remuneration) for it to remain as agent and the Agent is entitled to appoint a successor Agent under Clause 26.12.3, the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to this Clause 26 and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees together with a reasonable agency fee (acceptable to the Borrowers (acting reasonably) and those amendments will bind the Parties).

26.12.5

The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.

26.12.6

The Agent's resignation notice shall only take effect upon the appointment of a successor and (in the case of the Security Agent) the transfer of all the Trust Property to that successor.

26.12.7

Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance

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Documents (other than its obligations under Clause 26.12.5) but shall remain entitled to the benefit of Clause 14.3 ( Indemnity to the Agent ) and this Clause 26 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

26.12.8

The Agent shall resign in accordance with Clause 26.12.2 (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to Clause 26.12.3) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:

(a)

the Agent fails to respond to a request under Clause 12.7 ( FATCA information ) and a Borrower or a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

(b)

the information supplied by the Agent pursuant to Clause 12.7 ( FATCA information ) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

(c)

the Agent notifies the Borrowers and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

and (in each case) a Borrower or a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and that Borrower or that Lender, by notice to the Agent, requires it to resign.

26.13

Replacement of the Agent

26.13.1

After consultation with the Borrowers, the Majority Lenders may, by giving 30 days' notice to the Agent (or, at any time the Agent is an Impaired Agent, by giving any shorter notice determined by the Majority lenders) replace the Agent by appointing a successor Agent.

26.13.2

The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its function as Agent under the Finance Documents.

26.13.3

The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under Clause 26.13.2 but shall remain entitled to the benefit of Clause 14.3 ( Indemnity to the Agent ) and this Clause 26 (and any agency fees

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for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date).

26.13.4

Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

26.14

Confidentiality

26.14.1

In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

26.14.2

If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.

26.14.3

Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would or might in its reasonable opinion constitute a breach of any law or a breach of a fiduciary duty.

26.15

Relationship with the Lenders

26.15.1

The Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:

(a)

entitled to or liable for any payment due under any Finance Document on that day; and

(b)

entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

unless it has received not less than five Business Days' prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

26.15.2

Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or dispatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 31.6 ( Electronic communication )) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 31.2 ( Addresses ) and Clause 31.6.1(b) ( Electronic communication ) and the Agent shall be entitled to treat such person as

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the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

26.16

Credit appraisal by the Lenders Without affecting the responsibility of any Security Party for information supplied by it or on its behalf in connection with any Relevant Document, each Lender confirms to the Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Relevant Document including but not limited to:

26.16.1

the financial condition, status and nature of each Security Party;

26.16.2

the legality, validity, effectiveness, adequacy or enforceability of any Relevant Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Relevant Document;

26.16.3

whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Relevant Document, the transactions contemplated by the Relevant Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of under or in connection with any Relevant Document; and

26.16.4

the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any Encumbrance created or expressed to be created or evidenced by the Security Documents or the existence of any Encumbrance affecting the Charged Property.

26.17

Deduction from amounts payable by the Agent If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

27	Conduct of Business by the Finance Parties

No provision of this Agreement will:

27.1	interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

27.2	oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

27.3	oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

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28	Sharing among the Finance Parties

28.1	Payments to Finance Parties If a Finance Party (a " Recovering Finance Party ") receives or recovers any amount from a Security Party other than in accordance with Clause 29 ( Payment Mechanics ) (a " Recovered Amount ") and applies that amount to a payment due under the Finance Documents then:

28.1.1

the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent;

28.1.2

the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 29 ( Payment Mechanics ), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and

28.1.3

the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the " Sharing Payment ") equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 29.6 ( Partial payments ).

28.2

Redistribution of payments The Agent shall treat the Sharing Payment as if it had been paid by the relevant Security Party and distribute it between the Finance Parties (other than the Recovering Finance Party) (the " Sharing Finance Parties ") in accordance with Clause 29.6 ( Partial payments ) towards the obligations of that Security Party to the Sharing Finance Parties.

28.3

Recovering Finance Party's rights On a distribution by the Agent under Clause 28.2 ( Redistribution of payments ) of a payment received by a Recovering Finance Party from a Security Party, as between the relevant Security Party and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Security Party.

28.4	Reversal of redistribution If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

28.4.1

each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the " Redistributed Amount "); and

28.4.2

as between the relevant Security Party and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Security Party.

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28.5	Exceptions

28.5.1

This Clause 28 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Security Party.

28.5.2

A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:

(a)

it notified that other Finance Party of the legal or arbitration proceedings; and

(b)

that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

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Section 11

Administration

29	Payment Mechanics

29.1

Payments to the Agent On each date on which a Security Party or a Lender is required to make a payment under a Finance Document that Security Party or that Lender shall make the same available to the Agent for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

Payment shall be made to such account in the principal financial centre of the country of that currency with such bank as the Agent specifies.

29.2

Distributions by the Agent Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 29.3 ( Distributions to a Security Party ) and Clause 29.4 ( Clawback and pre-funding ) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days' notice with a bank specified by that Party in the principal financial centre of the country of that currency.

29.3

Distributions to a Security Party The Agent may (with the consent of a Security Party or in accordance with Clause 30 ( Set-Off )) apply any amount received by it for that Security Party in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Security Party under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

29.4	Clawback and pre-funding

29.4.1

Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

29.4.2

Unless Clause 29.4.3 applies, if the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

29.4.3

If the Agent has notified the Lenders that it is willing to make available amounts for the account of a Borrower before receiving funds from the Lenders then if and to the extent that the Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to a Borrower:

(a)

the Agent shall notify the Borrowers of that Lender's identity and the Borrowers shall on demand refund it to the Agent; and

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(b)

the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrowers shall on demand pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.

29.5	Impaired Agent

29.5.1

If, at any time, the Agent becomes an Impaired Agent, a Security Party or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with Clause 29.1 ( Payments to the Agent ) may instead either:

(a)

pay that amount direct to the required recipient(s); or

(b)

if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held with an Acceptable Bank in relation to which no Insolvency Event has occurred and is continuing, in the name of the Security Party or the Lender making the payment (the " Paying Party ") and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the " Recipient Party " or " Recipient Parties ").

In each case such payments must be made on the due date for payment under the Finance Documents.

29.5.2

All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements.

29.5.3

A Party which has made a payment in accordance with this Clause 29.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.

29.5.4

Promptly upon the appointment of a successor Agent in accordance with Clause 26.13 ( Replacement of the Agent ), each Paying Party shall (other than to the extent that that Party has given an instruction pursuant to Clause 29.5.5) give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance with Clause 29.2 ( Distributions by the Agent ).

29.5.5

A Paying Party shall, promptly upon request by a Recipient Party and to the extent:

(a)

that it has not given an instruction pursuant to Clause 29.5.4; and

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(b)

that it has been provided with the necessary information by that Recipient Party,

give all requisite instructions to the bank with whom the trust account is held to transfer the relevant amount (together with any accrued interest) to that Recipient Party.

29.6	Partial payments

29.6.1

If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by a Security Party under the Finance Documents, the Agent shall apply that payment towards the obligations of that Security Party under the Finance Documents in the following order:

(a)

first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent under the Finance Documents;

(b)

secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;

(c)

thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and

(d)

fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

29.6.2

The Agent shall, if so directed by the Majority Lenders, vary the order set out in Clauses 29.6.1(b) to 29.6.1(d).

29.6.3

Clauses 29.6.1 and 29.6.2 will override any appropriation made by a Security Party.

29.7	No set-off by Security Parties All payments to be made by a Security Party under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

29.8	Business Days Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

29.9	Currency of account

29.9.1

Subject to Clauses 29.9.2 to 29.9.5, dollars is the currency of account and payment for any sum due from a Security Party under any Finance Document.

29.9.2

A repayment or payment of all or part of the Loan or an Unpaid Sum shall be made in the currency in which the Loan or Unpaid Sum is denominated on its due date.

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29.9.3

Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.

29.9.4

Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

29.9.5

Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

29.10

Control account The Agent shall open and maintain on its books a control account in the names of the Borrowers showing the advance of the Loan and the computation and payment of interest and all other sums due under this Agreement. The Borrowers' obligations to repay the Loan and to pay interest and all other sums due under this Agreement shall be evidenced by the entries from time to time made in the control account opened and maintained under this Clause 29.10 and those entries will, in the absence of manifest error, be conclusive and binding.

29.11

Change of currency

29.11.1

Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

(a)

any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Borrowers); and

(b)

any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).

29.11.2

If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrowers) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

Set-Off

30.1

Set-off A Finance Party may set off any matured obligation due from a Security Party under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Security Party, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

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Notices

31.1	Communications in writing Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.

31.2	Addresses The address, fax number, e-mail address (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

31.2.1

in the case of each Borrower and any Security Party, that identified with that Borrower's name below;

31.2.2

in the case of each Guarantor, that identified with its name below;

31.2.3

in the case of each Lender, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and

31.2.4

in the case of the Agent or the Security Agent, that identified with its name below,

or any substitute address, fax number, or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days' notice.

31.3	Delivery Any communication or document made or delivered by one Party to another under or in connection with the Finance Documents will only be effective:

31.3.1

if by way of fax, when received in legible form; or

31.3.2

if by way of letter, when it has been left at the relevant address,

and, if a particular department or officer is specified as part of its address details provided under Clause 31.2 ( Addresses ), if addressed to that department or officer.

Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or the Security Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent's or the Security Agent's signature below (or any substitute department or officer as the Agent or the Security Agent shall specify for this purpose).

All notices from or to a Security Party shall be sent through the Agent.

Any communication or document which becomes effective, in accordance with this Clause 31.3, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

31.4	Notification of address and fax number Promptly upon changing its address or fax number, the Agent shall notify the other Parties.

31.5	Communication when Agent is Impaired Agent If the Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Agent,

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communicate with each other directly and (while the Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Agent has been appointed.

31.6	Electronic communication

31.6.1

Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication and if those two Parties:

(a)

notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

(b)

notify each other of any change to their address or any other such information supplied by them by not less than five Business Days' notice.

31.6.2

Any electronic communication made between those two Parties will be effective only when actually received in readable form and in the case of any electronic communication made by a Party to the Agent or the Security Agent only if it is addressed in such a manner as the Agent or the Security Agent shall specify for this purpose.

31.6.3

Any electronic communication which becomes effective, in accordance with Clause 31.6.2, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.

31.7	English language Any notice given under or in connection with any Finance Document must be in English. All other documents provided under or in connection with any Finance Document must be:

31.7.1

in English; or

31.7.2

if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

32	Calculations and Certificates

32.1	Accounts In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by the Agent are prima facie evidence of the matters to which they relate.

32.2	Certificates and determinations Any certification or determination by the Agent of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.

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32.3

Day count convention Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

33	Partial Invalidity

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

34	Remedies and Waivers

No failure to exercise, nor any delay in exercising, on the part of any Finance Party or Secured Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Document. No election to affirm any Finance Document on the part of any Finance Party or Secured Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

35	Amendments and Waivers

35.1	Required consents

35.1.1

Subject to Clause 35.2 ( Exceptions ) any term of the Finance Documents may be amended or waived only with the written consent of the Majority Lenders and the Borrowers and any such amendment or waiver will be binding on all Parties.

35.1.2

The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 35.

35.1.3

Without prejudice to the generality of Clauses 26.6.3, 26.6.4 and 26.6.5 ( Rights and discretions of the Agent ), the Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for and effecting any amendment, waiver or consent under this Agreement.

35.2	Exceptions

35.2.1

An amendment, waiver or (in the case of a Security Document) a consent of, or in relation to, any term of any Finance Document that has the effect of changing or which relates to:

(a)

the definition of " Majority Lenders " in Clause 1.1 ( Definitions );

(b)

an extension to the date of payment of any amount under the Finance Documents;

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(c)

a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

(d)

an increase in any Commitment, an extension of the Availability Period or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably;

(e)

a change to a Security Party, other than as contemplated by and in accordance with the provisions of Clause 7.11 or Clause 22.27.1;

(f)

any provision which expressly requires the consent of all the Lenders;

(g)

Clause 2.2 ( Finance Parties' rights and obligations ), Clause 24 ( Changes to the Lenders ), this Clause 35, Clause 40 ( Governing Law ) or Clause 41.1 ( Jurisdiction of English courts );

(h)

(other than as expressly permitted by the provisions of any Finance Document) the nature or scope of:

(i)

the Guarantee;

(ii)

the Charged Property; or

(iii)

the manner in which the proceeds of enforcement of the Security Documents are distributed; or

(i)

the release of the Guarantee or of any Encumbrance created or expressed to be created or evidenced by the Security Documents unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of any Encumbrance created or expressed to be created or evidenced by the Security Documents where such sale or disposal is expressly permitted under this Agreement or any other Finance Document;

shall not be made, or given, without the prior consent of all the Lenders and the Borrowers.

35.2.2

An amendment or waiver which relates to the rights or obligations of the Agent or the Security Agent (each in their capacity as such) may not be effected without the consent of the Agent or the Security Agent.

35.3	Excluded Commitments

If:

35.3.1

any Defaulting Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any term of any Finance Document or any other vote of Lenders under the terms of this Agreement within 5 Business Days of that request being made; or

35.3.2

any Lender which is not a Defaulting Lender fails to respond to such a request (other than an amendment, waiver or consent referred to in

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Clauses 35.2.1(b), 35.2.1(c) and 35.2.1(d) ( Exceptions )) or such a vote within 10 Business Days of that request being made,

(unless, in either case, the Borrowers and the Agent agree to a longer time period in relation to any request):

(a)

its Commitment(s) shall not be included for the purpose of calculating the Total Commitments when ascertaining whether any relevant percentage (including, for the avoidance of doubt, unanimity) of Total Commitments has been obtained to approve that request; and

(b)

its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.

35.4	Replacement of Lender

35.4.1

If:

(a)

any Lender becomes a Non-Consenting Lender (as defined in Clause 35.4.4); or

(b)

a Borrower or any other Security Party becomes obliged to repay any amount in accordance with Clause 7.1 ( Illegality ) or to pay additional amounts pursuant to Clause 12.2 ( Tax gross-up ), Clause 12.3 ( Tax Indemnity ) or Clause 13.1 ( Increased costs ) to any Lender,

then the Borrowers may, on ten Business Days' prior written notice to the Agent and such Lender, replace such Lender by requiring such Lender to (and, to the extent permitted by law, such Lender shall) transfer pursuant to Clause 24 ( Changes to the Lenders ) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a " Replacement Lender ") selected by the Borrowers, which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 24 ( Changes to the Lenders ) for a purchase price in cash payable at the time of transfer in an amount equal to the outstanding principal amount of such Lender's participation in the outstanding Loan and all accrued Interest Break Costs, Break Funding Costs and other amounts payable in relation thereto under the Finance Documents.

35.4.2

The replacement of a Lender pursuant to this Clause 35.4 shall be subject to the following conditions:

(a)

the Borrowers shall have no right to replace the Agent or Security Agent;

(b)

neither the Agent nor the Lender shall have any obligation to the Borrowers to find a Replacement Lender;

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(c)

in the event of a replacement of a Non-Consenting Lender such replacement must take place no later than 15 days after the date on which that Lender is deemed a Non-Consenting Lender;

(d)

in no event shall the Lender replaced under this Clause 35.4 be required to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents; and

(e)

the Lender shall only be obliged to transfer its rights and obligations pursuant to Clause 35.4.1 once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer.

35.4.3

A Lender shall perform the checks described in Clause 35.4.2(e) as soon as reasonably practicable following delivery of a notice referred to in Clause 35.4.1 and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks.

35.4.4

In the event that:

(a)

the Borrowers or the Agent (at the request of the Borrowers) have requested the Lenders to give a consent in relation to, or to agree to a waiver or amendment of, any provisions of the Finance Documents;

(b)

the consent, waiver or amendment in question requires the approval of all the Lenders; and

(c)

Lenders whose Commitments aggregate more than 66 % per cent of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 66 % per cent of the Total Commitments prior to that reduction) have consented or agreed to such waiver or amendment,

then any Lender who does not and continues not to consent or agree to such waiver or amendment shall be deemed a " Non-Consenting Lender ".

35.5	Disenfranchisement of Defaulting Lenders

35.5.1

For so long as a Defaulting Lender has any Commitment, in ascertaining:

(a)

the Majority Lenders; or

(b)

whether:

(i)

any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments; or

(ii)

the agreement of any specified group of Lenders,

has been obtained to approve any request for a consent, waiver, amendment or other vote of Lenders under the Finance Documents, that

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Defaulting Lender's Commitment will be reduced by the amount of its participation in the Loan it has failed to make available and, to the extent that that reduction results in that Defaulting Lender's Commitment being zero, that Defaulting Lender shall be deemed not to be a Lender for the purposes of (i) and (ii).

35.5.2

For the purposes of this Clause 35.5, the Agent may assume that the following Lenders are Defaulting Lenders:

(a)

any Lender which has notified the Agent that it has become a Defaulting Lender;

(b)

any Lender in relation to which it is aware that any of the events or circumstances referred to in (a), (b) or (c) of the definition of "Defaulting Lender" has occurred,

unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Agent) or the Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.

35.6	Replacement of a Defaulting Lender

35.6.1

The Borrowers may, at any time a Lender has become and continues to be a Defaulting Lender, by giving ten Business Days' prior written notice to the Agent and such Lender, replace such Lender by requiring such Lender to (and, to the extent permitted by law, such Lender shall) transfer pursuant to Clause 24 ( Changes to the Lenders ) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank, financial institution, trust, fund or other entity (a " Replacement Lender ") selected by the Borrowers which confirms its willingness to assume and does assume all the obligations, or all the relevant obligations, of the transferring Lender in accordance with Clause 24 ( Changes to the Lenders) for a purchase price in cash payable at the time of transfer which is either:

(a)

in an amount equal to the outstanding principal amount of such Lender's participation in the outstanding Loan and all accrued interest, Interest Break Costs, Break Funding Costs and other amounts payable in relation thereto under the Finance Documents; or

(b)

in an amount agreed between that Defaulting Lender, the Replacement Lender and the Borrowers and which does not exceed the amount described in (a).

35.6.2

Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause 35.6 shall be subject to the following conditions:

(a)

the Borrowers shall have no right to replace the Agent or Security Agent;

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(b)

neither the Agent nor the Defaulting Lender shall have any obligation to the Borrowers to find a Replacement Lender;

(c)

the transfer must take place no later than 10 Business Days after the notice referred to in Clause 35.6.1;

(d)

in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents; and

(e)

the Defaulting Lender shall only be obliged to transfer its rights and obligations pursuant to 35.6.1 once it is satisfied that it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to that transfer to the Replacement Lender.

35.6.3

The Defaulting Lender shall perform the checks described in Clause 35.6.2(e) as soon as reasonably practicable following delivery of a notice referred to in Clause 35.6.1 and shall notify the Agent and the Borrowers when it is satisfied that it has complied with those checks.

36	Confidentiality

36.1

Confidential Information Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 36.2 ( Disclosure of Confidential Information ) and Clause 36.3 ( Disclosure to numbering service providers ), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information. The Finance Parties acknowledge that all information relating to the participants or investors in the Sponsor is considered by the Borrowers and the Sponsor to be particularly commercially sensitive and highly confidential and is not to be shared with any person other than (i) in accordance with Clause 36.2.1, Clause 36.2.2(e) or Clause 36.2.2(f) or (ii) in all other circumstances with the prior written consent of the Sponsor (such consent not to be unreasonably withheld) on a case by case basis.

36.2	Disclosure of Confidential Information Subject to Clause 36.1, any Finance Party may disclose:

36.2.1

to any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this Clause 36.2.1 is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

36.2.2

to any person (who, in relation to Clauses 36.2.2 (a), (b), (d) or (g) satisfies the requirements to Clause 24.1.2 to be a New Lender):

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(a)

to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent or Security Agent and, in each case, to any of that person's Affiliates, and professional advisers;

(b)

with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Security Parties and to any of that person's Affiliates, and professional advisers;

(c)

appointed by any Finance Party or by a person to whom Clause 36.2.2(a) or 36.2.2(b) applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under Clause 26.15.2 ( Relationship with the Lenders ));

(d)

who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause 36.2.2(a) or 36.2.2(b);

(e)

to whom information is required to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

(f)

to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;

(g)

to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 24.7 ( Security over Lenders' rights );

(h)

who is a Party; or

(i)

with the consent of each Borrower;

in each case, such Confidential Information as that Finance Party shall consider appropriate if:

(i)

in relation to Clauses 36.2.2(a), 36.2.2(b) and 36.2.2(c), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

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(ii)

in relation to Clause 36.2.2(d), the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

(iii)

in relation to Clauses 36.2.2(e), 36.2.2(f) and 36.2.2(g), the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances; Provided that in relation to Clauses 36.2.2 (e) and (f) the relevant Finance Parties shall notify the Borrowers of any relevant request (if so permitted, prior to any relevant disclosure) and shall provide the minimum disclosure to meet any such requirement.

36.2.3

to any person appointed by that Finance Party or by a person to whom Clause 36.2.2(a) or 36.2.2(b) applies to provide administration or settlement services in respect of one or more of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this Clause 36.2.3 if the service provider to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking and agree to share such information only with parties who would qualify as New Lenders under Clause 24.1.2;

36.2.4

to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Security Parties if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information. Any Lender may also disclose the size and term of the Loan and the name of each of the Security Parties to any investor or a potential investor in a securitisation (or similar transaction of broadly equivalent economic effect) of that Lender's rights or obligations under the Finance Documents.

36.3	Disclosure to numbering service providers

36.3.1

Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Loan and/or one or more Security Parties the following information:

(a)

names of Security Parties;

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(b)

country of domicile of Security Parties;

(c)

place of incorporation of Security Parties;

(d)

date of this Agreement;

(e)

Clause 40 ( Governing law );

(f)

the name of the Agent;

(g)

date of each amendment and restatement of this Agreement;

(h)

amount of Total Commitments;

(i)

currencies of the Loan;

(j)

type of Loan;

(k)

ranking of the Loan;

(l)

Termination Date;

(m)

changes to any of the information previously supplied pursuant to (a) to (l); and

(n)

such other information agreed between such Finance Party and that Security Party,

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

36.3.2

The Parties acknowledge and agree that each identification number assigned to this Agreement, the Loan and/or one or more Security Parties by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

36.3.3

Each Borrower represents that none of the information set out in Clauses 36.3.1(a) to 36.3.1(n) is unpublished price-sensitive information.

36.3.4

The Agent shall notify the Borrowers and the other Finance Parties of:

(a)

the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Loan and/or one or more Security Parties; and

(b)

the number or, as the case may be, numbers assigned to this Agreement, the Loan and/or one or more Security Parties by such numbering service provider.

36.4

Entire agreement This Clause 36 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

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36.5

Inside information Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

36.6	Notification of disclosure Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrowers:

36.6.1

of the circumstances of any disclosure of Confidential Information made pursuant to Clause 36.2.2(e) ( Disclosure of Confidential Information ) except where such disclosure is made to any of the persons referred to in that Clause during the ordinary course of its supervisory or regulatory function; and

36.6.2

upon becoming aware that Confidential Information has been disclosed in breach of this Clause 36.

36.7	Continuing obligations The obligations in this Clause 36 are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 24 months from the earlier of:

36.7.1

the date on which all amounts payable by the Security Parties under or in connection with the Finance Documents have been paid in full and the Loan has been cancelled or otherwise ceases to be available; and

36.7.2

the date on which such Finance Party otherwise ceases to be a Finance Party.

37	Disclosure of Lender Details by Agent

37.1

Supply of Lender details to Borrowers The Agent shall provide to the Borrowers within seven Business Days of a request by the Borrowers (but no more frequently than once per calendar month) a list (which may be in electronic form) setting out the names of the Lenders as at that Business Day, their respective Commitments, the address and fax number (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the sending and receipt of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and the account details of each Lender for any payment to be distributed by the Agent to that Lender under the Finance Documents.

37.2	Supply of Lender details at Borrowers' direction

37.2.1

The Agent shall, at the request of the Borrowers, disclose the identity of the Lenders and the details of the Lenders' Commitments to any:

(a)

other Party or any other person if that disclosure is made to facilitate, in each case, a refinancing of the Financial Indebtedness

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arising under the Finance Documents or a material waiver or amendment of any term of any Finance Document; and

(b)

Security Party.

37.2.2

Subject to Clause 37.2.3, the Borrowers shall procure that the recipient of information disclosed pursuant to Clause 37.2.1 shall keep such information confidential and shall not disclose it to anyone and shall ensure that all such information is protected with security measures and a degree of care that would apply to the recipient's own confidential information.

37.2.3

The recipient may disclose such information to any of its officers, directors, employees, professional advisers, auditors and partners as it shall consider appropriate if any such person is informed in writing of its confidential nature, except that there shall be no such requirement to so inform if that person is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by duties of confidentiality in relation to the information.

37.3	Supply of Lender details to other Lenders

37.3.1

If a Lender (a " Disclosing Lender ") indicates to the Agent that the Agent may do so, the Agent shall disclose that Lender's name and Commitment to any other Lender that is, or becomes, a Disclosing Lender.

37.3.2

The Agent shall, if so directed by the Requisite Lenders, request each Lender to indicate to it whether it is a Disclosing Lender.

37.4	Lender enquiry If any Lender believes that any entity is, or may be, a Lender and:

37.4.1

that entity ceases to have an Investment Grade Rating; or

37.4.2

an Insolvency Event occurs in relation to that entity,

the Agent shall, at the request of that Lender, indicate to that Lender the extent to which that entity has a Commitment.

37.5	Lender details definitions In this Clause 37:

" Investment Grade Rating " means, in relation to an entity, a rating for its long-term unsecured and non-credit-enhanced debt obligations of BBB- or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or Baa3 or higher by Moody's Investors Service Limited or a comparable rating from an internationally recognised credit rating agency.

" Requisite Lenders " means a Lender or Lenders whose Commitments aggregate 15 per cent (or more) of the Total Commitments (or if the Total Commitments have been reduced to zero, aggregated 15 per cent (or more) of the Total Commitments immediately prior to that reduction).

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38	Counterparts

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

39	Joint and Several Liability

39.1

Nature of liability The representations, warranties, covenants, obligations and undertakings of the Owners (in their capacity as Guarantors) contained in this Agreement shall be joint and several so that each Guarantor shall be jointly and severally liable for all of the same and such liability shall not in any way be discharged, impaired or otherwise affected by:

39.1.1

any forbearance (whether as to payment or otherwise) or any time or other indulgence granted to any other Owner or any other Security Party under or in connection with any Finance Document;

39.1.2

any amendment, variation, novation or replacement of any other Finance Document;

39.1.3

any failure of any Finance Document to be legal valid binding and enforceable in relation to any other Owner or any other Security Party for any reason;

39.1.4

the winding-up or dissolution of any other Owner or any other Security Party;

39.1.5

the release (whether in whole or in part) of, or the entering into of any compromise or composition with, any other Owner or any other Security Party; or

39.1.6

any other act, omission, thing or circumstance which would or might, but for this provision, operate to discharge, impair or otherwise affect such liability.

39.2

No rights as surety Until the Indebtedness has been unconditionally and irrevocably paid and discharged in full, each Guarantor agrees that it shall not, by virtue of any payment made under this Agreement on account of the Indebtedness or by virtue of any enforcement by a Finance Party of its rights under this Agreement or by virtue of any relationship between, or transaction involving, the relevant Guarantor and any other Guarantor or any other Security Party:

39.2.1

exercise any rights of subrogation in relation to any rights, security or moneys held or received or receivable by a Finance Party or any other person; or

39.2.2

exercise any right of contribution from any other Guarantor or any other Security Party under any Finance Document; or

39.2.3

exercise any right of set-off or counterclaim against any other Guarantor or any other Security Party; or

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39.2.4

receive, claim or have the benefit of any payment, distribution, security or indemnity from any other Guarantor or any other Security Party; or

39.2.5

unless so directed by the Agent (when the relevant Guarantor will prove in accordance with such directions), claim as a creditor of any other Guarantor or any other Security Party in competition with any Finance Party; and

39.2.6

each Guarantor shall hold in trust for the Finance Parties and forthwith pay or transfer (as appropriate) to the Agent any such payment (including an amount equal to any such set-off), distribution or benefit of such security, indemnity or claim in fact received by it.

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Section 12

Governing Law and Enforcement

40	Governing Law

This Agreement is governed by Danish law, except for Clause 26.11 (Trust), which shall be governed by English law.

41	Enforcement

41.1

Jurisdiction of Danish courts The City Court of Copenhagen ( Københavns Byret ) has exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) (a " Dispute "). Each Party agrees that the courts of Denmark are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

This Clause 41.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with a legitimate basis for jurisdiction. To the extent allowed by law, any Finance Party may take concurrent proceedings in any number of jurisdictions.

41.2	Service of process

41.2.1

Without prejudice to any other mode of service allowed under any relevant law, each Borrower and each Guarantor;

(a)

irrevocably appoints Borrower A as its agent for service of process in relation to any proceedings before the Danish courts in connection with any Finance Document; and

(b)

agrees that failure by a process agent to notify that Borrower or that Guarantor (as the case may be) of the process will not invalidate the proceedings concerned.

41.2.2

If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process or terminates its appointment as agent for service of process, the relevant Borrower or the relevant Guarantor (as the case may be) must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.

This Agreement has been entered into on the date stated at the beginning of this Agreement.

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Schedule 1

The Original Lenders

Name of Original Lender	Commitment	Treaty Passport scheme reference number and jurisdiction of residence (if applicable)
Danmarks Skibskredit A/S (CVR number 27492649)	USD 149,163,191.35 (Existing Tranche)	N/A
Danmarks Skibskredit A/S (CVR number 27492649)	USD 87,800,000 (New Tranche)	N/A

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Schedule 2

Part I

Conditions Precedent to Execution of this Agreement

1	Security Parties

(a)

Constitutional documents Copies of the constitutional documents of each Security Party together with such other evidence as the Agent may reasonably require that each Security Party is duly incorporated in its country of incorporation and remains in existence with power to enter into, and perform its obligations under, the Relevant Documents to which it is or is to become a party.

(b)

Certificates of good standing A certificate of good standing in respect of each Security Party (if such a certificate can be obtained).

(c)

Board resolutions A copy of a resolution of the board of directors of each Security Party:

(i)

approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute those Finance Documents; and

(ii)

authorising a specified person or persons to execute those Relevant Documents (and all documents and notices to be signed and/or dispatched under those documents) on its behalf.

(d)

Specimen signatures A specimen of the signature of each person authorised by the resolutions referred to in (c).

(e)

Shareholder resolutions A copy of a resolution signed by all the holders of the issued shares in each Security Party, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Security Party is a party.

(f)

Officer's certificates An original certificate of a duly authorised officer of each Security Party:

(i)

certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect;

(ii)

setting out the names of the directors, officers and shareholders of that Security Party and the proportion of shares held by each shareholder; and

(iii)

confirming that borrowing or guaranteeing or securing, as appropriate, the Loan would not cause any borrowing, guarantee, security or similar limit binding on that Security Party to be exceeded.

(g)

Evidence of registration Where such registration is required or permitted under the laws of the relevant jurisdiction, evidence that the

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names of the directors, officers and shareholders of each Security Party are duly registered in the companies registry or other registry in the country of incorporation of that Security Party.

(h)

Powers of attorney The original notarially attested and legalised power of attorney of each of the Security Parties under which the Finance Documents to which it is or is to become a party are to be executed or transactions undertaken by that Security Party.

Security Documents The Guarantee and the Share Charges together with all other documents required by any of them, including, without limitation, all share certificates, certified copy share registers or registers of members, transfer forms, proxy forms, letters of resignation and letters of undertaking.

3	Other documents and evidence

(a)

Process agent Evidence that any process agent referred to in Clause 41.2 ( Service of process ) and any process agent appointed under any other Finance Document has accepted its appointment.

(b)

Other Authorisations A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Relevant Document or for the validity and enforceability of any Relevant Document.

(c)

Original Budgets A copy of the Original Budgets of the Borrower.

(d)

"Know your customer" documents Such documentation and other evidence as is reasonably requested by the Agent in order for the Lenders to comply with all necessary "know your customer" or similar identification procedures in relation to the transactions contemplated in the Finance Documents and any additional information required by the Agent to comply with anti-money laundering legislation and legislation against the financing of terrorism.

(e)

Equity Commitment Evidence satisfactory to the Agent that a minimum of USD 89,000,000 has been committed into OCM Holdings and the Guarantors by way of a letter of equity commitment from the Sponsor or other Affiliate of the Sponsor acceptable to the Agent together with a certificate from a director of the entity committing the equity confirming the amount of that entity's called and uncalled capital.

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Part II

Conditions Precedent to each Drawing

Bringdown Certificate . A certificate in respect of each Security Party dated no more than five Business Days prior to the Drawdown Date, signed by a director or duly authorised officer of each relevant Security Party, confirming that none of the documents and evidence delivered by such Security Party to the Agent pursuant to Schedule 2, Part I, paragraph 1, (or clause 2 of the Supplemental Agreement, in the case of the Owners of the New Vessels and in the case of the Borrower) have been modified, amended, or revoked since their delivery to the Agent, except as set forth in such certificate.

2	Security and related documents

(a)

Vessel documents Photocopies, certified as true, accurate and complete by the Owner, of:

(i)

the relevant MOAs and, if applicable, the Building Contract as the case may be) including all amendments thereto;

(ii)

such documents as the Agent may reasonably require to evidence the nomination of the Owner as purchaser of the Vessel pursuant to the relevant MOAs and, if applicable, the Building Contract as the case may be);

(iii)

the bill of sale transferring title in the Vessel to the Owner free of all encumbrances, maritime liens or other debts;

(iv)

the protocol of delivery and acceptance evidencing the unconditional physical delivery of the Vessel by the Seller (or the Builder) to the Owner pursuant to the MOA (or the Building Contract);

(v)

any Charter or other contract of employment of the Vessel which will be in force on the Drawdown Date;

(vi)

the Management Agreements;

(vii)

(if available) the Vessel's current Safety Construction, Safety Equipment, Safety Radio and Load Line Certificates;

(viii)

(if available) evidence of the Vessel's current Certificate of Financial Responsibility issued pursuant to the United States Oil Pollution Act 1990;

(ix)

(if available) the Vessel's current SMC;

(x)

the ISM Company's current DOC;

(xi)

(if available) the Vessel's current ISSC;

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(xii)

(if available) the Vessel's current IAPPC;

(xiii)

the Vessel's current Tonnage Certificate; and

(xiv)

in case of a New Vessel, evidence e.g. by a copy of the appropriate certificate that a Scrubber has been installed on the relevant New Vessel,

in each case together with all addenda, amendments or supplements.

(b)

Evidence of Owner's title Evidence that on the Drawdown Date (i) the Vessel will be at least provisionally registered under an Approved Flag in the ownership of the Owner and (ii) the Mortgage will be registered against the Vessel with first priority no later than simultaneously with the release of the Drawing by the Agent.

(c)

Evidence of insurance Evidence that the Vessel is insured in the manner required by the Security Documents and that letters of undertaking will be issued in the manner required by the Security Documents, together with (if required by the Agent) the written approval of the Insurances by an insurance adviser appointed by the Agent.

(d)

Confirmation of class A Certificate of Confirmation of Class or Class Certificate for hull and machinery confirming that the Vessel is classed with the highest class applicable to vessels of her type with Lloyd's Register or such other classification society as may be acceptable to the Agent (acting reasonably) free of overdue recommendations affecting class.

(e)

Security Documents The Mortgage and the Assignments in respect of the Vessel, the Inter-company Indebtedness Assignment and if applicable, the Managers' Undertakings, together with all other documents required by any of them, including, without limitation, all notices of assignment and/or charge and reasonable evidence that those notices will be duly acknowledged by the recipients provided always that notices of assignment will only be served on Charterers if the charter period is more than 13 months.

(f)

Building Contract Evidence that the Vessel has been constructed in accordance with the Building Contract in all material respects and that no changes have been made to the Building Contract which are not permitted under this Agreement.

(g)

Other Relevant Documents Copies of each of the Relevant Documents not otherwise comprised in the documents listed in this Part I of Schedule 2.

3	Legal opinions

The following legal opinions, each addressed to the Agent, the Security Agent and the Lenders and capable of being relied upon by any persons who become Lenders pursuant to the primary syndication of the Loan or confirmation satisfactory to the Agent that such opinions will be given (and the Agent undertakes to use all reasonable endeavours to receive such confirmation prior to the Drawdown Date):

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(a)

a legal opinion as to English law;

(b)

a legal opinion as to Singapore Law; and

(c)

a legal opinion as to Danish law.

4	Other documents and evidence

(a)

Drawdown Request A duly completed Drawdown Request.

(b)

Other Authorisations A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the relevant Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Relevant Document or for the validity and enforceability of any Relevant Document.

(c)

Fees Evidence that the fees, costs and expenses then due from the Borrower under Clause 11 ( Fees ) and Clause 16 ( Costs and Expenses ) have been paid or will be paid by the relevant Drawdown Date.

(d)

Material Adverse Effect No event or circumstance has occurred which would or is reasonably likely to affect the ability of any Security Party to perform its payment obligations under any Finance Document as they fall due.

(e)

Loan Note A copy of any loan note or other evidence of indebtedness from the Owner of the relevant Vessel to the relevant Borrower.

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Part III

Conditions Subsequent

Evidence of Owner's title Certificate of ownership and encumbrance/transcript of register (or equivalent) issued by the Registrar of Ships (or equivalent official) of the flag stated in the Preliminary confirming that (i) the Vessel is permanently registered under that flag in the ownership of the Owner, (ii) the Mortgage has been registered with first priority against the Vessel and (iii) there are no further Encumbrances registered against the Vessel.

2	Letters of undertaking Letters of undertaking in respect of the Insurances as required by the Security Documents together with copies of the relevant policies or cover notes or entry certificates duly endorsed with the interest of the Finance Parties.

3	Acknowledgements of notices Acknowledgements of all notices of assignment and/or charge served pursuant to any Security Documents received by the Agent pursuant to Part II of this Schedule 2.

4	Legal opinions Such of the legal opinions specified in Part I and Part II of this Schedule 2 as have not already been provided to the Agent.

5	Companies Act registrations Evidence that the prescribed particulars of any Security Documents received by the Agent pursuant to Part I of this Schedule 2 have been delivered to the Registry of Companies/Corporations in the relevant jurisdiction within the statutory time limit.

6	Compliance Certificate The Borrower and each Guarantor shall supply to the Agent as soon as practicable and in any event by the last day of the Availability Period, a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 21 ( Financial Covenants ).

Vessel Certificates If and to the extent that any of the items listed in Schedule 2, Part II, paragraph 2 (vii) to (xiii) and Schedule 2 Part II, paragraph (e) are not delivered to the Agent on or prior to the Drawdown Date, the Borrower shall supply such items to the Agent as soon as practicable and in any event no later than 3 calendar months of that Drawdown Date.

8	Master's receipt The master's receipt for the Mortgage (other than a Mortgage in respect of a Newbuilding).

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Part IV

Conditions Precedent to Re-flagging under an Approved Flag

A certificate from the relevant Owner confirming that none of the documents delivered to the Agent pursuant to Clauses 4.1, 4.2 and 4.3 have been amended or modified in any way since the date of their delivery to the Agent, or copies, certified by a duly authorised officer of the relevant Owner as true, complete, accurate and neither amended nor revoked, of any which have been amended or modified.

A copy, certified by the relevant Owner as true, complete and accurate and neither amended nor revoked, of a resolution of the directors and a resolution of the shareholders of that Owner (together, where appropriate, with signed waivers of notice of any directors’ meetings) approving, and authorising or ratifying the execution of the new Mortgage and any document to be executed by that Owner pursuant to the new Mortgage.

3	A notarially attested and legalised power of attorney of the relevant Owner under

which the new Mortgage and any documents required pursuant to it are to be executed by that Owner.

4	The relevant new Mortgage.

5	Evidence that immediately prior to the relevant re-flagging the new Mortgage will be capable of being registered against the relevant Vessel with first priority through the relevant Registrar of Ships (or equivalent official) immediately following the re-flagging.

6	Confirmation satisfactory to the Agent that all legal opinions required by the Finance Parties in respect of the re-flagging will be given substantially in the form required by the Agent.

7	No Default shall have occurred and be continuing.

A certificate of ownership and encumbrances (or equivalent) issued by the relevant Registrar of Ships (or equivalent official) confirming that, following the relevant re-flagging, (a) the relevant Vessel is permanently registered under the relevant Approved Flag in the ownership of the relevant Owner, (b) the new Mortgage has been registered with first priority against that Vessel and (c) there are no further Encumbrances registered against that Vessel.

9	Evidence that the relevant Vessel has been deleted from her previous approved Flag.

10	Such of the legal opinions specified in Part IV of this Schedule 2 (Conditions Precedent to Re-flagging under an Approved Flag) as have not already been provided to the Agent.

11	Within ten (10) Business Days of the re-flagging, confirmation satisfactory to the Agent that the Insurances in respect of the relevant Vessel remain in full force and effect notwithstanding the re-flagging.

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Schedule 3

Drawdown Request

From:

To:	Danmarks Skibskredit A/S

Dated:

Dear Sirs

TORM A/S and TORM PLC – USD 236,936,191.35 Loan Agreement dated 10 April 2014 as amended and restated on 2018 (the "Agreement")

1	We refer to the Agreement. This is a Drawdown Request. Terms defined in the Agreement have the same meaning in this Drawdown Request unless given a different meaning in this Drawdown Request.

2	We wish to make a Drawing on the following terms:

	Proposed Drawdown Date:	[ ] (or, if that is not a Business Day, the next Business Day)
	Currency of Drawing:	USD
	Amount:	[ ]
	Interest Period:	[ ]
	Vessel:	[ ]

3	We confirm that each condition specified in Clause 4.2 ( Further conditions precedent ) is satisfied on the date of this Drawdown Request.

4	This Drawdown Request is irrevocable.

Yours faithfully

...........................................
authorised signatory for
[TORM A/S/TORM PLC]

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Schedule 4

Form of Transfer Certificate

To:	Danmarks Skibskredit A/S as Agent

From:

[ The Existing Lender ] (the " Existing Lender ") and [ The New Lender ] (the " New Lender ")

Dated:

TORM A/S and TORM PLC – USD 236,936,191.35 Loan Agreement dated 10 April 2014 as amended and restated on [ 2018] (the "Loan Agreement")

1	We refer to the Loan Agreement. This agreement (the " Agreement ") shall take effect as a Transfer Certificate for the purposes of the Loan Agreement. Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.

2	We refer to Clause 24.4 ( Procedure for transfer ) of the Loan Agreement:

(a)

The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation and in accordance with Clause 24.4 ( Procedure for transfer ) all of the Existing Lender's rights and obligations under the Loan Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement as specified in the Schedule.

(b)

The proposed Transfer Date is [

(c)

The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 31.2 ( Addresses ) are set out in the Schedule.

3	The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in Clause 24.3.1(c) ( Limitation of responsibility of Existing Lenders ).

4	This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

5	This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

6	This Agreement has been entered into on the date stated at the beginning of this Agreement.

Note:

The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender's interest in any Encumbrance created or expressed to be created or evidenced by the Security Documents in all jurisdictions. It is the responsibility of the New Lender to ascertain whether

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any other documents or other formalities are required to perfect a transfer of such a share in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

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The Schedule

Commitment/rights and obligations to be transferred

[insert relevant details]

[Facility Office address, fax number and attention details for notices and account details for payments ,]

[Existing Lender]	[New Lender]
By:	By:

This Agreement is accepted as a Transfer Certificate for the purposes of the Loan Agreement by the Agent and the Transfer Date is confirmed as [ ].

Danmarks Skibskredit A/S

By:

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Schedule 5

Form of Assignment Agreement

To:	Danmarks Skibskredit A/S as Agent and TORM A/S as Borrower for and on behalf of each Security Party

From:

[the Existing Lender ] (the " Existing Lender ") and [the New Lender ] (the " New Lender ")

Dated:

TORM A/S and TORM PLC – USD 236,936,191.35 Loan Agreement dated 10 April 2014 and amended and restated on [ 2018] (the "Loan Agreement")

We refer to the Loan Agreement. This is an Assignment Agreement. This agreement (the " Agreement ") shall take effect as an Assignment Agreement for the purpose of the Loan Agreement. Terms defined in the Loan Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.

2	We refer to Clause 24.5 ( Procedure for assignment ) of the Loan Agreement:

(a)

The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Loan Agreement, the other Finance Documents and in respect of any Encumbrance created or expressed to be created or evidenced by the Security Documents which correspond to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement as specified in the Schedule.

(b)

The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender's Commitment(s) and participations in the Loan under the Loan Agreement specified in the Schedule.

(c)

The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b).

3	The proposed Transfer Date is [ ].

(d)

On the Transfer Date the New Lender becomes Party to the relevant Finance Documents as a Lender.

4	The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 31.2 ( Addresses ) are set out in the Schedule.

5	The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in Clause 24.3.3 ( Limitation of responsibility of Existing Lenders ).

6	This Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 24.6 ( Copy of Transfer Certificate or

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Assignment Agreement to Borrower ), to the Borrower (on behalf of each Security Party) of the assignment referred to in this Agreement.

7	This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

8	This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

9	This Agreement has been entered into on the date stated at the beginning of this Agreement.

Note:

The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender's interest in any Encumbrance created or expressed to be created or evidenced by the Security Documents in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.

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The Schedule

Commitment/rights and obligations to be transferred by assignment, release and accession

[ insert relevant details ]

[ Facility office address, fax number and attention details for notices and account details for payments ]

[Existing Lender]	[New Lender]
By:	By:

This Agreement is accepted as an Assignment Agreement for the purposes of the Loan Agreement by the Agent and the Transfer Date is confirmed as [ ].

Signature of this Agreement by the Agent constitutes confirmation by the Agent of receipt of notice of the assignment referred to in this Agreement, which notice the Agent receives on behalf of each Finance Party.

Danmarks Skibskredit A/S

(as Agent)

By:

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Schedule 6

Form of Compliance Certificate

To:	Danmarks Skibskredit A/S

From:

TORM PLC

Dated:

Dear Sirs

TORM A/S and TORM PLC – USD 236,936,191.35 Loan Agreement dated 10 April 2014 and amended and restated on [ 2018] (the "Agreement")

1	We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

2	I/We confirm that with respect to the financial quarter ending [30 June][31 December] of the Group:

2.1.1

Equity Ratio: The Equity Ratio is []. [Requirement: Equity Ratio shall not be less than twenty-five per cent. (25%)]

2.1.2

Free Liquidity: The Free Liquidity is [ ] being in excess of USD 75,000,000 and representing [ ]% of Group Debt

3	[I/We confirm that the LTV Coverage calculated in accordance with Clause 17.5 ( Additional Security ) is [ ], and attach copies of the underlying valuations.

[I/We confirm that no Event of Default is continuing and no Change of Control has occurred.] [ If this statement cannot be made, the certificate should identify any Event of Default that is continuing and the steps, if any, being taken to remedy it, or the change of control that has occurred as the case may be. ]



Signed:	.....................................................................
	Chief Executive Officer of TORM PLC

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Schedule 7

Vessels/Owners/Flags/Current Managers

Vessel	IMO Number	Owner	Commercial Manager	Technical Manager
"TORM FREYA" (" Vessel 2 ")	9250490	Vessel Co 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM GERD" (" Vessel 3 ")	9240897	Vessel Co 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM GERTRUD" (" Vessel 4 ")	9240885	Vessel Co 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM GUNHILD" (" Vessel 5 ")	9172193	Vessel Co 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM HELVIG" (" Vessel 7 ")	9288021	Vessel Co 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM INGEBORG" (" Vessel 8 ")	9243320	Vessel Co 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM RAGNHILD" (" Vessel 9 ")	9290579	Vessel Co 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM THYRA" (" Vessel 11 ")	9250488	Vessel Co 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM VALBORG" (" Vessel 12 ")	9243318	Vessel Co 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM THOR" (" Vessel 14 ")	9712292	VesselCo 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM THUNDER" (" Vessel 15 ")	9712307	VesselCo 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM TIMOTHY" (" Vessel 16 ")	9726487	VesselCo 8 Pte. Ltd.	Torm A/S*	Torm A/S*
"TORM LOKE" (" Vessel 17 ")	9301914	Vessel Co 11 Pte. Ltd	Torm A/S*	Torm A/S*
"TORM TROILUS"	9726475	Vessel Co 11 Pte.	Torm A/S*	Torm A/S*

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" Vessel 18 ")		Ltd
Hull No. 15121034 under the construction at Guangzhou Shipyard International Company Limited (" Vessel 19 ")	To be advised	VesselCo 5 K/S	Torm A/S*	Torm A/S*
Hull No. 15121035 under the construction at Guangzhou Shipyard International Company Limited (" Vessel 20 ")	To be advised	VesselCo 5 K/S	Torm A/S*	Torm A/S*
Hull No. 15121036 under the construction at Guangzhou Shipyard International Company Limited (" Vessel 21 ")	To be advised	VesselCo 5 K/S	Torm A/S*	Torm A/S*
Hull No. 15121037 under the construction at Guangzhou Shipyard International Company Limited (" Vessel 22 ")	To be advised	VesselCo 5 K/S	Torm A/S*	Torm A/S*

* acting in its capacity as Bareboat Charterer of the Vessel

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Schedule 8

Supplementary Agreement

[DELIBERATELY NOT USED]

Page 146

Schedule 9

Repayment Profile / Drawings

Page 147

Schedule 10

Approved Shipbrokers

1	Fearnleys, Oslo;

SSY;

3	Clarksons;

4	Inge Stensland;

BRS;

6	Maersk Brokers;

7	such other reputable and independent brokers with knowledge of the product tanker market appointed by the Agent.

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Schedule 11

1	Vessel and Insurance Undertakings

1.1

Insurance

1.1.1

Each Owner covenants to ensure at its own expense throughout the Facility Period that:

(a)

each Vessel owned by it remains insured against fire and all usual marine risks (including hull interest, freight interest and excess risks) and war risks (including blocking and trapping) on an agreed value basis for an amount which is the greater from time to time of (a) her full market value and (b) an amount which equals one hundred and ten per cent (110%) of the aggregate of the amount of the Appropriate Amount in respect of the Vessel. The amount of the hull and machinery marine risks for each Vessel shall at all times represent at least eighty per cent (80%) of her full market value; and

(b)

each Vessel owned by it remains entered in a protection and indemnity association which is a member of the International Group of P&I Clubs (or is otherwise approved by the Security Agent acting reasonably) in both protection and indemnity classes, or remains otherwise insured against protection and indemnity risks and liabilities (including, without limitation, protection and indemnity war risks) and for the highest amount available for vessels of her specification with a protection and indemnity association which is a member of the International Group of P&I Clubs including oil pollution liability risk; and

(c)

the Security Agent agrees that, if and for so long a Vessel may be laid up with the approval of the Security Agent, each Owner may at its own expense take out port risk insurance on the Vessels in place of hull and machinery insurance.

1.1.2

Each Owner undertakes to place the Obligatory Insurances in such markets, denominated in dollars, on such terms and conditions (always applying the terms of the Nordic Marine Insurance Plan 2013 (as amended from time to time) or such other insurance plan or conditions considered market standard, and with such brokers, underwriters and associations as the Security Agent shall have previously approved in writing or with such first class insurer with a credit rating of no less than "A-" with A.M. Best and/or "BBB" with Standard & Poor's or an equivalent rating from another rating agency of similar reputation which may be approved by the Security Agent, acting reasonably. No Owner shall alter the terms of any of the Obligatory Insurances in any material respect, and will supply the Security Agent from time to time on request with such information as the Security Agent may in its discretion require with regard to the Obligatory Insurances and the brokers, underwriters or associations through or with which the Obligatory Insurances are placed. Each Owner

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shall reimburse the Security Agent on demand for all costs and expenses incurred by the Security Agent in obtaining from time to time a report on the adequacy of the Obligatory Insurances, including as set out in Clause 1.1.5 of this Schedule 11 from an insurance adviser instructed by the Security Agent. Each Owner shall be liable to pay (or reimburse the Security Agent) for no more than one such report per year, unless (i) such report is obtained in connection with the occurrence of and Event of Default or (ii) there has been a material change to the Insurances, including as set out in Clause 1.1.5 of this Schedule 11.

