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 001-36810
EURONAV NV
(Exact name of Registrant as specified in its charter)

(Translation of Registrant's name into English)
Belgium
(Jurisdiction of incorporation or organization)
De Gerlachekaai 20, 2000 Antwerpen, Belgium
(Address of principal executive offices)
Hugo De Stoop, Tel: +32-3-247-4411, management@euronav.com ,
 De Gerlachekaai 20, 2000 Antwerpen, Belgium
(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
Ordinary Shares, no par value,
 CUSIP B38564108
 
New York Stock Exchange

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

NONE
(Title of class)

* Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

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, the issuer had 220,024,713 ordinary shares, no par value, outstanding.

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

Yes
X
 
No
 

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
 
 
No
X

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
X
 
No
 

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
X
 
No
 

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  x
 
Accelerated filer  ☐
 
Non-accelerated filer  ☐
 
Emerging growth 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
 
 
No
X




TABLE OF CONTENTS


 
 
Page


                                    

                

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
Matters discussed in this report may constitute 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 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 including this cautionary statement in connection therewith. This report and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial performance, and are not intended to give any assurance as to future results. When used in this document, the words “believe,” “expect,” “anticipate,” “estimate,” “intend,” “seek”, “plan,” “target,” “project,” “potential”, “continue”, “contemplate”, “possible”, “likely,” “may,” “might”, “will,” “would,” “could” and similar expressions, terms, or phrases may identify forward-looking statements.
These forward-looking statements are not historical facts, but rather 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. The forward-looking statements in this report are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to important factors and matters discussed elsewhere in this report, and in the documents incorporated by reference herein, important factors that, in our view, could cause our actual results and developments to differ materially from those discussed in the forward-looking statements include:

•
our future operating or financial results;
•
the strength of world economies and currencies;
•
fluctuations in interest rates and foreign exchange rates;
•
general market conditions, including the market for crude oil and for our vessels, fluctuations in charter rates and vessel values;
•
availability of financing and refinancing;
•
our business strategy and other plans and objectives for growth and future operations;
•
our ability to successfully employ our existing and newbuilding vessels;
•
planned capital expenditures and availability of capital resources to fund capital expenditures;
•
planned, pending or recent acquisitions, business strategy and expected capital spending or operating expenses, including drydocking, surveys, upgrades and insurance costs;
•
our ability to realize the expected benefits from acquisitions;
•
the anticipated benefits of the Merger (as defined herein) are not realized within the expected timeframe or at all;
•
the successful integration of the assets and activities acquired through the Merger (as defined herein);
•
potential liability from pending or future litigation;
•
general domestic and international political conditions;
•
potential disruption of shipping routes due to accidents or political events;
•
vessel breakdowns and instances of off-hire;
•
competition within our industry;
•
the supply of and demand for vessels comparable to ours;
•
corruption, piracy, militant activities, political instability, terrorism and ethnic unrest in locations where we may operate;
•
delays and cost overruns in construction projects;
•
our level of indebtedness;
•
our ability to obtain financing and comply with the restrictive and other covenants in our financing arrangements;
•
our need for cash to meet our debt service obligations;
•
our levels of operating and maintenance costs, including bunker prices, drydocking and insurance costs;
•
reputational risks;
•
availability of skilled workers and the related labor costs;
•
compliance with governmental, tax, environmental and safety regulations and related costs;

                                    

                

•
any non-compliance with the amendments by the International Maritime Organization, the United Nations agency for maritime safety and the prevention of pollution by vessels, or IMO, (the amendments hereinafter referred to as IMO 2020), to Annex VI to 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, which will reduce the maximum amount of sulfur that vessels may emit into the air and is expected to apply to us as of January 1, 2020;
•
any non-compliance with the International Convention for the Control and Management of Ships' Ballast Water and Sediments or BWM which is expected to apply to us as of September 2019;
•
any non-compliance with the European Ship Recycling regulation for large commercial seagoing vessels flying the flag of an European Union or EU, Member State which forces shipowners to recycle their vessels only in safe and sound vessel recycling facilities included in the European List of ship recycling facilities which is applicable as of January 1, 2019;
•
any non-compliance with the U.S. Foreign Corrupt Practices Act of 1977 or FCPA, or other applicable regulations relating to bribery;
•
general economic conditions and conditions in the oil and natural gas industry;
•
effects of new products and new technology in our industry;
•
the failure of counterparties to fully perform their contracts with us;
•
our dependence on key personnel;
•
adequacy of insurance coverage;
•
our ability to obtain indemnities from customers;
•
changes in laws, treaties or regulations; and
•
the volatility of the price of our ordinary shares; and
•
other factors that may affect future results of Euronav.

These factors and the other risk factors described in this annual report and other reports that we furnish or file with the U.S. Securities and Exchange Commission or the SEC are not necessarily all of the important factors that could cause actual results or developments to differ materially from those expressed in any of our forward-looking statements. Other unknown or unpredictable factors also could harm our results. Consequently, there can be no assurance that actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, us. These forward looking statements are made only as of the date of this annual report. These forward looking statements are not guarantees of our future performance, and actual results and developments may vary materially from those projected in the forward looking statements. Given these uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements. We undertake no obligation, and specifically decline any obligation, except as required by law, to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


                                    

                

PART I
ITEM 1.    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2.    OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3.    KEY INFORMATION
Throughout this report, all references to "Euronav", the "Company", "we", "our", and "us" refer to Euronav NV and its subsidiaries and all references to “Euronav NV” refer to Euronav NV and not to its subsidiaries. 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 and references to "Euro", "EUR", and "€" are to the lawful currency of Belgium.
We refer to our "U.S. Shares" as those shares of Euronav with no par value that are reflected in the U.S. component of our share register, or the U.S. Register, that is maintained by Computershare Trust Company N.A, or Computershare, our U.S. transfer agent and registrar, and are formatted for trading on the New York Stock Exchange, or the NYSE. The U.S. Shares are identified by CUSIP B38564 108.  We refer to our "Belgian Shares" as those shares of Euronav with no par value that are reflected in the Belgian component of our share register, or the Belgian Register, that is maintained by De Interprofessionele Effectendeposito- en Girokas (CIK) NV (acting under the commercial name Euroclear Belgium), or Euroclear Belgium, our agent, and are formatted for trading on Euronext Brussels. The Belgian Shares are identified by ISIN BE0003816338.  Our U.S. Shares and our Belgian Shares taken together are collectively referred to as our "ordinary shares." For further discussion of the maintenance of our share register, please see "Item 10. Additional Information —B. Memorandum and Articles of Association—Share Register."

A.            Selected Financial Data  
The following tables set forth, in each case for the periods and as of the dates indicated, our selected consolidated financial data and other operating data as of and for the years ended December 31, 2018 , 2017 , 2016 , 2015 and 2014 . The selected data is derived from our audited consolidated financial statements, except where noted, which have been prepared in accordance with International Financial Reporting Standards, or IFRS, as issued by the International Accounting Standards Board, or IASB.  The selected historical financial information presented in the tables below should be read in conjunction with and is qualified in its entirety by reference to our audited consolidated financial statements and the accompanying notes. The audited consolidated financial statements and the accompanying notes as of December 31, 2018 and December 31, 2017 and for the years ended December 31, 2018 , 2017 and 2016 are included in this annual report.

1
                                    

                

 
 
Year Ended December 31,
Consolidated Statement of Profit or Loss Data
 
2018
 
2017*
 
2016*
 
2015*
 
2014*
(USD in thousands, except per share data)
 
Revenue  
 
600,024

 
513,368

 
684,265

 
846,507

 
473,985

Gains on disposal of vessels/other tangible assets  
 
19,138

 
36,538

 
50,397

 
13,302

 
13,122

Other operating income  
 
4,775

 
4,902

 
6,996

 
7,426

 
11,411

Voyage expenses and commissions  
 
(141,416
)
 
(62,035
)
 
(59,560
)
 
(71,237
)
 
(118,303
)
Vessel operating expenses
 
(185,792
)
 
(150,427
)
 
(160,199
)
 
(153,718
)
 
(124,089
)
Charter hire expenses
 
(31,114
)
 
(31,173
)
 
(17,713
)
 
(25,849
)
 
(35,664
)
Losses on disposal of vessels  
 
(273
)
 
(21,027
)
 
(2
)
 
(8,002
)
 
—

Impairment on non-current assets held for sale  
 
(2,995
)
 
—

 
—

 
—

 
(7,416
)
Loss on disposal of investments in equity accounted investees
 
—

 
—

 
(24,150
)
 
—

 
—

Depreciation tangible assets  
 
(270,582
)
 
(229,777
)
 
(227,664
)
 
(210,156
)
 
(160,934
)
Depreciation intangible assets  
 
(111
)
 
(95
)
 
(99
)
 
(50
)
 
(20
)
General and administrative expenses  
 
(66,232
)
 
(46,868
)
 
(44,051
)
 
(46,251
)
 
(40,565
)
Result from operating activities  
 
(74,578
)
 
13,406

 
208,220

 
351,972

 
11,527

Finance income  
 
15,023

 
7,266

 
6,855

 
3,312

 
2,617

Finance expenses  
 
(89,412
)
 
(50,729
)
 
(51,695
)
 
(50,942
)
 
(95,970
)
Net finance expense  
 
(74,389
)
 
(43,463
)
 
(44,840
)
 
(47,630
)
 
(93,353
)
Gain on bargain purchase
 
23,059

 
—

 
—

 
—

 
—

Share of profit (loss) of equity accounted investees (net of income tax)  
 
16,076

 
30,082

 
40,495

 
51,592

 
30,286

Profit (loss) before income tax  
 
(109,832
)
 
25

 
203,875

 
355,934

 
(51,540
)
Income tax benefit/(expense)  
 
(238
)
 
1,358

 
174

 
(5,633
)
 
5,743

Profit (loss) for the period  
 
(110,070
)
 
1,383

 
204,049

 
350,301

 
(45,797
)
Attributable to:
 


 


 


 


 


Owners of the Company  
 
(110,070
)
 
1,383

 
204,049

 
350,301

 
(45,797
)
Basic earnings per share  
 
(0.57
)
 
0.01

 
1.29

 
2.25

 
(0.39
)
Diluted earnings per share  
 
(0.57
)
 
0.01

 
1.29

 
2.22

 
(0.39
)
Dividends per share declared
 
0.12

 
0.12

 
0.77

 
1.69

 
—

* The Group has initially applied IFRS 15 and IFRS 9 at January 1, 2018. Under the transition methods chosen, comparative information is not restated.


2
                                    

                

Consolidated Statement of Financial Position Data (at Period End)
 
Year Ended December 31,
(USD in thousands, except for per share and fleet data)
 
2018
 
2017
 
2016
 
2015
 
2014
Cash and cash equivalents  
 
173,133

 
143,648

 
206,689

 
131,663

 
254,086

Vessels  
 
3,520,067

 
2,271,500

 
2,383,163

 
2,288,036

 
2,258,334

Vessels under construction  
 
—

 
63,668

 
86,136

 
93,890

 
—

Total assets
 
4,127,351

 
2,810,973

 
3,046,911

 
3,040,746

 
3,096,360

Current and non-current bank loans
 
1,560,002

 
701,091

 
1,085,562

 
1,052,448

 
1,234,329

Share capital
 
239,148

 
173,046

 
173,046

 
173,046

 
142,441

Equity attributable to Owners of the Company  
 
2,260,523

 
1,846,361

 
1,887,956

 
1,905,749

 
1,472,708

Cash flow data
 
 
 
 
 
 
 
 
 
 
Net cash inflow/(outflow)
 
 
 
 
 
 
 
 
 
 
Operating activities  
 
841

 
211,298

 
438,202

 
450,532

 
14,782

Investing activities  
 
190,042

 
(40,243
)
 
(100,615
)
 
(205,873
)
 
(1,023,007
)
Financing activities  
 
(160,165
)
 
(234,976
)
 
(261,160
)
 
(365,315
)
 
1,189,021

Fleet Data (Unaudited)
 


 


 


 


 


VLCCs
 


 


 


 


 


Average number of vessels(1)  
 
38

 
31

 
30

 
27

 
20

Calendar days(2)  
 
13,802

 
11,330

 
10,770

 
9,860

 
7,450

Vessel operating days(3)  
 
13,175

 
10,859

 
10,553

 
9,645

 
7,294

Available days(4)  
 
13,722

 
11,130

 
10,691

 
9,780

 
7,391

Fleet utilization(5)  
 
96.0
%
 
97.6
%
 
98.7
%
 
98.6
%
 
98.7
%
Daily TCE charter rates(6)  
 
$
24,073

 
$
29,827

 
$
42,243

 
$
52,802

 
$
27,189

Suezmaxes
 


 


 


 


 


Average number of vessels(1)  
 
23

 
19

 
19

 
19

 
19

Calendar days(2)  
 
8,232

 
6,868

 
7,002

 
6,885

 
6,937

Vessel operating days(3)  
 
8,108

 
6,820

 
6,751

 
6,780

 
6,774

Available days(4)  
 
8,173

 
6,826

 
6,882

 
6,806

 
6,895

Fleet utilization(5)  
 
99.2
%
 
99.9
%
 
98.1
%
 
99.6
%
 
98.2
%
Daily TCE charter rates(6)  
 
$
17,557

 
$
19,144

 
$
27,114

 
$
39,689

 
$
24,490

LR1
 
 
 
 
 
 
 
 
 
 
Average number of vessels(1)
 
1

 
—

 
—

 
—

 
—

Calendar days(2)
 
361

 
—

 
—

 
—

 
—

Vessel operating days(3)
 
360

 
—

 
—

 
—

 
—

Available days(4)
 
361

 
—

 
—

 
—

 
—

Fleet utilization(5)
 
99.9
%
 
—
%
 
—
%
 
—
%
 
—
%
Daily TCE charter rates(6)
 
$
6,403

 
$
—

 
$
—

 
$
—

 
$
—

Other data
 


 


 


 


 


EBITDA (unaudited)(7)  
 
$
231,513

 
$
273,452

 
$
475,005

 
$
612,659

 
$
202,582

Adjusted EBITDA (unaudited)(8)  
 
$
254,816

 
$
294,467

 
$
503,453

 
$
648,705

 
$
241,106

Time charter equivalents revenues (unaudited)
 
$
459,516

 
$
454,455

 
$
628,842

 
$
778,368

 
$
364,211

Basic weighted average shares outstanding  
 
191,994,398

 
158,166,534

 
158,262,268

 
155,872,171

 
116,539,017

Diluted weighted average shares outstanding  
 
191,994,398


158,297,057


158,429,057


157,529,562


116,539,017

(1)
Average number of vessels is the number of vessels that constituted our fleet for the relevant period, as measured by the sum of the number of calendar days each vessel was part of our fleet during the period divided by the number of calendar days in that period.
(2)
Calendar days are the total days the vessels were in our possession for the relevant period, including off-hire days (scheduled or unscheduled).

3
                                    

                

(3)
Vessel operating days are the total days our vessels were in our possession for the relevant period net of all off-hire days (scheduled and unscheduled).
(4)
Available days are the total days our vessels were in our possession for the relevant period net of scheduled off-hire days associated with major repairs, drydockings or special or intermediate surveys.
(5)
Fleet utilization is the percentage of time that our vessels were available for revenue generating voyage days and is determined by dividing Vessel operating days by available days for the relevant period. The shipping industry uses fleet utilization to measure a company's efficiency in finding suitable employment for its vessels and minimizing the number of days that its vessels are off-hire for reasons other than scheduled repairs or repairs under guarantee, vessel upgrades, special surveys or intermediate or vessel positioning.
(6)
Time Charter Equivalent, or TCE , (a non-IFRS measure) is a measure of the average daily revenue performance of a vessel on a per voyage basis. Our method of calculating the TCE rate is consistent with industry standards and is determined by dividing total voyage revenues less voyage expenses by vessel operating days for the relevant time period. Voyage expenses primarily consist of port, canal and fuel costs that are unique to a particular voyage, which would otherwise be paid by the charterer under a time charter contract. The TCE rate is not a measure of financial performance under IFRS (non-IFRS measure), and should not be considered as an alternative to voyage revenues, the most directly comparable IFRS measure, or any other measure of financial performance presented in accordance with IFRS. However, TCE rate is standard shipping industry performance measure used primarily to compare period-to-period changes in a company's performance and assists our management in making decisions regarding the deployment and use of our vessels and in evaluating their financial performance. Our calculation of TCE rates may not be comparable to that reported by other companies and going forward, we will closely monitor the relevance of TCE within the industry. The new IMO 2020 legislation, coming into force as of January 1, 2020, allows the use of costly scrubbers to comply with the new legislation, allowing vessels retrofitted with such scrubbers to burn cheaper high-sulfur fuel compared to burning the more expensive low-sulfur fuel. This will reduce bunker cost and increase the net voyage revenues and TCE, but thereby foregoing the additional capital expenditure and depreciation of the new equipment.
(7)
EBITDA (a non-IFRS measure) represents operating earnings before interest expense, income taxes and depreciation expense attributable to us. EBITDA is presented to provide investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods. We believe that EBITDA is useful to investors as the shipping industry is capital intensive which often brings significant cost of financing. EBITDA should not be considered a substitute for profit/(loss) attributable to us or cash flow from operating activities prepared in accordance with IFRS as issued by the IASB or as a measure of profitability or liquidity. The definition of EBITDA used here may not be comparable to that used by other companies. Please see the reconciliation to Profit (loss) for the period, the nearest IFRS measure.
(8)
Adjusted EBITDA (a non-IFRS measure) represents operating earnings (including the share of EBITDA of equity accounted investees) before interest expense, income taxes and depreciation expense attributable to us. Adjusted EBITDA provides investors with meaningful additional information that management uses to monitor ongoing operating results and evaluate trends over comparative periods as the shipping industry is a capital intensive industry which often brings significant cost of financing. We also believe that Adjusted EBITDA is useful to investors and equity analysts as a measure of our operating performance including our equity accounted investees and we use Adjusted EBITDA in our internal evaluation of operating effectiveness and decisions regarding the allocation of resources. Adjusted EBITDA should not be considered a substitute for profit/(loss) attributable to us or cash flow from operating activities prepared in accordance with IFRS as issued by the IASB or any other measure of operating performance. The definition of Adjusted EBITDA used here may not be comparable to that used by other companies. Please see the reconciliation to Profit (loss) for the period, the nearest IFRS measure.

4
                                    

                

The following table reflects the calculation of our TCE rates for the years ended December 31, 2018 , 2017 , 2016 , 2015 , and 2014 :
(Unaudited)
 
2018
 
2017
 
2016
 
2015
 
2014
VLCC
 

 

 

 

 

Net VLCC revenues for all employment types
 
$
317,168,033

 
$
323,892,625

 
$
445,792,653

 
$
509,277,925

 
$
198,316,363

Total VLCC operating days
 
13,175

 
10,859

 
10,553

 
9,645

 
7,294

Daily VLCC TCE Rate
 
$
24,073

 
$
29,827

 
$
42,243

 
$
52,802

 
$
27,189

SUEZMAX
 


 


 


 


 


Net Suezmax revenues for all employment types
 
$
142,348,452

 
$
130,562,503

 
$
183,049,801

 
$
269,090,422

 
$
165,894,436

Total Suezmax operating days
 
8,108

 
6,820

 
6,751

 
6,780

 
6,774

Daily Suezmax rate
 
$
17,557

 
$
19,144

 
$
27,114

 
$
39,689

 
$
24,490

LR1
 
 
 
 
 
 
 
 
 
 
Net LR1 revenues for all employment types
 
$
2,307,222

 
$
—

 
$
—

 
$
—

 
$
—

Total LR1 operating days
 
360

 
—

 
—

 
—

 
—

Daily LR1 rate
 
$
6,403

 
$
—

 
$
—

 
$
—

 
$
—

Tanker Fleet
 


 


 


 


 


Net Tanker fleet revenues for all employment type
 
$
461,823,707

 
$
454,455,128

 
$
628,842,454

 
$
778,368,347

 
$
364,210,799

Total Fleet operating days
 
21,643

 
17,679

 
17,304

 
16,425

 
14,068

Daily Fleetwide TCE
 
$
21,338

 
$
25,706

 
$
36,341

 
$
47,389

 
$
25,889

The following table reflects the calculation of our net revenues for the years ended December 31, 2018 , 2017 , 2016 , 2015 , and 2014 :
 
 
Year Ended December 31,
(USD in thousands)
 
2018
 
2017
 
2016
 
2015
 
2014
Voyage charter revenues  
 
$
524,786

 
$
394,663

 
$
544,038

 
$
720,416

 
$
341,867

Time charter revenues  
 
$
75,238

 
$
118,705

 
$
140,227

 
$
126,091

 
$
132,118

 
 
 

 
 

 
 

 
 

 
 

Subtotal revenue  
 
$
600,024

 
$
513,368

 
$
684,265

 
$
846,507

 
$
473,985

Other income  
 
$
4,775

 
$
4,902

 
$
6,996

 
$
7,426

 
$
11,411

 
 
 

 
 

 
 

 
 

 
 

Total operating revenues  
 
$
604,799

 
$
518,270

 
$
691,261

 
$
853,933

 
$
485,396

Less:
 


 


 


 


 


Other Income*
 
$
(1,559
)
 
$
(1,780
)
 
$
(2,858
)
 
$
(4,328
)
 
$
(2,882
)
Tanker Fleet
 
 

 
 

 
 

 
 

 
 

Net Tanker Fleet Revenues reconciliation
 


 


 


 


 


Share of total Revenues attributable to ships owned by Euronav*  
 
$
603,240

 
$
516,490

 
$
688,403

 
$
849,605

 
$
482,514

less voyage expenses and commissions  
 
$
(141,416
)
 
$
(62,035
)
 
$
(59,560
)
 
$
(71,237
)
 
$
(118,303
)
 
 
 

 
 

 


 


 
 

Net Total tanker fleet  
 
$
461,824

 
$
454,455

 
$
628,843

 
$
778,368

 
$
364,211

of which Net VLCC Revenues for all employment types  
 
$
317,168

 
$
323,893

 
$
445,793

 
$
509,278

 
$
198,316

of which Net Suezmax Revenues for all employment types  
 
$
142,349

 
$
130,562

 
$
183,050

 
$
269,090

 
$
165,895

of which Net LR1 Revenues for all employment types
 
$
2,307

 
$
—

 
$
—

 
$
—

 
$
—

*           Some revenues are excluded because these do not relate directly to vessels, such as rental income and insurance rebates.

5
                                    

                

 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
 
2015
 
2014
EBITDA Reconciliation (unaudited)
 

 

 
 
 
 
 
 
Profit (loss) for the period
 
$
(110,070
)
 
$
1,383

 
$
204,049

 
$
350,301

 
$
(45,797
)
plus Net interest expenses
 
$
70,652

 
$
43,555

 
$
43,367

 
$
46,519

 
$
93,168

plus Depreciation of tangible and intangible assets
 
$
270,693

 
$
229,872

 
$
227,763

 
$
210,206

 
$
160,954

plus Income tax expense/(benefit)
 
$
238

 
$
(1,358
)
 
$
(174
)
 
$
5,633

 
$
(5,743
)
 
 
 

 


 


 


 


EBITDA (unaudited)
 
$
231,513

 
$
273,452

 
$
475,005

 
$
612,659

 
$
202,582

 
 
Year Ended December 31,
 
 
2018
 
2017
 
2016
 
2015
 
2014
Adjusted EBITDA Reconciliation (unaudited)
 

 

 

 

 

Profit (loss) for the period
 
$
(110,070
)
 
$
1,383

 
$
204,049

 
$
350,301

 
$
(45,797
)
plus Net interest expenses
 
$
70,652

 
$
43,555

 
$
43,367

 
$
46,519

 
$
93,168

plus Net interest expenses JV
 
$
3,634

 
$
1,456

 
$
4,459

 
$
6,914

 
$
9,466

plus Depreciation of tangible and intangible assets
 
$
270,693

 
$
229,872

 
$
227,763

 
$
210,206

 
$
160,954

plus Depreciation of tangible and intangible assets JV
 
$
18,070

 
$
18,071

 
$
23,774

 
$
29,314

 
$
29,058

plus Income tax expense/(benefit)
 
$
238

 
$
(1,358
)
 
$
(174
)
 
$
5,633

 
$
(5,743
)
plus Income tax expense/(benefit) JV
 
$
1,599

 
$
1,488

 
$
215

 
$
(182
)
 
—

 
 


 


 


 


 


Adjusted EBITDA (unaudited)
 
$
254,816

 
$
294,467

 
$
503,453

 
$
648,705

 
$
241,106

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 us and our business and the industry in which we operate, the securities market and ownership of our securities, including our ordinary shares. The occurrence of any of the risk factors described below could significantly and negatively affect our business, financial condition or operating results, which may reduce our ability to pay dividends, and lower the trading price of our ordinary shares.



6
                                    

                

Risk Factors Relating to Our Industry
The tanker industry is cyclical and volatile, which may lead to reductions and volatility in the charter rates we are able to obtain, in vessel values and in our earnings and available cash flow.
The tanker industry is both cyclical and volatile in terms of charter rates and profitability. For example, during the eight year period from 2010 through 2017, time charter equivalent, or TCE, spot rates for a VLCC trading between the Middle East Gulf and Japan ranged from rates below operating expenses to a high of $114,148 per day. This volatility continued in 2018 (the benchmark route changed in 2018 to discharge in China in line with market developments), with average daily rates on the route fluctuating between $3,859 (which amount was below our operating expenses) to $58,030 per day. Periodic adjustments to the supply of and demand for oil tankers cause the industry to be cyclical in nature. We expect continued volatility in market rates for our vessels in the foreseeable future with a consequent effect on our short- and medium-term liquidity. A worsening of the current global economic conditions may adversely affect our ability to charter or recharter our vessels or to sell them on the expiration or termination of their charters, or any renewal or replacement charters that we enter into may not be sufficient to allow us to operate our vessels profitably. Fluctuations in charter rates and vessel values result from changes in the supply and demand for tanker capacity and changes in the supply and demand for oil and oil products. The carrying values of our vessels or our floating, storage and offloading, or FSO, vessels may not represent their fair market values or the amount that could be obtained by selling the vessels at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings.
The factors affecting the supply and demand for tankers are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable.
The factors that influence demand for tanker capacity include:
•
supply and demand for energy resources and oil and petroleum products;
•
competition from, and supply and demand for, alternative sources of energy;
•
regional availability of refining capacity and inventories;
•
global and regional economic and political conditions, including armed conflicts, terrorist activities, embargoes and strikes;
•
currency exchange rates;
•
the distance over which the oil and the oil products are to be moved by sea;
•
changes in seaborne and other transportation patterns, including shifts in transportation demand between crude oil and refined oil products and the distance they are transported by sea;
•
changes in governmental or maritime self-regulatory organizations’ rules and regulations or actions taken by regulatory authorities;
•
environmental and other legal and regulatory developments;
•
weather and natural disasters;
•
developments in international trade, including those relating to the imposition of tariffs; and
•
international sanctions, embargoes, import and export restrictions, nationalizations and wars.

The factors that influence the supply of tanker capacity include:
•
demand for alternative sources of energy;
•
the number of newbuilding orders and deliveries;
•
vessel casualties;
•
the scrapping of older vessels, depending, amongst other things, on scrapping rates and international scrapping regulations;
•
conversion of tankers to other uses;
•
the number of vessels that are out of service or laid up;
•
environmental concerns and regulations; and
•
port or canal congestion.
•
sanctions (Iran, Venezuela)

Declines in oil and natural gas prices for an extended period of time, or market expectations of potential decreases in these prices, could negatively affect our future growth in the tanker and offshore sector. Sustained periods of low oil and natural gas prices typically result in reduced exploration and extraction because oil and natural gas companies’ capital expenditure budgets are subject to cash flow from such activities and are therefore sensitive to changes in energy prices. These changes in commodity prices can have a material effect on demand for our services, and periods of low demand can cause excess vessel supply and intensify the competition in the industry, which often results in vessels, particularly older and less technologically-advanced vessels, being idle for long periods of time. We cannot predict the future level of demand for our services or future conditions of the oil and natural gas industry. Any decrease in exploration, development or production expenditures by oil and natural gas companies could reduce our revenues and materially harm our business, results of operations and cash available for distribution.

7
                                    

                

Any decrease in shipments of crude oil may adversely affect our financial performance.
The demand for our vessels and services in transporting oil derives primarily from demand for Arabian Gulf, West African, North Sea, Caribbean Gulf and Gulf of Mexico crude oil, which, in turn, primarily depends on the economies of the world’s industrial countries and competition from alternative energy sources. A wide range of economic, social and other factors can significantly affect the strength of the world’s industrial economies and their demand for crude oil from the mentioned geographical areas. One such factor is the price of worldwide crude oil. The world’s oil markets have experienced high levels of volatility in the last 25 years. In 2018, crude oil reached a high of $77.41 per barrel (WTI)/$86.07 per barrel (Brent) and a low of $44.48 per barrel (WTI)/$50.57 per barrel (Brent). As of April 15, 2019, crude oil was $63.3 per barrel (WTI)/$71.3 per barrel (Brent).
Any decrease in shipments of crude oil from the above-mentioned geographical areas could have a material adverse effect on our financial performance. Among the factors which could lead to such a decrease are:
•
increased crude oil production from other areas, including the exploitation of shale reserves in the United States and the growth in its domestic oil production and exportation;
•
increased refining capacity in the Arabian Gulf or West Africa;
•
increased use of existing and future crude oil pipelines;
•
a decision by Arabian Gulf or West African oil-producing nations to increase their crude oil prices or to further decrease or limit their crude oil production;
•
armed conflict in the Arabian Gulf and West Africa and political or other factors;
•
trade embargoes or other economic sanctions by the United States and other countries (including the economic sanctions against Russia as a result of continued political tension due to the situation in the Ukraine and the economic sanctions against Iran and Venezuela); and
•
the development and the relative costs of nuclear power, natural gas, coal and other alternative sources of energy.
In addition, conditions affecting the economy of the United States and the world economies such as China and India may result in reduced consumption of oil products and a decreased demand for our vessels and lower charter rates, which could have a material adverse effect on our earnings and our ability to pay dividends.
An over-supply of tanker capacity may lead to a reduction in charter rates, vessel values, and profitability.
The market supply of 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, the current and expected purchase orders for newbuildings and the number of vessels being scrapped. If the capacity of new tankers delivered exceeds the capacity of tankers being scrapped or converted to non-trading tankers, tanker capacity will increase. If the supply of tanker capacity increases and if the demand for tanker capacity decreases or does not increase correspondingly, charter rates could materially decline. A reduction in charter rates and the value of our vessels may have a material adverse effect on our results of operations and earnings and available cash and our ability to comply with the covenants in our loan agreements.
Our growth in the FSO sector depends on the level of activity in the offshore oil and natural gas industry, which is significantly affected by, among other things, volatile oil and natural gas prices, and may be materially and adversely affected by a decline in the offshore oil and natural gas industry.
The offshore production, storage and export industry is cyclical and volatile. Our growth strategy is partially based on expansion in the offshore FSO sector, which depends on the level of activity in oil and natural gas exploration, development and production in offshore areas worldwide. The availability of quality FSO prospects, exploration success, relative production costs, the stage of reservoir development and political and regulatory environments affect customers’ FSO programs. Oil and natural gas prices and market expectations of potential changes in these prices also significantly affect this level of activity and demand for offshore units.
Our results of operations are subject to seasonal fluctuations, which may adversely affect our financial condition.
We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, charter rates. Peaks in tanker demand quite often precede seasonal oil consumption peaks, as refiners and suppliers anticipate consumer demand. Seasonal peaks in oil demand can broadly be classified into two main categories: (1) increased demand prior to Northern Hemisphere winters as heating oil consumption increases and (2) increased demand for gasoline prior to the summer driving season in the United States. Unpredictable weather patterns and variations in oil reserves disrupt tanker scheduling. This seasonality may result in quarter-to-quarter volatility in our operating results, as many of our vessels trade in the spot market. Seasonal variations in tanker demand will affect any spot market related rates that we may receive.

8
                                    

                

Acts of piracy on ocean-going vessels could adversely affect our business.
Acts of piracy have historically affected ocean-going vessels trading in regions of the world such as the South China Sea, the Indian Ocean, the Gulf of Guinea and in the Gulf of Aden off the coast of Somalia. Sea piracy incidents continue to occur. If these piracy attacks occur in regions in which our vessels are deployed being characterized by insurers as “enhanced risk” zones or “war risk” zones or “war and strikes” listed areas by the Joint War Committee, premiums payable for such coverage could increase significantly and such insurance coverage may be more difficult to obtain. In addition, crew and security equipment costs, as well as costs which may be incurred to the extent we employ onboard security armed guards, could increase in such circumstances. We may not be adequately insured to cover losses from these incidents, which could have a material adverse effect on us. In addition, detention or hijacking as a result of an act of piracy against our vessels, or increases in cost associated with seeking to avoid such events (including increased bunker costs resulting from vessels being rerouted or travelling at increased speeds as recommended by BMP4), or unavailability of insurance for our vessels, could have a material adverse impact on our business, results of operations, ability to pay dividends, cash flows and financial condition and may result in loss of revenues, increased costs and decreased cash flows to our customers, which could impair their ability to make payments to us under our charters.
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 international commerce 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 and international commerce. 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.

9
                                    

                

Rising fuel prices may adversely affect our profits.
Fuel is a significant, if not the largest, expense in our shipping operations when vessels are under voyage charter and is an important factor in negotiating charter rates. As a result, an increase in the price of fuel beyond our expectations may adversely affect our profitability at the time of charter negotiation. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by the Organization of 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, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.
The current state of the global financial banking markets may adversely impact our ability to obtain additional financing on acceptable terms and otherwise negatively impact our business.
Global financial banking markets and economic conditions have been, and continue to be, volatile. Although capital markets have improved, they still remain volatile. Since 2008, there has been a general decline in the willingness of banks and other financial institutions to extend credit, particularly in the shipping industry, due to the historically volatile asset values of vessels. As the shipping industry is highly dependent on the availability of credit to finance and expand operations, it has been negatively affected by this decline.
As a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets may increase as many lenders have increased interest rates, enacted tighter lending standards, refused to refinance existing debt at all or on terms similar to current debt and reduced, and in some cases ceased, to provide funding to borrowers. Due to these factors, additional financing may not be available if needed and 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 expand or 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.
If economic conditions throughout the world continue to be volatile, it could impede our operations.
The world economy faces a number of challenges, including the effects of volatile oil prices, continuing turmoil and hostilities in the Middle East, the Korean Peninsula, North Africa, Venezuela and other geographic areas and countries, continuing threat of terrorist attacks around the world, continuing instability and conflicts and other recent occurrences in the Middle East and in other geographic areas and countries, continuing economic weakness in the European Union, or the E.U., and stabilizing growth in China. There has historically been a strong link between the development of the world economy and demand for energy, including oil and gas. An extended period of deterioration in the outlook for the world economy could reduce the overall demand for oil and gas and for our services. Such changes could adversely affect our results of operations and cash flows.
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, disrupted and 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. However, these recent and developing economic and governmental factors, together with the concurrent decline in charter rates and vessel values, may have a material adverse effect on our results of operations and financial condition and may cause the price of our ordinary shares to decline.
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 loading or discharging operations 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 6.5% 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. We cannot assure you that the Chinese economy will not experience a significant contraction in the future.

10
                                    

                

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 oil tanker 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.
In addition, concerns regarding the possibility of sovereign debt defaults by European Union member countries, including Greece, have in the past disrupted financial markets throughout the world, and may lead to weaker consumer demand in the European Union, the United States, and other parts of the world. The possibility of sovereign debt defaults by European Union member countries, including Greece, and the possibility of market reforms to float the Chinese renminbi, either of which development could weaken the Euro against the Chinese renminbi, could adversely affect consumer demand in the European Union. Moreover, the revaluation of the renminbi may negatively impact the United States' demand for imported goods, many of which are shipped from China. Future weak economic conditions could have a material adverse effect on our business, results of operations and financial condition and our ability to pay dividends to our stockholders. Our business, financial condition, results of operations, ability to pay dividends as well as our future prospects, will likely be materially and adversely affected by another economic downturn in any of the aforementioned countries and regions.
If economic conditions throughout the world decline, this will impede our results of operations, financial condition and cash flows.
Negative trends in the global economy that emerged in 2008 continue to adversely affect global economic conditions. In addition, the world economy is currently facing a number of new challenges. The presence of the United States and other armed forces in Afghanistan, additional acts of terrorism and armed conflict around the world may contribute to further economic instability in global financial markets.
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, 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.
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. Major market disruptions may adversely affect our business or impair our ability to borrow amounts under our credit facilities or any future financial arrangements. In the absence of available financing, we also may be unable to take advantage of business opportunities or respond to competitive pressures.

11
                                    

                

As a result of any renewed concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets may increase as many lenders will increase margins or interest rates, enact tighter lending standards, refuse to refinance existing debt at all or on terms similar to current debt and reduce, and in some cases cease, to provide funding to borrowers. Furthermore, certain banks that have historically been significant lenders to the shipping industry have recently reduced or ceased lending to the shipping industry. Due to these factors, we cannot be certain that additional financing will be available if needed and 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 or otherwise take advantage of business opportunities as they arise.
In addition, as a result of the recent economic turmoil in Greece resulting from the sovereign debt crisis and the related austerity measures implemented by the Greek government, our operations in Greece may be subjected to new regulations that may require us to incur new or additional compliance or other administrative costs and may require that we pay to the Greek government new taxes or other fees. We also face the risk that strikes, work stoppages, civil unrest and violence within Greece may disrupt our shoreside operations and those of our managers located in Greece.
The instability of the Euro or the inability of countries to refinance their debts could have a material adverse effect on our revenue, profitability and financial position.
As a result of the credit crisis in Europe, in particular in Greece, Italy, Ireland, Portugal and Spain, the European Commission created the European Financial Stability Facility, or the EFSF, and the European Financial Stability Mechanism, or the EFSM, to provide funding to Eurozone countries in financial difficulties that seek such support. In March 2011, the European Council agreed on the need for Eurozone countries to establish a permanent stability mechanism, the European Stability Mechanism, or the ESM, which was activated by mutual agreement, to assume the role of the EFSF and the EFSM in providing external financial assistance to Eurozone countries entered into force in May 2013. Despite these measures, concerns persist regarding the debt burden of certain Eurozone countries and their ability to meet future financial obligations and the overall stability of the Euro. An extended period of adverse development in the outlook for European countries could still reduce the overall demand for oil and gas and for our services. These potential developments, or market perceptions concerning these and related issues, could affect our financial position, results of operations and cash flow.
Consolidation and governmental regulation of suppliers may increase the cost of obtaining supplies or restrict our ability to obtain needed supplies, which may have a material adverse effect on our results of operations and financial condition.
We rely on third-parties to provide supplies and services necessary for our operations, including equipment suppliers, caterers and machinery suppliers. Recent mergers have reduced the number of available suppliers, resulting in fewer alternatives for sourcing key supplies. With respect to certain items, we are generally dependent upon the original equipment manufacturer for repair and replacement of the item or its spare parts. Such consolidation may result in a shortage of supplies and services thereby increasing the cost of supplies and/or potentially inhibiting the ability of suppliers to deliver on time. These cost increases or delays could have a material adverse effect on our results of operations and result in downtime, and delays in the repair and maintenance of our vessels and FSOs. Furthermore, many of our suppliers are U.S. companies or non-U.S. subsidiaries owned or controlled by U.S. companies, which means that in the event a U.S. supplier was debarred or otherwise restricted by the U.S. government from delivering products, our ability to supply and service our operations could be materially impacted. In addition, through regulation and permitting, certain foreign governments effectively restrict the number of suppliers and technicians available to supply and service our operations in those jurisdictions, which could materially impact our operations and financial condition.
Our international operations expose us to additional costs and legal and regulatory risks, which could have a material adverse effect on our business, results of operations and financial conditions
We operate worldwide, where appropriate, through agents or other intermediaries. Compliance with complex local, foreign and U.S. laws and regulations that apply to our international operations increases our cost of doing business. These numerous and sometimes conflicting laws and regulations include, among others, data privacy requirements (in particular the European General Data Protection Regulation, enforceable as from May 25, 2018 and the EU-US Privacy Shield Framework, as adopted by the European Commission on July 12, 2016), labor relations laws, tax laws, anti-competition regulations, import and trade restrictions, export requirements, U.S. laws such as the FCPA and other U.S. federal laws and regulations established by the office of Foreign Asset Control, local laws such as the UK Bribery Act 2010 or other local laws which prohibit corrupt payments to governmental officials or certain payments or remunerations to customers.

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Given the high level of complexity of these laws, there is a risk that we may inadvertently breach some provisions. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or our employees, requirements to obtain export licenses, cessation of business activities in sanctioned countries, implementation of compliance programs, and prohibitions on the conduct of our business. Violations of laws and regulations also could result in prohibitions on our ability to operate in one or more countries and could materially damage our reputation, our ability to attract and retain employees, or our business, results of operations and financial condition. Furthermore, detecting, investigating and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.
We are subject to complex laws and regulations, including environmental laws and regulations that can adversely affect our business, results of operations, cash flows, financial condition, and our available cash.
Our operations are subject to numerous laws and regulations in the form of international conventions and treaties, national, state and local laws and national and international regulations in force in the jurisdictions in which our vessels operate or are registered, which can significantly affect the ownership and operation of our vessels. These requirements include, but are not limited to, the United States, or U.S., Oil Pollution Act of 1990, or OPA, the U.S. Comprehensive Environmental Response, Compensation and Liability Act of 1980, or CERCLA, the U.S. Clean Air Act, or the CAA, the U.S. Clean Water Act, or the CWA, the U.S. Marine Transportation Security Act of 2002, or the MTSA, European Union or E.U., regulations, regulations of the United Nations International Maritime Organization, or the IMO, including the International Convention for the Prevention of Pollution from Ships of 1973, as from time to time amended and generally referred to as MARPOL, including the designation of Emission Control Areas, or ECAs, thereunder, the International Convention on Load Lines of 1966, and the International Ship and Port Facility Security Code, or the ISPS Code. Compliance with such 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, 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. Oil spills that occur from time to time may also result in additional legislative or regulatory initiatives that may affect our operations or require us to incur additional expenses to comply with such new laws or regulations.
These costs could have a material adverse effect on our business, results of operations, cash flows and financial condition and our available cash. A failure to comply with applicable laws and regulations may result in administrative and civil penalties, criminal sanctions or the suspension or termination of our operations. Environmental laws often impose strict liability for remediation of spills and releases of oil and hazardous substances, which could subject us to liability without regard to whether we were negligent or at fault. Under OPA, for example, owners, operators and bareboat charterers are jointly and severally strictly liable for the discharge of oil within the 200-nautical mile exclusive economic zone around the U.S. (unless the spill results solely from the act or omission of a third-party, an act of God or an act of war). An oil spill could result in significant liability, including fines, penalties, criminal liability and remediation costs for natural resource damages under international and U.S. federal, state and local laws, as well as third-party damages, including punitive damages, and could harm our reputation with current or potential charterers of our tankers. We are required to satisfy insurance and financial responsibility requirements for potential oil (including marine fuel) spills and other pollution incidents. Although we have arranged insurance to cover certain environmental risks, there can be no assurance that such insurance will be sufficient to cover all such risks or that any claims will not have a material adverse effect on our business, results of operations, cash flows, financial condition and available cash.
It should be noted that the U.S. is currently experiencing changes in its environmental policy, the results of which have yet to be fully determined. For example, in April 2017, the U.S. President signed an executive order regarding environmental regulations, specifically targeting the U.S. offshore energy strategy, which may affect parts of the maritime industry and our operations. Furthermore, 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, cyber-risk management systems must be incorporated by ship-owners and managers by 2021. This might cause companies to cultivate additional procedures for monitoring cybersecurity, which could require additional expenses and/or capital expenditures. However, the impact of such regulations is hard to predict at this time.

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We are subject to international safety regulation and 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 government 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, promulgated by the IMO under the International Convention for the Safety of Life at Sea of 1974, or SOLAS. Because such conventions, laws, and regulations are often revised, we cannot predict the ultimate cost of complying with such conventions, laws and regulations or the impact thereof on the resale prices or useful lives of our vessels. Additional conventions, laws and regulations may be adopted which could limit our ability to do business or increase the cost of our doing business and which may materially adversely affect our operations. We are required by various governmental and quasi-governmental agencies to obtain certain permits, licenses, certificates, and financial assurances with respect to our operations.
Non-compliance with the ISM Code and other IMO regulations may subject the shipowner or bareboat charterer to increased liability, may lead to decreases 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 U.S. Coast Guard or USCG and E.U. Authorities enforce compliance with the ISM Code and prohibit non-compliant vessels from trading in U.S. and E.U. ports.
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 others, adoption of cap and trade regimes, carbon taxes, increased efficiency standards and incentives or mandates for renewable energy. More specifically, on October 27, 2016, the International Maritime Organization’s Marine Environment Protection Committee announced its decision concerning the implementation of regulations mandating a reduction in sulfur emissions from 3.5% currently to 0.5% as of the beginning of January 1, 2020. By January 1, 2020, ships will now have to either remove sulfur from emissions or buy fuel with low sulfur content, which may lead to increased costs and supplementary investments for ship owners. 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 are 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, which may not be a viable option due to the lack of supply network and high costs involved in this process. 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.
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, which required adopting countries to implement national programs to reduce emissions of certain gases, or the Paris Agreement (discussed further below), 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.
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. In addition, the physical effects of climate change, including changes in weather patterns, extreme weather events, rising sea levels, scarcity of water resources, may negatively impact our operations. Any long-term material adverse effect on the oil and gas industry could have a significant financial and operational adverse impact on our business that we cannot predict with certainty at this time.
Declines in charter rates, vessel values and other market deterioration could cause us to incur impairment charges.
We evaluate the carrying amounts of our vessels to determine if events have occurred that would require an impairment of their carrying amounts. The recoverable amount of vessels is reviewed based on events and changes in circumstances that would indicate that the carrying amount of the assets might not be recovered. The review for potential impairment indicators and projection of future cash flows related to the vessels is complex and requires us to make various estimates relating to, among other things, vessel values, future freight rates, earnings from the vessels, discount rates, residual values and economic life of vessels. Many of these items have historically experienced volatility and both charter rates and vessel values tend to be cyclical.

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We evaluate the recoverable amount as the higher of fair value less costs to sell or value in use. If the recoverable amount is less than the carrying amount of the vessel, the vessel is deemed impaired. The carrying values of our vessels may not represent their fair market value at any point in time because the new market prices of secondhand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings. For the years ended December 31, 2018 and 2017, we evaluated the recoverable amount of our vessels and we did not recognize an impairment loss. The carrying value of each of our vessels does not necessarily represent its fair market value or the amount that could be obtained if the vessel were sold. Our estimates of market values for our vessels assume that the vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified as being in class without notations of any kind. Our estimates are based on the estimated market values for vessels received from independent ship brokers and are inherently uncertain. In addition, because vessel values are highly volatile, these estimates may not be indicative of either the current or future prices that we could achieve if we were to sell any of the vessels. We would not record a loss for any of the vessels for which the fair market value is below its carrying value unless and until we either determine to sell the vessel for a loss or determine that the vessel is impaired. Factors that we considered in our estimate are described in the Critical Accounting policies.
In developing estimates of future cash flows, we must make assumptions about future performance, with significant assumptions being related to charter rates, ship operating expenses, utilization, drydocking requirements, residual value and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends and/or on future expectations. Specifically, in estimating future charter rates or service contract rates, management takes into consideration estimated daily rates for each asset over the estimated remaining lives. In the past, we have used a fixed cut of 10 years to define a shipping cycle. As management is assessing continuously the resilience of its projections to the business cycles that can be observed in the tanker market, it concluded that a business cycle approach provides a better long-term view of the dynamics at play in the industry. By defining a shipping cycle from peak to peak over the last 20 years and including management's expectation of the completion of the current cycle, management is better able to capture the full length of a business cycle while also giving more weight to recent and current market experience. The current cycle is forecasted based on management judgment, analyst reports and past experience.
We operate our vessels worldwide and as a result, our vessels are exposed to international risks and inherent operational risks of the tanker industry, which may adversely affect our business and financial condition.
The operation of an ocean-going vessel carries inherent risks. Our vessels and their cargoes are at risk of being damaged or lost because of events such as marine disasters, bad weather, and acts of God, business interruptions caused by mechanical failures, grounding, fire, explosions and collisions, human error, war, terrorism, piracy and other circumstances or events. In addition, 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 events may result in death or injury to persons, loss of revenues or property, the payment of ransoms, environmental damage, higher insurance rates, damage to our customer relationships, and market disruptions, delay or rerouting, which may also subject us to litigation. In addition, the operation of tankers has unique operational risks associated with the transportation of oil. An oil spill may cause significant environmental damage and the associated costs could exceed the insurance coverage available to us. Compared to other types of vessels, tankers are exposed to a higher risk of damage and loss by fire, whether ignited by a terrorist attack, collision, or other cause, due to the high flammability and high volume of the oil transported in tankers.
If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs and maintenance are unpredictable and may be substantial. We may have to pay drydocking costs that our insurance does not cover in full. The loss of revenues while these vessels are being repaired and repositioned, as well as the actual cost of these repairs, may adversely affect our business and financial condition. In addition, space at drydocking facilities is sometimes limited and not all drydocking facilities are conveniently located. We may be unable to find space at a suitable drydocking facility or our vessels may be forced to travel to a drydocking facility that is not conveniently located to our vessels’ positions. The loss of earnings while these vessels are forced to wait for space or to travel to more distant drydocking facilities may adversely affect our business and financial condition. Further, the total loss of any of our vessels could harm our reputation as a safe and reliable vessel owner and operator. If we are unable to adequately maintain or safeguard our vessels, we may be unable to prevent any such damage, costs, or loss which could negatively impact our business, financial condition, results of operations and available cash.
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 business, results of operations, cash flows, financial condition and available cash.

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We may be subject to risks inherent in the conversion of vessels into FSOs and the operation of FSO activities.
Our FSO activities are subject to various risks, including delays, cost overruns, unavailability of supplies, employee negligence, defects in machinery, collisions, service damage to vessels, damage or loss to freight, piracy or strikes. In case of delays in delivering FSO under service contract to the end-user, contracts can be amended and/or cancelled. Moreover, the operation of FSO vessels is subject to the inherent possibility of maritime disasters, such as oil spills and other environmental accidents, and to the obligations arising from the ownership and management of vessels in international trade. We have established current insurance against possible accidents and environmental damage and pollution that complies with applicable law and standard practices in the sector. However, there is no guarantee that such insurance will remain available at rates which are regarded as reasonable by us or that such insurance will remain sufficient to cover all losses incurred or the cost of each compensation claim made against us, or that our insurance policies will cover the loss of income resulting from a vessel becoming non-operational. Should compensation claims be made against us, our vessels may be impounded or subject to other judicial procedures, which would adversely affect our results of operations and financial condition.
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, financial condition and ability to pay dividends.
We employ masters, officers and crews to man our vessels. 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 business, results of operations, cash flows, financial condition and ability to pay dividends.
Our labor costs and the operating restrictions that apply to us could increase as a result of collective bargaining negotiations and changes in labor laws and regulations, and disputes resulting in work stoppages, strikes, or disruptions could adversely affect our business.
The majority of our employees (land-based and offshore) are represented by collective bargaining agreements in Belgium, Greece, France and the Philippines. For a limited number of vessels, the employment of onboard staff is based on internationally negotiated collective bargaining agreements. In addition, many of these represented individuals are working under agreements that are subject to salary negotiation. These negotiations could result in higher personnel costs, other increased costs or increased operating restrictions that could adversely affect our financial performance. In addition, as part of our legal obligations, we are required to contribute certain amounts to retirement funds and pension plans (with insurance companies or integrated in a national social security scheme) and are bound to legal restrictions in our ability to dismiss employees. Any 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, which could hinder our operations from being carried out normally, and if not resolved in a timely cost-effective manner, could have a material effect on our business.
World events could affect our results of operations and financial condition.
We conduct most of our operations outside of the U.S. and Belgium. Our business, results of operations, cash flows, financial condition and available cash may be adversely affected by the effects of political instability, terrorist or other attacks, war or international hostilities. Continuing conflicts and recent developments in the Middle East, the Korean Peninsula, North Africa, and other geographic regions and countries and the presence of the United States and other armed forces in certain of these regions may lead to additional acts of terrorism and armed conflict around the world, which may contribute to further world economic instability and uncertainty in 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. Future terrorist attacks could result in increased volatility of the financial markets and negatively impact the U.S. and global economy. These uncertainties could also adversely affect our ability to obtain additional financing on terms acceptable to us or at all.
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 business, financial condition, results of operations and available cash.

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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. It is not clear what impact this will have on the conduct of cross-border business, and this uncertain outcome could increase volatility in the markets and could increase our regulatory compliance costs. 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. The potential effects of Brexit could have unpredictable consequences for financial and shipping markets and may adversely affect 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 embargos imposed by the U.S. or other governments, that could adversely affect our reputation and the market for our ordinary shares.
The U.S. government and other authorities have made certain countries subject to certain sanctions and embargoes or have identified countries or other authorities as state sponsors of terrorism. From time to time on charterers’ instructions, our vessels may call on ports located in such countries. 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 addition, 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 E.U. or other international bodies. 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 and our results of operations may be adversely affected.
Although we believe that we have been in compliance with all applicable sanctions and embargo laws and regulations, and intend to maintain 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 ordinary shares may adversely affect the price at which our ordinary 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 ordinary 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.
The smuggling of drugs or other contraband onto our vessels may lead to governmental claims against us.
We expect that our vessels will call in ports where smugglers 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, cash flows and financial condition.
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, 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 or attaching a vessel through foreclosure proceedings. The arrest or attachment of one or more of our vessels could interrupt our business or require us to pay large sums of money to have the arrest lifted, which would have a negative effect on our cash flows.
In addition, in some jurisdictions, such as South Africa, under the “sister ship” theory of liability, a claimant may arrest both the vessel which is subject to the claimant’s maritime lien and any “associated” vessel, which is any vessel owned or controlled by the same owner. Claimants could try to assert “sister ship” liability against one vessel in our fleet for claims relating to another of our ships.

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Governments could requisition our vessels during a period of war or emergency, which may negatively impact our business, financial condition, results of operations and available cash.
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. Government requisition of one or more of our vessels may negatively impact our business, financial condition, results of operations and available cash.
Technological innovation could reduce our charterhire income and the value of our vessels.
The charterhire 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 tankers 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 charterhire payments we receive for our vessels and the resale value of our vessels could significantly decrease. As a result, our results of operations and financial condition could be adversely affected.



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Risk Factors Relating to Our Company
We are dependent on spot charters and any decrease in spot charter rates in the future may adversely affect our earnings.
As of April 15, 2019, we employed 72 of our vessels (including the vessels we acquired from Gener8 in the Merger (such capitalized terms are defined herein) in either the spot market or in a spot market-oriented tanker pool, including 42 vessels in the Tankers International Pool, or the TI Pool, a spot market-oriented pool in which we were a founding member in 2000, exposing us to fluctuations in spot market charter rates. We will also enter into spot charters in the future. The spot charter market may fluctuate significantly based upon tanker and oil supply and demand. Our partial reliance on the spot market contributes to fluctuations in cash flows from operating activities as a result of its exposure to highly cyclical tanker rates. For example, over the past eight years, VLCC spot market rates on the route from Arabian Gulf to Japan expressed as a time charter equivalent have ranged from rates below operating expenses to a high of $114,148 per day, and as of end-March 2019 year-to-date earnings have averaged $27,948 per day on the new benchmark route between the Middle East Gulf and China. The VLCC benchmark route from the Arabian Gulf to the Far East was changed by the Baltic in 2018 from discharging in Japan to discharging in China, to better reflect current trading patterns in the VLCC market. The rate at which a change in oil demand impacts the demand for oil tankers depends not only on the nominal change in oil demand but also how this oil is traded. 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 in 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. If future spot charter rates decline, then 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.
We may not be able to renew or obtain new and favorable charters for our vessels whose charters are expiring or are terminated, which could adversely affect our revenues and profitability.
Our revenues are also affected by our strategy to employ some of our vessels on time charters, which have a fixed income for a pre-set period of time as opposed to trading ships in the spot market where their earnings are heavily impacted by the supply and demand balance. Our ability to renew expiring contracts or obtain new charters will depend on the prevailing market conditions at the time. If we are not able to obtain new contracts in direct continuation with existing charters or for newly acquired vessels, or if new contracts are entered into at charter rates substantially below the existing charter rates or on terms otherwise less favorable compared to existing contracts terms, our revenues and profitability could be adversely affected. As of 15 April 2019, we employed one VLCC, four Suezmax and two FSOs on time charters. All of the four newbuilding Suezmax vessels delivered to us during 2018 are each employed under a seven-year time charter contract.
The markets in which we compete experience fluctuations in the demand. Upon the expiration or termination of their current charters, we may not be able to obtain charters for our vessels currently employed and there may be a gap in employment of the vessels between current charters and subsequent charters. In particular, if oil and natural gas prices are low, or if it is expected that such prices will decrease in the future, at a time when we are seeking to arrange charters for our vessels, we may not be able to obtain charters at attractive rates or at all. Moreover, our revenue relating to spot voyages is impacted by the number of vessels on the spot market.
If the charters which we receive for the reemployment of our current vessels are less favorable, we will recognize less revenue from their operations. Our ability to meet our cash flow obligations will depend on our ability to consistently secure charters for our vessels at sufficiently high charter rates. We cannot predict the future level of demand for our services or future conditions in the oil and gas industry. If oil and gas companies do not continue to increase exploration, development and production expenditures, we may have difficulty securing charters or we may be forced to enter into charters at unattractive rates, which would adversely affect our results of operations and financial condition.

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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 have entered into, and may enter in the future, various contracts, including shipbuilding contracts or on long term contracts such as the FSO vessels operating offshore Qatar, credit facilities, charter agreements and other agreements associated with the operation of our vessels. 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 and offshore industries, the overall financial condition of the counterparty, charter rates received for specific types of vessels and various expenses. For example, the combination of a reduction of cash flow resulting from declines in world trade, a reduction in borrowing bases under reserve-based credit facilities and the lack of availability of debt or equity financing may result in a significant reduction in the ability of our charterers to make charter payments to us. 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. 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 business, financial condition, results of operations and cash flows.
The failure of our charterers to meet their obligations under our charter agreements, on which we depend for our revenues, could cause us to suffer losses or otherwise adversely affect our business.
We expect to employ our vessels under short-term, medium or long-term charter agreements as well as in the spot market. The ability and willingness of each of our counterparties to perform their obligations under a time charter, spot voyage or other agreement 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 tanker shipping industry and the overall financial condition of the counterparties. Charterers are sensitive to the commodity markets and may be impacted by market forces affecting commodities such as oil. In addition, in depressed market conditions, there have been reports of charterers renegotiating their charters or defaulting on their obligations under charters. Our customers may fail to pay charterhire or attempt to renegotiate charter rates. Should a counterparty fail to honor its obligations under agreements with us, it may be difficult to secure substitute employment for such vessel, and any new charter arrangements we secure in the spot market or on time charters may be at lower rates given currently decreased tanker charter rate levels. If our charterers fail to meet their obligations to us or attempt to renegotiate our charter agreements, we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows, as well as our ability to pay dividends, if any, in the future, and compliance with covenants in our credit facilities.
Newbuilding projects are subject to risks that could cause delays, cost overruns or cancellation of our newbuilding contracts.
Currently we do not have a newbuilding program. We may, in the future, enter into construction contracts or purchase vessels that are under construction. These construction projects are subject to risks of delay or cost overruns inherent in any large construction project from numerous factors, including shortages of equipment, materials or skilled labor, unscheduled delays in the delivery of ordered materials and equipment or shipyard construction, failure of equipment to meet quality and/or performance standards, financial or operating difficulties experienced by equipment vendors or the shipyard, unanticipated actual or purported change orders, inability to obtain required permits or approvals, unanticipated cost increases between order and delivery, design or engineering changes and work stoppages and other labor disputes, adverse weather conditions or any other events of force majeure. Significant cost overruns or delays could adversely affect our financial position, results of operations and cash flows. Additionally, failure to complete a project on time may result in the delay of revenue from that vessel. In addition to the prevailing and anticipated freight rates, factors that affect the rate of newbuilding, scrapping and laying-up include newbuilding prices, secondhand vessel values in relation to scrap prices, operating costs, costs associated with classification society surveys, normal maintenance costs, insurance coverage costs, the efficiency and age profile of the existing tanker fleet in the market, and government and industry regulation of maritime transportation practices, particularly environmental protection laws and regulations. These factors influencing the supply of and demand for shipping capacity are outside of our control, and we may not be able to correctly assess the nature, timing and degree of changes in industry conditions.
If for any reason we default under any of our newbuilding contracts, or otherwise fail to take delivery of our newbuilding vessels, we would be prevented from realizing potential revenues from such vessels, we could also lose all or a portion of our investment, including any installment payments made, and we could be liable for penalties and damages under such contracts.
In addition, in the event a shipyard does not perform under its contract, we may lose all or part of our investment, which would have a material adverse effect on our results of operations, financial condition and cash flows.

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If we do not identify suitable tankers for acquisition or successfully integrate any acquired tankers, we may not be able to grow or to effectively manage our growth.
One of our strategies is to continue to grow by expanding our operations and adding to our fleet at attractive points in the cycle, including through mergers, strategic alliances or joint ventures. Our future growth will depend upon a number of factors, some of which may not be within our control. These factors include our ability to:
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identify suitable tankers and/or shipping companies for acquisitions at attractive prices, which may not be possible if asset prices rise too quickly;
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obtain financing for our existing and new operations;
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manage relationships with customers and suppliers;
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identify businesses engaged in managing, operating or owning tankers for acquisitions or joint ventures;
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integrate any acquired tankers or businesses successfully with our then-existing operations;
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attract, hire, train, integrate and retain qualified, highly trained personnel and crew to manage and operate our growing business and fleet;
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identify additional new markets;
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enhance our customer base;
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improve our operating, financial and accounting systems and controls; and
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obtain required financing for our existing and new operations.

Our failure to effectively identify, purchase, develop and integrate any tankers or businesses could adversely affect our business, financial condition and results of operations. The number of employees that perform services for us and our current operating and financial systems may not be adequate as we implement our plan to expand the size of our fleet, and we may not be able to effectively hire more employees or adequately improve those systems. We may incur unanticipated expenses as an operating company. Our current operating and financial systems may not be adequate as we implement our plan to expand the size of our fleet. Finally, additional acquisitions may require additional equity issuances, which may dilute our common shareholders if issued at lower prices than the price they acquired their shares or debt issuances (with amortization payments), both of which could reduce our cash flow. If we are unable to execute the points noted above, our financial condition may be adversely affected.
Growing any business by acquisition presents numerous risks such as undisclosed liabilities and obligations, difficulty in obtaining additional qualified personnel and managing relationships with customers and suppliers and integrating newly acquired operations into existing infrastructures. The expansion of our fleet may impose significant additional responsibilities on our management and staff, and the management and staff of our commercial and technical managers, and may necessitate that we, and they, increase the number of personnel. We cannot give any assurance that we will be successful in executing our growth plans or that we will not incur significant expenses and losses in connection with our future growth.
An increase in operating costs would decrease earnings and available cash.
Under time charters the charterer is responsible for voyage expenses and the owner is responsible for the vessel operating costs. Under our spot charters, we are responsible for vessel operating expenses. When our owned vessels are operated in the spot market, we are also responsible for voyage expenses and vessel costs. Our vessel operating expenses include the costs of crew, provisions, deck and engine stores, fluctuating price of fuel expenses when our vessels operate in the spot or voyage market, insurance and maintenance and repairs, which expenses depend on a variety of factors, many of which are beyond our control. Voyage expenses include bunkers (fuel), port and canal charges. If our vessels suffer damage, they may need to be repaired at a drydocking facility. The costs of drydock repairs are unpredictable and can be substantial. Increases in any of these expenses would decrease earnings and dividends per share.
Rising fuel prices may adversely affect our profits.
While we do not directly bear the cost of fuel or bunkers under our time charters, fuel is a significant factor in negotiating charter rates. Fuel is also a significant, if not the largest, expense in our shipping operations when vessels are under voyage charter. As a result, an increase in the price of fuel beyond our expectations may adversely affect our profitability at the time of charter negotiation. The price and supply of fuel is unpredictable and fluctuates based on events outside our control, including geopolitical developments, supply and demand for oil and gas, actions by the Organization of 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, which may reduce the profitability and competitiveness of our business versus other forms of transportation, such as truck or rail.

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The IMO 2020 regulations may cause us to incur substantial costs and to procure low-sulfur fuel oil directly on the wholesale market for storage at sea and onward consumption on our vessels.
On January 1, 2020, the IMO is expected to implement a new regulation for a 0.50% global sulfur cap for marine fuels. Under this new global cap, vessels will have to use marine fuels with a sulfur content of no more than 0.50% against the current limit of 3.50% in an effort to reduce the emission of sulfur oxide into the atmosphere.
We may incur costs to comply with these revised standards. Additional or new conventions, laws and regulations may be adopted that could require, among others, the installation of expensive emission control systems and could adversely affect our business, results of operations, cash flows and financial condition.
We have opted not to install scrubbers and continue to work closely with suppliers and producers on alternative mechanisms ahead of January 1, 2020, including the procurement of physical low-sulfur fuel oil directly on the wholesale market and storage thereof at sea on a vessel owned by us, with a view to secure availability of qualitative compliant fuel oil and to capture volatility in prices between high-sulfur fuel oil and low-sulfur fuel oil. The procurement of large quantities of low-sulfur fuel oil implies a commodity price risk upon fluctuations in the prices of the procured commodity between the time of the purchase and the consumption. While we may implement financial strategies with a view to limiting this risk, we cannot give any assurance that such strategies will be successful in which case we could sustain significant losses which could have a material adverse effect on our business, financial condition, results of operations and cash flows. The storage and onward consumption on our vessels of the procured commodity may require us to blend, co-mingle or otherwise combine, handle or manipulate such commodities which implies certain operational risks that may result in loss of or damage to the procured commodities or to the vessels and its machinery. While we carry cargo insurance to protect us against certain risks of loss of or damage to the procured commodities, we may not be adequately insured to cover any losses from such operational risks, which could have a material adverse effect on us. Any significant uninsured or under-insured loss or liability could have a material adverse effect on our business, results of operations, cash flows and financial condition and our available cash.
If we are unable to operate our vessels profitably, we may be unsuccessful in competing in the highly competitive international tanker market, which would negatively affect our financial condition and our ability to expand our business.
The operation of tanker vessels and transportation of crude and 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 tanker owners, including major oil companies and national oil companies or companies linked to authorities of oil producing or importing countries, as well as independent 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 tanker and its operator to the charterers. Our ability to operate our vessels profitably depends on a variety of factors, including, but not limited to the (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 scrappings, and (v) 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.
Our market share may decrease in the future. If we expand our business or provide new services in new geographic regions, we may not be able to compete profitably. New markets may require different skills, knowledge or strategies than we use in our current markets, and the competitors in those new markets may have greater financial strength and capital resources than we do.
A substantial portion of our revenue 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 a substantial portion of our revenue from a limited number of customers. For the year ended December 31, 2018, Valero Energy Corporation, or Valero, accounted for 7%, and Petroleo Brasileiro S.A. accounted for 5% of our total revenues in our tankers segment. In addition, our only FSO customer as of December 31, 2018 was North Oil Company. All of our charter agreements have fixed terms, but may be terminated early due to certain events, such as a charterer’s failure to make charter payments to us because of financial inability, disagreements with us or otherwise. The ability of each of our counterparties to perform its obligations under a charter 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 tanker industry and the overall financial condition of the counterparty. Should a counterparty fail to honor its obligations under an agreement with us, we may be unable to realize revenue under that charter and could sustain losses, which could have a material adverse effect on our business, financial condition, results of operations and ability to pay dividends, if any.

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In addition, a charterer may exercise its right to terminate the charter if, among other things:
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the vessel suffers a total loss or is damaged beyond repair;
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we default on our obligations under the charter, including prolonged periods of vessel off-hire;
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war, sanctions, or hostilities significantly disrupt the free trade of the vessel;
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the vessel is requisitioned by any governmental authority; or
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a prolonged force majeure event occurs, such as war, piracy, terrorism, or political unrest, which prevents the chartering of the vessel.

In addition, the charter payments we receive may be reduced if the vessel does not perform according to certain contractual specifications. For example, charterhire may be reduced if the average vessel speed falls below the speed we have guaranteed or if the amount of fuel consumed to power the vessel exceeds the guaranteed amount. Additionally, compensation under our FSO service contracts is based on daily performance and/or availability of each FSO in accordance with the requirements specified in the applicable FSO service contracts. The charter payments we receive under our FSO service contracts may be reduced if the vessel is idle, but available for operation, or if a force majeure event occurs, or we may not be entitled to receive charter payments if the FSO is taken out of service for maintenance for an extended period, or the charter may be terminated if these events continue for an extended period.
If any of our charters are terminated, we may be unable to re-deploy the related vessel on terms as favorable to us as our current charters, or at all. We are exposed to changes in the spot market rates associated with the deployment of our vessels. If we are unable to re-deploy a vessel for which the charter has been terminated, we will not receive any revenues from that vessel and we may be required to pay ongoing expenses necessary to maintain the vessel in proper operating condition. Any of these factors may decrease our revenue and cash flows. Further, the loss of any of our charterers, charters or vessels, or a decline in charterhire under any of our charters, could have a material adverse effect on our business, results of operations, financial condition and ability to pay dividends, if any, to our shareholders.
Our FSO service contracts may not permit us to fully recoup our cost increases in the event of a rise in expenses.
Our FSO service contracts have dayrates that are fixed over the contract term. In order to mitigate the effects of inflation on revenues from these term contracts, our FSO service contracts include yearly escalation provisions. These provisions are designed to recompense us for certain cost increases, including wages, insurance and maintenance costs. However, actual cost increases may result from events or conditions that do not cause correlative changes to the applicable escalation provisions. In addition, the adjustments are normally performed on an annual basis. For these reasons, the timing and amount received as a result of the adjustments may differ from the timing and amount of expenditures associated with actual cost increases, which could adversely affect our results of operations and financial condition and ability to pay dividends, if any, to our shareholders.
Currently, we operate our FSOs offshore Qatar, which has fields whose production lives deplete over time and as a result, overall activity may decline faster than anticipated.
We currently operate our FSOs offshore Qatar, which has fields whose production lives deplete over time, and as a result, the overall activity in such fields may decline faster than anticipated. There are increased costs associated with retiring old oil and gas installations, which may threaten to slow the development of the region’s remaining resources.
The purchase and operation of secondhand vessels expose us to increased operating costs which could adversely affect our earnings and, as our fleet ages, the risks associated with older vessels could adversely affect our ability to obtain profitable charters.
Our current business strategy includes additional growth through the acquisition of new and secondhand vessels. While we try to inspect secondhand vessels prior to purchase, this does not provide us with the same knowledge about their condition that we would have had if these vessels had been built for and operated exclusively by us. Generally, as is customary in the shipping sector, we do not receive the benefit of warranties from the builders for the secondhand vessels that we acquire.
In general, the costs to maintain a vessel in good operating condition increase with the age of the vessel. Older vessels are typically less fuel-efficient than more recently constructed vessels due to improvements in engine technology. Cargo insurance rates increase with the age of a vessel, which could lead to older vessels being less desirable for charterers.
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.

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We will be required to make additional capital expenditures to expand the number of vessels in our fleet and to maintain all our vessels, which will be dependent on additional financing.
Our business strategy is based in part upon the expansion of our fleet through the purchase of additional vessels at attractive points in the cycle. If we are unable to fulfill our obligations under any memorandum of agreement or newbuilding construction contract for future vessel acquisitions, the sellers of such vessels may be permitted to terminate such contracts and we may forfeit all or a portion of the down payments we already made under such contracts and we may be sued for any outstanding balance.
In addition, we will incur significant maintenance costs for our existing and any newly-acquired vessels. A newbuilding vessel must be drydocked within five years of its delivery from a shipyard, with survey cycles of no more than 60 months for the first three surveys, and 30 months thereafter, not including any unexpected repairs. In 2018, the Finesse, Nautica, Newton, Noble, Hojo, Cap Leon and Cap Felix have been dry-docked and the cost of planned repairs and maintenance was capitalized. The estimated cost to drydock a vessel are between $0.75 million and $2.5 million, depending on the size and condition of the vessel and the location of drydocking and the special surveys to be performed.
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 International Oil Pollution Prevention or IOPP renewal survey, existing vessels constructed before September 8, 2017 are required to 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. Vessels constructed on or after September 8, 2017 are required to comply with the D-2 standards on or after September 8, 2017. We currently have 41 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 or VGP program and U.S. National Invasive Species Act or NISA are currently in effect to regulate ballast discharge, exchange and installation, the Vessel Incidental Discharge Act or 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 which may adversely affect our profitability. 
If we do not set aside funds and are unable to borrow or raise funds for vessel replacement, at the end of a vessel’s useful life our revenue will decline, which would adversely affect our business, results of operations, financial condition, and available cash.
If we do not set aside funds and are unable to borrow or raise funds for vessel replacement, we will be unable to replace the vessels in our fleet upon the expiration of their remaining useful lives. Our cash flows and income are dependent on the revenues earned by the chartering of our vessels. If we are unable to replace the vessels in our fleet upon the expiration of their useful lives, our business, results of operations, financial condition and available cash would be adversely affected. Any funds set aside for vessel replacement will reduce available cash.
Our ability to obtain additional financing may be dependent on the performance and creditworthiness of our then existing charters.
The actual or perceived credit quality of our charterers and any defaults by them, may materially affect our ability to obtain the additional capital resources that we will require to purchase additional vessels or may significantly increase our costs of obtaining such capital. Our inability to obtain additional financing at all or at a higher than anticipated cost may materially affect our results of operation and our ability to implement our business strategy.
We depend on our executive officers and other key employees, and the loss of their services could, in the short term, have a material adverse effect on our business, results and financial condition.
We depend on the efforts, knowledge, skill, reputations and business contacts of our executive officers and other key employees. Accordingly, our success will depend on the continued service of these individuals. We may experience departures of senior executive officers and other key employees, and we cannot predict the impact that any of their departures would have on our ability to achieve our financial objectives. The loss of the services of any of them could, in the short term, have a material adverse effect on our business, results of operations and financial condition.

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We are currently undergoing a leadership 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 February 4, 2019, we announced that Patrick Rodgers has decided to step down from his role as Chief Executive Officer or CEO during 2019 and on March 28, 2019, we announced that Hugo De Stoop, our current Chief Financial Officer or CFO, will succeed Patrick Rodgers as our CEO after a brief handover period which is expected to take place in the course of the second quarter of 2019. As a result, we have commenced a recruitment process for a new replacement CFO. While we have confidence in our remaining senior management team, including members of the Company's Board of Directors, the uncertainty inherent in this ongoing leadership transition may be difficult to manage, may cause concerns from third parties with whom we do business, and may increase the likelihood of turnover of other key officers and employees. In addition, our future development and prospects depend to a large degree on the experience, performance and continued service of its senior management team, including a new replacement CFO and members of our Board of Directors. 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, and will be required to hire additional highly trained personnel in connection with the operation of newly acquired vessels. 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. Such developments could adversely affect our financial results and cash flow. Furthermore, as a result of any increased competition for people and risk for higher turnover, we may experience a reduction in the experience level of our personnel, which could lead to higher downtime and more operating incidents.
United States tax authorities could treat us as a “passive foreign investment company,” which could have adverse United States federal income tax consequences to United States shareholders.
A foreign corporation will be treated as a “passive foreign investment company,” or PFIC, for United States 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 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. For purposes of these tests, income derived from the performance of services does not constitute “passive income.” United States shareholders of a PFIC are subject to a disadvantageous United States 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 proposed method of operation, we do not believe that we will be a PFIC with respect to any taxable year. In this regard, we intend to treat the gross income we derive or are deemed to derive from our time chartering activities as services income, rather than rental income. Accordingly, our income from our time and voyage chartering activities should not constitute “passive income,” and the assets that we own and operate in connection with the production of that income should not constitute assets that produce or are held for the production of “passive income.”
There is substantial legal authority supporting this position, consisting of 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 also 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 change.

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If the IRS were to find that we are or have been a PFIC for any taxable year, our United States shareholders would face adverse United States federal income tax consequences and incur certain information reporting obligations. Under the PFIC rules, unless those shareholders make an election available under the United States Internal Revenue Code of 1986, as amended, or the Code (which election could itself have adverse consequences for such shareholders), such shareholders would be subject to United States federal income tax at the then prevailing rates on ordinary income plus interest, in respect of excess distributions and upon any gain from the disposition of their ordinary shares, as if the excess distribution or gain had been recognized ratably over the shareholder’s holding period of the ordinary shares. See “Item 10. Additional Information-E. Taxation-Passive Foreign Investment Company Status and Significant Tax Consequences” for a more comprehensive discussion of the United States federal income tax consequences to United States shareholders if we are treated as a PFIC.
We may have to pay tax on United States source shipping income, or taxes in other jurisdictions, which would reduce our net earnings.
Under the Code, 50% of the gross shipping income of a corporation that owns or charters vessels, as we and our subsidiaries do, that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States may be subject to a 4% United States federal income tax without allowance for deductions, unless that corporation qualifies for exemption from tax under Section 883 of the Code and the regulations promulgated thereunder by the United States Department of the Treasury or an applicable U.S. income tax treaty.
We and our subsidiaries continue to take the position that we qualify for either this statutory tax exemption or exemption under an income tax treaty for United States federal income tax return reporting purposes. However, there are factual circumstances beyond our control that could cause us to lose the benefit of this tax exemption and thereby become subject to United States federal income tax on our United States source shipping income. For example, we may no longer qualify for exemption under Section 883 of the Code for a particular taxable year if shareholders with a five percent or greater interest in our ordinary shares, or “5% Shareholders,” owned, in the aggregate, 50% or more of our outstanding ordinary shares for more than half the days during the taxable year, and there does not exist sufficient 5% Shareholders that are qualified shareholders for purposes of Section 883 of the Code to preclude non-qualified 5% Shareholders from owning 50% or more of our ordinary shares for more than half the number of days during such taxable year or we are unable to satisfy certain substantiation requirements with regard to our 5% Shareholders. Due to the factual nature of the issues involved, there can be no assurances on the tax-exempt status of us or any of our subsidiaries.
If we or our subsidiaries were not entitled to exemption under Section 883 of the Code for any taxable year, we or our subsidiaries could be subject for such year to an effective 2% United States federal income tax on the shipping income we or they derive during such year which is attributable to the transport of cargoes to or from the United States. The imposition of this taxation would have a negative effect on our business and would decrease our earnings available for distribution to our shareholders.
We may also be subject to tax in other jurisdictions, which could reduce our earnings.
Our shareholders residing in countries other than Belgium may be subject to double withholding taxation with respect to dividends or other distributions made by us.
Any dividends or other distributions we make to shareholders will, in principle, be subject to withholding tax in Belgium at a rate of 30%, except for shareholders which qualify for an exemption of withholding tax such as, amongst others, qualifying pension funds or a company qualifying as a parent company in the sense of the Council Directive (90/435/EEC) of July 23, 1990, or the Parent-Subsidiary Directive or that qualify for a lower withholding tax rate or an exemption by virtue of a tax treaty. Various conditions may apply and shareholders residing in countries other than Belgium are advised to consult their advisers regarding the tax consequences of dividends or other distributions made by us. Our shareholders residing in countries other than Belgium may not be able to credit the amount of such withholding tax to any tax due on such dividends or other distributions in any other country than Belgium. As a result, such shareholders may be subject to double taxation in respect of such dividends or other distributions.
Belgium and the United States have concluded a double tax treaty concerning the avoidance of double taxation, or the U.S.-Belgium Treaty. The U.S.-Belgium Treaty reduces the applicability of Belgian withholding tax to 15%, 5% or 0% for U.S. taxpayers, provided that the U.S. taxpayer meets the limitation of benefits conditions imposed by the U.S.-Belgium Treaty. The Belgian withholding tax is generally reduced to 15% under the U.S.-Belgium Treaty. The 5% withholding tax applies in cases where the U.S. shareholder is a company which holds at least 10% of the shares in the Company. A 0% Belgian withholding tax applies when the shareholder is a company which has held at least 10% of the shares in the Company for at least 12 months, or is, subject to certain conditions, a U.S. pension fund. The U.S. shareholders are encouraged to consult their own tax advisers to determine whether they can invoke the benefits and meet the limitation of benefits conditions as imposed by the U.S.-Belgium Treaty.

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Changes to the tonnage tax or the corporate tax regimes applicable to us, or to the interpretation thereof, may impact our future operating results.
The Belgian Ministry of Finance approved our application on October 23, 2013 for beneficial tax treatment of certain of our vessel operations income. Under this Belgian tax regime, our taxable basis is determined on a lump-sum basis (which is, on the basis of the tonnage of the vessels it operates), rather than on the basis of our accounting results, as adjusted, for Belgian corporate income tax purposes. This tonnage tax regime was initially granted for 10 years, and was renewed for an additional 10-year period in 2013. In addition, with respect to certain of our vessels operating under the Greek flag, we benefit from a similar tonnage tax regime in Greece. Our two subsidiaries that were formed in connection with our vessel acquisitions in 2014, Euronav Shipping NV and Euronav Tankers NV are as from January 1, 2016 also subject to the Belgian Tonnage Tax regime. We cannot assure you that we will be able to take advantage of past tax benefits built up in those companies, which can only be claimed upon an eventual return to the Belgian corporate income tax regime.
Changes to the tax regimes applicable to us, or the interpretation thereof, may impact our future operating results. In 2017 and early 2018 the Company took note of the correspondence between the Belgian authorities and the European Commission within the framework of request for extension of the state aid to the maritime industry by the State of Belgium. Based on the actual draft law, which includes the legislative changes as requested by the Commission, we do not expect any adverse effect of these changes to our existing tonnage tax regime.
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 tanker industry.
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, protection and indemnity insurance, which include pollution risks, crew insurance and war risk insurance. However, we may not be adequately insured to cover losses from our operational risks, which could have a material adverse effect on us. Additionally, our insurers may refuse to pay particular claims and our insurance may be voidable by the insurers if we take, or fail to take, certain action, such as failing to maintain certification of our vessels with applicable maritime regulatory organizations. Any significant uninsured or under-insured loss or liability could have a material adverse effect on our business, results of operations, cash flows and financial condition and our available cash. In addition, we may not be able to obtain adequate insurance coverage at reasonable rates in the future during adverse insurance market conditions.
In addition, changes in the insurance markets attributable to terrorist attacks may also make certain types of insurance more difficult for us to obtain due to increased premiums or reduced or restricted coverage for losses caused by terrorist acts generally.
Because we obtain some of our insurance through protection and indemnity associations, which result in significant expenses to us, we may be required to make additional premium payments.
We may be subject to increased premium payments, or calls, in amounts based on our claim records, the claim records of our managers, as well as the claim records of other members of the protection and indemnity associations through which we receive insurance coverage for tort liability, including pollution-related liability. In addition, our protection and indemnity associations may not have enough resources to cover claims made against them. Our payment of these calls could result in significant expense to us, which could have a material adverse effect on our business, results of operations, cash flows, financial condition and available cash.
Servicing our current or future indebtedness limits funds available for other purposes and if we cannot service our debt, we may lose our vessels.
We had $ 1,866.8 million and $ 964.6 million of indebtedness as of December 31, 2018 and December 31, 2017, respectively, and expect to incur additional indebtedness as we further expand our fleet. Borrowing under our credit facilities are secured by our vessels and certain of our vessel owning subsidiaries’ bank accounts and if we cannot service our debt, we may lose our vessels or certain of our pledged accounts. Such borrowings under our credit facilities requires us to dedicate a part of our cash flow from operations to paying interest on our indebtedness. These payments limit funds available for working capital, capital expenditures and other purposes, including further equity or debt financing in the future. Amounts borrowed under our credit facilities bear interest at variable rates. Increases in prevailing rates could increase the amounts that we would have to pay to our lenders, even though the outstanding principal amount remains the same and our net income and cash flows would decrease. We expect our earnings and cash flow to vary from year to year due to the cyclical nature of the tanker industry. If we do not generate or reserve enough cash flow from operations to enable us to satisfy our short-term or medium- to long-term liquidity requirements or to otherwise satisfy our debt obligations, we may have to undertake alternative financing plans, which could dilute shareholders or negatively impact our financial results, depending on market conditions at the time, such as:

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•
seeking to raise additional capital or equity;
•
refinancing or restructuring our debt;
•
establish new loans;
•
selling tankers or assets (including investments); or
•
reducing or delaying capital investments.

However, these alternative financing plans, if necessary, may not be sufficient to allow us to meet our debt obligations. If we are unable to meet our debt obligations or if some other default occurs under our credit facilities, our lenders could elect to declare that our debt, totally or partially, together with accrued interest and fees, to be immediately due and payable and proceed against the collateral vessels securing that debt even though the majority of the proceeds used to purchase the collateral vessels did not come from our credit facilities.
Adverse market conditions could cause us to breach covenants in our credit facilities and adversely affect our operating results.
The market values of tankers have generally been depressed. The market prices for tankers declined significantly from historically high levels reached in early 2008 and remain at relatively low levels. You should expect the market value of our vessels to fluctuate depending on general economic and market conditions affecting the shipping industry and prevailing charterhire rates, competition from other tanker companies and other modes of transportation, types, sizes and ages of vessels, applicable governmental regulations and the cost of newbuildings. We believe that the current aggregate market value of our vessels will be in excess of loan to value amounts required under our credit facilities. Our credit facilities generally require that the fair market value of the vessels pledged as collateral never be less than between 125% and 145% as, depending on the applicable credit facility, of the aggregate principal amount outstanding under the loan. We were in compliance with these requirements as of December 31, 2018 and as of the date of this annual report.
A decrease in vessel values or a failure to meet this ratio could cause us to breach certain covenants in our existing credit facilities and future financing agreements that we may enter into from time to time. If we breach such covenants and are unable to remedy the relevant breach or obtain a waiver, our lenders could accelerate our debt and foreclose on our owned vessels. Additionally, if we sell one or more of our vessels at a time when vessel prices have fallen, the sale price may be less than the vessel’s carrying value on our consolidated financial statements, resulting in a loss on sale or an impairment loss being recognized, ultimately leading to a reduction in earnings. In addition, due to the fact that FSO vessels are often purposely built for specific circumstances, and due to the absence of an efficient market for transactions of FSO vessels, the carrying values of our FSO’s may not represent their fair values at any point in time.
We may be unable to comply with the restrictions and financial covenants in the agreements governing our indebtedness or any future financial obligations, including the loan agreements that our 50%-owned joint ventures have entered or may enter into, that impose operating and financial restrictions on us.
Our agreements governing our indebtedness, including the loan agreements that our 50%-owned joint ventures have entered into, impose certain operating and financial restrictions on us, mainly to ensure that the market value of the mortgaged vessel under the applicable credit facility does not fall below a certain percentage of the outstanding amount of the loan, which we refer to as the asset coverage ratio. In addition, certain of our credit facilities will require us to satisfy certain other financial covenants, which require us to, among other things, maintain:
•
an amount of current assets, which may include undrawn amount of any committed revolving credit facilities and credit lines having a maturity of more than one year,  that, on a consolidated basis, exceeds our current liabilities;
•
an aggregate amount of cash, cash equivalents and available aggregate undrawn amounts of any committed loan of at least $50.0 million or 5% of our total indebtedness (excluding guarantees), depending on the applicable loan facility, whichever is greater;
•
an aggregate cash balance of at least $30.0 million; and
•
a ratio of stockholders’ equity to total assets of at least 30%.