1.1.3

Each Owner undertakes duly and punctually to pay all premiums, calls and contributions, and all other sums at any time payable in connection with the Obligatory Insurances, and, at its own expense, to arrange and provide any guarantees from time to time required by any protection and indemnity or war risks association. From time to time at the Security Agent's request, each Owner will provide the Security Agent with evidence satisfactory to the Security Agent that such premiums, calls, contributions and other sums have been duly and punctually paid; that any such guarantees have been duly given; and that all declarations and notices required by the terms of any of the Obligatory Insurances to be made or given by or on behalf of each Owner to brokers, underwriters or associations have been duly and punctually made or given.

1.1.4

Each Owner will comply in all respects with all terms and conditions of the Obligatory Insurances and will make all such declarations to brokers, underwriters and associations as may be required to enable the Vessel to operate in accordance with the terms and conditions of the Obligatory Insurances. No Owner will do, or permit to be done, any act, or make, or permit to be made, any omission, as a result of which any of the Obligatory Insurances may become liable to be suspended, cancelled or avoided, or may become unenforceable, or as a result of which any sums payable under or in connection with any of the Obligatory Insurances may be reduced or become liable to be repaid or rescinded in whole or in part. In particular, but without limitation, no Owner will permit the Vessels owned by it to be employed other than in conformity with the Obligatory Insurances without first taking out additional insurance cover in respect of that employment in all respects to the satisfaction of the Security Agent, and each Owner will notify the Security Agent without undue delay of any material new requirement imposed by any broker, underwriter or association in relation to any of the Obligatory Insurances.

1.1.5

Each Owner will, no later than the day of the expiry of any of the Obligatory Insurances, renew them and shall immediately give the Security Agent such details of those renewals as the Security Agent may require. In the event that the Obligatory Insurances are not placed on the terms of the Nordic Marine Insurance Plan 2013 upon their renewal, the Security Agent shall, at the cost of each Owner, have the right to obtain a report on the adequacy of the Obligatory Insurances from an insurance adviser instructed by the Security Agent.

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1.1.6

Each Owner shall reimburse the Security Agent the costs, premiums and expenses of taking out and keeping in force the Mortgagees' Insurances in relation to each Vessel for an amount which equals one hundred and ten per cent (110%) of the Appropriate Amount of such Vessel then outstanding. Such insurance can be taken out by the relevant Owner if the Security Agent so agrees (acting reasonably).

1.1.7

Each Owner shall, at its own cost, take out such additional insurances as may from time to time be required by any public body, classification society or other similar entity having authority over each Owner or the Vessels owned by it.

1.1.8

Each Owner shall deliver to the Security Agent extracts (and, if required by the Security Agent, pro-forma originals) of all policies and certificates of entry (including, if required by the Security Agent receipts for premiums, calls or contributions and other documents relating to the Insurances) and shall procure that letters of undertaking in such form as the Security Agent (acting reasonably) may approve shall be issued to the Security Agent by the brokers through which the Insurances are placed (or, in the case of protection and indemnity or war risks associations, by their managers). If a Vessel is at any time during the Facility Period insured under any form of fleet cover, the relevant Owner shall (if possible) procure that those letters of undertaking contain confirmation that the brokers, underwriters or association (as the case may be) will not set off claims relating to that Vessel against premiums, calls or contributions in respect of any other vessel or other insurance, and that the insurance cover of that Vessel will not be cancelled by reason of non-payment of premiums, calls or contributions relating to any other vessel or other insurance. Failing receipt of those confirmations, the relevant Owner will (if required by the Security Agent (acting reasonably)) instruct the brokers, underwriters or association concerned to issue a separate policy or certificate for that Vessel in the sole name of the relevant Owner or of such Owner's brokers as agents for such Owner.

1.1.9

Each Owner shall promptly provide the Security Agent with full information regarding any Major Casualty.

1.1.10

Each Owner agrees that:

(a)

at any time after the occurrence and during the continuation of an Event of Default, the Security Agent shall be entitled to collect, sue for, recover and give a good discharge for all claims in respect of any of the Insurances; to pay collecting brokers the customary commission on all sums collected in respect of those claims; to compromise all such claims or refer them to arbitration or any other form of judicial or non-judicial determination; and otherwise to deal with such claims in such manner as the Security Agent shall in its discretion think fit;

(b)

whether or not an Event of Default shall have occurred or be continuing, the proceeds of any claim under any of the Insurances

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in respect of a Total Loss shall be paid to the Security Agent and applied by the Security Agent in accordance with Clause 7.6; and

(c)

all sums paid under the Insurances to anyone other than the Security Agent shall be applied in repairing the damage and/or discharging the liability in respect of which they have been paid except to the extent that the repairs have already been paid for and/or the liability already discharged.

1.1.11

The Security Agent agrees that any amounts which may become due under any protection and indemnity entry or insurance shall be paid to the relevant Owner to reimburse such Owner for, and in discharge of, the loss, damage or expense in respect of which they shall have become due, unless, at the time the amount in question becomes due, an Event of Default shall have occurred and be continuing, in which event the Security Agent shall be entitled to receive the amounts in question and to apply them either in reduction of the Indebtedness or, at the option of the Security Agent, to the discharge of the liability in respect of which they were paid.

1.1.12

Each Owner agrees that:

(a)

no Owner shall settle, compromise or abandon any claim under or in connection with any of the Insurances (other than a claim of less than the Threshold Amount arising other than from a Total Loss) without the prior written consent of the Security Agent;

(b)

if an Owner fails to effect or keep in force the Obligatory Insurances, the Security Agent may (but shall not be obliged to) effect and/or keep in force such insurances on the Vessel and such entries in protection and indemnity or war risks associations as the Security Agent in its discretion considers desirable, and the Security Agent may (but shall not be obliged to) pay any unpaid premiums, calls or contributions; and

(c)

each Owner will reimburse the Security Agent from time to time on demand for all such premiums, calls or contributions paid by the Security Agent, together with interest at the Default Rate from the date of payment by the Security Agent until the date of reimbursement.

1.1.13

Each Owner shall:

(a)

comply with all Environmental Laws;

(b)

obtain, maintain and ensure compliance with all requisite Environmental Approvals; and

(c)

implement procedures to monitor compliance with and to prevent liability under any Environmental Law,

where failure to do so has or is reasonably likely to have a Material Adverse Effect.

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1.1.14

Each Owner shall comply with the requirements of the United States Oil Pollution Act 1990 (the " Act ") if a Vessel owned by it is to trade in the United States of America and Exclusive Economic Zone (as defined in the Act). Before any such trade is commenced and during the entire period during which such trade is carried on, the relevant Owner shall:

(a)

pay any additional premiums required to maintain protection and indemnity cover for oil pollution up to the limit available to that Owner for the relevant Vessel in the market; and

(b)

make all such quarterly or other voyage declarations as may from time to time be required by the relevant Vessel's protection and indemnity association in order to maintain such cover, and, if required by the Security Agent, promptly deliver to the Security Agent copies of such declarations; and

(c)

submit the relevant Vessel to such additional periodic, classification, structural or other surveys which may be required by the relevant Vessel's protection and indemnity insurers to maintain cover for such trade and, if required by the Security Agent, promptly deliver to the Security Agent copies of reports made in respect of such surveys; and

(d)

implement any recommendations contained in the reports issued following the surveys referred to in Clause 1.1.14(c) within the relevant time limits, and, if required by the Security Agent, provide evidence satisfactory to the Security Agent that the protection and indemnity insurers are satisfied that this has been done; and

1.1.15

in addition to the foregoing (if such trade is in the United States of America and Exclusive Economic Zone):

(a)

obtain and retain a certificate of financial responsibility under the Act in form and substance satisfactory to the United States Coast Guard and, if required by the Security Agent, provide the Security Agent with evidence of the same; and

(b)

procure that the protection and indemnity insurances do not contain a US Trading Exclusion Clause or any other analogous provision and, if required by the Security Agent, provide the Security Agent with evidence that this is so; and

(c)

comply strictly with any operational or structural regulations issued from time to time by any relevant authorities under the Act so that at all times the relevant Vessel falls within the provisions which limit strict liability under the Act for oil pollution.

1.2	Operation and Maintenance

Each Owner undertakes towards the Security Agent:

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1.2.1

to keep each Vessel owned by it seaworthy and in a state of repair consistent with prudent ownership and sound ship management practice; and

1.2.2

to maintain the registration of each Vessel owned by it under its current flag; to effect and maintain registration of the relevant Mortgage at the Vessel's Ship Registry; and not cause nor permit to be done any act or omission as a result of which either of those registrations might be defeated or imperilled; and

1.2.3

to maintain each Vessel owned by it in a condition entitling such Vessels to the highest class applicable to vessels of their type with a classification society approved by the Security Agent free of recommendations and qualifications; and

1.2.4

to carry on board each Vessel owned by it all applicable operating certificates and other documents which may from time to time be required by law, conventions or regulations applicable to the relevant Owner to be carried on board each Vessel owned by it; and

1.2.5

not without the prior written consent of the Security Agent to make, nor permit nor cause to be made, any material change in the structure, type or speed of the Vessels owned by it; and

1.2.6

to procure that all repairs to each Vessel owned by it or replacements of parts or equipment of each Vessel owned by it are effected in such a way as not to diminish the value of such Vessel and with replacement parts or equipment the property of each Owner and free of all Encumbrances (other than the relevant Mortgage); and

1.2.7

to permit the Security Agent and all persons appointed by the Security Agent to board each Vessel owned by it from time to time during the Facility Period (without materially interfering with the relevant Vessel’s trading or operation) to inspect such Vessel's state and condition, with only one such inspection each calendar year being at the expense of the Owner, and, if such Vessel shall not be in a state and condition which complies with the requirements of this Agreement, to effect such repairs as shall in the opinion of the Security Agent be desirable to ensure such compliance, without prejudice to the Security Agent's other rights under or pursuant to the relevant Mortgage or this Agreement; and

1.2.8

immediately to notify the Security Agent of any arrest or detention of any Vessel owned by it, and to cause such Vessel to be released from arrest or detention as quickly as possible, and in any event within sixty (60) days from the date of arrest or detention and immediately to notify the Security Agent in the same manner of the release of such Vessel; and

1.2.9

from time to time on request of the Security Agent to produce to the Security Agent written evidence satisfactory to the Security Agent confirming that the master and crew of each Vessel owned by it have no claims for wages beyond the ordinary arrears and that the master has no claim for disbursements other than those properly incurred by him in the

Page 154

ordinary course of trading of such Vessel on the voyage then in progress; and

1.2.10

not during the Facility Period to sell, agree to sell, or otherwise dispose of, or agree to dispose of, any shares in any Vessel owned by it unless the relevant Borrower complies with its obligations under Clause 7.6 of this Agreement ( Mandatory Prepayment on sale or Total Loss ); and

1.2.11

not during the Facility Period to change the name of any Vessel owned by it without prior notice to the Security Agent; and

1.2.12

not during the Facility Period to lay up any Vessel owned by it without the prior written consent of the Security Agent; and

1.2.13

in the event of any requisition or seizure of any Vessel owned by it, to take all lawful steps to recover possession of such Vessel as soon as it is entitled to do so; and

1.2.14

to give to the Security Agent from time to time during the Facility Period on request such information as the Security Agent may require with regard to the Vessel's employment, position and state of repair and, on the Security Agent's request, to supply the Security Agent with copies of all Charters and other similar contracts of employment relating to any Vessel owned by it and copies of the deck and engine logs of any Vessel's owned by it; and

1.2.15

to comply with all requirements from time to time of the classification society of any Vessel owned by it and to give to the Security Agent from time to time during the Facility Period on request copies of all classification certificates of each Vessel owned by it and reports of surveys required by the each Vessel's classification society (each Owner by its execution of this Agreement irrevocably authorising the Security Agent to obtain such information and documents from each Vessel's classification society as the Security Agent may from time to time require), and to notify the Security Agent immediately of any requirement or recommendation imposed by each Vessel's classification society; and

1.2.16

not during hostilities (whether or not a state of war shall formally have been declared and including, without limitation, any civil war) to permit each Vessel owned by it to be employed in carrying any goods which may be declared to be contraband of war or which may render the Vessel liable to confiscation, seizure, detention or destruction, nor to permit the Vessel to enter any area which is declared a war zone by any governmental authority or by such Vessel's insurers unless that employment or voyage is either (a) permitted under the terms of the Insurances or (b) (to the extent not covered by the Insurances) covered by additional insurance taken out by the relevant Owner at such Owner's expense, which additional insurance shall be deemed to be part of the Insurances and of the Assigned Property; and

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1.2.17

not without the prior written consent of the Security Agent to let any Vessel owned by it on any demise charter (irrespective of duration) or on any time charter (which, inclusive of any extension option is capable of exceeding 13 months), consecutive voyage charter or other contract of employment nor to employ any Vessel owned by it, in each case in any way which might impair the security created by the Finance Documents; and

1.2.18

duly to perform (unless prevented by force majeure), and to take all necessary steps to enforce the performance by charterers and shippers of, all charterparties and other contracts of employment and all bills of lading and other contracts relating to each Vessel owned by it; and

1.2.19

not following the occurrence and during the continuation of an Event of Default to let any Vessel owned by it on charter or renew or extend any charter or other contract of employment of any Vessel owned by it, nor agree to do so, without the prior written consent of the Security Agent; and

1.2.20

Each Owner shall generally pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

(i)

such payment is being contested in good faith;

(ii)

(iii)

such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.

1.2.21

not at any time during the Facility Period without the prior written consent of the Security Agent (and then subject to such conditions as the Security Agent may impose) to create nor grant nor permit to exist any Encumbrance over the Vessel or any share in any Vessel owned by it or any of the Assigned Property other than any Permitted Encumbrances existing from time to time; and

1.2.22

to notify the Security Agent immediately if the relevant Owner becomes aware of any legal proceedings or arbitration involving (i) any Vessel owned by it or (ii) the relevant Owner, where the amount claimed by any party (ignoring any counterclaim or defence of set-off) exceeds or may reasonably be expected to exceed the Threshold Amount; and

1.2.23

not without the prior written consent of the Security Agent to put any Vessel owned by it into the possession of any person for the purpose of work or repairs estimated to cost more than USD 6,000,000 (except for repairs where the amount above such threshold is recoverable under the

Page 156

Insurances and in respect of which the insurers have agreed to make payment in accordance with any applicable loss payable clause) unless that person shall have given an undertaking to the Security Agent in such terms as the Security Agent shall require not to exercise a lien on the relevant Vessel for the cost of the work; and

1.2.24

to keep proper books of account in respect of each Vessel owned by it and the Earnings and as and when required by the Security Agent to make such books available for inspection on behalf of the Security Agent; and

1.2.25

not to appoint anyone other than the Managers as commercial or technical managers of any Vessel owned by it, nor permit the commercial or technical management of any Vessel owned by it to be sub-contracted or delegated to any third party (save as is permitted in the relevant Management Agreement). For the avoidance of doubt and subject to Clause 22.25 of this Agreement ( Change of Manager ), no prior written consent of the Agent will be required in connection with the termination or cancellation of a Management Agreement; and

1.2.26

to take all reasonable precautions to prevent any infringements of any anti-drug legislation in any jurisdiction in which each Vessel owned by it shall trade and in particular (if any Vessel owned by it is to trade in the United States of America) to take all reasonable precautions to prevent any infringements of the Anti-Drug Abuse Act of 1986 of the United States of America; and

1.2.27

to comply in all material respect, or procure that the operator of any Vessel owned by it will comply in all material respects, with the ISM Code or any replacement of the ISM Code and in particular, without limitation, to:

(a)

procure that each Vessel owned by it emains for the duration of the Facility Period subject to a safety management system developed and implemented in accordance with the ISM Code; and

(b)

maintain for each Vessel owned by it throughout the Facility Period a valid and current SMC and provide a copy to the Security Agent; and

(c)

procure that the ISM Company maintains throughout the Facility Period a valid and current DOC and provide a copy to the Security Agent; and

(d)

notify the Security Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the SMC of the Vessel or of the DOC of the ISM Company; and

1.2.28

to comply all material respect in relation to each Vessel owned by it with the ISPS Code or any replacement of the ISPS Code and in particular, without limitation, to:

Page 157

(a)

procure that each Vessel owned by it and the company responsible for such Vessel's compliance with the ISPS Code comply with the ISPS Code; and

(b)

maintain for each Vessel owned by it throughout the Facility Period a valid and current ISSC and provide a copy to the Security Agent; and

(c)

notify the Security Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the ISSC; and

1.2.29

to comply all material respect in relation to each Vessel owned by it with Annex VI or any replacement of Annex VI and in particular, without limitation, to:

(a)

procure that the master and crew of each Vessel owned by it are familiar with, and that each Vessel owned by it complies with, Annex VI; and

(b)

maintain for the each Vessel owned by it throughout the Facility Period a valid and current IAPPC and provide a copy to the Security Agent; and

(c)

notify the Security Agent immediately in writing of any actual or threatened withdrawal, suspension, cancellation or modification of the IAPPC.

1.3	In this Schedule 11:

" Assigned Property " means the Insurances, the Earnings and the Requisition Compensation.

" Default Rate " means interest at the rate calculated in accordance with Clause 8.3 ( Default interest ) of the Agreement.

" Major Casualty " means any casualty to a vessel for which the total insurance
claim, inclusive of any deductible, exceeds or may exceed the Threshold Amount.

" Mortgagees' Insurances " means all policies and contracts of mortgagees' interest insurance and mortgagees' additional perils (oil pollution) insurance.

" Obligatory Insurances " means the insurances and entries referred to in Clause 1.1.1 of this Schedule 11 and, where applicable, those referred to in Clauses 1.1.4 and/or 1.1.5 of this Schedule 11.

" Threshold Amount " means one million dollars (USD1,000,000) or its equivalent in any other currency.

Page 158

Signatures

As Borrower A and Guarantor B
TORM A/S	)
(CVR No. 22460218)	)
By:	)

Address: Tuborg Havnevej 18	)
DK-2900 Hellerup	)
Denmark	)
Fax no.: [ ]	)
Department/Officer: [ ]	)
Email: man@torm.com; csm@torm.com

As Borrower B and Guarantor A
TORM PLC	)
(Company number 09818726)	)
By:	)

Address: TORM PLC, c/o TORM A/S,	)
Tuborg Havnevej 18	)
DK-2900 Hellerup	)
Denmark	)
Fax no.: [ ]	)
Department/Officer: [ ]	)
Email: man@torm.com; csm@torm.com	)

As Owner A and Guarantor
VesselCo 8 Pte. Ltd.	)
By:	)

Address: c/o TORM A/S.	)
Fax no.: [ ]	)
Department/Officer: [ ]	)
Email: man@torm.com; csm@torm.com	)

As Owner B and Guarantor
VesselCo 11 Pte. Ltd.	)
By:	)

Address: c/o TORM A/S	)
Fax no.: [ ]	)
Department/Officer: [ ]	)
Email: man@torm.com; csm@torm.com	)

As Owner C and Guarantor
VesselCo 5 K/S	)
By:	)
(CVR No, 38911538)	)
By:	)
	)
Address: c/o TORM A/S	)
Fax no.: [ ]	)
Department/Officer: [ ]	)
Email: man@torm.com; csm@torm.com	)

As Agent, Security Agent and Original Lender
	)
Danmarks Skibskredit A/S	)
(CVR no. 27492649)	)
By:	)
	)
Address: Sankt Annae Plads 3	)
DK-1250 Copenhagen K, Denmark	)
Fax no.: +45 33 33 9666	)
Department/Officer: Customer Relations	)
Email:danmarks@skibskredit.dk;	)
loanadmin@skibskredit.dk	)

In witness of which the parties to this Supplemental Agreement have executed this Supplemental Agreement as a deed the day and year first before written.

As Borrower A, Guarantor B, Manager and Bareboat Charterer

TORM A/S	)
(CVR number 22460218)	)
acting by	)
	)
the duly authorised	)	/s/Christian Gorrissen
in the presence of:	)	Christian Gorrissen
	)
Witness signature: /s/ Jens Norgil Damgaard	)
Name: Jens Norgil Damgaard	)
Address: TORM A/S	)
18 Tuborg Havnevej	)
DK-2900 Hellerup	)
Denmark	)
As Borrower B, Guarantor A, and Headbareboat Charterer
TORM A/S	)
company number 09818726	)
acting by	)
	)
its duly authorised	)	/s/Christian Gorrissen
in the presence of:	)	Christian Gorrissen
	)
Witness signature: /s/ Jens Norgil Damgaard	)
Name: Jens Norgil Damgaard	)
Address: TORM A/S	)
18 Tuborg Havnevej	)
DK-2900 Hellerup	)
Denmark	)

Page 12

As Owner A and Guarantor	)
	)
Signed sealed and delivered	)
as a Deed	)
By VesselCo 8 Pte. Ltd	)
acting by	)	/s/Christian Gorrissen
	)	Christian Gorrissen
its duly authorised	)
attorney	)
	)
in the presence of:	)
	)
Witness signature: /s/ Jens Norgil Damgaard	)
Name: Jens Norgil Damgaard	)
Address: TORM A/S	)
18 Tuborg Havnevej	)
DK-2900 Hellerup	)
Denmark	)


As Owner B and Guarantor	)
	)
Signed sealed and delivered	)
as a Deed	)
By VesselCo 11 Pte. Ltd	)
acting by	)	/s/Christian Gorrissen
	)	Christian Gorrissen
its duly authorised	)
attorney	)
	)
in the presence of:	)
	)
Witness signature: /s/ Jens Norgil Damgaard	)
Name: Jens Norgil Damgaard	)
Address: TORM A/S	)
18 Tuborg Havnevej	)
DK-2900 Hellerup	)
Denmark	)


As Owner C and Guarantor	)
	)
By VesselCo 5 K/S	)
(CVR number 38911538)
acting by	)	/s/Christian Gorrissen
	)	Christian Gorrissen
its duly authorised	)
attorney	)
	)
in the presence of:	)
	)
Witness signature: /s/ Jens Norgil Damgaard	)
Name: Jens Norgil Damgaard	)
Address: TORM A/S	)
18 Tuborg Havnevej	)
DK-2900 Hellerup	)
Denmark	)

Page 13

As Original Lenders, Agent and Security Agent

Danmarks Skibskredit A/S	)
(CVR no. 27492649)	)
acting by	)	/s/ Michael Friech	/s/ Marcus Christensen
	)	Michael Friech	Marcus Christensen
its duly authorised	)
in the presence of:	)
	)
Witness signature: /s/ Brian D. Kristiansen	)
Name: Brian D. Kristiansen	)
Address: Annexgardsvej 39	)
DK-2610 Rødovre

TORM plc
2018 MANAGEMENT LONG-TERM INCENTIVE PLAN

Section 1. Purpose .

Section 1.1 TORM plc, company registration number 09818726 (“TORM), an English company has adopted this management incentive plan (the “ Plan ”) to increase shareholder value and to advance the interests of TORM and its subsidiaries by providing share-based or cash-based economic incentives (the “ Incentives ”) designed to attract, retain, reward, and motivate key employees of TORM and its subsidiaries and to strengthen the mutuality of interests between those service providers and TORM’s shareholders.

Section 1.2 Under the Plan, Incentives consist of opportunities (a) to purchase or receive A Shares of a nominal value of US$ 0.01 of TORM (the “ A Shares ”) or Depositary Interests, (b) to earn cash awards valued in relation to A Shares, or (c) to earn other cash-based performance awards, in each case on terms determined under the Plan.

Section 2. Certain Definitions .

Section 2.1 As used herein, the following words or terms shall have the meanings below:

(a) “ Adoption Date ” shall mean the date of the Committee’s adoption of the Plan.

(b) “ Affiliate ” (and variants thereof) shall mean a Person that controls, or is controlled by, or is under common control with, another specified Person, either directly or indirectly.

(c) “ Beneficial Owner ” (and variants thereof), with respect to a security, shall mean a Person who, directly or indirectly (through any contract, understanding, relationship or otherwise), has or shares (i) the power to vote, or direct the voting of, the security, and/or (ii) the power to dispose of, or to direct the disposition of, the security or the traded interest in that security.

(d) “ Business Reorganisation ” shall mean the consummation of a reorganization, merger or consolidation (including a merger or consolidation of TORM or any direct or indirect subsidiary thereof), or sale or other disposition of all or substantially all of the assets, of the Group.

(e) “ Change of Control ” has the meaning given to it in Section 12.

(f) “ Change of Control Value ” shall equal the amount determined by whichever of the following items is applicable:

(i) the price per share to be paid to TORM’s shareholders in the relevant transaction;

(ii) the price per share offered to TORM’s shareholders in any tender offer or exchange offer whereby a Change of Control takes place;

(iii) in all other events, the Fair Market Value (as defined in Section 13.8) per A Share, as determined by the Committee as of the date determined by the Committee to be the date of conversion of such options or exercise of instruments; or

(iv) in the event that the consideration offered to TORM’s shareholders in any Change of Control transaction consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered that is other than cash.

(g) “ Committee ” has the meaning given to it in Section 3.1.

(h) “ Depositary ” means Computershare DR Nominees Limited, as nominee for Computershare Trustees (Jersey) Limited or another depositary approved by the Committee that will act as depositary for the purposes of holding A Shares and allowing Depositary Interests to be held by Persons and, if either (i) the relevant A Shares are not subject to transfer restrictions or (ii) on cessation of all transfer restrictions applicable to A Shares represented by such Depositary Interests (or, if earlier, when the relevant A Shares are covered by an effective registration statement filed with the U.S. Securities and Exchange Commission or on the sale of the relevant A Shares pursuant to an exemption from applicable transfer restrictions), Cede & Co. as nominee for the Depositary Trust Corporation (“ DTC ”).

(i) “ control ” (and variants thereof) shall mean, with respect to any Person, the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. A general partner, manager or adviser is deemed to control a limited partnership.

(j) “ Depositary Interests ” means either depositary receipts in respect of A Shares issued by Computershare Trustees (Jersey) Limited or book entry interests in A Shares allocated by DTC as the context requires (and, for the avoidance of doubt, excludes CREST depository interests).

(k) “ Fair Market Value ” has the meaning given in Section 13.8.

(l) “ Immediate Family Members ” of a Plan participant shall be defined as the spouse and natural or adopted children or grandchildren of the participant and their spouses.

(m) “ Person ” shall mean a natural person or company, and shall also mean the group or syndicate created when two or more Persons act as a syndicate or other group

(including, without limitation, a partnership or limited partnership) for the purpose of acquiring, holding, or disposing of a security, except that Person shall not include an underwriter temporarily holding a security pursuant to an offering of the security. References to a Person in the Plan include successors and assigns of such Person.

(n) “ Successor Corporation ” shall mean a corporation that is a successor holding company of the Group in place of TORM or a preceding successor corporation, as a result of a Business Reorganisation or other transaction or series of transactions, and excluding for the avoidance of doubt, an entity in the Sponsor Group.

(o) “ Sponsor Group ” means OCM Njord Holdings S.à r.l. and its Affiliates, excluding TORM or any other Successor Corporation and their respective subsidiaries.

Section 3. Administration .

Section 3.1 Composition . The Plan shall generally be administered by the board of directors of TORM or by a subcommittee thereof to whom such board of directors may delegate all or part of its authority in respect of the Plan from time to time (collectively, the “ Committee ”). In any event, the board of directors of TORM has the ultimate decision making authority in respect of the Plan,

Section 3.2 Authority . The Committee shall have full power and authority to administer the Plan, including awarding Incentives under the Plan and entering into agreements with, or providing notices to, participants as to the terms of the Incentives (the “ Incentive Agreements ”). Specifically, the Committee thereof shall have full and final authority and discretion over the Plan and any Incentives granted under it, including, but not limited to, the right, power, and authority, to: (a) determine the Persons to whom Incentives will be granted under Section 4 and the time at which such Incentives will be granted; (b) subject to Section 7.9, determine the terms, provisions, and conditions of each Incentive (including, if applicable, the number of A Shares or Depositary Interests covered by the Incentive), which need not be identical and need not match any default terms set forth in the Plan; (c) subject to Section 7.9, amend any outstanding Incentives or accelerate the time at which any outstanding Incentives may vest; (d) correct any defect, supply any omission, or reconcile any inconsistency in the Plan or any Incentive in the manner and to the extent it deems necessary or desirable to further the Plan’s objectives; (e) establish, amend, and rescind any rules or regulations relating to administration of the Plan that it determines to be appropriate; (f) resolve all questions of interpretation or application of the Plan or Incentives granted under the Plan; (g) determine any matters for the purposes of Section 12.2; (h) implement an adjustment to the Plan or the Incentives pursuant to Section 13.5; or (i) make any other determination that it believes necessary or advisable for the proper administration of the Plan. Committee decisions in matters relating to the Plan shall be final, binding, and conclusive on all Persons, including the Group and Plan participants.

Section 4. Eligible Participants . Key employees of the Group shall become eligible to receive Incentives under the Plan when designated by the Committee.

Section 5. Types of Incentives . Incentives may be granted under the Plan to eligible participants in the form of (a) share options, (b) share appreciation rights (“ SARs ”), (c) restricted shares, (d) restricted share units (“ RSUs ”), (e) Other Share-Based Awards (as defined in Section 10), or (f) Cash-Based Performance Awards (as defined in Section 11). Any

entitlement to A Shares under this Plan may be, at the discretion of the Committee, a right to be issued with an A Share or a Depositary Interest which is held by a Depositary.

Section 6. Shares Subject to the Plan .

Section 6.1 Percentage of Shares . Subject to adjustment as provided in Section 13.5, the maximum percentage of A Shares (together with Depositary Interests) that may be delivered to participants and their permitted transferees under the Plan is expected to be up to 7% of TORM’s share capital from time to time.

Section 6.2 Share Counting . Any A Shares subject to an Incentive that is subsequently canceled, forfeited, or expires prior to exercise or realization, whether in full or in part, shall be available again for issuance or delivery under the Plan. Notwithstanding the foregoing, however, A Shares subject to an Incentive under the Plan shall not be available again for issuance or delivery under the Plan if such A Shares were (a) tendered in payment of the Exercise Price, or (b) covered by, but not issued upon settlement of, share-settled SARs.

Section 6.3 Minimum Vesting Requirements .

(a) Incentives granted under the Plan may have minimum vesting schedules as prescribed by the Committee.

(b) No minimum vesting period applies to (i) A Shares or Depositary Interests issued or allocated in payment of cash amounts earned under the Group’s annual incentive plans; or (ii) A Shares or Depositary Interests issued or allocated in settlement of a Cash-Based Performance Award granted under Section 11 prescribed by the Committee.

Section 6.4 Type of A Shares . To the extent permitted by applicable law, A Shares (or Depositary Interests) issued under the Plan may be made available from authorized and previously unissued shares or previously issued shares held as treasury shares or shares held through an employee benefit trust.

Section 7. Share Options and Share Appreciation Rights .

Section 7.1 Grant of Appreciation Awards . The Committee may grant appreciation awards in the form of share options or share appreciation rights as provided in this Section 7.

(a) A share option is a right to acquire A Shares (or Depositary Interests) from TORM or an employee benefit trust established by TORM.

(b) A SAR is a right to receive, without payment to TORM, a number of A Shares, Depositary Interests, cash, or any combination thereof (as specified in the applicable Incentive Agreement), and the number or amount of which is determined pursuant to the formula set forth in Section 7.6(c).

(c) Each share option or SAR granted by the Committee under the Plan shall be subject to the terms and conditions of the Plan, including but not limited to, this Section 7, and the applicable Incentive Agreement.

Section 7.2 Exercise Price . The exercise price per A Share (the “ Exercise Price ”) of a grant of options or SARs shall be determined by the Committee at grant, subject to adjustment under Section 12.2 or Section 13.5.

Section 7.3 Number . The number of A Shares subject to each grant of share options or SARs shall be determined by the Committee, subject to Section 6 and adjustment as provided in Section 12. 2 or Section 13.5.

Section 7.4 Vesting and Exercisability . Subject to Section 6.3, at the time an award of share options or SARs is made, the Committee shall establish the time or times at which the Incentive shall vest and become exercisable. Each award of share options or SARs may have a different vesting period. An acceleration of the vesting period shall occur (a) as provided under Section 13.3 in the event of termination of employment under the circumstances as may be provided in the Incentive Agreement and (b) unless otherwise provided in the Incentive Agreement, as described in Section 12 in the event of a Change of Control.

Section 7.5 Term . The term of each share option or SAR shall be determined by the Committee, but shall not exceed a maximum term of 10 years.

Section 7.6 Manner of Exercise .

(a) Each share option may be exercised, in whole or in part, by giving written notice to TORM, specifying the number of A Shares to be purchased. The exercise notice shall be accompanied by the aggregate Exercise Price due for the A Shares to be purchased. The aggregate Exercise Price shall be payable in Danish kroner or in another currency as determined by the Committee and may be paid (i) in cash; (ii) by check; (iii) except as may be prohibited by applicable law, by delivery, or attestation of ownership in accordance with procedures established by the Committee, of A Shares (or Depositary Interests), which A Shares shall be valued for this purpose at the Fair Market Value on the business day preceding the date on which TORM received notice of exercise; (iv) except as may be prohibited by applicable law, by delivery of irrevocable written instructions to a broker approved by TORM (with a copy to TORM) to immediately sell a portion of the A Shares issuable under the option (or the relevant Depositary Interest) and to deliver promptly to TORM the amount of sale proceeds (or loan proceeds if the broker lends funds to the participant for delivery to TORM) to pay the aggregate Exercise Price; (v) if approved by the Committee at its sole discretion and subject to any requirements the Committee may deem fit to impose, through a net exercise procedure whereby the optionee surrenders the option in exchange for that number of A Shares (or Depositary Interests) with an aggregate Fair Market Value equal to the difference between the aggregate Exercise Price of the options being surrendered and the aggregate Fair Market Value of the A Shares subject to the option on the business day preceding the date on which TORM received notice of exercise; or (vi) in such other manner as may be authorized from time to time by the Committee.

(b) A SAR may be exercised, in whole or in part, by giving written notice to TORM, specifying the number of SARs that the holder wishes to exercise. TORM shall, within 30 days of receiving such notice, deliver to the holder, the A Shares (or Depositary Interests ), cash, or combination of A Shares (or Depositary Interests) and cash to which the holder is entitled as provided in the Incentive Agreement, calculated as provided in Section 7.6(c).

(c) If the SAR is payable in cash, then the holder is entitled to a cash payment equal to the appreciation value of the number of A Shares as to which the SAR is being exercised, calculated by (i) subtracting the Exercise Price of the SAR from the Fair Market Value of an A Share on the business day preceding the date on which TORM received notice of exercise then (ii) multiplying by the number of A Shares as to which the SAR is being exercised (such value, the “ Appreciation ”). If the SAR is payable in A Shares (or Depositary Interests ) , then the holder is entitled to receive a number of A Shares (or Depositary Interests ) equal to the Appreciation divided by the Fair Market Value of an A Share on the business day preceding the date on which TORM received notice of exercise, rounded down to the next whole share, with cash paid in lieu of fractional shares.

Section 7.7 No Dividend Equivalent Rights . Participants shall not be entitled to any dividend equivalent rights (or rights in respect of any other distributions made by TORM) for any period of time prior to exercise of the Incentive.

Section 7.8 Cancellation . Upon approval of the Committee, and except as may be prohibited by applicable law, TORM may cancel a previously-granted share option or SAR by mutual agreement with the participant prior to exercise by payment to the holder of the amount per A Share by which: (a) the Fair Market Value of an A Share on the trading day immediately preceding the date of cancellation exceeds (b) the Exercise Price, or by payment of such other mutually agreed upon amount; provided , however , that no such cancellation shall be permitted if prohibited by Section 7.9.

Section 7.9 General Prohibition Against Repricing . Except for adjustments pursuant to Section 13.5 or actions permitted to be taken by the Committee in the event of a Change of Control, unless approved by TORM’s shareholders, (a) the Exercise Price of any outstanding option or SAR granted under the Plan may not be decreased after the date of grant and (b) an outstanding option or SAR that has been granted under the Plan may not, as of any date that such option or SAR has a per share Exercise Price that is greater than the then current Fair Market Value of an A Share, be surrendered to TORM as consideration for the grant of a new option or SAR with a lower Exercise Price, restricted shares, RSUs, an Other Share-Based Award, a cash payment, or Depositary Interests.

Section 7.10 Securities Law Restrictions . By acquiring A Shares (or interests in A Shares) pursuant to the exercise of a share option or SAR, the relevant participant agrees and acknowledges that those A Shares (or Depositary Interests) may be subject to U.S. securities laws restrictions on the transfer of such A Shares (or Depositary Interests) and that the relevant A Shares may be issued to the Depositary and depositary receipts in respect of them may be issued by the Depositary. Each certificate for A Shares (and Depositary Interests) shall bear the following legend:

“The shares of common stock represented hereby have not been registered under the Securities Act of 1933, as amended (the “Act”), or any state securities laws, and may not be sold, assigned, transferred, pledged, hypothecated or otherwise disposed of in the absence of (i) an effective registration statement under the Act and compliance with applicable state securities laws or (ii) an applicable exemption therefrom and an opinion of counsel satisfactory to the issuer that such registration is not required.”

Alternatively, where, in the discretion of the Committee, no physical certificates are issued, the appropriate restrictions may be reflected in the records of TORM’s transfer agent and/or the Depositary.

Section 8. Restricted Shares .

Section 8.1 Grant of Restricted Shares . The Committee may award restricted shares to such eligible participants as provided in this Section 8. An award of restricted shares shall be subject to such restrictions on transfer, forfeitability provisions, and such other terms and conditions, including the attainment of specified performance goals, as the Committee may determine, subject to the provisions of the Plan and applicable law. Restricted shares may, at the absolute discretion of the Committee, be awarded by way of issue of restricted shares to a Depositary and the issue or allocation by the Depositary of Depositary Interests to the relevant participant, such Depositary Interests being subject to like restrictions as the restricted shares.

Section 8.2 The Restricted Period . Subject to Section 6.3, at the time an award of restricted shares is made, the Committee shall establish the period of time during which the shares are restricted (the “ Restricted Period ”), following which the restrictions shall lapse and the restricted shares shall vest. Each award of restricted shares may have a different Restricted Period. The expiration of the Restricted Period shall occur (a) as provided under Section 13.3 in the event of termination of employment under the circumstances as may be provided in the Incentive Agreement and (b) unless otherwise provided in the Incentive Agreement, as described in Section 12 in the event of a Change of Control.

Section 8.3 Escrow . The participant receiving restricted shares shall enter into an Incentive Agreement with TORM setting forth the conditions of the grant. At the direction of the Committee certificates, if issued, representing restricted shares or Depositary Interests in restricted shares may (at the sole discretion of the Committee) be registered in the name of the Depositary or participant and deposited with TORM, together with a stock power endorsed in blank by the participant. Each such certificate may bear legends in substantially the following form:

“The transferability of this certificate and the securities represented by it are subject to the terms and conditions (including conditions of forfeiture) contained in the TORM plc 2018 management incentive plan (the “ Plan ”), and an agreement entered into between the beneficial owner and TORM plc (“ TORM ”) thereunder. Copies of the Plan and the agreement are on file at the principal office of TORM.”; and

Alternatively, in the discretion of the Committee, ownership of the restricted shares or Depositary Interests in restricted shares and the appropriate restrictions may be reflected in the records of TORM’s transfer agent and/or the Depositary and no physical

certificates may be issued. In such case, restricted shares shall be issued to and held by the Depositary which will issue Depositary Interests to the participant or to an employee benefit trust established by the Company or Subsidiary or another nominee (as determined by the Committee), in each case on behalf of the participant.

Section 8.4 Dividends on Restricted Shares . Any and all cash and share dividends and other distributions paid with respect to the restricted shares shall be subject to any restrictions on transfer, forfeitability provisions, or reinvestment requirements as the Committee may, in its discretion, prescribe in the Incentive Agreement.

Section 8.5 Forfeiture . In the event of the forfeiture of any restricted shares or Depositary Interests under the terms provided in the Incentive Agreement (including any additional shares or Depositary Interests that may result from the reinvestment of cash and share dividends, if so provided in the Incentive Agreement), such forfeited shares shall be surrendered and any certificates cancelled. The participants shall have the same rights and privileges, and be subject to the same forfeiture provisions, with respect to any additional shares received pursuant to Section 13.5.

Section 8.6 Expiration of Restricted Period . Upon the expiration or termination of the applicable Restricted Period and the satisfaction of any other conditions prescribed by the Committee, the restrictions applicable to the restricted shares shall lapse and TORM shall direct the transfer agent to remove all restrictions and legends from the book entry for the vested shares and/or Depositary Interests, except for any restrictions and legends that may be imposed by law or regulations.

Section 8.7 Rights as a Shareholder . Subject to the terms and conditions of the Plan and any restrictions on the receipt of dividends and other distributions that may be imposed in the Incentive Agreement, each participant who is registered as the owner of restricted shares shall have all the rights of a shareholder with respect to shares during the Restricted Period, including without limitation, the right to vote such shares. Each participant who receives Depositary Interests instead of restricted shares agrees that the Depositary will be the legal owner of the restricted shares and, accordingly, the participant will not have the rights conferred on shareholders by TORM’s articles of association or under applicable law. As the legal owner of those restricted shares, the Depositary will be entitled to enjoy and exercise all of the rights attached to the restricted shares, provided that, similar to other securities held by depositaries, the Depositary will grant contractual rights to the holders of the Depositary Interests substantially equivalent in effect to the rights attached to the A Shares but not directly enforceable against TORM (subject to compliance with the depositary agreement and applicable law and regulations). Accordingly, the Employee’s ability to exercise shareholder rights in respect of restricted shares will be determined by the agreements between TORM and the Depositary.

Section 9. Restricted Share Units .

Section 9.1 Grant of Restricted Share Units . A restricted share unit, or RSU, represents the right to receive from TORM on the respective scheduled vesting or settlement date for such RSU one A Share (or a Depositary Interest in respect of one A Share). An award of RSUs may be subject to the attainment of specified performance goals or targets, forfeitability provisions, and such other terms and conditions as the Committee may determine, subject to the provisions of the Plan. If decided at the Committee’s discretion from time to time or in relation to specific Persons to grant RSUs, RSUs are intended to be granted annually. No

grant of RSUs in one instance shall automatically entitle any Person to receive grants at any subsequent time.

Section 9.2 Vesting and Settlement . Subject to Section 6.3, at the time an award of RSUs is made, the Committee shall establish the period of time during which the RSUs shall vest and when the RSUs may settle. Settlement may be in A Shares or in Depositary Interests at the Committee’s discretion. Each award of RSUs may have a different vesting or settlement period. An acceleration of the vesting and settlement may occur (a) as provided under Section 13.3 in the event of termination of employment under the circumstances as may be provided in the Incentive Agreement and (b) unless otherwise provided in the Incentive Agreement, as described in Section 12 in the event of a Change of Control.

Section 9.3 Dividend Equivalent Accounts . Subject to the terms and conditions of the Plan and the applicable Incentive Agreement, as well as any procedures established by the Committee, prior to the vesting and settlement of RSUs granted under the Plan, the Committee may determine to pay dividend equivalent rights (or rights to other distributions made by TORM) with respect to RSUs, in which case, unless determined by the Committee to be paid currently, TORM shall establish a bookkeeping account for the participant and reflect in that account any securities, cash, or other property comprising any dividend or property distribution with respect to each A Share underlying each RSU. The participant shall have no rights to the amounts or other property credited to such account except to the extent provided in the Incentive Agreement.

Section 9.4 Rights as a Shareholder . Subject to the restrictions imposed under the terms and conditions of the Plan and any other restrictions that may be imposed in the Incentive Agreement, each participant receiving RSUs shall have no rights as a shareholder with respect to such RSUs until such time as the RSUs vest and A Shares are issued to the participant. Each participant who receives Depositary Interests instead of A Shares agrees that the Depositary will be the legal owner of the A Shares and, accordingly, the participant will not have the rights conferred on shareholders by TORM’s articles of association or under applicable law. As the legal owner of those restricted shares, the Depositary will be entitled to enjoy and exercise all of the rights attached to the A Shares, provided that, similar to other securities held by depositaries, the Depositary will grant contractual rights to the holders of the Depositary Interests substantially equivalent in effect to the rights attached to the A Shares but not directly enforceable against TORM (subject to compliance with the depositary agreement and applicable law and regulations). Accordingly, the participant’s ability to exercise shareholder rights in respect of A Shares will be determined by the agreements between TORM and the Depositary.

Section 10. Other Share-Based Awards .

Section 10.1 Grant of Other Share-Based Awards . Subject to the limitations described in Section 10.2 hereof, the Committee may grant to eligible participants other share-based awards, which shall consist of awards (other than options, SARs, restricted shares, RSUs, or Cash-Based Performance Awards described in Section 7 to Section 9 and Section 11) paid out in A Shares (or Depositary Interests) or the value of which is based in whole or in part on the value of A Shares (“ Other Share-Based Awards ”). Other Share-Based Awards may be awards of A Shares (or Depositary Interests), awards of phantom shares, or may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, shares of, or appreciation in the value of, A Shares (including, without limitation, securities convertible or exchangeable into or exercisable for A Shares (or Depositary

Interests), as deemed by the Committee consistent with the purposes of the Plan. The Committee shall determine the terms and conditions of any Other Share-Based Award (including which rights of a shareholder, if any, the recipient shall have with respect to A Shares (or Depositary Interests) associated with any such award) and may provide that such award is payable in whole or in part in cash. An Other Share-Based Award may be subject to the attainment of such specified performance goals or targets as the Committee may determine, subject to the provisions of the Plan.

Section 10.2 Vesting . Subject to Section 6.3, at the time that an Other Share-Based Award is made, the Committee shall establish the period of time during which the Other Share-Based Award shall vest and following which all restrictions shall lapse. Each award of Other Share-Based Award may have a different vesting period. An acceleration of the vesting period shall occur (a) as provided under Section 13.3 in the event of termination of employment under the circumstances as may be provided in the Incentive Agreement and (b) unless otherwise provided in the Incentive Agreement, as described in Section 12 in the event of a Change of Control.

Section 11. Cash-Based Performance Awards . The Committee may grant Incentives in the form of cash-based performance awards to eligible participants, which shall consist of the opportunity to earn awards based on performance and valued in Danish kroner (or in another currency as determined by the Committee) rather than A Shares (or Depositary Interests) (“ Cash-Based Performance Awards ”). At the Committee’s election and as provided in the Incentive Agreement, Cash-Based Performance Awards may be settled in cash, A Shares (or Depositary Interests), or a combination of them. A Cash-Based Performance Award shall be subject to such terms and conditions, including the attainment of specified performance goals, as the Committee may determine, subject to the provisions of the Plan. Subject to Section 6.3, at the time that a Cash-Based Performance Award is granted, the Committee shall establish the vesting criteria for such Incentive, including, as applicable, the performance period, the time or times at which any payout shall be deemed vested and payable. An acceleration of vesting shall occur (a) as provided under Section 13.3 in the event of termination of employment under the circumstances as may be provided in the Incentive Agreement and (b) unless otherwise provided in the Incentive Agreement, as described in Section 12 in the event of a Change of Control.

Section 12. Change of Control .

Section 12.1 Change of Control Defined . Unless otherwise provided in an Incentive Agreement, “ Change of Control” shall mean:

(a) A transaction or series of transactions, including a Business Reorganisation, that results in:

(1) the Sponsor Group holding Beneficial Ownership of less than 1/3 of the issued and outstanding A Shares or common stock in TORM or the Successor Corporation (as applicable); AND

(2) the acquisition by any Person (other than the Sponsor Group) of Beneficial Ownership of 1/3 or more of the issued and outstanding A Shares or common stock in TORM or the Successor Corporation (as applicable); or

(b) approval by the shareholders of TORM or the Successor Corporation (as applicable) of a complete winding-up, liquidation or dissolution of TORM or the Successor Corporation (as applicable).

Notwithstanding anything herein to the contrary, the following transactions shall not constitute a Change of Control: (i) a reorganization, merger or consolidation amongst members of the Group, (ii) any acquisition of A Shares (or Depositary Interests) by TORM or its subsidiaries, (iii) any acquisition of A Shares (or Depositary Interests) by any employee benefit plan (or related trust) sponsored or maintained by the Group, (iv) a reincorporation or redomiciliation of a member of the Group in a different jurisdiction, or (v) changes to the Group’s holding structure, a listing of a member of the Group or any other transaction, in each case, in which there is no substantial change in the Beneficial Ownership of the Group. See also Section 13.5 ( Adjustment ) below.

Section 12.2 Effect of a Change of Control .

(i) Except as otherwise provided in an Incentive Agreement and notwithstanding any other provision of the Plan, in the event of a Change of Control, all outstanding Incentives shall, as determined by the Committee in its sole discretion:

(ii) be assumed or an equivalent award shall be substituted by the successor corporation or a parent or subsidiary of such successor corporation, or

(iii) become vested and immediately and fully exercisable, during such period immediately prior to such Change of Control as may be determined by the Committee, and all forfeiture restrictions shall be waived, or

(iv) cancelled by the Committee for Fair Market Value (as determined by the Committee), which in the case of any Incentives that set out a strike price, exercise price or similar payment obligation, may equal the excess of the Change of Control Value over such strike price, exercise price or similar payment obligation.

(b) For the purposes of this Section, the Incentive shall be considered assumed or substituted if, following the transaction, the Incentive confers the right to purchase or receive, for each A Share or Depositary Interest subject to the Incentive immediately before the transaction, the consideration (whether stock, other securities or property) received in the transaction by Beneficial Owners of A Shares for each A Share or Depositary Interest beneficially owned on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the Beneficial Owners of a majority of the outstanding A Shares or Depositary Interests, pursuant to the transaction (but not any statutory squeeze out or other procedure resulting from the transaction) but for those purposes ignoring those Beneficial Owners who are not entitled to elect for certain types of consideration for legal or regulatory reasons); provided, however, that if such consideration received in the transaction is not solely common stock of the successor corporation, its parent or subsidiary, then the Committee may, with the consent of the successor corporation, its parent or subsidiary, provide for the consideration to be received upon the exercise of the Incentive, for each A Share or Depositary Interest, subject to the Incentive, to be solely

common stock of the successor corporation its parent or subsidiary, equal in Fair Market Value to the per share consideration received by holders of A Shares in the transaction.

Section 13. General .

Section 13.1 Duration . No Incentives may be granted under the Plan after the date that is 10 years following the Adoption Date; provided , however , that the Plan shall remain in effect after such date with respect to Incentives granted prior to that date, until all such Incentives have either been satisfied by the issuance of A Shares (or Depositary Interests) or otherwise been terminated under the terms of the Plan and all restrictions imposed on A Shares (or Depositary Interests) in connection with their issuance under the Plan have lapsed.

Section 13.2 Transferability . No Incentives granted hereunder may be transferred, pledged, assigned or otherwise encumbered by a participant, except: (a) by will; (b) by the laws of descent and distribution; or (c) if permitted by the Committee (i) to Immediate Family Members, (ii) to a partnership in which the participant and/or Immediate Family Members, or entities in which the participant and/or Immediate Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole partners, (iii) to a limited liability company in which the participant and/or Immediate Family Members, or entities in which the participant and/or Immediate Family Members are the sole owners, members or beneficiaries, as appropriate, are the sole members, or (iv) to a trust for the sole benefit of the participant and/or Immediate Family Members. Any attempted assignment, transfer, pledge, hypothecation or other disposition of Incentives, or levy of attachment or similar process upon Incentives not specifically permitted herein, shall be null and void and without effect.