In general, the operating restrictions that are contained in our credit facilities may prohibit or otherwise limit our ability to, among other things:
•
effect changes in management of our vessels;
•
transfer or sell or otherwise dispose of all or a substantial portion of our assets;
•
declare and pay dividends if there is or will be, as a result of the dividend, an event of default or breach of a loan covenant; and
•
incur additional indebtedness.

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A violation of any of our financial covenants or operating restrictions contained in our credit facilities may constitute an event of default under our credit facilities, which, unless cured within the grace period set forth under the applicable credit facility, if applicable, or waived or modified by our lenders, provides our lenders with the right to, among other things, require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet, reclassify our indebtedness as current liabilities and accelerate our indebtedness and foreclose their liens on our vessels and the other assets securing the credit facilities, which would impair our ability to continue to conduct our business.
Furthermore, certain of our credit facilities contain a cross-default provision that may be triggered by a default under one of our other credit facilities, or those of our 50%-owned joint ventures. A cross-default provision means that a default on one loan would result in a default on certain other loans. Because of the presence of cross-default provisions in certain of our credit facilities, the refusal of any one lender under our credit facilities to grant or extend a waiver could result in certain of our indebtedness being accelerated, even if our other lenders under our credit facilities have waived covenant defaults under the respective credit facilities. If our secured indebtedness is accelerated in full or in part, it would be very difficult in the current financing environment for us to refinance our debt or obtain additional financing and we could lose our vessels and other assets securing our credit facilities if our lenders foreclose their liens, which would adversely affect our ability to conduct our business.
Moreover, in connection with any waivers of or amendments to our credit facilities that we may obtain, our lenders may impose additional operating and financial restrictions on us or modify the terms of our existing credit facilities. These restrictions may further restrict our ability to, among other things, pay dividends, make capital expenditures or incur additional indebtedness, including through the issuance of guarantees. In addition, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, accelerate the amortization schedule for our indebtedness and increase the interest rates they charge us on our outstanding indebtedness. Our credit facilities contain provisions that entitle the lenders to require us to prepay to the lenders their respective portion of any advances granted to us under the facility, which could negatively impact our financial results.
As of December 31, 2018 and as of the date of this annual report, we were in compliance with the financial covenants contained in our debt agreements.
For more information, please read “Item 5. Operating and Financial Review and Prospects.”
The contribution of our joint ventures to our profits and losses may fluctuate, which could have a material adverse effect on our business, financial condition, results of operation and cash flows.
We currently own an interest in two of our vessels, FSO Asia and FSO Africa, through 50%-owned joint ventures, together with other third-party vessel owners and operators in our industry. Our ownership in these joint ventures is accounted for using the equity method, which means that our allocation of profits and losses of the applicable joint venture is included in our consolidated financial statements. Our joint ventures have entered into certain credit facilities, which we have provided a guarantee for the revolving credit facility tranche and are secured by the FSO vessels. A violation of any of our financial covenants or operating restrictions contained in the credit facilities for the FSO Africa and the FSO Asia may constitute an event of default thereunder, which may provide our lenders with the right to, among other things, require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet, reclassify our indebtedness as current liabilities and accelerate our indebtedness and foreclose their liens on our vessels and the other assets securing the credit facilities, which would impair our ability to continue to conduct our business. The contribution of our joint ventures to our profits and losses may fluctuate, including the dividends that we may receive from such entities, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
In addition, we have provided, and may continue to provide in the future, unsecured loans to our joint ventures which we treat as additional investments in the joint ventures. Accordingly, in the event our joint ventures do not repay these loans as they become due and payable, the value of our investment in such entities may decline. Furthermore, we have provided, and may continue to provide in the future, guarantees to certain banks with respect to commercial bank indebtedness of our joint ventures. Failure on behalf of any of our joint ventures to service its debt requirements and comply with any provisions contained in its commercial loan agreements, including paying scheduled installments and complying with certain covenants, may lead to an event of default under its loan agreement. As a result, if our joint ventures are unable to obtain a waiver or do not have enough cash on hand to repay the outstanding borrowings, their lenders may foreclose their liens on the vessels securing the loans or seek repayment of the loan from us, or both, which would have a material adverse effect on our financial condition, results of operations, and cash flows.

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We are exposed to volatility in the London Interbank Offered Rate or LIBOR, and we have and we intend to selectively enter into derivative contracts, which can result in higher than market interest rates and charges against our income. If volatility in LIBOR occurs, it could affect our profitability, earnings and cash flow.
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 amounts outstanding under our senior secured credit facilities have been, and amounts under additional credit facilities that we may enter in the future will generally be, advanced at a floating rate based on LIBOR, which has been volatile in prior years, which can 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. 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 credit facilities and any other financing arrangements we may enter into in the future. Moreover, even if we have entered into interest rate swaps or other derivative instruments for purposes of managing our interest rate exposure, our hedging strategies may not be effective and we may incur substantial losses.
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.
Furthermore, interest in most financing agreements in our industry has been based on published LIBOR rates. Recently, however, there is uncertainty relating to the LIBOR calculation process, which may result in the phasing out of LIBOR in the future. As a result, lenders have insisted on provisions that entitle the lenders, in their discretion, to replace published LIBOR as the base for the interest calculation with their cost-of-funds rate. If we are required to agree to such a provision in future financing agreements, our lending costs could increase significantly, which would have an adverse effect on our profitability, earnings and cash flow.
In addition, the banks currently reporting information used to set LIBOR will likely stop such reporting after 2021, when their commitment to reporting information ends. The Alternative Reference Rate Committee, or “Committee”, a committee convened by the Federal Reserve that includes major market participants, has proposed an alternative rate to replace U.S. Dollar LIBOR: the Secured Overnight Financing Rate, or “SOFR.” The impact of such a transition away from LIBOR would be significant for us because of our substantial indebtedness.
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. No assurance can however be given that the use of these derivative instruments, if any, may 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 have entered into and may selectively in the future enter into additional derivative contracts to hedge our overall exposure to interest rate risk exposure. Entering into swaps and derivatives transactions is inherently risky and presents various possibilities for incurring significant expenses. The derivatives strategies that we employ currently or in the future may not be successful or effective, and we could, as a result, incur substantial additional interest costs and recognize losses on such arrangements in our financial statements. Such risk may have an adverse effect on our financial condition and results of operations. See “Item 5. Operating and Financial Review and Prospects” for a description of our interest rate swap arrangements.
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 operating costs being expressed in currencies other than U.S. dollars, primarily in Euro. As a result, there is transactional risk to us that currency fluctuations will have a negative effect on the value of our cash flows and our financial condition. Accordingly, we may experience currency exchange losses if we have not fully hedged our exposure to a foreign currency, which could lead to fluctuations in our results of operations.

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Our costs of operating as a public company are significant, and our management is required to devote substantial time to complying with public company regulations. If we fail to maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results or prevent fraud. As a result, shareholders could lose confidence in our financial and other public reporting, which would harm our business and the trading price of our common stock.
In January 2015, we became 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 the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, and as such, we have significant legal, accounting and other expenses that we did not incur previously. In 2016, we became subject to the requirements as directed by Section 404(b) of the Sarbanes-Oxley Act of 2002, requiring an auditor attestation with respect to our internal control over financial reporting or ICOFR. These reporting obligations impose various requirements on US registered public companies, including changes in corporate governance practices, and these requirements may continue to evolve. We and our management personnel, and other personnel, if any, devote a substantial amount of time to comply with these requirements. Moreover, these rules and regulations increase our legal and financial compliance costs and make some activities more time-consuming and costly.
Sarbanes-Oxley requires, among other things, that we maintain and periodically evaluate our internal control over financial reporting and disclosure controls and procedures. In particular, we need to perform system 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. Effective internal controls over financial reporting, together with adequate disclosure controls and procedures, are necessary for us to provide reliable financial reports and are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation, could cause us to fail to meet our reporting obligations. In addition, any testing we conduct in connection with Section 404 of the Sarbanes-Oxley Act of 2002, or any testing conducted by our independent registered public accounting firm, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to our financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our securities. Our compliance with Section 404 has and may continue to require us to incur substantial expenses and significant management efforts.

A shift in consumer demand from oil towards other energy sources or changes to trade patterns for oil and 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 the consumer demand from oil towards other energy resources such as wind energy, solar energy, water energy or nuclear energy will potentially affect the demand for our vessels.  This 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 oil and oil products may have a significant negative or positive impact on the ton-mile and therefore the demand for our tankers. This 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 secondhand 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.

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We rely on our information systems to conduct our business, and failure to protect these systems against security breaches could adversely affect our business and results of operations. Additionally, if these systems fail or become unavailable for any significant period of time, our business could be harmed.
The efficient operation of our business is dependent on computer hardware and software systems. Information systems are vulnerable to security breaches by computer hackers and cyber-terrorists. We rely on industry accepted security & control frameworks and technology to securely maintain confidential and proprietary information and personal data maintained on our information systems. However, these measures and technology may not adequately prevent security breaches. In addition, the unavailability of the information systems or the failure of these systems to perform as anticipated for any reason could disrupt our business and could result in decreased performance and increased operating costs, causing our business and results of operations to suffer. Any significant interruption or failure of our information systems or any significant breach of security could adversely affect our business, results of operations and financial condition, as well as our cash flows. Furthermore, as from May 25, 2018, data breaches on personal data as defined in the General Data Protection Regulation 2016/679 (EU), could lead to administrative fines up to €20 million or up to 4% of the total worldwide annual turnover of the company, whichever is higher.
We depend on directors who are associated with major shareholders, which may create conflicts of interest.
Certain of our directors are associated with major shareholders, which may create conflicts of interest. Because these directors owe fiduciary duties to both us and those shareholders, conflicts of interest may result in matters involving or affecting us and our customers. In addition, they may have conflicts of interest when faced with decisions that could have different implications for those shareholders than they do for us. Any such conflicts of interest could adversely affect our business, financial condition and results of operations and the trading price of our ordinary shares. For further discussion of transactions with, or involving, our directors that may give rise to potential conflicts of interest, please see "Item 6.A and F/S note 21 “Related Parties”: Relationship with CMB - Properties - Registration Rights”.




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Risk Factors Relating to Our Merger with Gener8

We may fail to realize the anticipated benefits of the Merger.
On December 20, 2017, the Company, Gener8 Maritime. Inc.,  a corporation organized under the laws of the Republic of the Marshall Islands or Gener8 and Euronav MI Inc., a corporation organized under the laws of the Republic of the Marshall Islands and a wholly-owned subsidiary of the Company entered into an agreement and plan of merger or the Merger Agreement to govern a stock-for-stock merger or the Merger for the entire issued and outstanding share capital of Gener8. The Merger closed in June 2018.
We believe that the Merger will continue to provide benefits to the combined company. However, there is a risk that some or all of the expected benefits of the Merger may fail to materialize, or may not occur within the time periods anticipated. The realization of such benefits may be affected by a number of factors, many of which are beyond our control, including but not limited to the strength or weakness of the economy and competitive factors in the areas where we do business, the effects of competition in the markets in which we operate, and the impact of changes in the laws and regulations regulating the seaborne transportation or refined petroleum products industries or affecting domestic or foreign operations. The challenge of coordinating previously separate businesses makes evaluating our business and future financial prospects difficult. The success of the Merger, including anticipated benefits and cost savings, depends, in part, on the ability to successfully integrate the operations of both companies in a manner that results in various benefits, including, among other things, an expanded market reach and operating efficiencies, and that does not materially disrupt existing relationships nor result in decreased revenues or dividends. The past financial performance of each of us and Gener8 may not be indicative of our future financial performance. Realization of the anticipated benefits in the Merger depends, in part, on the our ability to successfully integrate the two businesses. We devote significant management attention and resources to integrating all of the business practices and support functions. The diversion of management’s attention and any delays or difficulties encountered in connection with the aftermath of the Merger and the coordination of the two companies’ operations could have an adverse effect on the business, financial results, financial condition or our share price. The coordination process may also result in additional and unforeseen expenses in the aftermath of the Merger.
Failure to realize all of the anticipated benefits of the Merger may impact the financial performance of the combined company, the price of our ordinary shares and our ability to pay dividends, which will be at the discretion of its board of directors in accordance with our dividend policy. In addition, even if we do not realize the anticipated benefits of the Merger, we would remain liable for significant transaction costs, including legal, accounting and financial advisory fees. There is continuing risk that there may be resulting disruptions in and uncertainty surrounding our businesses, including impacts on our relationships with our existing and future customers, suppliers and employees, which could have an adverse effect on our business, results of operations and financial condition, regardless in the aftermath of the Merger. In particular, we could potentially lose customers or suppliers, and new customer or supplier contracts could be delayed or decreased. These uncertainties may impair our ability to attract, retain and motivate key personnel in the aftermath of the Merger. In addition, we have expended, and continue to expend, significant management resources, in an effort to successfully integrate or continue to integrate the two companies in the aftermath of the Merger, which are being diverted from our day-to-day operations. In addition, the failure to successfully integrate the two companies in the aftermath of the Merger may result in negative publicity or a negative impression of us in the investment community and may affect our relationships with employees, customers, suppliers, lenders and other partners in the business community.
We have incurred and may continue to incur significant transaction and integration-related costs in connection with the Merger.
We may continue to incur a number of non-recurring costs associated with the Merger and combining Gener8’s operations into our operations. We are subject to significant transaction costs and integration-related fees and costs related to formulating and implementing integration plans, including systems consolidation costs and employment-related costs. We continue to assess the amount of these costs, and additional unanticipated costs may be incurred in the aftermath of the Merger. Although we expect to realize other efficiencies related to the integration of us with Gener8 which may allow us to offset integration-related costs over time, this net benefit may not be achieved in the near term, or at all.

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We are subject to certain financing restrictions and changes in covenants as a result of the Merger.
We have assumed a substantial part of the existing indebtedness of Gener8 as a result of the completion of the Merger, which has imposed additional and substantial operating and financial restrictions on us, beyond those that existed prior to the completion of the Merger, which, together with the resulting debt services obligations, may significantly limit our ability to execute our business strategy, and increase the risk of default under our now existing debt obligations after the completion of the Merger. Our debt agreements generally contain financial covenants, which require us to maintain, among other things, an amount of current assets that, on a consolidated basis, exceeds our current liabilities, which amount of current assets may include undrawn amount of any committed revolving credit facilities and credit lines having a maturity of more than one year; minimum aggregate amounts of cash, cash equivalents and available aggregate undrawn amounts of any committed loan; minimum levels of aggregate cash, minimum ratios of stockholders’ equity to total assets; and a minimum asset coverage ratio. Our credit facilities discussed above also contain restrictions and undertakings which may limit our and our subsidiaries' ability to, among other things effect changes in management of our vessels; transfer or sell or otherwise dispose of all or a substantial portion of our assets; declare and pay dividends, (with respect to each of our joint ventures, no dividend may be distributed before its loan agreement, as applicable, is repaid in full); and incur additional indebtedness.
A violation of any of our financial covenants or operating restrictions contained in our credit facilities may constitute an event of default under our credit facilities, which, unless cured within the grace period set forth under the applicable credit facility, if applicable, or waived or modified by our lenders, provides our lenders with the right to, among other things, require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet, reclassify our indebtedness as current liabilities and accelerate our indebtedness and foreclose their liens on our vessels and the other assets securing the credit facilities, which would impair our ability to continue to conduct our business.
Furthermore, certain of our credit facilities contain a cross-default provision that may be triggered by a default under one of our other credit facilities. A cross-default provision means that a default on one loan would result in a default on certain other loans. Because of the presence of cross-default provisions in certain of our credit facilities, the refusal of any one lender under our credit facilities to grant or extend a waiver could result in certain of our indebtedness being accelerated, even if our other lenders under our credit facilities have waived covenant defaults under the respective credit facilities. If our secured indebtedness is accelerated in full or in part, it would be very difficult in the current financing environment for us to refinance our debt or obtain additional financing and we could lose our vessels and other assets securing our credit facilities if our lenders foreclose their liens, which would adversely affect our ability to conduct our business.
Moreover, in connection with any waivers of or amendments to our credit facilities that we may obtain, our lenders may impose additional operating and financial restrictions on us or modify the terms of our existing credit facilities. These restrictions may further restrict our ability to, among other things, pay dividends, make capital expenditures or incur additional indebtedness, including through the issuance of guarantees. In addition, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, accelerate the amortization schedule for our indebtedness and increase the interest rates they charge us on our outstanding indebtedness.
As a result of the Merger, we assumed $1,035.9 million of the existing indebtedness of Gener8 in connection with the completion of the Merger. Prior to the completion of the Merger, Gener8’s secured credit facilities required it to maintain specified financial ratios and satisfy financial covenants, including ratios and covenants based on the market value of the vessels in its fleet in relation to the indebtedness outstanding.
Because some of the ratios and covenants set minimum values for the vessels in respect of the indebtedness outstanding, including those assumed as a result of the Merger, should the value of our vessels decline in the future for any reason whatsoever, including due to declines in charter rates, we may be required to take action to reduce its debt or to act in a manner contrary to its business objectives to meet any such financial ratios and satisfy any such financial covenants. Additionally, some of the ratios and covenants require us to (i) maintain minimum levels of liquidity and (ii) not exceed the maximum level of leverage specified therein. Events beyond our control, including changes in the economic and business conditions in the shipping markets in which we operate, may affect our ability to comply with these covenants. No assurance can be provided that we will meet our financial or other covenants or that our lenders will waive any failure to do so.

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Additionally, the terms of our indebtedness (including those assumed as a result of the Merger) place certain restrictions on the operations of the obligors thereunder, including restrictions on incurring additional indebtedness and liens, disposal of assets and chartering arrangements. These covenants, along with the financial covenants discussed above, may adversely affect our ability to finance future operations or limit its ability to pursue certain business opportunities or take certain corporate actions. Moreover, in connection with any waivers of or amendments to our credit facilities that we may obtain, our lenders may impose additional operating and financial restrictions on us or modify the terms of our existing credit facilities. These restrictions may further restrict our ability to, among other things, pay dividends, make capital expenditures or incur additional indebtedness, including through the issuance of guarantees. In addition, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, accelerate the amortization schedule for our indebtedness and increase the interest rates they charge us on our outstanding indebtedness. The covenants may also restrict our flexibility in planning for, or reacting to, possible changes in our business and the industry and make it more vulnerable to economic downturns and adverse developments. A breach of any of the covenants in, or our inability to maintain the required financial ratios under, our credit facilities would prevent us from borrowing additional money under our credit facilities and could result in a default thereunder. If a default occurs under certain of our credit facilities, unless cured within the grace period set forth under the applicable credit facility, if applicable, or waived or modified by our lenders, the lenders could elect to declare the issued and outstanding debt, together with accrued interest and other fees, to be immediately due and payable and foreclose on the collateral securing that debt, which could constitute all or substantially all of our assets. Furthermore, our debt agreements contain cross-default provisions, whereby if we default under one of our debt agreements or credit facilities would automatically be an event of default under other debt agreements. Such cross defaults could result in the acceleration of the maturity of our existing debt under these agreements and the lenders thereunder may foreclose upon any collateral securing that debt, including our vessels. In the event of such acceleration or foreclosure, we might not have sufficient funds or other assets to satisfy all of our obligations, which would have a material adverse effect on our business, results of operations and financial condition.
In the aftermath of the Merger, our ability to meet our cash requirements, including our debt service obligations, will be dependent upon our operating performance, which will be subject to general economic and competitive conditions and to financial, business and other factors affecting our operations, many of which are or may be beyond the our control. We cannot provide assurance that our business operations will generate sufficient cash flows from operations and revenue generation to fund these cash requirements and debt service obligations. If our operating results, cash flow or capital resources prove inadequate, we could face substantial liquidity problems and we might be required to dispose of material assets or operations to meet our debt and other obligations, which would have an adverse impact on our financial condition. If we are unable to service our debt, we could be forced to stop, reduce or delay planned expansions and capital expenditures, sell assets, restructure or refinance our debt or seek additional equity capital. We may be unable to take any of these actions on satisfactory terms or in a timely manner or efficient manner, which could result in our entering bankruptcy proceedings. Further, any of these actions may not be sufficient to allow us to service our debt obligations or may have an adverse impact on our business. Our debt agreements may limit our ability to take certain of these actions. Our failure to generate sufficient operating cash flow to pay our debts or to successfully undertake any of these actions could have a material adverse effect on the combined company. In addition, the degree to which we are and may continue to be leveraged as a result of the indebtedness assumed in connection with the Merger or otherwise could materially and adversely affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, debt service requirements or other purposes, could make us more vulnerable to general adverse economic, regulatory, political, government and industry conditions, and could limit our flexibility in planning for, or reacting to, changes and opportunities in the markets in which we compete.
Additional information concerning the risks, uncertainties and assumptions associated with the Merger can be found in the section entitled “Risk Factors” contained in our preliminary joint proxy statement/prospectus on Form F-4 (Registration No. 333-223039), as amended and supplemented, that was initially filed with the SEC on February 14, 2018, and as may be subsequently amended.



35
                                    

                

Risk Factors Relating to an Investment in Our Ordinary Shares
Our share price may be highly volatile and future sales of our ordinary shares could cause the market price of our ordinary shares to decline.
The market price of our ordinary shares 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, fabricated news and other factors, many of which are beyond our control. Since 2008, the stock market has experienced extreme price and volume fluctuations. If the volatility in the market continues or worsens, it could have an adverse effect on the market price of our ordinary shares and impact a potential sale price if holders of our ordinary shares decide to sell their shares.
On December 19, 2018 our Board of Directors authorized a share buyback of up to 2 million shares, within the Belgian legal framework. There is no guarantee that we will repurchase shares at a level anticipated by stockholders or at all, which could reduce returns to our stockholders. Once authorised, decisions to repurchase our common stock will be at the discretion of our Executive Committee, based upon a review of relevant considerations.
We have the option but not the obligation of buying our own shares back should we believe there is a substantial value disconnect between the share price and the real value of the Company. We started buying back shares on December 19 2018 and announced share buybacks on January 2 2019, January 10 2019, January 21 2019, February 13 2019, February 22 2019, March 6 2019, and March 18 2019 with a total of 2,678,129 shares. We may continue to buy back our shares opportunistically. The extent to which we do and the timing of these purchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations.
The Board’s determination to repurchase shares of our common stock will depend upon our profitability and financial condition, contractual restrictions, restrictions imposed by applicable law and other factors that the board deems relevant. Based on an evaluation of these factors, the Board of Directors may determine not to repurchase shares or to repurchase shares at reduced levels compared to historical levels, any or all of which could reduce returns to our stockholders.
Although we have a fixed-dividend policy, we cannot assure you that we will declare or pay any dividends. The tanker industry is volatile and we cannot predict with certainty the amount of cash, if any, that will be available for distribution as dividends in any period.
Our Board of Directors may from time to time, declare and pay cash dividends in accordance with our Articles of Association and applicable Belgian law. The declaration and payment of dividends, if any, will always be subject to the approval of either our Board of Directors (in the case of “interim dividends”) or of the shareholders (in the case of “regular dividends”).
Dividends, if any, will be paid in two installments: first as an interim dividend based on the results of the first 6 months of our fiscal year, then as a balance payment corresponding to the final dividend once the full year results have been audited and presented to our shareholders for approval. The interim dividend payout ratio may typically be more conservative than the yearly payout and will take into account any other form of return of capital done over the same period.
Our Board of Directors will continue to assess the declaration and payment of dividends upon consideration of our financial results and earnings, restrictions in our debt agreements, market prospects, current capital expenditures, commitments, investment opportunities, and the provisions of Belgian law affecting the payment of dividends to shareholders and other factors. We may stop paying dividends at any time and cannot assure you that we will pay any dividends in the future or of the amount of such dividends. For instance, we did not declare or pay any dividends from 2010 until 2014.
In general, under the terms of our debt agreements, we are not permitted to pay dividends if there is or will be as a result of the dividend a default or a breach of a loan covenant. Our credit facilities also contain restrictions and undertakings which may limit our and our subsidiaries' ability to declare and pay dividends, (with respect to each of our joint ventures, no dividend may be distributed before its loan agreement, as applicable, is repaid in full). Please see “Item 5. Operating and Financial Review and Prospects” for more information relating to restrictions on our ability to pay dividends under the terms of the agreements governing our indebtedness. Belgian law generally prohibits the payment of dividends unless net assets on the closing date of the last financial year do not fall beneath the amount of the registered capital and, before the dividend is paid out, 5% of the net profit is allocated to the legal reserve until this legal reserve amounts to 10% of the share capital. No distributions may occur if, as a result of such distribution, our net assets would fall below the sum of (i) the amount of our registered capital, (ii) the amount of such aforementioned legal reserves, and (iii) other reserves which may be required by our Articles of Association or by law, such as the reserves not available for distribution in the event we hold treasury shares. We may not have sufficient surplus in the future to pay dividends and our subsidiaries may not have sufficient funds or surplus to make distributions to us. We can give no assurance that dividends will be paid at a level anticipated by stockholders or at all.

36
                                    

                

In addition, the corporate law of jurisdictions in which our subsidiaries are organized may impose restrictions on the payment or source of dividends under certain circumstances.
Future issuances and sales of our ordinary shares could cause the market price of our ordinary shares to decline.
As of December 31, 2018, our issued (and fully paid up) share capital was $239,147,506.82 which was represented by 220,024,713 shares, and our Board of Directors is authorized to increase share capital in one or several times by a total maximum of $150,000,000 for a period of five years as from June 19, 2015. Issuances and sales of a substantial number of ordinary shares in the public market, or the perception that these issuances or sales could occur, may depress the market price for our ordinary shares. These sales could also impair our ability to raise additional capital through the sale of our equity securities in the future. We intend to issue additional ordinary shares in the future. Our shareholders may incur dilution from any future equity offering.
We are incorporated in Belgium, which provides for different and in some cases more limited shareholder rights than the laws of jurisdictions in the United States.
We are a Belgian company and our corporate affairs are governed by Belgian corporate law. Principles of law relating to such matters as the validity of corporate procedures, the fiduciary duties of management, the dividend payment dates and the rights of shareholders may differ from those that would apply if we were incorporated in a jurisdiction within the United States.
For example, there are no statutory dissenters’ rights under Belgian law with respect to share exchanges, mergers and other similar transactions, and the rights of shareholders of a Belgian company to sue derivatively, on the company’s behalf, are more limited than in the United States.
Civil liabilities based upon the securities and other laws of the United States may not be enforceable in original actions instituted in Belgium or in actions instituted in Belgium to enforce judgments of U.S. courts.
Civil liabilities based upon the securities and other laws of the United States may not be enforceable in original actions instituted in Belgium or in actions instituted in Belgium to enforce judgments of U.S. courts. Actions for the enforcement of judgments of U.S. courts might be successful only if the Belgian court confirms the substantive correctness of the judgment of the U.S. court and is satisfied that:
•
the effect of the enforcement judgment is not manifestly incompatible with Belgian public policy;
•
the judgment did not violate the rights of the defendant;
•
the judgment was not rendered in a matter where the parties transferred rights subject to transfer restrictions with the sole purpose of avoiding the application of the law applicable according to Belgian international private law;
•
the judgment is not subject to further recourse under U.S. law;
•
the judgment is not incompatible with a judgment rendered in Belgium or with a subsequent judgment rendered abroad that might be enforced in Belgium;
•
a claim was not filed outside Belgium after the same claim was filed in Belgium, while the claim filed in Belgium is still pending;
•
the Belgian courts did not have exclusive jurisdiction to rule on the matter;
•
the U.S. court did not accept its jurisdiction solely on the basis of either the nationality of the plaintiff or the location of the disputed goods; and
•
the judgment submitted to the Belgian court is authentic.




37
                                    

                

ITEM 4.    INFORMATION ON THE COMPANY
A.            History and Development of the Company
Euronav NV was incorporated under the laws of Belgium on June 26, 2003 for an indefinite term. Our Company has the legal form of a public limited liability company ( naamloze vennootschap / société anonyme ). Our registered office is located at De Gerlachekaai 20, 2000 Antwerpen, Belgium and our telephone number is +32 3 247 44 11.
Our ordinary shares have traded on Euronext Brussels since December 2004.  In January 2015, we completed our underwritten initial public offering in the United States of 18,699,000 ordinary shares at $12.25 per share, and our ordinary shares commenced trading on the New York Stock Exchange, or NYSE. In March 2015, we completed our offer to exchange unregistered ordinary shares that were previously issued in Belgium (other than ordinary shares owned by our affiliates) for ordinary shares that were registered under the Securities Act of 1933, as amended, or the U.S. Exchange Offer, in which an aggregate of 42,919,647 ordinary shares were validly tendered and exchanged.  Our ordinary shares currently trade on the NYSE and Euronext Brussels under the symbol "EURN."
On December 20, 2017, Euronav NV, Gener8 Maritime. Inc., a corporation organized under the laws of the Republic of the Marshall Islands ("Gener8") and Euronav MI Inc., a corporation organized under the laws of the Republic of the Marshall Islands and a wholly-owned subsidiary of ours specifically set-up for the purpose of the proposed merger, entered into the Merger Agreement to govern the terms of the Merger, which was a stock for stock transaction. or the Merger for the entire issued and outstanding share capital of Gener8.
The Merger closed on June 12, 2018 and Gener8 became our wholly-owned subsidiary following the affirmative vote of Gener8's shareholders. Prior to the Merger Gener8 was a leading U.S.-based provider of international seaborne crude oil transportation services that resulted from a merger between General Maritime Corporation, a well-known tanker owner, and Navig8 Crude Tankers Inc., a company sponsored by the Navig8 Group, an independent vessel pool manager. At the date of the Merger, Gener8 owned a fleet of 29 tankers on the water, consisting of 21 VLCC vessels, six Suezmax vessels, and two LR1 vessels, with an aggregate carrying capacity of approximately 7.4 million deadweight tones or dwt, which included 19 “eco” VLCC newbuildings delivered from 2015 through 2017 equipped with advanced, fuel-saving technology, that were constructed at reputable shipyards.
The Merger created a world leading independent crude tanker operator with 74 large crude tankers focused predominately on the VLCC and Suezmax asset classes and two FSO vessels in joint venture and provides tangible economies of scale via pooling arrangements, procurement opportunities, reduced overhead and enhanced access to capital. Furthermore the combined company offers investors a well-capitalized and more liquid company in the tanker market.
The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, which can be accessed at http://www.sec.gov. Our website address is https://www.euronav.com/en/. The information contained on these websites do not form a part of this annual report.

For information about the development of our fleet, please see Item 5. Operating and Financial Review and Prospects—Fleet Development."

B.            Business Overview
We are a fully-integrated provider of international maritime shipping and offshore services engaged primarily in the transportation and storage of crude oil. As of April 15, 2019, we owned or operated a modern fleet of 74 vessels (including four chartered-in vessels) with an aggregate carrying capacity of approximately 18.9 million deadweight tons, or dwt, consisting of 43 very large crude carriers, or VLCCs, two V-plus, 27 Suezmax vessels, and two floating, storage and offloading vessels, or FSOs (both owned through 50/50 joint ventures).  The average age of our fleet as of April 15, 2019 was approximately 6.6 years for our VLCC fleet and 10.27 years for our Suezmax fleet, as compared to an industry average age as of April 15, 2019 of approximately 9.3 years for the VLCC fleet and 9.4 years for the Suezmax fleet.

38
                                    

                

We currently charter our vessels, non-exclusively, to leading international energy companies, such as North Oil Company, or NOC, (whose shareholders are Qatar Petroleum Oil & Gas Limited and Total E&P Golfe Limited), Total S.A. or Total and Valero or their respective subsidiaries, although there is no guarantee that these companies will continue their relationships with us. We pursue a chartering strategy that seeks an optimal mix of employment of our vessels depending on the fluctuations of freight rates in the market and our own judgment as to the direction of those rates in the future. Our vessels are therefore routinely employed on a combination of spot market voyages, fixed-rate contracts and long-term time charters, which typically include a profit sharing component. We principally employ our VLCCs through the TI Pool, a spot market-oriented pool in which we were a founding member in 2000. As of April 15, 2019, 22 of our vessels were employed directly in the spot market, 42 of our vessels were employed in the TI Pool, 5 of our vessels were employed on long-term charters, of which the average remaining duration is 4 years and 8 months, including five with profit sharing components, and our two FSOs were employed on long-term service contracts. While we believe that our chartering strategy allows us to capitalize  on opportunities in an environment of increasing rates by maximizing our exposure to the spot market, our vessels operating in the spot market may be subject to market downturns to the extent spot market rates decline. At times when the freight market may become more challenging, we will try to timely shift our exposure to more time charter contracts and potentially dispose of some of our assets which should provide us with incremental stable cash flows and stronger utilization rates supporting our business during periods of market weakness. We believe that our chartering strategy and our fleet size management, combined with the leadership of our experienced management team should enable us to capture value during cyclical upswings and to withstand the challenging operating environment such as the one seen in the years from 2010 to 2013 and seen in 2018.
Developments in 2018
On March 26, 2018, the Suezmax Cap Quebec (2018 - 156,600 dwt) was delivered into the Euronav fleet. This vessel was the first of four Ice Class Suezmax vessels progressively starting seven-year contracts with a leading global refinery player from delivery during 2018. When taking delivery of the Cap Quebec, the Company paid USD 44.1 million (including the final instalment).
On April 25, 2018, we took delivery of the Cap Pembroke (2018 - 156,600 dwt) against the payment of the remaining instalments of USD 43.5 million in aggregate. This vessel was the second of four Ice Class Suezmax vessels progressively starting seven-year contracts with a leading global refinery player from delivery during 2018.

On June 8, 2018, we sold the Suezmax Cap Jean (1998 - 146,643 dwt) for USD 10.6 million. The Group recorded a capital gain of approximately USD 10.6 million. The sale of the Cap Jean was part of a fleet rejuvenation program.


On June 12, 2018, we concluded the merger with Gener8. The 60.8 million new shares issued to Gener8 shareholders as consideration for the transaction began trading on the NYSE. At the date of the merger, Gener8 owned a fleet of 29 tankers on the water, consisting of 21 VLCC vessels, 6 Suezmax vessels, and 2 Panamax vessels, with an aggregate carrying capacity of approximately 7.4 million dwt, which includes 19 “eco” VLCC newbuildings delivered from 2015 through 2017 equipped with advanced, fuel-saving technology, that were constructed at highly reputable shipyards.

On June 14, 2018, in conjunction with the merger with Gener8, we sold six VLCCs to International Seaways for a total consideration of USD 434 million which included USD 123 million in cash and USD 311 million in the form of assumption of the outstanding debt related to the vessels. The six vessels were the Gener8 Miltiades (2016 - 301,038 dwt), Gener8 Chiotis (2016 - 300,973 dwt), Gener8 Success (2016 - 300,932 dwt), Gener8 Andriotis (2016 - 301,014 dwt), Gener8 Strength (2015 - 300,960 dwt) and Gener8 Supreme (2016 - 300,933 dwt).

On June 27, 2018 we acquired the V-Plus Seaways Laura Lynn (2003 - 441,561 dwt) from Oceania Tanker Corporation, a subsidiary of International Seaways for USD 32.5 million. Euronav renamed the V-Plus as Oceania and registered it under the Belgian flag. The Seaways Laura Lynn was the only other V-plus in the global tanker fleet -Euronav was also owner of the other one, the TI Europe (2002 - 442,470 dwt), providing the Company with a significant strategic opportunity

On August 8, 2018, we took delivery of the third Suezmax the Cap Port Arthur (2018 - 156,600 dwt) with the fourth and last vessel from Hyundai Heavy Industries due for delivery at the end of August. During the second quarter a total of USD 43.6 million was made in instalment payments towards the construction of the two remaining Suezmax vessels at Hyundai Heavy Industries with an outstanding balance of USD 86.6 million at the end of the second quarter.

On August 22, 2018, we sold the Suezmax Cap Romuald (1998 - 146,640 dwt) for USD 10.6 million. The Group recorded a capital gain of approximately USD 9 million. The sale of the Cap Romuald was part of a fleet rejuvenation program.


39
                                    

                

On August 29, 2018 we took delivery of the Cap Corpus Christi (2018 - 156,600 dwt) against the payment of the remaining instalments of USD 43.6 million in aggregate. All of the four Suezmax vessels delivered during 2018 were accompanied by seven-year time charter contracts.

On October 31, 2018 we entered into a sale agreement regarding the Suezmax vessel Felicity (2009- 157,667 dwt) with a global supplier and operator of offshore floating platforms. A capital loss on the sale of approximately USD 3.0 million was recorded in Q4 2018. The cash generated on this transaction after repayment of debt was USD 34.7 million. The vessel was delivered to her new owners and will be converted into an FPSO and therefore left the worldwide trading fleet in 2019. The sale - the eighth vessel successfully introduced by Euronav into an offshore project - demonstrated Euronav’s capability to generate value for its stakeholders and reflected its reputation for providing high quality operational tonnage for the offshore sector.

On November 29, 2018 we sold the LR1 vessel Genmar Companion (2004 - 72,768 dwt). A capital loss on the sale of approximately USD 0.2 million has been recorded in Q4 2018. The cash generated on this transaction after repayment of debt was USD 6.3 million. The LR1 Genmar Companion joined the Euronav fleet as part of the Gener8 merger in June
2018 and was always a non-core asset to the Group.

For information about acquisitions and dispositions of our vessels during 2017, please see Item. 5. Operating and Financial Review and Prospects-Fleet Development.



Our Fleet
Set forth below is certain information regarding our fleet as of April 15, 2019.
Vessel Name
 
Type
 
Deadweight Tons (dwt)
 
Year Built
 
Shipyard (1)
 
Charterer
 
Employment
 
Charter Expiry Date (2)
Owned Vessels














Europe

V-Plus

441,561

2002


Daewoo



Spot

N/A
Oceania

V-Plus

441,561

2003


Daewoo



Spot

N/A
Aegean

VLCC

299,999

2016


Hyundai



TI Pool

N/A
Alboran

VLCC

298,991

2016


Hyundai



TI Pool

N/A
Alex

VLCC

299,445

2016


Hyundai



TI Pool

N/A
Alice

VLCC

299,320

2016


Hyundai



TI Pool

N/A
Alsace

VLCC

320,350

2012


Samsung



TI Pool

N/A
Amundsen

VLCC

298,991

2017


Hyundai



TI Pool

N/A
Andaman

VLCC

299,392

2016


Hyundai



TI Pool

N/A
Anne

VLCC

299,533

2016


Hyundai



TI Pool

N/A
Antigone

VLCC

299,421

2015


Hyundai



TI Pool

N/A
Aquitaine

VLCC

298,767

2017


Hyundai



TI Pool

N/A
Arafura

VLCC

298,991

2016


Hyundai



TI Pool

N/A
Aral

VLCC

299,999

2016


Hyundai



TI Pool

N/A
Ardeche
 
VLCC
 
298,642
 
2017

 
Hyundai
 
 
 
TI Pool
 
N/A
Daishan
 
VLCC
 
306,005
 
2007

 
Daewoo
 
 
 
TI Pool
 
N/A
Dalma
 
VLCC
 
306,543
 
2007

 
Daewoo
 
 
 
TI Pool
 
N/A
Desirade
 
VLCC
 
299,999
 
2016

 
Daewoo
 
 
 
TI Pool
 
N/A
Dia
 
VLCC
 
299,999
 
2015

 
Daewoo
 
 
 
TI Pool
 
N/A
Dominica
 
VLCC
 
299,999
 
2015

 
Daewoo
 
 
 
TI Pool
 
N/A
Donoussa
 
VLCC
 
299,999
 
2016

 
Daewoo
 
 
 
TI Pool
 
N/A
Drenec
 
VLCC
 
299,999
 
2016

 
Daewoo
 
 
 
TI Pool
 
N/A
Hakata
 
VLCC
 
302,550
 
2010

 
Universal
 
Total
 
Time Charter (3)
 
Sep-19
Hakone
 
VLCC
 
302,624
 
2010

 
Universal
 
 
 
TI Pool
 
N/A
Hatteras
 
VLCC
 
297,363
 
2017

 
Hanjin Subic
 
 
 
TI Pool
 
N/A

40
                                    

                

Heron
 
VLCC
 
297,363
 
2017

 
Hanjin Subic
 
 
 
TI Pool
 
N/A
Hirado
 
VLCC
 
302,550
 
2011

 
Universal
 
 
 
TI Pool
 
N/A
Hojo
 
VLCC
 
302,965
 
2013

 
JMU
 
 
 
TI Pool
 
N/A
Ilma
 
VLCC
 
314,000
 
2012

 
Hyundai
 
 
 
TI Pool
 
N/A
Ingrid
 
VLCC
 
314,000
 
2012

 
Hyundai
 
 
 
TI Pool
 
N/A
Iris
 
VLCC
 
314,000
 
2012

 
Hyundai
 
 
 
TI Pool
 
N/A
Nautica
 
VLCC
 
307,284
 
2008

 
Dalian
 
 
 
TI Pool
 
N/A
Nectar
 
VLCC
 
307,284
 
2008

 
Dalian
 
 
 
TI Pool
 
N/A
Newton
 
VLCC
 
307,284
 
2009

 
Dalian
 
 
 
TI Pool
 
N/A
Noble
 
VLCC
 
307,284
 
2008

 
Dalian
 
 
 
TI Pool
 
N/A
Sandra
 
VLCC
 
323,527
 
2011

 
STX
 
 
 
TI Pool
 
N/A
Sara
 
VLCC
 
323,183
 
2011

 
STX
 
 
 
TI Pool
 
N/A
Simone
 
VLCC
 
313,988
 
2012

 
STX
 
 
 
TI Pool
 
N/A
Sonia
 
VLCC
 
314,000
 
2012

 
STX
 
 
 
TI Pool
 
N/A
TI Hellas
 
VLCC
 
319,254
 
2005

 
Hyundai
 
 
 
TI Pool
 
N/A
V.K. Eddie
 
VLCC
 
305,261
 
2005

 
Daewoo
 
 
 
TI Pool
 
N/A
Cap Charles
 
Suezmax
 
158,881
 
2006

 
Samsung
 
 
 
Spot
 
N/A
Cap Corpus Christi
 
Suezmax
 
156,600
 
2018

 
Hyundai
 
Valero
 
Time Charter (3)
 
Oct-25
Cap Diamant
 
Suezmax
 
160,044
 
2001

 
Hyundai
 
 
 
Spot
 
N/A
Cap Felix
 
Suezmax
 
158,765
 
2008

 
Samsung
 
 
 
Spot
 
N/A
Cap Guillaume
 
Suezmax
 
158,889
 
2006
 
Samsung
 
 
 
Spot
 
N/A
Cap Lara
 
Suezmax
 
158,826
 
2007

 
Samsung
 
 
 
Spot
 
N/A
Cap Leon
 
Suezmax
 
159,049
 
2003

 
Samsung
 
 
 
Spot
 
N/A
Cap Pembroke
 
Suezmax
 
156,600
 
2018

 
Hyundai
 
Valero
 
Time Charter (3)
 
Jun-25
Cap Philippe
 
Suezmax
 
158,920
 
2006

 
Samsung
 
 
 
Spot
 
N/A
Cap Pierre
 
Suezmax
 
159,083
 
2004

 
Samsung
 
 
 
Spot
 
N/A
Cap Port Arthur
 
Suezmax
 
156,600
 
2018

 
Hyundai
 
Valero
 
Time Charter (3)
 
Oct-25
Cap Quebec
 
Suezmax
 
156,600
 
2018

 
Hyundai
 
Valero
 
Time Charter (3)
 
Jun-25
Cap Theodora
 
Suezmax
 
158,819
 
2008

 
Samsung
 
 
 
Spot
 
N/A
Cap Victor
 
Suezmax
 
158,853
 
2007

 
Samsung
 
 
 
Spot
 
N/A
Captain Michael
 
Suezmax
 
157,648
 
2012

 
Samsung
 
 
 
Spot
 
N/A
Filikon
 
Suezmax
 
149,989
 
2002

 
Universal
 
 
 
Spot
 
N/A
Finesse
 
Suezmax
 
149,994
 
2003

 
Universal
 
 
 
Spot
 
N/A
Fraternity
 
Suezmax
 
157,714
 
2009

 
Samsung
 
 
 
Spot
 
N/A
Gener8 George T
 
Suezmax
 
150,205
 
2007

 
Universal
 
 
 
Spot
 
N/A
Gener8 Spartiate
 
Suezmax
 
165,000
 
2011

 
Hyundai
 
 
 
Spot
 
N/A
Maria
 
Suezmax
 
157,523
 
2012

 
Samsung
 
 
 
Spot
 
N/A
Sapphira
 
Suezmax
 
150,205
 
2008

 
Universal
 
 
 
Spot
 
N/A
Selena
 
Suezmax
 
150,205

 
2007

 
Universal
 
 
 
Spot
 
N/A
Sofia
 
Suezmax
 
165,000
 
2010

 
Hyundai
 
 
 
Spot
 
N/A
Statia
 
Suezmax
 
150,205

 
2006

 
Universal
 
 
 
Spot
 
N/A
Genmar Compatriot
 
LR1
 
72,700
 
2004

 
Dalian
 
 
 
Spot
 
N/A
Total DWT—Owned Vessels
 
 
 
16,776,187
 
 
 
 
 
 
 
 
 
 

41
                                    

                

Vessel Name
 
Type
 
Deadweight
Tons (dwt)
 
Year
Built

 
Shipyard (1)
 
Charterer
 
Employment
 
Chartered-In Expiry Date
Chartered-In Vessels
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Chartered-In Vessels
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nucleus
 
VLCC
 
307,284
 
2007

 
Dalian
 
 
 
TI Pool
 
Dec-21
Nautilus
 
VLCC
 
307,284
 
2006

 
Dalian
 
 
 
TI Pool
 
Dec-21
Navarin
 
VLCC
 
307,284
 
2007

 
Dalian
 
 
 
TI Pool
 
Dec-21
Neptun
 
VLCC
 
307,284
 
2007

 
Dalian
 
 
 
TI Pool
 
Dec-21
Total DWT Chartered-In Vessels
 
 
 
1,229,136
 
 
 
 
 
 
 
 
 
 
FSO Vessels
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FSO Africa (4)
 
FSO
 
442,000
 
2002

 
Daewoo
 
NOC
 
Service Contract
 
Sep-22
FSO Asia (4)
 
FSO
 
442,000
 
2002

 
Daewoo
 
NOC
 
Service Contract
 
Jul-22
Total DWT FSO Vessels
 
442,000
 
 
 
 
 
 
 
 
 
 
 
(1)
As used in this report, "Samsung" refers to Samsung Heavy Industries Co., Ltd, "Hyundai" refers to Hyundai Heavy Industries Co., Ltd., "Universal" refers to Universal Shipbuilding Corporation, "Hitachi refers to Hitachi Zosen Corporation, "Daewoo" refers to Daewoo Shipbuilding and Marine Engineering S.A., "JMU" refers to Japan Marine United Corp., Ariake Shipyard, Japan, "Dalian" refers to Dalian Shipbuilding Industry Co. Ltd., "STX" refers to STX Offshore and Shipbuilding Co. Ltd., and "Hanjin" refers to Hanjin Heavy Industry Co. Ltd.
(2)
Assumes no exercise by the charterer of any option to extend (if applicable).
(3)
Profit sharing component under time charter contracts.
(4)
Vessels in which we hold a 50% ownership interest and are only accounted for the share of DWT corresponding to such ownership interest.

Employment of Our Fleet
Our tanker fleet is employed worldwide through a combination of primarily spot market voyage fixtures, including through the TI Pool, fixed-rate contracts and time charters. We deploy our two FSOs as floating storage units under fixed-rate service contracts in the offshore services sector. For the year 2019, our fleet is currently expected to have approximately 25,467 available days for hire, of which, as of April 15, 2019, 91.68% are expected to be available to be employed on the spot market, either directly or through the TI Pool, 6.89% are expected to be available to be employed on fixed time charters with a profit sharing element and 1.43% are expected to be available to be employed on fixed time charters without a profit sharing element.
Spot Market
A spot market voyage charter is a contract to carry a specific cargo from a load port to a discharge port for an agreed freight per ton of cargo or a specified total amount. Under spot market voyage charters, we pay voyage expenses such as port, canal and bunker costs. Spot charter rates have historically been volatile and fluctuate due to seasonal changes, as well as general supply and demand dynamics in the crude oil marine transportation sector. Although the revenue we generate in the spot market is less predictable, we believe our exposure to this market provides us with the opportunity to capture better profit margins during periods when vessel demand exceeds supply leading to improvements in tanker charter rates. As of April 15, 2019, we employed 24 of our vessels directly in the spot market.

Tankers International Pool
Euronav principally employs and commercially manages its VLCCs through the TI Pool, a leading spot market-oriented VLCC pool in which other shipowners with vessels of similar size and quality participate along with us. We participated in the formation of the TI Pool in 2000 to allow it and other TI Pool participants, consisting of unaffiliated third-party owners and operators of similarly sized vessels, or Pool Participants, to gain economies of scale, obtain increased cargo, flow of information, logistical efficiency and greater vessel utilization. As of April 15, 2019, the TI Pool was comprised of 63 vessels, including 42 of Euronav’s VLCCs.

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By pooling its VLCCs with those of other shipowners, Euronav is able to derive synergies, including (i) the potential for increased vessel utilization by securing backhaul voyages for its vessels, and (ii) the performance of the Contracts of Affreightment, or COAs. Backhaul voyages involve the transportation of cargo on part of the return leg of a voyage. COAs, which can involve backhauls, may generate higher effective time charter equivalent, or TCE, revenues than otherwise might be obtainable directly in the spot market. Additionally, by operating a large number of vessels as an integrated transportation system, the TI Pool offers customers greater flexibility and an additional level of service while achieving scheduling efficiencies. The TI Pool is an owner-focused pool that does not charge commissions to its members, a practice that differs from that of other commercial pools; rather, the TI Pool aggregates gross charter revenues it receives and deducts voyage expenses and administrative costs before distributing net revenues to the pool members in accordance with their allocated pool points, which are based on each vessel's speed, fuel consumption and cargo-carrying capacity. We believe this results in lower TI Pool membership costs, compared to other similarly sized pools. In 2018, TI Pool membership costs were approximately $744 per vessel per day (with each vessel receiving its proportional share of pool membership expenses, excluding pool credit line costs).
In 2017, the corporate structure of the TI Pool was rationalized. This new structure allowed the TI Pool to arrange for a credit line financing. This credit line is used to fund the working capital in the ordinary course of TI Pool's business of operating a pool of tankers vessels, including but not limited to the purchase of bunker fuel, the payment of expenses relating to specific voyages and supplies of pool vessels, commissions payable on fixtures, port costs, expenses for hull and propeller cleaning, canal costs, insurance costs for the account of the pool, and insurance and fees payable for towage of vessels.
Tankers (UK) Agencies Ltd., of which Euronav owns 50% of the outstanding voting shares, is the manager of the pool and is also responsible for the commercial management of the Pool Participants, including negotiating and entering into vessel employment agreements on behalf of the Pool Participants. Technical management of the pooled vessels is performed by each shipowner, who bears the operating costs for its vessels.
Time Charters
Time charters provide us with a fixed and stable cash flow for a known period of time. Time charters may help Euronav mitigate, in part, its exposure to the spot market, which tends to be volatile in nature, being seasonal and generally weaker in the second and third quarters of the year due to refinery shutdowns and related maintenance during the warmer summer months. In the future, Euronav may when the cycle matures or otherwise opportunistically employ more of its vessels under time charter contracts as the available rates for time charters improve. Euronav may also enter into time-charter contracts with profit-sharing arrangements, which it believes will enable Euronav to benefit if the spot market increases above a base charter rate as calculated either by sharing sub charter profits of the charterer or by reference to a market index and in accordance with a formula provided in the applicable charter contract. As of April 15, 2019, Euronav employed six of its vessels on fixed-rate time charters with an average remaining duration of four years and eight months, including five with profit-sharing components based on a percentage of the excess between the prevailing applicable market rate and the base charter rate.
FSOs and Offshore Service Contracts
We currently deploy our two FSOs as floating storage units under service contracts with North Oil Company, in the offshore services sector. As our tanker vessels age, we may seek to extend their useful lives by employing such vessels on long-term offshore projects at rates higher than may otherwise be achieved in the time charter market, or sell such vessels to third-party owners in the offshore conversion market at a premium.
Technical and Commercial Management of our Vessels
A majority of Euronav’s vessels are technically managed in-house through our wholly-owned subsidiaries, Euronav Ship Management SAS, Euronav SAS and Euronav Ship Management (Hellas) Ltd. Its in-house technical management services include providing technical expertise necessary for all vessel operations, supervising the maintenance, upkeep and general efficiency of vessels, arranging and supervising newbuilding construction, drydocking, repairs and alterations, and developing, implementing, certifying and maintaining a safety management system.
In addition to Euronav’s in-house fully integrated technical management, Euronav utilizes the services of experienced third party managers. The independent technical managers typically have specific teams dedicated to Euronav’s vessels and are supervised by an experienced in-house oversight team. Euronav currently contracts Northern Marine Management Limited (part of Northern Marine Group), Wallem Shipmanagement Limited and Anglo Eastern group of companies (through some of their wholly-owned subsidiaries) The services provided by Euronav’s third party technical management are very similar to Euronav’s own technical management and involves part or all of the day-to-day management of vessels.

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 Euronav’s VLCCs are commercially managed by Tankers International while operating in the TI Pool. All of the participants in the TI Pool collectively pay a pool management fee equivalent to the costs of running the pool business, excluding voyage expenses, interest adjustments and administration costs, including legal, banking and other professional fees. The net charge is the pool administration cost, which is apportioned to each vessel by calendar days. During the year ended December 31, 2018, Euronav paid an aggregate of $8.1 million for the commercial management of Euronav’s vessels operating in the TI Pool.
 Euronav’s Suezmax vessels trading in the spot market are commercially managed by Euronav (UK) Agencies Ltd., our London commercial department. Commercial management services include securing employment for Euronav’s vessels.
 Euronav’s time chartered vessels are managed by Euronav’s operations department based in Antwerp.
Principal Executive Offices
Our principal executive headquarters are located at De Gerlachekaai 20, 2000 Antwerpen, Belgium. Our telephone number at that address is 011-32-3-247-4411. We also have offices located in the United Kingdom, France, Greece, Hong Kong, Geneva and Singapore. Our website is www.euronav.com.
Competition
The operation of tanker vessels and transportation of crude and petroleum products is extremely competitive. We compete with other tanker owners, including major oil companies as well as independent tanker companies. Competition arises primarily from other tanker owners, including major oil companies as well as independent tanker companies, some of whom have substantially greater resources than we do. We compete for charters on the basis of price, vessel location, size, age and condition of the vessel, as well as on our reputation as an operator. Competition is also affected by the availability of other size vessels to compete in the trades in which we engage. We currently operate all of our vessels in the spot market, either directly or through the TI Pool, or on time charter. For our vessels that operate in the TI Pool, Tankers UK Agencies Ltd. (TUKA), the pool manager, is responsible for their commercial management, including marketing, chartering, operating and purchasing bunker (fuel oil) for the vessels. From time to time, we may also arrange our time charters and voyage charters in the spot market through the use of brokers, who negotiate the terms of the charters based on market conditions.
Seasonality
We operate our vessels in markets that have historically exhibited seasonal variations in demand and, as a result, charter rates. Peaks in tanker demand quite often precede seasonal oil consumption peaks, as refiners and suppliers anticipate consumer demand. Seasonal peaks in oil demand can broadly be classified into two main categories: (1) increased demand prior to Northern Hemisphere winters as heating oil consumption increases and (2) increased demand for gasoline prior to the summer driving season in the United States. Unpredictable weather patterns and variations in oil reserves disrupt tanker scheduling. This seasonality may result in quarter-to-quarter volatility in our operating results, as many of our vessels trade in the spot market. Seasonal variations in tanker demand will affect any spot market related rates that we may receive.


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Industry and Market Conditions

THE INTERNATIONAL OIL TANKER SHIPPING INDUSTRY
All the information and data presented in this section, including the analysis of the international oil tanker shipping industry has been provided by Drewry. Drewry has advised us that the statistical and graphical information contained herein is drawn from its database and other sources. In connection therewith, Drewry has advised that: (i) certain information in Drewry’s database is derived from estimates or subjective judgments; (ii) the information in the databases of other maritime data collection agencies may differ from the information in Drewry’s database; (iii) while Drewry has taken reasonable care in the compilation of the statistical and graphical information and believes it to be accurate and correct, data compilation is subject to limited audit and validation procedures. The Company believes and acts as though the industry and market data presented in this section is reliable.
Overview
The maritime transport industry is fundamental to international trade, as it is the only practicable and economic way of transporting large volumes of many essential commodities and finished goods around the world. In turn, the oil tanker shipping industry represents a vital link in the global energy supply chain, in which larger vessels such as VLCCs and Suezmax tankers play an important role, given their capability to carry large quantities of crude oil.
The oil tanker shipping industry is divided between crude tankers that carry either crude oil or residual fuel oil and product tankers that carry refined petroleum products. The following review specifically focuses on the crude sector. Revenue for an oil tanker shipping company is primarily driven by freight rates paid for transportation capacity. Freight is paid for the movement of cargo between a load port and a discharge port. The cost of moving the ship from a discharge port to the next load port is not directly compensated by the charterers in the freight payment but is an expense of the owners if not on time charter.
The tanker freight market remained buoyant throughout 2015 and the first half of 2016 on account of favorable supply/demand dynamics. However, in the second half of 2016 rising newbuilding deliveries outpaced the growth in tanker demand and hence there was downward pressure on freight rates. A deluge of newbuilding in 2017 aggravated the situation further and rates fell. For example, the average VLCC spot rate on the Arabian Gulf (AG)-Japan route was $ 22,617 per day in 2017 compared with $ 42,183 per day in 2016. Oil tanker freight rates declined in the second half of 2016 and 2017 due to a number of factors, including:
i.
A surge in newbuilding deliveries that outpaced the growth in tanker demand in 2016 as well as 2017,
ii.
Oil production cuts announced by OPEC and higher compliance by the member countries; and
iii.
Reduced stockpiling activities by major Asian economies.
Freight rates for crude carriers remained unusually weak during the first quarter of 2018 because of supply side pressures. Inventory drawdown-on the back of OPEC production cuts and high newbuild deliveries aggravated the situation further for shipowners. Freight rates across vessel class averaged well below breakeven rates for the first nine months of 2018. Suppressed vessel earnings promoted demolitions and 106 crude tankers with aggregate capacity of 18.6 million dwt were sold to scrapyards in 2018. Sluggish fleet growth-on account of record high demolitions and steady increase in demand for tankers-has improved supply-demand dynamics to an extent in the latter months of 2018. Vessel earnings surged substantially in the last four months of 2018, and in December, VLCCs and Suezmaxes were reported fixed at $ 57,500 per day on Arabian Gulf (AG)-Japan routes and $ 32,300 per day on West Africa-United States routes, respectively. Asset prices followed a rising trend over the last twelve months and in January 2019, five-year-old VLCC and Suezmax tankers were valued at $ 66 and $ 45 million respectively. Nevertheless, it is worth noting that five-year old VLCC and Suezmax tankers were changing hands at prices nearly 25% below their long-term average.
In broad terms, the volume of oil trade which is seaborne is primarily dependent on global and regional economic growth, and to a lesser extent other factors such as changes in regional oil prices. Overall, there is a close relationship between changes in the level of economic activity and changes in the volume of oil moved by sea. With continued strong GDP growth in Asia, seaborne oil trade to emerging Asian markets has been growing significantly. Chinese oil consumption grew at a compound average growth rate (CAGR) of 5.2% from 7.9 million barrels per day (mbpd) in 2008 to 13.1 mbpd in 2018. Oil demand in OECD Europe and North America has also risen in the last four years primarily due to lower oil prices and higher industrial activity on the back of improving general economic conditions. In 2018, total seaborne trade in crude oil was equivalent to 2.1 billion tons.


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A2018WORLDGDPANDCRUDEA01.JPG
Changes in regional oil consumption, as well as a shift in global refinery capacity from the developed to the developing world, is also translating into growing seaborne oil trade distances. For example, a VLCC’s voyage from West Africa to the U.S. Gulf takes 40 days, but a trip from West Africa to China (a trade which is expanding) takes 65 days and a trip from the U.S. Gulf to Far East (a key trade route with growing U.S. crude export) takes nearly 100 days. The increase in oil trade distances, coupled with increases in world oil demand has had a positive impact on tanker demand in ton miles (crude and products), which has increased from 11.1 to 13.1 billion ton miles in the period from 2008 to 2018.
Supply in the tanker sector, as measured by its dwt cargo carrying capacity, is primarily influenced by the rate of deliveries of newbuilds from the shipyards in line with their orderbook, as well as the rate of removals from the fleet via vessel scrapping or conversion. After a period of rapid expansion, supply growth in the tanker sector moderated in 2013-14 and the overall tanker fleet grew by just 0.6% in 2014, and a relatively modest 2.7% in 2015. However, in 2016 the crude oil tanker fleet expanded by 5.8% due to a high level of newbuilding deliveries during the year and lower levels of scrapping. A further round of newbuilding deliveries took place in 2017 and the world tanker fleet grew by another 4.8% despite an increase in scrapping in second half of the year. Record high demolitions kept a check on fleet growth, and global crude tanker fleet expanded marginally by 0.3% in 2018 despite the delivery of 101 newbuilds with an aggregate capacity of 20.3 million dwt.
In terms of ordering activity, new tanker orders in the period from 2010 to 2014 were limited due to the lack of available bank financing and a challenged rate environment, which contributed to the total crude tanker orderbook declining to 13.9% of the existing global tanker fleet capacity as of December 2014, compared with nearly 50% of the existing fleet at its recent peak in 2008. However, new ordering picked up in the VLCC and Suezmax sectors in late 2014 and 2015 because of the continued strength in the tanker freight market and the exemption from compliance to tier III NOx emission norms for vessels ordered before January 1, 2016. Ordering activity fell substantially in 2016 and only 39 crude tankers were ordered compared with 244 in 2015. However, ordering activity picked up again in 2017 with 93 new contracts placed for crude tankers during the year. Weak newbuilding prices were one of the main factors stimulating new ordering. Ordering activity took a backseat in a depressed tanker market, and a total of 73 crude tankers were ordered in 2018. In January 2019, the crude tanker orderbook was equivalent to 11.7% of the existing fleet.
World Oil Demand and Production
In 2018, oil accounted for around one-third of global energy consumption. With the exception of 2008 and 2009, world oil consumption has increased steadily over the past two decades, as a result of increasing global economic activity and industrial production. In recent years, growth in oil demand has been largely driven by developing countries in Asia and growing Chinese consumption, but some developed economies also recorded increases in demand between 2014 and 2018. In 2018, world oil demand increased to 99.1 mbpd, which represents a 1.3% increase from 2017 and 16.0% higher than the recent low recorded in 2009 following the global financial crisis of 2008-09.

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A2018WORLDOILCONSUMPTIONA02.JPG
Seasonal trends also affect world oil consumption and, consequently, oil tanker demand. While trends in consumption vary with the specific season each year, peaks in tanker demand often precede seasonal consumption peaks, as refiners and suppliers anticipate consumer demand. Seasonal peaks in oil demand can be classified broadly into two main categories: increased demand prior to Northern Hemisphere winters as heating oil consumption increases and increased demand for gasoline prior to the summer driving season in the U.S.
Global trends in oil production have naturally followed the growth in oil consumption, allowing for the fact that changes in the level of oil inventories also play an integral role in determining production levels and tie in with the seasonal peaks in demand. Changes in world crude oil production by region in the period from 2008 to 2018 are shown in the table below.

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A2018WORLDOILPRODUCTION.JPG
At the beginning of 2018, proven global oil reserves totaled 1,697 billion barrels, about 45 times the current rates of annual production. These reserves tend to be located in regions far from the major consuming countries separated by large expanses of water, and this geographical barrier creates the demand for crude tanker shipping. However, the development of light tight oil (LTO) or shale oil reserves in the U.S. had a negative impact on the volume of U.S. crude oil imports as well as demand for crude tankers from 2004 to 2014. However, rising U.S. crude export on long-haul routes to China and India is good news for shipowners as every additional barrel exported from the country will open avenues for equal imports as the U.S. is a net importer of crude oil.
New technologies such as horizontal drilling and hydraulic fracturing have triggered a shale oil revolution in the U.S., and in 2013, for the first time in the previous two decades, the U.S. produced more oil than it imported. In view of the rising surplus in oil production, in 2015 the U.S. Congress lifted a 40 year-old ban on crude oil exports that was put in place after the Arab oil embargo in 1973. Thereby, allowing U.S. oil producers access to international markets.
The first shipments of U.S. crude oil were sent to Europe immediately after the lifting of ban, and since then other destinations have followed. The U.S. exported 0.5 mbpd of crude oil in 2015 and 2016. However, 2017 marked a very important development for the U.S. crude producers as the country exported crude to every major importer including China, India, South Korea and several European countries. In October 2017 U.S. crude exports surpassed 2 mbpd and on average the country’s crude exports more than doubled in 2017 to 1.1 mbpd. The U.S. crude exports jumped further to 1.9 mbpd in 2018 on the back of rising domestic crude oil production and nearly flat domestic demand. However, this is still well below the exports of major exporters such as Saudi Arabia, Russia and other Middle Eastern exporters. Nevertheless, the U.S. Gulf to Asia could be a key trading route with growing U.S. exports.
In the meantime, much of the oil from West Africa and the Caribbean that was historically imported by the U.S. is now shipped to China and other Asian economies, which has a positive impact on tanker demand due to increased ton miles given the longer distances the oil needs to travel. Production and exports from the Middle East (largely from OPEC suppliers) and West Africa have historically had a significant impact on the demand for tanker capacity, and, consequently, on tanker charter hire rates due to the long distances between these supply sources and demand centers. Oil exports from short-haul regions, such as the North Sea, are significantly closer to ports used by the primary consumers of such exports, which results in shorter average voyages.
Overall, the volume of crude oil moved by sea each year reflects the underlying changes in world oil consumption and production. Driven by increased world oil demand and production, especially in developing countries, seaborne trade in crude oil in 2018 is provisionally estimated at 2.1 billion tons or 66.7% of all seaborne oil trade (crude oil and refined petroleum products). The chart below illustrates changes in global seaborne movements of crude oil between 1983 and 2018.

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A2018SEABORNETRADEDEVA01.JPG
World seaborne oil trade is the result of geographical imbalances between areas of oil consumption and production. Historically, certain developed economies have acted as the primary drivers of these seaborne oil trade patterns. The regional growth rates in oil consumption shown in the chart below indicate that the developing world is driving recent trends in oil demand and trade. In Asia, the Middle East and Africa, oil consumption during the period from 2008 to 2018 grew at annual rates in excess of 1.5%, and, at an annual growth rate of 5.2% in the case of China. Strong demand for oil in these regions is driving both increased volume of seaborne oil trades and increased voyage distances, as more oil is being transported on long-haul routes.
A2018REGIONALOILCONSUMPTIONG.JPG
Furthermore, consumption on a per capita basis remains low in many parts of the developing world, and as many of these regions have insufficient domestic supplies, rising demand for oil will have to be satisfied by increased imports.

49
                                    

                

A2018OILCONSPERCAPITAA01.JPG

In the case of China and India, seaborne crude oil imports have risen significantly in the last decade to meet an increasing demand for energy. During the period from 2008 to 2018, Chinese crude oil imports increased from 178.9 to 461.4 million tons and Indian imports increased from 125.8 to 220.4 million tons. Conversely, Japanese imports declined from 202.4 to 148.9 million tons over the same period. In the U.S., crude oil imports declined between 2007 and 2015, but in 2016 the trend was reversed and average U.S. crude imports increased by 0.5 mbpd because of declining shale output. In 2017, the U.S. imports inched up by another 0.4% to reach 7.9 mbpd on the back of rising crude oil consumption, whereas in 2018 the U.S. crude imports declined 1.4% to touch 7.8 mbpd due to growing domestic production.
A2018ASIANCOUNTRIES.JPG
A vital factor affecting both the volume and pattern of world oil trades is the shift in global refinery capacity from the developed to the developing world, which is increasing the distances from oil production sources to refineries. The distribution of refinery throughput by region in the period from 2008 to 2018 is shown in the following table.


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A2018OILTROUGHPUT.JPG
Changes in refinery throughput are largely driven by changes in the location of capacity. Capacity increases are taking place mostly in the developing world, especially in Asia. In response to growing domestic demand coupled with export ambitions, Chinese refinery throughput has grown at a faster rate than that of any other global region in the last decade, with refinery throughput in India, the Middle East and other emerging economies following a similar pattern. The shift in refinery capacity is likely to continue as refinery development plans are heavily focused on areas such as Asia and the Middle East and few new refineries are planned for North America and Europe.
A2018OILREFINERYGROWTH.JPG


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As a result of changes in trade patterns, as well as shifts in refinery locations, average voyage distances in the crude sector have increased. In the period from 2008 to 2018, ton-mile demand in the crude tanker sector grew from 8.8 to 9.9 billion ton miles. The table below shows changes in tanker demand expressed in ton miles, which is measured as the product of the volume of oil carried (measured in metric tons) multiplied by the distance over which it is carried (measured in miles).

A2018CRUDETANKERDEMAND.JPG
Another aspect which has impacted on crude tanker demand in recent years has been the use of tankers for floating storage. In the closing weeks of 2014 and the opening weeks of 2015, commodity traders hired VLCCs in the expectation that profits could be made by storing oil at sea to create a contango, that is, where the current or spot price for the oil was below the price of oil for delivery in the futures market. As a result, several fixtures for long term storage were reported by oil majors and commodity traders for periods up to 12 months in late 2014 and first half of 2015. Floating crude oil storage reached a high of 197 million barrels in May 2015 and thereafter it declined because of a narrowing of the contango and shrinking arbitrage in crude oil futures.
The use of large tankers for offshore storage rebounded somewhat in 2016 on account of logistical considerations, marketing issues and inventory drawdown. Similar patterns were seen when floating storage peaked in June 2017, when more than 200 million barrels were reported to be stored in crude tankers. Floating storage declined gradually in the second half of 2017, production cuts pursued by OPEC, Russia and its allies encouraged inventory drawdown and floating storage dropped further in 2018. As of January 31, 2019, around 80 million barrels of oil were reported to be stored on crude oil tankers at sea.

Crude Tanker Fleet Overview
The world crude tanker fleet is generally classified into three major types of vessel categories, based on carrying capacity. The main crude tanker vessel types are:
•
     VLCCs , with an oil cargo carrying capacity in excess of 200,000 dwt (typically 300,000 to 320,000 dwt or approximately two million barrels). VLCCs generally trade on long-haul routes from the Middle East and West Africa to Asia, Europe and the U.S. Gulf or the Caribbean. Tankers in excess of 320,000 dwt are known as Ultra Large Crude Carriers (ULCCs), although for the purposes of this report they are included within the VLCC category.
•
     Suezmax tankers, with an oil cargo carrying capacity of approximately 120,000 to 200,000 dwt (typically 150,000 to 160,000 dwt or approximately one million barrels). Suezmax tankers are engaged in a range of crude oil trades across a number of major loading zones. Within the Suezmax sector, there are a number of product and shuttle tankers (shuttle tankers are specialized ships built to transport crude oil and condensates from offshore oil field installations to onshore terminals and refineries and are often referred to as ‘floating pipelines’), which do not participate in the crude oil trades.
•
     Aframax tankers, with an oil cargo carrying capacity of approximately 80,000 to 120,000 dwt (or approximately 500,000 barrels). Aframax tankers are employed in shorter regional trades, mainly in North West Europe, the Caribbean, the Mediterranean and Asia.
There are also a relatively small number of ships below 80,000 dwt which operate in crude oil trades, but many operate in cabotage type trades and therefore do not form part of the open market. For this reason, the following analysis of supply concentrates on the VLCC, Suezmax and Aframax tonnage. As of January 31, 2019, the crude tanker fleet consisted of 1,927 vessels with a combined capacity of 383.1 million dwt.

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A2018CRUDEFLEET.JPG

 
The table below shows principal routes for crude oil tankers and where these vessels are deployed.
A2018TANKERDEPLOYMENT.JPG
VLCCs are built to carry cargo parcels of two million barrels, and Suezmax tankers are built to carry cargo parcels of one million barrels, which are the most commonly traded parcel sizes in the crude oil trading markets. Their carrying capacities make VLCCs and Suezmax tankers the most appropriate asset class globally for long and medium haul trades. While traditional VLCC and Suezmax trading routes have typically originated in the Middle East and the Atlantic Basin, increased Asian demand for crude oil has opened up new trading routes for both classes of vessel. The map below shows the main VLCC and Suezmax tanker seaborne trade routes.

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A2018PRINCIPALVLCCSUEZTRA1.JPG

VLCC/Suezmax Fleet Development
In 2018, the world crude tanker fleet expanded 0.3% compared with 4.8% in 2017. A total of 20.3 million dwt of newbuild deliveries were added to the crude fleet in 2018, while scrapping activity surged to a record high due to a depressed freight market in the first nine months of 2018. A total of 18.3 million dwt was sent for demolition in 2018 compared with 8.5 million dwt in 2017.
The chart below indicates the volume of new orders placed in the VLCC and Suezmax sectors in the period from 2008 to 2018. Very few new vessel orders were placed in both sectors during 2011, 2012 and 2013, although the pace of new ordering in the VLCC sector increased in the closing months of 2013 and newbuild orders for VLCCs as well as Suezmax tankers were considerably higher in 2014 and 2015. Tight supply-demand dynamics in tanker market, firm freight rates and exemption from compliance to Tier III NOx emission norms for vessels ordered before January 1, 2016, were the reasons for high new ordering activity in 2015 and a total of 62 VLCCs and 51 Suezmaxes contracts were placed during the year. New ordering activity then declined in 2016, with only 14 VLCCs ordered during the year compared with 62 during 2015. Ordering activity picked up again in 2017 as ship-owners took advantage of low newbuild prices to embark on fleet renewal. However, newbuilding activity took a back seat in the depressed freight market, and 39 VLCCs and 12 Suezmaxes were ordered in 2018 compared with 48 VLCCs and 19 Suezmaxes in 2017.

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A2018NEWORDERS.JPG

In the last few years, delays in new vessel deliveries often referred to as ‘slippage’, have become a regular feature of the market. Slippage is the result of a combination of several factors, including cancellations of orders, issues in obtaining vessel financing, owners seeking to defer delivery during weak markets, shipyards quoting over-optimistic delivery times and in some cases, shipyards experiencing financial difficulty. A number of Chinese yards, including yards at which crude tankers are currently on order are experiencing financial problems which have led to both cancellations and delays in deliveries. New order cancellations have been a feature of most shipping markets during the market downturn. For obvious reasons, shipyards are reluctant to openly report such events, making the tracking of the true size of the orderbook at any given point in time difficult. The difference between actual and scheduled deliveries reflects the fact that order books are often overstated. Slippage has affected both the VLCC and Suezmax sectors. The table below indicates the relationship between scheduled and actual deliveries for both asset classes in the period from 2011 to 2018. Since slippage has occurred in recent years, it is not unreasonable to expect that some of the VLCC and Suezmax tankers currently on order will not be delivered on time.
A2018SCHEDULEDUNSCHEDULED.JPG

In 2018, VLCC and Suezmax deliveries amounted to 12.1 and 4.4 million dwt respectively, compared with 15.2 and 7.8 million dwt respectively in 2017. As a result of these deliveries and record scrapping during the year, the VLCC and Suezmax fleets expanded 1.5% and 3.5% respectively in 2018.

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At its peak in 2008, the VLCC and Suezmax tanker orderbooks were each equivalent to 50% of the existing fleets, which led to high levels of new deliveries in both sectors between 2009 and 2012. The orderbook as a percentage of the existing fleet declined in the period from 2010 to 2013, due to low levels of new ordering. However, with the upturn in new ordering activity in 2014 and 2015, the VLCC and Suezmax orderbook to fleet ratios rose to 19.4% and 24.7% respectively in December 2015. As a result of lower levels of new ordering and elevated deliveries in the last three years, the orderbooks for VLCC and Suezmax vessels as of January 31, 2019 were equivalent to 13.2% and 8.6% of the existing fleets, respectively.
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As of January 31, 2019, the total crude tanker orderbook comprised of 217 vessels with an aggregate capacity of 45.4 million dwt. The orderbook for Suezmax tankers was 45 vessels representing 7.0 million dwt (excluding shuttle tankers), while the orderbook for VLCC was 98 vessels representing 30.3 million dwt.

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Tanker supply is also affected by vessel scrapping or demolition. As an oil tanker ages, vessel owners often conclude that it is more economical to scrap a vessel that has exhausted its useful life than to upgrade the vessel to maintain its ’in-class’ status. Often, particularly when tankers reach approximately 25 years of age, the costs of conducting the class survey and performing required repairs become economically inefficient. In recent years, most oil tankers that have been scrapped were between 20 and 25 years of age.
In addition to vessel age, scrapping activity is influenced by freight markets. During periods of high freight rates, demolitions will decline and the opposite will occur when freight rates are low. The chart below indicates that vessel scrapping was much higher from 2010 to 2014 than in the preceding five years. Firm freight rates in 2015 and 2016 also encouraged shipowners to defer the scrapping of older tonnage, and demolitions in these two years were substantially lower compared with that during the period from 2010 to 2014. However, weak freight rates in the third quarter of 2017 accelerated demolitions and a total of 58 crude tankers totaling 8.9 million dwt were sold to scrapyards in 2017. Scrapping activity touched a record high as a weak freight market forced shipowners to phase out vessels below 20 years of age. Consequently, 108 crude carriers aggregating 18.6 million dwt were demolished in 2018.
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Two other important factors are likely to affect crude tanker supply in the future. The first is the requirement to retrofit ballast water management systems (BWMS) to existing vessels. In February 2004, the IMO adopted the International Convention for the Control and Management of Ships’ Ballast Water and Sediments. The IMO Ballast Water Management (BWM) Convention contains an environmentally protective numeric standard for the treatment of ship's ballast water before it is discharged. This standard, detailed in Regulation ‘D-2’ of the BWM Convention, sets out the numbers of organisms allowed in specific volumes of treated discharge water. The IMO ‘D-2’ standard is also the standard that has been adopted by the U.S. Coast Guard’s ballast water regulations and the U.S. EPA’s Vessel General Permit. The BWM Convention also contains an implementation schedule for the installation of IMO member state type approved treatment systems in existing ships and in new vessels, requirements for the development of vessel ballast water management plans, requirements for the safe removal of sediments from ballast tanks, and guidelines for the testing and type approval of ballast water treatment technologies. In July 2017, the IMO extended the regulatory requirement of compliance to the BWM Convention from September 8, 2017 to September 8, 2019. Vessels trading internationally will have to comply with the BWM Convention upon their next special survey after that date. For a VLCC tanker, the retrofit could cost as much as $3.0 million per vessel, including labor. Expenditure of this kind will be another factor impacting the decision to scrap older vessels once the BWM convention comes into force in September 2019.
The second factor that is likely to impact future vessel supply is the drive to introduce low sulfur fuels. For many years heavy fuel oil (HFO) has been the main fuel of the shipping industry. It is relatively inexpensive and widely available, but it is ‘dirty’ from an environmental point of view.
The sulfur content of HFO is extremely high and it is the reason that maritime shipping accounts for 8% of global emissions of sulfur dioxide (SO2), an significant source of acid rain as well as respiratory diseases. In some port cities, such as Hong Kong, shipping is the largest single source of SO2 emissions, as well as emissions of particulate matter (PM), which are directly tied to the sulfur content of the fuel.
The IMO, the governing body of international shipping, has made a concerted effort to diversify the industry away from HFO into cleaner fuels with less harmful effects on the environment and human health. Effective in 2015, ships operating within the Emission Control Areas (ECAs) covering the Economic Exclusive Zone of North America, the Baltic Sea, the North Sea, and the English Channel are required to use marine gas oil with allowable sulfur content up to 0.1%. The IMO’s 2020 regulations stipulate that from January 1, 2020, ships sailing outside ECAs will switch to an alternate fuel with permitted sulfur content up to 0.5%. This will create openings for a variety of new fuels, or major capital expenditure for costly scrubbers to be retrofitted on existing ships and, as such, the regulation will be another factor hastening the demise of older ships. Within the context of the wider market, increased vessel scrapping is a positive development as it helps to counterbalance new ship deliveries and moderates the fleet growth.
The implementation of the new bunker fuel regulation, which places a cap on the sulfur content in marine fuel, will be a blessing in disguise for shipowners as it will keep vessel demolitions high until 2021. The price of compliant fuel will be higher because of limited availability at least until 2021. Operating old and inefficient ships will be uneconomical without fitting high-cost scrubbers. Shipowners will prefer to phase out vintage vessels over going the scrubber way, which will further improve supply-demand dynamics of the tanker market. Additionally, refiners will enjoy a higher margin because of the price differential between low sulfur compliant fuel and HFO. Accordingly, refinery runs are expected to increase to meet the growing demand of compliant marine fuel once IMO’s 2020 regulation is in place. Higher refinery runs will create demand for additional crude imports by refiners, which will lead to higher seaborne trade and greater ton-mile demand for tankers.

The Crude Oil Tanker Freight Market
Types of Charter
Oil tankers are employed in the market through a number of different chartering options, described below.
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A bareboat charter involves the use of a vessel usually over longer periods of up to several years. All voyage related costs, including vessel fuel, or bunkers, and port dues as well as all vessel operating expenses, such as day-to-day operations, maintenance, crewing and insurance, transfer to the charterer’s account. The owner of the vessel receives monthly charter hire payments on a per day basis and is responsible only for the payment of capital costs related to the vessel.
•
A time charter involves the use of the vessel, either for a number of months or years or for a trip between specific delivery and redelivery positions, known as a trip charter. The charterer pays all voyage related costs. The owner of the vessel receives monthly charter hire payments on a per day basis and is responsible for the payment of all vessel operating expenses and capital costs of the vessel.

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•
A single or spot voyage charter involves the carriage of a specific amount and type of cargo on a load port to discharge port basis, subject to various cargo handling terms. Most of these charters are of a single or spot voyage nature. The cost of repositioning the ship to load the next cargo falls outside the charter and is at the cost and discretion of the owner. The owner of the vessel receives one payment derived by multiplying the tons of cargo loaded on board by the agreed upon freight rate expressed on a per cargo ton basis. The owner is responsible for the payment of all expenses including voyage, operating and capital costs of the vessel.
•
A contract of affreightment , or COA , relates to the carriage of multiple cargoes over the same route and enables the COA holder to nominate different ships to perform individual voyages. This arrangement constitutes a number of voyage charters to carry a specified amount of cargo during the term of the COA, which usually spans a number of years. All of the ship’s operating, voyage and capital costs are borne by the shipowner. The freight rate is normally agreed on a per cargo ton basis.
  Tanker Freight Rates
Worldscale is the tanker industry’s standard reference for calculating freight rates. Worldscale is used because it provides the flexibility required for the oil trade. Oil is a fairly homogenous commodity as it does not vary significantly in quality and it is relatively easy to transport by a variety of methods. These attributes, combined with the volatility of the world oil markets, means that an oil cargo may be bought and sold many times while at sea and therefore, the cargo owner requires great flexibility in its choice of discharge options. If tanker fixtures were priced in the same way as dry cargo fixtures, this would involve the shipowner calculating separate individual freights for a wide variety of discharge points. Worldscale provides a set of nominal rates designed to provide roughly the same daily income irrespective of discharge point.
Time charter equivalent (TCE) is the measurement that describes the earnings potential of any spot market voyage based on the quoted Worldscale rate. As described above, the Worldscale rate is set and can then be converted into dollars per cargo ton. A voyage calculation is then performed which removes all expenses (port costs, bunkers and commission) from the gross revenue, resulting in a net revenue which is then divided by the total voyage days, which includes the days from discharge of the prior cargo until discharge of the cargo for which the freight is paid (at sea and/or in port), to give a daily TCE rate.
The supply and demand for tanker capacity influences tanker charter hire rates and vessel values. In general, time charter rates are less volatile than spot rates as they reflect the fact that the vessel is fixed for a longer period of time. In the spot market, rates will reflect the immediate underlying conditions in vessel supply and demand and are thus more prone to volatility. Small changes in tanker utilization have historically led to relatively large fluctuations in tanker charter rates for VLCCs, with more moderate price volatility in the Suezmax, Aframax and Panamax markets and less volatility in the Handy market, as compared to the tanker market as a whole. The chart below illustrates monthly changes in TCE rates for VLCC and Suezmax tankers during the period from January 2008 to January 2019.
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After a weak phase between 2009 and the first half of 2014, tanker freight rates started rising in the second half of 2014, the main stimulus being the fall in oil prices and rising oil consumption. In addition, key oil-importing countries such as India and China started building Strategic Petroleum Reserves (SPRs).
In the last quarter of 2015, VLCC spot rates surged, benefiting from seasonal demand and low growth in the global crude tanker fleet. However, a wave of newbuilding deliveries in 2016 outpaced demand, and average TCE rates in 2016 were around 40% lower than in 2015. A spate of newbuilding deliveries in 2017 aggravated the situation further and average TCE rates dropped by another 45% in 2017. The situation worsened further and TCE rates were below breakeven rates for the first nine months of 2018. However, vessel earnings improved in the later months of the year and TCE rates for VLCCs on the Arabian Gulf-Japan route averaged at about $ 21,500 per day in 2018, which is nearly 5% lower than the rates realized in 2017.
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In the tanker market, independent shipowners have two principal employment options - either the spot or time charter markets or a combination of both. How tankers are deployed varies from operator to operator, and is also influenced by the market conditions. In a buoyant market, the companies that prefer to deploy vessels on the spot market will gain more as they will benefit from the rise in freight rates. Broadly speaking, a shipowner with an operating strategy, which is focused on the time charter market, will experience a more stable income stream and will be relatively insulated against the volatility in spot rates.
Newbuilding Prices
Global shipbuilding is concentrated in South Korea, China and Japan. This concentration is the result of economies of scale, construction techniques and the prohibitive costs of building ships in other parts of the world. Collectively, these three countries account for about 90% of the global shipbuilding market.
Vessels constructed at shipyards are of varying size and technical sophistication. Dry bulk carriers generally require less technical know-how to construct, while oil tankers, container vessels and LNG carriers require technically advanced manufacturing processes.
The actual construction of a vessel can take place in 9 to 12 months and can be partitioned into five stages: contract signing, steel cutting, keel laying, launching and delivery. The amount of time between signing a newbuilding contract and the date of delivery is usually at least 16 to 20 months, but in times of high shipbuilding demand, it can extend to two to three years.
Newbuilding prices for tankers of all sizes rose steadily between 2004 and mid-2008. This was due to a number of factors, including high levels of new ordering, a shortage in newbuilding capacity during a period of high charter rates, and increased shipbuilders’ costs as a result of strengthening steel prices and the weakening U.S. dollar. Prices weakened in 2009 as a result of a downturn in new ordering and remained weak until the second half of 2013, when they slowly started to rise.
Newbuild prices increased by an average of 10% across vessel class in 2014, but they declined marginally in 2015 because of weaker steel prices and spare capacity at shipyards on account of negligible activity in other sectors of maritime industry. Average newbuilding prices for VLCCs in 2015 dropped 2.4% year on year, while for Suezmax tankers, prices were flat between 2014 and 2015. Spare capacity at shipyards, coupled with low ordering in 2016, led to further decline of 10% to 12% in newbuilding prices of crude tankers. Newbuild prices remained stable throughout 2017. However, asset value data for the last twelve months reflects a steady increase in newbuild prices primarily on the back of optimism about a recovery in the tanker market. As of January 2019, indicative VLCC and Suezmax newbuild prices were estimated at $ 93m and $ 61m, respectively.
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Second-hand Prices
Second-hand prices are generally influenced by potential vessel earnings, which in turn are influenced by trends in the supply of and demand for shipping capacity. The second-hand vessel prices follow the prevailing freight rates and they provide a better assessment of the existing supply - demand dynamics in the market. Vessel values are also dependent on other factors including the age of the vessel. Prices for young vessels, those around five-years old or under are also influenced by newbuilding prices. Prices for old vessels, those in excess of 20 years of age and near the end of their useful economic lives, are swayed by the value of scrap steel. In addition, values for younger vessels tend to fluctuate less on a percentage basis than values for older vessels. This is attributed to the finite useful economic life of older vessels that makes the price of younger vessels less sensitive to freight rates in the short term.
Vessel values are determined on a daily basis in the sale and purchase (S&P) market, where vessels are sold and bought through specialized sale and purchase brokers who regularly report these transactions to participants in the seaborne transportation industry. The S&P market for oil tankers is transparent and quite liquid with a large number of vessels changing hands on a regular basis.
The chart below illustrates the movements of prices for second-hand (five-year old) oil tankers between 2008 and 2019. After remaining range bound between 2010 and 2013, second-hand vessel prices started recovering in 2014 and 2015, but a sharp decline in earning capabilities of vessels in 2016 reversed the trend and second-hand prices plunged 25-30% during the year. However, second-hand prices remained stable for much of 2017 and started to move up slowly from the beginning of 2018 due to increased demand for modern fuel-efficient vessels in the S&P market. Nevertheless, second-hand prices of crude tankers are well below the last peak recorded in 2008. As of January 2019, five-year old VLCC and Suezmax vessels were changing hands at $ 66m and $ 45m, respectively.
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OVERVIEW OF THE OFFSHORE OIL AND GAS INDUSTRY
All the information and data in this prospectus about the offshore oil industry has been provided by Energy Maritime Associates (EMA), an independent strategic planning and consulting firm focused on the marine and offshore sectors. [EMA has advised that the statistical and graphical information contained herein is drawn from its database and other sources. In connection therewith, EMA has advised that: (a) certain information in EMA’s database is derived from estimates or subjective judgments; (b) the information in the databases of other maritime data collection agencies may differ from the information in EMA’s database; (c) while EMA has taken reasonable care in the compilation of the statistical and graphical information and believes it to be accurate and correct, data compilation is subject to limited audit and validation procedures.]