Section 13.3 Effect of Termination of Employment or Death . In the event that a participant ceases to be an employee of the Group or to provide services to the Group for any reason, including death, disability, early retirement, or normal retirement, any Incentives may be exercised, shall vest, or shall expire at such times as may be determined by the Committee and provided in the Incentive Agreement (in compliance with applicable law).

Section 13.4 Additional Conditions . Anything in the Plan to the contrary notwithstanding, TORM shall have no obligation to issue any Incentives or A Shares (or Depositary Interests) pursuant to the Plan unless the issuance and delivery of such Incentives or A Shares (or Depositary Interests) complies with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which the Incentives or A Shares (or Depositary Interests) may then be listed. The Committee may require, as a condition to the issuance of Incentives or A Shares (or Depositary Interests), that the participant make such covenants, agreements and representations, and that any certifications representing the Incentives bear such legends, as the Committee deems necessary or desirable.

Section 13.5 Adjustment .

(a) Notwithstanding anything to the contrary herein, in the event of any transaction or series of transactions resulting in a change in the Group’s holding structure or change in the outstanding share capital of TORM after the Adoption Date by reason of reorganization, recapitalization, reclassification, redomiciliation, stock dividend, stock split, stock issuance, combination of shares, stock exchange, corporate exchange or Business Reorganisation or other similar transaction which does not constitute a Change of Control under Section 12.1(a), including for the avoidance of doubt, a Business Reorganisation

whereby a Successor Corporation of the Group is established through which the Sponsor Group holds at least an equivalent economic interest in the Group as it currently holds through TORM, the Committee at its discretion and without liability to any Person shall make such substitution or adjustment as it deems to be equitable, as to (i) the number or kind of shares or other securities issued or to be issued pursuant to the Plan or pursuant to outstanding Incentives, including to substitute Incentives existing prior to the transaction with substantially the same rights in such acquiring Successor Corporation (ii) the strike price or exercise price of any Incentive, or (iii) any other affected terms of the Plan or an Incentive.

(b) Without prejudice to the generality of the foregoing, the Committee may at its discretion determine that following any applicable transaction described in this section, an Incentive shall confer the right to purchase or receive, for each A Share (or Depositary Interests) subject to the Incentive immediately before the transaction, the consideration (whether stock, other securities or property) received in the transaction by holders of A Shares (or Depositary Interests) for each A Share (or Depositary Interest) held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding A Shares (or Depositary Interests), pursuant to the transaction (but not any statutory squeeze out or other procedure resulting from the transaction); provided, however, that if such consideration received in the transaction is not solely common stock of the successor corporation, its parent or subsidiary, then the Committee may, with the consent of the successor corporation, its parent or subsidiary, provide for the consideration to be received upon the exercise of the Incentive, for each A Share (or Depositary Interest in an A Share) subject to the Incentive, to be solely common stock of the successor corporation its parent or subsidiary, equal in Fair Market Value to the per share consideration received by holders of shares in A Shares in the transaction.

(c) No substitution or adjustment shall require the issuance of a fractional share under the Plan and the substitution or adjustment shall be limited by deleting any fractional share.

Section 13.6 No Continued Employment . No participant under the Plan shall have any right, because of his or her participation, to continue in the employ of the Group for any period of time or to any right to continue his or her present or any other rate of compensation.

Section 13.7 Amendments to or Termination of the Plan . The Committee may amend or discontinue the Plan at any time; provided , however , that to no such amendment may:

(a) materially revise the Plan without the approval of the shareholders to the extent such approval is required under applicable listing standards of any exchange on which A Shares (or Depositary Interests) are listed;

(b) amend Section 7.9 to permit repricing of options or SARs without the approval of shareholders; or

(c) materially impair, without the consent of the recipient, an Incentive previously granted, except that the Group retains all of its rights under Section 12.

For the avoidance of doubt, nothing in this Section 13.7 shall impair the Committee’s rights under Section 13.5.

A material revision of the Plan as used in this Section 13.7 includes (1) except for adjustments permitted herein, a material increase to the maximum number of A Shares (or Depositary Interests) that may be issued through the Plan; (2) a material increase to the benefits accruing to participants under the Plan; (3) a material expansion of the classes of Persons eligible to participate in the Plan; (4) an expansion of the types of Incentives available for grant under the Plan; (5) a material extension of the term of the Plan; and (6) a material change that reduces the price at which A Shares (or Depositary Interests) may be offered through the Plan.

Section 13.8 Definition of Fair Market Value . Whenever “ Fair Market Value ” of a member of the Group’s shares are required to be determined for purposes of the Plan, it shall be determined in good faith by the Committee, and if such shares are listed, then, shall be based on the closing sale price on the applicable date (or if no sale of the shares shall have been made on that day, on the next preceding day on which there was a sale of the shares) on the consolidated transaction reporting system of the stock exchange with the greatest volume of trading in the Group’s shares during the immediately preceding 90 days prior to the time of determination (as such volume is reported in any source the Committee deems reliable). The determination of the Committee shall be conclusive and binding on all Persons.

Section 13.9 Sub-plans . The Committee may establish sub-plans under the Plan for purposes of satisfying securities, tax, or other laws of various jurisdictions in which the Group intends to grant Incentives. Any sub-plans shall contain such limitations and other terms and conditions as the Committee determines are necessary or desirable. All sub-plans shall be deemed a part of the Plan, but any sub-plan shall apply only to the participants specified in that sub-plan, whether specified by individual name, job-title, classification, employer, or jurisdiction.

Section 13.10 No Trust or Fund Created . Neither the Plan nor any Incentive shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Group and a participant or any other Person. To the extent that any Person acquires the right to receive payments from the Group pursuant to an Incentive, such right shall be no greater than the right of any unsecured general creditor of the Group.

Section 13.11 Tax . Unless otherwise agreed in writing, the Group shall have the power and right to deduct or withhold from any amount payable to a participant under the Plan or otherwise, or require a participant to remit to the Group, an amount sufficient to satisfy any taxes employee national insurance contributions, social security charges (as applicable) or penalties required by applicable law or regulation to be paid (whether following withholding or otherwise) with respect to any taxable event arising as a result of the Plan. Unless otherwise agreed in writing, Plan participants are solely responsible and liable for the satisfaction of any tax liability, employee national insurance contributions, other social security charges (as applicable) or penalties that may arise in connection with Incentives and the Group shall not have any obligation to indemnify or otherwise hold any such Person harmless from any or all of such taxes, employee national insurance contributions, other social security charges (as applicable) or penalties. The participant shall make all tax elections and filings required by applicable law or as reasonably required by the Committee within the time limits required by law and provide to the Group such information as it shall require for the purposes of fulfilling its obligations in respect of any such filings and elections. Unless otherwise agreed in writing, the participant shall indemnify the Group against, and shall pay to the Group, the full amount of any tax, employee national insurance contribution, any other social security charge or penalty arising from any Incentive within 90 days of that liability arising to the extent that the Group has not recovered such amounts from the participant by way of deduction or withholding

from any other payment. Subject to applicable law and at its discretion, the Group shall have the power and right to transfer to the relevant employee social security liabilities of the applicable member of the Group.

Section 13.12 Offset . If a participant under the Plan becomes entitled to a cash payment under an Incentive, and if at such time, the participant has any outstanding debt, obligation or other liability representing an amount owed to the Group, then the Group, upon a determination of the Committee and to the extent permitted by applicable law, may offset such amount so owing against the amount of cash otherwise distributable.

Section 13.13 Governing Law . The Plan will be construed and administered in accordance with the laws of England and Wales, without giving effect to principles of conflict of laws and subject to the non-exclusive jurisdiction of the English courts.

Section 13.14 Severability . If any term or provision of the Plan shall at any time or to any extent be invalid, illegal, or unenforceable in any respect as written, in whole or in part, such provision shall be deemed modified or limited to the extent necessary to render it valid and enforceable to the fullest extent allowed by law. Any such provision that is not susceptible of such reformation shall be ignored so as to not affect any other term or provision hereof, and the remainder of the Plan, or the application of such term or provision to Persons or circumstances other than those as to which it is held invalid, illegal or unenforceable, shall not be affected thereby and each term and provision of the Plan shall be valid and enforced to the fullest extent permitted by law.

EXECUTION VERSION

TERM FACILITY AGREEMENT US$70,000,000

			LAW FIRM WWW.KROMANNREUMERT.COM CVR NO. DK 62 60 67 11 RESPONSIBLE PARTNER THOMAS KAAS MAY 2018 MATTER ID. 1046164 CML/CML DOC. NO. 51275537-21

Between	TORM PLC as Borrower
and	TORM A/S VESSELCO 6 K/S as Guarantors
arranged by	ABN AMRO BANK N.V. as Arranger
with	ABN AMRO BANK N.V. as Original Lender
and	ABN AMRO BANK N.V. as Agent and Security Agent


Date	7 May	2018

COPENHAGEN

SUNDKROGSGADE 5

DK-2100 COPENHAGEN Ø

AARHUS

RÅDHUSPLADSEN 3

DK-8000 AARHUS C

LONDON

65 ST. PAUL'S CHURCHYARD

LONDON EC4M 8AB

CONTENTS

1.	DEFINITIONS AND INTERPRETATION	6
2.	THE FACILITY	32
3.	PURPOSE	35
4.	CONDITIONS OF UTILISATION	35
5.	UTILISATION	36
6.	REPAYMENT	37
7.	ILLEGALITY, PREPAYMENT AND CANCELLATION	38
8.	INTEREST	41
9.	INTEREST PERIODS	42
10.	CHANGES TO THE CALCULATION OF INTEREST	42
11.	FEES	44
12.	TAX GROSS UP AND INDEMNITIES	45
13.	INCREASED COSTS	51
14.	OTHER INDEMNITIES	53
15.	MITIGATION BY THE LENDERS	57
16.	COSTS AND EXPENSES	57
17.	GUARANTEE AND INDEMNITY	59
18.	REPRESENTATIONS	62
19.	INFORMATION UNDERTAKINGS	70
20.	FINANCIAL COVENANTS	73
21.	GENERAL UNDERTAKINGS	77
22.	DEALINGS WITH MORTGAGED VESSELS	81

23.	CONDITION AND OPERATION OF MORTGAGED VESSELS	84
24.	INSURANCE	87
25.	MINIMUM SECURITY VALUE	91
26.	BANK ACCOUNTS	95
27.	BUSINESS RESTRICTIONS	95
28.	HEDGING	98
29.	EVENTS OF DEFAULT	99
30.	TRANSACTION SECURITY	104
31.	CHANGES TO THE LENDERS	107
32.	CHANGES TO THE OBLIGORS	111
33.	ROLES OF AGENT, ARRANGER AND BASE REFERENCE BANKS	112
34.	THE SECURITY AGENT	121
35.	CONDUCT OF BUSINESS BY THE FINANCE PARTIES	128
36.	SHARING AMONG THE FINANCE PARTIES	129
37.	PAYMENT MECHANICS	130
38.	SET OFF	134
39.	NOTICES	135
40.	CALCULATIONS AND CERTIFICATES	136
41.	PARTIAL INVALIDITY	137
42.	REMEDIES AND WAIVERS	137
43.	AMENDMENTS AND GRANT OF WAIVERS	137
44.	COUNTERPARTS	140
45.	CONFIDENTIALITY	140

46.	RESTRICTION ON DEBT PURCHASE TRANSACTIONS	144
47.	CONFIDENTIALITY OF FUNDING RATES AND BASE REFERENCE BANK QUOTATIONS	144
48.	GOVERNING LAW	145
49.	ENFORCEMENT	145
50.	PATRIOT ACT	146
51.	CONTRACTUAL RECOGNITION OF BAIL-IN	146

SCHEDULE 1 - THE ORIGINAL PARTIES	150
SCHEDULE 2 - VESSEL INFORMATION	153
SCHEDULE 3 - CONDITIONS PRECEDENT	154
SCHEDULE 4 - FORM OF UTILISATION REQUEST	161
SCHEDULE 5 - FORM OF SELECTION NOTICE	162
SCHEDULE 6 - FORM OF TRANSFER CERTIFICATE	163
SCHEDULE 7 - FORM OF ASSIGNMENT AGREEMENT	166
SCHEDULE 8 - FORM OF COMPLIANCE CERTIFICATE	169
SCHEDULE 9 - FORM OF INCREASE CONFIRMATION	170
SCHEDULE 10 - SCHEDULED AMORTISATION PAYMENTS	173
SCHEDULE 11 - FORM OF ACCESSION DEED	174
SCHEDULE 12 - GROUP STRUCTURE CHART	177

PARTIES

This term facility agreement (the " Agreement ") is made

between	TORM PLC (Companies House registration number 09818726) Birchin Court, 20 Birchin Lane London EC3V 9DU United Kingdom ("the “ Borrower ”)
and	The Entities listed in Schedule 1 ( The Original Parties ) as guarantors (the “ Original Guarantors ”)
arranged by	ABN AMRO BANK N.V. (the " Arranger ")
with	ABN AMRO BANK N.V. (the " Original Lender ")
and	ABN AMRO BANK N.V. as agent for the other Finance Parties (the " Agent ")
and	ABN AMRO BANK N.V. as security agent and trustee for the Secured Parties (the " Security Agent ")

1.	DEFINITIONS AND INTERPRETATION

1.1	Definitions

In this Agreement:

“ Acceptable Bank ” means:

a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A- or higher by Standard & Poor’s Rating Services or A3 or higher by Moody’s Investors Service Limited or a comparable rating from an internationally recognised credit rating agency; or

any other bank or financial institution approved by the Agent (acting on the instructions of the Majority Lenders).

“ Accession Deed ” means an accession deed executed by any Additional Guarantor, as accepted by the Agent, for accession to this Agreement, substantially in the form set out in Schedule 11 ( Form of Accession Deed ) .

“ Account ” means any bank account, deposit or certificate of deposit opened, made or established by the Owner.

“ Account Bank ” means, in relation to any Account, either the Agent (or if the Agent is replaced its successor) or the Security Agent (or if the Security Agent is replaced, its successor) or another bank or financial institution approved by the Majority Lenders (acting reasonably) at the request of the Borrower.

“ Accounting Reference Date ” means 31 December or such other date as may be approved by the Lenders.

“ Additional Guarantor ” means a company which becomes an Additional Guarantor in accordance with Clause 32 ( Changes to the Obligors ).

“ Affiliate ” means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company. For the purpose of ABN AMRO Bank N.V., “Affiliate” shall exclude the State of the Netherlands and any of its Subsidiaries other than ABN AMRO Bank N.V., but shall include any entity that acquires the business of ABN AMRO Bank N.V. to which the State of the Netherlands is entitled.

“ Applicable Code ” means any code or prescribed procedures required to be observed by a Mortgaged Vessel or the persons responsible for its operation under any applicable law (including, but not limited to, those currently known as the ISM Code and the ISPS Code).

“ Approved Brokers ” means the ship broker/consultancy firms Clarksons Platou, Maersk Broker, Braemar ACM, Arrow Shipbrokers, Fearnleys, SSY Valuation Services Limited, Inge Steensland, BRS and Lorentzen & Stemoco (or, in each case, any of their Affiliates) and such other reputable international and independent consultancy or ship broker firm approved in advance by the Agent (acting reasonably).

“ Approved Technical Manager ” means any of Fleet Ship Management Inc. (British Virgin Islands), Wallem, Executive Ship Management, V-Group, Synergy Marine Group, Anglo Eastern, Bernard Schulte Shipmanagement and Thome Group together with any of their Affiliates; provided that the identity of any new technical manager is

promptly notified to the relevant Mortgaged Vessel's insurers and a copy of the addenda to the relevant insurances reflecting the new technical manager is promptly provided to the Security Agent.

“ Assignment Agreement ” means an agreement substantially in the form set out in Schedule 7 ( Form of Assignment Agreement ) or any other form agreed between the relevant assignor and assignee.

“ Auditors ” means the Borrower’s current auditors or any other firm appointed by the Borrower to act as its statutory auditors, in each case, having the necessary skills and experience to audit a group of companies such as the Group.

“ Authorisation ” means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

“ Availability Period ” means the period from and including the date of this Agreement to and including 27 July 2020.

“ Available Commitment ” means, in relation to each Lender, its Commitment minus:

the amount of its participation in any outstanding Utilisations; and

in relation to any proposed Utilisation, the amount of its participation in any other Utilisations that are due to be made on or before the proposed Utilisation Date.

“ Available Facility ” means the aggregate for the time being of the Lenders' Available Commitments.

“ Bareboat Charter ” means each bareboat charter contract between (i) the Owner and the Borrower; (ii) the Borrower and TORM A/S, or (iii) the Owner and TORM A/S, as the case may be, in each case in form and substance satisfactory to the Agent.

“ Bareboat Charterer ” means each of the Borrower and TORM A/S, as the case may be.

“ Base Reference Bank Quotation ” means any quotation supplied to the Agent by a Base Reference Bank.

“ Base Reference Bank Rate " means, in relation to LIBOR, the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Base Reference Banks:

(other than where paragraph b) below applies) as the rate at which the relevant Base Reference Bank could borrow funds in the London interbank market in the relevant currency and for the relevant period were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or

if different, as the rate (if any and applied to the relevant Base Reference Bank and the relevant currency and period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator.

“ Base Reference Banks ” means, in relation to LIBOR, the principal London offices of ABN AMRO Bank N.V. or such other banks as may be appointed by the Agent in consultation with the Borrower.

“ Break Costs ” means the amount (if any) by which:

the interest (excluding the Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loan or Unpaid Sum to the last day of the current Interest Period in respect of the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

exceeds:

the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the London interbank market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

“ Business Day ” means a day (other than a Saturday or Sunday) on which banks are open for general business in Copenhagen, Amsterdam, New York and London (or any other relevant place of payment under Clause 37 ( Payment Mechanics )).

“ Cash ” shall have the meaning given to such term in Clause 20.1 ( Financial definitions ).

“ Change in Ultimate Beneficial Owner ” means in respect of an Obligor any event by which a private individual (i) acquires the legal and/or beneficial ownership (directly or indirectly) of 25 per cent. (25%) or more of the issued share capital of that Obligor or (ii) acquires the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to (directly or indirectly) cast, or control the casting of, 25 per cent. (25%) or more of the votes that might be cast at a general meeting of that Obligor or (iii) gains effective control over that Obligor (such private individual being referred to as the “ Ultimate Beneficial Owner ”).

“ Change of Control ” means either:

any person or group of persons acting in concert gains direct or indirect control of the Borrower where:

“ control ” of the Borrower means:

the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:

cast, or control the casting of, more than 50 per cent (50%). of the maximum number of votes that might be cast at a general meeting of the Borrower; or

II)

appoint or remove the chairman of the board of directors or the majority of the directors or other equivalent officers of the Borrower; or

III)

give directions with respect to the operating and financial policies of the Borrower with which the directors or other equivalent officers of the Borrower are obliged to comply; and/or

the holding beneficially of more than 50 per cent. (50%) of the issued share capital of the Borrower (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); and

ii)

“ acting in concert ” means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Borrower by any of them, either directly or indirectly, to obtain or consolidate control of the Borrower,

provided that for the avoidance of doubt no action by the Lenders (in any capacity) shall result in those Lenders being deemed to be acting in concert for this purpose; or

the Sponsor, directly or indirectly, either:

ceases to be able through its appointees to the Borrower’s board of directors (including the chairman (who shall have the casting vote)) to control the board of directors of the Borrower; or

ii)

ceases to own or control at least 33.34 per cent. (33.34%) of the maximum number of votes that might be cast at a general meeting of the Borrower.

“ Charged Property ” means all of the assets of the Obligors which from time to time are, or are expressed or intended to be, the subject of the Security Documents.

“ Charter ” means in relation to a Mortgaged Vessel, any charter commitment or similar contract of employment of that Mortgaged Vessel made between TORM A/S (or any other Group Member, if relevant) and a charterer that is not a Group Member.

“ Charter Documents ” means, in relation to a Mortgaged Vessel, each Charter of that Mortgaged Vessel, any documents supplementing it and any guarantee or security given by any person for the relevant charterer’s obligations under it, as applicable.

“ Classification ” means, in relation to a Mortgaged Vessel, the classification with the relevant Classification Society specified in respect of such Mortgaged Vessel in Schedule 2 ( Vessel Information ) (or, in the case of any vessel mortgaged as additional security pursuant to Clause 25.13 ( Creation of Additional Security ), the classification with a Classification Society notified to the Agent as at the date of creation of such mortgage).

“ Classification Society ” means, in relation to a Mortgaged Vessel, Lloyds Register, DNV GL, American Bureau of Shipping, Bureau Veritas or ClassNK or another classification society approved by the Agent (acting reasonably) at the request of the Owner.

“ Code ” means the US Internal Revenue Code of 1986.

“ Commitment ” means:

in relation to the Original Lender, the amount relating to the Original Lender in respect of the “Commitment” in Schedule 1 ( The Original Parties ) and the amount of any other Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 ( Increase ); and

in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 ( Increase ),

to the extent not cancelled, reduced or transferred by it under this Agreement.

“ Compliance Certificate ” means a certificate substantially in the form set out in Schedule 8 ( Form of Compliance Certificate ) or otherwise in form and substance satisfactory to the Agent.

“ Confidential Information ” means all information relating to an Obligor, the Group, the Finance Documents or the Facility of which a Finance

Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

any Group Member or any of its advisers; or

another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any Group Member or any of its advisers,

information that:

is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 45 ( Confidentiality ); or

is identified in writing at the time of delivery as non‑confidential by any Group Member or any of its advisers; or

is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs a) or b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and

ii)

any Funding Rate or Base Reference Bank Quotation.

“ Confidentiality Undertaking ” means a confidentiality undertaking substantially in a recommended form of the LMA amended so as to be addressed to or capable of being relied upon by the Borrower without requiring its signature by virtue of reliance on the Third Parties Act or in any other form agreed between the Borrower and the Agent (a copy of which is provided to the Borrower as soon as reasonable practicable following execution).

“ Constitutional Documents ” means, in respect of an Obligor, such Obligor’s certificate of incorporation, memorandum and articles of association, by‑laws or similar or other constitutional documents including as referred to in any certificate relating to the Agent pursuant to this Agreement.

" Copenhagen Stock Exchange " means NASDAQ Copenhagen A/S.

“ Debt Purchase Transaction ” means, in relation to a person, a transaction where such person:

purchases by way of assignment or transfer;

enters into any sub‑participation in respect of; or

enters into any other agreement or arrangement having an economic effect substantially similar to a sub‑participation in respect of,

any Commitment or amount outstanding under this Agreement.

“ Default ” means an Event of Default or any event or circumstance which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.

“ Defaulting Lender ” means any Lender:

which has failed to make its participation in the Loan available or has notified the Agent that it will not make its participation in the Loan available by the Utilisation Date in accordance with Clause 5.4 ( Lenders’ Participation );

which has otherwise rescinded or repudiated a Finance Document; or

with respect to which an Insolvency Event has occurred and is continuing, unless, in the case of paragraph a) above:

its failure to pay is caused by:

administrative or technical error; or

a Payment Disruption Event; and,

ii)

payment is made within three (3) Business Days of its due date; or

iii)

the relevant Lender is disputing in good faith whether it is contractually obliged to make the payment in question.

“ Delegate ” means any delegate, agent, attorney or co-trustee appointed by the Security Agent.

“ Disposal Proceeds ” means, in relation to the sale of a Mortgaged Vessel, the proceeds to the Owner or any other Group Member from such sale (net of fees, costs, and expenses payable by the Owner or any Group Member in connection with such sale).

“ Disposal Repayment Date ” means in relation to:

a Total Loss of a Mortgaged Vessel, the applicable Total Loss Repayment Date; or

a sale of a Mortgaged Vessel by the Owner, the date upon which such sale is completed by the transfer of title to the relevant purchaser in exchange for payment of all or part of the relevant purchase price.

“ Dollars ” or “ US$ ” means the lawful currency of the US.

“ Earnings ” means, in relation to a Mortgaged Vessel and a person, all money at any time payable to that person for or in relation to the use or operation of such Mortgaged Vessel including freight, hire and passage moneys and/or for the provision of services by or from such Mortgaged Vessel or under any charter commitment, requisition for hire compensation, remuneration for salvage and towage services, demurrage and detention moneys, damages for breach and payments for termination or variation of any charter commitment, contributions in general average, any claims under any guarantees related to freight and/or hire payable to an Obligor as a consequence of the operation of that Mortgaged Vessel, all moneys which are at any time payable under the Insurances relating to such Mortgaged Vessel in respect of loss of earnings, if and when that Mortgaged Vessel is employed on terms whereby any moneys described in this definition are pooled or shared with any other person,

the proportion of the net receipts of the relevant pooling or sharing arrangements which are attributable to such Mortgaged Vessel and any other money whatsoever due or to become due to an Obligor from third parties in relation to that Mortgaged Vessel, or otherwise.

“ Environmental Approval ” means any permit or Authorisation and the filing of any notification, report or assessment required for the operation of the Fleet Vessels under any Environmental Law applicable to the operation of such Fleet Vessel.

“ Environmental Claim ” means

any claim by any governmental, judicial or regulatory authority which arises out of an Environmental Incident or an alleged Environmental Incident or which relates to any Environmental Law; or

any claim by another person which relates to an Environmental Incident or to an alleged Environmental Incident,

and “ claim ” means a claim for damages, compensation, fines, penalties or any other payment of any kind whether or not similar to the foregoing; an order or direction to take, or not to take, certain action or to desist from or suspend certain action; and any form of enforcement or regulatory action, including the arrest or attachment of any asset.

“ Environmental Incident ” means

any Release from any Fleet Vessel;

any incident in which Hazardous Material is Released from a vessel other than a Fleet Vessel and which involves a collision between a Fleet Vessel and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Fleet Vessel is actually or is reasonably likely to be arrested, attached, detained or injuncted and/or a Fleet Vessel and/or the relevant owner or Owner and/or any operator or manager of a Fleet Vessel is at fault or allegedly at fault or is reasonably likely to be subject to any legal or administrative action; or

any other incident in which Hazardous Materials are Released otherwise than from a Fleet Vessel and in connection with which a Fleet Vessel is actually or reasonably likely to be arrested and/or where the relevant owner or Owner and/or any operator or manager of a Fleet Vessel is at fault or allegedly at fault or is reasonably likely to be subject to any legal or administrative action.

“ Environmental Laws ” means any law relating to pollution or protection of the environment, to the carriage of Hazardous Materials or to actual or threatened Release of Hazardous Materials.

“ Event of Default ” means any event or circumstance specified as such in Clause 29 ( Events of Default ).

“ Existing Charter Agreement ” means in relation to a Mortgaged Vessel, each charter commitment that is for a period in excess of thirteen (13) months (including any optional or automatic extension periods), if any, in effect on the date of delivery of that Mortgaged Vessel details of which are provided in Schedule 2 ( Vessel information ) .

“ Facility ” means the term loan facility made available under this Agreement as described in Clause 2 ( The Facility ).

“ Facility Office ” means:

in respect of a Lender, the office or offices notified by that Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five (5) Business Days’ written notice) as the office through which it will perform its obligations under this Agreement; or

in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes.

“ Facility Period ” means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies the Borrower and the other Obligors (which the Agent shall do promptly) that:

all amounts which have become due for payment by the Borrower or any other party under the Finance Document have been paid;

no amount is owing or has accrued (without yet having become due for payment) under any of the Finance Documents;

the Borrower has no future or contingent liability under any provision of this Agreement and the other Finance Documents; and

there are no Commitments in force.

“ Fallback Interest Period ” means three (3) months.

“ FATCA ” means:

sections 1471 to 1474 of the Code or any associated regulations;

any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph a) above; or

any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs a) or b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

“ FATCA Application Date ” means:

in relation to a “ withholdable payment ” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

in relation to a “ withholdable payment ” described in section 1473(1)(A)(ii) of the Code (which relates to “ gross proceeds ” from the disposition of property of a type that can produce interest from sources within the US), 1 January 2019; or

in relation to a “ passthru payment ” described in section 1471(d)(7) of the Code not falling within paragraphs a) or b) above, 1 January 2019,

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

“ FATCA Deduction ” means a deduction or withholding from a payment under a Finance Document required by FATCA.

“ FATCA Exempt Party ” means a Party that is entitled to receive payments free from any FATCA Deduction.

“ Fee Letter ” means any letter between the Borrower and any Finance Party setting out any of the fees referred to in Clause 11 ( Fees ) or any other fees referred to in this Agreement.

“ Final Repayment Date ” means, subject to Clause 37.8 ( Business Days ), in relation to the Loan, the date that falls 5 (five) years after the Initial Borrowing Date, but in any event no later than 31 December 2024.

“ Finance Documents ” means this Agreement, any Fee Letter, the Subordination Deed, the Security Documents, any Transfer Certificate or Assignment Agreement, any Selection Notice, any Accession Deed and any other document designated as such by the Agent and the Borrower.

“ Finance Party ” means the Agent, the Security Agent, the Arranger, or a Lender.

" Finance Lease " means any lease or hire purchase contract, a liability under which would, in accordance with GAAP, be treated as a balance sheet liability (other than a lease or hire purchase contract which would, in accordance with GAAP in force on the date of this Agreement have been treated as an operational lease).

“ Financial Indebtedness ” means any indebtedness for or in respect of:

moneys borrowed and debit balances at banks or other financial institutions;

any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

the amount of any liability in respect of any Finance Leases;

receivables sold or discounted (other than any receivables to the extent they are sold on a non‑recourse basis);

any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close‑out of that Treasury Transaction, that amount) shall be taken into account);

any counter‑indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability of an entity which is not a Group Member, which liability would fall within one of the other paragraphs of this definition;

asset or service in question or (ii) the agreement is in respect of the supply of assets or services (other than legal or accounting services) and payment is due more than ninety (90) days after the date of supply;

any amounts raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Final Repayment Date or which would under relevant applicable accounting principles be classified as borrowings under GAAP;

the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs a) to j) above.

“ Flag State ” means, in relation to a Mortgaged Vessel, the country specified in respect of such Mortgaged Vessel in (Vessel Information), or such other state or territory as may be approved by all the Lenders, at the request of the Owner, as being the “Flag State” of such Mortgaged Vessel for the purposes of the Finance Documents, provided that, subject to Clause 22.1 ( Vessel’s name and Registration ), each of Singapore, Denmark, Norway, United Kingdom, Isle of Man, Bahamas, Bermuda, Panama, Malta, Marshall Islands, Cyprus, Hong Kong and Liberia shall be deemed to be approved by the Lenders as being a Flag State.

“ Fleet Vessel ” means each Mortgaged Vessel and any other vessel owned by any Group Member or, for purposes of the definitions of "Environmental Approval", "Environmental Incident", and "Release" and Clause 14.6 ( Environmental Indemnity ), and Clause 21.10 ( Environmental Matters ), operated by any Group Member.

“ Forecast ” means:

the Original Forecast; and

in relation to any other period, any forecast delivered by the Borrower to the Agent in respect of that period pursuant to paragraph c) of Clause 19.1 (Financial Statements).

“ Forward Freight Agreement ” means a forward freight agreement made or (as the context may require) to be made between the Borrower and any counterparty thereto in relation to the purposes set out in Clause 28 ( Hedging ), each based on (i) the 2007 terms and conditions of the Forward Freight Agreement Brokers’ Association standard contract and/or (ii) the 2002 ISDA Master Agreement and Schedule thereto.

“ Funding Rate ” means any individual rate notified by a Lender to the Agent pursuant to paragraph (a)ii) of Clause 10.4 ( Cost of funds ).

“ GAAP ” means International Financial Reporting Standards (as adopted by the EU) and related interpretations as amended, supplemented, issued or adopted from time to time by the International Accounting Standards Board to the extent applicable to the relevant financial statements in respect of the Borrower and its Subsidiaries and otherwise generally accepted accounting principles of the jurisdiction of incorporation of such party consistently applied.

“ General Assignment ” means, in relation to a Mortgaged Vessel, a first priority assignment of the Owner’s and Bareboat Charterers' interest in such Mortgaged Vessel’s Insurances, Earnings, Requisition Compensation,

Bareboat Charters and any Charter in excess of thirteen (13) months (including any optional or automatic extension periods) in relation to such Mortgaged Vessel (and any guarantee of such Charter) (without step-in rights), entered or to be entered into by the Owner and Bareboat Charterers in favour of the Security Agent in the agreed form.

" Group " means the Borrower and its Subsidiaries for the time being and, for the purposes of Clause 19.1 ( Financial Statements ) and Clause 20 ( Financial Covenants ), any other entity required to be treated as a subsidiary in its consolidated accounts in accordance with GAAP and/or any applicable law.

“ Group Member ” means any Obligor and any other entity which is a member of the Group.

“ Guarantors ” means each Original Guarantor and each Additional Guarantor and “ Guarantor ” means any of them.

“ Hazardous Material ” means (a) any chemical, material, waste or other substance that is listed, defined, designated, or classified as, or otherwise determined to be, hazardous, restricted waste, toxic, a contaminant, a pollutant, industrial waste, special waste, or radioactive, under or pursuant to any applicable law, and (b) any other chemical, material, substance or waste, exposure to or Release of which is prohibited or regulated in any way by any governmental authority having competent jurisdiction, including, in either case, petroleum and all derivatives thereof or synthetic substitutes therefor.

“ Historic Screen Rate ” means, in relation to any Loan, the most recent applicable Screen Rate for the currency of that Loan and for a period equal in length to the Interest Period of that Loan and which is as of a day which is no more than one day before the Quotation Day.

“ Holding Company ” means, in relation to a person, any other person in respect of which it is a Subsidiary.

“ Impaired Agent ” means the Agent at any time when:

it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;

the Agent otherwise rescinds or repudiates a Finance Document;

(if the Agent is also a Lender) it is a Defaulting Lender under paragraph a) or b) of the definition of “Defaulting Lender”; or

an Insolvency Event has occurred and is continuing with respect to the Agent;

unless, in the case of paragraph a) above:

its failure to pay is caused by:

administrative or technical error; or

a Disruption Event; and

payment is made within 3 Business Days of its due date; or

ii)

the Agent is disputing in good faith whether it is contractually obliged to make the payment in question.

“ Increase Confirmation ” means a confirmation substantially in the form set out in Schedule 9 ( Form of Increase Confirmation ) .

“ Increase Lender ” has the meaning given to that term in Clause 2.2 ( Increase ).

“ Increased Costs ” has the meaning given to it in Clause 13.1 (b) ( Increased Costs );

“ Indemnified Person ” means:

each Finance Party and each Receiver and Delegate and any attorney, agent or other person appointed by any of them under the Finance Documents;

each Affiliate of those persons; and

any officers, employees or agents of any of the above persons.

“ Initial Borrowing Date ” means the Utilisation Date on which the first Utilisation is advanced to the Borrower.

“ Initial Security Value ” means, in respect of each Mortgaged Vessel, for the period from the date of the Utilisation for the financing of that Mortgaged Vessel until the delivery of the first valuation in respect of that Mortgaged Vessel provided under Clause 25 ( Minimum Security Value ), such value based on Valuations made in accordance with Clause 25 ( Minimum Security Value ) to ensure that such Initial Security Value reflects the Market Value of the relevant Mortgaged Vessel based on valuations obtained no earlier than 30 days prior to the date of the Utilisation for the financing of that Mortgaged Vessel.

“ Insolvency Event ” in relation to an entity, means that the entity:

is dissolved (other than pursuant to a consolidation, amalgamation or merger);

admits in writing its inability generally to pay its debts as they become due;

makes a general assignment, arrangement or composition with or for the benefit of its creditors;

institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding‑up or liquidation by it or such regulator, supervisor or similar official;

has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding‑up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph d) above and:

results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding‑up or liquidation; or

ii)

Is not dismissed, discharged, stayed or restrained in each case within thirty (30) days of the institution or presentation thereof;

has a resolution passed for its winding‑up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);

seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets (other than, for so long as it is required by law or regulation not to be publicly disclosed, any such appointment which is to be made or is made, by a person or entity described in paragraph d) above);

causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs a) to h) above; or

takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.

“ Insurance Notice ” means, in relation to a Mortgaged Vessel, a notice of assignment in the form scheduled to the Mortgaged Vessel’s General Assignment or otherwise in agreed form.

“ Insurances ” means, in relation to a Mortgaged Vessel:

all policies and contracts of insurance; and

all entries in a protection and indemnity or war risks or other mutual insurance association,

which are from time to time required to be obtained or maintained in respect of that Mortgaged Vessel by any Group Member pursuant to the terms of this Agreement.

“ Interest Period ” means, in relation to the Loan, each period determined in accordance with Clause 9 ( Interest Periods ) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 8.3 ( Default Interest ).

“ Interpolated Historic Screen Rate ” means, in relation to the Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:

the most recent applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of the Loan; and

the most recent applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of the Loan,

each for the currency of the Loan and each of which is as of a day which is no more than one day before the Quotation Day.

“ Interpolated Screen Rate ” means, in relation to LIBOR for the Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:

the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period; and

the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period,

each as of 11:00 a.m. on the Quotation Day.

" Intra-Group Creditor " means any Group Member that is or becomes a creditor of an Obligor under an intercompany loan.

" Intra-Group Loans Assignment " means the document constituting a first priority assignment by the Intra-Group Creditors who are creditors of the Owner of their rights under any loans made by them to the Owner from time to time in favour of the Security Agent in the agreed form.

“ISM Code” means the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention (including the guidelines on its implementation), adopted by the International Maritime Organisation, as the same may be amended or supplemented from time to time.

“ISPS Code” means the International Ship and Port Facility Security (ISPS) Code as adopted by the International Maritime Organization's (IMO) Diplomatic Conference of December 2002, as the same may be amended or supplemented from time to time.

“ Legal Reservations ” means:

the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for, or indemnify a person against, non‑payment of UK stamp duty may be void and defences of set‑off or counterclaim;

similar principles, rights and defences under the laws of any Relevant Jurisdiction; and

any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinions delivered to the Agent under Clause 0 ( Conditions of Utilisation ) or Clause 32.2 ( Additional Guarantors ).

“ Lenders ” means:

the Original Lender; and

any bank, financial institution, trust, fund or other entity, which has become a Party as a Lender in accordance with Clause 2.2 ( Increase ) or Clause 31 ( Changes to the Lenders ),

and which in each case has not ceased to be a Lender in accordance with the terms of this Agreement.

“ LIBOR ” means, in relation to the Loan:

the applicable Screen Rate as of 11:00 a.m. on the Quotation Day for Dollars and for a period equal in length to the Interest Period of the Loan; or

as otherwise determined pursuant to Clause 10.1 ( Unavailability of Screen Rate ),

and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.

“ Limitation Acts ” means the Limitation Act 1980 and the Foreign Limitation Periods Act 1984.

“ Loan ” means the loan made or to be made under the Facility or the principal amount of the loan for the time being outstanding under this Agreement.

“ Losses ” means any costs, expenses, legal expenses, payments, charges, losses, demands, liabilities, claims, actions, proceedings, penalties, fines, damages, judgments, orders or other sanctions.

“ Loss Payable Clauses ” means, in relation to a Mortgaged Vessel, the provisions concerning payment of claims under the Mortgaged Vessel’s Insurances in the form scheduled to the Mortgaged Vessel’s General Assignment or in such other approved form.

“ Major Casualty ” means any casualty to a vessel for which the total insurance claim, inclusive of any deductible, exceeds or may exceed the Major Casualty Amount.

“ Major Casualty Amount ” means US$1,000,000 or the equivalent in any other currency.

“ Majority Lenders ” means a Lender or Lenders whose Commitments aggregate sixty six and two thirds per cent. (66 ² / 3 %) or more of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated sixty six and two thirds per cent. (66 ² / 3 %) or more of the Total Commitments immediately prior to that reduction).

“ Margin ” means 2.10% per annum.

“ Market Value ” means, in respect of a Mortgaged Vessel, the fair market value of such Mortgaged Vessel as determined in accordance with Clause 25 ( Minimum Security Value ).

“ Material Adverse Effect ” means, in the reasonable opinion of the Majority Lenders, a material adverse effect on:

the business or financial condition of the Group taken as a whole; or

the ability of the Obligors taken as a whole to perform their obligations under the Finance Documents; or

the validity or enforceability of, or the effectiveness or ranking of any Security Interest granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.

“ Minimum Value ” means the amount in Dollars which is at that time equal to one hundred and thirty per cent. (130%) of the principal amount of the Loan outstanding, minus, in relation to any Mortgaged Vessel which has become a Total Loss but whose Disposal Repayment Date has not then occurred, such proportion of the Loan as the Market Value of such Mortgaged Vessel bore to the aggregate Market Value of all the Mortgaged Vessels (including the relevant Mortgaged Vessel) immediately before its Total Loss.

“ Mortgage ” means, in relation to a Mortgaged Vessel, a first priority or first preferred mortgage in respect of the Mortgaged Vessel in the agreed form entered or to be entered into by the Owner in favour of the Security Agent, together with, to the extent required, any collateral deed of covenants in the agreed form.

“ Mortgage Period ” means, in relation to a Mortgaged Vessel, the period from the Initial Borrowing Date until the date the Mortgage or other Security Interest in respect of such Mortgaged Vessel and/or its Earnings, Insurances and Requisition Compensation is released and discharged or, if earlier, its Total Loss Date.

“ Mortgaged Vessel ” means each vessel listed in Schedule 2 ( Vessel Information ) and any other Fleet Vessel, in each case, which is subject to a Mortgage and/or whose Earnings, Insurances and Requisition Compensation are subject to a Security Interest under the Finance Documents.

“New Lender ” has the meaning given to such term in Clause 31.1 ( Assignment and Transfers by the Lenders ).

“ Obligor ” means the Borrower or a Guarantor.

“ Obligors' Agent ” means the Borrower, appointed to act on behalf of each other Obligor in relation to the Finance Documents pursuant to Clause 2.4 ( Obligors' Agent ).

“ Original Financial Statements ” means the audited annual consolidated financial statements of the Borrower for the Borrower’s financial year ended 31 December 2016 and the consolidated unaudited financial statements of the Borrower for the half year period ending on 30 June 2017.

“ Original Forecast ” means the Forecast for the financial year commencing on 1 January 2018 and ending on 31 December 2018 delivered to the Agent pursuant to Clause 4.1 ( Initial Conditions Precedent ).

“ Owner ” means VesselCo 6 K/S, a limited partnership (in Danish kommanditselskab ) established under the laws of Denmark with company registration (CVR) number 39356813, having its principal office at c/o TORM A/S, Tuborg Havnevej 18, 2900 Hellerup, Denmark.

“ Owner's Guarantee ” means the guarantee and indemnity provided by the Owner as set out in Clause 17 ( Guarantee and Indemnity ).

“ Participating Member State ” means any member state of the European Community that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.

“ Party ” means a party to this Agreement.

“ Payment Disruption Event ” means either or both of:

a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

the occurrence of any other event which results in a disruption (of a technical or systems‑related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

from performing its payment obligations under the Finance Documents; or

ii)

from communicating with other Parties in accordance with the terms of the Finance Documents,

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

“ Permitted Maritime Liens ” means, in relation to a Mortgaged Vessel:

any ship repairer’s or outfitter’s lien (whether or not constituting a maritime lien) arising in connection with such Mortgaged Vessel being put into the possession of any other person as permitted by Clause 23.12 ( Repairer’s Liens ), or any work carried out while the Mortgaged Vessel is in such person’s possession;

any lien on such Mortgaged Vessel for master’s, officer’s or crew’s wages outstanding in the ordinary course of its trading;

any lien on such Mortgaged Vessel for salvage; and

any lien arising solely by operation of law and/or in the ordinary course of business and which does not secure Financial Indebtedness.

“ Permitted Security Interests ” means, in relation to any asset, any Security Interest over it which is:

granted by the Finance Documents; or

a Permitted Maritime Lien; or

is approved by the Majority Lenders; or

in relation to Taxes not overdue, or, in the case of income and property taxes and assessments, which are being contested in good faith with due diligence and where the relevant Obligor or the Group as a whole has adequate cash reserves in excess of such contested sums; or

a lien arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by any Group Member; or

any netting or set-off arrangement entered into by the Owner in the ordinary course of its banking arrangements for the purposes of netting debit and credit balances.

“ Quotation Day ” means, in relation to any period for which an interest rate is to be determined, two (2) Business Days before the first day of that period unless market practice differs in the London interbank market for Dollars, in which case the Quotation Day for that currency will be determined by the Agent in accordance with market

practice in the London interbank market (and if quotations would normally be given by leading banks in the London interbank market on more than one day, the Quotation Day will be the last of those days).

“ RCF Facility ” means the “ Facility ” under and as defined in the RCF Facility Agreement.

“ RCF Facility Agreement ” means the working capital facility agreement comprising a US$75,000,000 revolving credit facility made between, among others, TORM A/S as borrower, and Danske Bank A/S as agent dated 13 July 2015, as amended, restated, replaced and/or refinanced from time to time.

“ Receiver ” means a receiver or a receiver and manager or an administrative receiver appointed in relation to the whole or any part of any Charged Property under any relevant Security Document.

“ Registry ” means , in relation to each Mortgaged Vessel, such registrar, commissioner or representative of the relevant Flag State who is duly authorised and empowered to register the relevant Mortgaged Vessel, the Owner’s title to such Mortgaged Vessel and the relevant Mortgage under the laws of its Flag State.

“ Release ” means, in relation to a Fleet Vessel, any releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, seeping, dispersal, leaching, dumping, disposing of, depositing, migrating or placing, including movement through, into or upon, the environment or otherwise entering into the indoor or outdoor environment, including any natural or man‑made structure (including the abandonment or discarding of barrels, containers, and other receptacles containing any Hazardous Material), and “ Released ” shall be construed accordingly.

“ Relevant Affiliate ” means, in relation to any Obligor or Group Member:

a Subsidiary of that Obligor or Group Member; or

a Holding Company of that Obligor or Group Member; or

any other Subsidiary of that Holding Company,

but in each case excluding the Sponsor and excluding any Affiliate of the Sponsor which is not a Group Member (other than any Affiliate of the Sponsor which is the immediate Holding Company of the Borrower).

“ Relevant Jurisdiction ” means, in relation to an Obligor:

its jurisdiction of incorporation;

any jurisdiction where any asset (other than a Mortgaged Vessel and the assets which are the subject of the General Assignment) subject to or intended to be subject to any Transaction Security created or to be created by it is situated;

the Flag State of any Mortgaged Vessel in respect of which it is the Owner; and

any jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.

“ Repayment Date ” means each Repayment Date, as determined in accordance with Clause 6 ( Repayment ).

“ Repeating Representations ” means each of the representations and warranties set out in Clauses 18.1 ( Status ) to and including Clause 18.6 ( Governing Law and Enforcement ) (except for those contained in Clause 18.2 ( Binding Obligations ) to the extent that the circumstances giving rise to a misrepresentation as a result of the repetition of Clause 18.2 ( Binding Obligations ) also constitute an Event of Default under Clause 29.13 ( Unlawfulness and Invalidity )), 18.7a) ( Information ), 18.15 ( No Proceedings Pending or Threatened ), and 18.32 ( Sanctions ).

“ Representative ” means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

“ Requisition Compensation ” means, in relation to a Mortgaged Vessel, any compensation paid or payable by a government entity for the requisition for title, confiscation or compulsory acquisition of such Mortgaged Vessel (other than by way of requisition of hire).

“ Restricted Party ” means a person:

that is listed on any Sanctions List (whether designated by name or by reason of being included in a class of person) or otherwise is a target of Sanctions Laws;

that is directly or indirectly owned or controlled by a person referred to in a) and/or b) above; or

with which any national of a Sanctions Authority is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws.

“ Sanctions Authority ” means (a) the United Nations, the European Union, the member states of the European Union, the United Kingdom, Singapore, the US or any country to which any Obligor, or any other Group Member or any Relevant Affiliate or any of them is bound or (b) the respective governmental institutions and agencies of any of the foregoing, including, without limitation, the Office of Foreign Assets Control of the US Department of Treasury (“ OFAC ”), the United States Department of State and Her Majesty’s Treasury (“ HMT ”).

“ Sanctions Laws ” means the trade, economic or financial sanctions laws and/or regulations, trade embargoes, prohibitions, restrictive measures, decisions, executive orders or notices from regulators implemented, adopted, imposed, administered, enacted and/or enforced by any Sanctions Authority.

“ Sanctions List ” means the Specially Designated Nationals and Blocked Persons list maintained by OFAC, the Consolidated List of Financial Sanctions Targets maintained by HMT, or any similar list of persons or entities maintained by or published in connection with Sanctions Laws, by or on behalf of any Sanctions Authority, each as amended, supplemented or substituted from time to time.

“ Scheduled Amortisation Payment ” means the amount set forth on Schedule 10 ( Scheduled Amortisation Payments ) for each Repayment Date as such Schedule 10 may be updated as contemplated in Clause 6.1b).

“ Screen Rate ” means, in relation to LIBOR, the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant currency and period displayed on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement

Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.

“ Secured Obligations ” means all the liabilities and all other present and future liabilities and obligations at any time due, owing or incurred by any Obligor or any other Group Member to any Secured Party under any of the Finance Documents, both actual and contingent and whether incurred solely or jointly and as principal or surety or in any other capacity.

“ Secured Parties ” means the Finance Parties and any Receiver or Delegate from time to time but, in the case of each Finance Party, only if it is a Party or has acceded to this Agreement and the Subordination Deed.

“ Security Documents ” means:

the Mortgage in respect of each of the Mortgaged Vessels;

the General Assignment in relation to each of the Mortgaged Vessels;

the Share Security in relation to the Owner;

the Intra-Group Loans Assignment; and

any other document as may be executed to guarantee and/or secure any amounts owing to the Finance Parties under this Agreement and any other Finance Document.

“ Security Interest ” means a mortgage, charge, pledge, lien, assignment, trust, hypothecation or other security interest of any kind securing any obligation of any person or any other agreement or arrangement having a similar effect.

“ Security Value ” means, (i) prior to the delivery of the first valuations pursuant to Clause 25 ( Minimum Security Value ), the Initial Security Value and (ii) thereafter, the amount in Dollars which, at that time, is the aggregate of (a) the Market Value of all of the Mortgaged Vessels which have not then become a Total Loss and (b) the value of any additional security then held by the Security Agent provided under Clause 25 ( Minimum Security Value ), in each case as most recently determined in accordance with this Agreement.

“ Selection Notice ” means a notice substantially in the form set out in Schedule 5 ( Form of Selection Notice ) given in accordance with Clause 9 ( Interest Periods ).

“ Share Security ” means, in relation to the Owner, the document constituting a first priority Security Interest in favour of the Security Agent given by each of (i) DK Vessel HoldCo K/S in respect of all of the limited liability partnership shares (in Danish: " kommanditanparter ") in the Owner and (ii) TORM A/S in respect of all of the shares (in Danish " anparter ") in VesselCo F ApS (as general partner of the Owner), in the agreed form.

" Shipbuilding Contracts " means:

the shipbuilding contract dated 9 January 2018 between TORM A/S, or its guaranteed nominee (the Owner to be nominated) as buyer and the Yard as builder concerning the construction of Vessel 1; and

the shipbuilding contract dated 9 January 2018 between TORM A/S, or its guaranteed nominee (the Owner to be nominated) as buyer and the Yard as builder concerning the construction of Vessel 2; and

the shipbuilding contract dated 3 April 2018 between TORM A/S, or its guaranteed nominee (the Owner to be nominated) as buyer and the Yard as builder concerning the construction of Vessel 3.

“ Sponsor ” means Oaktree Capital Management, L.P. and any fund or funds solely managed by Oaktree Capital Management, L.P.

“ Subordination Deed ” means the subordination deed dated on or about the same date as this Agreement and made between, among others, the Borrower, the Obligors, the Intra-Group Creditors, the Agent, the Security Agent and the Lenders.