Brief History of the Offshore Industry

Over the past 20 years global oil demand has grown at an average annual rate of 1.2%. With the exception of two years during the global financial crisis in 2008 and 2009, oil demand has increased year after year during this period. The Energy Information Administration (EIA) forecasts world oil production will grow to 113 million barrels per day (b/d) by 2040.

The offshore oil and gas industry can generally be defined as the extraction and production of oil and gas offshore. From a more nuanced perspective, it is a highly technical industry with significant risks, but whose rewards are high. Unlike on-shore developments, where drilling and processing equipment be constructed onsite, often with access to existing infrastructure, offshore developments have additional engineering and logistical requirements in designing, transporting, installing and operating facilities in remote offshore environments. Because of this, each production unit is unique and designed for the specific field’s geological and environmental characteristics including hydrocarbon specifications, reservoir requirements (water/gas/chemical injection), well/subsea configuration, water depth, and weather conditions (above and below the water).
    
The water depth of offshore developments has increased dramatically since its start from piers extended from shore in just a few meters of water. In 1947, Kerr-McGee drilled the first well beyond the sight of land. This well was in only 5.5 meters of water, but was 17 kilometers off the Louisiana coast. Offshore developments have continued to move further from land and into increasingly deeper waters using fixed platforms that extended from the seabed to the surface.

Floating Production and Storage (or FPS) and Floating, Production, Storage and Offloading unit (or FPSO) units emerged in the 1970s. Since that time, FPS units have been installed in increasing water depths, with the deepest unit now operating in 2,900 meters of water. Water depths are currently defined as shallow (less than 1,000 meters), deepwater (between 1,000 meters and 1,500 meters), and ultra-deepwater (greater than 1,500 meters). Units installed before 2000 were almost all shallow water. Since 2000, 45% of units have been installed in deepwater including 20% in ultra-deepwater. For units currently on order, 40% are in deepwater, including 50% in ultra-deepwater. Other types of FPS units include Spar, Tension-Leg Platform (TLP), and Semi-submersible (Semi), which are well suited to deepwater. For liquefying gas and then converting it back to gas, Floating Liquefied Natural Gas (FLNG) and Floating Storage Regas Unit (FSRU) can be used. Mobile Offshore Production Units (MOPU), and Floating Storage Offloading Units (FSO) are popular for shallow water developments.

The geographical range of the FPS industry has also changed over the years. For the first few decades of industry activity, projects were concentrated in the Gulf of Mexico and the North Sea. However, with discoveries of new hydrocarbon basins, the location of offshore developments expanded to include most parts of the world, with Brazil, West Africa, and Southeast Asia now leading the way.


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Along with increasing water depth, the size and complexity of these offshore developments has also grown, which in turn has increased the size and complexity of the FPS units. Project development cycles have increased in time, complexity, and cost. In particular, the time between initial discovery and starting production is now five to ten years. However, over the past few years there has been a concerted effort to reduce field development costs by reducing the number of interfaces and re-using standardized designs as much as possible. It remains to be seen how sustainable and lasting these changes will be.

Contract Awards and Orderbook

Approval of these projects depends largely on the oil price expectation at the time and the related production potential associated with the specific project. As a result, the orders for FPS units generally follow the price of oil. However, oil price is not the only factor. Development costs also play a major role in determining the economic viability of a project. After the price of Brent crude dropped to $34 per barrel in 2008, only 10 FPS units were awarded in 2009. As the price of Brent crude recovered to over $100 per barrel, 25-33 FPS units were awarded each year from 2010 to 2014. Following the sharp decline in oil prices, FPS orders dropped to 15 units in 2015 and 17 in 2016. With the oil price recovery, by 2017 there were 27 awards, ten more than the previous year and back to the level before the oil price crash. In 2018 there was a sharp drop in the number of FSRU awards, due to excess number of speculative units already on order. However, the number of FPSO awards increased to 11 units, returning to levels not seen since 2014.


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Currently Installed Units

As of December 2018, there are 297 FPS systems in service worldwide comprised of FPSOs (59%) of the current total, Production Semis (13%), TLPs (9%), Production Spars (7%), FSRUs (7%), Production Barges (3%), and FLNGs (1%). This does not include 37 production units and three floating storage/offloading units that are available for re-use. Another 98 floating storage/offloading units (without production capability) are in service.

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Global Distribution of Installed Units by Type:

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Markets

The top five regions for floating production systems are Southeast Asia (21%), Brazil (18%), Africa (17%), Gulf of Mexico or GOM (14%), and Northern Europe or NE (13%). The type of systems varies widely from region to region - FSOs are the dominant type in Southeast Asia or SEA due to the relatively shallow water depths and lack of infrastructure. In this type of environment, a fixed production platform and FSO is often the most economic development option.

The current order backlog consists of 49 production floaters, six FSOs (3 Oil and 3 LNG) and four Mobile Offshore Production Units, or MOPUs. Within the backlog, 29 units are utilizing purpose-built hulls and 20 units are based on converted hulls. Of the production floaters being built, 24 are owned by field operators, 25 by leasing contractors.

Since 1997, the production floater order backlog has ranged from a low of 17 units in 1999 to a peak of 70 units in the first half of 2013. Within this period, there have been multiple cycles: a downturn in 1998 and 1999 followed by an upturn from 2000 to 2002 of 17 to 39 units, relative stability in 2003 and 2004, an upturn from 2005 to 2007 from 35 to 67 units followed by a downturn from 2008 to 2009 down to 32 units, an upturn between 2010 and 2013 to 70 units, and a gradual decline to near 50 units by the end of 2016.

The leading destinations for the oil FSOs currently on order are Northern Europe, Southeast Asia, and China.
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Most Attractive Growth Regions

Between 2023 and 2028, Brazil and West Africa are expected to continue to be the most attractive areas for offshore projects and present ample investment opportunities according to respondents of EMA’s 2019 industry sentiment survey. As of December 2018, these two regions account for 33% (75 out of 226) potential floating production projects in the planning process. Other industry participants believe that GOM-Mexico and South America (excluding Brazil) present the next largest growth opportunities globally. New shallow and deepwater projects requiring FPSOs and FSOs are expected to increase dramatically following reforms in Mexico that allow foreign investment. Guyana is rapidly becoming a prime destination, with at least five FPSOs planned by ExxonMobil and other exploration activity underway.


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The FSO Market

FSOs provide field storage and offloading in a variety of situations. FSOs are primarily used in conjunction with fixed platforms, MOPUs and production floaters (Semis, TLPs, Spars) to provide offshore field storage of oil and condensate. They are also used as offshore storage/export facilities for onshore production fields and as storage/blending/transshipment terminals for crude oil or refined products. Most FSOs store oil, although there are a few FSOs that store liquefied natural gas (LNG) or liquefied petroleum gas (LPG).

FSOs range from simple tankers with few modifications to purpose built and extensively modified tankers with significant additional equipment at a total cost ranging between $250 and $300 million. Oil storage capacity on FSOs varies from 60,000 barrels to 3 million barrels. FSO Asia and the FSO Africa , which are co-owned by Euronav, are among the largest and most complex FSOs in operation. Water depth ranges from 15 meters to 380 meters with the exception of an FSO located in Brazil’s Marlim Sul field (1,180 meters). There is no inherent limitation on water depth for FSOs.

Most FSOs currently in operation are older single-hull tankers modified for storage/offloading use. Over 60% of the FSOs now operating are at least 20 years old, with almost 30% over 30 years old. Production continues on many of these fields, therefore requiring life extension or replacement of these older hulls. Around 40% of the FSOs in service are Aframax or Suezmax-size (600,000 to 1 million barrels). VLCC or ULCC size units (up to 3 million barrels) account for another 40%. The remaining 20% of FSOs is comprised of smaller units.

Approximately 50% of FSOs in service are positioned in Southeast Asia. Around another 15% are in West Africa. The others are spread over the Middle East, India, Northern Europe, Mediterranean, Brazil, and elsewhere.

Large storage capacity and ability to be moored in almost any water depth makes FSOs ideal for areas without pipeline infrastructure and where the production platform has no storage capabilities (fixed platforms, MOPU, Spar, TLP, Semi-submersible platform). FSOs do not have or have limited process topsides, which make them relatively simple to convert from old tankers, as compared to an FPSO. FSOs can be relocated to other fields and some have also later been converted to FPSOs.

The Key Components of an FSO

Unlike other FPS systems, the hull is the primary component of an FSO. Topsides are normally simple and feature primarily accommodation, helicopter landing facilities, crude metering equipment, and sometimes power generation. However some FSOs, including the FSO Asia and the FSO Africa , which are co-owned by Euronav, have more sophisticated topsides (which are described below). Mooring systems are the same as for an FPSO: spread-mooring or turret-moored (internal and external). In addition, some simple storage units are moored by their own anchor or alongside a jetty. In benign environments, an FSO can be moored to a Catenary Anchor Leg Mooring buoy (soft mooring), where the buoy is fixed to the seabed and attached to the FSO by mooring ropes.


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Some FSOs, such as FSO Asia and FSO Africa , include a small part of the production process, particularly water separation/treatment and chemical injection. For example, after initial processing on the platform, the FSO Asia and FSO Africa may provide additional processing of the platform fluids and separate the water from the crude oil. The oil and water are usually heated, accelerating the separation of the two organic compounds. Once separated, oil is transferred to separate storage cargo tanks and then offloaded to export vessels. Water is treated, purified and returned to the underwater source reservoir or directly to the sea.

Trends in FSO orders

52 orders for FSOs have been placed over the past ten years, an average of 5.2 annually. While the majority of FSOs were converted from oil tankers, approximately 25% of these units were purpose-built as FSOs. This is in line with the currently installed fleet profile.

Forecast Summary

EMA is tracking 27 potential projects in the planning stage that may require an FSO. The number of FSO projects in the planning pipeline is up slightly from last year. In 2013 there were 29 FSO projects visible. FSO projects can typically be developed more quickly than other FPS developments and therefore there are a number of projects to be awarded in the next five years that are not yet visible.

The prospects for the FSO sector remain good, supported by the number of visible projects in the planning stage as well as the low development costs for shallow water fields. Utilization of jack-up drilling rigs has begun to increase, but rates are expected to remain low for some time due to competition. In Southeast Asia, the most popular development option is an FSO, in conjunction with a fixed platform or MOPU.

The vast majority of FSO orders will continue to go to Southeast Asian countries including Thailand, Vietnam, Indonesia, and Malaysia, but there has been increased activity in the North Sea and Mediterranean as well. Mexico is also a large potential market for FSO solutions, which would be ideal for many shallow water developments.

From 2019 to 2023, converted oil tankers will remain the dominant choice for FSOs. Newbuilt units will be used for some projects in the North Sea as well as for condensate FSOs on gas fields. We expect between 12 to 25 conversion and 3 to 6 newbuilding orders over the next five years. In addition, we expect 5 to 9 FSO orders to be filled by redeployed units. Currently there are 26 idle FPSOs and 3 idle FSOs. Another 20 units that could potentially be redeployed may come available over the next five years.

Between $2.0 and $4.1 billion is expected to be spent on FSO orders over the next five years, with the mid-case being $3.0 billion. Around 60% will be spent on conversions, 20% on newbuildings, and 20% on redeployments. The purpose-built units will cost in the range of $125 to $200 million. Converted units will cost an average of around $100 million. Capital cost for redeployed units would depend on the value assigned to the existing asset, but should be lower than a converted unit. Where the capex falls in this range depends on the hull size, design life and mooring/ offloading system needed.
    
In the past, the majority of vessels chosen for conversion were between 20 and 25 years old. However, this trend is changing as companies increasingly scrutinize the quality and hull fatigue of the units earmarked as conversion candidates. Some recent FPSO conversion projects have selected newbuilt intercepts or units as young as 5 years old.

FSO conversion work is being carried out in Chinese yards, but some of the more complex FSO projects will continue to be performed in Singapore and Malaysia. Most newbuilt units have been constructed by the Chinese and Korean yards. However Sembcorp shipyard in Singapore was awarded a contract in 2015 for a high spec unit destined for the UK’s Culzean field.


Competition

Competition in the FSO market includes tanker owners, specialized FSO/FPSO contractors, and engineering/construction companies in the floating production sector. Tanker owners tend to compete for projects which require less modification and investment. Companies such as Teekay Offshore Partners L.P., Knutsen NYK Offshore Tankers AS, Malaysia International Shipping Corporation Berhad, and Omni Offshore Terminals Pte Ltd target more complex FSO projects with higher specifications and client requirements. FPSO contractors such as MODEC Inc, SBM Offshore N.V., and BW Offshore Limited had competed in the FSO market in the past, but are now primarily focused on large FPSO projects.


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Most clients conduct a detailed pre-qualification screening before accepting proposals. Pre-qualification requirements include: FSO conversion and operation experience, health, safety, environment systems and procedures, access to tanker for conversion, and financial resources.

Contract Structure

As part of the overall offshore field development, most FSOs are leased on long-term (5 to 15 years), fixed rate service contracts (normally structured as either a time charter or a bareboat contract). The FSO is essential to the field production as oil is exported via the FSO. Typically, the FSO contract has a fixed period as well as additional extension periods (at the charterer’s option) depending on the projected life of the development project. The FSO is designed to remain offshore for the duration of the contact, as opposed to conventional tankers, which have scheduled drydocking repairs every 2 to 3 years. Depending on tax treatment and local regulations, some oil companies elect to purchase the FSO rather than lease it, particularly when the unit is expected to remain on site for over 20 years. However, there have been FSO lease contracts for 20 or even 25 years.


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Environmental and Other Regulations on Tankers and FSO's
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 expense, including vessel modifications (where applicable) 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 or USCG, harbor master 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 our vessels.
Increasing environmental concerns have created a demand for vessels that conform to 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 United States and international regulations. We believe that the operation of our vessels is in full 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 had adopted “MARPOL”, the International Convention for the Safety of Life at Sea of 1974 or “SOLAS Convention”, and the International Convention on Load Lines of 1966 or the “LL Convention”. MARPOL establishes structural and operational 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 tankers, among other vessels, and is broken into six Annexes, each of which regulates a different source of pollution. Annex I relates to prevention of pollution by oil; 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 prevention of air pollution from ships. 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.
Air Emissions
In September of 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 vessels, and the shipboard incineration (from incinerators installed after January 1, 2000) of certain substances (such as polychlorinated biphenyls, or PCBs) are also prohibited.

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 onboard vessels. On October 27, 2016, 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, vessels will be required to obtain delivery notes and International Air Pollution Prevention or “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 vessels were adopted and will take effect March 1, 2020. These regulations subject ocean-going vessels to stringent emissions controls, and may cause us to incur substantial costs.

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Sulfur content standards are even stricter within certain “Emission Control Areas,” or ECAs. As of January 1, 2015, vessels 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. In addition several Chinese ports have established a similar system. Ocean-going vessels in these areas will be subject to stringent emission controls and may cause us to incur additional costs. 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 vessels that operate in the North American and U.S. Caribbean Sea ECAs designed for the control of NOx produced by vessels 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 vessels 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.
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 or “VIDA”, which was signed into law on December 4, 2018 and will replace the 2013 Vessel General Permit or “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 or “NISA”, such as mid-ocean ballast 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 VGP 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 or “NOI”, or retention of a PARI form and submission of annual reports. 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.
As determined at the MEPC 70, the new Regulation 22A of MARPOL Annex VI became effective as of March 1, 2018 and requires vessels 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 vessels, as discussed further below.
As of January 1, 2013, MARPOL made mandatory certain measures relating to energy efficiency for vessels. All vessels are now required to develop and implement Ship Energy Efficiency Management Plans (“SEEMPS”), and new vessels must be designed in compliance with minimum energy efficiency levels per capacity mile as defined by the Energy Efficiency Design Index or “EEDI”. Under these measures, by 2025, all new vessels 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 addresses issues related to the safe manning of vessels and emergency preparedness, training and drills.  The Convention of Limitation of Liability for Maritime Claims or the “LLMC” sets limitations of liability for a loss of life or personal injury claim or a property claim against vessel owners. We believe that our vessels are in full compliance with SOLAS and LLMC standards.


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Under Chapter IX of the SOLAS Convention, introduces the International Safety Management Code for the Safe Operation of Ships and for Pollution Prevention or 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 or "SMC:" 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 or "DOC", 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.

Chapter II-1 of the SOLAS Convention governs vessel construction and stipulates that vessels 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, among other vessels. The SOLAS Convention regulation II-1/3-10 on goal-based vessel construction standards for oil tankers, among other vessels, which entered into force on January 1, 2012, requires that all oil tankers, among other vessels, 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).
Amendments to the SOLAS Convention Chapter VII apply to vessels transporting dangerous goods and require those vessels be in compliance with the International Maritime Dangerous Goods Code or “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 or “STCW”. As of February 2017, all seafarers are required to meet the STCW standards and 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.
Furthermore, 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, cyber-risk management systems are required to be incorporated by vessel-owners and managers by 2021. This may cause companies to create 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.
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 or the “BWM Convention” in 2004. The BWM Convention entered into force on September 9, 2017. The BWM Convention requires vessels 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 vessels to carry a ballast water record book and an international ballast Water management certificate. 

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On December 4, 2013, the IMO Assembly passed a resolution revising the application dates of 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 “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. Vessels 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 vessels, 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 exchange ballast water treatment requirements become mandatory under the BWM Convention, the cost of compliance could increase for ocean carriers and 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 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 or “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 vesselowner’s actual fault and under the 1992 Protocol where the spill is caused by the vesselowner’s intentional or reckless act or omission where the vesselowner knew pollution damage would probably result. The CLC requires vessels 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. 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.
The IMO also adopted the International Convention on Civil Liability for Bunker Oil Pollution Damage or the “Bunker Convention” to impose strict liability on vessel owners (including the registered owner, bareboat charterer, manager or operator) for pollution damage in jurisdictional waters of ratifying states caused by discharges of bunker fuel. The Bunker Convention requires registered owners of vessels over 1,000 gross tons to maintain insurance for pollution damage in an amount equal to the limits of liability under the applicable national or international limitation regime (but not exceeding the amount calculated in accordance with the LLMC). With respect to non-ratifying states, liability for spills or releases of oil carried as fuel in vessel’s bunkers typically is determined by the national or other domestic laws in the jurisdiction where the events or damages occur.
Vessels 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 and the Bunker Convention have 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.
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 are 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.
Compliance Enforcement
Noncompliance with the ISM Code or other IMO regulations may subject the vessel owner 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. 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 may have on our operations.

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United States Regulations
The U.S. Oil Pollution Act of 1990 and the Comprehensive Environmental Response, Compensation and Liability Act
The U.S. Oil Pollution Act of 1990 or “OPA” established an extensive regulatory and liability regime for the protection and cleanup of the environment from oil spills. OPA affects all “owners and operators” whose vessels trade or operate within the U.S., its territories and possessions or whose vessels operate in U.S. waters, which includes the U.S.’s territorial sea and its 200 nautical mile exclusive economic zone around the U.S. The U.S. has also enacted the Comprehensive Environmental Response, Compensation and Liability Act or “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 cleanup costs. Effective December 21, 2015, the USCG adjusted the limits of OPA liability for tankers, other than a single-hull 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. The limitation on liability similarly 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 cleanup, 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 the 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 comply and plan to comply going forward with the USCG’s financial responsibility regulations by providing applicable certificates of financial responsibility.

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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 vessel owners’ responsibilities under these laws. The Company intends to comply with all applicable state regulations in the ports where 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) or “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 cargoes 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 cargoes are equipped with vapor recovery systems that satisfy these existing requirements.
The U.S. Clean Water Act or “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” or “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 effect of this proposal on U.S. environmental regulations is still unknown.
European Union Regulations
In October 2009, the European Union amended a directive to impose criminal sanctions for illicit vessel-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 vessel 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 vessels 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 vessels, as determined by type, age, and flag as well as the number of times the vessel has been detained. The European Union also adopted and extended a ban on substandard vessels 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 vessels at berth in EU ports.
The Ship Recycling Regulation adopted in 2013 by the European Parliament and the Council of the European Union aims to reduce the negative impacts linked to the recycling of ships flying the flag of Member States of the Union. The Regulation lays down requirements that ships and recycling facilities have to fulfill in order to make sure that ship recycling takes place in an environment sound and safe manner.
The Regulation first prohibits or restricts the installation and use of hazardous materials (like asbestos or ozone-depleting substances) on board ships.
New European ships and EU-flagged ships going for dismantling must also have on board an inventory of hazardous materials (IHM) verified by the relevant administration or authority and specifying the location and approximate quantities of those materials. This obligation will also apply from 31 December 2020 to all existing ships sailing under the flag of Member States of the Union as well as to ships flying the flag of a third country and calling at an EU port or anchorage.

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Greenhouse Gas Regulation
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 vessels. 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 vessels 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 vessels. The initial strategy identifies “levels of ambition” to reducing greenhouse gas emissions, including (1) decreasing the carbon intensity from vessels through implementation of further phases of the EEDI for new vessels; (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 emission levels; 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 vessels 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.
International Labour Organization
The International Labor Organization or the “ILO” is a specialized agency of the UN that has adopted the Maritime Labor Convention 2006 or “MLC 2006”. A Maritime Labor Certificate and a Declaration of Maritime Labor Compliance is required to ensure compliance with the MLC 2006 for all vessels above 500 gross tons in international trade. MLC often called the “fourth pillar” of International maritime regulatory regime, because it stands beside the key IMO Conventions (SOLAS, MARPOL & STCW) that support quality shipping and held to eliminate substandard shipping. The MLC requires that vessel operators obtain an MLC Compliance certificate for each vessel they operate. We believe that all our vessels are in full compliance with and are certified to meet MLC 2006.

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 or “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 or “the ISPS Code”. The ISPS Code is designed to enhance the security of ports and vessels against terrorism. To trade internationally, a vessel must attain an International Ship Security Certificate or “ISSC” from a recognized security organization approved by the vessel’s flag state.

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The following are among the various requirements, some of which are found in SOLAS:
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onboard 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;
•
onboard 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.
Vessels 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 vessels and shore stations, including information on a vessel’s identity, position, course, speed and navigational status; on-board installation of vessel security alert systems, which do not sound on the vessel but only alert the authorities on shore; the development of vessel security plans; vessel 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 vessel, the state whose flag the vessel is entitled to fly, the date on which the vessel was registered with that state, the vessel's identification number, the port at which the vessel 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.
Inspection by Classification Societies
The hull and machinery of every commercial vessel must be classed by a classification society authorized by its country of registry. The classification society certifies that a vessel is safe and seaworthy in accordance with the applicable rules and regulations of the country of registry of the vessel and SOLAS. Most insurance underwriters make it a condition for insurance coverage and lending that a vessel be certified “in class” by a classification society which is a member of the International Association of Classification Societies, the IACS. The IACS has adopted harmonized Common Structural Rules, or the Rules, which apply to oil tankers, among other vessels, constructed on or after July 1, 2015. The Rules attempt to create a level of consistency between IACS Societies. In complying with current and future environmental requirements, vessel-owners and operators may also incur significant additional costs in meeting new maintenance and inspection requirements, in developing contingency arrangements for potential spills and in obtaining insurance coverage. Government regulation of vessels, particularly in the areas of safety and environmental requirements, can be expected to become stricter in the future and require us to incur significant capital expenditures on our vessels to keep them in compliance. All of our vessels are certified as being “in class” by all the applicable Classification Societies (e.g., DNVGL, Lloyd's Register of Shipping).

A vessel must undergo annual surveys, intermediate surveys, drydockings and special surveys. In lieu of a special survey, a vessel’s machinery may be on a continuous survey cycle, under which the machinery would be surveyed periodically over a five-year period. Every vessel is also required to be drydocked every 30 to 36 months for inspection of the underwater parts of the vessel. If any vessel does not maintain its class and/or fails any annual survey, intermediate survey, drydocking or special survey, the vessel will be unable to carry cargo between ports and will be unemployable and uninsurable which could cause us to be in violation of certain covenants in our loan agreements. Any such inability to carry cargo or be employed, or any such violation of covenants, could have a material adverse impact on our financial condition and results of operations.

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The operation of our vessels is affected by the requirements set forth in the United Nations' International Maritime Organization's International Management Code for the Safe Operation of Ships and Pollution Prevention, or the ISM Code. The ISM Code requires ship owners, ship managers and bareboat charterers to develop and maintain an extensive "Safety Management System" that includes the adoption of a safety and environmental protection policy setting forth instructions and procedures for safe operation and describing procedures for dealing with emergencies. Currently, all of our vessels are ISM Code-certified and we expect that any vessels that we acquire in the future will be ISM Code-certified when delivered to us. The failure of a shipowner or bareboat charterer to comply with the ISM Code may subject it to increased liability, may invalidate existing insurance or decrease available insurance coverage for the affected vessels and may result in a denial of access to, or detention in, certain ports. If we are subject to increased liability for non-compliance or if our insurance coverage is adversely impacted as a result of non-compliance, it may negatively affect our ability to pay dividends, if any, in the future. If any of our vessels are denied access to, or are detained in, certain ports, this may decrease our revenues.
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 is normally to be carried out with the vessel in drydock but an alternative examination while the vessel is afloat by an approved underwater inspection may be considered. One such examination is to be carried out in conjunction with the Special Periodical Survey and in this case the vessel must be in drydock. For vessels older than 15 years (after the third Special Periodical Survey) the bottom survey must always be in the drydock. 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.

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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 the 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 secondhand 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.
In addition to the classification inspections, many of our customers regularly inspect our vessels as a precondition to chartering them for voyages. We believe that our well-maintained, high-quality vessels provide us with a competitive advantage in the current environment of increasing regulation and customer emphasis on quality.
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, piracy incidents, 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 imposes virtually unlimited liability upon vessel owners, 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 vessel owners and operators trading in the United States market.

Hull and Machinery Insurance
We procure hull and machinery insurance, protection and indemnity insurance, which includes environmental damage and pollution insurance and war risk insurance and freight, demurrage and defense insurance for our fleet. We generally do not maintain insurance against loss of hire (except for certain charters for which we consider it appropriate), which covers business interruptions that result in the loss of use of a vessel.
Marine and War Risks Insurance
We have in force marine 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. As of the date of this annual report, nil deductible applies under the war risks insurance.
Protection and Indemnity Insurance
Protection and indemnity insurance is provided by mutual protection and indemnity associations, or P&I Associations, 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, claims arising from collisions with other vessels, 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 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. 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 kinds of permits, licenses and certificates 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 been able to obtain 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.

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C.            Organizational Structure
We were incorporated under the laws of Belgium on June 26, 2003. We own our vessels either directly at the parent level, indirectly through our wholly-owned vessel owning subsidiaries, or jointly through our 50%-owned subsidiaries. We conduct our vessel operations through our wholly-owned subsidiaries Euronav Ship Management SAS, Euronav SAS, Euronav Singapore Pte. Ltd. and Euronav Ship Management (Hellas) Ltd., and also through the TI Pool. Our subsidiaries are incorporated under the laws of Belgium, France, United Kingdom, Liberia, Luxembourg, Cyprus, Hong Kong, Singapore, Bermuda and the Marshall Islands. Our vessels are flagged in Belgium, the Marshall Islands, France, Panama, Liberia and Greece.
Please see Exhibit 8.1 to this annual report for a list of our subsidiaries.

D.            Property, Plants and Equipment
For a description of our fleet, please see "Item 4. Information on the Company—B. Business Overview—Our Fleet."
We own no properties other than our vessels. We lease office space in various jurisdictions, and have the following material leases in place for such use as of January 1, 2019:
•
Belgium, located at Belgica Building, De Gerlachekaai 20, Antwerp, Belgium, for a yearly rent of $283,881.
•
Greece, located at 31-33 Athinon Avenue, Athens, Greece 10447, for a yearly rent of $376,399.
•
France, located at Quai Ernest Renaud 15, CS20421, 44104 Nantes Cedex 1, France, for a yearly rent of $32,611.
•
United Kingdom, London, located at 81-99 Kings Road, Chelsea, London SW3 4PA, 1-3 floor, for a yearly rent of $966,995. We sublease part of this office space to third parties and received a yearly rent of $717,681.
•
Singapore, located at 10 Hoe Chiang Road # 10-04, Keppel Tower, Singapore 089315, for a yearly rent through June 2018 of $27,039.
•
Hong Kong, located at Room 2503-05 25th Floor Harcourt House 39 Gloucester Road Wanchai Hong Kong, for a yearly rent of $17,825.
•
United States of America, New York, Park Avenue 299, for a yearly rent of $2,013,887. We sublease this office space to third parties and received a total yearly rent of $1,484,114. This lease expires in September 2025


ITEM 4A.    UNRESOLVED STAFF COMMENTS
None.
ITEM 5.    OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following management's discussion and analysis of the results of our operations and financial condition should be read in conjunction with the financial statements and the notes to those statements included elsewhere in this annual report. This discussion includes forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, such as those set forth in "Item 3. Key Information—D. Risk Factors" and elsewhere in this report.
Factors affecting our results of operations
The principal factors which have affected our results of operations and are expected to affect our future results of operations and financial position include:
•
The spot rate and time charter market for VLCC and Suezmax tankers;
•
The number of vessels in our fleet;
•
Utilization rates on our vessels, including actual revenue days versus non-revenue ballast and off-hire days;

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•
Our ability to maintain and grow our customer relationships;
•
Economic, financial, regulatory, political and government conditions that affect the tanker shipping industry;
•
The earnings on our vessels;
•
Gains and losses from the sale of assets and amortization of deferred gains;
•
Vessel operating expenses, including in some cases, the fluctuating price of fuel expenses when our vessels operate in the spot or voyage market;
•
Impairment losses on vessels;
•
Administrative expenses;
•
Acts of piracy or terrorism;
•
Depreciation;
•
Drydocking and special survey days, both expected and unexpected;
•
Our overall debt level and the interest expense and principal amortization; and
•
Equity gains (losses) of unconsolidated subsidiaries and associated companies.
Lack of Historical Operating Data for Vessels Before Their Acquisition
Consistent with shipping industry practice, other than inspection of the physical condition of the vessels and examinations of classification society records, there is no historical financial and/or operational due diligence process when we acquire vessels. Accordingly, we do not obtain the historical operating data for the vessels from the sellers because that information is not material to our decision to make acquisitions, nor do we believe it would be helpful to potential investors in assessing our business or profitability. Most vessels are sold under a standardized agreement, which, among other things, provides the buyer with the right to inspect the vessel and the vessel's classification society records. The standard agreement does not give the buyer the right to inspect, or receive copies of, the historical operating data of the vessel. Prior to the delivery of a purchased vessel, the seller typically removes from the vessel all records, including past financial records and accounts related to the vessel. In addition, the technical management agreement between the seller's technical manager and the seller is automatically terminated and the vessel's trading certificates are revoked by its flag state following a change in ownership.
Consistent with shipping industry practice, we treat the acquisition of a vessel (whether acquired with or without charter) as the acquisition of an asset rather than a business. Although the vessels we acquire generally do not have a charter attached, we have agreed to acquire (and may in the future acquire) some vessels with time charters attached. Where a vessel has been under a voyage charter, the vessel is delivered to the buyer free of charter. It is rare in the shipping industry for the last charterer of the vessel in the hands of the seller to continue as the first charterer of the vessel in the hands of the buyer. In most cases, when a vessel is under time charter and the buyer wishes to assume that charter, the vessel cannot be acquired without the charterer's consent and the buyer's entering into a separate direct agreement with the charterer to assume the charter. The purchase of a vessel itself does not transfer the charter, because it is a separate service agreement between the vessel owner and the charterer. When we acquire a vessel and assume a related time charter, we take the following steps before the vessel will be ready to commence operations:
•
obtain the charterer's consent to us as the new owner;
•
obtain the charterer's consent to a new technical manager;
•
in some cases, obtain the charterer's consent to a new flag for the vessel;
•
arrange for a new crew for the vessel;
•
replace most if not all hired equipment on board, such as computers and communication equipment;
•
negotiate and enter into new insurance contracts for the vessel through our own insurance brokers;

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•
register the vessel under a flag state and perform the related inspections in order to obtain new trading certificates from the flag state;
•
implement a new planned maintenance program for the vessel; and
•
ensure that the new technical manager obtains new certificates for compliance with the safety and vessel security regulations of the flag state.

Critical Accounting Policies
Our consolidated financial statements are prepared in accordance with IFRS, which requires us to make estimates in the application of accounting policies based on the best assumptions, judgments and opinions of management.
The following is a discussion of our accounting policies that involve a higher degree of judgment and the methods of their application. For a description of all of our material accounting policies, please see Note 1—Summary of Significant Accounting Policies to our consolidated financial statements included herein.
Revenue Recognition
We generate a large part of our revenue from voyage charters, including vessels in pools that predominantly perform voyage charters. Under the new revenue standard (IFRS 15) , voyage revenue is recognized ratably over the estimated length of each voyage, calculated on a load-to-discharge basis. Voyage expenses are capitalized between the previous discharge port, or contract date if later, and the next load port if they qualify as fulfillment costs under IFRS 15. To recognize costs incurred to fulfill a contract as an asset, the following criteria shall be met: (i) the costs relate directly to the contract, (ii) the costs generate or enhance resources of the entity that will be used in satisfying performance obligations in the future and (iii) the costs are expected to be recovered. Capitalized voyage expenses are amortized ratably between load port and discharge port.
    Revenues from time charters are accounted for as operating leases and are thus recognized ratably over the rental periods of such charters, as service is performed. The board will, however, analyze each contract before deciding on its accounting treatment between operating lease and finance lease. We do not recognize time charter revenues during periods that vessels are off-hire.

For our vessels operating in the TI Pool, revenues and voyage expenses are pooled and allocated to the pool's participants on a TCE basis in accordance with an agreed-upon formula. The formulas in the pool agreements for allocating gross shipping revenues net of voyage expenses are based on points allocated to participants' vessels based on cargo carrying capacity and other technical characteristics, such as speed and fuel consumption. The selection of charterers, negotiation of rates and collection of related receivables and the payment of voyage expenses are the responsibility of the pool. The pool may enter into contracts that earn either voyage charter revenue or time charter revenue.
The following table presents our average TCE rates (in U.S. dollars) and vessel operating days, which are the total days the vessels were in our possession for the relevant period, net of scheduled off-hire days associated with major repairs, drydockings or special or intermediate surveys for the periods indicated:

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Year ended December 31, 2018
 
Year ended December 31, 2017
 
Year ended December 31, 2016
 
 
REVENUE
 
REVENUE
 
REVENUE
 
 
Fixed

 
Spot

 
Pool

 
Fixed

 
Spot

 
Pool

 
Fixed

 
Spot

 
Pool

TANKER SEGMENT*
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
VLCC
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average rate
 
$
33,338


$
25,958


$
23,005


$
39,629


$
—


$
27,773


$
42,618


$
47,384


$
41,863

Vessel Operating days
 
1,312


173


11,691


1,882


—


8,977


1,918


468


8,167

SUEZMAX
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average rate
 
$
30,481


$
15,784


—


$
22,131


$
18,002


—


$
26,269


$
27,498


—

Vessel Operating days
 
978


7,129


—


1,886


4,934


—


2,105


4,646


—

LR1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average rate
 
—

 
$
6,403

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Vessel Operating days
 
—

 
360

 
—

 
—

 
—

 
—

 
—

 
—

 
—

FSO SEGMENT**
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FSO
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average rate
 
$
136,022


—


—


$
163,975


—


—


$
178,650


—


—

FSO Operating days
 
365


—


—


365


—


—


366


—


—

* The figures for the tanker segment do not include our economic interest in joint ventures.
**The figures for the FSO segment are included and presented at our economic interest, 50%.

Through pooling mechanisms, we receive a weighted, average allocation, based on the total spot results earned by the total of pooled vessels (reflected under "Pool" in the table above), whereas results from direct spot employment are earned and allocated on a one-on-one basis to the individual vessel and thus owner of the according vessel (reflected under "Spot" in the table above).
Vessel Useful Lives and Residual Values
The useful economic life of a vessel is variable. Elements considered in the determination of the useful lives of the assets are the uncertainty over the future market and future technological changes. The carrying value of each of our vessels represents its initial cost at the time it was delivered or purchased plus any additional capital expenditures less depreciation calculated using an estimated useful life of 20 years, except for FSO service vessels for which estimated useful lives of 25 years are used. Newbuildings are depreciated from delivery from the construction yard. Purchased vessels and tankers converted later into an FSO are depreciated over their respective remaining useful lives as from the delivery of the construction yard to its first owner.
On December 31, 2018, all of our owned vessels were of double hull construction. If the estimated economic lives assigned to our vessels prove to be too long because of new regulations, the continuation of weak markets, the broad imposition of age restrictions by our customers or other future events, this could result in higher depreciation expenses and impairment losses in future periods related to a reduction in the useful lives of any affected vessels.
 We estimate that our vessels will not have any residual value at the end of their useful lives. Even though the scrap value of a vessel could be worth something, it is difficult to estimate taking into consideration the cyclicality of the nature of future demand for scrap steel and is likely to remain volatile and unpredictable. The costs of scrapping and disposing of a vessel with due respect for the environment and the safety of the workers in such specialized yards is equally challenging to forecast as regulations and good industry practice leading to self-regulation can dramatically change over time. For example, certain organizations have suggested that the industry adopt The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, or the Convention. While this Convention has not been accepted yet by the flag states of the flags we use, we believe that this Convention or a similar convention may be adopted in the future. In the event that more stringent requirements are imposed upon tanker owners, including those seeking to sell their vessels to a party that intends to recycle the vessels after they have been purchased, or a Recycling Purchaser, such requirements could negatively impact the sales prices obtainable from the Recycling Purchasers or require companies, including us, to incur additional costs in order to sell their vessels to recycling purchasers or to other foreign buyers intending to use such vessels for further trading. Therefore, we take the view that by the time our assets reach the end of their useful lives, their scrap values are likely to be the same as their disposal costs.

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Vessel Impairment
The carrying values of our vessels may not represent their fair market values at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of constructing new vessels. The carrying amounts of our vessels are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount is estimated. We define our cash generating unit as a single vessel, unless such vessel is operated in a pool, in which case such vessel, together with the other vessels in the pool, are collectively treated as a cash generating unit. An impairment loss is recognized whenever the carrying amount of an asset or cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the income statement.
FSO Impairment
Due to the fact that FSO vessels are often purposely built for specific circumstances, and due to the absence of an efficient market for transactions of FSO vessels, the carrying values of our FSOs may not represent their fair values at any point in time. The carrying amounts of our FSOs are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount is estimated. We define our cash generating unit as a single FSO. An impairment loss is recognized whenever the carrying amount of an asset or cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the income statement.
Calculation of recoverable amount
The recoverable amount of an asset or cash generating unit is the greater of its fair value less its cost to dispose and value in use. In assessing value in use, the estimated future cash flows, which are based on current market conditions, historical trends as well as future expectations, are discounted to their present value using a pre-tax discount rate that reflects the time value of money and the risks specific to the asset or cash generating unit.
 The carrying values of our vessels or our FSOs may not represent their fair market values or the amount that could be obtained by selling the vessels at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of newbuildings. Historically, both charter rates and vessel values tend to be cyclical. The value of a FSO is highly dependent on the value of the service contract under which the unit is employed.
 In developing estimates of future cash flows, we must make assumptions about future performance, with significant assumptions being related to charter rates, ship operating expenses, utilization, drydocking requirements, residual value and the estimated remaining useful lives of the vessels. These assumptions are based on historical trends and/or on future expectations. Specifically, in estimating future charter rates or service contract rates, management takes into consideration estimated daily rates for each asset over the estimated remaining lives. In the past, the Group used a fixed cut of 10 years to define a shipping cycle. As management is assessing continuously the resilience of its projections to the business cycles that can be observed in the tanker market, it concluded that a business cycle cycles approach provides a better long-term view of the dynamics at play in the industry. By defining a shipping cycle from peak to peak over the last 20 years and including management's expectation of the completion of the current cycle, management is better able to capture the full length of a business cycle while also giving more weight to recent and current market experience. The current cycle is forecasted based on management judgement, analyst reports and past experience. The impairment test did not result in a requirement to record an impairment loss in 2018. This weighting and forecasting of the ongoing cycle is based on management judgement, but none of the full cycles, with or without management forecasting of the ongoing cycle or the sole use of the ongoing cycle would lead to an impairment. When using 10-year historical charter rates in this impairment analysis, the impairment analysis indicates that an impairment is required for the tanker fleet of USD 47.9 million (2017 and 2016: no impairment). When using 5-year historical charter rates in this impairment analysis, the impairment analysis indicates that no impairment is required for the tanker fleet (2017: USD 5.7 million and 2016: no impairment), and when using 1-year historical charter rates in this impairment analysis, the impairment analysis indicates that an impairment is required for the tanker fleet of USD 92.7 million (2017: USD 427.3 million and 2016: no impairment). The value in use calculation for FSOs is based on the remaining useful life of the vessels as of the reporting date, and is based on fixed daily rates for the remaining period of the charter as well as management's best estimate of daily rates for future periods.
The WACC used to calculate the value in use of our assets is derived from our actual cost of debt and the cost of equity is calculated by using the beta as reported on Bloomberg with the country premiun and market risk of our direct competitors, which we believe reflects the appropriate cost of equity. With an increase of the WACC of 300bps to 10.70%, the analysis would also indicate that the carrying amount of the vessels as of December 31, 2018 is not impaired.
Estimated outflows for operating expenses and drydocking requirements are based on historical and budgeted costs and are adjusted for assumed inflation. Finally, utilization is based on historical levels achieved over the last 5 years, vessels useful lives and estimates of residual values consistent with our depreciation policy.