“ Subsidiary ” means in relation to any company, corporation, limited liability partnership or other legal entity (a “holding company”), a company, corporation, limited liability partnership or other legal entity:

which is controlled, directly or indirectly, by the holding company; or

more than half the issued share capital of which is beneficially owned, directly or indirectly, by the holding company; or

which is a subsidiary of another Subsidiary of the holding company,

and, for this purpose, a company, corporation or limited liability partnership shall be treated as being controlled by another if that other company, corporation or limited liability partnership is able to direct is affairs and/or determine the composition of the majority of its board of directors or equivalent body.

“ Tax ” means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

“ Third Parties Act ” has the meaning given to such term in Clause 1.3 ( Third Party Rights ).

" TORM USD 130M Facility Agreement " means the facility agreement comprising a US$130,000,000 term loan facility made between, among others, TORM PLC as borrower, the Original Lender, Danske Bank A/S, DVB Bank SE and ING Bank N.V. as original lenders, and Danske Bank A/S as agent and security agent dated 7 January 2017 as amended, restated, replaced and/or refinanced from time to time

“ TORM A/S ” means TORM A/S with CVR no. 22460218 and address at Tuborg Havnevej 18, 2900 Hellerup, Denmark.

“ Total Commitments ” means the aggregate of the Commitments being seventy million Dollars (US$70,000,000) at the date of this Agreement.

“ Total Loss ” means, in relation to a Mortgaged Vessel, its:

actual, constructive, compromised, agreed or arranged total loss; or

requisition for title, confiscation or other compulsory acquisition by a government entity (excluding a requisition for hire for a fixed period not exceeding one (1) year without any right to extension); or

hijacking, theft, condemnation, capture, seizure, or disappearance for more than one hundred twenty (120) days or such longer period as may be agreed by the Majority Lenders.

“ Total Loss Date ” means, in relation to the Total Loss of a Mortgaged Vessel (but, for the purposes of this definition, ignoring any time periods set out in the definition of “ Total Loss ”):

in the case of an actual total loss, the date it happened or, if such date is not known, the date on which the Mortgaged Vessel was last reported;

in the case of a constructive, compromised, agreed or arranged total loss, the earliest of:

the date notice of abandonment of the Mortgaged Vessel is given to its insurers; or

ii)

if the insurers do not admit such a claim, the date later determined by a competent court of law to have been the date on which the total loss happened; or

iii)

the date upon which a binding agreement as to such compromised or arranged total loss has been entered into by the Mortgaged Vessel’s insurers;

in the case of a requisition for title, confiscation or compulsory acquisition, the date falling ninety (90) days after the date upon which such event happened; and

in the case of hijacking, theft, condemnation, capture, seizure, or disappearance, the date than one hundred twenty (120) days (or such longer period as may be agreed by the Majority Lenders) after the date upon which such event happened.

“ Total Loss Repayment Date ” means where a Mortgaged Vessel has become a Total Loss the earlier of:

the date falling ninety (90) days after its Total Loss Date; and

the date upon which insurance proceeds or Requisition Compensation for such Total Loss are paid by insurers or the relevant government entity.

" Tranches " means Tranche 1, Tranche 2 and Tranche 3.

" Tranche 1 " means the loan facility granted to the Borrower under the terms of this Agreement in the original principal amount of the Tranche 1 Commitment.

" Tranche 1 Commitment " means twenty-five million Dollars (USD 25,000,000) as reduced or cancelled in accordance with the Agreement.

" Tranche 2 " means the loan facility granted to the Borrower under the terms of this Agreement in the original principal amount of the Tranche 2 Commitment.

" Tranche 2 Commitment " means twenty-five million Dollars (USD 25,000,000) as reduced or cancelled in accordance with the Agreement.

" Tranche 3 " means the loan facility granted to the Borrower under the terms of this Agreement in the original principal amount of the Tranche 3 Commitment.

" Tranche 3 Commitment " means twenty million Dollars (USD 20,000,000) as reduced or cancelled in accordance with the Agreement.

“ Transaction Documents ” means the Finance Documents and the Bareboat Charters.

“ Transaction Security ” means the Security Interests created or expressed to be created pursuant to the Security Documents and the Owner's Guarantee.

“ Transfer Certificate ” means a certificate substantially in the form set out in Schedule 6 ( Form of Transfer Certificate ) or any other form agreed between the Agent and the Borrower.

“ Transfer Date ” means, in relation to an assignment or transfer, the later of:

the proposed Transfer Date specified in the Assignment Agreement or Transfer Certificate; and

the date on which the Agent executes the Assignment Agreement or Transfer Certificate.

“ Treasury Transaction ” means any derivative transaction entered into in connection with protection against, or benefit from, fluctuation in any rate, price or position.

“ Trust Property ” means, collectively:

all moneys duly received by the Security Agent under or in respect of the Finance Documents;

the Security Interests, guarantees, security, powers and rights given to the Security Agent under and pursuant to the Finance Documents including, without limitation, the covenants given to the Security Agent in respect of all obligations of any Obligor;

all assets paid or transferred to or vested in the Security Agent or its agent or received or recovered by the Security Agent or its agent in connection with any of the Finance Documents whether from any Obligor or any other person; and

all or any part of any rights, benefits, interests and other assets at any time representing or deriving from any of the above, including all income and other sums at any time received or receivable by the Security Agent or its agent in respect of the same (or any part thereof).

“ Unpaid Sum ” means any sum due and payable but unpaid by an Obligor under the Finance Documents.

“ US ” means the United States of America.

“ US Tax Obligor ” means:

the Borrower to the extent it is resident for tax purposes in the US; or

an Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.

“ USA PATRIOT Act ” has the meaning given to such term in Clause 50 ( Patriot Act ).

“ Utilisation ” means the making available of all or part of the Facility.

“ Utilisation Date ” means the date on which a Utilisation is made.

“ Utilisation Request ” means a notice substantially in the form set out in Schedule 4 ( Form of Utilisation Request ) .

“ VAT ” means:

any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

any other tax of similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph a) above, or imposed elsewhere.

" Vessel 1 " means a LR-1 tanker vessel with Yard's Hull No.15121140 under construction at the Yard, as further described in Schedule 2 ( Mortgaged Vessel Information ).

" Vessel 2 " means a LR-1 tanker vessel with Yard's Hull No. 15121141 under construction at the Yard, as further described in Schedule 2 ( Mortgaged Vessel Information ).

" Vessel 3 " means an MR tanker with Yard's Hull No. 15121038 under construction at the Yard, as further described in Schedule 2 ( Mortgaged Vessel Information ).

" Yard " means, with respect to each of Vessel 1, Vessel 2, and Vessel 3, China Shipbuilding Trading Company Limited, a corporation organized and existing under the laws of the People's Republic of China, having its registered office at 56(Yi) Zhongguancun Nan Da Jie, Beijing 100044, the People's Republic of China and Guangzhou Shipyard International Company Limited, a corporation organized and existing under the laws of the People's Republic of China, having its registered office at 1st Floor, No.68, West Road, Pearl River Precinct, Nansha District, Guangzhou, the People's Republic of China.

1.2	Construction

Unless a contrary indication appears, any reference in any of the Finance Documents to:

Sections, Clauses and Schedules are to be construed as references to the Sections and Clauses of, and the Schedules to, the relevant Finance Document and references to a Finance Document include its Schedules;

ii)

a “ Finance Document ” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as it may from time to time be amended, restated, novated or replaced, however fundamentally;

iii)

words importing the plural shall include the singular and vice versa;

iv)

a time of day is to Copenhagen time;

any person includes its successors in title, permitted assignees or transferees;

vi)

“ agreed form ” means:

where a Finance Document has already been executed by all of the relevant parties, such Finance Document in its executed form;

prior to the execution of a Finance Document, the form of such Finance Document separately agreed in writing between the Agent and the Borrower as the form in which that Finance Document is to be executed or another form approved at the request of the Borrower;

vii)

“ approved by the Majority Lenders ” or “ approved by the Lenders ” means approved in writing by the Agent acting on the instructions of the Majority Lenders or, as the case may be, all of the Lenders (on such conditions as they may respectively impose) and otherwise “ approved ” means approved in writing by the Agent (on such conditions as the Agent may impose) and “ approval ” and “ approve ” shall be construed accordingly;

viii)

“ assets ” includes present and future properties, revenues and rights of every description;

ix)

“ charter commitment ” means, in relation to a vessel, any charter or contract for the employment of that vessel or the carriage of people and/or cargo or the provision of services by or from it and includes any agreement for pooling or sharing income derived from any such charter or contract;

the term “ disposal ” or “ dispose ” means a sale, transfer or other disposal (including by way of lease or loan but not including by way of loan of money) by a person of all or part of its assets, whether by one transaction or a series of transactions and whether at the same time or over a period of time, but not the creation of a Security Interest;

xi)

the “ equivalent ” of an amount specified in a particular currency (the “ specified currency amount ”) shall be construed as a reference to the amount of the other relevant currency which can be purchased with the specified currency amount in the London foreign exchange market at or about 11 a.m. on the date the calculation falls to be made for spot delivery, as conclusively determined by the Agent (with the relevant exchange rate of any such purchase being the “ Agent’s spot rate of exchange ”);

xii)

“ euro / € ” means the lawful currency of the Participating Member States and, in respect of all payments to be made under the Finance Documents in euro, funds which are for the same day settlement in the European Interbank Payments System (or such other funds as may at the relevant time be customary for the settlement of international banking transactions denominated in euro);

xiii)

a “ government entity ” means any government, state or agency of a state;

xiv)

a “ guarantee ” means any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;

xv)

“ indebtedness ” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

xvi)

“ month ” means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month or the calendar month in which it is to end, except that:

if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that month (if there is one) or on the immediately preceding Business Day (if there is not); and

if there is no numerically corresponding day in that month, that period shall end on the last Business Day in that month,and the above rules in paragraph A) and B) will only apply to the last month of any period;

xvii)

an “ obligation ” means any duty, obligation or liability of any kind;

xviii)

something being in the “ ordinary course of business ” of a person means something that is in the ordinary course of that person’s day‑to‑day business (and not merely anything which that person is entitled to do under its Constitutional Documents);

xix)

pay, prepay or repay in Clause 27 ( Business Restrictions ) includes by way of set‑off, combination of accounts or otherwise;

xx)

a “ person ” includes any individual, firm, company, corporation, government entity or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);

xxi)

a “ regulation ” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self‑regulatory or other authority or organisation and includes (without limitation) any regulation relating to Basel II, Basel III or Basel IV;

xxii)

“ right ” means any right, privilege, power or remedy, any proprietary interest in any asset and any other interest or remedy of any kind, whether actual or contingent, present or future, arising under contract or law, or in equity;

xxiii)

“ trustee , ” “ fiduciary ” and “ fiduciary duty ” has in each case the meaning given to such term under applicable law;

xxiv)

the “ winding up ,” “ dissolution ,” or “ administration ” of person or (ii) a “ receiver ” or “ administrative ” “ receiver ” or “ administrator ” in the context of insolvency proceedings or security enforcement actions in respect of a person shall be construed so as to include any equivalent or analogous proceedings or any equivalent and analogous person or appointee (respectively) under the law of the jurisdiction in which such person is established or incorporated or any jurisdiction in which such person carries on business including (in respect of proceedings) the seeking or occurrences of liquidation, winding‑up, reorganisation, dissolution, administration, arrangement, adjustment, protection or relief of debtors; and

xxv)

a provision of law is a reference to that provision as amended or re‑enacted.

Where in this Agreement a provision includes a monetary reference level in one currency, unless a contrary indication appears, such reference level is intended to apply equally to its equivalent in other currencies as of the relevant time for the purposes of applying such reference level to any other currencies.

Section, Clause and Schedule headings are for ease of reference only.

Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

A Default (other than an Event of Default) is " continuing " if it has not been remedied or waived and an Event of Default is " continuing " if it has not been waived by the Agent (acting on the instructions of all of the Lenders).

1.3	Third Party Rights

Unless expressly provided to the contrary in a Finance Document for the benefit of a Finance Party or another Indemnified Person, a person who is not a party to a Finance Document has no right under the Contracts (Rights of Third Parties) Act 1999 (the “ Third Parties Act ”) to enforce or to enjoy the benefit of any term of the relevant Finance Document.

Any Finance Document may be rescinded or varied by the parties to it without the consent of any person who is not a party to it (unless otherwise provided by this Agreement).

An Indemnified Person who is not a party to a Finance Document may only enforce its rights under that Finance Document through a Finance Party and if and to the extent and in such manner as the Finance Party may determine.

1.4	Conflict of Documents

Unless a contrary indication appears, the terms of the Finance Documents (other than as relates to the creation and/or perfection of security) are subject to the terms of this Agreement and, in the event of any conflict between any provision of this Agreement and any provision of any Finance Document (other than in relation to the creation and/or perfection of security) the provisions of this Agreement shall prevail.

2.	THE FACILITY

2.1	The Facility

Subject to the terms of this Agreement, the Lenders severally agree to provide to the Borrower a senior secured term loan facility in an amount equal to the Total Commitments, which will be available in up to two (2) Utilisations as follows:

Tranche 1: a Utilisation of up to the Tranche 1 Commitment for the purpose of post-delivery debt financing, including payment of the last instalment payable upon delivery, of Vessel 1;

Tranche 2: a Utilisation of up to the Tranche 2 Commitment for the purpose of post-delivery debt financing, including payment of the last instalment payable upon delivery, of Vessel 2; and

Tranche 3: a Utilisation of up to the Tranche 3 Commitment for the purpose of post-delivery debt financing, including payment of the last instalment payable upon delivery, of Vessel 3.

The Tranches will be subject to the further limitations set out in Clause 5.2 (iv) and (v) below.

2.2

Increase

The Borrower may, by giving prior notice to the Agent by no later than the date falling fifteen (15) Business Days after the effective date of a cancellation of:

the Available Commitments of a Defaulting Lender in accordance with Clause 7.7 f) ( Right of Replacement or Cancellation and Prepayment in Relation to a Single Lender ); or

ii)

the Commitments of a Lender in accordance with Clause 7.1 ( Illegality ),

request that the Commitments be increased (and the Commitments shall be so increased) in an aggregate amount of up to the amount of the Available Commitment or Commitments so cancelled as follows:

the increased Commitments will be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities (each an “ Increase Lender ”) selected by the Borrower (each of which shall not be a Group Member and which is further acceptable to the Agent (acting reasonably)) and each of which confirms in writing its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been the Original Lender;

each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been the Original Lender;

each Increase Lender shall become a Party as a “ Lender ” and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been the Original Lender;

the Commitments of the other Lenders shall continue in full force and effect; and

any increase in the Commitments shall take effect on the date specified by the Borrower in the notice referred to above or any later date on which the conditions set out in Clause 2.2b) below are satisfied.

An increase in the Commitments will only be effective on:

the execution by the Agent of an Increase Confirmation from the relevant Increase Lender;

ii)

in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase (A) the Increase Lender entering into documentation required for it to accede as a party to this Agreement and the Subordination Deed and (B) the performance by the Agent of all necessary “ know your customer ” or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Agent shall promptly notify to the Borrower and the Increase Lender.

Each of the other Finance Parties hereby appoint the Agent as its agent to execute on its behalf any Increase Confirmation delivered to the Agent in accordance with this Clause 2.2.

Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective.

Unless the Agent otherwise agrees or the increased Commitments are assumed by an existing Lender, the Borrower shall, not later than on the date upon which the increase takes effect, pay to the Agent (for its own account) a fee of three thousand five hundred Dollars (US$3,500) and the Borrower shall promptly on demand pay the Agent and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by either of them, and, in the case of the Security Agent, by any Receiver or Delegate, in connection with any increase in Commitments under this Clause 2.2.

The Borrower shall pay to the Increase Lender any fee in the amount and at the times agreed between the Borrower and the Increase Lender in any letter between the Borrower and the Increase Lender setting out such fee. A reference in this Agreement to a Fee Letter shall include any letter referred to in this Clause 2.2 f).

Clause 31.4 ( Limitation of Responsibility of Existing Lenders ) shall apply mutatis mutandis in this Clause 2.2g) in relation to an Increase Lender as if references in that clause to:

an “ Existing Lender ” were references to all the Lenders immediately prior to the relevant increase;

ii)

the “ New Lender ” were references to that “ Increase Lender ”; and

iii)

a “ re assignment ” and “ re-transfer ” were references to a “ transfer ” and “ assignment ”.

2.3	Finance Parties’ Rights and Obligations

The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.

A Finance Party may separately enforce its rights under the Finance Documents, provided that no Finance Party shall have any independent power to enforce, or have recourse to, any of the Security under the Security Documents or to exercise any right, power, authority or discretion arising under the Security Documents except through the Agent or Security Agent.

2.4	Obligors' Agent

Each Obligor (other than the Borrower) by its execution of this Agreement or an Accession Deed irrevocably appoints the Borrower (acting through one or more authorised signatories) to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:

the Borrower on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions, to execute on its behalf any Accession Deed, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and

ii)

each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Borrower,

and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.

Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors' Agent or given to the Obligors' Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors' Agent and any other Obligor, those of the Obligors' Agent shall prevail.

PURPOSE

3.1

Purpose

The Borrower shall apply all amounts borrowed under the Facility towards post-delivery financing of the Mortgaged Vessels, and for the avoidance of doubt all amounts borrowed under the Facility shall also be available for Utilisation in relation to the payment of the last instalment payable upon delivery.

3.2	Monitoring

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

4.	CONDITIONS OF UTILISATION

4.1	Initial Conditions Precedent

The Lenders will only be obliged to comply with Clause 5.4 ( Lenders’ Participation ) in relation to the initial Utilisation if on or before the Utilisation Date for that Utilisation the Agent, or its duly authorised representative, has received all of the documents and other evidence listed in Part 1 of Schedule 3 ( Conditions Precedent to Delivery of a Utilisation Request ) and in Part 2 of Schedule 3 ( Conditions Precedent to Utilisation ) in each case in form and substance satisfactory to the Agent.

The Lenders will only be obliged to comply with Clause 5.4 ( Lenders’ Participation ) in relation to each Utilisation if on or before the Utilisation Date for that Utilisation the Agent, or its duly authorised representative, has received all of the documents and other evidence listed in Part 2 of Schedule 3 ( Conditions Precedent to Utilisation ) in respect of the Mortgaged Vessel(s) for which such Utilisation is made as set out in Clause 0b) in each case in form and substance satisfactory to the Agent.

4.2	Notice to Lenders

The Agent shall notify the Borrower and the Lenders promptly upon receiving and being satisfied with all of the documents and evidence delivered to it under Clause 4.1 ( Initial Conditions Precedent ). Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification referred to in this Clause 4.2, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

4.3	Further Conditions Precedent

Subject to Clause 4.1 ( Initial Conditions Precedent ), the Lenders will only be obliged to comply with Clause 5.4 ( Lenders’ Participation ) if on the date of a Utilisation Request and on a proposed Utilisation Date:

no Default is continuing or would result from the proposed Utilisation; and

all of the representations set out in Clause 18 ( Representations ) are true in all material respects (or with respect to any such representations which are already qualified by materiality, in all respects).

4.4	Waiver of Conditions Precedent

The conditions in this Clause 0 are inserted solely for the benefit of the Finance Parties and may be waived on their behalf in whole or in part and with or without conditions by the Agent acting on the instructions of the Majority Lenders (or, in relation to those conditions precedent which are expressed in Schedule 3 ( Conditions Precedent ) to require all Lender approval, on the instructions of all Lenders).

5.	UTILISATION

5.1	Delivery of a Utilisation Request

The Borrower may utilise the Facility by delivery to the Agent of duly completed Utilisation Requests not later than 10:00 a.m. three (3) Business Days before a proposed Utilisation Date.

5.2	Completion of a Utilisation Request, number and amount of Utilisations

A Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

the proposed Utilisation Date is a Business Day within the Availability Period;

ii)

the currency and amount of the Utilisation comply with Clause 5.3 ( Currency and Amount );

iii)

the proposed Interest Period complies with Clause 9 ( Interest Periods ); and

iv)

it identifies the purpose for the Utilisation and that purpose complies with Clause 3 ( Purpose ).

The Facility may be utilised in up to two (2) Utilisations as follows:

provided that the conditions precedent listed in Part 2 of Schedule 3 ( Conditions Precedent to Utilisation ) have been satisfied in respect of Vessel 1, a part of the Facility equal to Tranche 1 will be available for Utilisation;

ii)

provided that the conditions precedent listed in Part 2 of Schedule 3 ( Conditions Precedent to Utilisation ) have been satisfied in respect of Vessel 2, a part of the Facility equal to Tranche 2 will be available for Utilisation;

iii)

provided that the conditions precedent listed in Part 2 of Schedule 3 ( Conditions Precedent to Utilisation ) have been satisfied in respect of Vessel 3, a part of the Facility equal to Tranche 3 will be available for Utilisation;

iv)

the amount of each proposed Utilisation must not exceed the Available Facility and when added to the principal amount of the Loan outstanding immediately prior to such Utilisation must not exceed the Total Commitments;

subject to paragraph (v) below, the amount of the proposed Utilisation attributable to each relevant Mortgaged Vessel shall not exceed the lesser of (i) 60% of the Initial Security Value of that Mortgaged Vessel and (ii) USD 25,000,000 with respect to Vessel 1 and Vessel 2, and USD 20,000,000 with respect to Vessel 3; and

vi)

notwithstanding paragraph (iv) above, provided that between 1 January 2018 and the relevant Utilisation Date the Borrower has raised a minimum equity amount of USD 40,000,000, the proposed Utilisation attributable to a Mortgaged Vessel may exceed 60% of the Initial Security Value but shall in such case not exceed the lesser of (i) 70% of the Initial Security Value of that Mortgaged Vessel and (ii) USD 22,200,000 with respect to Vessel 1 and Vessel 2, and USD 17,750,000 with respect to Vessel 3.

5.3	Currency and Consolidation

The currency specified in a Utilisation Request must be Dollars.

The principal amount of each Utilisation shall be consolidated with the principal amount of the Loan outstanding at the time of that Utilisation so that all Utilisations, once advanced, will form one Loan.

5.4	Lenders’ Participation

If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Utilisation available by the proposed Utilisation Date through its Facility Office.

The amount of each Lender’s participation in each Utilisation will be equal to the proportion borne by its Available Commitment to the relevant Available Facility immediately prior to making the Utilisation.

The Agent shall promptly notify each Lender of the amount of the requested Utilisation and the amount of its participation in the Utilisation, in each case by 11:00 a.m. on the relevant Quotation Day.

The Agent shall pay all amounts received by it in respect of the Utilisation (and its own participation in it, if any) to the Borrower or for its account in accordance with the instructions contained in the relevant Utilisation Request.

5.5	Cancellation of Commitments

The Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period for the Facility.

REPAYMENT

6.1	Repayment of Loan

To the extent not previously reduced and/or rescheduled in accordance with paragraph (c) below, the Borrower shall by no later than 3:00 p.m. on each Repayment Date repay an amount of each Utilisation of the Loan equal to the Scheduled Amortisation Payment for such Repayment Date, as set forth in Schedule 10 ( Scheduled Amortisation Payments ) .

Schedule 10 ( Scheduled Amortisation Payments ) shall be updated by the Agent in connection with each Utilisation on the basis of the following parameters:

the first Repayment Date of each Utilisation shall be the date falling 3 months after such Utilisation and each subsequent Repayment Date in relation to such Utilisation shall be the dates falling with consecutive intervals of three months thereafter;

ii)

if the amount of the Facility that is utilised is reduced as a result of compliance with the Initial Security Value requirements, such reduction shall be applied to reduce the Scheduled Amortisation Payments pro-rata;

iii)

notwithstanding paragraph (i) above, if the Initial Security Value of either Mortgaged Vessel is higher than 60% of the Market Value, the amount in excess of 60% of the Market Value only shall be fully repaid in 8 equal quarterly repayments during the first 2 years after the relevant Utilisation; and

iv)

Scheduled Amortisation Payments shall be determined by the Agent on the basis that the portion of the Loan attributed to each Mortgaged Vessel is repaid in full by the time that that Mortgaged Vessel is 16 years of age.

The latest updated version of Schedule 10 prepared by the Agent shall be the applicable version for purposes of this Agreement.

If any Commitments have been partially reduced under this Agreement and/or any part of the Loan is prepaid (other than under Clause 6.1a) above) before any Repayment Date, the amount of the instalments by which the Loan shall be repaid under Clause 6.1 above on any such Repayment Date (as reduced by any earlier operation of this Clause 6.1c)) shall be reduced pro rata to such reduction in the Total Commitments and the Scheduled Amortisation Payments shall be reduced on a pro rata basis.

No amounts repaid under this Clause 6.1 may be reborrowed.

6.2	Final Repayment Date

On the Final Repayment Date (without prejudice to any other provision of this Agreement), all outstanding amounts under this Agreement and the Security Documents (including, but not limited to the outstanding amounts of the Loan) shall be repaid in full.

7.	ILLEGALITY, PREPAYMENT AND CANCELLATION

7.1	Illegality

If it becomes unlawful (including, without limitation, if it becomes unlawful under or contrary to any applicable Sanctions Laws) in any applicable jurisdiction for a Lender to perform any of its obligations or to collect or claim any amount under the Loan as contemplated by this Agreement or to fund or maintain its participation in the Loan:

that Lender shall promptly notify the Agent upon becoming aware of that event;

upon the Agent notifying the Borrower, each Available Commitment of that Lender will be immediately cancelled and the undrawn Total Commitments shall each be reduced rateably; and

to the extent that the Lender’s participation has not been transferred pursuant to Clause 31.1 ( Assignments or Transfers by the Lenders ), the Borrower shall repay that Lender’s participation in the Loan on the last day of the Interest Period for such period occurring after the Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender’s corresponding Commitment(s) shall be cancelled in the amount of the participations repaid.

7.2	Mandatory Prepayment - Change of Control

Each Obligor shall promptly notify the Agent upon becoming aware of a Change of Control.

If a Change of Control occurs and unless the Agent has previously approved the Change of Control (acting on the instructions of all Lenders, whose consent shall not be unreasonably withheld or delayed) the Total Commitments shall be cancelled with effect from the date such Change of Control occurs and the Loan and all other outstanding obligations under this Agreement and any of the other Finance Documents shall be payable not later than the date falling thirty (30) days after the date on which such Change of Control occurs.

7.3	Mandatory Prepayment – Security Value

In the event that, following the receipt of the notice from the Agent under Clause 25.12 ( Security Shortfall ), the Borrower does not comply with the provisions of Clause 25.12 ( Security Shortfall ), the Borrower shall be

immediately obliged to prepay such amount of the Loan as shall be required in order to ensure that the Security Value equals or exceeds the Minimum Value.

7.4	Mandatory prepayment - Sale or Total Loss of a Mortgaged Vessel

Provided that no Default has occurred and is continuing and without prejudice to the requirement set out in Clause 25.12 ( Security Shortfall ) that the Security Value shall at all times be equal to the Minimum Value, in connection with any sale or Total Loss of a Mortgaged Vessel, on the applicable Disposal Repayment Date relating to such Mortgaged Vessel, the Borrower shall prepay such amount of the Loan as may be necessary to ensure that (on the basis of valuations of the Mortgaged Vessels that are no older than thirty (30) days as at the relevant Disposal Repayment Date), the ratio of the outstanding Loan after such prepayment to the Security Value after such sale or Total Loss shall be no higher than the ratio of the outstanding Loan prior to such prepayment to the Security Value prior to such sale or Total Loss.

If a Default has occurred and is continuing and without prejudice to the requirement set out in Clause 25.12 ( Security Shortfall ) that the Security Value shall at all times be equal to the Minimum Value, in connection with any sale or Total Loss of a Mortgaged Vessel, on the applicable Disposal Repayment Date relating to such Mortgaged Vessel, the Borrower shall apply all of the Disposal Proceeds or all of the insurance proceeds in respect of such Total Loss, as the case may, to the prepayment of the Loan.

7.5	Voluntary Cancellation

At any time the Borrower may, if it gives the Agent not less than three (3) Business Days’ prior written notice, cancel the whole or any part of the Available Facility. Upon any such cancellation the Commitments of the Lenders shall be reduced rateably.

7.6	Voluntary Prepayment

The Borrower may, if it gives the Agent not less than five (5) Business Days’ (or such shorter period as the Lenders may agree) prior written notice, prepay, on the last day of an Interest Period, the whole or any part of the Loan but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of one million Dollars (US$1,000,000) and in amounts that are even multiples of five hundred thousand Dollars (US$500,000) (or, in each case, such lesser amount as may be acceptable to the Agent).

7.7	Right of Replacement or Cancellation and Prepayment in Relation to a Single Lender

If:

any sum payable to any Lender by an Obligor is required to be increased under Clause 12.2 ( Tax Gross up ); or

ii)

any Lender claims indemnification from an Obligor under Clause 12.3 ( Tax Indemnity ) or Clause 13.1 ( Increased Costs );

the Borrower may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment(s) of that Lender and its intention to procure the repayment of that Lender’s participation in the Loan or give the Agent notice of its intention to replace that Lender in accordance with Clause 7.7d) below.

On receipt of a notice referred to in Clause 7.7a) above in relation to a Lender, the Commitment of that Lender shall immediately be reduced to zero and (unless the Commitment of the relevant Lender is replaced in accordance with Clause 7.7d) below), the Commitments shall be reduced rateably.

On the last day of each Interest Period which ends after the Borrower has given notice under Clause 7.7a) above in relation to a Lender (or, if earlier, the date specified by the Borrower in that notice), the Borrower shall repay that Lender’s participation in the Loan together with all interest and other amounts due to that Lender under the Finance Documents.

The Borrower may, in the circumstances set out in Clause 7.7a) above and if an Obligor becomes obliged to repay any amount in accordance with Clause 7.1 ( Illegality ), on ten (10) Business Days’ prior written notice to the Agent and the relevant Lender, replace that Lender by requiring that Lender to transfer (and, to the extent permitted by law, that Lender shall transfer) pursuant to Clause 31 ( Changes to the Lenders ) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank or financial institution selected by the Borrower which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 31 ( Changes to the Lenders ) for a purchase price in cash or other cash payment payable at the time of the transfer equal to the aggregate of:

the outstanding principal amount of such Lender’s participation in the Loan;

ii)

all accrued interest owing to such Lender;

iii)

the Break Costs which would have been payable to such Lender pursuant to Clause 10.6 ( Break Costs ) had the Borrower prepaid in full that Lender’s participation in the Loan on the date of the transfer; and

iv)

all other amounts payable to that Lender under the Finance Documents on the date of the transfer.

The replacement of a Lender pursuant to Clause 7.7d) above shall be subject to the following conditions:

the Borrower shall have no right to replace the Agent;

ii)

neither the Agent nor any Lender shall have any obligation to find a replacement Lender; and

iii)

in no event shall the Lender replaced under Clause 7.7d) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents.

If any Lender becomes a Defaulting Lender, the Borrower may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent twenty (20) Business Days’ notice of the cancellation of the undrawn Commitment of that Lender.

7.8	Automatic Cancellation

Any part of the Total Commitments which has not become available by the end of the Availability Period relating to that part of the Total Commitments shall be automatically cancelled at close of business in London on the last day of the relevant Availability Period.

7.9	Restrictions

Any notice of cancellation or prepayment given by any Party under this Agreement shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs if the prepayment is not made on the last day of the relevant Interest Period,

without premium or penalty. Any cancellation of any part of the Total Commitments pursuant to this Agreement shall be made without premium or penalty.

The Borrower may not reborrow any part of the Facility which is repaid or prepaid.

The Borrower shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

Subject to Clause 2.2 ( Increase ), no amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

If the Agent receives a notice under this Clause 7 it shall promptly forward a copy of that notice to either the Borrower or the affected Lender, as appropriate.

If any Commitments are partially reduced under this Agreement (other than under Clause 7.1 ( Illegality ) and Clause 7.7 ( Right of Cancellation and Prepayment in Relation to a Single Lender )), the Commitments of the Lenders shall be reduced rateably.

Any prepayment of the Loan pursuant to Clause 7.3 ( Mandatory Prepayment – Security Value ) to Clause 7.4 ( Mandatory prepayment - Sale or Total Loss of Collateral Vessels ) and Clause 7.6 ( Voluntary Prepayment ) shall be applied against the Loan pro rata to each Lender’s participation in the Loan and pro rata against each Scheduled Amortisation Payment.

INTEREST

8.1	Calculation of Interest

The rate of interest on the Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:

Margin; and

LIBOR.

8.2	Payment of Interest

The Borrower shall pay accrued interest on the Loan on the last day of each Interest Period or, if an Interest Period is longer than three (3) months, every three (3) months during such Interest Period and on the last day of such Interest Period. All interest is due and payable in cash.

8.3	Default Interest

If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to Clause 8.3 b) below, is two per cent. (2%) higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted the Loan for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing in accordance with this Clause 8.3 shall be immediately payable by the Obligor on demand by the Agent.

If any overdue amount consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period:

the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period; and

ii)

the rate of interest applying to the overdue amount during that first Interest Period shall be two per cent. (2%) higher than the rate which would have applied if the overdue amount had not become due.

8.4	Notification of Rates of Interest

The Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.

The Agent shall promptly notify the Borrower of each Funding Rate relating to the Loan.

9.	INTEREST PERIODS

9.1	Selection of Interest Periods

The Borrower may select an Interest Period for the first Utilisation in the Utilisation Request for that Utilisation. The first Interest Period for each Subsequent Utilisation shall commence on the Utilisation Date for that Utilisation and end on the last day of the then current Interest Period applicable to the Loan.

The Borrower may select an Interest Period for the Loan in a Selection Notice.

Each Selection Notice is irrevocable and must be delivered to the Agent by the Borrower not later than 10:00 a.m. three (3) Business Days before the first day of the relevant Interest Period.

If the Borrower fails to deliver a Selection Notice to the Agent in accordance with paragraph c) above, the relevant Interest Period will be three (3) months.

Subject to this Clause 9, the Borrower may select an Interest Period of one (1), three (3), or (6) six month(s) or any other period agreed between the Borrower and the Agent (acting on the instructions of all the Lenders), provided that the Borrower may not select an Interest Period of one (1) month more than three (3) times in a calendar year.

No Interest Period shall extend beyond the Final Repayment Date.

9.2	Non Business Days

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

9.3	Commencement of Interest Periods

Each Interest Period shall start on the Utilisation Date or (if already made) on the last day of its preceding interest period.

10.	CHANGES TO THE CALCULATION OF INTEREST

10.1	Unavailability of Screen Rate

Interpolated Screen Rate : If no Screen Rate is available for LIBOR for an Interest Period, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to that Interest Period.

Shortened Interest Period : If no Screen Rate is available for LIBOR for an Interest Period and it is not possible to calculate the Interpolated Screen Rate, that Interest Period shall (if it is longer than the applicable Fallback Interest Period) be shortened to the applicable Fallback Interest Period and the applicable LIBOR for that shortened Interest Period shall be determined pursuant to the definition of “ LIBOR ”.

Shortened Interest Period and Historic Screen Rate : If an Interest Period is, after giving effect to paragraph b) above, either the applicable Fallback Interest Period or shorter than the applicable Fallback Interest Period and, in either case, no Screen Rate is available for LIBOR for that Interest Period and it is not possible to calculate the Interpolated Screen Rate, the applicable LIBOR shall be the Historic Screen Rate for that Loan.

Shortened Interest Period and Interpolated Historic Screen Rate : If paragraph c) above applies but no Historic Screen Rate is available for an Interest Period, the applicable LIBOR shall be the Interpolated Historic Screen Rate for a period equal in length to that Interest Period.

Base Reference Bank Rate : If paragraph d) above applies but it is not possible to calculate the Interpolated Historic Screen Rate, the Interest Period shall, if it has been shortened pursuant to paragraph b) above, revert to its previous length and the applicable LIBOR shall be the Base Reference Bank Rate as of 11:00 a.m. on the Quotation Day for the currency of the Loan and for a period equal in length to that Interest Period.

Cost of funds : If p aragraph e) above applies but no Base Reference Bank Rate is available for the relevant currency or Interest Period there shall be no LIBOR for the Loan and Clause 10.4 ( Cost of funds ) shall apply to the Loan for that Interest Period.

10.2	Calculation of Base Reference Bank Rate

Subject to paragraph b) below, if LIBOR is to be determined on the basis of a Base Reference Bank Rate but a Base Reference Bank does not supply a quotation by 11:00 a.m. on the Quotation Day, the Base Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Base Reference Banks.

If at or about noon on the Quotation Day none or only one of the Base Reference Banks supplies a quotation, there shall be no Base Reference Bank Rate for the relevant Interest Period.

10.3	Market disruption

If before close of business in London on the Quotation Day for the relevant Interest Period the Agent receives notifications from a Lender or Lenders (whose participations in the Loan exceed twenty per cent. (20%) of the Loan) that the cost to it of funding its participation in that Loan from whatever source it may reasonably select would be in excess of LIBOR then Clause 10.4 ( Cost of funds ) shall apply to that Loan for the relevant Interest Period.

10.4	Cost of funds

If this Clause 10.4 applies, the rate of interest on the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

the Margin; and

ii)

the weighted average of the rates notified to the Agent by each Lender as soon as practicable and in any event before the date on which interest is due to be paid in respect of that Interest Period, to be that

which expresses as a percentage rate per annum the cost to that Lender of funding its participation in the Loan from whatever source it may reasonably select.

If this Clause 10.4 applies and the Agent or the Borrower so requires, the Agent and the Borrower shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.

Any alternative basis agreed pursuant to paragraph b) above shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.

If this Clause 10.4 applies pursuant to Clause 10.3 ( Market disruption ) and:

a Lender's Funding Rate is less than LIBOR; or

ii)

a Lender does not supply a quotation by the time specified in paragraph a)ii) above,

the cost to that Lender of funding its participation in that Loan for that Interest Period shall be deemed, for the purposes of paragraph a) above, to be LIBOR.

If thi s Clause 10.4 applies pursuant to Clause 10.1 ( Unavailability of Screen Rate ) but any Lender does not supply a quotation by the time specified in paragraph a)ii) above the rate of interest shall be calculated on the basis of the quotations of the remaini ng Lenders.

10.5	Notification to Borrower

If Clause 10.4 ( Cost of funds ) applies the Agent shall, as soon as is practicable, notify the Borrower.

10.6	Break Costs

The Borrower shall, within three (3) Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of the Loan or any Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for the Loan or that Unpaid Sum.

Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

11.

FEES

11.1	Commitment fee

The Borrower shall pay to the Agent (for the account of each Lender) a fee in Dollars computed at the rate of 35% of the Margin on that Lender's Available Commitment under the Facility for the Availability Period.

The commitment fee will accrue as from the date of this Agreement and accrued commitment fee is payable on the last day of each successive period of three Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.

No commitment fee is payable to the Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender.

11.2	Other fees

The Borrower shall pay the fees set out in any Fee Letter in the amounts and at the times set out in such Fee Letter.

12.	TAX GROSS UP AND INDEMNITIES

12.1	Definitions

In this Agreement:

" Borrower DTTP Filing " means an HM Revenue & Customs' Form DTTP2 duly completed and filed by the relevant Borrower, which:

where it relates to a Treaty Lender that is the Original Lender, contains the scheme reference number and jurisdiction of tax residence and is filed with HM Revenue & Customs within 30 days of the date of this Agreement; or

where it relates to a Treaty Lender that is a New Lender, contains the scheme reference number and jurisdiction of tax residence stated in respect of that Lender in the relevant Transfer Certificate or Assignment Agreement and is filed with HM Revenue & Customs within 30 days of that Transfer Date.

" CTA " means the Corporation Tax Act 2009.

" ITA " means the Income Tax Act 2007.

" Qualifying Lender " means a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is:

a Lender:

which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document and is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payment apart from section 18A of the CTA; or

ii)

in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made and within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or

a Lender which is:

a company resident in the United Kingdom for United Kingdom tax purposes; or

ii)

a partnership each member of which is:

a company so resident in the United Kingdom; or

a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits

(within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA;

iii)

a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company; or

a Treaty Lender; or

the Original Lender.

" Tax Credit " means a credit against, relief or remission for, or repayment of, any Tax.

" Tax Deduction " means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.

" Tax Payment " means either the increase in a payment made by the Borrower to a Finance Party under Clause 12.2 ( Tax gross-up ) or a payment under Clause 12.3 ( Tax indemnity ).

" Treaty Lender " means a Lender which:

is treated as a resident of a Treaty State for the purposes of the Treaty; and

does not carry on a business in the United Kingdom through a permanent establishment with which that Lender's participation in the Loans is effectively connected.

" Treaty State " means a jurisdiction having a double taxation agreement (a " Treaty ") with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest.

Unless a contrary indication appears, in this Clause 12.1 a reference to " determines " or " determined " means a determination made in the absolute discretion of the person making the determination.

12.2	Tax gross-up

Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

The Borrower shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Borrower.

If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from the Borrower shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

A payment shall not be increased under paragraph (c) above by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due:

the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the

interpretation, administration, or application of) any law or Treaty or any published practice or published concession of any relevant taxing authority; or

ii)

the relevant Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under paragraph (g) or (h) (as applicable) below.

If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment a statement under section 975 of the ITA or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.

Subject to paragraph (ii) below, a Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for the Obligor to obtain authorisation to make that payment without a Tax Deduction.

ii)

A Treaty Lender which becomes a Party on the day on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence; and

a New Lender that is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence in the Transfer Certificate or Assignment Agreement which it executes,

and, having done so, that Lender shall be under no obligation pursuant to paragraph (i) above.

If a Lender has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with paragraph (g)(ii) above and:

the Borrower has not made the Borrower DTTP Filing in respect of that Lender; or

ii)

the Borrower has made the Borrower DTTP Filing in respect of that Lender but:

the Borrower DTTP Filing has been rejected by HM Revenue & Customs; or

HM Revenue & Customs has not given the Obligor authority to make payments to that Lender without a Tax Deduction within 60 days of the date of the Borrower DTTP Filing,

and in each case, the Obligor has notified that Lender in writing, that Lender and the Obligor shall co-operate in completing any additional procedural formalities necessary for the Obligor to obtain authorisation to make that payment without a Tax Deduction.

If a Lender has not confirmed its scheme reference number and jurisdiction of tax residence in accordance with paragraph (g)(ii) above, the Obligor shall not make a Borrower DTTP Filing or file any other form relating

to the HMRC DT Treaty Passport scheme in respect of that Lender's Commitment(s) or its participation in any Utilisation unless the Lender otherwise agrees.

The Borrower shall, promptly on making a Borrower DTTP Filing, deliver a copy of that Borrower DTTP Filing to the Agent for delivery to the relevant Lender.

12.3	Tax indemnity

The Borrower shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.

Paragraph (a) above shall not apply:

with respect to any Tax assessed on a Finance Party:

under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or

ii)

to the extent a loss, liability or cost:

is compensated for by an increased payment under Clause 12.2 ( Tax gross-up ); or

would have been compensated for by an increased payment under Clause 12.2 ( Tax gross-up ) but was not so compensated solely because one of the exclusions in paragraph (d) of Clause 12.2 ( Tax gross-up ) applied; or

relates to a FATCA Deduction required to be made by a Party.

A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Borrower.

A Protected Party shall, on receiving a payment from the Borrower under this Clause 12.3, notify the Agent.

12.4	Tax Credit

If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and

that Finance Party has obtained and utilised that Tax Credit,

the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.

12.5	Lender Status Confirmation

Each Lender which becomes a Party to this Agreement after the date of this Agreement shall indicate, in the documentation which it executes on becoming a Party, and for the benefit of the Agent and without liability to any Obligor, which of the following categories it falls in:

not a Qualifying Lender;

a Qualifying Lender (other than a Treaty Lender); or

a Treaty Lender.

If that Lender fails to indicate its status in accordance with this Clause 12.5 then such Lender shall be treated for the purposes of this Agreement (including by each Obligor) as if it is not a Qualifying Lender until such time as it notifies the Agent which category applies (and the Agent, upon receipt of such notification, shall inform the Company). For the avoidance of doubt, the documents which a Lender executes on becoming a Party shall not be invalidated by any failure of a Lender to comply with this Clause 12.5.

12.6	Stamp Taxes

The Borrower shall pay and, within three (3) Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

12.7	Value Added Tax

All amounts set out, or expressed in a Finance Document to be payable by any party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to Clause 12.7b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate VAT invoice to such party).

If VAT is or becomes chargeable on any supply made by any Finance Party (the “ Supplier ”) to any other Finance Party (the “ Recipient ”) under a Finance Document, and any party to a Finance Document other than the Recipient (the “ Subject Party ”) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration):

(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Subject Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph i) applies) promptly pay to the Subject Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

ii)

(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Subject Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

Where a Finance Document requires any party to it to reimburse or indemnify a Finance Party for any cost or expense, that party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment of in respect of such VAT from the relevant tax authority.

Any reference in this Clause 12.7d) to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the person who is treated at that time as making the supply, or (as appropriate) receiving the supply, under the grouping rules (provided for in Article 11 of Council Directive 2006/112/EC (or as implemented by the relevant Member State of the European Union) so that a reference to a Party shall be construed as a reference to that Party or the relevant group or unity (or fiscal unity) of which that Party is a member for VAT purposes at the relevant time or the relevant representative member (or representative or head) of that group or unity at the relevant time (as the case may be)).

12.8	FATCA Information

Subject to Clause 12.8c) below, each Party shall, within ten (10) Business Days of a reasonable request by another Party:

confirm to that other Party whether it is:

a FATCA Exempt Party; or

not a FATCA Exempt Party;

ii)

supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA;

iii)

supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party’s compliance with any other law, regulation, or exchange of information regime.

If a Party confirms to another Party pursuant to paragraph a)i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

Clause 12.8a) above shall not oblige any Finance Party to do anything, and Clause 12.8a)iii) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:

any law or regulation;

ii)

any fiduciary duty; or

iii)

any duty of confidentiality.

If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with Clause 12.8a)i) or a)ii) above (including, for the avoidance of doubt, where Clause 12.8c) above applies), then such Party shall be treated for the purposes of the Finance

Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.

If the Borrower is a US Tax Obligor or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten (10) Business Days of:

where the Borrower is a US Tax Obligor and the relevant Lender is the Original Lender, the date of this Agreement;

ii)

where the Borrower is a US Tax Obligor on a date on which any other lender becomes a Party as a Lender, that date; or

iii)

where the Borrower is not a US Tax Obligor, the date of a request from the Agent,

supply to the Agent:

a withholding certificate on Form W-8, Form W-9 or any other relevant form; or

any withholding statement or other document, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.

The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clause 12.8e) above to the relevant Borrower.

If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to Clause 12.8e) above is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Agent). The Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the relevant Borrower.

The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clauses 12.8e) or g) above without further verification. The Agent shall not be liable for any action taken by it under or in connection with Clauses 12.8e), f) or g) above.

12.9	FATCA Deduction

Each Party may make any FATCA Deduction from a payment under this Agreement that it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrower and the Agent and the Agent shall notify the other Finance Parties.

13.	INCREASED COSTS

13.1	Increased Costs

Subject to Clause 13.3 ( Exceptions ), the Borrower shall, within three (3) Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of:

the introduction after the date of this Agreement of or any change in (or in the interpretation, administration or application of) any law or regulation;

ii)

compliance with any law or regulation made after the date of this Agreement;

iii)

the implementation or application of or compliance with Basel III, CRD IV, or CRR or any law or regulation (whether national, international or supranational) implementing Basel III, CRD IV or CRR; or

iv)

any change in (or change of interpretation, administration or application of) the implementation, administration or application of or compliance with Basel III, CRD IV, or CRR or any other law or regulation which implements or applies Basel III, CRD IV, or CRR whether such implementation, application or compliance is by government, regulator, Finance Party or any of its Affiliates.

In this Agreement:

“ Increased Costs ” means:

a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;

ii)

an additional or increased cost; or

iii)

a reduction of any amount due and payable under any Finance Document,

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.

“ Basel III ” means:

the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

ii)

the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text” published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

iii)

any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”.

“ CRD IV ” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms.

“ CRR ” means the Council Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012.

13.2	Increased Cost Claims

A Finance Party intending to make a claim pursuant to Clause 13.1 ( Increased Costs ) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.

Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.

The Borrower shall not be obliged to compensate a Finance Party in respect of any claim pursuant to Clause 13.1 ( Increased Costs ) which relates to Increased Costs incurred more than twelve (12) months prior to the date on which the Finance Party (or the Agent in accordance with paragraph a) above) notifies the Agent of the event giving rise to the claim.

13.3	Exceptions

Clause 13.1 ( Increased Costs ) does not apply to the extent any Increased Cost is:

attributable to a Tax Deduction required by law to be made by an Obligor;

ii)

attributable to a FATCA Deduction required to be made by a Party;

iii)

compensated for by Clause 12.3 ( Tax Indemnity ) (or would have been compensated for under Clause 12.3 ( Tax Indemnity ) but was not so compensated solely because any of the exclusions in Clause 12.3 ( Tax Indemnity ) applied);

iv)

attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation; or

attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III, Basel IV, CRD IV, or CRR) (“ Basel II ”) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).

In this Clause 13.3, a reference to a “ Tax Deduction ” has the same meaning given to the term in Clause 12.1 ( Definitions ).

14.	OTHER INDEMNITIES

14.1	Currency Indemnity

If any sum due from an Obligor under the Finance Documents (a “ Sum ”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “ First Currency ”) in which that Sum is payable into another currency (the “ Second Currency ”) for the purpose of:

making or filing a claim or proof against that Obligor; and/or

ii)

obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

that Obligor shall, as an independent obligation, within three (3) Business Days of demand by a Finance Party, indemnify each Finance Party to whom that Sum is due against any Losses arising out of or as a result of the conversion including any discrepancy between (i) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (ii) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

14.2	Other Indemnities

The Borrower shall (or shall procure that another Obligor will), within three (3) Business Days of demand by a Finance Party, indemnify each Finance Party against any and all Losses incurred by that Finance Party as a result of:

the occurrence of any Event of Default;

a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any and all Losses arising as a result of Clause 36 ( Sharing Among the Finance Parties );

funding, or making arrangements to fund, its participation in the Loan requested by the Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone);

the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower; or

any claim, action, civil penalty or fine against, any settlement, and any other kind of loss or liability, and all reasonable costs and expenses (including reasonable counsel fees and disbursements) incurred by the Agent or any Finance Party as a result of the conduct of an Obligor or any of their partners (where such Obligor is a partnership) directors, officers, employees, agents or advisors that violates any Sanctions Laws, and shall cover any cost, loss or liability incurred by each Finance Party in any jurisdiction arising or asserted under or in connection with any Sanctions Laws as a result of the aforementioned.

14.3	Indemnity to the Agent and the Security Agent

The Borrower shall promptly indemnify the Agent and the Security Agent against:

any and all Losses incurred by the Agent or the Security Agent (acting reasonably) as a result of:

investigating any event which it reasonably believes is a Default;

ii)

acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;

iii)

instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement;

iv)

any action taken by the Agent or the Security Agent or any of their representatives, agents or contractors in connection with any powers conferred by any Security Document to remedy any breach of any Obligor’s obligations under the Finance Documents; and

any Losses incurred by the Agent (otherwise than by reasons of the Agent’s gross negligence or wilful misconduct or, in the case of any Losses pursuant to Clause 37.12 ( Disruption to Payment Systems Etc .) notwithstanding the Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent under the Finance Documents.

14.4	Indemnity Concerning Security

The Borrower shall (or shall procure that another Obligor will) promptly indemnify each Indemnified Person against any cost, expense, loss or liability incurred by it in connection with:

any failure by the Borrower to comply with its obligations under Clause 16 ( Costs and Expenses );

ii)

the taking, holding, protection or enforcement of the Security Documents;

iii)

the exercise or purported exercise of any of the rights, powers, discretions and remedies vested in the Security Agent and each Receiver or Delegate by the Finance Documents or by law unless and to the extent that it was caused by its gross negligence or wilful misconduct;

iv)

any claim (whether relating to the environment or otherwise) made or asserted against the Indemnified Person which would not have arisen but for the execution or enforcement of one or more Finance Documents (unless and to the extent it is caused by the gross negligence or wilful misconduct of that Indemnified Person);

any breach by any Obligor of the Finance Documents; or

vi)

its role (as applicable) as Security Agent, Receiver or Delegate under the Finance Documents or otherwise in connection with the Charged Property (otherwise, in each case, than by reason of the relevant Security Agent’s, Receiver’s or Delegate’s gross negligence or wilful misconduct).