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The more significant factors that could impact management's assumptions regarding time charter equivalent rates include (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 scrappings, and (v) 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. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate at the time they were made, such assumptions are highly subjective and likely to change, possibly materially, in the future. There can be no assurance as to how long charter rates and vessel values will remain at their current levels.
Our Fleet—Vessel Carrying Values
During the past few years, the market values of vessels have experienced particular volatility, with substantial declines in many vessel classes. As a result, the charter-free market value, or basic market value, of certain of our vessels may have declined below the carrying amounts of those vessels. After undergoing the impairment analysis discussed above, we have concluded that for the years ended December 31, 2018 and 2017, no impairment was required.
The following table presents information with respect to the carrying amount of our vessels by type and indicates whether their estimated market values are below their carrying values as of December 31, 2018 and December 31, 2017. The carrying value of each of our vessels does not necessarily represent its fair market value or the amount that could be obtained if the vessel were sold. Our estimates of market values for our vessels assume that the vessels are all in good and seaworthy condition without need for repair and, if inspected, would be certified as being in class without notations of any kind. Our estimates are based on the estimated market values for vessels received from independent ship brokers and are inherently uncertain. In addition, because vessel values are highly volatile, these estimates may not be indicative of either the current or future prices that we could achieve if we were to sell any of the vessels. We would not record a loss for any of the vessels for which the fair market value is below its carrying value unless and until we either determine to sell the vessel for a loss or determine that the vessel is impaired as discussed above in "Critical Accounting Policies—Vessel Impairment". We believe that the future discounted cash flows expected to be earned over the estimated remaining useful lives for those vessels that have experienced declines in market values below their carrying values would exceed such vessels' carrying values (For Vessels or for the CGU as appropriate and defined in the Critical Accounting Policies - Vessel Impairment). For vessels that are designated as held for sale at the balance sheet date, we either use the agreed upon selling price of each vessel if an agreement has been reached for such sale or an estimate of basic market value if an agreement for sale has not been reached as of this annual report.
 
 
 
 
 
 
(In thousands of USD)
Vessel Type
 
Numbers of Vessels at December 31, 2018
 
Numbers of Vessels at December 31, 2017
 
Carrying Value at December 31, 2018
 
Carrying Value at December 31, 2017
VLCC (includes ULCC) (1)
 
41


25


2,614,037


1,667,308

Suezmax (2)
 
25


18


899,718


604,192

LR1 (3)
 
1

 
—

 
6,312

 
—

Vessels held for sale
 
1


—


42,000


—

Total
 
68


43


3,562,067


2,271,500

(1)
As of December 31, 2018, 17 of our VLCC owned vessels (December 31, 2017: 20) had carrying values which exceeded their market values. These vessels had an aggregate carrying value of $1,175.3 million (December 31, 2017: $1,462.5 million), which exceeded their aggregate market value by approximately $132.0 million (December 31, 2017: $244.2 million).
(2)
As of December 31, 2018, 14 of our Suezmax owned vessels (December 31, 2017: 16) had carrying values which exceeded their market values. These vessels had an aggregate carrying value of $474.4 million (December 31, 2017: $598.2 million), which exceeded their aggregate market value by approximately $80,5 million (December 31, 2017: $191.6 million).
The table above only takes into account the fleet that is 100% owned by us and therefore does not take into account the FSOs as they are accounted for using the equity method.

86
                                    

                

Vessels held for sale
Vessels whose carrying values are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. This is the case when the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such vessels and its sale is highly probable (when it is significantly more likely than merely probable).
Immediately before classification as held for sale, the vessels are remeasured in accordance with our accounting policies. Thereafter the vessels are measured at the lower of their carrying amount and fair value less cost to sell.
Impairment losses on initial classification as held for sale and subsequent gains and losses on remeasurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment loss.
Vessels classified as held for sale are no longer depreciated.
As of December 31, 2018, we had one Suezmax ( Felicity) as a non-current asset held for sale. As of December 31, 2017 we had no vessels as a non-current asset held for sale.


87
                                    

                

Fleet Development
The following table summarizes the development of our fleet as of the dates presented below*:
 
 
Year ended
December 31, 2018
 
Year ended
December 31, 2017
 
Year ended
December 31, 2016
VLCCs
 
 
 
 
 
 
At start of period
 
29.0


30.0


28.5

Acquisitions
 
22.0


2.0


3.5

Dispositions
 
(6.0
)

(3.0
)

(5.0
)
Chartered-in
 
—


—


3.0

At end of period
 
45.0


29.0


30.0

Newbuildings on order
 
—


—


2.0

Suezmax
 








At start of period
 
18.0


19.0


20.0

Acquisitions
 
10.0


—


1.0

Dispositions
 
(2.0
)

(1.0
)

(1.0
)
Chartered in
 
—


—


(1.0
)
At end of period
 
26.0


18.0


19.0

Newbuildings on order
 
—


4.0


2.0

LR1
 
 
 
 
 
 
At start of period
 
—

 
—

 
—

Acquisitions
 
2.0

 
—

 
—

Dispositions
 
(1.0
)
 
—

 
—

Chartered in
 
—

 
—

 
—

At end of period
 
1.0

 
—

 
—

Newbuildings on order
 
—

 
—

 
—

FSO
 








At start of period
 
1.0


1.0


—

Acquisitions
 
—


—


—

Dispositions
 
—


—


—

Chartered in
 
—


—


—

At end of period
 
1.0


1.0


1.0

Newbuildings on order
 
—


—


—

Total fleet
 








At start of period
 
48.0


50.0


49.5

Acquisitions
 
34.0


2.0


4.5

Dispositions
 
(9.0
)

(4.0
)

(6.0
)
Chartered in
 
—


—


2.0

At end of period
 
73.0


48.0


50.0

Newbuildings on order
 
—


4.0


4.0

* This table includes the two vessels that we own through joint venture entities, which we recognize in our income statement using the equity method, at our respective share of economic interest. This table does not include vessels acquired, but not yet delivered.
Vessel Acquisitions and Charter-in Agreements
On June 15, 2015, we entered into an agreement with an unrelated third-party to acquire contracts for the construction of the Metrostar Acquisition Vessels, which at the time of our purchase were under construction at Hyundai, for an aggregate purchase price of $384.0 million, or $96.0 million per vessel. The first vessel, the Antigone , was delivered to us on September 25, 2015. The second vessel, the Alice , was delivered to us on January 26, 2016. The third vessel, the Alex , was delivered to us on March 24, 2016. The fourth vessel, the Anne , was delivered to us on May 13, 2016.

88
                                    

                

On June 2, 2016, we entered into a Share Swap and Claims Transfer Agreement whereby (i) we transferred our 50% equity interest in Moneghetti Shipholding Ltd., or Moneghetti, and Fontvieille Shipholding Ltd., or Fontvieille, and, as consideration therefor, acquired from Bretta its 50% ownership interest in Fiorano Shipholding Ltd., or Fiorano, and Larvotto Shipholding Ltd., or Larvotto; and (ii) we transferred our claims arising from the shareholder loans to Moneghetti and Fontvieille and acquired Bretta’s claims arising from the shareholder loans to Fiorano and Larvotto. In addition, we paid $15.1 million to Bretta as compensation for the difference in value of the vessels. As a result of this transaction, our equity interest in both Fiorano and Larvotto increased from 50% to 100% and we are now the sole owner of the Suezmaxes  Captain Michael  and  Maria , respectively. We no longer have an equity interest in Moneghetti or Fontvieille, which now fully own the Suezmaxes  Devon  and the  Eugenie , respectively. Effective as of the same date, Fiorano and Larvotto are fully consolidated within our consolidated group of companies. We refer to these transactions collectively as the Share Swap and Claims Transfer Agreement. 
On August 16, 2016, we entered into an agreement to acquire two VLCCs that were already under construction at Hyundai for an aggregate purchase price of $169 million or $84.5 million per vessel. The two VLCCS,   Ardeche  and  Aquitaine , were delivered to us on January 12, 2017 and January 20, 2017 respectively.
 On October 3, 2016, we entered into contracts for the construction of two high specification Ice-Class Suezmax vessels by Hyundai. The two Suezmaxes Cap Quebec and Cap Pembroke were delivered to us on March 26, 2018 and April 25, 2018, respectively. 
On November 1, 2016, we entered into an agreement to purchase the VLCC  V.K. Eddie  from our 50% joint venture Seven Seas Shipping Ltd., or Seven Seas, at a price of $39.0 million.
On April 20, 2017, we entered into two additional long-term time charter contracts of seven years each with Valero, for high specification Ice-Class Suezmax vessels starting in the second half of 2018. To fulfill these contracts, we ordered two high specification Ice Class Suezmax vessels from Hyundai. Additional specifications for these vessels include substantially increased steel structure, specific emissions controls and other bespoke operational capabilities. The two Suezmaxes Cap Port Arthur and Cap Corpus Christi were delivered to us on August 8, 2018 and August 29, 2018, respectively and commenced operation under these contracts.
On March 26, 2018, we took delivery of the newbuilding Suezmax Cap Quebec (2018-156,600 dwt) against payment of the remaining installments of $44.1 million in aggregate. This vessel was the first of four newbuilding Ice Class Suezmax vessels that are contracted to commence seven-year employment contracts with a leading global refinery player upon delivery from the yard during 2018.

On April 25, 2018, we took delivery of the Cap Pembroke (2018-156,600 dwt) against the payment of the remaining instalments of $43.5 million in aggregate. This vessel was the second of the four newbuilding Ice Class Suezmax vessels that are contracted to commence seven-year employment contracts with a leading global refinery player upon delivery during 2018.

On June 12, 2018, we closed the Merger with Gener8 which is a corporation incorporated under the laws of the Republic of the Marshall Islands that owned at the date of the Merger, a fleet of 29 tankers on the water, consisting of 21 VLCC vessels, six Suezmax vessels, and two Panamax vessels, with an aggregate carrying capacity of approximately 7.4 million dwt, which includes 19 “eco” VLCC newbuildings delivered from 2015 through 2017 equipped with advanced, fuel-saving technology, that were constructed at highly reputable shipyards.
On June 27, 2018, we acquired the ULCC Seaways Laura Lynn (2003 - 441,561 dwt) from Oceania Tanker Corporation, a subsidiary of International Seaways for $32.5 million. We renamed the ULCC as Oceania and registered it under the Belgian flag. The Oceania is one of two V-plus vessels in the global tanker fleet. We also own another one, the TI Europe (2002-442,470 dwt) which provides us with significant strategic opportunities in this sector.
On August 8, 2018, we took delivery of the newbuilding Cap Port Arthur (2018-156,600 dwt) against payment of the remaining installments of $43.6 million. This vessel was the third of the four newbuilding Ice Class Suezmax vessels that are contracted to commence seven-year employment contracts with a leading global refinery player upon delivery during 2018.
On August 29, 2018 we took delivery of the newbuilding Cap Corpus Christi (2018-156,600 dwt) against payment of the remaining installments of $43.6 million. This vessel was the fourth of the four newbuilding Ice Class Suezmax vessels that are contracted to commence seven-year employment contracts with a leading global refinery player upon delivery during 2018.



89
                                    

                

Vessel Sales and Redeliveries
On January 15, 2016, we sold the VLCC Famenne, for a net price of $38.0 million to an unrelated third-party, resulting in a capital gain of $13.8 million, which was recorded in the first quarter of 2016. We delivered the vessel to its new owner on March 9, 2016.
On October 27, 2016 and November 27, 2016, we redelivered the VLCC KHK Vision and the Suezmax Suez Hans , respectively, to their owners upon the conclusion of their respective time charter-in periods .
On December 16, 2016, we entered into a five-year sale and leaseback agreement with an unrelated third-party for four VLCCs. The four VLCCs are  Nautilus ,  Navarin ,  Neptun , and  Nucleus . The transaction assumed a net en-bloc sale price of $185 million and produced a gain of $41.5 million which was recorded in the fourth quarter of 2016. However, because there was a total difference of $5.0 million between the observable fair value of the assets ($181 million) and the sale price ($186 million), this excess has been deferred and is being amortized over the period for which the asset is expected to be used (in this case, the duration of the lease, which is 5 years.).
 On May 23, 2017, we sold the VLCC TI Topaz (2002 – 319,430 dwt), one of its two oldest VLCC vessels, for $21.0 million. The loss on that sale of $21.0 million, was recorded in the second quarter.
On November 10, 2017, we sold the VLCC Flandre (2004 - 305,688 dwt) for $45.0 million to a global supplier and operator of offshore floating platforms. The Company recorded a gain of $20.3 million on the sale which was recorded in the fourth quarter of 2017. The vessel was delivered to its new owner on December 20, 2017 and will be converted into an FSPO by her new owner and will therefore leave the worldwide VLCC trading fleet.
On November 16, 2017, we sold the Suezmax Cap Georges (1998 - 146,652 dwt) for $9.3 million. The Company recorded a gain of $8.5 million on the sale which was recorded in the fourth quarter of 2017. The vessel was delivered to its new owner on November 29, 2017.
On November 17, 2017, we sold the VLCC Artois (2001 - 298,330 dwt) for $21.8 million. The Artois was the oldest vessel in the Company’s VLCC fleet. The Company recorded a gain of $7.7 million on the sale which was recorded in the fourth quarter of 2017. The vessel was delivered to its new owner on December 4, 2017.
On June 8, 2018, we sold the Suezmax Cap Jean (1998 – 146,643 dwt) for $10.6 million. As a result of the sale, we recorded a capital gain of approximately $10.6 million. The sale of the Cap Jean was part of our fleet rejuvenation program.
On June 15, 2018, we sold 6 VLCCS, Gener8 Miltiades (2016 - 301,038 dwt), Gener8 Chiotis (2016 - 300,973 dwt), Gener8 Success (2016 - 300,932 dwt), Gener8 Andriotis (2016 - 301,014 dwt), Gener8 Strength (2015 - 300,960 dwt) and Gener8 Supreme (2016 - 300,933 dwt), to INSW for a total consideration of $434.0 million relating to the vessels which included $ 123.0 million in cash consideration and $311.0 million in the form of assumption of the outstanding debt related to the vessels.

On June 25, 2018, we sold the Suezmax Cap Romuald (1998 - 146,643 dwt) for a net sale price of $10.3 million. The Company recorded a gain of $9.0 million on the sale upon delivery to its new owner on August 22, 2018.
On October 31, 2018 we entered into a sale agreement regarding the Suezmax vessel Felicity (2009-157,667 dwt) with a global supplier and operator of offshore floating platforms. A capital loss on the sale of approximately $3.0 million was recorded in Q4 2018. The cash generated on this transaction after repayment of debt was $34.7 million. The vessel was delivered to her new owners and is is expected to be converted into an FPSO and thus is expected to leave the worldwide trading fleet in 2019. The sale represents the eighth vessel successfully removed from the tanker fleet and introduced by us into an offshore project demonstrating our ability to generate value for stakeholders and reflecting its reputation for providing high quality operational tonnage for the offshore sector.
On November 29, 2018, we sold the LR1 Companion (2004 - 72,749 dwt) for USD 6.3 million. The vessel came as part of the Gener8 transaction and was a non-core asset. The Company recorded a loss of USD 0.2 million on the sale upon delivery to its new owner on November 29, 2018.

90
                                    

                

The Merger with Gener8
On June 12, 2018, we closed the Merger with Gener8 persuant to which Gener8 became a wholly-owned subsidiary of Euronav NV following affirmative vote of Gener8's shareholders. At the date of the Merger, Gener8 owned a fleet of 29 tankers on the water, consisting of 21 VLCC vessels, six Suezmax vessels, and two LR1 vessels, with an aggregate carrying capacity of approximately 7.4 million dwt, which includes 19 “eco” VLCC newbuildings delivered from 2015 through 2017 equipped with advanced, fuel-saving technology, that were constructed at reputable shipyards.
We believe that the Merger was accretive to the shareholders of both companies and is consistent with previously set expansion criteria. The Merger created a world leading independent crude tanker operator with 74 large crude tankers focused predominately on the VLCC and Suezmax asset classes and two FSO vessels in joint venture and provides tangible economies of scale via pooling arrangements, procurement opportunities, reduced overhead and enhanced access to capital.
Furthermore, the combined company offers investors a well-capitalized and more liquid company in the tanker market.
Holders of 81% of the outstanding shares of Gener8 casted their vote, of which 98% approved the Merger. The "Exchange Ratio" of 0.7272 Euronav shares for each share of Gener8 resulted in the issuance of 60,815,764 new ordinary shares on June 12, 2018. The Exchange Ratio implied a premium of 35% paid on Gener8 shares based on the closing share prices on December 20, 2017. The Merger resulted in Euronav NV shareholders owning approximately 72% of the issued share capital of the combined entity and Gener8 shareholders owning approximately 28% (based on the fully diluted share capital of Euronav and fully diluted share capital of Gener8). Euronav NV as the combined entity remain listed on NYSE and Euronext under the symbol "EURN".
Following the Merger, we sold the subsidiaries owning six modern VLCCs to INSW for a total cash payment of $141.0 million of which $120.0 million was received on June 14, 2018, the date of closing. The remaining balance of USD 20.9 million was paid in Q4 (Note 20). This sale was an important part of the Merger as it allows Euronav to retain leverage around our target level of 50% and to retain substantial liquidity going forward. The six vessels sold were the Gener8 Miltiades (2016 – 301,038 dwt), Gener8 Chiotis (2016 – 300,973 dwt), Gener8 Success (2016 – 300,932 dwt), Gener8 Andriotis (2016 – 301,014 dwt), Gener8 Strength (2015 – 300,960 dwt) and Gener8 Supreme (2016 – 300,933 dwt). The assets and liabilities of these companies were recognized at fair value on the date of the closing of the Merger. No result was recorded on this transaction.
Consideration transferred
in USD
 
Total Business combinations

 
 
 
Gener8 shares outstanding
 
83,267,426

RSU
 
362,613

Total Gener8 shares
 
83,630,039

Ratio
 
0.7272

Issued Euronav shares
 
60,815,764

Closing price Euronav on June 11, 2018
 
9.1

 
 
 
Total consideration transferred
 
553,423,452



Contribution to revenue and profit/loss
Since their acquisition by us on June 12, 2018, the acquired Gener8 companies contributed revenue of $16.5 million and a loss of $43.7 million to our consolidated results for the year ended December 31, 2018. If the acquisition had occurred on 1 January 2018, management estimates that the Group’s consolidated revenue for the year ended December 31, 2018 would have been $ 665.5 million and consolidated loss for the twelve month period ended December 31, 2018 would have been $ (160.1) million. In determining these amounts, management has assumed that the fair value adjustments, that arose on the date of acquisition would have been the same if the acquisition had occurred on January 1, 2018.

Acquisition related costs
We incurred approximately $5.0 million relating to external legal fees, due to diligence costs and advisory fees. These acquisition-related costs for the business combination were expensed as incurred and are included in 'General and administrative expenses'.



91
                                    

                

Repayment of Blue Mountain Note
As part of the Merger Gener8's senior note with a carrying value of USD 205.7 million was prepaid on June 12, 2018. The repayment of the senior note was financed in full by us under our existing liquidity (cash on hands and our credit facilities).


Identifiable assets acquired and liabilities assumed
The following table summarizes the recognized amounts of assets acquired and liabilities assumed at the acquisition date, with a split between those retained and those sold to INSW:
(in thousands of USD)
 
Total
 
Gener8 Subsidiaries
INSW Subsidiaries
Vessels
 
1,704,250

 
1,270,250

434,000

Other tangible assets
 
345

 
345

—

Intangible assets
 
152

 
152

—

Receivables
 
16,750

 
9,599

7,151

Current assets
 
79,459

 
64,829

14,629

Cash and cash equivalents
 
126,288

 
126,288

—

Loans and borrowings
 
(1,312,446)

 
(1,001,478)

(310,968)

Provision onerous contracts
 
(5,303)

 
(5,303)

—

Current liabilities
 
(33,012)

 
(29,160)

(3,852)

 
 
 
 
 
 
Total identifiable net assets acquired
 
576,482

 
435,522

140,960

 
 
 
 
 
 
 
 
 
 
 
 
(in thousands of USD)
 
Fair value at acquisition date
 
 
 
Consideration transferred
 
553,423

 
 
 
Total identifiable net assets acquired
 
576,482

 
 
 
 
 
 
 
 
 
Bargain Purchase
 
23,059

 
 
 

The transaction resulted in a bargain purchase gain of $ 23.1 million because the fair value of assets acquired and liabilities assumed exceeded the total of the fair value of consideration paid. Euronav’s management has reassessed whether they had correctly identified all of the assets acquired and all of the liabilities assumed and this excess remains.

Euronav’s management believes that the bargain purchase price is a direct consequence of Gener8 limited liquidity and its shares trading under the net asset value per share prior to and at the time of the agreed ratio as well as a small uptick in the fair value of the vessels between the time of the agreed ratio and the date of the Merger when the valuations of the vessels were assessed.

This gain was recognized in the consolidated statement of profit or loss for 2018, under the heading ‘Gain on bargain purchase’.



92
                                    

                

A.  Operating Results 

Year ended December 31, 2018 , compared to the year ended December 31, 2017
Total shipping revenues and voyage expenses and commissions.
The following table sets forth our total shipping revenues and voyage expenses and commissions for the years ended December 31, 2018 and 2017 :
(USD in thousands)
 
2018

2017

$ Change

% Change
Voyage charter and pool revenues
 
524,786


394,663


130,123


33
 %
Time charter revenues
 
75,238


118,705


(43,467
)

(37
)%
Other income
 
4,775


4,902


(127
)

(3
)%
Total shipping revenues
 
604,799


518,270


86,529


17
 %
Voyage expenses and commissions
 
(141,416
)

(62,035
)

(79,381
)

128
 %
Voyage Charter and Pool Revenues .    Voyage charter and pool revenues increased by 33% , or $130.1 million , to $524.8 million for the year ended December 31, 2018 , compared to $394.7 million for 2017 . This increase was due to an increase of the total number of vessel operating days following the Merger with Gener8. This increase was partially offset with a decrease in the average TCE rates for VLCCs and Suezmax tankers from $29,827  per day and $19,144 per day, respectively in 2017 to $24,073 and $17,557 , respectively in 2018 .
Time Charter Revenues .    Time charter revenues decreased by 37% , or $43.5 million , to $75.2 million for the year ended December 31, 2018 , compared to $118.7 million for 2017 .  This decrease was due to several time charter contracts that ended without being renewed during the course of 2017 combined with deteriorating spot market conditions that resulted in lower profit splits existing on some of those contracts.
Other Income .    Other income decreased by 3% , or $0.1 million , to $4.8 million for the year ended December 31, 2018 , compared to $4.9 million for 2017 . Other income includes revenues related to the standard business operation of the fleet and that are not directly attributable to an individual voyage.
Voyage Expenses and Commissions .    Voyage expenses and commissions increased by 128% or $79.4 million , to $(141.4) million for the year ended December 31, 2018 , compared to $(62.0) million for 2017 . This increase was primarily due to increased oil prices which increased bunker expenses, the largest component of voyage expenses, fewer vessels operating under a long term time charter and the additional vessels operating in the spot market which were acquired under the Gener8 merger.
Net gain (loss) on lease terminations and net gain (loss) on the sale of assets.
The following table sets forth our gain (loss) on lease terminations and gain (loss) on the sale of assets for the years ended December 31, 2018 and 2017 :
(USD in thousands)
 
2018

2017

$ Change

% Change
Net gain (loss) on sale of assets (including impairment on non-current assets held for sale)
 
15,870


15,511


359


2
%
Net gain (loss) on sale of assets (including impairment on non-current asset s held for sale).    Net gain (loss) increased by 2% , or $0.4 million , to a net gain of $15.9 million for the year ended December 31, 2018 , compared to a net gain of $15.5 million for 2017 .
The net gain on sale of assets of $15.9 million in 2018 , represents the aggregate of a gain of $10.2 million recorded on the sale of the Suezmax Cap Jean , a gain of $9.0 million on the sale of the Suezmax Cap Romuald and an impairment on non-current assets held for sale of 3.0 million on the Suezmax Felicity.
The net gain on sale of assets of $15.5 million in 2017 represents the aggregate of a gain of $8.5 million recorded on the sale of the Suezmax Cap Georges , a gain of $7.7 million on the sale of the VLCC Artois, a gain of $20.3 million recorded on the sale of the VLCC Flandre and a loss of 21.0 million on the sale of the VLCC TI Topaz.

93
                                    

                

Vessel Operating Expenses.
The following table sets forth our vessel operating expenses for the years ended December 31, 2018 and 2017 :
(USD in thousands)
 
2018

2017

$ Change

% Change
Total VLCC operating expenses
 
118,481


95,987


22,494


23
%
Total Suezmax operating expenses
 
64,295


54,440


9,855


18
%
Total LR1 operating expenses
 
3,014

 
—

 
3,014

 
—
%
Total vessel operating expenses
 
185,790


150,427


35,363


24
%
Total vessel operating expenses increased by 24% , or $35.4 million , to $185.8 million during the year ended December 31, 2018 , compared to $150.4 million for 2017 .
VLCC operating expenses increased by 23% , or $22.5 million , during the year ended December 31, 2018 , compared to 2017 . This increase was primarily due to the delivery of the vessels acquired under the Merger with Gener8, partially offset by the sale of the VLCC Artois , VLCC Flandre and VLCC Ti Topaz .
Suezmax operating expenses increased by 18% , or $9.9 million , during the year ended December 31, 2018 , compared to 2017 . This increase was primarily due to the delivery of the Suezmax Cap Quebec , Suezmax Cap Pembroke, Suezmax Cap Corpus Christi , Suezmax Cap Port Arthur and the six Suezmax vessels acquired under the Merger with Gener8 , partially offset by the sale of Suezmax Cap Georges in November 2017 and the sale of Suezmaxes Cap Jean and Cap Romuald in June 2018 and August 2018 respectively .
Time charter-in expenses and bareboat charter-hire expenses.
The following table sets forth our chartered-in vessel expenses and bareboat charter-hire expenses for the years ended December 31, 2018 and 2017 :
(USD in thousands)
 
2018

2017

$ Change

% Change
Time charter-in expenses
 
(6
)

62


(68
)

(110
)%
Bareboat charter-hire expenses
 
31,120


31,111


9


—
 %
Total charter hire expense
 
31,114


31,173


(59
)

—
 %
Time charter-in expenses. Time charter-in expenses decreased by 110% , or $0.1 million , to $(6.0) thousand during the year ended December 31, 2018 , compared to $0.1 million for 2017 . The decrease was attributable to the expiration of two time charter parties in 2016 with final settlement in 2017.
Bareboat charter-hire expenses. Bareboat charter-hire expenses increased by $9.0 thousand , to $31.1 million for the year ended December 31, 2018 , compared to $31.1 million for 2017 .
General and administrative expenses.
The following table sets forth our general and administrative expenses for the years ended December 31, 2018 and 2017 :
(USD in thousands)
 
2018

2017

$ Change

% Change
General and administrative expenses
 
66,232


46,868


19,364


41
%
General and administrative expenses which include also, among others, directors' fees, office rental, consulting fees, audit fees and tonnage tax, increased by 41% , or $19.4 million , to $66.2 million for the year ended December 31, 2018 , compared to $46.9 million for 2017 .
This increase was mainly due to the Merger with Gener8, which among other factors lead to an increase of $8.9 million in staff costs due to (i) an overall increase in FTE and severance payments to the former employees of Gener8, (ii) an increase of $7.4 million in legal and other fees, (iii) an increase of $0.8 million in travel costs and (iv) an increase of rental expense of $1.3 million.

94
                                    

                

Furthermore, the administrative expenses related to the TI Pool increased by $1.0 million during the year ended December 31, 2018, compared to the same period in 2017, mainly due to the increased number of vessel in the TI pool.
 
Depreciation and amortization expenses.
The following table sets forth our depreciation and amortization expenses for the years ended December 31, 2018 and 2017 :
(USD in thousands)
 
2018

2017

$ Change

% Change
Depreciation and amortization expenses
 
270,693


229,872


40,821


18
%
Depreciation and amortization expenses increased by 18% , or $40.8 million , to $270.7 million for the year ended December 31, 2018 , compared to $229.9 million for 2017 .
Depreciation increased primarily due to (i) the acquisition and delivery of the Suezmaxes  Cap Quebec,   Cap Pembroke ,  Cap Corpus Christi and Cap Port Arthur resulting in an aggregate increase of $7.4 million, (ii) the acquisition of the Gener8 fleet resulting in an aggregate increase of $49.7 million, and (iii) an increase of $3.8 million due to the acquisition of the ULCC Oceania (see Fleet Development).
This increase was partially offset by (i) the sale of the Suezmaxes  Cap Georges,   Cap Jean  and Cap Romuald resulting in an aggregate decrease of $12.4 million and (ii) the sale of the VLCCs  Artois  and  Flandre  resulting in an aggregate decrease of $6.8 million. 

Finance Expenses.
The following table sets forth our finance expenses for the years ended December 31, 2018 and 2017 :
(USD in thousands)
 
2018

2017

$ Change

% Change
Interest expense on financial liabilities measured at amortized cost
 
67,956


38,391


29,565


77
%
Other financial charges
 
9,592


5,819


3,773


65
%
Foreign exchange losses
 
11,864


6,521


5,343


82
%
Finance expenses
 
89,412


50,731


38,681


76
%
Finance expenses increased by 76% , or $38.7 million , to $89.4 million for the year ended December 31, 2018 , compared to $50.7 million for 2017 .
Interest expense on financial liabilities measured at amortized cost increased by 77% , or $29.6 million , during the year ended December 31, 2018 , compared to 2017 . This increase was primarily attributable to the increase in average outstanding debt during the year ended December 31, 2018 , compared to the same period in 2017 , and an increase of floating interest rates in 2018 . Other financial charges increased by 65% , or $3.8 million , to $9.6 million for the year ended December 31, 2018 , compared to $5.8 million for 2017 . This increase was primarily attributable to commitment fees paid for available credit lines, of which the total availability increased in 2018, and hedge ineffectiveness recognized in profit or loss.
Foreign exchange losses increased by 82% , or $5.3 million , primarily due to change in exchange rates between the EUR and the USD.
Share of results of equity accounted investees, net of income tax.
The following table sets forth our share of results of equity accounted investees (net of income tax) for the years ended December 31, 2018 and 2017 :
(USD in thousands)
 
2018

2017

$ Change

% Change
Share of results of equity accounted investees
 
16,076


30,082


(14,006
)

(47
)%
As at December 31, 2018, our equity accounted investees included two joint ventures which owned one FSO each.

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The result of our participations in the 50%-owned joint ventures, TI Asia Ltd. and TI Africa Ltd., the owners of FSO Asia and FSO Africa, respectively, have decreased by an aggregate of $14.0 million, mostly due to lower revenue under the new FSO contracts which started in July and September 2017 for the FSO Asia and FSO Africa, respectively and an additional interest expense following the signing on March 29, 2018 of a new $220.0 million senior secured credit facility.
Income tax benefit/(expense).
The following table sets forth our income tax benefit/(expense) for the years ended December 31, 2018 and 2017 :
(USD in thousands)
 
2018

2017

$ Change

% Change
Income tax benefit (expense)
 
(238
)

1,358


(1,596
)

(118
)%
Income tax benefit/(expense) decreased by 118% , or $1.6 million , to an expense of  $0.2 million for the year ended December 31, 2018 , compared to a benefit of $1.4 million for 2017 , which was mainly attributable to the recognition of a deferred tax asset related to our fully owned subsidiary Euronav Luxembourg in 2017.


Year ended December 31, 2017, compared to the year ended December 31, 2016
Total shipping revenues and voyage expenses and commissions.
The following table sets forth our total shipping revenues and voyage expenses and commissions for the years ended December 31, 2017 and 2016:
(USD in thousands)
 
2017
 
2016
 
$ Change
 
% Change
Voyage charter and pool revenues
 
394,663

 
544,038

 
(149,375
)
 
(27
)%
Time charter revenues
 
118,705

 
140,227

 
(21,522
)
 
(15
)%
Other income
 
4,902

 
6,996

 
(2,094
)
 
(30
)%
Total shipping revenues
 
518,270

 
691,261

 
(172,991
)
 
(25
)%
Voyage expenses and commissions
 
(62,035
)
 
(59,560
)
 
(2,475
)
 
4
 %
Voyage Charter and Pool Revenues .    Voyage charter and pool revenues decreased by 27%, or $149.4 million, to $394.7 million for the year ended December 31, 2017, compared to $544.0 million for 2016. This decrease was due to a decrease in the average TCE rates for VLCCs and Suezmax tankers from $42,243 per day and $27,114 per day, respectively in 2016 to $29,827 and $19,144, respectively in 2017. This decrease in the average TCE was partially offset by an increase of the total number of vessel operating days.
Time Charter Revenues .    Time charter revenues decreased by 15%, or $21.5 million, to $118.7 million for the year ended December 31, 2017, compared to $140.2 million for 2016. This decrease was due to several time charter contracts that ended without being renewed during the course of 2017 combined with deteriorating spot market conditions that resulted in lower profit splits existing on some of those contracts.
Other Income .    Other income decreased by 30%, or $2.1 million, to $4.9 million for the year ended December 31, 2017, compared to $7 million for 2016. Other income includes revenues related to the standard business operation of the fleet and that are not directly attributable to an individual voyage.
Voyage Expenses and Commissions .    Voyage expenses and commissions increased by 4% or $2.5 million, to $(62.0) million for the year ended December 31, 2017, compared to $(59.6) million for 2016. This increase was primarily due to increased of oil prices which increased bunker expenses, the largest component of voyage expenses and fewer vessels operating under a long term time charter.

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Net gain (loss) on lease terminations and net gain (loss) on the sale of assets.
The following table sets forth our gain (loss) on lease terminations and gain (loss) on the sale of assets for the years ended December 31, 2017 and 2016:
(USD in thousands)
 
2017
 
2016
 
$ Change
 
% Change
Net gain (loss) on lease terminations
 
—

 
—

 
—

 
0
 %
Net gain (loss) on sale of assets (including impairment on non-current assets held for sale and loss on disposal of investments in equity-accounted investees)
 
15,511

 
26,245

 
(10,734
)
 
(41
)%
Net gain (loss) on lease terminations.     We did not terminate any leases during the years ended December 31, 2017 and 2016.
Net gain (loss) on sale of assets (including impairment on non-current asset s held for sale, and loss on disposal of investments in equity-accounted investees).    Net gain (loss) decreased by 41%, or $10.7 million, to a net gain of $15.5 million for the year ended December 31, 2017, compared to a net gain of $26.2 million for 2016.
The net gain on sale of assets of $15.5 million in 2017, represents the difference between a gain of $8.5 million recorded on the sale of the Suezmax Cap Georges , a gain of $7.7 million on the sale of the VLCC Artois, a gain of $20.3 million recorded on the sale of the VLCC Flandre and a loss of $21.0 million on the sale of the VLCC TI Topaz.
The net gain on sale of assets of $26.2 million in 2016 represents the difference between a gain of $13.8 million recorded on the sale of the VLCC Famenne , a gain of $36.5 million recorded on the sale and lease back transaction of the VLCC Nautilus, Navarin, Neptun and Nucleus , and a loss of $24.1 million on the disposal of the joint ventures with Bretta, where we assumed full ownership of the two youngest vessels, the Suezmax Captain Michael and the Suezmax Maria .
Vessel Operating Expenses.
The following table sets forth our vessel operating expenses for the years ended December 31, 2017 and 2016:
(USD in thousands)
 
2017
 
2016
 
$ Change
 
% Change
Total VLCC operating expenses
 
95,987

 
100,848

 
(4,861
)
 
(5
)%
Total Suezmax operating expenses
 
54,440

 
59,351

 
(4,911
)
 
(8
)%
Total vessel operating expenses
 
150,427

 
160,199

 
(9,772
)
 
(6
)%
Total vessel operating expenses decreased by 6%, or $9.8 million, to $150.4 million during the year ended December 31, 2017, compared to $160.2 million for 2016.
VLCC operating expenses decreased by 5%, or $4.9 million, during the year ended December 31, 2017, compared to 2016. The decrease was primarily attributable to various cost savings and positive rate of exchange impact, partly offset by the delivery of the VLCC  Ardeche  and VLCC  Aquitaine  in January 2017 and purchase of the VLCC  V.K. Eddie  in November 2016.
Suezmax operating expenses decreased by 8%, or $4.9 million, during the year ended December 31, 2017, compared to 2016. The decrease was mainly due to lower technical costs in general, partly offset by the acquisition of the Suezmaxes  Maria  and  Captain Michael  following the Share Swap and Claims Transfer Agreement. See Item 5. Operating and Financial Review and Prospects-Fleet Development.
Time charter-in expenses and bareboat charter-hire expenses.
The following table sets forth our chartered-in vessel expenses and bareboat charter-hire expenses for the years ended December 31, 2017 and 2016:
(USD in thousands)
 
2017
 
2016
 
$ Change
 
% Change
Time charter-in expenses
 
62

 
16,921

 
(16,859
)
 
(100
)%
Bareboat charter-hire expenses
 
31,111

 
792

 
30,319

 
3,828
 %
Total charter hire expense
 
31,173

 
17,713

 
13,460

 
76
 %

97
                                    

                

Time charter-in expenses. Time charter-in expenses decreased by 100%, or $16.9 million, to $0.1 million during the year ended December 31, 2017, compared to $16.9 million for 2016. The decrease was attributable to the expiration of two time charter parties in 2016.
Bareboat charter-hire expenses. Bareboat charter-hire expenses increased by $30.3 million, to $31.1 million for the year ended December 31, 2017, compared to $0.8 million for 2016. The increase was entirely attributable to the sale and leaseback transaction of the VLCCs Nautilus, Navarin, Nucleus and Neptun entered into on December 16, 2016.
General and administrative expenses.
The following table sets forth our general and administrative expenses for the years ended December 31, 2017 and 2016:
(USD in thousands)
 
2017
 
2016
 
$ Change
 
% Change
General and administrative expenses
 
46,868

 
44,051

 
2,817

 
6
%
General and administrative expenses which include also, among others, directors' fees, office rental, consulting fees, audit fees and tonnage tax, increased by 6%, or $2.8 million, to $46.9 million for the year ended December 31, 2017, compared to $44.1 million for 2016.
This increase was due to, among other factors, an increase of $0.5 million relating to tonnage tax due to a higher number of VLCCs in the fleet, and an increase of $1.7 million in administrative expenses related to the TI Pool, due to the signing and usage of a senior secured line of credit to fund the working capital in the ordinary course of TI Pool's business of operating a pool of tankers vessels, including but not limited to the purchase of bunker fuel, the payment of expenses relating to specific voyages and supplies of pool vessels, commissions payable on fixtures, port costs, expenses for hull and propeller cleaning, canal costs, insurance costs for the account of the pool, and insurance and fees payable for towage of vessels. The TI Pool's financing expenses are part of the Pool administrative expenses which are borne by the Pool Participants, including Euronav. Furthermore, the audit and other fees increased by $0.6 million for the year ended December 31, 2017, compared to 2016, due to the enhanced effort on internal processes excellence in 2017. Staff costs increased with $0.6 million due to an increased head count.
 This increase was offset partially by a decrease of $0.7 million in directors’ fees, due to a favorable rate of exchange and the resignation of one of our directors. 
Depreciation and amortization expenses.
The following table sets forth our depreciation and amortization expenses for the years ended December 31, 2017 and 2016:
(USD in thousands)
 
2017
 
2016
 
$ Change
 
% Change
Depreciation and amortization expenses
 
229,872

 
227,763

 
2,109

 
1
%
Depreciation and amortization expenses increased by 1%, or $2.1 million, to $229.9 million for the year ended December 31, 2017, compared to $227.8 million for 2016.
Depreciation increased primarily due to (i) the acquisition and delivery of the VLCCs  Ardeche, Aquitaine, Alex, Anne and V.K. Eddie , resulting in an aggregate increase of $15.7 million, (ii) an increase in depreciation of drydock of $3.6 million and (iii) an increase of $3.6 million due to the acquisition of full ownership of the Suezmaxes  Maria  and  Captain Michael  following the Share Swap and Claims Transfer Agreement (see Fleet Development). This increase was partially offset by a decrease in depreciations due to (i) the sale and leaseback transaction of the VLCCs  Nautilus, Navarin, Nucleus  and  Neptun  entered into on December 16, 2016, resulting in an aggregate decrease of $13.3 million (ii) the sale and delivery of the VLCC  TI Topaz  to its new owner on June 9, 2017, (iii) the sale and delivery of the Suezmax Cap Georges  to its new owner on November 29, 2017, (iv) the sale and delivery of the VLCC Flandre  to its new owner on December 20, 2017 and (iv) the sale and delivery of the VLCC Artois  to its new owner on December 4, 2017 resulting in a combined decrease of $6.2 million.

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Finance Expenses.
The following table sets forth our finance expenses for the years ended December 31, 2017 and 2016:
(USD in thousands)
 
2017
 
2016
 
$ Change
 
% Change
Interest expense on financial liabilities measured at amortized cost
 
38,391

 
39,007

 
(616
)
 
(2
)%
Other financial charges
 
5,819

 
4,577

 
1,242

 
27
 %
Foreign exchange losses
 
6,521

 
8,111

 
(1,590
)
 
(20
)%
Finance expenses
 
50,731

 
51,695

 
(964
)
 
(2
)%
Finance expenses decreased by 2%, or $1.0 million, to $50.7 million for the year ended December 31, 2017, compared to $51.7 million for 2016.
Interest expense on financial liabilities measured at amortized cost decreased by 2%, or $0.6 million, during the year ended December 31, 2017, compared to 2016. This decrease was primarily attributable to the decrease in average outstanding debt during the year ended December 31, 2017, compared to the same period in 2016, partially offset by an increase of floating interest rates in 2017. Other financial charges increased by 27%, or $1.2 million, to $5.8 million for the year ended December 31, 2017, compared to $4.6 million for 2016. This increase was primarily attributable to commitment fees paid for available credit lines, of which the total availability increased in 2017.
Foreign exchange losses decreased by 20%, or $1.6 million, primarily due to change in exchange rates between the EUR and the USD.
Share of results of equity accounted investees, net of income tax.
The following table sets forth our share of results of equity accounted investees (net of income tax) for the years ended December 31, 2017 and 2016:
(USD in thousands)
 
2017
 
2016
 
$ Change
 
% Change
Share of results of equity accounted investees
 
30,082

 
40,495

 
(10,413
)
 
(26
)%
As at December 31, 2017, our equity accounted investees included two joint ventures which owned one FSO each.
On June 2, 2016, we entered into a Share Swap and Claims Transfer Agreement whereby (i) we transferred our 50% equity interest in Moneghetti and Fontvieille, and, as consideration therefor, acquired from Bretta its 50% ownership interest in Fiorano and Larvotto; and (ii) we transferred our claims arising from the shareholder loans to Moneghetti and Fontvieille and acquired Bretta’s claims arising from the shareholder loans to Fiorano and Larvotto. As a result, our equity interest in both Fiorano and Larvotto increased from 50% to 100% giving us control of both companies. We no longer have an equity interest in Moneghetti and Fontvieille. Before the swap agreement, we accounted for the four entities using the equity method. Following the acquisition, Fiorano and Larvotto are fully consolidated as of June 2, 2016. These transactions led to a decrease in the share of results of equity accounted investees for the year ended December 31, 2017, by $2.0 million compared to 2016.
On November 23, 2016, we took delivery of the VLCC V.K. Eddie that we purchased from our 50% joint venture Seven Seas. As a result, our share of the profit of this joint venture for the year ended December 31, 2017, was $3.7 million lower compared to 2016.
The result of our participations in the 50%-owned joint ventures, TI Asia Ltd. and TI Africa Ltd., the owners of FSO Asia and FSO Africa, respectively, have decreased by an aggregate of $4.6 million, mostly due to the recognition of a deferred tax liability and lower revenue under the new FSO contracts which started in July and September 2017 for the FSO Asia and FSO Africa, respectively. This was partly offset by lower interest expense after the repayment of the remaining bank debt in July 2017.

99
                                    

                

Income tax benefit/(expense).
The following table sets forth our income tax benefit/(expense) for the years ended December 31, 2017 and 2016:
(USD in thousands)
 
2017
 
2016
 
$ Change
 
% Change
Income tax benefit (expense)
 
1,358

 
174

 
1,184

 
680
%
Income tax benefit/(expense) increased by 680%, or $1.2 million, to a benefit of  $1.4 million for the year ended December 31, 2017, compared to a benefit of $0.2 million for 2016, which was mainly attributable to the recognition of a deferred tax asset related to our fully owned subsidiary Euronav Luxembourg.

B.    Liquidity and Capital Resources
We operate in a capital intensive industry and have historically financed our purchase of tankers and other capital expenditures through a combination of cash generated from operations, equity capital, borrowings from commercial banks and the issuance of convertible or other unsecured notes. Our ability to generate adequate cash flows on a short- and medium-term basis depends substantially on the trading performance of our vessels. Historically, market rates for charters of our vessels have been volatile. Periodic adjustments to the supply of and demand for oil tankers cause the industry to be cyclical in nature. We expect continued volatility in market rates for our vessels in the foreseeable future with a consequent effect on our short- and medium-term liquidity.
Our funding and treasury activities are conducted within corporate policies to maximize investment returns while maintaining appropriate liquidity for our requirements. Cash and cash equivalents are held primarily in U.S. dollars with some balances held in British Pounds, Euros, and other currencies we may hold for limited amounts.
As of December 31, 2018 and December 31, 2017 , we had $173.1 million and $143.6 million in cash and cash equivalents, respectively.
Our short-term liquidity requirements relate to payment of operating costs (including certain repairs performed in drydock), lease payments for our chartered-in fleet, funding working capital requirements, maintaining cash reserves against fluctuations in operating cash flows as well as maintaining some cash balances on accounts pledged under borrowings from commercial banks.
Sources of short-term liquidity include cash balances, restricted cash balances, syndicated credit lines, short-term investments and receipts from our customers. Revenues from time charters and bareboat charters are generally received monthly in advance. Revenues from FSO service contracts are received monthly in arrears while revenues from voyage charters are received upon completion of the voyage. As of December 31, 2018 and December 31, 2017 , we had $60.0 million and $60.0 million in available syndicated credit lines, respectively.
Our medium- and long-term liquidity requirements include funding the equity portion of investments in new or replacement vessels and funding all the payments we are required to make under our loan agreements with commercial banks. Sources of funding for our medium- and long-term liquidity requirements include new loans, refinancing of existing arrangements, drawdown under committed secured revolving credit facilities, issuance of new notes or refinancing of existing ones via public and private debt offerings, equity issues, vessel sales and sale and leaseback arrangements. As of December 31, 2018 and December 31, 2017 , we had $438.9 million and $547.4 million in available committed secured revolving credit facilities, respectively.
Net cash from (used in) operating activities during the year ended December 31, 2018 was $0.8 million , compared to $211.3 million during the year ended December 31, 2017 . Our partial reliance on the spot market contributes to fluctuations in cash flows from operating activities as a result of its exposure to highly cyclical tanker rates. Any increase or decrease in the average TCE rates earned by our vessels in periods subsequent to December 31, 2018 will have a positive or negative comparative impact, respectively, on the amount of cash provided by operating activities.
We believe that our working capital resources are sufficient to meet our requirements for the next 12 months from the date of this annual report.
As of December 31, 2018 and December 31, 2017 , our total indebtedness was $1,866.8 million and $964.6 million respectively.

100
                                    

                

We expect to finance our funding requirements with cash on hand, operating cash flow and bank debt or other types of debt financing. In the event that our cash flow from operations does not enable us to satisfy our short-term or medium- to long-term liquidity requirements, we will also have to consider alternatives, such as raising equity, or new convertible notes, which could dilute shareholders, or selling assets (including investments), which could negatively impact our financial results, depending on market conditions at the time, establish new loans or refinancing of existing arrangements.
Our Borrowing Activities
 
 
Amounts Outstanding as of
(US$ in thousands)
 
43465

 
43100

Euronav NV Credit Facilities
 
 
 
 
$340.0 Million  Senior Secured Credit Facility
 
184,762

 
111,666

$750.0 Million Senior Secured Credit Facility
 
165,000

 
330,000

$409.5 Million Senior Secured Credit Facility
 
150,000

 
118,000

$67.5 Million Secured Loan Facility (Larvotto)  
 
—

 
25,173

$76.0 Million Secured Loan Facility (Fiorano)  
 
—

 
23,563

$108.5 Million Secured Loan Facility
 
97,695

 
104,932

$173.5 Million Secured Loan Facility
 
170,224

 
—

$633.5 Million Secured Loan Facility
 
604,787

 
—

$200.0 Million Secured Loan Facility
 
200,000

 
—

 
 
 
 
 
Credit Line Facilities
 
 
 
 
Credit Lines

—


—

 
 
 
 
 
Senior unsecured bond
 
 
 
 
Senior Unsecured Bond
 
150,000

 
150,000

 
 
 
 
 
Treasury notes program
 
 
 
 
Treasury Notes Program
 
60,341

 
50,010

 
 
 
 
 
Total interest bearing debt
 
1,782,809

 
913,344

 
 
 
 
 
Joint Venture Credit Facilities (at 50% economic interest)
 
 

 
 

$220.0 Million Senior Secured Facility (TI Asia and TI Africa)  

93,033


—

 
 
 
 
 
Total interest bearing debt - joint ventures
 
93,033

 
—

Euronav NV Credit Facilities
$340.0 Million Senior Secured Credit Facility
On October 13, 2014, we entered into a $340.0 million senior secured credit facility with a syndicate of banks and ING Bank N.V., as Agent and Security Trustee. Borrowings under this facility have been used to partially finance our acquisition of the VLCC Acquisition Vessels and to repay $153.1 million of outstanding debt and retire our $300.0 million Secured Loan Facility dated April 3, 2009. This facility is comprised of (i) a $148.0 million non-amortizing revolving credit facility and (ii) a $192.0 million term loan facility. This facility has a term of 7 years and bears interest at LIBOR plus a margin of 2.25% per annum. This credit facility is secured by eight of our wholly-owned vessels, the  Fraternity ,  Felicity ,  Cap Felix , Cap Theodora  and the VLCCs Hakata, Hakone, Hirado and Hojo . As of December 31, 2018 and December 31, 2017 the outstanding balance on this facility was $184.8 million and $111.7 million , respectively.

101
                                    

                

$750.0 Million Senior Secured Credit Facility
On August 19, 2015, we entered into a $750.0 million secured loan facility with a syndicate of banks and Nordea Bank Norge SA, as Agent and Security Agent. This facility is comprised of a $500.0 million revolving credit facility, a $250.0 million revolving acquisition facility, and an uncommitted $250.0 million upsize facility. We used the proceeds of this facility to refinance all remaining indebtedness under our $750.0 million senior secured credit facility (2011) and our $65.0 million secured credit facility and for the acquisition of the Metrostar Acquisition Vessels in June 2015. This facility is secured by 24 of our wholly-owned vessels. The revolving credit facility is reduced in 13 installments of consecutive six-month interval. The revolving acquisition facility is reduced in 13 installments of consecutive six-month interval and a final $154.0 million repayment is due at maturity in 2022. This facility bears interest at LIBOR plus a margin of 1.95% per annum plus applicable mandatory costs. Following the sale of the  Cap Laurent  in November 2015, the total revolving credit facility was reduced by $11.5 million. Following the sale of the  Famenne  in January 2016, the total revolving credit facility was reduced by $21.3 million. Following the sale of the VLCC TI Topaz  in June 2017, the total revolving credit facility was reduced by $19.5 million. Following the sale of the Suezmax Cap Georges in November 2017, the total revolving credit facility was reduced by $7.5 million. Following the sale of the VLCC Artois and Flandre in December 2017, the total revolving credit facility was reduced by $35.5 million. Following the sale of the Suezmax  Cap Jean  in May 2018, the total revolving credit facility was reduced by $7.4 million. Following the sale of the Suezmax Cap Romuald in August 2018, the total revolving credit facility was reduced by $7.4 million. As of December 31, 2018 and December 31, 2017 the outstanding balance on this facility was $165.0 million and $330.0 million , respectively.
$409.5 Million Senior Secured Credit Facility
On December 16, 2016, we entered into a $409.5 million senior secured amortizing revolving credit facility with a syndicate of banks and Nordea Bank Norge SA, as Agent and Security Agent. We used the proceeds of this facility to refinance all remaining indebtedness under our $500.0 Million Senior Secured Credit Facility. This facility is secured by 11 of our wholly-owned vessels. The revolving credit facility is reduced in 12 installments of consecutive six-month interval and a final $129.2 million repayment is due at maturity in 2023. This facility bears interest at LIBOR plus a margin of 2.25% per annum plus applicable mandatory costs. As of December 31, 2018 and December 31, 2017 , the outstanding balance on this facility was $150.0 million and $118.0 million , respectively.
$67.5 Million Secured Loan Facility (Larvotto)
On August 29, 2008, one of our previously 50%-owned joint ventures, Larvotto Shipholding Limited, entered into a $67.5 million loan facility, as supplemented by a supplemental letter dated November 28, 2011, with Fortis Bank S.A./N.V. to partially finance the acquisition of the  Maria . This loan has a term of eight years starting after the delivery of the vessel (January 2012) with a balloon payment of $16.2 million due at maturity. This loan bears interest at LIBOR plus a margin of 1.5% per annum. As of December 31, 2015, the outstanding balance on this facility was $33.1 million of which we had a 50% economic interest of $16.5 million. After the Share Swap and Claims Transfer Agreement (see Fleet Development), we acquired the full economic interest in this loan facility. On December 11, 2018, we repaid this facility in full using a portion of the borrowings under our new $200.0 million Senior Secured Credit Facility.
$76.0 Million Secured Loan Facility (Fiorano)
On October 23, 2008, one of our previously 50%-owned joint ventures, Fiorano Shipholding Limited, entered into a $76.0 million loan facility with Scotiabank Ireland Ltd. to partially finance the acquisition of the  Capt. Michael . This loan had an original term of eight years and was extended in January 2017 bringing the final maturity date to January 31, 2020, with a final balloon payment of $14.0 million. This loan bears interest at LIBOR plus a margin of 1.95% per annum. As of December 31, 2015 the outstanding balance on this facility was $32.0 million, of which we had a 50% economic interest of $16.0 million. After the Share Swap and Claims Transfer Agreement (see Fleet Development), we acquired the full economic interest in this loan facility. On September 25, 2018, we repaid this facility in full using a portion of the borrowings under our new $200.0 million Senior Secured Credit Facility.

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$108.5 Million Senior Secured Credit Facility
On April 25, 2017, we entered into a $108.5 million revolving credit facility with DNB Bank ASA, as Agent and Security Trustee. This facility is comprised of (i) a term loan of $27.1 million from a syndicate of commercial lenders which we refer to as the “commercial tranche” and (ii) a term loan of $81.4 million insured by the Korea Trade Insurance Corporation, which we refer to as “K-sure tranche”. We used the proceeds of this facility to finance our acquisition of the VLCC newbuildings  Ardeche  and  Aquitaine , which were delivered to us on January 12, 2017 and January 20, 2017, respectively, and which serve as security under this facility. The commercial tranche bears interest at LIBOR plus a margin of 1.95% per annum plus applicable mandatory costs and is reduced in 24 installments of consecutive six-month interval and a final $21.7 million repayment is due at maturity in 2029. The K-sure tranche bears interest at LIBOR plus a margin of 1.50% per annum plus applicable mandatory costs and is reduced in 24 installments of consecutive six-month interval until maturity in 2029. As of December 31, 2018 and December 31, 2017 , the outstanding balance on this facility was $97.7 million and $104.9 million , respectively.
The facility agreement contains a provision that entitles the lenders to require us to prepay to the lenders, on January 12, 2024, with 180 days’ notice, their respective portion of any advances granted to us under the facility. The facility agreement also contains provisions that allow the remaining lenders to assume an outgoing lender’s respective portion(s) of the advances made to us or to allow us to suggest a replacement lender to assume the respective portion of such advances.
$173.5 Million Senior Secured Credit Facility 
On March 22, 2018, we entered into a $173.5 million revolving credit facility with Crédit Agricole Corporate and Investment Bank, as Agent and Security Trustee. This facility is comprised of (i) a term loan of $69.4 million from a syndicate of commercial lenders which we refer to as the “commercial tranche” and (ii) a term loan of $104.1 million provided by the Export-Import Bank of Korea, which we refer to as “Kexim tranche”. We used the proceeds of this facility to finance our acquisition of the Suezmax newbuildings  Cap Quebec , Cap Pembroke , Cap Port Arthur , and  Cap Corpus Christi , which were delivered to us on March 26, 2018, April 25, 2018, August 8, 2018 and August 29, 2018, respectively, and which serve as security under this facility. The commercial tranche bears interest at LIBOR plus a margin of 2.00% per annum plus applicable mandatory costs and is reduced in 24 installments of consecutive six-month interval and a final $3.5 million repayment is due at maturity in 2030.The Kexim tranche bears interest at LIBOR plus a margin of 2.00% per annum plus applicable mandatory costs and is reduced in 24 installments of consecutive six-month interval till maturity in 2030. The facility agreement contains a provision that entitles the lenders to require us to prepay to the lenders, on March 28, 2025, with 13 months notice, their respective portion of any advances granted to us under the facility. The facility agreement also contains provisions that allow the remaining lenders to assume an outgoing lender’s respective portion(s) of the advances made to us or to allow us to suggest a replacement lender to assume the respective portion of such advances. As of December 31, 2018, the outstanding balance on this facility was  $170.2 million .
$633.5 Million Senior Secured Loan Facility
As a result of the business combination on June 12, 2018, Euronav assumed the $633.0 million Senior Secured Loan facility from Gener8, initially entered into to fund a portion of the remaining installment payments due under shipbuilding contracts for 15 VLCC newbuildings owned by Gener8 at that time. This facility provided for term loans up to the aggregate approximate amount of $963.7 million, which is comprised of a tranche of term loans to be made available by a syndicate of commercial lenders up to the aggregate approximate amount of $282.0 million (the “Commercial Tranche”), a tranche of term loans to be fully guaranteed by the Export-Import Bank of Korea or the “KEXIM” up to the aggregate approximate amount of up to $139.7 million or the “KEXIM Guaranteed Tranche”, a tranche of term loans to be made available by KEXIM up to the aggregate approximate amount of $197.4 million or the “KEXIM Funded Tranche” and a tranche of term loans insured by Korea Trade Insurance Corporation (“K-Sure”) up to the aggregate approximate amount of $344.6 million or the “K-Sure Tranche”.

The Commercial Tranche with a final maturity on September 29, 2022, bears interest at LIBOR plus a margin of 2.75% per annum and is reduced in 10 remaining installments of consecutive three-month interval and a balloon repayment at maturity in 2022. The KEXIM Guaranteed Tranche, with a final maturity on February 28, 2029, bears interest at LIBOR plus a margin of 1.50% per annum and is reduced in 39 remaining installments of consecutive three-month interval. The KEXIM Funded Tranche, with a final maturity on February 28, 2029, bears interest at LIBOR plus a margin of 2.60% per annum and is reduced in 39 remaining installments of consecutive three-month interval. The K-Sure Tranche, with a final maturity on February 28, 2029, bears interest at LIBOR plus a margin of 1.70% per annum and is reduced in 39 remaining installments of consecutive three-month interval. This facility is secured by 13 of our wholly-owned vessels. As of December 31, 2018 , the outstanding balance on this facility was  $604.8 million in aggregate.

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$581.0 Million Senior Secured Loan Facility
As a result of the business combination on June 12, 2018, Euronav assumed the $581.0 million Senior Secured Loan facility from Gener8. This facility with a final maturity on September 3, 2020 bears interest at LIBOR plus a margin of 3.75% per annum and is reduced in 9 remaining installments of consecutive six-month interval and a final $77.4 million repayment is due at maturity in 2020. This facility was secured by 10 of our wholly-owned vessels and a pledge of certain of our and Gener8 Maritime Sub II vessel owning subsidiaries’ respective bank accounts. On September 17, 2018, we repaid this facility in full ($-139.7 million) using a portion of the borrowings under our new $200.0 million Senior Secured Credit Facility.

$200.0 Million Senior Secured Credit Facility 
On September 7, 2018, we entered into a $200.0 million secured revolving credit facility with a syndicate of banks and Nordea Bank Norge SA, as Agent and Security Agent. We used the proceeds of this facility to refinance all remaining indebtedness under our $581.0 Senior Secured Loan facility, our $67.5 Million Secured Loan Facility (Larvotto), and our $76.0 Million Secured Loan Facility (Fiorano). This facility is secured by nine of our wholly-owned vessels. This revolving credit facility is reduced in 12 installments of consecutive six-month interval and a final $55.0 repayment is due at maturity in 2025. This facility bears interest at LIBOR plus a margin of 2.00% per annum plus applicable mandatory costs. As of December 31, 2018 , the outstanding balance on this facility was $200.0 million  .

$150.0 Million Senior Unsecured Note  
On May 31, 2017, we completed an issuance of $150.0 million of senior unsecured bonds with a fixed coupon of 7.50% and maturity in May 2022. We serve as guarantor of the bonds. The net proceeds from the bond issuance are being used for general corporate purposes. DNB Markets, Nordea and Arctic Securities AS acted as joint lead managers in connection with the placement of the bonds. The related transaction costs for a total of $2.7 million are amortized over the lifetime of the bonds using the effective interest rate method. The bonds were listed on the Oslo Stock Exchange on October 23, 2017.

€150.0 Million Treasury Notes Program
 On June 6, 2017, we entered into an agreement, or the Dealer Agreement, with BNP Paribas Fortis SA/NV to act as arranger and dealer for a Belgian Multi-Currency Short-Term Treasury Notes Program with a maximum outstanding amount of €50.0 million. On October 1, 2018, we amended the agreement to increase the maximum outstanding amount to €150.0 million, while appointing KBC Bank NV as additional dealer for the program. Pursuant to the terms of the Dealer Agreement, we may issue the treasury notes to the dealer from time to time upon such terms and such prices as we and the dealer agree. As of December 31, 2018 and December 31, 2017 , the outstanding balances under this program was $60.3 million (€52.7 million) and $50.0 million (€41.7 million), respectively

Joint Venture Credit Facilities (at 50% economic interest)
$220.0 Million Secured Loan Facility (TI Asia and TI Africa)
On March 29, 2018, two of our 50%-owned joint ventures, TI Asia Ltd. and TI Africa Ltd. entered into a $220.0 million senior secured credit facility. The facility consists of a term loan $110.0 million and a revolving loan of $110.0 million for the purpose of refinancing the two FSOs as well as for general corporate purposes. The term loan consists of two tranches; the FSO Asia Term loan of $54.0 million, maturing on June 21, 2022 and the FSO Africa Term loan of $56.0 million, maturing on September 22, 2022. The revolving credit facility consists of two tranches; the FSO Asia revolving loan of $54.0 million, maturing on June 21, 2022 and the FSO Africa revolving loan of $56.0 million, maturing on September 22, 2022.
As of December 31, 2018  the outstanding balance under this program was $186.0 million in aggregate.
The joint venture term loans described above were secured by a mortgage of the specific vessel and we provided a guarantee for the revolving credit facility tranche. As of December 31, 2018, the outstanding balance under the revolving credit facility tranche was  $93.0 million .


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Security
Our secured indebtedness is generally secured by:
•
a first priority mortgage in all collateral vessels;
•
a general pledge of earnings generated by the vessels under mortgage for the specific facility; and
•
a parent guarantee when the indebtedness is not taken at the level of the parent.
Loan Covenants
Our debt agreements discussed above generally contain financial covenants, which require us to maintain, among other things:
•
an amount of current assets that, on a consolidated basis, exceeds our current liabilities. Current assets may include undrawn amount of any committed revolving credit facilities and credit lines having a maturity of more than one year;
•
an aggregate amount of cash, cash equivalents and available aggregate undrawn amounts of any committed loan of at least $50.0 million or 5% of our total indebtedness (excluding guarantees), depending on the applicable loan facility, whichever is greater;
•
an aggregate cash balance of at least $30.0 million; and
•
a ratio of stockholders' equity to total assets of at least 30%.
Our credit facilities discussed above also contain restrictions and undertakings which may limit our and our subsidiaries' ability to, among other things:
•
effect changes in management of our vessels;
•
transfer or sell or otherwise dispose of all or a substantial portion of our assets;
•
declare and pay dividends, (with respect to each of our joint ventures, other than Seven Seas Shipping Limited, no dividend may be distributed before its loan agreement, as applicable, is repaid in full); and
•
incur additional indebtedness.
A violation of any of our financial covenants or operating restrictions contained in our credit facilities may constitute an event of default under our credit facilities, which, unless cured within the grace period set forth under the applicable credit facility, if applicable, or waived or modified by our lenders, provides our lenders with the right to, among other things, require us to post additional collateral, enhance our equity and liquidity, increase our interest payments, pay down our indebtedness to a level where we are in compliance with our loan covenants, sell vessels in our fleet, reclassify our indebtedness as current liabilities and accelerate our indebtedness and foreclose their liens on our vessels and the other assets securing the credit facilities, which would impair our ability to continue to conduct our business.
Furthermore, certain of our credit facilities contain a cross-default provision that may be triggered by a default under one of our other credit facilities. A cross-default provision means that a default on one loan would result in a default on certain other loans. Because of the presence of cross-default provisions in certain of our credit facilities, the refusal of any one lender under our credit facilities to grant or extend a waiver could result in certain of our indebtedness being accelerated, even if our other lenders under our credit facilities have waived covenant defaults under the respective credit facilities. If our secured indebtedness is accelerated in full or in part, it would be very difficult in the current financing environment for us to refinance our debt or obtain additional financing and we could lose our vessels and other assets securing our credit facilities if our lenders foreclose their liens, which would adversely affect our ability to conduct our business.
Moreover, in connection with any waivers of or amendments to our credit facilities that we may obtain, our lenders may impose additional operating and financial restrictions on us or modify the terms of our existing credit facilities. These restrictions may further restrict our ability to, among other things, pay dividends, make capital expenditures or incur additional indebtedness, including through the issuance of guarantees. In addition, our lenders may require the payment of additional fees, require prepayment of a portion of our indebtedness to them, accelerate the amortization schedule for our indebtedness and increase the interest rates they charge us on our outstanding indebtedness.

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In addition, we have provided, and may continue to provide in the future, unsecured loans to our joint ventures which we consider economically as equivalent to investments in the joint ventures. Accordingly, in the event our joint ventures do not repay these loans as they become due and payable, the value of our investment in such entities may decline. Furthermore, we have provided, and may continue to provide in the future, guarantees to certain banks with respect to commercial bank indebtedness of our joint ventures. Failure on behalf of any of our joint ventures to service its debt requirements and comply with any provisions contained in its commercial loan agreements, including paying scheduled installments and complying with certain covenants, may lead to an event of default under its loan agreement. As a result, if our joint ventures are unable to obtain a waiver or do not have enough cash on hand to repay the outstanding borrowings, their lenders may foreclose their liens on the vessels securing the loans or seek repayment of the loan from us, or both, which would have a material adverse effect on our financial condition, results of operations, and cash flows.

As of December 31, 2018, $186.0 million was outstanding under these joint venture loan agreements, of which we guaranteed $93.0 million. In 2017, there were no amounts outstanding under these joint venture loan agreements.
As of December 31, 2018 and December 31, 2017 , we were in compliance with all of the covenants contained in our debt agreements, and our joint ventures were in compliance with all of the covenants contained in their respective debt agreements.
Guarantees
We have provided guarantees to financial institutions that have provided credit facilities in 2018 to two of our joint ventures, in the aggregate amount of $93.0 million. 
In addition, on July 14, 2017 and September 22, 2017, TI Asia Ltd. and TI Africa Ltd., two 50%-owned joint ventures, which own the  FSO Asia  and  FSO Africa , two FSO vessels, respectively, entered into two guarantees of up to $5.0 million each with ING Bank, in favor of North Oil Company in connection with its use of the  FSO Asia  and  FSO Africa . These guarantees terminate on October 21, 2022 for the FSO Asia and December 21, 2022 for the FSO Africa . As of December 31, 2018 , these guarantees have not been called upon. 

C.     Research and development, patents and licenses
Not applicable.
D.    Trend information
The supply and demand patterns for ships continue to be the biggest impact on revenues. Generally the global demand for oil transportation on ships is affected by the global demand for crude oil, which in turn is highly dependent on the state of the global economy. Most economies across the world are experiencing healthy economic growth at the moment and this is reflected in strong oil demand growth. In its latest published report the International Energy Agency (IEA) are forecasting 2019 oil demand growth of 1.42 million barrels per day compared to average growth levels in the last 10 years of 1.28 million barrels.
 The rate at which a change in oil demand impacts the demand for oil tankers depends not only on the nominal change in oil demand but also how this oil is traded. Looking at crude oil, the market has continued to see a significant uptick in exports emanating from the US Gulf, most of which have been destined for China and other Far Eastern customers. This oil travels a substantially longer distance than crude oil originating from the Arabian Gulf headed for the same destination, and hence employs the crude tankers for a longer period of time. The current trend is a rise in crude exports from the Atlantic basin combined with demand growth centered in the Far East providing longer employment times for crude tankers for the incremental barrel produced.
 The supply of tankers is influenced by the number of vessels delivered to the fleet, the number of vessels removed from the fleet (through recycling or conversion) and the number of vessels tied up in alternative employment such as storage. 2018 saw a significant number of new ships join the fleet across all the crude tanker segments, and this trend is set to continue in 2018. The tanker orderbook as a whole however remains measured, with the VLCC orderbook equal to 14% of the fleet and Suezmax orderbook equal to 8% of the current fleet. Vessel exits from the trading fleet have continued the momentum in 2018 and we expect this trend to continue in 2019 as a number of factors support increased recycling levels, in particular regulatory requirements that encourage ship owners to make decisions on whether to continue trading their older tonnage or put them through costly upgrades to comply with new directives, such as the Ballast Water Management convention. The imminent requirement for vessels to burn low sulfur fuel from 2020 is another factor that may cause ship owners to re-evaluate the longevity of some of their older tonnage.

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Our revenues are also affected by our strategy to employ some of our vessels on time charters, which have a fixed income for a pre-set period of time as opposed to trading ships in the spot market where their earnings are heavily impacted by the supply and demand balance. The Management team continuously evaluates the value of both strategies and makes informed decisions on the chartering mix based on anticipated earnings, and through this process we aim to always maximize each vessel’s return.
We have no additional funding requirements going forward all things being equal and are supported by a proven management team, strict capital discipline and an established dividend distribution policy.
Please see also "Item 4. Information on the Company—B. Business Overview—Industry and Market Conditions."

E.    Off-balance sheet arrangements
We are committed to make rental payments under operating leases for vessels and for office premises. The future minimum rental payments under our non-cancellable operating leases are disclosed below under "Contractual Obligations."

F.    Tabular disclosure of contractual obligations
Contractual Obligations
As of December 31, 2018 , we had the following contractual obligations and commitments which are based on contractual payment dates:
(USD in thousands)
 
Total

 
2019

 
2020

 
2021

 
2022

 
2023

 
Thereafter

Long-term bank loan facilities (1)
 
1,572,467

 
138,537

 
157,693

 
273,332

 
340,807

 
216,986

 
445,112

Long-term debt obligations
 
150,000

 
—

 
—

 
—

 
150,000

 


 
—

Treasury Note Program
 
60,342

 
60,342

 
 
 
 
 
 
 
 
 
 
Bank credit line facilities
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Operating leases (vessels)
 
95,524

 
32,120

 
32,208

 
31,196

 


 
—

 
—

Operating leases (non-vessel)
 
24,779

 
4,213

 
4,541

 
4,163

 
3,889

 
3,163

 
4,810

Capital Expenditure commitments (2)
 
—

 
—

 
—

 
—

 
—

 
—

 
—

Total contractual obligations due by period
 
1,903,112

 
235,212

 
194,442

 
308,691

 
494,696

 
220,149

 
449,922

(1) Excludes interest payments.
(2) Includes obligations only under our newbuilding program.
 
Not included in the table above are options that have been granted to us but not yet exercised under our time charter-in agreements to extend their respective durations.

G.     Safe harbor
Forward-looking information discussed in this Item 5 includes assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as "forward-looking statements." We caution that assumptions, expectations, projections, intentions and beliefs about future events may and often do vary from actual results and the differences can be material. Please see the section entitled "Cautionary Statement Regarding Forward-Looking Statements" in this annual report.


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ITEM 6.    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
A.            Directors and Senior Management
Set forth below are the names, ages and positions of our Directors and Executive Officers as of the date of this annual report. Our Board of Directors is elected annually on a staggered basis, and each director holds office for a term of maximum four years, until his or her term expires or until his or her death, resignation, removal or the earlier termination of his or her term of office. All Directors whose term expires are eligible for re-election. Officers are appointed from time to time by our Board of Directors and hold office until a successor is appointed or their employment is terminated. The business address of each of our Directors and Executive Officers listed below is Euronav NV, Belgica House, De Gerlachekaai 20, 2000 Antwerp, Belgium.
Name
 
Age
 
Position
 
Date of Expiry of Current Term
(for Directors)
Carl E. Steen   
 
68
 
Chairman of the Board of Directors
 
Annual General Meeting 2022
Daniel R. Bradshaw   
 
72
 
Director
 
Annual General Meeting 2019
Anne-Hélène Monsellato   
 
51
 
Director
 
Annual General Meeting 2022
Ludovic Saverys   
 
35
 
Director
 
Annual General Meeting 2021
Grace Reksten Skaugen
 
65
 
Director
 
Annual General Meeting 2020
Steven Smith
 
60
 
Director
 
Annual General Meeting 2021
Patrick Rodgers   
 
59
 
Chief Executive Officer and Director*
 
Annual General Meeting 2020
Hugo De Stoop   
 
46
 
Chief Financial Officer*
 
 
Alex Staring   
 
53
 
Chief Operating Officer
 
 
Egied Verbeeck   
 
44
 
General Counsel
 
 
An Goris   
 
41
 
Secretary General
 
 
Brian Gallagher
 
48
 
Head of Investor Relations
 
 
Stamatis Bourboulis
 
61
 
General Manager, Euronav Ship Management (Hellas) Ltd.
 
 
*
Mr. Rodgers is resigning from the position of CEO sometime in the second quarter of 2019. Mr. De Stoop will succeed Mr. Rodgers as CEO.
Biographical information concerning the Directors and Executive Officers listed above is set forth below
Carl E. Steen , our Chairman, was co-opted as director and appointed Chairman of our Board of Directors with effect immediately after the meeting of our Board of Directors of December 3 2015. Mr. Steen is also a member of our Audit and Risk Committee and of the Remuneration Committee. He graduated from the Eidgenössische Technische Hochschule in Zurich, Switzerland in 1975 with a M.Sc. in Industrial and Management Engineering. After working as a consultant in a logistical research and consultancy company, he joined a Norwegian shipping company in 1978 with primary focus on business development. Five years later, in 1983, he joined Christiania Bank and moved to Luxembourg, where he was responsible for Germany and later the Corporate division. In 1987 Mr. Steen became Senior Vice president within the Shipping Division in Oslo and in 1992 he took charge of the Shipping/Offshore and Transport Division. When Christiania Bank merged with Nordea in 2001 he was made Executive Vice President within the newly formed organization while adding the International Division to his responsibilities. Mr. Steen remained Head of Shipping, Offshore and Oil services and the International Division until 2011. Since leaving Nordea, Mr. Steen has become a non-executive director for the following listed companies in the finance, shipping and logistics sectors: Golar LNG Limited (NASDAQ: GLNG) and Golar LNG Partners LP (NASDAQ: GMLP), both part of the same group and where he also sits on the audit committee, Wilh Wilhelmsen Holding ASA and Belships ASA. Mr. Steen is also member of the Board of Directors of CMB NV, a company controlled by Fam. Marc Saverys, our former director and the father of Ludovic Saverys, a member of our Board of Directors. The Company’s Board of Directors has determined that Mr. Steen is considered “independent” under Rule 10A-3 promulgated under the Exchange Act and under the rules of the NYSE.

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Daniel R. Bradshaw , one of our directors, serves and has served on our Board of Directors since 2004, and is a member of our Audit and Risk Committee and the chairman of our Corporate Governance and Nomination Committee. Since 2014 Mr. Bradshaw has also served as Independent Director of GasLog Partners LP (NYSE: GLOP), a Marshall Islands limited partnership. Since 2010 he has served as an Independent non-executive Director of IRC Limited, a company listed in Hong Kong, which operates iron mines in far eastern Russia, and which is an affiliate of Petropavlovsk PLC, a London-listed mining and exploration company. Since 2006 Mr. Bradshaw has been an Independent non-executive Director of Pacific Basin Shipping Company Limited, a company listed in Hong Kong and operating in the Handysize bulk carrier sector. Since 1978 Mr. Bradshaw has worked at Johnson Stokes & Master, now Mayer Brown JSM, in Hong Kong, from 1983 to 2003 as a Partner and since 2003 as a Senior Consultant. From 2003 until 2008 Mr. Bradshaw was a member of the Hong Kong Maritime Industry Council. From 1993 to 2001 he served as Vice-Chairman of the Hong Kong Shipowners' Association and was a member of the Hong Kong Port and Maritime Board until 2003. Mr. Bradshaw began his career with the New Zealand law firm Bell Gully and in 1974, joined the international law firm Sinclair Roche & Temperley in London. Mr. Bradshaw obtained a Bachelor of Laws and a Master of Laws degree at the Victoria University of Wellington (New Zealand). The Company’s Board of Directors has determined that Mr. Bradshaw is considered “independent” under Rule 10A-3 promulgated under the Exchange Act and under the rules of the NYSE.
Anne-Hélène Monsellato , one of our directors, serves and has served on our Board of Directors since her appointment at the AGM in May 2015, and is the Chairman of our Audit and Risk Committee and a member of our Corporate Governance and Nomination Committee. She can be considered as the Audit and Risk Committee financial expert for purposes applicable for corporate governance regulations and Article 96 paragraph 1, 9° of the Belgian Company Code. Since June 2017, Mrs. Monsellato serves on the Board of Directors of Genfit, a biopharmaceutical company listed in Euronext, and is the chairman of the Audit Committee. Mrs. Monsellato is an active member of the French National Association of Directors since 2013. In addition, she serves as the Vice President and Treasurer of the Mona Bismarck American Center for Art and Culture, a U.S. public foundation based in New York. From 2005 to 2013, Mrs. Monsellato served as a Partner with Ernst & Young (now EY), Paris, after having served as Auditor/Senior, Manager and Senior Manager for the firm starting in 1990. During her time at EY, she gained extensive experience in cross border listing transactions, in particular with the U.S. She is a Certified Public Accountant in France since 2008 and graduated from EM Lyon in 1990 with a degree in Business Management. The Company’s Board of Directors has determined that Ms. Monsellato is considered “independent” under Rule 10A-3 promulgated under the Exchange Act and under the rules of the NYSE.
Ludovic Saverys , one of our directors, serves and has served on our Board of Directors since 2015 and is a member of our Remuneration Committee and our Corporate Governance and Nomination Committee. Mr. Saverys currently serves as Chief Financial Officer of CMB NV and as General Manager of Saverco NV. Until the end of March 2019, he also served as Chief Financial Officer and Director of Hunter Maritime Acquisition Corp. (NASDAQ: HUNT), a blank check company listed on NASDAQ. During the time he lived in New York, Mr. Saverys served as Chief Financial Officer of MiNeeds Inc. from 2011 to 2013 and as Chief Executive Officer of SURFACExchange LLC from 2009 to 2013. He started his career as Managing Director of European Petroleum Exchange (EPX) in 2008. From 2001 to 2007 he followed several educational programs at universities in Leuven, Barcelona and London from which he graduated with M. Sc. degrees in International Business and Finance.
Grace Reksten Skaugen , one of our directors, serves and has served on the Board of Directors since the AGM on May 12 2016 and is Chairman of the Remuneration Committee and a member of the Corporate Governance and Nomination Committee. Ms. Reksten Skaugen is a member of the HSBC European Senior Advisory Council (ESAC). In 2009 she founded Infovidi Board Services Ltd, an independent consulting company. From 2002 to 2015, she was a member of the Board of Directors of Statoil ASA. She is presently Deputy Chairman of Orkla ASA and a Board member of Investor AB and Lundin Petroleum AB. In 2009 she was one of the founders of the Norwegian Institute of Directors, of which she continues to be a member of the Board. From 1994 to 2002 she was a Director in Corporate Finance in SEB Enskilda Securities in Oslo. She has previously worked in the fields of venture capital and shipping in Oslo and London and carried out research in microelectronics at Columbia University in New York. She has a doctorate in Laser Physics from Imperial College of Science and Technology, University of London. In 1993 she obtained an MBA from the BI Norwegian School of Management. The Company’s Board of Directors has determined that Ms. Skaugen is considered “independent” under Rule 10A-3 promulgated under the Exchange Act and under the rules of the NYSE.

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Steven Smith serves and has served on the Board of Directors since Euronav’s Annual Shareholders’ Meeting on May 9 2018 approved his appointment a director which was a condition of the Merger with Gener8 . He also became a member of the Remuneration Committee and the Audit and Risk Committee. Since 2011 he has been the Managing Partner and a Member of the Investment Committee at Aurora Resurgence Fund, a USD 550 million special situations/distressed for control fund. From 2001 till 2011, Mr. Smith held a variety of leadership positions at UBS Investment Bank and served on the Americas Executive Committee and Global Management Committee. Previously, he worked as a Managing Director at Credit Suisse and Donaldson, Lufkin & Jenrette/Credit Suisse, where he was a member of the restructuring and leveraged finance groups. Mr. Smith started his career in restructuring and leveraged finance at the law firm of Latham & Watkins where he worked as an Associate until 1992. Steven Smith is a Member of the California Bar Association and has FINRA Series 7, 63 and 24 Qualifications. In 1985 he obtained a Juris Doctor/MBA degree from the UCLA School of Law/Anderson School of Management in Los Angeles. He also holds a Bachelor of Arts in English and American Literature from the University of California, San Diego. The Company’s Board of Directors has determined that Mr. Smith is considered “independent” under Rule 10A-3 promulgated under the Exchange Act and under the rules of the NYSE.
Patrick Rodgers became Chief Executive Officer of Euronav in 2000 and has served on Euronav’s Board of Directors since June 2003. He joined Euronav as a member of the Executive Committee in 1995 and was appointed Chief Financial Officer in 1998. In February 2019, it was announced that Mr. Rodgers has decided to step down from his role as Chief Executive Officer of the Company.  Since 2011, he has served as Director and Chairman of the International Tanker Owners Pollution Federation Fund (ITOPF).  Mr. Rodgers was elected to the Executive Committee of Intertanko in May 2017. From 1990 to 1995 Mr.Rodgers worked at CMB Group as in-house lawyer and subsequently as Shipping Executive moving to Euronav when it became a subsidiary for tanker investments of the CMB Group.  He graduated in with an LLB in Law from University College London in 1981 and qualified to practice in 1984 having passed law society entrance exams after studying at the College of Law, Guildford in 1982.  In 1984 he joined Bentley, Stokes & Lowless as a solicitor and in 1986 he moved to Johnson, Stokes & Master in Hong Kong where he practiced until 1990.
Hugo De Stoop serves and has served as our Chief Financial Officer since 2008, after serving as our Deputy Chief Financial Officer and Head of Investor Relations beginning in 2004. Mr. De Stoop has been a member of our Executive Committee since 2008. In March 2019, it was announced that Mr. De Stoop will succeed Mr. Rodgers as Chief Executive Officer of the Company following a brief handover period which is expected to take place during the course of the second quarter of 2019. Mr. De Stoop started his career in 1998 with Mustad International Group, an industrial group with over 30 companies located in five continents where he worked as a project manager on various assignments in the United States, Europe and Latin America, in order to integrate recently acquired subsidiaries. In 1999, Mr. De Stoop founded First Tuesday in America, the world's largest meeting place for high tech entrepreneurs, venture capitalists and companies and helped develop the network in the United States and in Latin America and, in 2001, was appointed member of the Board of Directors of First Tuesday International . In 2000, he joined Davos Financial Corp., an investment manager for UBS, specializing in Asset Management and Private Equity, where he became an Associate and later a Vice President in 2001. He conducted several transactions, including private placement in public equities (PIPE) and investments in real estate. Mr. De Stoop studied in Oxford, Madrid and Brussels and graduated from école polytechnique (ULB) with a Master of Science in engineering. He also holds a MBA from INSEAD.
Alex Staring serves and has served as our Chief Operating Officer since 2005. He has also been in charge of our offshore segment since July 2010. Captain Staring serves and has served as a member of our Executive Committee since 2005. Captain Staring has been a Director of Euronav Hong Kong Ltd. since 2007, a Director of Euronav SAS and Euronav Ship Management since 2002 and a Director of Euronav Luxembourg SA since 2000. In 2000, international shipping companies, AP Moller, Euronav, Frontline, OSG, Osprey Maritime and Reederei'Nord' Klaus E Oldendorff consolidated the commercial management of their VLCCs by operating them in a pool, Tankers International, of which Captain Staring became Director of Operations. In 1988, Captain Staring gained his master's and chief engineer's license and spent the majority of his time at sea on Shell Tankers and CMB tankers, the last 3 years of which he attained the title of Master. From 1997 to 1998, Captain Staring headed the SGS S.A. training and gas centre. In 1998, Captain Staring rejoined CMB and moved to London to head the operations team at their subsidiary, Euronav UK. Captain Staring graduated with a degree in Maritime Sciences from the Maritime Institute in Flushing, The Netherlands and started his career at sea in 1985.
Egied Verbeeck serves and has served as General Counsel of the Company since 2009 and became a member of the Executive Committee of the Company in January 2010. From 2006 until June 2014, Mr. Verbeeck served as Secretary General of the Company. Prior to joining Euronav he was a managing associate at Linklaters De Bandt from 1999-2005. Mr. Verbeeck has been a Director of Euronav Ship Management SAS since 2012, a Director of Euronav Hong Kong Ltd. since 2007 and a Director of Euronav Luxembourg S.A. since 2008. Mr. Verbeeck graduated in law from the Catholic University of Louvain in 1998. He also holds a Master Degree in international business law from Kyushu University (Japan) as well as a postgraduate degree in corporate finance from the Catholic University of Louvain.