The Security Agent and every Receiver and Delegate may, in priority to any payment to the other Finance Parties, indemnify itself out of the Trust Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.4 and shall have a lien on the Trust Property and the proceeds of the enforcement of the relevant Security Documents for all monies payable to it.

14.5	Indemnity Concerning Claims

The Guarantors hereby indemnify and agree to hold harmless each of the Finance Parties and in each case each of its and their Affiliates and each of their respective officers, directors, employees, agents, advisors and representatives (each, an “ Indemnified Party ”) from and against any and all Losses joint or several, that may be incurred by or asserted or awarded against any Indemnified Party, in each case arising out of or in connection with or relating to any claim, investigation, litigation or proceeding (or the preparation of any defence with respect thereto) commenced or threatened in relation to the Agreement (or the transactions contemplated hereby or thereby) or any use made or proposed to be made with the proceeds of the Facility except to the extent that such Losses resulted from such Indemnified Party’s gross negligence or wilful misconduct.

14.6	Environmental Indemnity

Without in any way limiting the generality of the other provisions contained in this Clause 14, the Borrower shall (or shall procure that an Obligor will), on demand, defend, protect, indemnify, save and hold harmless each Indemnified Person, without prejudice to any of their other rights under this Agreement and the other Finance Documents, from and against any and all Losses, demands, actions, proceedings (whether civil or criminal), penalties, fines, damages, judgments, orders, sanctions or other outgoings of whatever nature which may be suffered, incurred or paid by, or made or asserted against the Indemnified Persons or any of them at any time, whether before or after the repayment in full of principal and interest under this Agreement, in connection with or arising out of any Environmental Claim or otherwise arising out of or related to assets which is subject to any Security Documents, including:

the actual or alleged presence of Hazardous Materials on, in, under or affecting all or any of the Mortgaged Vessels, any body of water, any other public domain or any surrounding areas, whether or not the same originates or emanates from the Mortgaged Vessels or from properties at which any Hazardous Materials generated, stored or handled by the Borrower were Released or disposed of; or

ii)

any Environmental Claim or other environmental action relating to the Vessels (or any of them) or any of the assets which are the subject of any of the Security Documents (the “ Indemnified Matters ”), whether any of the Indemnified Matters arise before or after acceleration of the Loan pursuant to Clause 29.24 (Acceleration) including, without limitation, (A) the costs of removal of any and all Hazardous Materials from all or any of the Mortgaged Vessels, any body of water, any other public domain or any surrounding areas, (B) additional costs required to take reasonable precautions to protect against the Release of Hazardous Materials on, in, under or affecting the Mortgaged Vessels into the air, any body of water, any other public domain or any surrounding areas, and (C) costs incurred to comply, in connection with all or any portion of the Project, with all applicable Environmental Laws with respect to Hazardous Materials, except to the extent that any such Indemnified Matter arises solely from the gross negligence or wilful misconduct of that Indemnified Person; or

iii)

any other loss incurred by the Finance Party due to any non-compliance of any Environmental Laws applicable to the Obligors and/or the Mortgaged Vessels.

In no event shall any site visit, observation, or testing by any Finance Party (or any representative of any such Finance Party) be deemed to be a representation or warranty that Hazardous Materials are or are not present with respect to the Mortgaged Vessel or that there has been or shall be compliance with any Environmental Law.

Neither the Borrower nor any other person is entitled to rely on any site visit, observation, or testing by any Finance Party or its representative.

No Finance Party owes any duty of care to protect the Borrower or any other person against, or to inform the Borrower or any other person of, any Hazardous Materials or any other adverse condition affecting the Mortgaged Vessels.

No Finance Party shall be obligated to disclose to the Borrower or any other person any report or findings made as a result of, or in connection with, any site visit, observation, or testing by any Finance Party or its representatives.

Notwithstanding anything to the contrary set forth above in this Clause 14.6, if any event occurs with respect to a Fleet Vessel (other than a Mortgaged Vessel) in respect of which indemnification may be sought from the Borrower under this Clause 14.6, the Indemnified Person seeking such indemnification shall only be indemnified if it notifies the Borrower in writing within a reasonable time after the relevant Indemnified Person becomes aware of such event and shall, to the extent legally permitted and only if it would not prejudice the defence or making of such claim, consult with the Borrower with respect to the conduct of the relevant claim, action or proceeding, conducts such action or proceeding properly and diligently (based on advice from its legal counsel, to the extent permitted by law and without being under any obligation to disclose any information which it is not lawfully permitted to disclose) and does not settle any such claim, action or proceeding without the Borrower’s prior written consent (such consent not to be unreasonably withheld or delayed.

14.7	Continuation of Indemnities

The indemnities by the Borrower in favour of the Indemnified Persons contained in this Agreement shall continue in full force and effect notwithstanding the repayment or prepayment of the Loan or any part of it, the cancellation of the Total Commitments or the repudiation by the Agent or the Borrower of this Agreement.

14.8	Third Parties Act

Each Indemnified Person may rely on the terms of Clause 14.4 ( Indemnity Concerning Security ) and Clauses 12 ( Tax Gross up and Indemnities ) and 14.9 ( Interest ) insofar as it relates to interest on any amount demanded by that Indemnified Person under Clause 14.4 ( Indemnity Concerning Security ), subject to Clause 1.3 ( Third Party Rights ) and the provisions of the Third Parties Act.

14.9

Interest

Moneys becoming due by the Borrower to any Indemnified Person under the indemnities contained in this Clause 14 ( Other Indemnities ) shall be paid within five (5) Business Days following a demand from such Indemnified Person and shall be paid together with interest on the sum demanded from the date which is five (5) Business Days following the date of demand therefor to the date of reimbursement by the Borrower to such Indemnified Person (both before and after judgment) at the rate referred to in Clause 8.3 ( Default Interest ).

14.10

Exclusion of Liability

No Indemnified Person will be in any way liable or responsible to any Obligor (whether as a mortgagee in possession or otherwise) who is a Party or is a party to a Finance Document to which this clause applies for any loss or liability arising from any act, default, omission or misconduct of that Indemnified Person, except to the extent caused by its own gross negligence or wilful misconduct. Any Indemnified Person may rely on this Clause 14.10, subject to Clause 1.3 ( Third Party Rights ) and the provisions of the Third Parties Act.

15.	MITIGATION BY THE LENDERS

15.1	Mitigation

Each Finance Party shall, in consultation with the Borrower, take all reasonable steps to mitigate any circumstances which arise and which would result in the Facility ceasing to be available or any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 ( Illegality ), Clause 12 (T ax Gross up and Indemnities ) or Clause 13.1 ( Increased Costs ) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

Clause 15.1a) above does not in any way limit the obligations of any Obligor under the Finance Documents.

15.2	Limitation of Liability

The Borrower shall promptly indemnify each Finance Party for all costs and expenses incurred by that Finance Party as a result of steps taken by it under Clause 15.1 ( Mitigation ).

A Finance Party is not obliged to take any steps under Clause 15.1 ( Mitigation ) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

16.	COSTS AND EXPENSES

16.1	Transaction Expenses

The Borrower shall promptly, regardless of whether any Utilisation has occurred, within five (5) Business Days of demand pay any Finance Party the amount of all costs and expenses (including fees, costs and expenses of legal advisers and insurance and other consultants and advisers) reasonably incurred by any of them (and by any Receiver or Delegate) in connection with the negotiation, preparation, printing, execution, registration and perfection and any release, discharge or reassignment of:

this Agreement, and any other documents referred to in this Agreement and the Security Documents;

any other Finance Documents executed or proposed to be executed after the date of this Agreement including any executed to provide additional security under Clause 25 ( Minimum Security Value ); or

any Security Interest expressed or intended to be granted by a Finance Document.

16.2	Amendment Costs

If an Obligor requests an amendment, waiver or consent, the Borrower shall, within five (5) Business Days of demand, reimburse the Agent and the Security Agent for the amount of all costs and expenses (including fees, costs and expenses of legal advisers and insurance and other consultants and advisers) reasonably incurred by the Agent or the Security Agent (and by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.

16.3	Security Agent's management time and additional remuneration

Any amount payable to the Security Agent under Clause 14.3 ( Indemnity to the Agent and the Security Agent ) and this Clause 16 following the occurrence of an Event of Default and while it is continuing shall include the cost of utilising the Security Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hou rly rates as the Security Agent may notify to the Borrower and the Lenders, and is in addition to any other fee paid or payable to the Security Agent.

Without prejudice to paragraph a) above, in the event of:

the Security Agent being requested by an Obligor or the Majority Lenders to undertake duties which the Security Agent and the Borrower agree to be of an exceptional nature or outside the scope of the normal duties of the Security Agent under the Finance Documents; or

ii)

the Security Agent and the Borrower agreeing that it is otherwise appropriate in the circumstances,

the Borrower shall pay to the Security Agent any additional remuneration that may be agreed between them or determined pursuant to paragraph c) below.

If the Security Agent and the Borrower fail to agree upon the nature of the duties, or upon the additional remuneration referred to in paragraph b) above or whether additional remuneration is appropriate in the circumstances, any dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Borrower or, failing approval, nominated (on the application of the Security Agent) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Borrower) and the determination of any investment bank shall be final and binding upon the Parties.

16.4	Enforcement, Preservation and Other Costs

The Borrower shall within five (5) Business Days of demand by a Finance Party, pay to each Finance Party the amount of all costs and expenses (including fees, costs and expenses of legal advisers and insurance and other consultants, brokers, surveyors and advisers) incurred by that Finance Party in connection with:

the enforcement of, or the preservation of any rights under, any Finance Document and any proceedings initiated by or against any Indemnified Person and as a consequence of holding the Charged Property or enforcing those rights;

any valuation carried out under Clause 25 ( Minimum Security Value ); provided, however, that if no Event of Default has occurred and is continuing, the costs of valuations carried out with inspection at the request of the Agent as contemplated in Clause 25.6a) ( Basis of Valuation ) to be borne by the Borrower shall be limited to one such valuation per year per Mortgaged Vessel; and/or

any inspection carried out under Clause 23.8 ( Inspection and Notice of Drydockings ); provided, however, that if no Event of Default has occurred and is continuing, the costs of such inspections to be borne by the Borrower shall be limited to one such inspection per year per Mortgaged Vessel.

For purposes of determining the costs and expenses of valuations with inspection and inspections to be borne by the Borrower as contemplated in Clause b) and Clause c) above, a valuation with inspection shall also count as an inspection.

17.	GUARANTEE AND INDEMNITY

17.1	Guarantee and Indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:

guarantees to the Security Agent (as trustee for the Finance Parties) and the other Finance Parties punctual performance by each other Obligor of all such Obligor’s obligations under the Finance Documents;

undertakes with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and

agrees with the Security Agent (as trustee for the Finance Parties) and the other Finance Parties that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have become due. The amount payable by the Guarantors under this indemnity will not exceed the amount it would have had to pay under this Clause 17.1 if the amount claimed had been recoverable on the basis of a guarantee.

17.2	Continuing Guarantee

This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

17.3	Reinstatement

If any discharge, release or arrangement (whether in respect of the obligations of an Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each of the Guarantors under this Clause 17 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

17.4	Waiver of Defences

The obligations of each Guarantor under this Clause 17 will not be affected by an act, omission, matter or thing (whether or not known to it or any Finance Party) which, but for this Clause 17.4, would reduce, release or prejudice any of its obligations under this Clause 17 including (without limitation):

any time, waiver or consent granted to, or composition with, any Obligor or other person;

the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any other Group Member;

the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or increase in any facility or the addition of any new facility under any Finance Document or other document or security;

any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security;

any insolvency or similar proceedings; or

any change in name, authorised activities, capital stock, corporate existence, structure, personnel or ownership of the Borrower or any other Obligor.

17.5	Guarantor Intent

Without prejudice to the generality of Clause 17.4 ( Waiver of Defences ), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

17.6	Immediate Recourse

Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 17. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

17.7	Appropriations

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and none of the Guarantors shall be entitled to the benefit of the same; and

hold in an interest bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under this Clause 17.

17.8	Deferral of Guarantors’ Rights

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 17:

to be indemnified by another Obligor;

to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;

to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which a Guarantor has given a guarantee, undertaking or indemnity under this Clause 17;

to exercise any right of set off against any other Obligor; and/or

to claim or prove as a creditor of any other Obligor in competition with any Finance Party.

If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay an equal amount to the Agent or as the Agent may direct for application in accordance with Clause 37 ( Payment Mechanics ).

17.9	Additional Security

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

17.10

Release

A Guarantor shall be released from its obligations under this Clause 17 (and, with effect from the date of such release, shall be deemed to have resigned as a Guarantor and Obligor under the Finance Documents and shall no longer be considered a Guarantor or Obligor under the Finance Documents) if and to the extent all Mortgaged Vessels which it owns are sold and/or become a Total Loss provided that, in respect of a sale or Total Loss of a Mortgaged Vessel:

the provisions of Clause 7.4 ( Mandatory Prepayment - Sale or Total Loss of a Mortgaged Vessel ) have been complied with to the Agent’s satisfaction; and

no Event of Default has occurred.

18.	REPRESENTATIONS

Each of the Borrower and the Guarantors makes and repeats the representations and warranties set out in this Clause 18 in relation to itself and any Transaction Documents to which it is a party to each Finance Party at the times specified in Clause 18.33 ( Times When Representations are Made ).

18.1

Status

Each Obligor is duly incorporated or formed and validly existing under the laws of the jurisdiction of its incorporation or formation as a limited liability company, partnership or corporation.

Each Obligor has power and authority to carry on its business as it is now being conducted and to own its property and other assets.

18.2	Binding Obligations

Subject to the Legal Reservations, (a) the obligations expressed to be assumed by each Obligor in each Transaction Document to which it is, or is to be, a party are or, when entered into by it, will be legal, valid, binding and enforceable obligations and (b) each Security Document to which an Obligor is, or will be, a party, creates or will create the Security Interests which that Security Document purports to create and those Security Interests are or will be valid and effective.

18.3	Power and Authority

Each Obligor has power to enter into, perform and deliver and comply with its obligations under, and has taken all necessary action to authorise its entry into, performance and delivery of each Transaction Document to which it is or is to be a party and the transactions contemplated by those Transaction Documents.

No limitation on any Obligor’s powers to borrow, create security or give guarantees will be exceeded as a result of any transaction under, or the entry into of, any Transaction Document to which such Obligor is, or is to be, a party.

18.4	Non conflict

The entry into and performance by each Obligor of, and the transactions contemplated by, the Transaction Documents and the granting of the Security Interests purported to be created by the Security Documents do not and will not conflict with:

any present law or regulation or judicial or official order applicable to any Obligor;

the Constitutional Documents of any Obligor; or

any document, agreement or other instrument binding upon any Obligor or any Obligor’s assets, and do not or will not constitute a default or termination event (however described) under any such agreement or instrument or result in the creation of any Security Interest (save for a Permitted Security Interest) on any Obligor’s assets, rights or revenues.

18.5	Validity and Admissibility in Evidence

All Authorisations required or desirable:

to enable each Obligor lawfully to enter into, exercise its rights and comply with its obligations under each Transaction Document to which it is a party;

ii)

to make each Transaction Document to which it is a party valid and enforceable and admissible in evidence in its Relevant Jurisdiction; and

iii)

to ensure that each Transaction Security has the priority and ranking contemplated by it,

have been obtained or effected and are in full force and effect except any Authorisation referred to in Clause 18.12 ( No Filing or Stamp Taxes ), which Authorisation will be promptly obtained or effected within any applicable period.

All Authorisations necessary for the conduct of the business, trade and ordinary activities of each Obligor as presently conducted have been obtained or effected and are in full force and effect, if and to the extent that failure to obtain those Authorisations has or is reasonably likely to have a Material Adverse Effect.

18.6	Governing Law and Enforcement

Subject to the Legal Reservations, the choice of English law or any other applicable law as the governing law of any Transaction Document will be recognised and enforced in each relevant Obligor’s Relevant Jurisdiction.

Subject to the Legal Reservations, any judgment obtained in relation to a Transaction Document in the jurisdiction of the governing law of that Transaction Document will be recognised and enforced in each Obligor’s Relevant Jurisdictions.

18.7	Information

Save as disclosed in writing to the Agent and the Arranger at least five (5) Business Days prior to the date of this Agreement:

all written information provided by any member of the Group (including its advisers) to a Finance Party was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect;

there are no facts or circumstances or any other information which could make the Information incomplete, untrue, inaccurate or misleading in any material respect;

the Information does not omit anything (including any off-balance sheet liabilities or other information, documents or agreements) which could make the Information incomplete, untrue, inaccurate or misleading in any material respect;

all opinions, projections, forecasts or expressions of intention contained in the Information and the assumptions on which they are based have been arrived at after due and careful enquiry and consideration and were believed in good faith by the Obligors to be reasonable as at the time at which such Information was prepared and at the time such Information was supplied to any Finance Party.

For the purposes of this Clause 18.7, “ Information ” means any factual information, documents, exhibits or reports relating to the Obligors or any other Group Member (excluding the Original Financial Statements covered by Clause 18.8 ( Original Financial Statements )) provided by or on behalf of any Obligor or any other Group Member to any of the Finance Parties, including on or prior to the date of this Agreement, in connection with the Transaction Documents or the transactions referred to in them.

18.8	Financial Statements

The Original Financial Statements were prepared in accordance with GAAP consistently applied.

The audited Original Financial Statements give a true and fair view of the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis or of TORM A/S on an unconsolidated basis, as the case may be for the relevant period to which they relate.

The unaudited Original Financial Statements fairly present the financial condition and results of operations of the Borrower and its Subsidiaries on a consolidated basis for the relevant period to which they relate.

There has been no change in the assets, business or financial condition of the Borrower or any of its Subsidiaries (or the assets, business or consolidated financial condition of the Group) since the date of the Original Financial Statements which might reasonably be expected to have a Material Adverse Effect.

The Borrower has not omitted to disclose to the Agent in the Original Financial Statements or otherwise any off balance sheet liabilities or other information, documents or agreements which if disclosed, could reasonably be expected to affect the decisions of the Finance Parties to enter into this Agreement.

The most recent financial statements delivered pursuant to Clause 19.1 ( Financial statements ):

have been prepared in accordance with GAAP as applied to the Original Financial Statements; and

ii)

give a true and fair view of (if audited) or fairly present (if unaudited) the consolidated or unconsolidated, as the case may be, financial condition as at the end of, and consolidated or unconsolidated, as the case may be, results of operations for, the period to which they relate.

Since the date of the most recent financial statements delivered pursuant to Clause 19.1 ( Financial statements ) there has been no change in the assets, business or financial condition of the Borrower or any of its Subsidiaries which might reasonably be expected to have a Material Adverse Effect.

18.9	Pari Passu Ranking

Each Obligor’s payment obligations under the Finance Documents to which it is, or is to be, a party rank at least pari passu with all its other present and future unsecured and unsubordinated payment obligations, except for obligations mandatorily preferred by law applying to companies generally.

18.10

Ranking and Effectiveness of Security

Subject to the Legal Reservations and any applicable filing, registration or notice requirements, the Security Interest created by the Security Documents has (or will have when the Security Documents have been executed) the ranking in priority which it is expressed to have in the Security Documents, the Charged Property is not subject to any Security Interest other than Permitted Security Interests and such Security Interests will constitute perfected security on the assets described in the Security Documents.

18.11

No Insolvency

No corporate action, legal proceeding or other procedure or step described in Clause 29.11 ( Insolvency Proceedings ) or creditors’ process described in Clause 29.12 ( Creditors’ Process ) has been taken or, to the knowledge of any Obligor, threatened in relation to a Group Member and none of the circumstances described in Clause 29.11 ( Insolvency Proceedings ) applies to any Group Member.

18.12

No Filing or Stamp Taxes

Under the laws of each Obligor’s Relevant Jurisdictions or any other jurisdiction where each Obligor conducts its business it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents, except:

registrations of particulars of the Security Documents to which the Borrower is a party at Companies House in England and Wales under section 859A of the Companies Act 2006 and payment of associated fees;

registrations of the Security Documents to which the Owner is a party and payment of associated fees; and

such other registrations and filings and payments of associated fees as may be required pursuant to the terms of any of the Finance Documents and which will be made or paid promptly after the date of the relevant Finance Document.

18.13

Tax

No Obligor is required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to which it is, or is to be, a party to Lender who is a Qualifying Lender.

18.14

No Default

No Default is continuing or is reasonably likely to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Finance Document.

No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (however described) under any other agreement or instrument which is binding on any Obligor or any other Group Member or to which any Obligor’s (or any other Group Member’s) assets are subject which has or is reasonably likely to have a Material Adverse Effect.

18.15

No Proceedings Pending or Threatened

No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect are (to the best of any Obligor’s knowledge and belief having made due and careful enquiry) pending or threatened against any Obligor or any other Group Member.

18.16

No Breach of Laws

Except as disclosed by an Obligor in writing to, and acknowledged in writing by the Agent, no Obligor has breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.

No labour dispute is current or, to the best of any Obligor’s knowledge and belief (having made due and careful enquiry), threatened against any Obligor or other Group Member which have or are reasonably likely to have a Material Adverse Effect.

18.17

Environmental and Other Matters

Except as disclosed by an Obligor in writing to, and acknowledged in writing by, the Agent (acting on the instructions of the Majority Lenders) no Environmental Law applicable to any Mortgaged Vessel and/or any Obligor and no provision of any Applicable Code (to the extent applicable in the discretion of the Agent (acting on the instructions of the Majority Lenders)) relating to any Mortgaged Vessel and/or any Obligor has been violated where such violation has or is reasonably likely to have a Material Adverse Effect.

All consents, licences and approvals required under any Environmental Laws or any Applicable Code applicable to such Obligor have been obtained and are currently in force, if and to the extent that failure to obtain such consents, licenses and approvals or keep them in force has or is reasonably likely to have a Material Adverse Effect.

No Environmental Claim has been made, or to the best of an Obligor's knowledge, is threatened or is pending against any Obligor or any Mortgaged Vessel and there are no circumstances reasonably likely to form the basis of any Environmental Claim relating to any Mortgaged Vessel or against or affecting any Obligor or any other person in connection with any Mortgaged Vessel, where such Environmental Claim has or is reasonably likely to have a Material Adverse Effect.

18.18

Tax Compliance

No Obligor is materially overdue in the filing of any Tax returns or overdue in the payment of any amount in respect of Tax (except for income and property taxes and assessments which are being contested in good faith and with due diligence and where the relevant Obligor or the Group as a whole has adequate cash reserves in excess of such contested sums).

To the best of the Obligors' knowledge, no claims or investigations are being, or are reasonably likely to be, made or conducted against any Obligor with respect to Taxes such that a liability of, or claim against, any Obligor is reasonably likely to arise for an amount for which adequate reserves have not been provided in the Original Financial Statements and which might have a Material Adverse Effect.

The Borrower is resident for Tax purposes only in the jurisdiction notified to the Agent from time to time.

18.19

Security and Financial Indebtedness

No Security Interest exists over all or any of the present or future assets of any Obligor in breach of this Agreement, other than those which have been disclosed in writing to the Agent before the date of this Agreement.

No Obligor has any Financial Indebtedness outstanding in breach of this Agreement.

All of the Charged Property is freely assignable and chargeable in the manner contemplated by the Security Documents.

18.20

Legal and Beneficial Ownership

Each Obligor is the sole legal and beneficial owner of the respective assets over which it purports to grant a Security Interest under the Security Documents.

Each Obligor has good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted, in each case save to the extent that failure to have such title, leases, licences or Authorisations does not have and is not reasonably likely to have a Material Adverse Effect.

18.21

The shares of the Owner are fully paid, are not subject to any option to purchase or similar rights and are owned directly by the Borrower. The Constitutional Documents of the Owner do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Security Documents. There are no agreements in force which provide for the issue or allotment of, or grant any person the right to call for the issue or allotment of, any share or capital or, if appropriate, any loan capital of the Owner (including any option or right of pre-emption or conversion).

18.22

Group Structure Chart

The Group structure chart set out in Schedule 12 (Group Structure Chart) is true, complete and accurate in all respects.

18.23

Accounting Reference Date

The financial year-end of the Borrower is the Accounting Reference Date.

18.24

No Adverse Consequences

It is not necessary under the laws of the Relevant Jurisdictions of any Obligor:

in order to enable any Finance Party to enforce its rights under any Finance Document; or

by reason of the execution of any Finance Document or the performance by any Obligor of its obligations under any Finance Document to which it is, or is to be, a party,

that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of such Relevant Jurisdictions.

18.25

Copies of Documents

The copies of the Bareboat Charters, any Charter Documents for the Existing Charter Agreements and the Constitutional Documents of the Obligors delivered to the Agent under Clause 0 (Conditions of Utilisation) are or will be true, complete and accurate copies of such documents and include all amendments and supplements to them as at the time of such delivery and no other agreements or arrangements exist between any of the parties to the Bareboat Charters or any Existing Charter Agreement which would materially affect the transactions or arrangements contemplated by the Bareboat Charters or any Existing Charter Agreement or modify or release the obligations of any party under the Bareboat Charters or that Existing Charter Agreement.

18.26

No Immunity

The execution and delivery by an Obligor of any Transaction Document to which such Obligor is a party constitutes, and the exercise of its respective rights and performance of its respective obligations under such Transaction Documents will constitute private and commercial acts performed for private and commercial purposes. No Obligor will (except for bankruptcy and similar proceedings) be entitled to claim for itself or any or all of its respective assets any immunity from suit, execution, attachment or other legal process in any proceedings taken in connection with such Transaction Documents.

18.27

Vessel Status

Each Mortgaged Vessel will, on the first day of the relevant Mortgage Period, be:

owned and registered in the name of the Owner through the relevant Registry as a ship under the laws and flag of the relevant Flag State;

classed with the relevant Classification free of all overdue requirements and recommendations of the relevant Classification Society;

insured in the manner required by the Finance Documents; and

free of any Security Interests (other than Permitted Security Interests).

18.28

Vessel’s Employment

Each Mortgaged Vessel:

has been delivered, and accepted for service, under each Bareboat Charter and the Existing Charter Agreement set forth in Schedule 2 ( Vessel Information ) opposite the name of such Mortgaged Vessel, if relevant; and

is free of any other charter commitment which, if entered into after that date, would require approval under the Finance Documents.

18.29

Address Commission

To the best knowledge of the Obligors (having made due inquiry), there are no rebates, commissions or other payments in connection with the Bareboat Charters or any Charter other than those referred to in it.

18.30

No Money Laundering

Each Obligor is acting for its own account in relation to the Facility and the performance and discharge of its respective obligations and liabilities under the Finance Documents and the transactions and other arrangements effected or contemplated by the Finance Documents. None of the Obligors is in contravention of any anti money laundering law, official requirement or other regulatory measure or procedure implemented to combat “ money laundering ” (as defined in Article I of the EU Directive 2015/849 of 25 May 2015).

18.31

No Corrupt Practices

The Obligors have observed, and, to the best of their knowledge and belief, parties acting on their behalf have observed in the course of acting for any Obligor, all applicable laws and regulations relating to bribery and corrupt practices.

18.32

Sanctions

Each Obligor and their respective directors, officers, joint ventures and employees and, to the best of each Obligor’s knowledge, their respective agents and representatives (each acting in the capacity as agent or, as the case may be, representative for an Obligor) has been and is in compliance with Sanctions Laws.

No Obligor nor any other Group Member or any Relevant Affiliate of any of them or their respective directors, officers, joint ventures or employees and, to the best of each Obligor’s knowledge, their respective agents and representatives (each acting in the capacity as agent or, as the case may be, representative for an Obligor):

is a Restricted Party, or is involved in any transaction through which it is likely to become a Restricted Party or acts directly or indirectly on behalf of a Restricted Party; or

ii)

is subject to or involved in any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws by any Sanctions Authority.

18.33

Times When Representations are Made

All of the representations and warranties set out in this Clause 18 are made on the date of this Agreement and are deemed to be made on the dates of:

each Utilisation Request;

ii)

each Utilisation Date; and

iii)

in respect of any Additional Guarantor, the delivery of an Accession Deed in respect of such Additional Guarantor.

The Repeating Representations are deemed to be made on:

the last day of each Interest Period; and

ii)

the date of each Compliance Certificate.

The representations in Clause 18.27 (Vessel Status) relating to any Mortgaged Vessels which become Mortgaged Vessels after the date of this Agreement shall be made on the first day of the Mortgage Period for the relevant Mortgaged Vessel.

The representation and warranty in Clause 18.7 (Information), when made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances existing at the date at which the Information (as defined in Clause 18.7 ( Information )) was provided. Each other representation or warranty

deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances then existing at the date the representation or warranty is deemed to be made.

19.	INFORMATION UNDERTAKINGS

Each Obligor undertakes that this Clause 19 will be complied with from the date of this Agreement until the end of the Facility Period.

In this Clause 19:

“ Annual Financial Statements ” means the financial statements for a financial year delivered pursuant to Clause 19.1(a) (Financial Statements ).

“ Quarterly Financial Statements ” means the financial statements for a financial quarter delivered pursuant to Clause 19.1(b) (Financial Statements).

19.1	Financial Statements

The Borrower shall supply to the Agent, as soon as reasonably practicable, but in any event within (i) in relation to item (i) below, one hundred and twenty (120) days, and (ii) in relation to items (ii) and (iii) below one hundred and fifty (150) days, (or, in each case if that day is not a Business Day, the next Business Day) after the end of each financial year, each of:

the consolidated audited annual financial statements of the Borrower for that financial year;

ii)

the unconsolidated audited annual financial statements of TORM A/S; and

iii)

on request of the Agent, the unconsolidated audited annual financial statements of the Owner.

The Borrower shall supply to the Agent, as soon as reasonably practicable, but in any event within forty-seven (47) days (or if that day is not a Business Day, the next Business Day) after the end of each financial quarter of each of its financial years (being 31 March, 30 June, 30 September and 31 December of each calendar year) the consolidated unaudited financial statements of the Borrower for that financial quarter.

The Borrower shall supply to the Agent, as soon as reasonably practicable but in any event, on or prior to 1 December of any financial year, an annual Forecast (showing profit and loss, balance sheet and cash flow statements, as well as written assumptions of the Borrower) for the Borrower (on a consolidated basis) for the immediately succeeding financial year.

19.2	Provision and Contents of Compliance Certificate

The Borrower shall supply a Compliance Certificate to the Agent, with each set of Annual Financial Statements and the set of Quarterly Financial Statements for the financial quarter of the Borrower ending 30 June in each calendar year for the Group.

Each Compliance Certificate accompanying the Annual Financial Statements or accompanying the Quarterly Financial Statements for any financial quarter ending on 30 June in any calendar year shall, among other things, set out (in reasonable detail) computations as to compliance with Clause 20 (Financial Covenants ) and confirmations of compliance with Clause 25 (Minimum Security Value).

Each Compliance Certificate shall be signed on behalf of the Borrower by:

a director of the Borrower which is a member of the management of the Group; or

ii)

the Chief Financial Officer or the Head of Treasury of TORM A/S pursuant to a power of attorney from a director of the Borrower which is a member of the management of the Group.

19.3	Requirements as to Financial Statements and Forecast

The Borrower shall procure that each set of Annual Financial Statements and Quarterly Financial Statements and each Forecast includes a profit and loss account, a balance sheet, a cashflow statement and written assumptions. In addition, each set of Annual Financial Statements for the Borrower shall be audited by the Auditors. Upon request of the Agent (acting on the instructions of the Majority Lenders), the Borrower shall provide to the Agent, in respect of the Quarterly Financial Statements for any financial quarter ending on 30 June or 31 December in any calendar year, a cause/effect analysis of deviations to the Forecast.

Each set of financial statements delivered pursuant to Clause 19.1 (Financial Statements) shall give a true and fair view of (in the case of Annual Financial Statements for any financial year), or fairly represent (in other cases), the financial condition and operations of the Group or (as the case may be) the relevant Obligor as at the date as at which those financial statements were drawn up.

The Borrower shall procure that each set of financial statements and Forecast delivered pursuant to Clause 19.1 (Financial Statements ) shall be prepared using GAAP, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements and Original Forecast as applicable, unless, in relation to any set of financial statements or Forecast, the Borrower notifies the Agent that there has been a change in GAAP or the accounting practices and the Borrower delivers to the Agent:

a description of any change necessary for those financial statements or Forecast to reflect the GAAP or accounting practices and reference periods upon which corresponding Original Financial Statements or Original Forecast, as applicable, were prepared; and

ii)

sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine (having regard to Clause 20.3 (Financial Testing)) whether Clause 20 (Financial Covenants) has been complied with and to make an accurate comparison between the financial position indicated in those financial statements and the Original Financial Statements or that Forecast and the Original Forecast, as applicable.

If the Borrower updates or changes the Forecast in any material respect, it shall deliver to the Agent such updated or changed Forecast and a written explanation of the main changes in that Forecast, together with the next Compliance Certificate delivered pursuant to Clause 19.2.

19.4

Year end

The Borrower shall procure that each financial year end of each Obligor falls on the Accounting Reference Date.

19.5	Information: Miscellaneous

The Borrower shall supply to the Agent:

at the same time as they are dispatched, copies of all documents dispatched by the Borrower to its shareholders generally (or any class of them) or dispatched by the Borrower or any other Obligor to its creditors generally (or any class of them);

ii)

promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, or, to its knowledge, threatened or pending against it or any other Obligor, and which might, if adversely determined, be reasonably expected to have a Material Adverse Effect;

iii)

promptly, such information as the Agent or the Security Agent may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Security Documents;

iv)

promptly on request, such further information regarding the financial condition, business, vessels, properties, assets and operations of the Group and/or any Group Member (including, but not limited to, any amplification or explanation of any item in the financial statements, Forecast or other materials provided by any Obligor under this Agreement, changes to management of the group and (except for the Borrower) an up-to-date copy of its shareholders register (or equivalent in its jurisdiction of incorporation)) as any Finance Party through the Agent may from time to time reasonably request;

promptly upon request, such other information as any Finance Party through the Agent may from time to time reasonably request relating to vessels chartered-in by the Group, including details of how any charter commitments in respect of vessels chartered-in by Group Members are classified as a "liability" in the relevant Compliance Certificate;

vi)

promptly upon becoming aware of them, the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions Laws by any Sanctions Authority against it, any Group Members, any of their joint ventures or any of their respective directors, officers, employees, or, in their capacity as agents or representatives of such Group Member, their agents or representatives, including information on what steps are being taken with regards to answer or oppose such;

vii)

promptly upon becoming aware of it, written notification if any Obligor or any of their respective directors, officers, employees, agents or representatives is a Restricted Party, including identification of the Obligor or other relevant person that has become a Restricted Party and the circumstances relating thereto; and

viii)

promptly upon becoming aware of any Change in Ultimate Beneficial Owner, the name of the Ultimate Beneficial Owner and such documentation and other evidence as is reasonably requested by the Agent, the Security Agent, or any Lender in order for the Agent, the Security Agent, or such Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the Ultimate Beneficial Owner.

Each Obligor shall inform the Agent in writing as soon as reasonably practicable upon becoming aware of the same, but no later than ten (10) days thereafter: if any material Environmental Claim has been commenced or is threatened against any Obligor, or the Mortgaged Vessels, and of any facts or circumstances which will or are reasonably likely to result in any material Environmental Claim being commenced or threatened against any Obligor or the Mortgaged Vessels.

19.6	Notification of Default

Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon such Obligor becoming aware of its occurrence (unless such Obligor is aware that a notification has already been provided by another Obligor).

19.7	Sufficient Copies

The Borrower, if so requested by the Agent, shall deliver sufficient copies of each document to be supplied under the Finance Documents to the Agent to distribute to each of the Lenders.

19.8	“Know Your Customer” Checks

If:

the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

ii)

any change in the status of an Obligor or the composition of the shareholders of an Obligor, after the date of this Agreement;

iii)

a proposed assignment or transfer by a Lender of any of its rights and/or obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer; or

iv)

any anti-money laundering or anti-terrorism financing laws and regulations applicable to the Agent or any Lender,

obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

Each Finance Party shall promptly upon the request of the Agent or the Security Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent or the Security Agent (in each case for itself) in order for it to carry out and be satisfied with the results of all necessary “ know your customer ” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

The Borrower shall, by not less than 10 Business Days' prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Guarantor pursuant to Clause 32 (Changes to the Obligors).

Following the giving of any notice pursuant to paragraph c) above, if the accession of such Additional Guarantor obliges the Agent or any Lender to comply with " know your customer " or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary " know your customer " or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Guarantor.

20.	FINANCIAL COVENANTS

Each Obligor undertakes that this Clause 20 will be complied with from the date of this Agreement until the end of the Facility Period and tested on a semi-annual basis.

20.1	Financial Definitions

In this Clause 20:

“ Borrowings ” means, at any time, the aggregate outstanding principal, capital or nominal amount (and any fixed or minimum premium payable on prepayment or redemption) of any indebtedness of the Group for or in respect of:

moneys borrowed and debit balances at banks or other financial institutions;

any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

the amount of any liability in respect of Finance Leases;

receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

any counter indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of an underlying liability of an entity which is not a Group Member, which liability would fall within one of the other paragraphs of this definition;

any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services (other than legal or accounting services) and payment is due more than ninety (90) days after the date of supply;

any amounts raised by the issue of shares which are redeemable (other than at the option of the issuer) during the Facility Period or which would under relevant applicable accounting principles be classified as borrowings under GAAP;

(without double counting) the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs a) to i) above.

“ Cash ” means, at any time, cash in hand or at bank and (in the latter case) credited to an account in the name of any Group Member and to which such Group Member is alone beneficially entitled for so long as:

that cash is repayable on demand;

repayment of that cash is not contingent on the prior discharge of any other indebtedness of any Group Member or of any other person whatsoever or on the satisfaction of any other condition;

there is no Security Interest over that cash except for (i) Permitted Security Interests granted pursuant to the Finance Documents, (ii) Security Interests which have not yet become enforceable in accordance with their terms and which do not restrict or block the use of the cash by the Group in the relevant account prior to their becoming enforceable, or (iii) Security Interests constituted by a netting or set-off arrangement entered into by Group Members in the ordinary course of their banking arrangements; and

subject to paragraph c), the cash is freely and immediately available to be applied in repayment or prepayment of the Facility or any other amounts and has not been specifically pledged and blocked including for example as cash collateral to cure a collateral maintenance test or support a derivative transaction,

and, for the avoidance of doubt, any cash at bank which does not fall within the above definition shall not represent “Cash” for the purposes of this Agreement except with the approval of the Agent.

“ Cash Equivalents ” means at any time:

certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank;

any investment in marketable debt obligations issued or guaranteed by the government of the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State or any other country having a credit rating of A- or higher by Standard & Poor’s Rating Services or A3 or higher by Moody’s Investors Service Limited or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security;

commercial paper not convertible or exchangeable to any other security:

for which a recognised trading market exists;

ii)

issued by an issuer incorporated in the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State or any other country having a credit rating of A- or higher by Standard & Poor’s Rating Services or A3 or higher by Moody’s Investors Service Limited;

iii)

which matures within one year after the relevant date of calculation; and

iv)

which has a credit rating of either A- or higher by S&P or A3 or higher by Moody’s, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating;

any investment in money market funds which (i) has a credit rating of either A- or higher by S&P or A3 or higher by Moody’s, (ii) which invest substantially all their assets in securities of the types described in paragraphs a) to c) above and (iii) can be turned into cash on not more than five (5) days’ notice; or

any other debt security approved by the Agent (on behalf of the Majority Lenders),

in each case, to which any Group Member is alone (or together with other Group Members) beneficially entitled at that time and which is not issued or guaranteed by any Group Member or subject to any Security Interest (other than Permitted Security Interests arising under the Finance Documents).

“ Equity ” means, on any date, the value of the aggregate capital and reserves of the Group (on a consolidated basis) determined in accordance with GAAP and adjusted to reflect the fair market value of the Fleet Vessels (including the fair market value of each Mortgaged Vessel as determined in accordance with Clause 25 (Minimum Security Value )).

“ Equity Ratio ” means the ratio of the Group’s Equity to Total Assets.

“ Minimum Liquidity ” means, as at any date, the sum of:

the Group’s Cash and Cash Equivalents; and

for so long as the Availability Period (as defined in the RCF Facility Agreement) ends at least twelve months after that date, the aggregate amount of undrawn commitments under the RCF Facility which are available for utilisation pursuant to the RCF Facility Agreement at that date,

as certified to the Agent by the chief financial officer of the Borrower signing on behalf of the Borrower.

“ Total Assets” means, on any date, the value of the total assets of the Group (on a consolidated basis) determined in accordance with GAAP and adjusted to reflect the fair market value of the Fleet Vessels (including the fair market value of each Mortgaged Vessel as determined in accordance with Clause 25 (Minimum Security Value)).

“Total Debt ” means on any date, the aggregate amount of all obligations of all Group Members for or in respect of Borrowings at that time but excluding any such obligations to any other Group Member.

20.2	Financial Condition

The Borrower shall ensure that at all times following the date of this Agreement:

Minimum Liquidity

Minimum Liquidity shall be equal to or greater than the greater of:

seventy five million Dollars (US$75,000,000); and

ii)

five per cent. (5%) of the Group’s Total Debt,

provided that at all times, a part of the Minimum Liquidity equal to the greater of (x) forty million Dollars (US$40,000,000) and (y) five per cent. (5%) of the Group's Total Debt shall consist of Cash and Cash Equivalents.

Equity Ratio

The Equity Ratio shall not be less than twenty-five per cent. (25%).

20.3	Financial Testing

The financial covenants set out in Clause 20.2 ( Financial Condition ) shall be calculated in accordance with GAAP (save for terms which are specifically defined within this Clause 20 (Financial Covenants) and tested by reference to each of the Borrower’s financial statements for each financial quarter ending 30 June and each financial year ending 31 December, in each case, delivered pursuant to Clause 19.1 (Financial Statements ) and/or each Compliance Certificate delivered in connection therewith pursuant to Clause 19.2 (Provision and Contents of Compliance Certificate).

20.4	Most Favoured Lender

In the event that the Borrower agrees to additional financial covenants, or similar financial covenants at a stricter level with other banks, lenders and/or financiers (excluding minimum value clauses and dividend restrictions), the Borrower shall promptly notify the Agent and, if so required by the Majority Lenders, the Parties

shall enter into such documentation as may be necessary to include such additional or similar stricter financial covenants into this Agreement.

21.	GENERAL UNDERTAKINGS

Each Obligor undertakes that this Clause 21 will be complied with from the date of this Agreement until the end of the Facility Period.

21.1	Use of Proceeds

The proceeds of the Loan will be used exclusively for the purposes specified in Clause 3 (Purpose ). No proceeds of the Loan shall be (a) made available, directly or indirectly, to or for the benefit of a Restricted Party, (b) applied in a manner or for a purpose prohibited by Sanctions Laws or (c) applied in any other manner that could result in any Obligor or a Finance Party being in breach of any Sanctions Laws or becoming a Restricted Party.

21.2	Authorisations

Each Obligor will promptly:

obtain, comply with and do all that is necessary to maintain in full force and effect; and

supply certified copies to the Agent of,

any Authorisation required under any law or regulation of a Relevant Jurisdiction or (in the case of any material Authorisation) any other jurisdiction where each Obligor conducts substantive business to:

enable it to perform its obligations under the Transaction Documents;

ii)

ensure the legality, validity, enforceability or admissibility in evidence of any Transaction Document; and

iii)

carry on its business where failure to do so has, or is reasonably likely to have, a Material Adverse Effect.

21.3	Compliance with Laws

Each Obligor shall:

comply in all material respects with all laws or regulations:

applicable to its business; and

ii)

applicable to the Mortgaged Vessel(s) owned by such Obligor its ownership, employment, operation, management and registration,

including Applicable Codes, Environmental Laws, and the laws of each relevant Flag State;

obtain, comply with and do all that is necessary to maintain in full force and effect any material Environmental Approvals for a Mortgaged Vessel;

without limiting Clause 21.3a) above, not employ the Mortgaged Vessel(s) owned by such Obligor, nor allow their employment, operation or management in any manner contrary in any material respect to any law or regulation including but not limited to Applicable Codes and Environmental Laws, in each case, applicable to such Obligor; and

comply with all applicable Sanctions Laws and not employ the Mortgaged Vessel(s) owned by such Obligor, nor allow their employment, operation or management in any manner contrary to any applicable Sanctions Laws.

21.4	Pari Passu Ranking

Each of the Obligors shall ensure that its obligations under the Finance Documents do and will rank at least pari passu with all its other present and future unsecured and unsubordinated obligations, except for those obligations which are preferred by mandatory law applying to companies generally.

21.5	Subordination

The Obligors shall ensure that the claims of any Intra-Group Creditor under any intercompany loans made by such Intra-Group Creditors to any Obligor from time to time are subordinated to the claims of the Finance Parties against the Obligors under the Finance Documents pursuant to the Subordination Deed and that each Group Member that becomes an Intra-Group Creditor after the Initial Borrowing Date accedes to the Subordination Deed as an Intra-Group Creditor not later than on the date on which it becomes an Intra-Group Creditor in each case to the extent that such Intra-Group Creditor makes any loan or credit to an Obligor in excess of USD 500,000 or if the Agent (acting on the instructions of the Majority Lenders) otherwise reasonably requires that a specific Intra-Group Creditor accedes to the Subordination Deed.

21.6	Tax Compliance

Each Obligor shall (and the Borrower shall ensure that each Group Member will) duly pay and discharge in all material respects all Taxes imposed upon it or its assets within such time period as may be allowed by law without incurring penalties unless and only to the extent that:

such payment is being contested in good faith;

ii)

adequate reserves are being maintained for those Taxes and the costs required to contest them which have been or will be disclosed in its latest financial statements delivered or which are next to be delivered to the Agent under Clause 19.1 (Financial Statements) ; and

iii)

such payment can be lawfully withheld.

Except as approved by the Majority Lenders, each Obligor shall maintain its residence for Tax purposes in the jurisdiction notified to the Agent on or prior to the date of this Agreement and ensure that it is not resident for Tax purposes in any other jurisdiction.

21.7

Merger

No Obligor will enter into any amalgamation, demerger, merger, consolidation, re-domiciliation, legal migration or corporate reconstruction, except with the prior written consent of the Majority Lenders.

21.8	Further Assurance

Each Obligor shall promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Agent or Security Agent may reasonably specify (and in such form as the Agent or Security Agent may reasonably require):

to perfect the Security Interests created or intended to be created by that Obligor under or evidenced by the Security Documents (which may include the execution of a mortgage, charge, assignment or other security over all or any of the assets which are, or are intended to be, the subject of the Security Documents) or for the exercise of any rights, powers and remedies of the Security Agent provided by or pursuant to the Finance Documents or by law;

ii)

to confer on the Security Agent Security Interests over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security Interest intended to be conferred by or pursuant to the Security Documents over those assets;

iii)

to facilitate the realisation of the assets which are, or are intended to be, the subject of the Security Documents; and/or

iv)

to facilitate the accession by a New Lender to any Security Document following an assignment in accordance with Clause 31.1 (Assignments and Transfers by the Lenders).

Each Obligor shall take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security Interest conferred or intended to be conferred on the Security Agent by or pursuant to the Finance Documents.

21.9	Negative Pledge in Respect of Charged Property

Except as approved by the Majority Lenders and save for Permitted Security Interests, no Obligor will grant, assume or permit to exist any Security Interest over any Charged Property to the extent prohibited by Clause 27.3 (General Negative Pledge - The Owner).

21.10

Environmental Matters

Each Obligor shall, as soon as reasonably practicable but no later than five (5) Business Days after the date that the relevant Obligor obtains knowledge thereof, notify the Agent of any Environmental Claim being made against any Group Member or any Fleet Vessel which, if successful to any extent, might have a Material Adverse Effect and of any Environmental Incident which may give rise to such a claim and will keep the Agent regularly and promptly informed in reasonable detail of the nature of, and response to, any such Environmental Incident and the defence to any such claim.

Environmental Laws (and any consents, licences or approvals obtained under them) applicable to Fleet Vessels will not be violated in a way which might have a Material Adverse Effect.

21.11

Maintenance of Listing

The Borrower shall maintain its listing on the Copenhagen Stock Exchange and Nasdaq New York.

21.12

No Change of Legal Entity Type, Jurisdiction, Etc.

During the Facility Period, no Obligor will, without prior written approval of the Majority Lenders (such approval not to be unreasonably withheld or delayed) change:

the type of legal entity which it exists as;

its jurisdiction or country of domicile or centre of establishment or tax residency; or

its Accounting Reference Date.

21.13

Money Laundering and Bribery

Each Obligor shall, and each Obligor shall use all reasonable endeavours to procure that any parties acting on their behalf shall, observe and abide with any measure (including but not limited to) any law, official requirement or other regulatory measure or procedure implemented to combat:

money laundering (as defined in article I of the Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 648/2012 of the European Parliament and of the Council, and repealing Directive 2005/60/EC of the European Parliament and of the Council and Commission Directive 2006/70/EC Directive 2005/60/EF (Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing); and

bribery and corrupt practices in compliance with the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.

21.14

Certificate of Financial Responsibility

If required at any time by the government of the United States of America, the Owner shall obtain and provide to the Agent a copy of the certificate of financial responsibility and the vessel response plan as required under the laws of the United States of America. If requested by the Agent (acting reasonably), the Owner shall also provide evidence of the approval of such documents by the appropriate United States of America government entity.

21.15

Sanctions

Each Obligor shall ensure that none of them, nor any of their respective directors, officers or employees is or will become a Restricted Party.

Each Obligor shall, and shall procure that each other Group Member and each Relevant Affiliate of any of them shall, not use any revenue or benefit derived from any activity or dealing with a Restricted Party in discharging any obligation due or owing to the Finance Parties, to the extent such discharge with such revenue or benefit would be prohibited by Sanctions Laws or would otherwise cause any Finance Party to be in breach of Sanctions Laws.

Each Obligor shall procure that no proceeds from any activity or dealing with a Restricted Party are credited to any bank account held with any Finance Party in its name or in the name of any other Group Member or any Relevant Affiliate of any of them, to the extent such provision of proceeds would be prohibited by Sanctions Laws or would otherwise cause any Finance Party to be in breach of Sanctions Laws.

Each Obligor shall, and shall procure that each other Group Member shall, to the extent permitted by law promptly upon becoming aware of them supply to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions Laws by any Sanctions Authority.

No Obligor shall permit or authorise and each Obligor shall prevent any Mortgaged Vessel being used directly or indirectly:

by or for the benefit of any Restricted Party in violation of Sanctions Laws or in any manner which would otherwise cause any Finance Party to be in breach of Sanctions Laws; and/or

ii)

in any trade which is reasonably likely to expose the Mortgaged Vessel, any Finance Party, any manager, crew or insurers to enforcement proceedings or any other consequences whatsoever arising from Sanctions Laws.

21.16

Ownership of Assets

The Owner shall hold full legal title to, and own the entire beneficial interest in, the applicable Mortgaged Vessel, Insurances and Earnings, free of any Security Interest and other interests and rights of every kind, save for Permitted Security Interests.

21.17

Centralised Cash Management

The Obligors shall ensure that the Group's cash management function is centralised and handled by TORM A/S for the Group.

22.	DEALINGS WITH MORTGAGED VESSELS

Each Obligor undertakes that this Clause 22 will be complied with in relation to each Mortgaged Vessel throughout the relevant Mortgaged Vessel’s Mortgage Period.

22.1	Vessel’s Name and Registration

A Mortgaged Vessel’s name shall not be changed without the prior written consent of the Agent (acting on the instructions of the Majority Lenders).

The Mortgaged Vessel shall be registered with the relevant Registry under the laws of its Flag State in the name of the Owner. Subject to Clause 22.1d) below, the Mortgaged Vessel shall not be registered under any other flag or at any other port or fly any other flag (other than that of its Flag State), except with approval of the Agent (acting on the instructions of all of the Lenders). If that registration is for a limited period, it shall be renewed at least forty five (45) days before the date it is due to expire and the Agent shall be notified of that renewal at least thirty (30) days before that date.

Nothing will be done and no action will be omitted if that might result in such registration being forfeited or imperilled or the Mortgaged Vessel being required to be registered under the laws of another state of registry.

An Owner may change the Flag State of any Mortgaged Vessel owned by it to any other Flag State without the consent of the Lenders subject to:

the Owner providing the Finance Parties with a replacement Mortgage at the time of such transfer and any other replacement Security Documents and other documentation as the Agent or the Security Agent may reasonably request (including, without limitation, legal opinions, certificates of ownership and encumbrance (or the equivalent evidence of registration in the name of the Owner), in each case in form and substance satisfactory to the Agent), so that the Finance Parties have the equivalent Security Interest over such Mortgaged Vessel as they had prior to such change of Flag State;

ii)

any amendments to the Finance Documents which may be required in the reasonable opinion of the Agent as a result of such change of Flag State; and

iii)

no Default having occurred and being continuing.

Notwithstanding the provisions of Clause 22.1a), b), c) and d) above, no bareboat registrations may be effected in respect of any of the Mortgaged Vessels without the prior written consent of the Agent (acting on the

instructions of the Majority Lenders); provided that bareboat registrations may be effected in Denmark subject to the receipt by the Security Agent of such undertakings and powers of attorney relating to the deletion of such bareboat registrations in form and substance satisfactory to the Security Agent as the Security Agent may require.

22.2	Sale or Other Disposal of Mortgaged Vessel

The Owner may sell any Mortgaged Vessel or any share or interest in it to any person, provided that:

no Default is continuing or has occurred; and

ii)

the Borrower has made or will make no later than at the Disposal Repayment Date, a prepayment in accordance with Clause 7.4 (Mandatory prepayment – Sale or Total Loss of a Mortgaged Vessel).

There are no restrictions on the purchase or disposal of any Fleet Vessel (other than a Mortgaged Vessel, as set out in 22.2a) above), including with respect to new-build programs.

22.3

Manager

Subject to paragraphs b) and c) below, each Mortgaged Vessel shall be managed commercially and technically by TORM A/S or in a tanker pool managed by TORM A/S.

Any Mortgaged Vessel may be managed commercially and technically by another Group Member, or in another vessel pool, provided that the vessel pool is managed by a reputable and experienced vessel pool manager acceptable to the Agent (with such acceptance not to be unreasonably withheld), and provided that at least fourteen (14) Business Days prior written notice is given to the Agent.

Any Mortgaged Vessel may be managed by another Approved Technical Manager or by another commercial manager that has been consented to by the Majority Lenders (such consent not to be unreasonably withheld) subject to such Approved Technical Manager and/or approved commercial manager, as the case may be, having delivered a duly executed manager’s undertaking in a form consistent with market practice in ship finance transactions in favour of the Security Agent in a form and substance acceptable to the Majority Lenders and including in any event a subordination of the manager's claims against the Obligors and the Mortgaged Vessels to the claims of the Finance Parties under the Finance Documents; provided that in the case of a third party manager, the Obligors shall only use their reasonable commercial efforts to obtain such subordination).

22.4	Copy of Mortgage on Board; Notice of Mortgage

To the extent required by the applicable law of the Flag State, the Owner agrees to:

keep on board the relevant Mortgaged Vessel with its papers a properly certified copy of the relevant Mortgage shown to anyone having business with the Mortgaged Vessel which business might create or imply any commitment or Security Interest over or in respect of the Mortgaged Vessel (other than a lien for crew’s wages and salvage) and to any representative of the Agent or the Security Agent; and

prominently display a framed printed notice of the Mortgaged Vessel’s Mortgage in the navigation room and in the master’s cabin of the Mortgaged Vessel. The notice must be satisfactory to the Security Agent.

22.5	Chartering

None of the Obligors shall enter into any Charter for a Mortgaged Vessel (except for the Bareboat Charters copies of which have been provided to the Agent as a condition precedent to the first Utilisation under this Agreement and, if the Obligors expect to change the bareboat charter structure of any Mortgaged Vessel, such other Bareboat Charters as may be approved by the Agent (acting on the instructions of the Majority Lenders) and a copy of which has been provided to the Agent) which is a bareboat or demise charter or passes possession and operational control of such Mortgaged Vessel to another person.

All Charters of the Mortgaged Vessels shall be on terms as to payment or amount of hire which are not materially less beneficial to the Obligors than the terms which at that time could reasonably be expected to be obtained on the open market for vessels of the same age and type as such Mortgaged Vessel under charter commitments of a similar type and period.

The Obligors shall promptly notify the Agent of any Charter made for a period which is longer than thirteen (13) months (including any optional or automatic extension periods) and shall deliver to the Agent, upon the Agent’s reasonable request, a summary of all Charters to which the Mortgaged Vessels are subject, including the identity of the charterers.

The Obligors shall give notice of the assignments contained in the General Assignment for each Mortgaged Vessel to the charterer under any Charter for such Mortgaged Vessel longer than thirteen (13) months (including any optional or automatic extension periods) immediately upon entry into the General Assignment (or, if later, the date of entry into such Charter) and shall ensure that the Agent receives a copy of that notice, provided that, prior to the occurrence and continuance of an Event of Default, no notice shall be required to be given if the Borrower demonstrates to the reasonable satisfaction of the Agent (acting on the instructions of all of the Lenders), sound commercial reasons to refrain from giving such notice. If a charterer of a Mortgaged Vessel is notified of the assignment under the General Assignment, the Obligors shall use reasonable endeavours to obtain acknowledgements of such notices from that charterer (it being acknowledged that it may not be possible to obtain such acknowledgements).

Except with approval or as provided at paragraph f) below, the Obligors shall not terminate or rescind the Bareboat Charters or withdraw the Mortgaged Vessel from service under the Bareboat Charters or take any similar action. Except with approval or as provided at paragraph f) below, the Bareboat Charterers shall not terminate or rescind the Bareboat Charters for any reason whatsoever.

The Owner and/or the Bareboat Charterers may terminate the Bareboat Charters and related Bareboat Charterparty Fee Agreements (as defined in the relevant General Assignment) and withdraw the relevant Mortgaged Vessel from service under the Bareboat Charters and the Security Agent shall, at the request and the cost of the Borrower, as soon as reasonably practicable release all Transaction Security granted to it by the Owner and/or the Bareboat Charterers in respect of the Bareboat Charters and related Bareboat Charterparty Hire and Management Fee Agreements in each case provided that:

the Owner or the relevant Bareboat Charterer has given the Agent and the Security Agent not less than 5 (five) Business Days’ (or such shorter period as the Lenders may agree) prior written notice of the proposed termination;

ii)

the Owner grants such Transaction Security as the Security Agent, in its reasonable opinion, requires and the Owner carries out any action to protect, perfect or give priority to the Transaction Security in each case as the Security Agent, in its reasonable opinion, requires;

iii)

this Agreement and any other relevant Finance Documents has been unconditionally amended in such manner as the Agent, in its reasonable opinion, requires in consequence of that additional security being provided; and

iv)

the Agent, or its duly authorised representative, has received such documents and evidence it may, in its reasonable opinion, require in relation to that amendment and additional security including documents and evidence of the type referred to in Schedule 3 (Conditions Precedent) in relation to that amendment and additional security and its execution and (if applicable) registration.

No Obligor shall do anything which would or might prevent the other Obligors complying with this Clause 22 (Dealings with Mortgaged Vessels) or Clauses 23 (Condition and Operation of Mortgaged Vessels) or 24 (Insurance), or fail to do anything required by the Bareboat Charters where failure to do so would or might have such an effect.

Except as approved by the Majority Lenders, the Bareboat Charterers shall not grant or allow to exist any Security Interest over any asset of the Bareboat Charterers over which a Security Interest is granted or expressed to be granted by its General Assignment.

22.6	Payment of Earnings

The relevant Earnings from the Mortgaged Vessel shall be paid in accordance with the provisions of the relevant Mortgaged Vessel’s General Assignment. If any Earnings are held by brokers or other agents, they shall be paid to the Security Agent, if so required by the Security Agent following any date on which the Earnings have become payable to the Security Agent under the Mortgaged Vessel’s General Assignment.

22.7	Class Records

Upon written request by the Agent not more than once per year except in case of the occurrence and continuance of an Event of Default, the Obligors shall instruct the relevant Classification Society to send to the Agent copies of all class records held by that Classification Society in relation to the relevant Mortgaged Vessel.

23.	CONDITION AND OPERATION OF MORTGAGED VESSELS

Each Obligor undertakes that this Clause 23 will be complied with in relation to each Mortgaged Vessel throughout the relevant Mortgaged Vessel’s Mortgage Period.

23.1	Defined Terms

In this Clause 23 and in Schedule 3 ( Conditions Precedent ) :

“ Applicable Law ” means all laws and regulations applicable to vessels registered in the Mortgaged Vessel’s Flag State or which for any other reason apply to the Mortgaged Vessel or to its condition or operation at any relevant time, including, without limitation, laws and regulations relating to scrapping and/or dismantling vessels.

“ Applicable operating certificate ” means any certificates or other document relating to the Mortgaged Vessel or its condition or operation required to be in force under any Applicable Law or any Applicable Code.

23.2

Repair

The Obligors shall keep each Mortgaged Vessel owned by it in a good safe condition and state of repair:

consistent with prudent ownership and sound ship management practice; and

so as to maintain that Mortgaged Vessel’s class as at the date of this Agreement (or, in the case of any vessel mortgaged as additional security pursuant to Clause 25.13 (Creation of Additional Security ), as at the date of creation of such mortgage) free of overdue recommendations and conditions affecting that Mortgaged Vessel’s class with a Classification Society.

23.3	Modification

Except with approval of the Agent (acting on the instructions of the Majority Lenders), the structure, type or performance characteristics of the Mortgaged Vessel shall not be modified in a way which could or might materially alter the Mortgaged Vessel or materially reduce its value.

23.4	Removal of Parts

Except with approval of the Agent (acting on the instructions of the Majority Lenders), no material part of the Mortgaged Vessel or any equipment shall be removed from the Mortgaged Vessel if to do so would materially reduce its value (unless at the same time it is replaced with equivalent parts or equipment owned by the Owner free of any Security Interest except Security Interests created pursuant to the Security Documents).

23.5	Third Party Owned Equipment

Except with approval of the Agent (acting on the instructions of the Majority Lenders), equipment owned by a third party shall not be installed on the Mortgaged Vessel if it cannot be removed without risk of causing damage to the structure or fabric of the Mortgaged Vessel or incurring significant expense.

23.6	Maintenance of Class; Compliance with Laws and Codes

The Mortgaged Vessel’s class shall be the relevant Classification, which may not be changed without consent of the Majority Lenders. The Mortgaged Vessel and every person who owns, operates or manages the Mortgaged Vessel shall comply in all material respects with all Applicable Laws, and the requirements of all Applicable Codes. There shall be kept in force and on board the Mortgaged Vessel or in such person’s custody any applicable operating certificates which are required by Applicable Laws or Applicable Codes to be carried on board the Mortgaged Vessel or to be in such person’s custody.

23.7

Surveys

The Mortgaged Vessel shall be submitted to continuous surveys and any other surveys which are required for it to maintain the Classification as its class. Copies of reports of those surveys shall be provided promptly to the Agent if it so requests. If any recommendations are made in such a report, they shall be complied with in the way and by the time required in the report.

23.8	Inspection

The Agent and/or Security Agent, through a qualified surveyor appointed by the Agent and/or Security Agent for such purpose, shall be allowed once a year to board the Mortgaged Vessels at all reasonable times (without materially interfering with that Mortgaged Vessel’s trading or operations) to inspect it and given all proper facilities needed for that purpose, subject to customary indemnity undertakings. The limitation of one such inspection per year per Mortgaged Vessel shall not apply at any time that an Event of Default has occurred and is continuing.

23.9

Lay up

The Obligors shall not allow any lay up of any Mortgaged Vessels without the prior written consent of the Agent (acting on the instructions of the Majority Lenders).

23.10

Information about Mortgaged Vessel

The Agent shall promptly be given any information which it may reasonably require about the Mortgaged Vessel or its employment, position, use or operation, including details of towages and salvages, copies of all Charters subject to the General Assignment and copies of any applicable operating certificates.

23.11

Notification of Certain Events

The Borrower shall immediately notify the Agent of:

any Major Casualty or any damage to a Mortgaged Vessel where the cost of the resulting repairs is likely to exceed the Majority Casualty Amount;

any occurrence which may result in a Mortgaged Vessel becoming a Total Loss;

any requisition of a Mortgaged Vessel for hire;

any Environmental Incident, or any Release which in either case may reasonably result in a liability in excess of two million Dollars (US$2,000,000) (or the equivalent in any other currency) involving any single Mortgaged Vessel or five million Dollars (US$5,000,000) (or the equivalent in any other currency) in respect of the Mortgaged Vessels taken together, in accordance with the provisions of Clause 21.10a) (Environmental Matters );

any capture, seizure, arrest, confiscation or detention of the Mortgaged Vessel or any exercise or purported exercise of a lien, Security Interest or other claim on the Mortgaged Vessel or its Earnings or Insurances.

23.12

Repairers’ Liens

Except with prior written consent of the Security Agent, the Mortgaged Vessel shall not be put into any other person’s possession for work to be done on the Mortgaged Vessel if the cost of that work will exceed or is likely to exceed an amount equal to $6,000,000 for such Mortgaged Vessel put into any other person’s possession for work, unless any amount above such threshold is either covered by (i) a written undertaking not to exercise any lien on the Mortgaged Vessel or its Earnings for the cost of such work exceeding such threshold, delivered by such person to the Security Agent on approved terms or (ii) adequate reserves which have been made available (as evidenced in a form and substance reasonably acceptable to the Agent).

23.13

Lawful Use

The Mortgaged Vessel shall not be employed:

in any way or in any activity which is unlawful under international law or the domestic laws of any relevant country;

in carrying illicit or prohibited goods;

in a way which may make it liable to be condemned by a prize court or destroyed, seized or confiscated; or

if there are hostilities in any part of the world (whether war has been declared or not), in carrying contraband goods

and the persons responsible for the operation of the Mortgaged Vessel shall take all necessary and proper precautions to ensure that this does not happen, including participation in industry or other voluntary schemes available to the Mortgaged Vessel and in which leading operators of ships operating under the same flag or engaged in similar trades generally participate at the relevant time.

23.14

War Zones

The Mortgaged Vessel shall not enter or remain in any zone which has been declared a war zone by any government entity or the Mortgaged Vessel’s war risk insurers unless the Insurances permit the Mortgaged Vessel to enter into or remain in such zone. If the Owner has to take out additional insurances in order to comply with the Mortgaged Vessel’s insurer’s requirements to ensure that the Mortgaged Vessel remains properly insured in accordance with the Finance Documents in order to enter such war zone, the Owner shall: ensure that such additional insurances are obtained and copies of such documents are provided to the Agent at the Agent's request.

23.15

Dismantling, recycling and green passport

In the event that the any Group Member sells a Mortgaged Vessel for dismantling or recycling, the relevant Group Member shall obtain from the buyer of that Mortgaged Vessel a covenant that such buyer will dismantle or recycle the vessel in accordance with the provisions of The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009.

If any Mortgaged Vessel is to be scrapped by the Owner, the Owner shall first provide the Agent with a copy of that Mortgaged Vessel's "Green Passport" (being a document listing all the potentially hazardous materials on board) or an equivalent document for that Mortgaged Vessel in a form satisfactory to the Agent (acting on the instructions of the Majority Lenders) and executed by a surveyor approved by the Agent (acting on the instructions of the Majority Lenders).

24.

INSURANCE

Each Obligor undertakes that this Clause 24 shall be complied with in relation to each Mortgaged Vessel and its Insurances throughout the relevant Mortgaged Vessel’s Mortgage Period.

24.1	Insurance Terms

In this Clause 24:

“ Approved Insurers ” means any first class insurer for prudent ship operations with a minimum rating of A- with AM Best and/or BBB+ with Standard & Poor’s, or any other international, reputable maritime insurance company, underwriter approved in writing by the Agent (acting reasonably) and, in respect of any P&I risk, any club that is a member of the International Group of P&I Clubs or any other P&I Club or association approved in writing by the Agent (acting reasonably).

“ Approved Insurance Brokers ” means each of Arthur Gallagher, Henschien, Bergvall, BMS, George Duncker, Marsh, Willis, Towers Watson, Hugh Wood Inc., or such other reputable international insurance broker approved in writing by the Agent (acting reasonably).

“ Excess risks ” means the proportion (if any) of claims for general average, salvage and salvage charges not recoverable under the hull and machinery insurances of a vessel in consequence of the value at which the vessel is assessed for the purpose of such claims exceeding its insured value.

“ Excess war risk P&I cover ” means cover for claims only in excess of amounts recoverable under the usual war risk cover including (but not limited to) hull and machinery, crew and protection and indemnity risks.

“ Hull cover ” means insurance cover against the risks identified in paragraphs a) and b) of Clause 24.3 (Coverage Required).

“ P&I risks” means the usual risks (including liability for oil pollution, excess war risk P&I cover) covered by a protection and indemnity association which is a member of the International Group of protection and indemnity associations (or, if the International Group ceases to exist, any other leading protection and indemnity association or other leading provider of protection and indemnity insurance) (including, without limitation, the proportion (if any) of any collision liability not covered under the terms of the hull cover).

24.2	Required Insurance

The Borrower shall, at its own cost, obtain and maintain at all times insurances in respect of each Mortgaged Vessel against:

fire and usual marine risks (including hull and machinery, excess risks, hull interest and freight interest);

war and usual dispossession risks (including war protection and indemnity risks and terrorism, piracy, hijacking and confiscation risks);

protection and indemnity risks (including pollution liability risks) on usual entry terms adopted by the industry for similar vessels for the full tonnage of each Mortgaged Vessel; and

at the request of the Agent, such other risks and matters specified by the Agent by written notice to the Borrower which the Agent (acting on the instructions of the Majority Lenders) reasonably considers necessary or advisable for a prudent shipowner or operator of a vessel similar to the relevant Mortgaged Vessel to insure against at the time of that notice, where such insurance is available at a reasonable cost, and having regard to market practices and other circumstances prevailing at the relevant time,

in each case, on terms which comply with the other provisions of this Clause 24.

24.3	Coverage Required

The insured value of each Mortgaged Vessel shall at all times during the Facility Period represent at least such Mortgaged Vessel’s Market Value and the aggregate insured value of all the Mortgaged Vessels in respect of such Insurances shall at all times during the Facility Period be no less than one hundred and twenty per cent. (120%) of the aggregate amount of the Loan then outstanding.

The amount of the hull and machinery marine risks coverage for each Mortgaged Vessel shall at all times during the Facility Period represent at least eighty per cent. (80%) of the Mortgaged Vessel’s Market Value.

The amount insured in respect of P&I risks shall be in the amount equal to the maximum limit of cover available in the market.

24.4	Placing of Cover

The insurance coverage required by Clause 24.2 ( Required Insurances ) shall be:

in the name of the Mortgaged Vessel’s Owner and (in the case of the Mortgaged Vessel’s hull cover for claims in respect of physical loss or damage to a Mortgaged Vessel) no other person, other than:

the Security Agent to the extent required by the Security Agent under Clause 24.4b) below; and

ii)

any manager or other third party subject to such person, upon request from the Security Agent, assigning all rights to the Security Agent in a manner acceptable to the Security Agent,

and, if so required by the Agent from time to time, has duly executed and delivered a first priority assignment of its interest in the Mortgaged Vessel’s Insurances to the Security Agent in an approved form and provided such supporting documents and opinions in relation to that assignment as the Agent requires);

if the Agent so requests (acting on instructions of the Majority Lenders), in the joint names of the Mortgaged Vessel’s Owner and the Security Agent (and, to the extent reasonably practicable in the insurance market, without liability on the part of the Security Agent for premiums or calls);

in Dollars or another approved currency;

arranged through Approved Insurance Brokers or direct with Approved Insurers or protection and indemnity or war risks associations and/or clubs that are members of the “ International Group of P&I Clubs ”; and

on terms and conditions satisfactory to the Security Agent.

24.5	Deductibles

The aggregate amount of any excess or deductible under the Mortgaged Vessel’s hull cover shall not exceed US$300,000, unless approved in writing by the Agent (acting reasonably).

24.6	Mortgagee’s Insurance

The Borrower shall promptly reimburse to the Agent (i) the full cost (as conclusively certified by the Agent) of taking out and keeping in force in respect of the Mortgaged Vessels mortgagee’s interest insurance (MII) and a mortgagee’s additional perils pollution insurance (MAPP) (all P&I risks) cover for the benefit of the Finance Parties in each case for an amount equal to up to one hundred and ten per cent. (110%) of the Loan then outstanding and on such terms as the Agent considers appropriate, and (ii) the full cost incurred by the Agent or the Lenders in considering or making claims thereunder.

24.7	Fleet Liens, Set off and Cancellations

If the Mortgaged Vessel’s hull cover also insures other vessels, the Security Agent shall either be given an undertaking in approved terms by the brokers or (if such cover is not placed through brokers or the brokers do not, under any applicable laws or insurance terms, have such rights of set off and cancellation) the relevant insurers that the brokers or (if relevant) the insurers will not:

set off against any claims in respect of the Mortgaged Vessel any premiums due in respect of any of such other vessels insured (other than other Mortgaged Vessels); or

cancel that cover because of non-payment of premiums in respect of such other vessels,

or the Borrower shall ensure that hull cover for any Mortgaged Vessels is provided under a separate policy from any other vessels, in each case unless reputable international insurance brokers and reputable maritime insurance companies have developed a general policy of not giving such undertakings.

24.8	Insurance Notices and Loss Payable Clauses

The interest of the Security Agent as assignee of the Insurances shall be endorsed on all insurance policies by the incorporation of a Loss Payable Clause and an Insurance Notice in respect of the Mortgaged Vessel and its Insurances signed by its Owner and, unless otherwise approved, each other person assured under the relevant cover (other than the Security Agent if it is itself an assured) in a manner satisfactory to the Security Agent (acting reasonably).

24.9	Details of Proposed Renewal of Insurances

Before any of the Mortgaged Vessel’s Insurances are due to expire and only if so requested by the Agent, the Agent shall be notified of the names of the brokers, insurers and associations proposed to be used for the renewal of such Insurances and the amounts, risks and terms in, against and on which the Insurances are proposed to be renewed.

24.10

Instructions for Renewal

Before any of the Mortgaged Vessel’s Insurances are due to expire, instructions shall be given to brokers, insurers and associations for them to be renewed or replaced on or before their expiry.

24.11

Confirmation of Renewal

The Mortgaged Vessel’s Insurances shall be renewed upon their expiry in a manner and on terms which comply with this Clause 24 and confirmation of such renewal given by approved brokers or insurers to the Agent at least three Business Days (or such shorter period as may be approved by the Agent) before such expiry.

24.12

Insurance Documents

The Agent shall be provided with pro forma copies of all insurance policies and other relevant documentation issued by brokers, insurers and associations in connection with the Mortgaged Vessel’s Insurances as soon as possible after they are available after they have been placed or renewed.

24.13

Letters of Undertaking

Unless otherwise approved where the Agent is satisfied that equivalent protection is afforded by the terms of the relevant Insurances and/or any applicable law and/or a letter of undertaking provided by another person, on each placing or renewal of the Insurances, the Agent shall be provided promptly with letters of undertaking in an approved form (having regard to general insurance market practice and law at the time of issue of such letter of undertaking) from the relevant Approved Insurance Brokers, Approved Insurers protection and indemnity risks and/or war risks associations and club undertakings.

24.14

Independent Report

The Agent may at any time request a detailed report from an independent firm of marine insurance brokers giving their opinion on the adequacy of the Mortgaged Vessel’s Insurances in which case the Borrower shall reimburse

the Agent for the cost of obtaining such a report. The Borrower shall be liable to pay (or reimburse the Agent) for no more than one such report per Mortgaged Vessel per year (unless (x) such report is obtained in connection with the occurrence of, or shows the occurrence of, an Event of Default, in which case the cost of such report shall be for the Borrower’s account or (y) there shall be a material change to the Mortgaged Vessel’s Insurances).

24.15

Collection of Claims

All documents and other information and all assistance required by the Agent to assist it and/or the Security Agent in trying to collect or recover any claims under the Mortgaged Vessel’s Insurances shall be provided promptly.

24.16

Employment of Mortgaged Vessel

The Mortgaged Vessel shall only be employed or operated in conformity with the terms of the Mortgaged Vessel’s Insurances (including any express or implied warranties) and not in any other way (unless the insurers have consented and/or any additional requirements of the insurers have been satisfied).

24.17

Declarations and Returns

If any of the Mortgaged Vessel’s Insurances are on terms that require a declaration, certificate or other document to be made or filed before the Mortgaged Vessel sails to, or operates within, an area, those terms shall be complied with within the time and in the manner required by those Insurances.

24.18

Application of Recoveries

All sums paid under the Mortgaged Vessel’s Insurances to anyone other than the Security Agent shall be applied in repairing the damage and/or in discharging the liability in respect of which they have been paid except to the extent that the repairs have already been paid for and/or the liability already discharged.

24.19

Settlement of Claims

Any claim under the Mortgaged Vessel’s Insurances for a Total Loss or Major Casualty shall only be settled, compromised or abandoned with prior approval of the Agent (acting on the instructions of the Majority Lenders).

24.20

Change in Insurance Requirements

If the Agent gives notice to the Borrower to change the terms and requirements of this Clause 24 (which the Agent may only do, in such manner as it considers appropriate in its reasonable opinion, as a result of changes of circumstances or market practice after the date of this Agreement), this Clause 24 shall be modified in the manner so notified by the Agent on the date fourteen (14) days after such notice from the Agent is received , provided always that the Agent shall use reasonable endeavours to give such notices as close as practicable to renewal dates for the Insurances and to consult with the Borrower before giving any such notice.

25.	MINIMUM SECURITY VALUE

Each Obligor undertakes that this Clause 25 will be complied with from the date of this Agreement until the end of the Facility Period.

25.1	Valuation of Assets

For the purpose of the Finance Documents, the value at any time of any Mortgaged Vessel or any other asset over which additional security is provided under this Clause 25 will be its value as most recently determined in accordance with this Clause 25 and, for the avoidance of doubt, in case of additional valuations required by the Agent as contemplated in Clause 25.2c), on the basis of such additional valuations.

25.2	Valuation Frequency

Prior to the occurrence of an Event of Default, valuations of each Mortgaged Vessel and each such other asset in accordance with this Clause 25 shall be provided to the Agent:

as required to determine the Initial Security Value,

ii)

semi-annually (as at each 30 June and 31 December), along with each Compliance Certificate delivered pursuant to Clause 20.3 (Financial Testin g) in respect of such dates, and

iii)

as required to determine the Market Value of the Mortgaged Vessels as contemplated in Clause 7.4 ( Mandatory prepayment - Sale or Total Loss of a Mortgaged Vessel ) in connection with a Sale or Total Loss of a Mortgaged Vessel Security Value.

After an Event of Default has occurred and while it is continuing, valuations of each Mortgaged Vessel and each such other asset in accordance with this Clause 25 may be required by the Agent at any time.

At any time, if the Agent reasonably suspects the Borrower is not in compliance with (i) Clause 20 ( Financial Covenants ) , (ii) Clause 28c) (in relation to Forward Freight Agreements ) , (iii) the required Initial Security Value in connection with any Utilisation, or (iv) this Clause 25, the Agent may with thirty (30) days’ prior notice (other than in the case of item (iii) of this sub-clause (c) in which case no such notice period shall apply) either request additional valuations of each Mortgaged Vessel to be provided to it by the Borrower or itself obtain additional valuations of each Mortgaged Vessel, in each case, such additional valuations (whether obtained by the Borrower or by the Security Agent) to prevail.

25.3	Expenses of Valuation

The Borrower shall bear, and reimburse to the Agent where incurred by the Agent, all costs and expenses of providing or obtaining valuations.

25.4	Valuations Procedure

The value of any Mortgaged Vessel shall be determined in accordance with this Clause 25.

Additional security in the form of Cash deposited in a blocked account subject to Security Interest in favour of the Security Agent shall be valued at par. Any other additional security provided under this Clause 25 shall be valued in such a way, on such a basis and by such persons (including the Agent itself) as may be approved by the Majority Lenders or as may be agreed in writing by the Borrower and the Agent (on the instructions of the Majority Lenders).

25.5	Currency of Valuation

Valuations shall be provided by an Approved Broker in Dollars or, if an Approved Broker is of the view that the relevant type of vessel is generally bought and sold in another currency, in that other currency. If a valuation is provided in another currency, for the purposes of this Agreement it shall be converted into Dollars at the Agent’s

spot rate of exchange for the purchase of Dollars with that other currency as at the date to which the valuation relates.

25.6	Basis of Valuation

Each valuation will be addressed to the Agent in its capacity as such and made:

without physical inspection provided that the Agent (acting on the instructions of the Majority Lenders acting reasonably) may by no less than two months' notice to the Borrower require that the Market Value be determined in respect of one or more Mortgaged Vessels with physical inspection;

on the basis of a sale for prompt delivery for a price payable in full in cash on delivery at arm’s length on normal commercial terms between a willing buyer and a willing seller not under duress; and

without taking into account the benefit of any charter commitment.

25.7	Information Required for Valuation

The Borrower shall promptly provide to the Agent and any such Approved Broker any information which they reasonably require for the purposes of providing such a valuation.

25.8	Approved Brokers

All valuers must be an Approved Broker. The Agent may from time to time notify the Borrower of approval of one or more additional independent ship brokers as Approved Brokers for the purposes of this Clause 25.

25.9	Appointment of Approved Brokers

When a valuation is required for the purposes of this Clause 25, the Borrower shall promptly appoint two (2) Approved Brokers to provide such a valuation. If the Borrower is approved to appoint valuers but fails to do so promptly, the Agent may appoint Approved Brokers to provide that valuation.

25.10

Number of Valuers

Each valuation will be carried out by two Approved Brokers obtained by the Borrower.

25.11

Differences in Valuations

Subject to paragraphs b) and c) below, if the valuations provided by each Approved Broker differ, the value of the relevant Mortgaged Vessel for the purposes of the Finance Documents will be the mean average of those valuations.

If the valuations on a Mortgaged Vessel delivered by the two (2) Approved Brokers deviates by a margin of more than twenty per cent. (20%) of the higher of the two valuations, the Agent (acting on behalf of the Lenders) may request a valuation from a third Approved Broker and the “ Market Value ” of the relevant Mortgaged Vessel shall thereafter be the average of the three (3) valuations.

If the valuations of all Mortgaged Vessels in the aggregate delivered by two (2) Approved Brokers deviates by a margin of more than ten per cent. 10% of the higher of the two valuations, the Agent (acting on behalf of the Lenders) may request valuations from a third Approved Broker for all such Mortgaged Vessels and the “ Market Value ” of such Mortgaged Vessels shall thereafter be the average of the three (3) valuations.

25.12

Security Shortfall

If at any time the Security Value is less than the Minimum Value, the Agent may, and shall, if so directed by the Majority Lenders, by notice to the Borrower require that such deficiency be remedied. The Borrower shall then within fourteen (14) days of receipt by the Borrower of such notice ensure that the Security Value equals or exceeds the Minimum Value. For this purpose, the Borrower may, at its option:

provide additional security over other assets approved by the Majority Lenders in accordance with this Clause 25; and/or

prepay any part of the Loan under Clause 7.6 (Voluntary Prepayment) provided that in such case no minimum prepayment amount requirements shall be applicable;

and in the event that such additional security is not provided, or prepayment made, within fourteen (14) days of receipt by the Borrower of such notice, the Borrower shall prepay such amount of the Loan as shall be required under Clause 7.3 (Mandatory Prepayment – Security Value ), which shall, for the avoidance of doubt, not constitute a breach of this Agreement.

25.13

Creation of Additional Security

The value of any additional security which the Borrower offers to provide to remedy all or part of a shortfall in the amount of the Security Value will only be taken into account for the purposes of determining the Security Value if and when:

in the case of any vessel mortgaged as additional security pursuant to Clause 25.12 ( Security Shortfall ), the relevant owner accedes as an Additional Guarantor and grants the Transaction Security and carries out any action to protect, perfect or give priority to the Transaction Security in each case identified in Part III of Schedule 3 (Conditions Precedent) ;

that additional security, its value and the method of its valuation have been approved by the Majority Lenders, it being agreed that cash collateral provided in Dollars and placed in a blocked account with the Account Bank which is subject to a perfected Security Interest in favour of the Security Agent shall always be acceptable to the Majority Lenders and shall be valued at par;

a Security Interest over that security has been constituted in favour of the Security Agent or (if appropriate) the Finance Parties pursuant to security documentation in form and substance satisfactory to the Security Agent;

the Finance Documents have been unconditionally amended in such manner as the Agent, in its reasonable opinion, requires in consequence of that additional security being provided; and

the Agent, or its duly authorised representative, has received such documents and evidence it may, in its reasonable opinion, require in relation to that amendment and additional security including documents and evidence of the type referred to in Schedule 3 ( Conditions Precedent ) in relation to that amendment and additional security and its execution and (if applicable) registration.

25.14

Release of Additional Security

In connection with each semi-annual valuation of the Mortgaged Vessels as contemplated in Clause 25.2a)i) only and provided always that the conditions set out in Clause 25.14b) below are satisfied, the Security Agent shall, at the request and the cost of the Borrower, as soon as reasonably practicable following receipt of the

notice referred to in Clause 25.14b)b)i) below (but in any case no earlier than the Proposed Additional Security Reduction Date set out in such notice), release any Security Interests over additional security in the form of cash created pursuant to Clause 25.13 ( Creation of Additional Security ), such date on which the relevant releases occur being a “ Additional Security Reduction Date ”.

The conditions referred to in Clause 25.14a) above are as follows:

the Borrower shall have provided the Agent and the Security Agent with at least fifteen (15) Business Days’ prior written notice of such request for release of the relevant Security Interests, such notice stating a proposed date of release (the “Proposed Additional Security Reduction Date ”) which date shall be no later than 30 days following the date of the relevant semi-annual valuation Compliance Certificate referred to Clause iii) below;

ii)

the released security must be in lump sums of US$1,000,000 or, if the security is less than US$1,000,000, that amount; and

iii)

immediately prior to and following the Additional Security Reduction Date, the Security Value shall be equal to or greater than the Minimum Value, as set out in a semi-annual valuation Compliance Certificate.

26.	BANK ACCOUNTS

26.1	Account pledge

The Owner undertakes that if, at any time from the date of this Agreement to the end of the Facility Period, it opens an Account with respect to any of the Mortgaged Vessels, it will grant a pledge over such Account in favour of, and on terms acceptable to, the Security Agent as soon as practicable after establishing the Account.

Any Account established by the Owner with respect to any of the Mortgaged Vessels is to be established with an Account Bank.

27.	BUSINESS RESTRICTIONS

Except as otherwise approved by the Majority Lenders, each Obligor undertakes that this Clause 27 will be complied with by and in respect of each Group Member from the date of this Agreement until the end of the Facility Period.

27.1	Change of Business

Except as approved by the Majority Lenders, no Group Member shall engage in any business other than the businesses in which such entity is engaged as at the date of this Agreement and activities related directly thereto and similar or related business (such as owning and operating bulk, chemical and tanker vessels. The Borrower shall not, and shall procure that no other Group Member will, make any material change to its business from that as at the date of this Agreement except:

the disposal of any Fleet Vessels, subject to compliance with Clause 7.4 (Mandatory Prepayment – Sale or Total Loss) ; or

as approved by the Majority Lenders.

27.2	The Owner's Business

The Owner shall not conduct any business other than the ownership and operation of the Mortgaged Vessels and any business incidental thereto.

27.3	Negative Pledge – The Owner

The Owner shall not grant, assume or permit any Security Interest to exist, arise or be created or extended over all or any part of its assets.

Without prejudice to Clauses 27.4 (Financial Indebtedness) and 27.7 (Disposals), the Owner shall not:

sell, transfer or otherwise dispose of any of its assets on terms whereby that asset is or may be leased to, or reacquired by, any other Group Member other than pursuant to disposals permitted under Clause 27.7 ( Disposals);

ii)

sell, transfer, factor or otherwise dispose of any of its receivables on recourse terms (except for the discounting of bills or notes in the ordinary course of business);

iii)

enter into any arrangement under which money or the benefit of a bank or other account may be applied, set off or made subject to a combination of accounts; or

iv)

enter into any other preferential arrangement having a similar effect,

in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

Clauses 27.3a) and 27.3b) above do not apply to Permitted Security Interests.

27.4	Financial Indebtedness - The Obligors (other than the Owner)

No Obligor (other than the Owner) shall incur or permit to exist, any Financial Indebtedness owed by it to any other person except:

any Financial Indebtedness incurred by an Obligor (other than the Owner) if:

the Borrower and the Group is in compliance with the provisions of Clause 20 (Financial Covenants ); and

the Borrower and the Group will remain in compliance with the provisions of Clause 20 (Financial Covenants) even after taking account of such Financial Indebtedness on a pro forma basis; and

no Event of Default has occurred and is continuing at the time such Financial Indebtedness is incurred or would occur as the result of the incurrence of such Financial Indebtedness; and

ii)

Financial Indebtedness incurred under the Finance Documents.

The Borrower shall ensure that the aggregate exposure of the Group under charter arrangements for vessels owned by third parties with remaining terms in excess of six (6) months shall not exceed, when added to any exposure of the Group under Forward Freight Agreements entered into under Clause 28c), an amount equal to a charter-in day rate of US$25,000 payable on 50% of all Fleet Vessels owned by all Group Members for a period of twenty-four (24) months. The aggregate exposure of the Group under charter-in arrangements for vessels owned by third parties as per 30 June or 31 December (as the case may be) in the relevant year shall be reported on in each Compliance Certificate.

27.5	Financial Indebtedness - The Owner

The Owner shall not incur or permit to exist, any Financial Indebtedness owed by it to anyone else except:

Financial Indebtedness incurred under the Finance Documents;

Financial Indebtedness incurred which is approved at the relevant time by all of the Lenders; and

trade credits on normal commercial terms and in the ordinary course of business.

27.6	Loans and credit – The Owner

The Owner shall not make, grant or permit to exist any loans or any credit by it to anyone else other than:

loans or credit to another Obligor; and

trade credit granted by it to its customers on normal commercial terms in the ordinary course of its trading activities.

27.7	Disposals – the Owner

Other than as set forth in Clause 27.7b) below, the Owner shall not enter into a single transaction or a series of transactions, whether related or not and whether voluntarily or involuntarily, to sell, lease, transfer or otherwise dispose of any of its assets except for any of the following disposals so long as they are not prohibited by any other provision of the Finance Documents:

disposals of assets on normal commercial terms, at market value and on an arm’s length basis; and

ii)

disposals permitted by Clause 27.1 ( Negative Pledge - The Owner).

Provided that no Event of Default has occurred and is continuing, the Owner may dispose of a Mortgaged Vessel, subject to compliance with Clause 7.4 (Mandatory Prepayment – Sale or Total Loss of Vessel ).

27.8	Contracts and Arrangements with Affiliates

No Group Member shall be party to any arrangement or contract with any of its Affiliates unless such arrangement or contract is on an arm’s length basis (except for Financial Indebtedness owed to another Group Member or an “ Affiliate ” (as such term is defined in accordance with GAAP) of any Group Member, provided that all Financial Indebtedness owing from an Obligor to another Group Member shall be unsecured and, to the extent required by the Subordination Deed, fully subordinated to this Agreement and the other Finance Documents).

27.9	Acquisitions and Investments - The Owner

The Owner shall not acquire any person, business, vessels or other material assets (other than a vessel that is, or becomes, a Mortgaged Vessel) or make any investment in any person or business or enter into any joint venture arrangement except for capital expenditures or investments relating to upgrade or maintenance work in the ordinary course of business.

27.10

Distributions and Other Payments

Except as permitted under Clause 27.10b) below, the Borrower shall not:

ii)

repay or distribute any dividend or share premium reserve;

iii)

pay or allow the payment by any other Group Member of any management, advisory or other fee to or to the order of any of the shareholders of the Borrower;

iv)

redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so; or

make any payment or repayment or allow any other Group Member to make a payment or repayment under any Financial Indebtedness owed to a shareholder of the Borrower or a Group Member which is not an Obligor;

each of the above being referred to herein as a " Distribution ".

Clause 27.10a) above does not apply to any direct or indirect Distributions by the Borrower after the expiry of each half of each of its financial years, of up to 75% of its Net Income (as defined below) for that half year period; provided that:

any such Distributions are declared and made when no Default is continuing or would occur immediately after the declaration or making of such payments; and

ii)

after giving effect to any such payments, the Borrower is not in breach of any of the provisions of Clause 20.2 ( Financial Condition).

For this purpose, "Net Income" shall mean the net income determined based on the Borrower's financial statements as at 30 June or its annual audited financial statements, as the case may be. Any amount available for distribution based on Net Income for a financial year and that is not distributed shall not be carried forward.

This Clause 27.10 shall cease to apply at any time:

at which the Group LTV is equal to or less than fifty per cent. (50%) and would continue to be equal to or less than fifty per cent. (50%) following the Distribution; or

ii)

the Borrower is listed on the New York Stock Exchange or Nasdaq New York.

For this purpose " Group LTV " means the ratio of (y) the sum of the Group's Borrowings less Cash and Cash Equivalents to (z) the aggregate Market Value of the Fleet Vessels determined in the same manner as Market Value in respect of the Mortgaged Vessels.

28.

HEDGING

Each Obligor undertakes that this Clause 28 will be complied with from the date of this Agreement until the end of the Facility Period:

The Owner shall not enter into any Treasury Transactions.

The Obligors shall not enter into any Treasury Transaction which is speculative, including Treasury Transactions that are (i) not entered into to hedge a real risk or exposure which the Borrower has or (ii) entered into by the Borrower for the main purpose of financial losses or gains.

Notwithstanding the provisions of Clause 28b), Forward Freight Agreements which are not entered into for the purpose of hedging cover against the forward position in which the Group has a commitment in relation to

freight market risk existing because of trading of specified time charters and voyages in respect of physical vessels or cargoes in respect of any Fleet Vessel may be entered into (other than by the Owner), provided that the aggregate exposure under such Forward Freight Agreements (when added to the outstanding exposure under Charters permitted by Clause 27.4b)) shall not exceed an amount equal to a charter-in day rate of US$25,000 payable on fifty per cent. (50%) of all Fleet Vessels owned by all Group Members for a period of twenty-four (24) months; and provided further that such Forward Freight Agreements are entered into in the ordinary course of trading, on arms' length terms and using market standard documents. The aggregate exposure of the Group under Forward Freight Agreements entered into under this Clause 28c) as of 30 June or 31 December (as the case may be) in the relevant financial year shall be specified in each Compliance Certificate.

29.	EVENTS OF DEFAULT

Each of the events or circumstances set out in Clauses 29.1 ( Non-payment ) to 29.23 ( Mortgaged Vessel Registration ) is an Event of Default.

29.1	Non payment

An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:

its failure to pay is caused by administrative or technical error or by a Payment Disruption Event; and

payment is made within three (3) Business Days of its due date.

29.2	Financial Covenants

The Borrower does not comply with Clause 20 ( Financial Covenants ).

29.3

Insurance

The Insurances in respect of a Mortgaged Vessel are not placed and kept in force in the manner required by Clause 24 ( Insurance ).

29.4	Security Shortfall

The Borrower, upon the request of the Agent, fails to timely comply with the provisions of Clause 25.12 ( Security Shortfall ).

29.5

Sanctions

The representation made or deemed to be made or repeated by the Obligors in Clause 18.32 ( Sanctions ) is or proves to have been incorrect or misleading in any respect when made or deemed to be made or repeated or any proceeds of the Loan are applied in contravention of the restrictions set out in Clause 21.1 ( Use of Proceeds ) or any Obligor fails to comply with its obligations under Clause 21.3d) ( Compliance with Laws - Sanctions Laws ) or Clause 21.15 ( Sanctions ) or any other requirement with respect to Sanctions set out in this Agreement is not complied with.

29.6	Other Obligations

An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clauses 29.1 (Non-paymen t), 29.2 (Financial Covenants ), 29.3 (Insuran ce), 29.4 ( Security Shortfall ), or 29.5 ( Sanctions )).

No Event of Default under Clause 0a) above will occur if the Agent considers in its reasonable opinion that the failure to comply is capable of remedy and the failure is remedied within ten (10) Business Days of the earlier of (i) the Agent giving notice to the Borrower or relevant Obligor and (ii) the Borrower or an Obligor becoming aware of the failure to comply.

29.7	Misrepresentation

Any representation, warranty or statement made or deemed to be made or repeated by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document (other than the representation set out in Clause 18.32 ( Sanctions )) is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.

No Event of Default under Clause 29.7a) above will occur if the Agent considers in its reasonable opinion that the circumstances giving rise to that misrepresentation are capable of remedy and are remedied within fifteen (15) Business Days of the earlier of (i) the Agent giving notice to the Borrower or relevant Obligor and (ii) the Borrower or an Obligor becoming aware of the failure to comply.

29.8	Breach of material contract

An event or circumstance is outstanding which constitutes an event of default or termination event (however described) under any material agreement or instrument (other than a Finance Document or any agreement between an Obligor and any Lender or any Affiliate of any Lender or any other agreement or arrangement which relates to Financial Indebtedness (without prejudice to Clause 29.9 (Cross Default)) which is binding on the Borrower or any other Group Member or to which its assets are subject.

29.9	Cross Default

Any Financial Indebtedness of any Group Member is not paid when due nor within any originally applicable grace period.

Any Financial Indebtedness of any Group Member is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

Any commitment for any Financial Indebtedness of any Group Member is cancelled or suspended by a creditor of that Obligor as a result of an event of default (however described).

The counterparty to a Treasury Transaction entered into by any Group Member becomes entitled to terminate that Treasury Transaction early by reason of an event of default (however described).

Any creditor of any Group Member becomes entitled to declare any Financial Indebtedness of that Group Member immediately due and payable prior to its specified maturity as a result of a material event of default (however described).

No Event of Default will occur under this Clause 29.9 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within Clauses 29.9a) to e) is less than ten million Dollars (US$10,000,000) (or its equivalent in any other currency or currencies).

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29.10

Insolvency

Any Group Member (other than the Owner) is generally unable or admits inability to pay its debts in an aggregate amount exceeding ten million Dollars (US$10,000,000) or the Owner is generally unable or admits inability to pay its debts in an aggregate amount exceeding one million Dollars (US$1,000,000) as they fall due, suspends making payments on any of its debts exceeding ten million Dollars (US$10,000,000) or one million Dollars (US$1,000,000), as the case may be, in aggregate or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such hereunder) with a view to rescheduling any of its indebtedness in excess of ten million Dollars (US$10,000,000) or one million Dollars (US$1,000,000), as the case may be, in aggregate.

The value of the assets of any Group Member is less than its liabilities (taking into account contingent and prospective liabilities) and as a result such Group Member is required under applicable law to file for insolvency or cease trading.

A moratorium is declared in respect of any indebtedness of any Group Member (other than the Owner) exceeding ten million Dollars (US$10,000,000) in aggregate or of any indebtedness of the Owner exceeding one million Dollars (US$1,000,000) in aggregate. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.

29.11

Insolvency Proceedings

Any corporate action, legal proceedings or other procedure or step is taken in relation to:

the suspension of payments (with respect to payments in respect of debt, in respect of debt in an aggregate amount exceeding US$10,000,000), a moratorium of any indebtedness exceeding ten million Dollars (US$10,000,000) aggregate, winding up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Group Member (other than the Owner);

ii)

the suspension of payments (with respect to payments in respect of debt, in respect of debt in an aggregate amount exceeding US$1,000,000), a moratorium of any indebtedness exceeding one million Dollars (US$1,000,000) aggregate, winding up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Owner;

iii)

a composition, compromise, assignment or arrangement with any creditor of any Group Member (other than the Owner) in respect of debt in an aggregate amount exceeding US$10,000,000 or in respect of the Owner in respect of debt in an aggregate amount exceeding US$1,000,000;

iv)

the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of any Group Member (other than the Owner) or any of its assets having an aggregate value exceeding US$10,000,000 (including the directors of any such Group Member requesting a person to appoint any such officer in relation to such Obligor or any of its assets), or

the appointment of a liquidator, receiver, administrator, administrative receiver, compulsory manager or other similar officer in respect of the Owner or any of its assets having an aggregate value exceeding US$1,000,000 (including the directors of the Owner requesting a person to appoint any such officer in relation to the Owner or any of its assets)

or any analogous procedure or step is taken in any jurisdiction.

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Clause 29.11a) above shall not apply to any winding up petition (or analogous procedure or step) which is frivolous or vexatious and is discharged, stayed or dismissed within fourteen (14) days (or such longer period as the Agent may agree) of commencement or, if earlier, the date on which it is advertised.

29.12

Creditors’ Process

Any expropriation, attachment, sequestration, distress, execution or analogous process affects any substantial asset or assets of any Group Member (other than the Owner) having an aggregate value exceeding ten million Dollars (US$10,000,000) or, in respect of the Owner having an aggregate value exceeding one million Dollars (US$1,000,000) (other than a Mortgaged Vessel) and, in each case, is not discharged within five (5) Business Days.

29.13

Unlawfulness and Invalidity

It is or becomes unlawful for an Obligor or any other Group Member which is a party to the Subordination Deed to perform any of its obligations under the Finance Documents.

Any obligation or obligations of any Obligor under any Finance Documents or any other Group Member under the Subordination Deed are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents.

Any Finance Document ceases to be in full force and effect or any Transaction Security or any subordination created under the Subordination Deed ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Finance Party) to be ineffective.

29.14

Subordination Deed

Any Group Member which is party to the Subordination Deed (other than an Obligor) fails to comply with the provisions of, or does not perform its obligations under, the Subordination Deed; or

a representation or warranty given by that party in the Subordination Deed is incorrect in any material respect,

and if the non-compliance or circumstances giving rise to the misrepresentation are capable of remedy, and it is not remedied within fifteen (15) Business Days of the earlier of the Agent giving notice to that party or that party becoming aware of the non-compliance or misrepresentation.

29.15

Cessation of Business and Revocation of Authorisations

The Borrower suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or substantially all of its business.

Any Authorisation required in connection with the entry by any Obligor into, validity or enforceability of any of the Finance Documents or the performance by any Obligor of the obligations thereunder or any of the transactions contemplated thereby is revoked, terminated or otherwise ceases to be in full force and effect and such revocation, termination or cessation has or is reasonably like to have a Material Adverse Effect.

29.16

Ownership of the Obligors

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At any time after the initial Utilisation Date any Obligor (other than the Borrower) is not or ceases to be a direct or indirect wholly-owned Subsidiary of the Borrower.

29.17

Audit Qualification

The Borrower’s Auditors issue a qualified opinion or an adverse opinion as contemplated by international auditing standards as at the date of this Agreement with respect to the consolidated audited annual financial statements of the Borrower.

29.18

Expropriation

The authority or ability of any Obligor to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action (including destruction of a substantial part of such Obligor’s assets (including any Mortgaged Vessel)) by or on behalf of any governmental, regulatory or other authority or other person in relation to any Group Member or any of its assets, provided such event has or is reasonably likely to have a Material Adverse Effect.

29.19

Repudiation and Rescission of Finance Documents

An Obligor (or, in the case of the Subordination Deed, any Group Member which is a party to the Subordination Deed (other than an Obligor)) repudiates or purports to repudiate a Finance Document or rescinds or purports to rescind a Finance Document.

29.20

Litigation

Any litigation, alternative dispute resolution, arbitration or administrative proceeding is taking place, or threatened against any Group Member or any of its assets, rights or revenues which, which is not frivolous or vexatious and which, if adversely determined has or is reasonably likely to have a Material Adverse Effect, except if such Group Member has taken out an appropriate insurance cover in respect of the whole amount of any judgement, arbitral award or order relating thereto and has provided evidence thereof to the Agent.

29.21

Material Adverse Effect

Any Environmental Incident or other event or circumstance or series of events (including any change of law) occurs which has or is reasonably likely to have a Material Adverse Effect.

29.22

Arrest of Mortgaged Vessel

A maritime or other lien (not being a Permitted Maritime Lien) is imposed on any Mortgaged Vessel or if a Mortgaged Vessel, its Earnings, Insurances or Requisition Compensation is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim and in either case the Owner fails to procure the release of such lien or Mortgaged Vessel within a period of thirty (30) days (or such longer period as may be approved) of any of the Obligors becoming aware of such event save where the Obligors have provided additional security to the Security Agent in such form and for such amounts as the Agent may approve, acting on the instructions of all the Lenders.

29.23

Mortgaged Vessel Registration

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Except with approval, the registration of any Mortgaged Vessel under the laws and flag of its Flag State is cancelled or terminated or, where applicable, not renewed or, if such Mortgaged Vessel is only provisionally registered on the date of its Mortgage, such Mortgaged Vessel is not permanently registered under such laws within thirty (30) days of such date.

29.24

Acceleration

On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Borrower:

cancel the Total Commitments at which time they shall immediately be cancelled; and/or

declare that all or part of the Loan, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, at which time they shall become immediately due and payable; and/or

declare that all or part of the Loan be payable on demand, at which time it shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or

declare that no withdrawals be made from any Account; and/or

exercise or direct the Security Agent and/or any other beneficiary of the Security Documents to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.

30.	TRANSACTION SECURITY

30.1

Ranking

The Transaction Security shall secure the Obligors' liabilities under this Agreement and the Finance Documents on a first priority basis.

30.2	Enforcement of Transaction Security

Enforcement instructions:

The Security Agent may refrain from enforcing the Transaction Security unless instructed otherwise by the Majority Lenders.

ii)

The Security Agent shall not enforce the Transaction Security in the absence of instructions from the Majority Lenders unless the Security Agent reasonably considers that it is necessary to do so in order to protect the priority, value or enforceability of the relevant Transaction Security.

iii)

If any action has been taken under Clause 29.24 ( Acceleration ), the Majority Lenders may, subject to the Transaction Security having become enforceable in accordance with its terms, give or refrain from giving instructions to the Security Agent to enforce or refrain from enforcing the Transaction Security as the Majority Lenders see fit.

Manner of enforcement: If any Transaction Security is being enforced in accordance with this Agreement and the Security Documents, the Security Agent shall enforce the Transaction Security in such manner (including, without limitation, the selection of any administrator (or any analogous officer in any jurisdiction) of any Obligor to be appointed by the Security Agent) as the Majority Lenders shall instruct, or, in the absence of any

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such instructions, as the Security Agent considers in its discretion to be appropriate or in the best interests of the relevant Secured Parties.

Waiver of rights. To the extent permitted under applicable law, each of the Secured Parties and the Obligors waives all rights it may otherwise have to:

require that the Transaction Security be enforced in any particular order or manner or at any particular time or that any sum received or recovered from any person, or by virtue of the enforcement of any of the Transaction Security or of any other security interest, which is capable of being applied in or towards discharge of any of the Secured Obligations is so applied; or

ii)

contest or support any other person in contesting, in any proceeding, (i) the validity, perfection, priority or enforceability of the Transaction Security and/or (ii) the relative rights and duties of the Secured Parties under this Agreement or any other Finance Document with respect to such Transaction Security; provided that nothing in this Agreement shall be construed to prevent or impair the rights of any party hereto to enforce this Agreement, including the priority of the Transaction Security as provided herein.

Duties owed: Each of the Secured Parties and the Obligors acknowledges that, in the event that the Security Agent enforces or is instructed to enforce any Transaction Security by the Majority Lenders, the duties of the Security Agent and of any Receiver or Delegate owed to the other Secured Parties in respect of the method, type and timing of that enforcement or of the exploitation, management or realisation of any of that Transaction Security shall be no different to or greater than the duty that is owed by the Security Agent, Receiver or Delegate to the Obligors under general law.

Enforcement through Security Agent only: The Secured Parties shall not have any independent power to enforce, or have recourse to, any of the Transaction Security or to exercise any right, power, authority or discretion arising under the Security Documents except through the Security Agent.

30.3	Application of Recoveries

Order of application : Subject to Clause b) below, all amounts from time to time received or recovered by the Security Agent in connection with the realisation or enforcement of all or any part of the Transaction Security and any collections under the Owner's Guarantee (together, for the purposes of this Clause 30.3, the " Recoveries ") shall be held by the Security Agent on trust to apply them to the extent permitted by applicable law (and subject to the provisions of this Clause 30.3), in the following order of priority:

in discharging costs, expenses, fees or other sums of a similar nature owing to the Security Agent, any Receiver or any Delegate in connection with any realisation or enforcement of the Transaction Security taken in accordance with the terms of this Agreement;

ii)

in payment of all costs and expenses incurred by any other Secured Party in connection with any realisation or enforcement of the Transaction Security taken in accordance with the terms of this Agreement;

iii)

in payment to the Agent on its own behalf and on behalf of the Lenders for application (in accordance with the terms of this Agreement) towards the discharge of:

first, any and all obligations of the Obligors owed to the Agent under the Finance Documents; and

second, any and all obligations of the Obligors owed to the Lenders under the Finance Documents; and

iv)

if none of the Obligors or other Group Members is under any further actual or contingent liability under any Finance Document, in payment to the relevant Obligor or Group Member.

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Prospective liabilities: Following an acceleration under Clause 29.24 and/or the enforcement of any of the Transaction Security and/or the receipt of any Recoveries under the Owner's Guarantee, the Security Agent may (upon instructions from the Majority Lenders) hold any amount of the Recoveries in a suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (any interest being credited to the relevant account) for later application under Clause 30.3a) ( Order of application ) in respect of:

any sum due or owing to the Security Agent, any Receiver or any Delegate; and

ii)

any part of the Obligors' liabilities to the Finance Parties,

that the Security Agent reasonably considers, in each case, might become due or owing at any time in the future.

Investment of proceeds: Prior to the application of the proceeds of the Security Property in accordance with Clause 30.3a) ( Order of application ) the Security Agent may, upon instructions from the Majority Lenders, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Agent with such financial institution (including itself) and for so long as the Security Agent shall think fit (the interest being credited to the relevant account) pending the application from time to time of those monies in accordance with the provisions of this Clause 30.3.

Currency Conversion: For the purpose of, or pending the discharge of, any of the Secured Obligations the Security Agent may convert any moneys received or recovered by the Security Agent from one currency to another (in the case of the Security Agent, at the Security Agent’s Spot Rate of Exchange). The obligations of any Obligor to pay in the due currency shall only be satisfied to the extent of the amount of the due currency purchased after deducting the costs of conversion.

Permitted Deductions: The Security Agent shall be entitled, in its discretion, (a) to set aside by way of reserve amounts required to meet and (b) to make and pay, any deductions and withholdings (on account of taxes or otherwise) which it is or may be required by any applicable law to make from any distribution or payment made by it under this Agreement, and to pay all Taxes which may be assessed against it in respect of any of the Charged Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).

Good Discharge:

Any payment to be made in respect of the Secured Obligations by the Security Agent may be made to the Agent on behalf of the Lenders, and any payment made in that way shall be a good discharge, to the extent of that payment, by the Security Agent.

ii)

The Security Agent is not under any obligation to make the payments to the Agent under this paragraph f) in the same currency as that in which the Obligors' liabilities are denominated.

Calculation of Amounts: For the purpose of calculating any person’s share of any sum payable to or by it, the Security Agent shall be entitled to:

notionally convert the liabilities owed to any person into US Dollars, that notional conversion to be made at the spot rate at which the Security Agent is able to purchase the US Dollars with the actual currency of the Liabilities owed to that person at the time at which that calculation is to be made; and

ii)

assume that all moneys received or recovered as a result of the enforcement or realisation of the Security Property are applied in discharge of the liabilities in accordance with the terms of the Finance Documents under which those Liabilities have arisen.

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30.4	Turnover by the Finance Parties

Turnover: If at any time prior to the Final Repayment Date, any Finance Party receives or recovers any amount of Recoveries not paid to it in accordance with Clause 30.3 ( Application of Recoveries ) (including by way of set-off) that Finance Party will:

in relation to receipts and recoveries not received or recovered by way of set-off, hold that amount on trust for the Security Agent and promptly pay that amount to the Security Agent for application in accordance with the terms of this Agreement; and

ii)

in relation to receipts and recoveries received or recovered by way of set-off, promptly pay an amount equal to that recovery to the Security Agent for application in accordance with the terms of this Agreement.

Sums received by Obligors or other Group Members: If any of the Obligors or any other Group Member receives or recovers any sum which, under the terms of any of the Finance Documents, should have been paid to the Security Agent, that Obligor will, and in the case of a Group Member the Obligors shall ensure that that Group Member will, hold that amount on trust for the Security Agent and promptly pay that amount to the Security Agent for application in accordance with the terms of this Agreement; and

Saving provision: If, for any reason, any of the trusts expressed to be created in this Clause 7 should fail or be unenforceable, the affected Finance Party or Obligor or other Group Member will promptly pay an amount equal to that receipt or recovery to the Security Agent to be held on trust by the Security Agent for application in accordance with the terms of this Agreement.

30.5

Prevalence of this Clause 30 over Clause 37.6 (Partial Payments). To the extent that there are any Recoveries (as defined in Clause 30.3 ( Application of Recoveries )), such Recoveries shall be applied first in accordance with this Clause 30 and thereafter the Recoveries received by the Agent in accordance with this Clause 30 shall be applied by the Agent in accordance with Clause 37.6 (Partial Payments) if applicable .

31.	CHANGES TO THE LENDERS

31.1	Assignments and Transfers by the Lenders

Subject to this Clause 31, a Lender (the “ Existing Lender ”) may assign any of its rights, or transfer by novation or sub-participate any of its rights and obligations, under any Finance Document to a bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “ New Lender ”).

31.2	Conditions of Assignment or Transfer

The consent of the Borrower is required for an assignment or transfer by an Existing Lender or any sub-participation or any other agreement or arrangement having an economic effect substantially similar to a sub-participation of any of its obligations by a Lender which involves the transfer of voting rights to the transferee or gives the transferee effective control over voting rights (a “ Sub-Participation ”), unless the assignment, transfer or Sub-Participation (as applicable) is (i) to a Lender or an Affiliate of a Lender, or (ii) following the occurrence of an Event of Default which is continuing and has been notified to the Borrower by the Agent. Any assignment, transfer or Sub-Participation by a Lender shall be without additional cost to the Borrower or the Agent. The Agent will immediately advise the Borrower of the assignment, transfer or Sub-Participation.

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The Borrower’s consent may not be unreasonably withheld or delayed and will be deemed to have been given ten (10) Business Days after the Agent or Existing Lender has requested consent unless consent is expressly refused within that time.

An assignment or transfer will only be effective:

on receipt by the Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the Borrower and the other Finance Parties as it would have been under if it was the Original Lender;

ii)

on the New Lender entering into any documentation required for it to accede as a party to the Subordination Deed and to any Security Document to which the Existing Lender is a party in its capacity as a Lender and, in relation to such Security Documents, completing any filing, registration or notice requirements;

iii)

on the performance by the Agent of all “ know your customer ” or other checks relating to any person that it is required to carry out in relation to such assignment or transfer to a New Lender, the completion of which the Agent shall promptly notify to the Lender and the New Lender;

iv)

if it is for a minimum amount of five million Dollars (US$5,000,000) or, if less, all of the Commitments of the Existing Lender;

if required, the Borrower has given its consent in accordance with paragraph (a) above; and

vi)

in respect of a transfer only, will only be effective if the New Lender enters into the documentation required for it to accede as a party to the Subordination Deed and if the procedure set out in Clause 31.5 (Procedure for Transfer ) is complied with.

If:

a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

ii)

as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 12 ( Tax gross-up and indemnities ) or Clause 13 (Increased Costs ),

then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under that Clause to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.

Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with the Finance Documents on or prior to the date on which the transfer or assignment becomes effective in accordance with the Finance Documents and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.

No Lender may transfer all or any part of its rights and/or obligations under the Finance Documents to a direct or indirect shareholder of the Borrower holding or controlling more than 5% of the shares in the Borrower, to any Obligor, or to any other Group Member without the prior written consent of all of the Lenders.

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31.3

Fee

The New Lender (unless it is an Affiliate of the Existing Lender) shall, on the date upon which an assignment takes effect, pay to the Agent (for its own account) a fee of three thousand five hundred Dollars (US$3,500).

31.4	Limitation of Responsibility of Existing Lenders

Unless expressly agreed to the contrary, an Existing Lender and the Arranger makes no representation or warranty and assumes no responsibility to a New Lender for:

the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

ii)

the financial condition of any Obligor;

iii)

the performance and observance by any Obligor or any other person of its obligations under the Finance Documents or any other documents; or

iv)

the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

and any representations or warranties implied by law are excluded.

Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of the Obligors and their related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Finance Document; and

ii)

will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

Nothing in any Finance Document obliges an Existing Lender to:

accept a re transfer or re assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 31 ( Changes to the Lenders ); or

ii)

support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.

31.5	Procedure for Transfer

Subject to the conditions set out in Clause 31.2 (Conditions of Assignment or Transfer), a transfer is effected in accordance with Clause 31.5d) below when (a) the Agent executes an otherwise duly completed Transfer Certificate and (b) the Agent executes any document required under Clause 31.2c) (Conditions of Assignment or Transfer ) which it may be necessary for it to execute, in each case delivered to it by the Existing Lender and the New Lender duly executed by them and, in the case of any such other document, any other relevant person. The Agent shall, subject to Clause 31.5b) below, as soon as reasonably practicable after receipt by it of a Transfer Certificate and any such other document each duly completed, appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate and such other document.

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The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “ know your customer ” or similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

The Obligors and the other Finance Parties irrevocably authorise the Agent to execute any Transfer Certificate on their behalf without any consultations with them.

On the Transfer Date:

to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents, the Existing Lender shall be released from further obligations towards the Obligors and the other Finance Parties under the Finance Documents and the rights of the Obligors and the other Finance Parties against the Existing Lender under the Finance Documents shall be cancelled (being the “ Discharged Rights and Obligations ”) (but the obligations owed by the Obligors under the Finance Documents shall not be released);

ii)

each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;

iii)

the other Finance Parties and the New Lender shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been the Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Existing Lender and the other Finance Parties shall each be released from further obligations to each other under the Finance Documents; and

iv)

the New Lender shall become a Party to the Finance Documents as a “ Lender ” for the purposes of all the Finance Documents.

31.6	Procedure for Assignment

Subject to the conditions set out in Clause 31.2 (Conditions of Assignment or Transfer ) an assignment may be effected in accordance with Clause 31.6c) below when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 31.6b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.

The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary " know your customer " or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.

The Obligors and the other Finance Parties irrevocably authorise the Agent to execute any Assignment Agreement on their behalf without any consultations with them.

On the Transfer Date:

the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents expressed to be the subject of the assignment in the Assignment Agreement;

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ii)

iii)

the New Lender shall become a Party as a “ Lender ” and will be bound by obligations equivalent to the Relevant Obligations.

Lenders may utilise procedures other than those set out in this Clause 31.6 to assign their rights and obligations under the Finance Documents (but not, without the consent of the Borrower or unless in accordance with Clause 31.5 (Procedure for Transfer), to obtain a release by the relevant Obligor from the obligations owed to such Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that such Lenders comply with the conditions set out in Clause 31.2 ( Conditions of Assignment or Transfer).

31.7	Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Borrower

The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, an Assignment Agreement or an Increase Confirmation and any other document required under Clause 31.2c) ( Conditions of Assignment or Transfer ), send a copy of that Transfer Certificate, Assignment Agreement or Increase Confirmation and such documents to the Borrower.

31.8	Security Over Lenders’ Rights

In addition to the other rights provided to Lenders under this Clause 31, each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create a Security Interest in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; except that no such charge, assignment or Security Interest shall:

release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security Interest for the Lender as a party to any of the Finance Documents; or

require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

32.	CHANGES TO THE OBLIGORS

32.1	No Transfer or Assignment

No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents without the prior written consent of the Lenders.

32.2	Additional Guarantors

Subject to compliance with the provisions of paragraphs c) and d) of Clause 19.8 (“ Know your custome r” checks ), the Borrower may request that any of its wholly owned Subsidiaries become a Guarantor.

A Group Member shall become an Additional Guarantor if:

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the proposed Additional Guarantor delivers to the Agent a duly completed and executed Accession Deed; and

ii)

the Agent has received all of the documents and other evidence listed in Part III of Schedule 3 (Conditions Precedent ) in relation to that Additional Guarantor, each in form and substance satisfactory to the Agent.

The Agent shall notify the Borrower and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part III of Schedule 3 (Conditions Precedent ) .

Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in paragraph c) above, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

32.3	Repetition of Representations

Delivery of an Accession Deed by any Additional Guarantor constitutes confirmation by that Additional Guarantor that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.

33.	ROLES OF AGENT, ARRANGER AND BASE REFERENCE BANKS

33.1	Appointment of the Agent

Each of the Arranger and the Lenders appoints the Agent to act as its agent under and in connection with the Finance Documents.

Each of the Arranger and the Lenders authorises the Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

33.2	Instructions

The Agent shall:

all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

in all other cases, the Majority Lenders;

ii)

not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph i) above.

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In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.

The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph f) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Security Documents or enforcement of the security constituted by the Security Documents or the Security Documents.

33.3	Duties of the Agent

The Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

Subject to paragraph c) below, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.

Without prejudice to Clause 31.7 ( Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Borrower ), paragraph b) above shall not apply to any Transfer Certificate, any Assignment Agreement or any Increase Confirmation.

Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent, the Arranger or the Security Agent) under this Agreement, it shall promptly notify the other Finance Parties.

The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).

33.4	Role of the Arranger

Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.

33.5	No fiduciary duties

Nothing in any Finance Document constitutes the Agent or the Arranger as a trustee or fiduciary of any other person.

Neither the Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

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33.6	Business with the Group

The Agent and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any Group Member.

33.7	Rights and discretions

The Agent may:

rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;

ii)

assume that:

any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and

unless it has received notice of revocation, that those instructions have not been revoked; and

iii)

rely on a certificate from any person:

as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

to the effect that such person approves of any particular dealing, transaction, step, action or thing,

as sufficient evidence that that is the case and, in the case of paragraph A) above, may assume the truth and accuracy of that certificate.

The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

no Default has occurred (unless it has actual knowledge of a Default arising under Clause 29.1 ( Non-payment) );

ii)

any right, power, authority or discretion vested in any Party or any group of Lenders has not been exercised; and

iii)

any notice or request made by the Borrower (other than a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Obligors.

The Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.

Without prejudice to the generality of paragraph c) above or paragraph e) below, the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be desirable.

The Agent may act in relation to the Finance Documents through its officers, employees and agents and the Agent shall not:

be liable for any error of judgment made by any such person; or

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ii)

be bound to supervise, or be in any way responsible for, any loss incurred by reason of misconduct, omission or default on the part of any such person,

unless such error or such loss was directly caused by the Agent's gross negligence or wilful misconduct.

Unless a Finance Document expressly provides otherwise the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

Without prejudice to the generality of paragraph g) above, the Agent:

may disclose; and

ii)

on the written request of the Borrower or the Majority Lenders shall, as soon as reasonably practicable, disclose,

the identity of a Defaulting Lender to the Borrower and to the other Finance Parties.

Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arranger is obliged to do or omit to do anything if it would, or might in its reasonable opinion, constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

33.8	Responsibility for documentation

Neither the Agent nor the Arranger is responsible or liable for:

the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, an Obligor or any other person in or in connection with any Finance Document or the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; or

the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security; or

33.9	No duty to monitor

The Agent shall not be bound to enquire:

whether or not any Default has occurred;

as to the performance, default or any breach by any Party of its obligations under any Finance Document; or

whether any other event specified in any Finance Document has occurred.

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33.10

Exclusion of liability

Without limiting paragraph b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent, the Agent will not be liable (including, without limitation, for negligence or any other category of liability whatsoever) for:

any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document or the Transaction Security, unless directly caused by its gross negligence or wilful misconduct;

ii)

exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document, the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document or the Transaction Security; or

iii)

without prejudice to the generality of paragraphs i) and ii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:

any act, event or circumstance not reasonably within its control; or

the general risks of investment in, or the holding of assets in, any jurisdiction,

including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Payment Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document or any Transaction Document and any officer, employee or agent of the Agent may rely on this Clause subject to Clause 1.3 ( Third party rights) and the provisions of the Third Parties Act.

Nothing in this Agreement shall oblige the Agent or the Arranger to carry out:

any " know your customer " or other checks in relation to any person; or

ii)

any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender,

on behalf of any Lender and each Lender confirms to the Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arranger.

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shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss. In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages.

33.11

Lenders’ indemnity to the Agent

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise than by reason of the Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 37.12 ( Disruption to Payment Systems etc .), notwithstanding the Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document).

b) Subject to paragraph c) below, the Borrower shall immediately on demand reimburse any Lender for any payment that Lender makes to the Agent pursuant to paragraph a) above.

Paragraph b) above shall not apply to the extent that the indemnity payment in respect of which the Lender claims reimbursement relates to a liability of the Agent to an Obligor.

33.12

Resignation of the Agent

The Agent may resign and appoint one of its Affiliates as successor by giving notice to the Lenders and the Borrower.

Alternatively the Agent may resign by giving 30 days’ notice to the Lenders and the Borrower, in which case the Majority Lenders may appoint a successor Agent, such successor to be acceptable to the Borrower (acting reasonably).

If the Majority Lenders have not appointed a successor Agent in accordance with paragraph b) above within 20 days after notice of resignation was given, the retiring Agent may appoint a successor Agent, such successor to be acceptable to the Borrower (acting reasonably).

If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under paragraph c) above, the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to this Clause 0 and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Agent's normal fee rates and those amendments will bind the Parties.

The retiring Agent shall make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents. The Borrower shall, within three Business Days of demand,

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reimburse the retiring Agent for the amount of all costs and expenses (including legal fees) properly incurred by it in making available such documents and records and providing such assistance.

The Agent's resignation notice shall only take effect upon the appointment of a successor.

Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph e) above) but shall remain entitled to the benefit of Clause 14.3 ( Indemnity to the Agent and Security Agent ) and this Clause 33.12 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

The Agent shall resign in accordance with paragraph b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph c) above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the Agent under the Finance Documents, either:

the Agent fails to respond to a request under Clause 12.8 ( FATCA Information ) and the Borrower or a Lender reasonably believes that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

ii)

the information supplied by the Agent pursuant to Clause 12.8 ( FATCA Information ) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

iii)

the Agent notifies the Borrower and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

and (in each case) the Borrower or a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and the Borrower or that Lender, by notice to the Agent, requires it to resign.

33.13

Replacement of the Agent

After consultation with the Borrower, the Majority Lenders may, by giving 30 days’ notice to the Agent (or, at any time the Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Agent by appointing a successor Agent, such successor to be acceptable to the Borrower (acting reasonably).

The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph b) above) but shall remain entitled to the benefit of Clause 14.3 ( Indemnity to the Agent and the Security Agent ) and this Clause 0 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date).

Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

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33.14

Confidentiality

If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.

33.15

Relationship with the Lenders

entitled to or liable for any payment due under any Finance Document on that day; and

ii)

entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,

unless it has received not less than five Business Days' prior notice from that Lender to the contrary in accordance with the terms of this Agreement.

Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address and (where communication by electronic mail or other electronic means is permitted under Clause 39.6 (Electronic communication)) electronic mail address and/or any other information required to enable the transmission of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, electronic mail address (or such other information), department and officer by that Lender for the purposes of Clause 39.2 ( Addresses) and paragraph a)i) of Clause 39.6 (Electronic communication ) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

33.16

Credit appraisal by the Lenders

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

the financial condition, status and nature of each Group Member;

the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the Transaction Security and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security;

whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the Transaction Security, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security;

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the adequacy, accuracy or completeness of any information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any of the Transaction Security or the existence of any Security Interest affecting the Charged Property.

33.17

Agent's management time

Any amount payable to the Agent under Clause 14.3 (Indemnity to the Agent and the Security Agent ), Clause 16 ( Costs and Expenses ) and Clause 33.11 ( Lenders' indemnity to the Agent ) after the occurrence of an Event of Default while such Event of Default is continuing, shall include the cost of utilising the Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Agent may notify to the Borrower and the Lenders, and is in addition to any fee paid or payable to the Agent under Clause 11 ( Fees ).

33.18

Deduction from amounts payable by the Agent

If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

33.19

Reliance and engagement letters

Each Finance Party and Secured Party confirms that each of the Arranger and the Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Arranger or Agent) the terms of any reliance letter or engagement letters relating to any reports or letters provided by accountants in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.

33.20

Role of Base Reference Banks

No Base Reference Bank is under any obligation to provide a quotation or any other information to the Agent.

No Base Reference Bank will be liable for any action taken by it under or in connection with any Finance Document, or for any Base Reference Bank Quotation, unless directly caused by its gross negligence or wilful misconduct.

No Party (other than the relevant Base Reference Bank) may take any proceedings against any officer, employee or agent of any Base Reference Bank in respect of any claim it might have against that Base Reference Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document, or to any Base Reference Bank Quotation, and any officer, employee or agent of each Base Reference Bank may rely on this Clause 33.20 subject to Clause 1.3 ( Third party rights) and the provisions of the Third Parties Act.

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33.21

Third party Base Reference Banks

A Base Reference Bank which is not a Party may rely on Clause 33.20 ( Role of Base Reference Banks ), paragraph b) of Clause 43.2 ( Exceptions ) and Clause 47 ( Confidentiality of Funding Rates and Base Reference Bank Quotation s) subject to Clause 1.3 (Third party rights ) and the provisions of the Third Parties Act.

34.	THE SECURITY AGENT

34.1	Trust and agency

The Security Agent declares that it shall hold the Transaction Security on trust for the Secured Parties on the terms contained in this Agreement.

Each Secured Party (that is or may become party to this Agreement) hereby irrevocably appoints the Security Agent to act as its agent (in Danish: repræsentant ) for the Secured Parties in accordance with the Danish act on capital markets (as amended from time to time) (in Danish: Lov om kapitalmarkeder ) under and in connection with each of the Danish law governed Security Documents to which the Security Agent is a party (the " Relevant Danish Security Documents ").

Each of the parties to this Agreement agrees that the Security Agent shall have only those duties, obligations and responsibilities expressly specified in this Agreement or in the Security Documents to which the Security Agent is expressed to be a party (and no others shall be implied).

34.2	Instructions to Security Agent and exercise of discretion

Subject to paragraphs (d) and (e) below, the Security Agent shall act in accordance with any instructions given to it by the Majority Lenders or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Security Agent and shall be entitled to assume that (i) any instructions received by it from an Agent, the Finance Parties or a group of Finance Parties are duly given in accordance with the terms of the Finance Documents and (ii) unless it has received actual notice of revocation, that those instructions or directions have not been revoked. The Security Agent shall not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with this paragraph (a) (or, if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, in accordance with instructions given to it by that Finance Party or group of Finance Parties).

The Security Agent shall be entitled to request instructions, or clarification of any direction, from the Majority Lenders as to whether, and in what manner, it should exercise or refrain from exercising any rights, powers, authorities and discretions and the Security Agent may refrain from acting unless and until those instructions or clarification are received by it.

Any instructions given to the Security Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Secured Parties.

Paragraph (a) above shall not apply:

where a contrary indication appears in this Agreement;

ii)

where this Agreement requires the Security Agent to act in a specified manner or to take a specified action;

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iii)

in respect of any provision which protects the Security Agent’s own position in its personal capacity as opposed to its role of Security Agent for the Secured Parties including, without limitation, the provisions set out in Clauses 34.4( Security Agent’s discretions ) to Clause 34.19 ( Disapplication );

iv)

in respect of the exercise of the Security Agent’s discretion to exercise a right, power or authority under any of Clause 30.3a) ( Order of application ), Clause 30.3b) ( Prospective liabilities ), and Clause 30.3e) ( Permitted Deductions ).

If giving effect to instructions given by the Majority Lenders would (in the Security Agent’s opinion) have an effect equivalent to an amendment to this Agreement or the Finance Documents, the Security Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Secured Party (other than the Security Agent) whose consent would have been required in respect of that amendment.

In exercising any discretion to exercise a right, power or authority under this Agreement where either it has not received any instructions from the Majority Lenders as to the exercise of that discretion, the Security Agent shall do so having regard to the interests of all the relevant Secured Parties.

34.3	Security Agent’s Actions

Without prejudice to the provisions of Clause 30.2 ( Enforcement of Transaction Security ) and Clause 34.2 ( Instructions to Security Agent and exercise of discretion ), the Security Agent may (but shall not be obliged to), in the absence of any instructions to the contrary, take such action in the exercise of any of its powers and duties under the Finance Documents as it considers in its reasonable discretion to be appropriate or in the best interests of the relevant Secured Parties.

34.4	Security Agent’s discretions

The Security Agent may:

assume (unless it has received actual notice to the contrary from the Agent) that (i) no Default has occurred and no Obligor is in breach of or default under its obligations under any of the Finance Documents and (ii) any right, power, authority or discretion vested by any Finance Document in any person has not been exercised;

if it receives any instructions or directions under Clause 30.2 ( Enforcement of Transaction Security ) to take any action in relation to the Transaction Security, assume that all applicable conditions under the Finance Documents for taking that action have been satisfied;

engage, pay for and rely on the advice or services of any legal advisers, accountants, tax advisers, surveyors or other experts (whether obtained by the Security Agent or by any other Secured Party) whose advice or services are at any time necessary, expedient or desirable and the Security Agent shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of so relying;

rely upon any communication or document believed by it to be genuine and, as to any matters of fact which might reasonably be expected to be within the knowledge of a Secured Party or an Obligor, upon a certificate signed by or on behalf of that person;

unless this Agreement expressly specifies otherwise, disclose to any other Party any information it reasonably believes it has received as security trustee under this Agreement; and

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refrain from acting in accordance with the instructions of any Party (including bringing any legal action or proceeding arising out of or in connection with the Finance Documents) until it has received any indemnification and/or security that it may in its discretion require (whether by way of payment in advance or otherwise) for all costs, losses and liabilities which it may incur in so acting.

34.5	Security Agent’s obligation to forward documents

The Security Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Security Agent for that Party by any other Party provided that, except where a Finance Document expressly provides otherwise, the Security Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

34.6	Excluded obligations

Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Agent shall not:

be bound to enquire as to (i) whether or not any Default has occurred or (ii) the performance, default or any breach by an Obligor of its obligations under any of the Finance Documents;

be bound to account to any other Party for any sum or the profit element of any sum received by it for its own account;

be bound to disclose to any other person (including but not limited to any Secured Party) (i) any confidential information or (ii) any other information if disclosure would, or might in its reasonable opinion, constitute a breach of any law or be a breach of fiduciary duty;

have or be deemed to have any relationship of trust or agency or any fiduciary relationship with, any Obligor; or

be obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

34.7	Exclusion of liability

None of the Security Agent, any Receiver or any Delegate shall accept responsibility or be liable for:

the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Security Agent or any other person in or in connection with any Finance Document or the transactions contemplated in the Finance Documents, or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security;

any damages, costs or losses to any person, any diminution in value, or any liability arising as a result of taking or refraining from taking any action in relation to any of the Finance Documents, the Transaction Security

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or otherwise, whether in accordance with an instruction from an Agent or otherwise unless directly caused by its gross negligence or wilful misconduct;

the exercise of, or the failure to exercise, any judgment, discretion or power given to it by or in connection with any of the Finance Documents, the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, the Finance Documents or the Transaction Security; or

any shortfall which arises on the enforcement or realisation of the Transaction Security.

34.8	No proceedings

No Party (other than the Security Agent, that Receiver or that Delegate) may take any proceedings against any officer, employee or agent of the Security Agent, a Receiver or a Delegate in respect of any claim it might have against the Security Agent, a Receiver or a Delegate or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document or any Transaction Security and any officer, employee or agent of the Security Agent, a Receiver or a Delegate may rely on this Clause subject to Clause 1.3 ( Third Party Rights ) and the provisions of the Third Parties Rights Act.

Nothing in this Agreement shall oblige the Security Agent to carry out:

any "know your customer" or other checks in relation to any person; or

ii)

any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Finance Party,

on behalf of any Finance Party and each Finance Party confirms to the Security Agent that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Security Agent.

Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Security Agent, any Receiver or Delegate, any liability of the Security Agent, any Receiver or Delegate arising under or in connection with any Finance Document or the Transaction Security shall be limited to the amount of actual loss which has been finally judicially determined to have been suffered (as determined by reference to the date of default of the Security Agent, Receiver or Delegate (as the case may be) or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Security Agent, Receiver or Delegate (as the case may be) at any time which increase the amount of that loss. In no event shall the Security Agent, any Receiver or Delegate be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Security Agent, Receiver or Delegate (as the case may be) has been advised of the possibility of such loss or damages.

34.9	Own responsibility

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Secured Party confirms to the Security Agent that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

the financial condition, status and nature of each Group Member;

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the legality, validity, effectiveness, adequacy and enforceability of any Finance Document, the Transaction Security and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security;

whether that Secured Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the Transaction Security, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security;

the adequacy, accuracy and/or completeness of any information provided by the Security Agent or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any of the Transaction Security or the existence of any security affecting the Charged Property,

and each Secured Party warrants to the Security Agent that it has not relied on and will not at any time rely on the Security Agent in respect of any of these matters.

34.10

No responsibility to perfect the Transaction Security

The Security Agent shall not be liable for any failure (other than any failure resulting from the gross negligence or wilful misconduct of the Security Agent) to:

require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Charged Property;

obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any of the Finance Documents or the Transaction Security;

register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any applicable laws in any jurisdiction or to give notice to any person of the execution of any of the Finance Documents or of the Transaction Security;

take, or to require any of the Obligors to take, any steps to perfect its title to any of the Charged Property or to render the Transaction Security effective or to secure the creation of any ancillary Security Interests under the laws of any jurisdiction; or

require any further assurances in relation to any of the Security Documents.

34.11

Insurance by Security Agent

The Security Agent shall not be under any obligation to insure any of the Charged Property, to require any other person to maintain any insurance or to verify any obligation to arrange or maintain insurance contained in the Finance Documents. The Security Agent shall not be responsible for any loss which may be suffered by any person as a result of the lack of or inadequacy of any such insurance.

Where the Security Agent is named on any insurance policy as an insured party, it shall not be responsible for any loss which may be suffered by reason of, directly or indirectly, its failure to notify the insurers of any material fact relating to the risk assumed by such insurers or any other information of any kind, unless an

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Agent shall have requested it to do so in writing and the Security Agent shall have failed to do so within fourteen days after receipt of that request.

34.12

Custodians and nominees

The Security Agent may appoint and pay any person to act as a custodian or nominee on any terms in relation to any assets of the trust as the Security Agent may determine, including for the purpose of depositing with a custodian this Agreement or any document relating to the trust created under this Agreement and the Security Agent shall not be responsible for any loss, liability, expense, demand, cost, claim or proceedings incurred by reason of the misconduct, omission or default on the part of any person appointed by it under this Agreement or be bound to supervise the proceedings or acts of any person.

34.13

Acceptance of title

The Security Agent shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that any of the Obligors may have to any of the Charged Property and shall not be liable for or bound to require any Obligor to remedy any defect in its right or title.

34.14

Refrain from illegality

Notwithstanding anything to the contrary expressed or implied in the Finance Documents, the Security Agent may refrain from doing anything which in its opinion will or may be contrary to any relevant law, directive or regulation of any jurisdiction and the Security Agent may do anything which is, in its opinion, necessary to comply with any such law, directive or regulation.

34.15

Business with the Group

The Security Agent may accept deposits from, lend money to, and generally engage in any kind of banking or other business with any Group Member.

34.16

Winding up of trust

If the Security Agent, with the approval of the Agent, determines that (i) all of the Secured Obligations and all other obligations secured by the Security Documents have been fully and finally discharged and (ii) none of the Secured Parties is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Obligor or other Group Member pursuant to the Finance Documents:

the trusts set out in this Agreement shall be wound up and the Security Agent shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Agent under each of the Security Documents; and

any Retiring Security Agent shall release, without recourse or warranty, all of its rights under each of the Security Documents.

34.17

Powers supplemental

The rights, powers, authorities and discretions conferred upon the Security Agent by this Agreement shall be supplemental to the Trustee Act 1925 and the Trustee Act 2000 and in addition to any which may be vested in the Security Agent by general law or otherwise.

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34.18

Agency division separate

In acting as trustee or agent for the Secured Parties, the Security Agent shall be regarded as acting through its trustee, or as the case may be, agency division which shall be treated as a separate entity from any of its other divisions or departments.

If information is received by another division or department of the Security Agent, it may be treated as confidential to that division or department and the Security Agent shall not be deemed to have notice of it.

34.19

Disapplication

Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Agent in relation to the trusts constituted by this Agreement. Where there are any inconsistencies between the Trustee Act 1925 or the Trustee Act 2000 and the provisions of this Agreement, the provisions of this Agreement shall, to the extent allowed by law, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement shall constitute a restriction or exclusion for the purposes of that Act.

34.20

Intra-Group Creditors and Obligors: Power of Attorney

Each Intra-Group Creditor and Obligor by way of security for its obligations under this Agreement irrevocably appoints the Security Agent to be its attorney to do anything which that Intra-Group Creditor or Obligor has authorised the Security Agent or any other Party to do under this Agreement or is itself required to do under this Agreement but has failed to do (and the Security Agent may delegate that power on such terms as it sees fit) and the same constitutes an Event of Default which is continuing.

34.21

Resignation of the Security Agent

The Security Agent may resign by giving notice to the other Parties in which case the Majority Lenders may appoint a successor Security Agent, such successor to be acceptable to the Borrower (acting reasonably).

If the Majority Lenders have not appointed a successor Security Agent in accordance with paragraph (a) above within 30 days after the notice of resignation was given, the Security Agent (after consultation with the Agents) may appoint a successor Security Agent, such successor to be acceptable to the Borrower (acting reasonably).

The retiring Security Agent (the " Retiring Security Agent ") shall, at its own cost, make available to the successor Security Agent such documents and records and provide such assistance as the successor Security Agent may reasonably request for the purposes of performing its functions as Security Agent under the Finance Documents.

The Security Agent’s resignation notice shall only take effect upon (i) the appointment of a successor and (ii) the transfer of all of the Transaction Security to that successor.

Upon the appointment of a successor, the Retiring Security Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of Clause 34.16 ( Winding up of trust ) and under paragraph (c) above) but shall, in respect of any act or omission by it whilst it was the Security Agent, remain entitled to the benefit of Clauses 34 ( The Security Agent ), 14.3 (Indemnity to the Agent and the Security Agent and Clause 14.4 ( Indemnity Concerning Security ). Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if that successor had been an original Party.

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By notice to the Security Agent, the Majority Lenders may require the Security Agent to resign in accordance with paragraph (a) above. In this event, the Security Agent shall resign in accordance with paragraph (a) above but the cost referred to in paragraph (c) above shall be for the account of the Company.

34.22

Delegation

Each of the Security Agent, any Receiver and any Delegate may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any of the rights, powers and discretions vested in it by any of the Finance Documents.

Any delegation made pursuant to this Clause 34.22 may be made upon any terms and conditions (excluding the power to sub-delegate) and subject to any restrictions that the Security Agent, that Receiver or that Delegate (as the case may be) may, in its discretion, think fit in the interests of the Secured Parties and it shall not be bound to supervise or monitor the performance of, or be in any way responsible for any loss incurred by reason of any misconduct or default on the part of any such delegate.

The Security Agent shall, at the instruction of the Majority Lenders, undertake such enforcement or other proceedings and make such claims against any delegates of the Security Agent appointed pursuant to this Clause 34.22 in respect of any right the Security Agent may have with respect to any act or omission of any kind by such delegate of the Security Agent.

34.23

Additional Security Agents

The Security Agent may at any time with the prior consent of the Majority Lenders appoint (and subsequently remove) any person to act as a separate trustee or as a co-trustee jointly with it (i) if it considers that appointment to be in the interests of the relevant Secured Parties or (ii) for the purposes of conforming to any legal requirements, restrictions or conditions which the Security Agent deems to be relevant or (iii) for obtaining or enforcing any judgment in any jurisdiction, and the Security Agent shall give prior notice to the Company and each of the Agents of that appointment.

Any person so appointed shall have the rights, powers and discretions (not exceeding those conferred on the Security Agent by this Agreement) and the duties and obligations that are conferred or imposed by the instrument of appointment.

The remuneration that the Security Agent may pay to that person, and any costs and expenses (together with any applicable VAT) incurred by that person in performing its functions pursuant to that appointment shall, for the purposes of this Agreement, be treated as costs and expenses incurred by the Security Agent.

35.	CONDUCT OF BUSINESS BY THE FINANCE PARTIES

35.1	Finance Parties Tax Affairs

No provision of this Agreement will:

interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;

oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

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oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

35.2	Finance Parties Acting Together

Notwithstanding Clause 2.3 ( Finance Parties’ Rights and Obligations ), if the Agent makes a declaration under Clause 29.24 ( Acceleration) the Agent shall, in the names of all the Finance Parties, take such action on behalf of the Finance Parties and conduct such negotiations with the Borrower and any Group Members and generally administer the Facility in accordance with the wishes of the Majority Lenders. All the Finance Parties shall be bound by the provisions of this Clause and no Finance Party shall be entitled to take action independently against any Obligor or any of its assets without the prior consent of the Majority Lenders.

35.3

Conflicts

The Borrower acknowledges that the Arranger and its parent undertaking, subsidiary undertakings and fellow subsidiary undertakings (together the “ Arranger Group ”) may be providing debt finance, equity capital or other services (including financial advisory services) to other persons with which the Borrower may have conflicting interests in respect of the Facility or otherwise.

No member of the Arranger Group shall use confidential information gained from any Obligor by virtue of the Facility or its relationships with any Obligor in connection with their performance of services for other persons. This shall not, however, affect any obligations that any member of the Arranger Group has as Agent in respect of the Finance Documents. The Borrower also acknowledges that no member of the Arranger Group has any obligation to use or furnish to any Obligor information obtained from other persons for their benefit.

The terms “ parent undertaking,” “subsidiary undertakin g” and “ fellow subsidiary undertaking ” when used in this Clause have the meaning given to them in sections 1161 and 1162 of the Companies Act 2006.

35.4

Obligors

Any information or consent provided by the Agent or Security Agent under the Finance Documents may be relied upon by the Obligors as having been properly authorised by the Lenders, the Majority Lenders and/or the Finance Parties, as applicable, in accordance with the terms of the Finance Documents, unless otherwise notified by the Agent or Security Agent. Furthermore, each Obligor shall be entitled to deal with Agent and/or Security Agent in all matters arising under or relating to this Agreement and other Finance Documents.

36.	SHARING AMONG THE FINANCE PARTIES

36.1	Payments to Finance Parties

If a Finance Party (a “ Recovering Finance Party ”) receives or recovers any amount from an Obligor other than in accordance with Clause 30 ( Transaction Security ) or Clause 37 ( Payment Mechanics ) (a “ Recovered Amount ”) and applies that amount to a payment due under the Finance Documents then:

the Recovering Finance Party shall, within three (3) Business Days, notify details of the receipt or recovery, to the Agent;

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in accordance with Clause 37 ( Payment Mechanics ), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and

the Recovering Finance Party shall, within three (3) Business Days of demand by the Agent, pay to the Agent an amount (the “ Sharing Paymen t”) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 37.6 ( Partial Payments ).

36.2	Redistribution of Payments

The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the “ Sharing Finance Parties ”) in accordance with Clause 37.6 ( Partial Payments ) towards the obligations of that Obligor to the Sharing Finance Parties.

36.3	Recovering Finance Party’s Rights

On a distribution by the Agent under Clause 36.2 ( Redistribution of Payments ) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.

36.4	Reversal of Redistribution

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.

36.5	Exceptions

This Clause 36 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause 36.5, have a valid and enforceable claim against the relevant Obligor.

it notified that other Finance Party of the legal or arbitration proceedings; and

ii)

37.	PAYMENT MECHANICS

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37.1	Payments to the Agent

On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in a Participating Member State or London) with such bank as the Agent specifies.

37.2	Distributions by the Agent

Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 0 ( Distributions to an Obligo r) and Clause 37.4 ( Clawback ) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment (but with same day value) in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five (5) Business Days’ notice with a bank in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London). Any such payment made under this Clause 37.2 shall be made on the basis that if such payment is placed on overnight deposit by the Agent before making such funds available to the relevant Party and interest is earned on such overnight deposit, this interest shall be (or a pro rata amount of such interest in accordance with that Party’s share in the payment) shall be made available to the Party entitled to receive the payment.

37.3	Distributions to an Obligor

The Agent may (with the consent of the Obligor or in accordance with Clause 38 ( Set off )) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

37.4

Clawback

If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

37.5	Impaired Agent

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If, at any time, the Agent becomes an Impaired Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with Clause 37.1 ( Payments to the Agent ) may instead either:

pay that amount direct to the required recipient(s); or

ii)

if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held with an Acceptable Bank within the meaning of paragraph a) of the definition of “ Acceptable Bank ” and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Obligor or the Lender making the payment (the “ Paying Party ”) and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the “ Recipient Par ty” or “ Recipient Parties ”).

In each case such payments must be made on the due date for payment under the Finance Documents.

All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements.

A Party which has made a payment in accordance with this Clause 37.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.

Promptly upon the appointment of a successor Agent in accordance with Clause 33.13 (R eplacement of the Agent ), each Paying Party shall (other than to the extent that that Party has given an instruction pursuant to paragraph e) below) give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance with Clause 37.2 ( Distributions by the Agent ).

A Paying Party shall, promptly upon request by a Recipient Party and to the extent:

that it has not given an instruction pursuant to paragraph d) above; and

ii)

that it has been provided with the necessary information by that Recipient Party,

give all requisite instructions to the bank with whom the trust account is held to transfer the relevant amount (together with any accrued interest) to that Recipient Party.

37.6	Partial Payments

If the Agent receives a payment for application against amounts due under the Finance Documents that is insufficient to discharge all the amounts then due and payable by an Obligor under those Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under those Finance Documents in the following order:

first, in or towards payment pro rata of any unpaid fees, costs and expenses;

ii)

secondly , in or towards payment to the Lenders pro rata of any amount owing to the Lenders under Clause 33.11 ( Lenders’ Indemnity to the Agent ) including any amount resulting from the indemnity to the Agent and the Security Agent under Clause 14.3 ( Indemnity to the Agent and the Security Agent );

iii)

thirdly , in or towards payment to the Lenders pro rata of any accrued interest, fee or commission due but unpaid under those Finance Documents;

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iv)

fourthly , in or towards payment to the Lenders pro rata of any principal which is due but unpaid under those Finance Documents; and

fifthly , in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

The Agent shall, if so directed by all the Lenders, vary the order set out in Clause 37.6a)i) to a)v) above.

Clauses 37.6a) and 37.6b) above will override any appropriation made by an Obligor.

37.7	No Set off by Obligors

All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set off or counterclaim (except as otherwise provided in the Finance Documents).

37.8	Business Days

Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

37.9	Payments on Demand

For the purposes of Clause 29.1 ( Non-paym ent) and subject to the Agent’s right to demand interest under Clause 8.3 ( Default Interest ), payments on demand shall be treated as paid when due if paid within three (3) Business Days of demand, except as otherwise expressly provided in the Finance Documents.

37.10

Currency of Account

Subject to Clauses 37.10b) and 37.10c) below, Dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.

A repayment of all or part of the Loan or an Unpaid Sum and each payment of interest shall be made in Dollars on its due date.

Each payment in respect of the amount of any costs, expenses or Taxes or other losses shall be made in Dollars and, if they were incurred in a currency other than Dollars, the amount payable under the Finance Documents shall be the equivalent in Dollars of the relevant amount in such other currency on the date on which it was incurred.

37.11

Change of Currency

Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

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ii)

If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Borrower) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the London interbank market and otherwise to reflect the change in currency.

37.12

Disruption to Payment Systems Etc.

If either the Agent determines (in its discretion) that a Payment Disruption Event has occurred or the Agent is notified by the Borrower that a Payment Disruption Event has occurred:

the Agent may, and shall, upon instructions from the Majority Lenders, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Facility as the Agent may deem necessary in the circumstances;

the Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in Clause 37.12a) above if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;

the Agent shall promptly notify the Finance Parties of any such determination or notice from the Borrower but in any event no later than five (5) Business Days after the date on which such determination was made or notice of such determination was received;

the Agent shall, upon instructions from the Majority Lenders, consult with the Finance Parties in relation to any changes mentioned in paragraph a) above but shall not be entitled to take any action to implement any changes to the operation or administration of the Facility without the instructions of the Majority Lenders and Clause 33.2 ( Instructions ) shall not apply in such circumstances pending receipt by the Agent of the Majority Lenders’ instructions;

any such changes agreed upon by the Agent, acting upon instructions from the Majority Lenders, and the Borrower shall (whether or not it is finally determined that a Payment Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents, notwithstanding the provisions of Clause 0 ( Amendments and Grant of Waivers );

the Agent shall not be liable to the Finance Parties for failing to take any steps in respect of a Payment Disruption Event in the absence of specific instructions from the Majority Lenders;

the Agent shall notify the Finance Parties of all changes agreed pursuant to Clause 37.12e) above;

the Agent shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation, for negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take any actions pursuant to or in connection with, this Clause 37.12.

38.

SET OFF

A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations

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are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set off.

39.

NOTICES

39.1	Communications in Writing

Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by letter.

39.2

Addresses

The address (and the department or officer, if any, for whose attention the communication is to be made) of each Obligor or Finance Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

in the case of any Obligor which is a Party, that identified with its name in Schedule 1 ( The Original Parties ) ;

in the case of any Obligor which is not a Party, that identified in any Finance Document to which it is a party;

in the case of the Agent and any other original Finance Party that identified with its name in Schedule 1 ( The Original Parties ) ; and

in the case of each Lender or other Finance Party, that notified in writing to the Agent on or prior to the date on which it becomes a Party in the relevant capacity,

or, in each case, any substitute address or department or officer as an Obligor or Finance Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five (5) Business Days’ notice.

39.3

Delivery

Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective when it has been left at the relevant address or five (5) Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address and, if a particular department or officer is specified as part of its address details provided under Clause 39.2 ( Addresses), if addressed to that department or officer.

Any communication or document to be made or delivered to the Agent or Security Agent will be effective only when actually received by the Agent or Security Agent and then only if it is expressly marked for the attention of the department or officer identified in Schedule 1 ( The Original Parties ) (or any substitute department or officer as the Agent or Security Agent shall specify for this purpose).

All notices from or to an Obligor shall be sent through the Agent.

Any communication or document made or delivered to the Borrower in accordance with this Clause 0 will be deemed to have been made or delivered to each of the Obligors.

39.4	Notification of Address

Promptly upon receipt of notification of an address or change of address pursuant to Clause 39.2 ( Addresses ) or changing its own address, the Agent shall notify the other Parties.

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39.5	Communication when Agent is Impaired Agent

If the Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Agent, communicate with each other directly and (while the Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Agent has been appointed

39.6	Electronic Communication

Any communication to be made between the Agent and a Lender or an Obligor under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including by way of the Agent’s Debt Domain system), if the Agent and the relevant Lender or such Obligor:

agree that, unless and until notified to the contrary, this is to be an accepted form of communication;

ii)

notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and

iii)

notify each other of any change to their address or any other such information supplied by them.

Any electronic communication made between the Agent and a Lender or an Obligor will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender or an Obligor to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.

All Lenders confirm that they have consented to the use of the Agent’s Debt Domain system as an accepted method of communication under or in connection with the Finance Documents and agree that the Debt Domain system will be the primary method of communication between the Agent and the Lenders. The Lenders acknowledge that a communication via Debt Domain will be effective once the communication is posted to Debt Domain by the Agent.

39.7	English Language

Any notice given under or in connection with any Finance Document shall be in English.

All other documents provided under or in connection with any Finance Document shall be:

in English; or

ii)

40.	CALCULATIONS AND CERTIFICATES

40.1

Accounts

In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

40.2	Certificates and Determinations

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Any certification or determination by the Agent of a rate or amount under any Finance Document is in the absence of manifest error, conclusive evidence of the matters to which it relates.

40.3	Day Count Convention

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of three hundred and sixty (360) days or, in any case where the practice in the London interbank market differs, in accordance with that market practice.

41.	PARTIAL INVALIDITY

42.	REMEDIES AND WAIVERS

No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver of any such right or remedy or constitute an election to affirm any Finance Documents. No election to affirm any Finance Document shall be effective unless it is in writing. No single or partial exercise of any right or remedy prevents any further or other exercise, or the exercise of any other right or remedy. The rights and remedies provided in the Finance Documents are cumulative and not exclusive of any rights or remedies provided by law.

43.	AMENDMENTS AND GRANT OF WAIVERS

43.1	Required Consents

Subject to Clause 43.2 ( Exceptions ), any term of the Finance Documents may be amended or waived with the consent of the Agent (acting on the instructions of the Majority Lenders and, if it affects the rights and obligations of the Agent, the consent of the Agent) and the Borrower and any such amendment or waiver agreed or given will be binding on all Parties.

The Agent may (or, in the case of the Security Documents, may instruct the Security Agent to) effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 43.1.

Without prejudice to the generality of Clause 33.7 ( Rights and discretions ), the Agent may engage, pay for and rely on the services of lawyers in determining the consent level required for, and effecting, any amendment, waiver or consent under this Agreement.

Each Obligor agrees to any such amendment or waiver permitted by this Clause 0 which is agreed to by the Borrower. This includes any amendment or waiver which would, but for this paragraph d), require the consent of all of the Guarantors.

43.2	Exceptions

An amendment, waiver or discharge or release that has the effect of changing or which relates to:

the definition of “ Majority Lenders ” in Clause 1.1 ( Definitions );

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ii)

an extension to the date of payment of any amount under the Finance Documents;

iii)

a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable or the rate at which they are calculated;

iv)

an increase in, or an extension of, any Commitment or the Total Commitments or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably;

a change to the Borrower or any other Obligor, except in the case of the release of any Guarantor in accordance with Clause 17.10 ( Release );

vi)

any provision which expressly requires the consent or approval of all the Lenders (other than the all Lender consent required under Clause 22.5(d));

vii)

Clause 2.3 ( Finance Parties’ Rights and Obligations ), Clause 31 ( Changes to the Le nders), Clause 36.1 ( Payments to Finance Parties ), this Clause 0, Clause 48 ( Governing Law ) or Clause 49.1 ( Jurisdiction of English Courts );

viii)

the order of distribution under Clause 30 ( Transaction Security ) or Clause 37.6 ( Partial Payments );

ix)

the currency in which any amount is payable under any Finance Document;

the nature or scope of the Charged Property (except in the case of any release of Charged Property expressly permitted by any Finance Document) or the manner in which the proceeds of enforcement of the Security Documents are distributed;

xi)

the nature or scope of the guarantee and indemnity granted under Clause 17 ( Guarantee and Indemnity ), except in the case of the release of any Guarantor in accordance with Clause 17.10 ( Release );

xii)

the circumstances in which the security constituted by the Security Documents are permitted or required to be released under any of the Finance Documents;

xiii)

changes to Clause 28 ( Hedging );

xiv)

changes to Clause 9.1a) ( Selection of Interest Periods ); or

xv)

changes to any provision in this Agreement relating to Sanctions Laws or any person being a Restricted Party;

shall not be made without the prior consent of all the Lenders.

An amendment or waiver which relates to the rights or obligations of the Agent, Security Agent or the Arranger or a Base Reference Bank in their respective capacities as such (and not just as a Lender) may not be effected without the consent of the Agent, Security Agent or the Arranger (as the case may be).

Notwithstanding Clauses 43.1 ( Required Consents ) and 43.2a) to 43.2 Error! Reference source not found. above (inclusive), the Agent may, if the Borrower (acting reasonably) agrees, make technical amendments to the Finance Documents arising out of manifest errors on the face of the Finance Documents, where such amendments would not prejudice or otherwise be adverse to the interests of any Finance Party without any reference or consent of the Finance Parties.

The Borrower shall (at its own cost) have the right, in the absence of a Default which is continuing, to replace any Lender (the “ Replaced Lender ”) that refuses to consent to certain amendments or waivers of this Agreement approved by the Agent which expressly require the consent of such Lender and which have been approved by the Majority Lenders with a New Lender (as defined in Clause 31.1 ( Assignments and Transfers by the Lenders ) provided that:

such New Lender consents to the proposed amendments or waivers;

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ii)

the New Lender and the Replaced Lender enter into a Transfer Certificate or Assignment Agreement;

iii)

the conditions set out in Clause 31.2c)c)i) to c)iii) ( Conditions of Assignment or Transfer ) inclusive are satisfied; and

iv)

all amounts owing to the Replaced Lender including, but not limited to

all amounts of principal and all accrued interest on the amount of the Replaced Lender’s Commitment which has been utilised on the date of the Transfer Certificate or Assignment Agreement;

any Break Costs; and

any accrued but unpaid fees payable pursuant to Clause 11 ( Fees )

are paid on or before the date of the Transfer Certificate or Assignment Agreement.

43.3

Releases

Except with the approval of the Lenders or as is expressly permitted or required by the Finance Documents, the Agent shall not have authority to authorise the Security Agent to release:

any Charged Property from the security constituted by any Security Document; or

any Obligor from any of its guarantee or other obligations under any Finance Document.

43.4	Excluded Commitments

If any Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any term of any Finance Document or any other vote of Lenders under the terms of this Agreement (other than an amendment, waiver or consent referred to in Clause 43.2 ( Exception s)) within fifteen (15) Business Days of that request being made (unless the Borrower and the Agent agree to a longer time period in relation to any request):

its Commitment(s) shall not be included for the purpose of calculating the Total Commitments under the Facility when ascertaining whether any relevant percentage of Total Commitments has been obtained to approve that request; and

its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.

43.5	Disenfranchisement of Defaulting Lenders

For so long as a Defaulting Lender has any Available Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments under the Facility or the agreement of any specified group of Lenders has been obtained to approve any request for a consent, waiver, amendment or other vote of Lenders under the Finance Documents, that Defaulting Lender’s Commitments under the Facility will be reduced by the amount of its Available Commitments under the Facility and, to the extent that the reduction results in that Defaulting Lender’s Total Commitments being zero, that Defaulting Lender shall be deemed not to be a Lender for the purposes of this Clause 43.5.

For the purposes of this Clause 43.5, the Agent may assume that the following Lenders are Defaulting Lenders:

any Lender which has notified the Agent that it has become a Defaulting Lender; and

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ii)

any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs a), b) or c) of the definition of Defaulting Lender has occurred,

43.6	Replacement of a Defaulting Lender

The Borrower may, at any time a Lender has become and continues to be a Defaulting Lender or a Non-Consenting Lender, by giving ten (10) Business Days’ prior written notice to the Agent and such Lender replace such Lender by requiring such Lender to (and to the extent permitted by law such Lender shall) assign pursuant to Clause 31 ( Changes to the Lenders ) all (and not part only) of its rights and obligations under this Agreement;

Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause 43.6 shall be subject to the following conditions:

the Borrower shall have no right to replace the Agent or Security Agent;

ii)

neither the Agent nor the Defaulting Lender shall have any obligation to the Borrower to find a Replacement Lender;

iii)

the transfer must take place no later than fourteen (14) days after the notice referred to in Clause 43.6a) above; and

iv)

in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents.

44.	COUNTERPARTS

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

45.	CONFIDENTIALITY

45.1	Confidential Information

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 45.2 ( Disclosure of Confidential Information ) and Clause e) ( Disclosure to Numbering Service Providers ), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

45.2	Disclosure of Confidential Information

Any Finance Party may disclose:

to any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners, insurers, insurance brokers, providers of direct or indirect credit protection and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the

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Confidential Information is to be given pursuant to this Clause 45.2a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

to any person:

to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Agent and, in each case, to any of that person’s Affiliates, Representatives and professional advisers;

ii)

with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person’s Affiliates, Representatives and professional advisers;

iii)

appointed by any Finance Party or by a person to whom Clause 45.2b)i) or 45.2b)ii) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under Clause 33.15 ( Relationship with the Lenders ));

iv)

who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause 45.2b)i) or 45.2b)ii) above;

to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

vi)

to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;

vii)

to any persons to whom or for whose benefit that Finance Party charges, assigns or otherwise creates a Security Interest (or may do so) pursuant to Clause 0 ( Security over Lenders’ Rights );

viii)

who is a Party; or

ix)

with the consent of the Borrower,

in each case, such Confidential Information as that Finance Party shall consider appropriate, if:

in relation to paragraphs b)i), b)ii) and b)iii) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

in relation to paragraph b)iv) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

in relation to paragraphs b)v), b)vi) and b)vii) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information

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may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;

to any person appointed by that Finance Party or by a person to whom Clauses 45.2b)b)i) or 45.2b)b)ii) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this Clause 45.2c) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Borrower and the relevant Finance Party;

any Confidential Information which is required to be publicised by applicable laws and regulations.

45.3	Disclosure to Numbering Service Providers

Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information:

names of Obligors (including any logos or trademarks of such Obligors);

ii)

country of domicile of Obligors;

iii)

place of incorporation of Obligors;

iv)

date of this Agreement;

Clause 48 ( Governing Law );

vi)

the names of the Agents and the Arranger;

vii)

date of each amendment and restatement of this Agreement;

viii)

amount of, and name of, the Facility;

ix)

amount of Total Commitments;

currency of the Facility;

xi)

type of the Facility;

xii)

ranking of the Facility;

xiii)

Final Repayment Date for the Facility;

xiv)

changes to any of the information previously supplied pursuant to Clauses e)a)i) to e)a)xiii) above; and

xv)

such other information agreed between such Finance Party and the Borrower,

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

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The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.

Each Obligor represents that none of the information set out in Clauses e)a)i) to e)a)xv) above is, nor will at any time be, unpublished price sensitive information.

45.4	Disclosure for Statistical Purposes

Each Finance Party undertakes, upon request of the Borrower, to deliver such information as to the place where its participation in any outstanding Utilisation, or other Financial Indebtedness owed to such Finance Party, is beneficially held to the extent required to be delivered to any public authority in Denmark for statistical purposes.

45.5	Entire Agreement

This Clause 45 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

45.6	Inside Information

Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to inside dealing and market abuse and each of the Finance Parties undertakes not to use only Confidential Information for unlawful purpose.

45.7	Notification of Disclosure

Each of the Finance Parties agrees (to the extent permitted by applicable law and regulation) to inform the Borrower:

of the circumstances of any disclosure of Confidential Information made pursuant to Clause 45.2 ( Disclosure of Confidential Informatio n) if allowed by the applicable laws, regulations and internal compliance rules except where such disclosure is made to any of the persons referred to in that clause during the ordinary course of its supervisory or regulatory function; and

upon becoming aware that Confidential Information has been disclosed in breach of this Clause 45 ( Confidentiality ).

45.8	Continuing Obligations

The obligations in this Clause 45 ( Confidentiality ) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve (12) months from the earlier of:

the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and

the date on which such Finance Party otherwise ceases to be a Finance Party.

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46.	RESTRICTION ON DEBT PURCHASE TRANSACTIONS

No Obligor shall, and each Obligor shall procure that no Group Member shall, enter into any Debt Purchase Transaction or beneficially own all or any part of the share capital of a company that is a Lender or a party to a Debt Purchase Transaction of the type referred to in paragraphs b) or c) of the definition of Debt Purchase Transaction. No Lender shall enter into any Debt Purchase Transaction with a direct or indirect shareholder of the Borrower holding or controlling more than five per cent. (5%) of the shares in the Borrower without the prior written consent of all of the Lenders.

47.	CONFIDENTIALITY OF FUNDING RATES AND BASE REFERENCE BANK QUOTATIONS

47.1	Confidentiality and disclosure

The Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Agent, each Base Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs b), c) and d) below.

The Agent may disclose:

any Funding Rate (but not, for the avoidance of doubt, any Base Reference Bank Quotation) to the relevant Borrower pursuant to Clause 8.4 ( Notification of rates of intere st); and

ii)

any Funding Rate or any Base Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Agent and the relevant Lender or Base Reference Bank, as the case may be.

The Agent may disclose any Funding Rate or any Base Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to:

any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate or Base Reference Bank Quotation is to be given pursuant to this paragraph i) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Base Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it;

ii)

any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Base Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;

iii)

any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Base Reference Bank Quotation is to be given is informed in writing of its

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confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and

iv)

any person with the consent of the relevant Lender or Base Reference Bank, as the case may be.

The Agent's obligations in this Clause 47 relating to Base Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause 8.4 ( Notification of rates of interest) provided that (other than pursuant to paragraph b)i) above) the Agent shall not include the details of any individual Base Reference Bank Quotation as part of any such notification.

47.2	Related obligations

The Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Agent, each Base Reference Bank Quotation) is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Agent, any Base Reference Bank Quotation for any unlawful purpose.

The Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Base Reference Bank, as the case may be:

of the circumstances of any disclosure made pursuant to paragraph c)ii) of Clause 47.1 ( Confidentiality and disclosure ) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

ii)

upon becoming aware that any information has been disclosed in breach of this Clause 47.

47.3	No Event of Default

No Event of Default will occur under Clause 29.4 ( Other obligations ) by reason only of an Obligor's failure to comply with this Clause 47.

48.	GOVERNING LAW

This Agreement and any non-contractual obligations connected with it are governed by English law.

49.	ENFORCEMENT

49.1	Jurisdiction of English Courts

The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement or any non-contractual obligations connected with it (including a dispute regarding the existence, validity or termination of this Agreement) (a “ Disput e”).

The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

This Clause 49.1 is for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

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49.2	Service of Process

Without prejudice to any other mode of service allowed under any relevant law, each Obligor which is a Party (other than an Obligor incorporated in England and Wales) and each Additional Guarantor (at the time it becomes an Additional Guarantor hereunder):

irrevocably appoints TORM plc of Birchin Court, 20 Birchin Lane, London EC3V 9DU, United Kingdom (as also set out in Schedule 1 ( The Original Parties ) or, for an Additional Guarantor, in its relevant Accession Deed, as that Obligor’s English agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document;

agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned; and

if any person appointed as process agent for an Obligor is unable for any reason to act as agent for service of process, that Obligor must immediately (and in any event within ten (10) days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.

By its signature to this Agreement, TORM plc acknowledges and accepts its appointment as agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document as set out in a) above.

50.	PATRIOT ACT

Each Lender hereby notifies the Borrower and the Guarantors that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. Law 107-56 (signed into law October 26, 2001)) (as amended from time to time, the “ USA PATRIOT Act ”) it may be required to obtain, verify and record information that identifies the Borrower and the Guarantors, including the names and addresses thereof and other information that allows each Lender to identify the Borrower and the Guarantors in accordance with the USA PATRIOT Act. The Borrower and the Guarantors shall provide such information and take such actions as are requested by any Lender to comply with the USA PATRIOT Act.

51.	CONTRACTUAL RECOGNITION OF BAIL-IN

51.1	Bail-in recognition

any Bail-In Action in relation to any such liability, including (without limitation):

a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;

ii)

a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and

iii)

a cancellation of any such liability; and

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a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.

51.2	Definitions

As used in Clause 51.1 ( Bail-in recognition ), the following terms have the following meanings:

" Bail-In Action " means the exercise of any Write-down and Conversion Powers.

" Bail-In Legislation " means in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms , the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time.

" EEA Member Country " means any member state of the European Union, Iceland, Liechtenstein and Norway.

" EU Bail-In Legislation Schedule " means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

" Resolution Authority " means any body which has authority to exercise any Write-down and Conversion Powers.

" Write-down and Conversion Powers " means in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule.

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SIGNATURES TO TERM FACILITY AGREEMENT

This Agreement has been entered into on the date stated at the beginning of this Agreement.

FOR TORM PLC as Borrower



/s/ Jacob Meldgaard
Signature:		Signature:
Name:	Jacob Meldgaard	Name:
Position:		Position:

FOR TORM A/S as Guarantor



/s/ Christian Gorrissen		/s/ Lars Christensen
Signature:		Signature:
Name:	Christian Gorrissen Attorney at Law Torm A/S Tuborg Havnevej 18 2900 Hellerup, Denmark	Name:	Lars Christensen
Position:	Director	Position:	Chairman

FOR VESSELCO 6 K/S as Guarantor



/s/ Christian Gorrissen		/s/ Peter Brogaard Hansen
Signature:		Signature:
Name:	Christian Gorrissen Attorney at Law Torm A/S Tuborg Havnevej 18 2900 Hellerup, Denmark	Name:	Peter Brogaard Hansen
Position:	Director	Position:	Director

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FOR ABN AMRO BANK N.V. as Arranger, Original Lender, Agent and Security Agent



/s/ J.P. Keijzer		/s/ illegible
Signature:		Signature:	illegible
Name:	J.P. Keijzer	Name:
Position:	Managing Director	Position:	Executive Director

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SCHEDULE 1 - THE ORIGINAL PARTIES

The Original Parties

Borrower

Name :	TORM PLC
Jurisdiction of incorporation	England
Registration number ( or equivalent, if any )	09818726
Registered office	Birchin Court, 20 Birchin Lane London EC3V 9DU United Kingdom
Address for service of notices	c/o TORM A/S Tuborg Havnevej 18 2900 Hellerup Denmark Fax: +45 39 17 93 80 Attention: Executive Management Email: man@torm.com

Original Guarantors

Name :	TORM A/S
Jurisdiction of incorporation	Denmark
Registration number ( or equivalent, if any )	22460218
English process agent ( if not incorporated in England )	TORM PLC, Birchin Court, 20 Birchin Lane, London EC3V 9DU United Kingdom
Registered office	Tuborg Havnevej 18, 2900 Hellerup, Denmark
Address for service of notices	Tuborg Havnevej 18 2900 Hellerup Denmark

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Fax: +45 39 17 93 80
Attention: Executive Management
Email: man@torm.com

Name :	VesselCo 6 K/S
Jurisdiction of incorporation	Denmark
Registration number ( or equivalent, if any )	39356813
English process agent ( if not incorporated in England )	TORM PLC, Birchin Court, 20 Birchin Lane, London EC3V 9DU United Kingdom
Registered office	c/o TORM A/S, Tuborg Havnevej 18, 2900 Hellerup, Denmark
Address for service of notices	c/o TORM A/S Tuborg Havnevej 18 2900 Hellerup Denmark Fax: +45 39 17 93 80 Attention: Executive Management Email: man@torm.com

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Arranger, Original Lender, Agent and Security Agent

Name	ABN AMRO Bank N.V.
Commitment US$70,000,000	OPS NL/Credits/Lending/ECT & International Coolsingel 93 3012 AE Rotterdam The Netherlands Fax: +31 10 401 6118 Attention: Mr. Pieter van Wijk en Mr. Dien Quan Email: loket.leningenadministratie.ccs@nl.abnamro.com

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SCHEDULE 2 - VESSEL INFORMATION

Mortgaged Vessel Information

No	Mortgaged Vessel Name	Registered Owner	Type	Flag and Port of Registry	Hull Number	Classification Society and Classification
1.	To be named	VesselCo 6 K/S	LR1 Tanker	Danish Flag, Port of Registry to be provided when available	15121140	To be provided when available
2.	To be named	VesselCo 6 K/S	LR1 Tanker	Danish Flag, Port of Registry to be provided when available	15121141	To be provided when available
3.	To be named	VesselCo 6 K/S	MR Tanker	Danish Flag, Port of Registry to be provided when available	15121038	To be provided when available

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SCHEDULE 3 - CONDITIONS PRECEDENT

Conditions Precedent

Part 1
Conditions Precedent to Delivery of the first Utilisation Request

1.	Borrower’s Corporate Documents

A copy of the Constitutional Documents of the Borrower.

A copy of a resolution of the board of directors of the Borrower:

approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute such Finance Documents;

ii)

authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and

iii)

authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request or Selection Notice) to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party.

A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above and who will sign any of the Finance Documents and related documents.

A certificate of the Borrower (signed on behalf of the Borrower by a director of the Borrower) confirming that borrowing or guaranteeing or securing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing, security or similar limit binding on the Borrower to be exceeded.

A copy of any power of attorney under which any person is to execute any of the Finance Documents on behalf of the Borrower.

A certificate of an authorised signatory of the Borrower certifying that each copy document relating to it specified in paragraphs a) to e) above is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement and that any such resolutions or power of attorney have not been revoked.

A copy of the Original Financial Statements and Forecast of the Borrower.

2.	Original Guarantors

A copy of the Constitutional Documents of each Original Guarantor and the share register of the Owner.

A copy of a resolution of the board of directors of each Original Guarantor:

approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute such Finance Documents;

ii)

authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf;

iii)

authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party; and

iv)

authorising the Borrower to act as its agent in connection with the Finance Documents.

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A specimen of the signature of each person authorised by the resolution referred to in paragraph (b) above and who will sign any of the Finance Documents and related documents.

In respect of the Owner, a copy of a resolution signed by all the holders of the issued shares in the Owner approving the terms of, and the transactions contemplated by, the Finance Documents to which the Owner and any such other Original Guarantor is a party.

A certificate of each Original Guarantor (signed by a director of such Original Guarantor on behalf of such Original Guarantor) confirming that borrowing or guaranteeing or securing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing, security or similar limit binding on such Original Guarantor to be exceeded.

A copy of any power of attorney under which any person is to execute any of the Finance Documents on behalf of any Original Guarantor.

A certificate of an authorised signatory of each Original Guarantor certifying that each copy document relating to it specified in paragraphs a) through f) above is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement and that any such resolutions or power of attorney have not been revoked.

3.	“ Know Your Customer” Information

Such documentation and information as any Finance Party may reasonably request through the Agent to comply with “know your customer” or similar identification procedures under all laws and regulations applicable to that Finance Party.

4.	Transaction Documents

This Agreement executed by the Borrower.

The Fee Letter executed by the Borrower.

The Deed of Subordination executed by each of the parties thereto.

The Share Security duly executed by each of the parties thereto, together with all letters, notices, transfers, certificates and other documents required to be delivered under such Share Security.

The Intra-Group Loans Assignment duly executed by the parties thereto, together with all letters, notices, transfers, certificates and other documents required to be delivered under the Intra-Group Loans Assignment.

5.	Charter Documents

A copy of the Bareboat Charters and any Charter Document relating to the Existing Charter Agreements of each Mortgaged Vessel, each certified by a director of the Borrower (signing on behalf of the Borrower) to be a true and complete copy and to be current and valid (including, to the extent not in the English language, a translation thereof).

6.	Shipbuilding Contracts

A copy of each Shipbuilding Contract, with all schedules and addenda thereto.

7.	Account pledge

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In the event that an Account has been established by the Owner with respect to a Mortgaged Vessel, an Account pledge (in accordance with Clause 26.1) with respect to such Account.

8.	Jurisdiction

Details of each Obligor’s jurisdiction or tax residency or centre of establishment on or immediately prior to the date of this Agreement.

9.	Financial Statements

A copy of the most recent financial statements of each Obligor.

10.	Solvency Certificate

A solvency certificate (in a form and substance acceptable to the Agent) from the chief executive officer of the Borrower (signing on behalf of the Borrower and in relation to all of the Obligors), confirming that as a result of entering into, and performing their obligations under, the Finance Documents, (a) none of the Obligors on an individual basis are insolvent, or would, upon entry into of the relevant Finance Documents, become the subject of insolvency or analogous proceedings and (b) the Group is not, and will not become insolvent or the subject of insolvency or analogous proceedings.

11.	Legal Opinions

A legal opinion of Kromann Reumert, addressed to the Arranger, the Agent, and the Security Agent, in respect of matters of English law, substantially in the form approved by the Agent (acting on the instructions of the Lenders) prior to signing the Agreement.

A legal opinion of Kromann Reumert, addressed to the Arranger, the Agent, and the Security Agent, in respect of matters of Danish law, substantially in the form approved by the Agent (acting on the instructions of the Lenders) prior to signing the Agreement.

12.	Other Documents and Evidence

A copy of any other Authorisation or other document, opinion or assurance which the Agent reasonably considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document.

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Part 2
Conditions Precedent to each Utilisation

1.	Finance Documents

The Mortgage in respect of each Mortgaged Vessel for which the relevant Utilisation is made as set out in Clause 0a) of the Agreement (the " Relevant Vessel(s) ") duly executed by the Owner.

The General Assignment in respect of each Mortgaged Vessel duly executed by the Owner and the Bareboat Charterers.

Duly executed notices of assignment of those notices and acknowledgements thereof as required by any of the above Security Documents.

2.	Mortgaged Vessels

Evidence that the Relevant Vessel(s):

is legally and beneficially owned by the Owner and registered in the name of the Owner through the relevant Registry as a ship under the laws and flag of the relevant Flag State; and

ii)

is classed with the relevant Classification free of all overdue requirements and recommendations of the relevant Classification Society.

3.	Mortgage Registration

Evidence that the Mortgage(s) in respect of the Relevant Vessel(s) has been registered against the Relevant Vessel(s) at the relevant Registry under the laws and flag of the relevant Flag State as a first priority or preferred mortgage over such Mortgaged Vessel(s).

Insurance

In relation to each of the Insurances relating to the Relevant Vessel(s):

an opinion from insurance consultants appointed by the Agent in respect of such Insurances;

evidence that such Insurances have been placed in accordance with Clause 24 ( Insuranc e) (including as regards coverage and amounts); and

evidence that approved brokers, insurers and/or associations have issued or will issue letters of undertaking in favour of the Security Agent in an approved form in relation to the Insurances.

5.	ISM and ISPS Code

Copies of:

the document of compliance issued in accordance with the ISM Code to the person who is the operator of the Relevant Vessel(s) for the purposes of that code;

the safety management certificate in respect of the Relevant Vessel(s) issued in accordance with the ISM Code; and

the international ship security certificate in respect of the Relevant Vessel(s) issued under the ISPS Code,

in each case, together with a certificate of the chief financial officer of the Bareboat Charterers or Owner (signing on behalf of the Bareboat Charterer or Owner, as applicable) confirming that each copy is a true and complete copy of such document and is current and valid.

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6.	Value of Security

Evidence that the Tranche 1 Commitment, Tranche 2 Commitment, or Tranche 3 Commitment, as the case may be, is not more than sixty per cent (60%) of the Market Value of the relevant Mortgaged Vessel, based on valuations obtained no earlier than 30 days prior to the relevant Utilisation Date; or

If the Tranche 1 Commitment, Tranche 2 Commitment, or Tranche 3 Commitment, as the case may be, is greater than sixty per cent (60%) of the Market Value of the relevant Mortgaged Vessel, evidence that:

it is not more than seventy per cent (70%) of the Market Value of the relevant Mortgaged Vessel, based on valuations obtained no earlier than 30 days prior to the relevant Utilisation Date; and

ii)

the Borrower has raised a minimum amount of USD 40,000,000 in equity.

7.	Fees and Expenses

Evidence that the fees, commissions, costs and expenses that are due from the Borrower pursuant to Clause 11 ( Fees ) and Clause 16 ( Costs and Expenses ) have been paid or will be paid by the relevant Utilisation Date.

8.	Legal Opinion

9.	Other Documents and Evidence

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Part 3
Conditions Precedent required to be delivered by an Additional Guarantor

1.	An Accession Deed executed by the Additional Guarantor.

2.	A copy of the Constitutional Documents of the Additional Guarantor and a certificate of good standing (to the extent applicable in the jurisdiction of incorporation of the Additional Guarantor) and the share register of the Additional Guarantor.

3.	A copy of a resolution of the board of directors of the Additional Guarantor (or any committee of such board empowered to approve and authorise the following matters):

approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute such Finance Documents;

authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf;

authorising the Borrower to act as its agent in connection with the Finance Documents.

4.	If applicable, a copy of a resolution of the board of directors of the relevant company, establishing any committee referred to in paragraph 3 above and conferring authority on that committee.

5.	A specimen of the signature of each person authorised by the resolution referred to in paragraph 3 above in relation to the relevant Finance Documents and related documents.

6.	If required, a copy of a resolution signed by all the holders of the issued shares in the Additional Guarantor, approving the terms of, and the transactions contemplated by, the Finance Documents to which the Additional Guarantor is a party.

7.	If required, a copy of a resolution of the board of directors of each corporate shareholder of the Additional Guarantor approving the terms of the resolution referred to in paragraph 6 above.

A certificate of the Additional Guarantor (signed on behalf of the Additional Guarantor by a director of the Additional Guarantor) confirming that borrowing or guaranteeing or securing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing, security or similar limit binding on the Additional Guarantor to be exceeded.

9.	A copy of any power of attorney under which any person is to execute any of the Finance Documents on behalf of any Additional Guarantor.

10.

A certificate of an authorised signatory of the Additional Guarantor certifying that each copy document relating to it specified in paragraphs 1 through 9 above is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement and that any such resolutions or power of attorney have not been revoked.

11.

A certificate from an officer of the Additional Guarantor (signing on behalf of such Additional Guarantor) that no consents, authorisations, licences or approvals are necessary for the Additional Guarantor to guarantee and/or grant security for the borrowing by the Borrower of the Loan pursuant to this Agreement and execute, deliver and perform any other Finance Document to which the Additional Guarantor is a party.

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12.

A copy of any other Authorisation or other document, opinion or assurance which the Agent reasonably considers to be necessary or desirable (if it has notified the Borrower accordingly) in connection with the entry into and performance of the transactions contemplated by the Accession Deed or for the validity and enforceability of any Finance Document.

13.	A legal opinion of Kromann Reumert, addressed to the Arranger, the Agent, and the Security Agent, in respect of matters of English law, substantially in the form approved by the Agent (acting on the instructions of the Lenders) prior to signing the Accession Deed.

14.

A legal opinion of the legal advisers to the Arranger and the Agent in each jurisdiction in which an Additional Guarantor is incorporated and/or which is or is to be the Flag State of a Mortgaged Vessel relating to that Additional Guarantor, and/or of each jurisdiction relevant to the Security Documents to which that Additional Guarantor is a party, each substantially in the form approved by the Agent (acting on the instructions of the Lenders) prior to signing the Accession Deed.

15.	Evidence that any process agent referred to in Clause 49.2 (Service of Process) has accepted its appointment in relation to the Additional Guarantor.

16.	Any security documents which are required by the Agent to be executed by the proposed Additional Guarantor.

17.	Any notices or documents required to be given or executed under the terms of those security documents.

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SCHEDULE 4 - FORM OF UTILISATION REQUEST

Form of Utilisation Request

From:

TORM PLC

To:	ABN AMRO Bank N.V., as Agent

Dated:

[●]

Dear Sirs

US$70,000,000 Term Facility Agreement dated [●] 2018 (the “ Agreement ”)

1.	We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.

2.	We wish to borrow the Loan on the following terms:

Proposed Utilisation Date:

[●] (or, if that is not a Business Day, the next Business Day)

Amount:

US$ [●]

Interest Period:

[●]

3.	The Mortgaged Vessel(s) to which the Utilisation is being made are the following:

[ List relevant Mortgaged Vessels ]

4.	We confirm that each condition specified in Clause 4.3 ( Further Conditions Precedent ) is satisfied or waived on the date of this Utilisation Request.

5.	The purpose of this Loan is [ specify purpose complying with Clause 3 of the Agreement ] and its proceeds should be credited to [●] [ specify account ].

5.	The Repeating Representations are correct at the date of this Utilisation Request.

Yours faithfully

Authorised Signatory for

TORM PLC

[●]

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SCHEDULE 5 - FORM OF SELECTION NOTICE

Form of Selection Notice

From:

TORM PLC

To:	ABN AMRO Bank N.V., as Agent

Dated:

[●]

Dear Sirs

US$70,000,000 Term Facility Agreement dated [●] 2018 (the “ Agreement ”)

1.	We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.

2.	We refer to the Interest Period ending on [●].

3.	We request that the next Interest Period for the Loan is [one/three/six] months.

4.	This Selection Notice is irrevocable.

Yours faithfully

Authorised Signatory for

TORM PLC

[●]

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SCHEDULE 6 - FORM OF TRANSFER CERTIFICATE

Form of Transfer Certificate

To:	[●] as Agent and [●] as Security Agent

From:

[ The Existing Lende r] (the “ Existing Lender ”) and [ The New Lender ] (the “ New Lender ”)

Dated:

[●]

US$70,000,000 Term Facility Agreement dated [●] 2018 (the “ Agreement ”)

We refer to the Agreement and to the Subordination Deed (as defined in the Agreement). This certificate (the " Certificate ") shall take effect as a Transfer Certificate for the purpose of the Agreement and as a Creditor Accession Undertaking for the purposes of the Subordination Deed (and as defined in the Subordination Deed). Terms defined in the Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.

2.	We refer to Clause 31.5 ( Procedure for Transfer ):

The Existing Lender and the New Lender agree to the Existing Lender assigning to the New Lender all or part of the Existing Lender’s Commitment rights and assuming the Existing Lender’s obligations referred to in the Schedule in accordance with Clause 31.5 ( Procedure for Transfer ) and the Existing Lender assigns and agrees to assign such rights to the New Lender with effect from the Transfer Date

The proposed Transfer Date is [●].

The Facility Office and address and attention details for notices of the New Lender for the purposes of Clause 39.2 ( Addresses ) are set out in the Schedule.

3.	The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in Clause 31.4c) ( Limitation of Responsibility of Existing Lenders ).

4.	The New Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it is:

Qualifying Lender (other than a Treaty Lender);]

Treaty Lender;]

[not a Qualifying Lender]. ¹

[The New Lender acknowledges the provisions of Clause 12 of the Agreement and in particular that if it is not a Qualifying Lender it will not be entitled to any increased payment under Clause 12 ( Tax Gross Up and Indemnities ) of the Agreement by reason of a Tax Deduction on account of Tax, as more particularly set out in Clause 12.2 ( Tax Gross-up ) and other provisions of Clause 12.]

We refer to [Clause 14] ( Changes to the Parties ) of the Subordination Deed. In consideration of the New Lender being accepted as a Senior Creditor for the purposes of the Subordination Deed (and as defined in the Subordination Deed), the New Lender confirms that, as from the Transfer Date, it intends to be party to the Subordination Deed as a Senior Creditor, and undertakes to perform all the obligations expressed in the Subordination Deed to be assumed by a Senior

_________________________

¹ Delete as applicable - each New Lender is required to confirm which of these three categories it falls within.

163

Creditor and agrees that it shall be bound by all the provisions of the Subordination Deed, as if it had been an original party to the Subordination Deed.

6.	This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

7.	This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

8.	This Agreement has been entered into on the date stated at the beginning of this Agreement.

Note: The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender’s interest in the Transaction Security in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender’s Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities

164

The Schedule

Commitment/rights to be assigned and obligations to be assumed

[ insert relevant details ]

Facility Office address and attention details for notices and account details for payments

[ insert relevant details ]

[ Existing Lender ]

_____________________________________

By:

[ New Lender ]

_____________________________________

By:

This Agreement is accepted as a Transfer Certificate for the purposes of the Agreement by the Agent, and as a Creditor Accession Undertaking for the purposes of the Subordination Deed by the Security Agent, and the Transfer Date is confirmed to be as stated above.

[ Agent ]

______________________________________

By:

[ Security Agent ]

______________________________________

165

SCHEDULE 7 - FORM OF ASSIGNMENT AGREEMENT

Form of Assignment Agreement

To:	[●] as Agent, [●] as Security Agent and [●] as Borrower, for and on behalf of each Obligor

From:

[The Existing Lender] (the “ Existing Lender ”) and [the New Lender] (the “ New Lender ”)

Dated:

[●]

US$70,000,000 Term Facility Agreement dated [●] (the “ Agreement ”)

We refer to the Agreement and to the Subordination Deed (as defined in the Facility Agreement). This is an Assignment Agreement. This agreement (the “ Agreement ”) shall take effect as an Assignment Agreement for the purpose of the Agreement and as a Creditor Accession Undertaking for the purposes of the Subordination Deed (and as defined in the Subordination Deed). Terms defined in the Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.

2.	We refer to Clause 31.6 ( Procedure for Assignment ) of the Agreement:

The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Agreement, the other Finance Documents and in respect of the Security Documents which correspond to that portion of the Existing Lender’s Commitment(s) and participations in Utilisations under the Agreement as specified in the Schedule.

The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender’s Commitment(s) and participations in Utilisations under the Agreement specified in the Schedule.

The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph b) above.

3.	The proposed Transfer Date is [●].

4.	On the Transfer Date the New Lender becomes:

a party to the relevant Finance Documents (other than the Subordination Deed) as a Lender; and

a party to the Subordination Deed as a Senior Creditor (as defined in the Subordination Deed).

5.	The Facility Office and address and attention details for notices of the New Lender for the purposes of Clause 39.2 ( Addresses ) of the Agreement are set out in the Schedule.

6.	The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in Clause 31.4c) ( Limitation of Responsibility of Existing Lenders ) of the Agreement.

166

7.	The New Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it is:

[a Qualifying Lender (other than a Treaty Lender);]

[a Treaty Lender;]

[not a Qualifying Lender]. ²

We refer to [Clause 14] (Changes to the Parties) of the Subordination Deed. In consideration of the New Lender being accepted as a Senior Creditor for the purposes of the Subordination Deed (and as defined in the Subordination Deed), the New Lender confirms that, as from the Transfer Date, it intends to be party to the Subordination Deed as a Senior Creditor, and undertakes to perform all the obligations expressed in the Subordination Deed to be assumed by a Senior Creditor and agrees that it shall be bound by all the provisions of the Subordination Deed, as if it had been an original party to the Subordination Deed.

This Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 31.7 (Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Borrow er) of the Agreement, to the Borrower (on behalf of each Obligor) of the assignment referred to in this Agreement.

10.	This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

11.	This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

12.	This Agreement has been entered into on the date stated at the beginning of this Agreement.

__________________

² Delete as applicable - each New Lender is required to confirm which of these three categories it falls within.

167

The Schedule

Commitment/rights and obligations to be transferred by assignment, release and accession

[ insert relevant details]

[Facility office address and attention details for notices and account details for payments]

[ Existing Lender ]

___________________________________

By:

[ New Lender ]

___________________________________

By:

This Agreement is accepted as an Assignment Agreement for the purposes of the Agreement by the Agent, and as a Creditor Accession Undertaking for the purposes of the Subordination Deed by the Security Agent, and the Transfer Date is confirmed as [●].

[ Agent ]

__________________________________

By:

[ Security Agent ]

___________________________________

By:

168

SCHEDULE 8 - FORM OF COMPLIANCE CERTIFICATE

Form of Compliance Certificate

To:	ABN AMRO Bank N.V., as Agent

From:

TORM PLC

Dated:

[●]

Dear Sirs

US$70,000,000 Term Facility Agreement dated [●] 2018 (the “ Agreement ”)

1.	I/We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

2.	I/We confirm that with respect to the financial quarter ending [30 June][31 December] of the Group:

Minimum Liquidity: The Minimum Liquidity is US$[•]; [Requirement: Minimum Liquidity to be equal or greater than the greater of:

seventy five million dollars (US$75,000,000); and

ii)

five per cent. (5%) of the Group’s Total Debt;

provided that at all times a part of the Minimum Liquidity equal to the greater of (x) forty million Dollars (US$40,000,000) and (y) five per cent. (5%) of the Group's Total Debt shall consist of Cash and Cash Equivalents.

Equity Ratio: The Equity Ratio is [•]. [Requirement: Equity Ratio shall not be less than twenty-five per cent. (25%)]

3.	[I/We confirm that the Security Value is greater than the Minimum Value under the latest valuations of each Mortgaged Vessel obtained in accordance with Clause 25 ( Minimum Security Value ).]

4.	I/We confirm that

the aggregate exposure of the Group under any charter arrangements for vessels owned by third parties as per [30 June/31 December] [year] is US$[●].

the aggregate exposure of the Group under Forward Freight Agreements entered into under Clause 27.1c) as per [30 June/31 December] [year] is US$[●].

5.	[I/We confirm that no Event of Default is continuing.] [If this statement cannot be made, the certificate should identify any Event of Default that is continuing and the steps, if any, being taken to remedy it.]

Signed by:

____________________________________

[Finance Director] [Chief Financial Officer] on behalf of Torm PLC

169

SCHEDULE 9 - FORM OF INCREASE CONFIRMATION

Form of Increase Confirmation

To:	[●] as Agent and [●] as Security Agent

and

TORM PLC

From:

[the Increase Lender] (the Increase Lender)

Dated:

[●]

US$[●] Term Facility Agreement dated [●] 2018 (the “ Agreement ”)

We refer to the Agreement and to the Subordination Deed (as defined in the Agreement). This agreement (the " Agreement ") shall take effect as an Increase Confirmation for the purpose of the Agreement and as a Creditor Accession Undertaking for the purposes of the Subordination Deed (and as defined in the Subordination Deed). Terms defined in the Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.

2.	We refer to Clause 2.2 ( Increase ) of the Agreement.

3.	The Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the “ Relevant Commitment”) as if it was the Original Lender under the Agreement.

4.	The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the “ Increase Date ”) is [●].

5.	On the Increase Date, the Increase Lender becomes:

party to the relevant Finance Documents (other than the Subordination Deed) as a Lender; and

a party to the Subordination Deed as a Senior Creditor (as defined in the Subordination Deed).

6.	The Facility Office and address and attention details for notices to the Increase Lender for the purposes of Clause 39.2 (Addresses ) are set out in the Schedule.

7.	The Increase Lender expressly acknowledges the limitations on the Lenders’ obligations referred to in Clause 2.2g) ( Increase).

8.	The Increase Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it is:

[a Qualifying Lender (other than a Treaty Lender);]

[a Treaty Lender;]

[not a Qualifying Lender]. ³

^{__________________________________}

³ Delete as applicable - each New Lender is required to confirm which of these three categories it falls within.

170

We refer to [Clause 14] ( Changes to the Parties) of the Subordination Deed. In consideration of the New Lender being accepted as a Senior Creditor for the purposes of the Subordination Deed (and as defined in the Subordination Deed), the New Lender confirms that, as from the Transfer Date, it intends to be party to the Subordination Deed as a Senior Creditor, and undertakes to perform all the obligations expressed in the Subordination Deed to be assumed by a Senior Creditor and agrees that it shall be bound by all the provisions of the Subordination Deed, as if it had been an original party to the Subordination Deed.

10.	This Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.

11.	This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

12.	This Agreement has been entered into on the date stated at the beginning of this Agreement.

171

The Schedule

Relevant Commitment/rights and obligations to be assumed by the Increase Lender

[ insert relevant details ]

[Increase Lender]

________________________________________

By:

________________________________________

By:

This Agreement is accepted as an Increase Confirmation for the purposes of the Agreement by the Agent and as a Creditor Accession Undertaking for the purposes of the Subordination Deed and the Increase Date is confirmed as [●].

Agent

(on behalf of itself and the other Finance Parties)

________________________________________

By:

Security Agent

(on behalf of itself and the other Finance Parties)

________________________________________

By:

TORM PLC

________________________________________

By:

172

SCHEDULE 10 - SCHEDULED AMORTISATION PAYMENTS

(see next page)

173

SCHEDULE 11 - FORM OF ACCESSION DEED

Form of Accession Deed

To:	[●] (as Agent) and [●] (as Security Agent)

From:

[Acceding Guarantor]

Dated:

[●]

Dear Sirs

TORM PLC

US$[●] Term Facility Agreement dated [●] 2018 (the “ Agreement ”)

We refer to the Agreement and to the Subordination Deed. This deed (the " Accession Deed ") shall take effect as an Accession Deed for the purposes of the Agreement and as a Debtor accession Deed for the purposes of the Subordination Deed (and as defined in the Subordination Deed). Terms defined in the Agreement have the same meaning in paragraphs 1-[3]/[4] of this Accession Deed unless given a different meaning in this Accession Deed.

2.	[●] agrees to become a Guarantor and to be bound by the terms of the Agreement as a Guarantor, including Clause 17.4 (Wai ver of Defences ). [●] is a company duly incorporated under the laws of [●].

3.	[●] administrative details are as follows:

Address:

[●]

Attention:

[●]

4.	We confirm that no Default is continuing or would occur as a result of [●] becoming a Guarantor.

5.	[Subsidiary] (for the purposes of this paragraph 5, the " Acceding Debtor ") intends to give a guarantee, indemnity or other assurance against loss in respect of liabilities under the Agreement.

IT IS AGREED as follows:

Terms defined in the Subordination Deed shall, unless otherwise defined in this Accession Deed, bear the same meaning when used in this paragraph 6.

The Acceding Debtor and the Security Agent agree that the Security Agent shall hold:

any Security Interest in respect of Liabilities created or expressed to be created pursuant to the Agreement;

ii)

all proceeds of that Security Interest; and

iii)

all obligations expressed to be undertaken by the Acceding Debtor to pay amounts in respect of the Liabilities to the Security Agent as trustee for the Secured Parties (in the Agreement or otherwise) and secured by the Transaction Security together with all representations and warranties expressed to be given by the Acceding Debtor (in the Agreement or otherwise) in favour of the Security Agent as trustee for the Secured Parties,

174

on trust for the Secured Parties on the terms and conditions contained in the Subordination Deed.

The Acceding Debtor confirms that it intends to be party to the Subordination Deed as an Obligor, undertakes to perform all the obligations expressed to be assumed by an Obligor under the Subordination Deed and agrees that it shall be bound by all the provisions of the Subordination Deed as if it had been an original party to the Subordination Deed.

[In consideration of the Acceding Debtor being accepted as an Intra-Group Lender for the purposes of the Subordination Deed, the Acceding Debtor also confirms that it intends to be party to the Subordination Deed as an Intra-Group Lender, and undertakes to perform all the obligations expressed in the Subordination Deed to be assumed by an Intra-Group Lender and agrees that it shall be bound by all the provisions of the Subordination Deed, as if it had been an original party to the Subordination Deed].

The limitations set forth herein shall apply mutatis mutandis to any security created by [●] under the Security Documents and to any guarantee, indemnity, any similar obligation resulting in a payment obligation and payment, including but not limited to set off, pursuant to this Agreement and made by [●].

8.	This Accession Deed and any non-contractual obligations connected with it are governed by English law.

9.	[ For Guarantors incorporated outside of England and Wales : For the purposes of Clause 49.2 ( Service of process ) of the Agreement [●] appoints [●] of [●] as its English process agent.]

10.	This Accession Deed shall be considered a Finance Document.

11.	The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Accession Deed or any non-contractual obligations connected with it (including a dispute regarding the existence, validity or termination of this Accession Deed) (a Dispute).

12.	The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

13.

Paragraphs 11 and 12 are for the benefit of the Finance Parties only. As a result, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.

14.	This Accession Deed has been executed as a deed by [●] and is delivered on the date stated above.

[●]

____________________________________

By:

[●]

Date:

[●]

[ to be executed as a deed under the relevant local law requirements ]

175

This Accession Deed is accepted

by the Agent on behalf of itself

and the other Finance Parties.

[●]

____________________________________

By:

[●]

Date:

[●]

____________________________________

By:

[●]

Date:

[●]

This Accession Deed is accepted

by the Security Agent on behalf of itself

and the other Finance Parties.

[●]

____________________________________

By:

[●]

Date:

[●]

____________________________________

By:

[●]

Date:

[●]

176

Exhibit 8.1

List of TORM plc Subsidiaries

Name of Subsidiary	Jurisdiction of Incorporation or Organization

TORM A/S	Denmark
DK Vessel HoldCo GP ApS	Denmark
DK Vessel HoldCo K/S	Denmark
OCM (Gibraltar) Njord Midco Ltd	Gibraltar
OCM Njord Chartering Inc.	Marshall Islands
OCM Singapore Njord Holdings Alice, Pte. Ltd	Singapore
OCM Singapore Njord Holdings Almena, Pte. Ltd	Singapore
OCM Singapore Njord Holdings Hardrada, Pte. Ltd	Singapore
OCM Singapore Njord Holdings St. Michaelis, Pte. Ltd	Singapore
OCM Singapore Njord Holdings St. Gabriel, Pte. Ltd	Singapore
OCM Singapore Njord Holdings Agnete, Pte. Ltd	Singapore
OCM Singapore Njord Holdings Alexandra, Pte. Ltd	Singapore
OCM Holdings Mrs Inc.	Marshall Islands
TORM Crewing Service Ltd.	Bermuda
TORM Shipping India Private Limited	India
TORM Singapore Pte. Ltd.	Singapore
TORM USA LLC	United States
VesselCo 1 K/S	Denmark
VesselCo 3 K/S	Denmark
VesselCo 5 K/S	Denmark
VesselCo 6 K/S	Denmark
VesselCo 6 Pte. Ltd.	Singapore
VesselCo 7 Pte. Ltd.	Singapore
VesselCo 8 Pte. Ltd.	Singapore
VesselCo 9 Pte. Ltd.	Singapore
VesselCo 10 Pte. Ltd.	Singapore
VesselCo 11 Pte. Ltd.	Singapore
VesselCo 12 Pte. Ltd.	Singapore
TORM SHIPPING (PHILS.), INC.	Philippines
VesselCo A ApS	Denmark
VesselCo C ApS	Denmark
VesselCo E ApS	Denmark
VesselCo F ApS	Denmark

Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

I, Jacob Meldgaard, certify that:

1. I have reviewed this annual report on Form 20-F of TORM plc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

5. The Company’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: March 12, 2019


/s/ Jacob Meldgaard
Jacob Meldgaard Executive Director (Principal Executive Officer)

Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Christian Søgaard-Christensen, certify that:

1. I have reviewed this annual report on Form 20-F of TORM plc;

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: March 12, 2019


/s/ Christian Søgaard-Christensen
Christian Søgaard-Christensen Chief Financial Officer (Principal Financial Officer)

Exhibit 13.1

PRINCIPAL EXECUTIVE OFFICER CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of TORM plc (the “Company”) on Form 20-F for the year ended December 31, 2018 as filed with the Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Jacob Meldgaard, Executive Director of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: March 12, 2019


/s/ Jacob Meldgaard
Jacob Meldgaard Executive Director (Principal Executive Officer)

Exhibit 13.2

PRINCIPAL FINANCIAL OFFICER CERTIFICATION
PURSUANT TO 18 U.S.C. SECTION 1350

In connection with this Annual Report of TORM plc (the “Company”) on Form 20-F for the year ended December 31, 2018 as filed with the Securities and Exchange Commission (the “SEC”) on or about the date hereof (the “Report”), I, Christian Søgaard-Christensen, Principal Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement has been provided to the Company and will be retained by the Company and furnished to the SEC or its staff upon request.

Date: March 12, 2019


/s/ Christian Søgaard-Christensen
Christian Søgaard-Christensen Chief Financial Officer (Principal Financial Officer)

Exhibit 15.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement No. 333-228878 on Form F-3 of our report dated March 12, 2019, relating to the consolidated financial statements of TORM plc appearing in this Annual Report on Form 20-F of TORM plc for the year ended December 31, 2018.

Deloitte Statsautoriseret Revisionspartnerselskab

Copenhagen, Denmark

March 12, 2019

/s/ Max Damborg

State Authorised

Public Accountant