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An Goris serves and has served as Secretary General of the Company since June 2014, in which capacity, she is responsible for the general corporate affairs of the Company. From 2011 to 2014, Ms. Goris served as legal counsel to the Company. She became a member of the Antwerp Bar when joining Linklaters in 2001 where she gained extensive experience in corporate law, mergers and acquisitions and finance. In 2008 she joined Euroclear as a legal manager where she worked for both the local central securities depository Euroclear Belgium as well as the international central securities depository Euroclear Bank. Ms. An Goris graduated in law from the University of Antwerp in 2000. She also holds a Master's Degree in law from Oxford University, International Business Law (Paris, University René Descartes) and in Corporate Law (Catholic Universities of Louvain and Brussels). Ms. Goris is a native Dutch speaker and is also fluent in English and French. She is also a sworn legal translator for English and French into Dutch.
Brian Gallagher serves and has served as Head of Investor Relations of the Company since March 2014 and joined the Euronav Executive Committee on January 1, 2019. Mr. Gallagher began his fund management career at the British Coal Pension fund unit, CIN Management, before moving to Aberdeen Asset Management in 1996. Managing and marketing a range of UK investment products Mr. Gallagher then progressed to Murray Johnstone in 1999 and then was headhunted by Gartmore Investment Management in 2000 to manage a range of UK equity income products. In 2007 he then set up a retail fund at UBS Global Asset Management before switching into Investor Relations as IR Director at APR Energy in 2011. Mr. Gallagher graduated in Economics from Birmingham University in 1992.
Stamatis Bourboulis joined the Euronav Executive Committee on January 1, 2019. Mr. Bourboulis has been General Manager of Euronav Ship Management (Hellas) Ltd. since its inception in November 2005. Following his employment in a chemical factory, ship building and ship repair shipyards in Greece, he joined Ceres Hellenic Shipping Enterprises Ltd in October 1990 as Superintendent Engineer and dealt with various types of vessels. In 1997 Mr. Bourboulis became Ship Manager for the Crude Oil Tankers and OBOs. In 2000 Mr. Bourboulis undertook the position of Technical Manager for the Ceres fleet of Dry Bulk, Crude Oil, Chemical and LNG Carriers. He is a member of Intertanko Safety and Technical Committee (ISTEC), DNVGL and RINA Greek Technical Committee. Mr. Bourboulis graduated from the National Technical University of Athens as a Naval Architect and Marine Engineer in 1981.
B.           Compensation
The compensation of our Board of Directors is determined on the basis of four regular meetings of the full board per year. The actual amount of remuneration is determined by the annual general meeting and is benchmarked periodically with Belgian listed companies and international peer companies. The provisional aggregate annual compensation paid to our executive officers, excluding our Chief Executive Officer, for the year ended December 31, 2018 (with discussions regarding share related compensation being ongoing as of the date of this report) was EUR 2,085,700 comprised of EUR 1,117,263 of fixed compensation, EUR 854,700 of variable compensation in cash, pension and benefits valued at EUR38,672 and EUR 75,065 in other compensation. The annual aggregate compensation paid to our Chief Executive Officer was EUR 2,581,831 comprised of EUR 562,000 of fixed compensation, EUR 1,975,000 of variable compensation in cash and EUR 44,831 in other compensation. We also paid an aggregate of EUR 564,583.34 fixed fees (board and committees) to our non-executive directors during the year ended December 31, 2018, with an additional aggregate board and committee meeting attendance fee of EUR 470,000. Our Chairman of the Board is entitled to receive a gross fixed amount of EUR 160,000 per year, and each member of the board is entitled to receive a gross fixed amount of EUR 60,000 per year, save for Mr. Dan Bradshaw. For Mr. Bradshaw, the gross fixed annual remuneration pursuant to his director's mandate was set at EUR 20,000. In addition, our Chairman and each director are entitled to receive an attendance fee of EUR 10,000 per board meeting attended, not to exceed EUR 40,000 per year. The Chairman of our audit and risk committee is entitled to receive a gross fixed amount of EUR 40,000, and each member of the audit and risk committee is entitled to receive a gross fixed amount of EUR 20,000 per year. In addition, the Chairman of our audit and risk committee and members of the audit and risk committee are entitled to receive an attendance fee of EUR 5,000 per audit and risk committee meeting attended, not to exceed EUR 20,000 per year. Our Chairmen of all of our other committees are entitled to receive a gross fixed amount of EUR 7,500 per year, and the members of all of our other committees are entitled to receive a gross fixed amount of EUR 5,000. In addition, our Chairmen and members of these other committees will also be entitled to receive an attendance fee of EUR 5,000 for each committee meeting attended, with a maximum of EUR 20,000 per year for each committee served.
Our Chief Executive Officer, who is also a director, has waived his director's fees.
C.            Board Practices
Our Board of Directors currently consists of seven members, five of which are considered "independent" under Rule 10A-3 promulgated under the Exchange Act and under the rules of the NYSE: Mr. Steen, Mr. Bradshaw, Ms. Monsellato, Ms. Skaugen and Mr. Smith.
Our Board of Directors has established the following committees, and may, in the future, establish such other committees as it determines from time to time:

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Audit and Risk Committee
Our Audit and Risk Committee consists of four Directors (all four Directors are independent under the Exchange Act and NYSE rules): Ms. Monsellato, as Chairman, Mr. Smith, Mr. Bradshaw and Mr. Steen. Our Audit and Risk Committee is responsible for ensuring that we have an independent and effective internal and external audit system. Additionally, the Audit and Risk Committee advises the Board of Directors in order to achieve its supervisory oversight and monitoring responsibilities with respect to financial reporting, internal controls and risk management. Our Board of Directors has determined that Ms. Monsellato qualifies as an "audit committee financial expert" for purposes of SEC rules and regulations.
Corporate Governance and Nomination Committee
Our Corporate Governance and Nomination Committee consists of three members: Mr. Bradshaw, as Chairman, Ms. Monsellato and Ms. Skaugen. Our Corporate Governance and Nomination Committee is responsible for evaluating and making recommendations regarding the size, composition and independence of the Board of Directors and the Executive Committee, including the recommendation of new Director-nominees.
Remuneration Committee
Our Remuneration Committee consists of four members: Ms. Skaugen, as Chairman, Mr. Smith, Mr. Steen and Mr. Saverys. Our remuneration committee is responsible for assisting and advising the Board of Directors on determining compensation for our directors, executive officers and other employees and administering our compensation programs.
D.            Employees
As of December 31, 2018, we employed approximately 2,900 people, including approximately 200 onshore employees based in our offices in Greece, Belgium, United Kingdom, France, Hong Kong and Singapore and approximately 2,700 seagoing officers and crew. Some of our employees are represented by collective bargaining agreements. As part of the legal obligations in some of these agreements, we are required to contribute certain amounts to retirement funds and pension plans and have restricted ability to dismiss employees. In addition, many of these represented individuals are working under agreements that are subject to salary negotiation. These negotiations could result in higher personnel costs, other increased costs or increased operating restrictions that could adversely affect our financial performance. We consider our relationships with the various unions as satisfactory. As of the date of this annual report, there are no ongoing negotiations or outstanding issues.
E.           S hare ownership
The ordinary shares beneficially owned by our directors and senior managers are disclosed in "Item 7. Major Shareholders and Related Party Transactions—A. Major Shareholders."
Equity Incentive Plans
Stock Option Plan
In 2013, our Board of Directors has adopted a stock option plan, pursuant to which directors, officers, and certain employees of us and our subsidiaries were eligible to receive options to purchase ordinary shares of us at a predetermined price.  On December 16, 2013, we granted options to purchase an aggregate of 1,750,000 ordinary shares to members of our Executive Committee at an exercise price of €5.7705 per share.  The following table provides a summary of the number of options that were granted pursuant to this plan, together with the amount of options that have vested and have been exercised as of the date of this annual report.
 
Options Granted
Options Vested
Options Exercised
CEO
525,000
525,000
525,000
CFO
525,000
525,000
525,000
COO
350,000
350,000
350,000
General Counsel
350,000
350,000
350,000

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2015 Long-Term Incentive Plan
In 2015, our Board of Directors adopted a long-term incentive plan, pursuant to which key management personnel are eligible to receive options to purchase ordinary shares at a predetermined price and restricted stock units (RSUs) that represent the right to receive ordinary shares or payment of cash in lieu thereof, in accordance with the terms of the plan.  On February 12, 2015, we granted options to purchase an aggregate of 236,590 ordinary shares at €10.0475 per share, subject to customary vesting provisions, and 65,433 RSUs which vested automatically on the third anniversary of the grant. The following tables provide a summary of the number of options and RSUs that were granted pursuant to this plan, together with the amount of options that have vested and have been exercised as of the date of this annual report.
 
Options Granted
Options Vested
Options Exercised
CEO
80,518
80,518
—
CFO
58,716
58,716
—
COO
54,614
54,614
—
General Counsel
42,742
42,742
—
 
RSUs granted
CEO
22,268
CFO
16,239
COO
15,105
General Counsel
11,821
2016 Long Term Incentive Plan
In December 2015, our Board of Directors adopted a long term incentive plan, or the 2016 Long Term Incentive Plan, pursuant to which members of the Executive Committee are eligible to receive phantom stock unit grants. Other senior employees may in the future be invited to participate in this long term incentive plan by the Board of Directors upon recommendation of the Remuneration Committee. Upon the vesting of each phantom stock unit and subject to the terms of the 2016 Long Term Incentive Plan, each phantom stock unit grants the holder a conditional right to receive an amount of cash equal to the fair market value of one share of the Company on the settlement date. On February 2, 2016, we granted 54,616 phantom stock units to certain of our executive officers.  The phantom stock units will mature one-third each year on the second, third, fourth anniversary of the award.  All of the beneficiaries have accepted the phantom stock units granted to them. The number of phantom stock units granted was calculated on the basis of a share price of €10.6134 which equals the weighted average of the share price of the three days preceding the grant date. The following tables provide a summary of the number of phantom stock units that were granted pursuant to this plan and the amount that has vested as of the date of this annual report.
 
Phantom Stock Units Granted
Phantom Stock Units Vested
CEO
17,116
5,705
CFO
20,728
13,818
COO
8,009
5,338
General Counsel
8,762
5,840
2017 Long Term Incentive Plan
In February 2017, our Board of Directors adopted a long term incentive plan, pursuant to which members of the Executive Committee as well as the Head of Investor Relations are eligible to receive phantom stock unit grants. Other senior employees may in the future be invited to participate in this long term incentive plan by the Board of Directors upon recommendation of the Remuneration Committee. Upon the vesting of each phantom stock unit and subject the terms of the 2017 Long Term Incentive Plan, each phantom stock unit grants the holder a conditional right to receive an amount of cash equal to the fair market value of one share of the Company on the settlement date. On February 9, 2017, we granted 66,448 phantom stock units to certain of our executive officers.  The phantom stock units will mature one-third each year on the second, third, fourth anniversary of the award.  All of the beneficiaries have accepted the phantom stock units granted to them. The number of phantom stock units granted was calculated on the basis of a share price of €7.2677 which equals the weighted average of the share price of the three days preceding the announcement of our preliminary full year results of 2016. The following tables provide a summary of the number of phantom stock units that were granted pursuant to this plan and the amount that has vested as of the date of this annual report.

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Phantom Stock Units Granted
Phantom Stock Units Vested
CEO
17,819
0*
CFO
20,229
6,743
COO
12,557
4,186
General Counsel
9,808
3,269
Head of Investor Relations
6,036
2,012
* The CEO waived further entitlements under the 2017 Long Term Incentive Plan as a result of termination of his employment, announced by press release on 4 February 2019.
2018 Long Term Incentive Plan
In February 2018, our Board of Directors adopted a long term incentive plan, pursuant to which members of the Executive Committee as well as the Head of Investor Relations are eligible to receive phantom stock unit grants. Other senior employees may in the future be invited to participate in this long term incentive plan by the Board of Directors upon recommendation of the Remuneration Committee. Upon the vesting of each phantom stock unit and subject the terms of the 2018 Long Term Incentive Plan, each phantom stock unit grants the holder a conditional right to receive an amount of cash equal to the fair market value of one share of the Company on the settlement date. On February 16, 2018, we granted 154,431 phantom stock units to certain of our executive officers.  The phantom stock units will mature one-third each year on the second, third, fourth anniversary of the award.  All of the beneficiaries have accepted the phantom stock units granted to them. The number of phantom stock units granted was calculated on the basis of a share price of €7.2368 which equals the weighted average of the share price of the three days preceding the announcement of our preliminary full year results of 2017. The following tables provide a summary of the number of phantom stock units that were granted pursuant to this plan and the amount that has vested as of the date of this annual report.
 
Phantom Stock Units Granted
Phantom Stock Units Vested
CEO
46,652
—
CFO
37,620
—
COO
36,480
—
General Counsel
27,360
—
Head of Investor Relations
6,319
—
Transaction Based Incentive Plan
The members of the Executive Committee and certain other senior employees were granted a transaction based incentive award in the form of 1,200,000 phantom stock units. The vesting and settlement of the transaction based incentive award is spread over a timeframe of five years. The phantom stock awarded matures in four tranches as follows:
•
First tranche of 12% vesting when share price reaches $ 12
•
Second tranche of 19% vesting when share price reaches $14
•
Third tranche of 25% vesting when share price reaches $ 16
•
Fourth tranche of 44% vesting when share price reaches $18
 
Phantom Stock Units Granted
Phantom Stock Units Vested
CEO
400,000
—
CFO
300,000
—
COO
150,000
—
General Counsel
170,000
—
Head of Investor Relations
80,000
—
Global Head of HR
50,000
—
General Manager Hellas
50,000
—



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ITEM 7.    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS.
A.            Major shareholders.
The following table sets forth information regarding beneficial ownership of our ordinary shares for (i) owners of more than five percent of our ordinary shares and (ii) our directors and officers as a group, of which we are aware as of April 15, 2019.
 
 
Number  

 
Percentage(1)

Châteauban SA (2)
 
18,462,007

 
8.39
%
Mr. Marc Saverys (3)
 
15,335,000

 
6.97
%
Euronav (treasury shares)
 
3,370,544

 
1.53
%
Directors and Executive Officers as a Group *
 
—

 
—

 
*Individually each owning less than 1.0% of our outstanding ordinary shares.
(1)
Calculated based on 220,024,713 ordinary shares outstanding as of April 15, 2019.
(2)
Based on information contained in the Schedule 13G/A that was filed with the SEC on February 12, 2019 by Châteauban SA.
(3)
Based on information contained in the Schedule 13G/A that was filed with the SEC on February 12, 2019 by Mr. Marc Saverys, Saverco NV and CMB NV.
As of April 15, 2019, our issued share capital amounted to 239,147,507.82 divided into ordinary shares with no par value. On the same date, 64,900,790 of our shares, our U.S. Shares, representing approximately 29,50% of our share capital, were reflected on the U.S. Register, 18 US holders including CEDE & CO, acting as nominee holder for the Depository Trust Company.

In accordance with a May 2, 2007 Belgian law relating to  disclosure of major holdings in issuers whose shares are admitted to trading on a regulated market and containing  miscellaneous provisions requiring investors in certain publicly-traded corporations whose investments reach certain thresholds to notify th e Company and the Belgian Financial Services and Markets Authority, or the FSMA, of such change as soon as possible and in any event within four trading days.  The minimum disclosure threshold is 5% of the Company's issued voting share capital. Further details in this respect can be found on the website of the FSMA: https://www.fsma.be/en/shareholding-structure-0.
To our knowledge, we are neither directly nor indirectly owned nor controlled by any other corporation, by any government or by any other natural or legal person severally or jointly.  Pursuant to Belgian law and our organizational documents, to the extent that we may have major shareholders at any time, we may not give them different voting rights from any of our other shareholders.
We are aware of no arrangements which may at a subsequent date result in a change in control of our company.
B.            Related party transactions.
See “Item 6.A Directors, Senior Management and Employees - E.Share Ownership - Equity Incentive Plans.”
Loan Agreements of Our Joint Ventures
For a description of our Joint Venture Loan Agreements, please see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Joint Venture Credit Facilities (at 50% economic interest)".
Guarantees
For a description of our guarantees, please see "Item 5. Operating and Financial Review and Prospects—B. Liquidity and Capital Resources—Guarantees" and our consolidated financial statements included herein.

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Properties
We sublease office space in our London, United Kingdom office, through our subsidiary Euronav (UK) Agencies Limited, pursuant to a sublease agreement, dated September 25, 2014, with Tankers (UK) Agencies Limited, a joint venture with INSW. This sublease expires on April 27, 2023.
C.            Interests of experts and counsel.
Not applicable.
ITEM 8.    FINANCIAL INFORMATION
A.            Consolidated Statements and Other Financial Information
See "Item 18. Financial Statements."
Legal Proceedings
We are not involved in any other legal proceedings which we believe may have, or have had, a significant effect on our business, financial position and results of operations or liquidity, nor are we aware of any other proceedings that are pending or threatened which may have a significant effect on our business, financial position, results of operations or liquidity. From time to time, we may be subject to other legal proceedings and claims in the ordinary course of business, principally personal injury and property casualty claims. We expect that these claims would be covered by insurance, subject to customary deductibles. Any such claims, even if lacking merit, could result in the expenditure of managerial resources and materially adversely affect our business, financial condition and results of operations.

Capital Allocation Policy & Dividend Policy
Our Board of Directors may from time to time, declare and pay cash dividends in accordance with our Articles of Association and applicable Belgian law. The declaration and payment of dividends, if any, will always be subject to the approval of either our Board of Directors (in the case of "interim dividends") or of the shareholders (in the case of "regular dividends").
Dividends, if any, will be paid in two instalments: first as an interim dividend based on the results of the first six months of our fiscal year, then as a balance payment corresponding to the final dividend once the full year results have been audited and presented to our shareholders for approval. The interim dividend payout ratio may typically be more conservative than the yearly payout and will take into account any other form of return of capital made over the same period.
Pursuant to the dividend policy set out above, our Board of Directors will continue to assess the declaration and payment of dividends upon consideration of our financial results and earnings, restrictions in our loan agreements, market prospects, current capital expenditures, commitments, investment opportunities, and the provisions of Belgian law affecting the payment of dividends to shareholders and other factors.
As adopted by our Board of Directors in August 2017, our current dividend policy, as of the date of this annual report, is to pay a minimum fixed dividend of at least $0.12 per share per year provided that, at the sole discretion of our Board of Directors, (i) the Company has sufficient balance sheet strength and liquidity and (ii) sufficient earnings visibility from fixed income contracts. In addition, if our results per share are positive and exceed the amount of the fixed dividend over the same period, the additional income during such period will be allocated to either additional cash dividends, the purchase by us of our own shares, accelerated amortization of debt or the acquisition of vessels which the Board of Directors considers, at that time, to be accretive to shareholders’ value. As part of this distribution policy we will continue to include exceptional capital losses when assessing additional dividends but also continue to exclude exceptional capital gains when assessing additional dividend payments. In addition, as a part of this dividend policy, we will not include non-cash items affecting the results such as deferred tax assets or deferred tax liabilities.
We may stop paying dividends at any time and cannot assure you that we will pay any dividends in the future or of the amount of such dividends. For instance, we did not declare or pay any dividends from 2010 until May 2015. Since May 2015, we have declared and paid six dividends to shareholders in an aggregate amount of $2.52 per share.

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The current dividend payment policy as adopted by the Board is the following: the company intends to pay a minimum fixed dividend of at least $ 0.12 in total per share per year provided (a) the company has in the view of the board, sufficient balance sheet strength and liquidity combined (b) with sufficient earnings visibility from fixed income contracts. In addition, if the results per share are positive and exceed the amount of the fixed dividend, that additional income* will be allocated to either: additional cash dividends, share buy-back, accelerated amortization of debt or the acquisition of vessels which the board considers at that time to be accretive to shareholders’ value.
*Treatment of capital losses and capital gains
As part of its distribution policy Euronav will continue to include exceptional capital losses when assessing additional dividends but also continue to exclude exceptional capital gains when assessing additional dividend payments.
*Treatment of Deferred Tax Assets (DTA) and Deferred Tax Liabilities (DTL)
As part of its distribution policy Euronav will not include non-cash items affecting the results such as DTA or DTL.
In general, under the terms of our debt agreements, we are not permitted to pay dividends if there is or will be as a result of the dividend a default or a breach of a loan covenant. Please see "Item 5. Operating and Financial Review and Prospects" for more information relating to restrictions on our ability to pay dividends under the terms of the agreements governing our indebtedness. Belgian law generally prohibits the payment of dividends unless net assets on the closing date of the last financial year do not fall beneath the amount of the registered capital and, before the dividend is paid out, 5% of the net profit is allocated to the legal reserve until this legal reserve amounts to 10% of the share capital. No distributions may occur if, as a result of such distribution, our net assets would fall below the sum of (i) the amount of our registered capital, (ii) the amount of such aforementioned legal reserves, and (iii) other reserves which may be required by our Articles of Association or by law, such as the reserves not available for distribution in the event we hold treasury shares. We may not have sufficient surplus in the future to pay dividends and our subsidiaries may not have sufficient funds or surplus to make distributions to us. We can give no assurance that dividends will be paid at all. In addition, the corporate law of jurisdictions in which our subsidiaries are organized may impose restrictions on the payment or source of dividends under certain circumstances.
For a discussion of the material tax consequences regarding the receipt of dividends we may declare, please see "Item 10. Additional Information—E. Taxation."
B.            Significant Changes.
Please see Note 29 - Subsequent Events to our Audited Consolidated Financial Statements included herein.
ITEM 9.    OFFER AND THE LISTING
A.            Offer and Listing Details.
Our share capital consists of ordinary shares issued without par value.  Under Belgian law, shares without par value are deemed to have a "nominal" value equal to the total amount of share capital divided by the number of shares.  As of April 15, 2019, our issued (and fully paid up) share capital was $239,147,505.82 which is represented by 220,024,713 ordinary shares with no par value.  The fractional value of our ordinary shares is $1.086912 per share.
Our ordinary shares have traded on Euronext Brussels, since December 1, 2004 and on the NYSE since January 23, 2015, under the symbol "EURN."  We maintain the Belgian Register and, for the purposes of trading our shares on the NYSE, the U.S. Register.
All shares on Euronext Brussels trade in euros, and all shares on the NYSE trade in U.S. dollars. 
B.            Plan of Distribution
Not applicable
C.            Markets.
Our ordinary shares trade on the NYSE and Euronext Brussels under the symbol "EURN."
For a discussion of our ordinary shares which are listed and eligible for trading on the NYSE and Euronext Brussels, please see "Item 10. Additional Information — B. Memorandum and Articles of Association — Share Register."
D.            Selling Shareholders
Not applicable.

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E.            Dilution
Not applicable.
F.            Expenses of the Issue
Not applicable.
ITEM 10.    ADDITIONAL INFORMATION
A.            Share capital.
Not applicable.
B.            Memorandum and Articles of Association.
We are a public limited liability company incorporated in the form of a naamloze vennootschap / société anonyme under Belgian law (Register of Legal Entities number 0860.402.767 (Antwerpen)).
The following is a description of the material terms of our Articles of Association currently in effect. Because the following is a summary, it does not contain all information that you may find useful. For more complete information, you should read our Articles of Association which are filed as Exhibit 1.1 to this annual report on Form 20-F filed with the SEC on April 30, 2018.
Purpose
Our objectives are set forth in Section I, Article 2 of our Articles of Association. Our purpose, as stated therein, is to engage in operations related to maritime transport and shipowning, particularly the chartering in and out, the acquisition and sale of ships, and the opening and operation of regular shipping lines, but is not restricted to these activities.
Ordinary Shares
Each outstanding ordinary share entitles the holder to one vote on all matters submitted to a vote of shareholders. Each share represents an identical fraction of the share capital and is either in registered or dematerialized form.
Share Register
We maintain a share register in Belgium, the Belgian Register, maintained by Euroclear Belgium, on which our Belgian Shares are reflected.  Our U.S. Shares are reflected in our U.S. Register that is maintained by Computershare.
The U.S. Shares have CUSIP B38564 108.  Only these shares, which are reflected in the U.S. Register, may be traded on the NYSE.
The Belgian Shares have ISIN BE0003816338.  Only these shares, which are reflected in the Belgian Register, may be traded on Euronext Brussels.
For Belgian Shares, including shares that were either acquired on Euronext Brussels or prior to our initial public offering, to be traded on the NYSE and for U.S. Shares to be traded on Euronext Brussels, shareholders must reposition their shares to the appropriate component of our share register (the U.S. Register for listing and trading on the NYSE and the Belgian Register for listing and trading on Euronext Belgium).  As part of the repositioning procedure, the shares to be repositioned would be debited from the Belgian Register or the U.S. Register, as applicable, and cancelled from the holder's securities account, and simultaneously credited to the relevant register (the Belgian Register for shares to be eligible for listing and trading on Euronext Brussels and the U.S. Register for shares to be eligible for listing and trading on the NYSE) and deposited in the holder's securities account. The repositioning procedure is normally completed within three trading days, but may take longer and the Company cannot guarantee the timing.  The Company may suspend the repositioning of shares for periods of time, which we refer to as "freeze periods" for certain corporate events, including the payment of dividends or shareholder meetings. In such cases, the Company plans to inform its shareholders about such freeze periods on its website.
Please see the Company's website www.euronav.com for instructions on how to reposition your shares to be eligible for trading on either the NYSE or Euronext Brussels.

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Dividend Rights
For a summary of our dividend policy and legal basis for dividends under Belgian law, see "Item 8: Financial Information – Dividend Policy."
Liquidation Rights
In the event of the dissolution and liquidation of the Company, the assets remaining after payment of all debts, liquidation expenses and taxes shall be distributed to the holders of our ordinary shares, each receiving a sum proportional to the number of our shares held by them, subject to prior liquidation rights of any preferred stock that may be outstanding.
Directors
Our Articles of Association provide that our Board of Directors shall consist of at least five members. Our Board of Directors currently consists of seven members. The Articles of Association provide that the members of the Board of Directors remain in office for a period not exceeding 4 years and are eligible for re-election. The term of a director comes to an end immediately after the annual shareholders' meeting of the last year of his term. Directors can be dismissed at any time by the vote of a majority of our shareholders. Each year, there may be one or more directors who have reached the end of their current term of office and may be reappointed.
The Board of Directors is our ultimate decision-making body, with the exception of the matters reserved for the general shareholders' meeting as provided by the Belgian Companies Code or by our Articles of Association.
Belgian law does not regulate specifically the ability of directors to borrow money from the Company. Our Corporate Governance Charter provides that as a matter of principle, no loans or advances will be granted to any director (except for routine advances for business-related expenses in accordance with our rules for reimbursement of expense).
Article 523 of the Belgian Code of Companies provides that if one of our directors directly or indirectly has a personal financial interest that conflicts with a decision or transaction that falls within the powers of our Board, the director concerned must inform our other directors before our Board makes any decision on such transaction. The statutory auditor must also be notified. The director may not participate in the deliberation or vote on the conflicting decision or transaction. An excerpt from the minutes of the meeting of our Board that sets forth the financial impact of the matter on us and justifies the decision of our Board must be published in our annual report. The statutory auditor's report to the annual accounts must contain a description of the financial impact on us of each of the decisions of our Board where director conflicts arise.
Shareholder Meetings
The annual general shareholders' meeting is held annually on the second Thursday of May at 11 a.m. (Central European Time). If this day is a legal holiday, the meeting is held on the preceding business day.
The Board of Directors or the statutory auditor (or, as the case may be, the liquidators) can convene a special or extraordinary general shareholders' meeting at any time if the interests of the Company so require. Such general meetings must also be convened whenever requested by the shareholders who together represent a fifth of our share capital within three weeks of their request, provided that the reason of convening a special or extraordinary general shareholders' meeting is given.
A shareholder only has the right to be admitted to and to vote at the general shareholders' meeting on the basis of the registration of the shares on the fourteenth calendar day at 12 p.m. (Belgian time) preceding the date of the meeting, the day of the meeting not included, or such fourteenth calendar day the "Record Date", either by registration in the Company's register of registered shares, either by their registration in the accounts of an authorized custody account keeper or clearing institution, regardless of the number of shares owned by the shareholder on the day of the general shareholders' meeting.
The shareholder must notify the Company or a designated person of its intention to take part in the general shareholders' meeting at the sixth calendar day preceding the date of the meeting, the day of the meeting not included, in the way mentioned in the convening notice.
The financial intermediary of the authorized custody account keeper or clearing institution delivers a certificate to the shareholders of dematerialized shares which are tradable on Euronext Brussels stating the number of dematerialized shares which are registered in the name of the shareholder on its accounts at the Record Date and with which the shareholder intends to take part in the general shareholders' meeting.

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A shareholder of shares which are tradable on the New York Stock Exchange only has the right to be admitted to and vote at the general meeting if such shareholder complies with the conditions and formalities set out in the convening notice, as decided upon by the board of directors in compliance with all applicable legal provisions.
The convening notice for each general shareholders' meeting shall be disclosed to our shareholders in compliance with all applicable legal terms and provisions, including on our website www.euronav.com
In general, there is no quorum requirement for the general shareholders' meeting and decisions are taken with a simple majority of the votes, except as provided by law on certain matters.
Preferential Subscription Rights
In the event of a share capital increase for cash by way of the issue of new shares, or in the event of an issue of convertible bonds or warrants, our existing shareholders have a preferential right to subscribe, pro rata, to the new shares, convertible bonds or warrants.
In accordance with the provisions of the Belgian Code of Companies and our Articles of Association, the Company, when issuing shares, has the authority to limit or cancel the preferential subscription right of the shareholders in the interest of the Company in respect of such issuance. This limitation or cancellation can be decided upon in favor of one or more particular persons subscribing to that issuance.
When cancelling the preferential right of the shareholders, priority may be given to the existing shareholders for the allocation of the newly issued shares.
Disclosure of Major Shareholdings
In accordance with a May 2, 2007 Belgian law relating to disclosure of major holdings in issuers whose shares are admitted to trading on a regulated market and containing miscellaneous provisions requiring investors in certain publicly-traded corporations whose investments reach certain thresholds to notify the Company and the Belgian Financial Services and Markets Authority, or the FSMA, of such change as soon as possible and in any event within four trading days. The minimum disclosure threshold is 5% of the Company's issued voting share capital. Further details in this respect can be found in article 14 of our Articles of Association and on the website of the FSMA: https://www.fsma.be/en/shareholding-structure-0.
Purchase and Sales of Our Own Shares
We may only acquire our own ordinary shares pursuant to a decision by our shareholders' meeting taken under the conditions of quorum and majority provided for in the Belgian Companies Code.
The extraordinary shareholders' meeting of May 13, 2015 resolved to authorize the Board of Directors of the Company and its direct subsidiaries to acquire, in accordance with the conditions of the law, with available assets in the sense of article 617 of the Belgian Companies Code, for a period of five years as from May 13, 2015, a maximum of twenty per cent of the existing ordinary shares of the Company where all ordinary shares already purchased by the Company and its direct subsidiaries need to be taken into account and at a price per share equal to the average of the last five closing prices of the Company's ordinary shares at Euronext Brussels before the acquisition, increased with a maximum of twenty percent (20%) or decreased with a maximum of twenty percent (20%) of the said average.
Anti-Takeover Effect of Certain Provisions of Our Articles of Association
Our Articles of Association contain provisions which may have anti-takeover effects. These provisions are intended to avoid costly takeover battles, lessen our vulnerability to a hostile change of control and enhance the ability of our Board of Directors to maximize shareholder value in connection with any unsolicited offer to acquire us. However, these anti-takeover provisions could also discourage, delay or prevent (1) the merger or acquisition of us by means of a tender offer, a proxy contest or otherwise that a shareholder may consider in its best interest and (2) the removal of incumbent officers and directors.
For example, a shareholder's voting rights can be suspended with respect to ordinary shares that give such shareholder the right to voting rights above 5% (or a multiple of 5%) of the total number of voting rights attached to our ordinary shares on the date of the relevant general shareholder's meeting, unless we and the Belgian Financial Services and Markets Authority have been informed at least 20 days prior to the date of the relevant general shareholder's meeting in which the holder wishes to vote. In addition, our Board of Directors is authorized in our Articles of Association to (i) increase the Company's capital within the framework of the authorized capital with a maximum amount of $150,000,000 (of which on the date of this report $83,898,616.32 remains available) and (ii) buy back and sell the Company's own shares. These authorizations may be used by the Board of Directors in the event of a hostile takeover bid.

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Limitations on the Right to Own Securities
Neither Belgian law nor our articles of association imposes any general limitation on the right of non-residents or foreign persons to hold our ordinary shares or exercise voting rights on our ordinary shares other than those limitations that would generally apply to all shareholders.
Transfer agent
The registrar and transfer agent for our ordinary shares in the United States is Computershare Trust Company N.A. Our Belgian Register is maintained by Euroclear Belgium.
C.            Material contracts.
Registration Rights Agreement
On January 28, 2015, we entered into a registration rights agreement with companies affiliated with our former Chairman, Peter Livanos, or the Ceres Shareholders, and companies affiliated with our former Vice Chairman and current shareholder, Marc Saverys, or the Saverco Shareholders.

The Ceres Shareholders and the Saverco Shareholders may require us to file shelf registration statements permitting sales by them of ordinary shares into the market from time to time over an extended period, subject to certain exceptions. The Ceres Shareholders and the Saverco Shareholders are only treated as having made their request if the registration statement for such shareholder group’s shares is declared effective. The Ceres Shareholders and the Saverco Shareholders can also exercise piggyback registration rights to participate in certain registrations of ordinary shares by us, including through on the others’ demand registration. All expenses relating to the registrations, including the participation of our executive management team in two marketed roadshows and a reasonable number of marketing calls in connection with one-day or overnight transactions, will be borne by us. The registration rights agreement also contains provisions relating to indemnification and contribution. There are no specified financial remedies for non-compliance with the registration rights agreement.

We have not entered into any other material contracts, other than contracts entered into in the ordinary course of business, attached as exhibits hereto or otherwise described herein.

D.            Exchange controls.
There are no Belgian exchange control regulations that would affect the import or export of capital, including the availability of cash and cash equivalents for use by the company's group or the remittance of dividends, interest or other payments to nonresident holders of the Company's securities.
See "Item 10. Additional information—E. Taxation" for a discussion of the tax treatment of dividends.
E.            Taxation.
United States Federal Income Tax Considerations
In the opinion of Seward & Kissel LLP, our United States counsel, the following are the material United States 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 of our ordinary shares. This discussion does not purport to deal with the tax consequences of owning ordinary shares 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 United States dollar, investors that are or own our ordinary shares through partnerships or other pass-through entitles, investors that own, actually or under applicable constructive ownership rules, 10% or more of our ordinary shares, persons that will hold the ordinary shares as part of a hedging transaction, “straddle” or “conversion transaction,” persons who are deemed to sell the ordinary shares under constructive sale rules, persons required to recognize income for U.S. federal income tax purposes no later than when such income is reported 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 United States 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 of which are subject to change, possibly with retroactive effect. This discussion deals only with holders who purchase ordinary and hold the ordinary shares as a capital asset. The discussion below is based, in part, on the description of our business as described herein and assumes that we conduct our business as described herein. Unless otherwise noted, references in the following discussion to the “Company,” “we” and “us” are to Euronav NV and its subsidiaries on a consolidated basis.

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United States Federal Income Taxation of the Company
Taxation of Operating Income: In General
Unless exempt from U.S. federal income taxation under the rules discussed below, a foreign corporation is subject to U.S. federal income taxation in respect of any income that is derived from the use of vessels, from the hiring or leasing of vessels for use on a time, voyage or bareboat charter basis, from the participation in a pool, partnership, strategic alliance, joint operating agreement, code sharing arrangements or other joint venture it directly or indirectly owns or participates in that generates such income, or from the performance of services directly related to those uses, which we refer to as “shipping income,” to the extent that the shipping income is derived from sources within the United States. For these purposes, 50% of shipping income that is attributable to transportation that begins or ends, but that does not both begin and end, in the United States constitutes income from sources within the United States, which we refer to as “U.S.-source shipping income.”
Shipping income attributable to transportation that both begins and ends in the United States is considered to be 100% from sources within the United States. We are not permitted by law to engage in transportation that produces income which is considered to be 100% from sources within the United States.
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.
In the absence of exemption from tax under Section 883 of the Code or an applicable U.S. income tax treaty, our gross U.S.-source shipping income would be subject to a 4% tax imposed without allowance for deductions as described below.
Exemption of Operating Income from U.S. Federal Income Taxation
Under the U.S.-Belgium income tax treaty, or the Belgian Treaty, we will be exempt from U.S. federal income tax on our U.S.-source shipping income if (1) we are resident in Belgium for Belgian income tax purposes and (2) we satisfy one of the tests under the Limitation on Benefits Provision of the Belgian Treaty. We believe that we satisfy the requirements for exemption under the Belgian Treaty for our 2018 and possibly for our future taxable years. Alternatively, we may qualify for exemption under Section 883, as discussed below.
Under Section 883 of the Code and the regulations there under, we will be exempt from U.S. federal income tax on our U.S.-source shipping income if:
(1)
we are organized in a foreign country, or our country of organization, that grants an “equivalent exemption” to corporations organized in the United States; and
(2)
either
(A)
more than 50% of the value of our stock is owned, directly or indirectly, by individuals who are “residents” of our country of organization or of another foreign country that grants an “equivalent exemption” to corporations organized in the United States, which we refer to as the “50% Ownership Test,” or
(B)
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 United States corporations, or in the United States, which we refer to as the “Publicly-Traded Test”.
Each of the jurisdictions where our ship-owning subsidiaries are incorporated grant an “equivalent exemption” to U.S. corporations. Therefore, we will be exempt from U.S. federal income tax with respect to our U.S.-source shipping income if either the 50% Ownership Test or the Publicly-Traded Test is met.
We do not currently anticipate circumstances under which we would be able to satisfy the 50% Ownership Test given the widely held nature of our ordinary shares. Our ability to satisfy the Publicly-Traded Test is discussed below.
Treasury Regulations provide, in pertinent part, that stock of a foreign corporation will be considered to be “primarily traded” on an established securities market if the number of shares of each class of stock that are traded during any taxable year on all established securities markets in that country exceeds the number of shares in each such class that are traded during that year on established securities markets in any other single country. Our ordinary shares are “primarily traded” on Euronext for this purpose even though the ordinary shares are also listed and traded on the NYSE.

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Under the Treasury Regulations, our ordinary shares will be considered to be “regularly traded” on an established securities market if one or more classes of our stock representing more than 50% of our outstanding shares, by total combined voting power of all classes of stock entitled to vote and total value, is listed on the market which we refer to as the listing threshold. Our ordinary shares are listed on the NYSE and therefore we satisfy the listing requirement.
It is further required that with respect to each class of stock relied upon to meet the listing threshold, (i) such class of stock be traded on the market, other than in minimal quantities, on at least 60 days during the taxable year or one-sixth of the days in a short taxable year, which we refer to as the “trading frequency test”; and (ii) the aggregate number of shares of such class of stock traded on such market is at least 10% of the average number of shares of such class of stock outstanding during such year or as appropriately adjusted in the case of a short taxable year, which we refer to as the “trading volume test”. We believe we satisfied the trading frequency and trading volume tests for the 2018 taxable year. Even if this was not the case, the Treasury Regulations provide that the trading frequency and trading volume tests will be deemed satisfied if, as is the case with our ordinary shares, such class of stock is traded on an established securities market in the United States and such stock is regularly quoted by dealers making a market in such stock.
Notwithstanding the foregoing, the Treasury Regulations provide, in pertinent part, that a class of our stock will not be considered to be “regularly traded” on an established securities market for any taxable year if 50% or more of the vote and value of the outstanding shares of such class of stock are owned, actually or constructively under specified stock attribution rules, on more than half the days during the 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 we refer to as the “5 Percent Override Rule.”
For purposes of being able to determine the persons who own 5% or more of our stock, or “5% Shareholders,” the Treasury Regulations permit us to rely on those persons that are identified on Schedule 13G and Schedule 13D filings with the SEC, as having a 5% or more beneficial interest in our ordinary shares. The Treasury Regulations further provide that an investment company identified on a SEC Schedule 13G or Schedule 13D filing which is registered under the Investment Company Act of 1940, as amended, will not be treated as a 5% shareholder for such purposes.
In the event the 5 Percent Override Rule is triggered, the Treasury Regulations provide that the 5 Percent Override Rule will not apply if we can establish that among the closely-held group of 5% Shareholders, there are sufficient 5% Shareholders that are considered to be qualified shareholders for purposes of Section 883 of the Code to preclude non-qualified 5% Shareholders in the closely-held group from owning 50% or more of each class of our stock for more than half the number of days during such year.
We believe that we and each of our subsidiaries qualify for exemption under Section 883 of the Code for our 2018 taxable year. We also expect that we and each of our subsidiaries will qualify for this exemption for our subsequent taxable years. However, there can be no assurance in this regard. For example, if our 5% Stockholders own 50% or more of our ordinary shares, we would be subject to the 5% Override Rule unless we can establish that among the closely-held group of 5% Stockholders, there are sufficient 5% Stockholders that are qualified stockholders for purposes of Section 883 of the Code to preclude non-qualified 5% Stockholders in the closely-held group from owning 50% or more of our ordinary shares for more than half the number of days during the taxable year. In order to establish this, sufficient 5% Stockholders that are qualified stockholders would have to comply with certain documentation and certification requirements designed to substantiate their identity as qualified stockholders. These requirements are onerous and there is no assurance that we will be able to satisfy them.
Taxation in the Absence of Exemption under Section 883 of the Code
To the extent the benefits of Section 883 of the Code are unavailable, our U.S.-source shipping income, to the extent not considered to be “effectively connected” with the conduct of a U.S. trade or business, as described below, would be subject to a 4% 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”. Since under the sourcing rules described above, no more than 50% of our shipping income would be treated as being derived from U.S. sources, the maximum effective rate of U.S. federal income tax on our shipping income would never exceed 2% under the 4% gross basis tax regime.
To the extent the benefits of the exemption under Section 883 of the Code 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 described below, any such “effectively connected” U.S.-source shipping income, net of applicable deductions, would be subject to the U.S. federal corporate income tax imposed at a rate of 21%. In addition, we may be subject to the 30% “branch profits” tax 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 such U.S. trade or business.

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Our U.S.-source shipping income would 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 currently have, nor intend to have or permit circumstances that would result in having, any vessel operating to the United States on a regularly scheduled basis. Based on the foregoing and on the expected mode of our shipping operations and other activities, 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, we will not 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.
United States Federal Income Taxation of U.S. Holders
As used herein, the term “U.S. Holder” means a beneficial owner of ordinary shares that is a United States citizen or resident, United States corporation or other United States entity taxable as a corporation, an estate the income of which is subject to United States federal income taxation regardless of its source, or a trust if (i) a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States 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 United States person for United States federal income tax purposes.
If a partnership holds our ordinary shares, the 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 ordinary shares, you are encouraged to consult your tax advisor.
Distributions
Subject to the discussion of passive foreign investment companies below, any distributions made by us with respect to our ordinary shares to a U.S. Holder will generally constitute dividends, which may be taxable as ordinary income or “qualified dividend income” as described in more detail below, to the extent of our current and accumulated earnings and profits, as determined under United States federal income tax principles. Distributions in excess of our earnings and profits will be treated first as a nontaxable return of capital to the extent of the U.S. Holder’s tax basis in the holder’s ordinary shares on a dollar-for-dollar basis and thereafter as capital gain. Because we are not a United States corporation, U.S. Holders that are corporations will generally not be entitled to claim a dividends received deduction with respect to any distributions they receive from us. Dividends paid with respect to our ordinary 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 United States foreign tax credit purposes.
Dividends paid on our ordinary shares to a U.S. Holder who is an individual, trust or estate (a “U.S. Non-Corporate Holder”) will generally be treated as “qualified dividend income” that is taxable to such U.S. Non-Corporate Holders at preferential tax rates provided that (1) either we qualify for the benefits of the Belgian Treaty (which we expect to be the case) or the ordinary shares are readily tradable on an established securities market in the United States (such as the NYSE, on which our ordinary shares are listed); (2) we are not a passive foreign investment company for the taxable year during which the dividend is paid or the immediately preceding taxable year (as discussed below); (3) the U.S. Non-Corporate Holder has owned the ordinary shares for more than 60 days in the 121-day period beginning 60 days before the date on which the ordinary shares become ex-dividend (and has not entered into certain risk limiting transactions with respect to such ordinary share); and (4) the U.S. Non-Corporate Holder is not under an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to positions in substantially similar related property. There is no assurance that any dividends paid on our ordinary shares will be eligible for these preferential tax rates in the hands of a U.S. Non-Corporate Holder.

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As discussed below, our dividends may be subject to Belgian withholding taxes. A U.S. Holder may elect to either deduct his share of any foreign taxes paid with respect to our dividends in computing his Federal taxable income or treat such foreign taxes as a credit against U.S. federal income taxes, subject to certain limitations. No deduction for foreign taxes may be claimed by an individual who does not itemize deductions. Dividends paid with respect to our ordinary 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 United States foreign tax credit purposes. The rules governing foreign tax credits are complex and U.S. Holders are encouraged to consult their tax advisors regarding the applicability of these rules in a U.S. Holder’s specific situation.
Amounts taxable as dividends generally will be treated as passive income from sources outside the U.S. However, if (a) Euronav is 50% or more owned, by vote or value, by U.S. persons and (b) at least 10% of Euronav’s earnings and profits are attributable to sources within the U.S., then for foreign tax credit purposes, a portion of its dividends would be treated as derived from sources within the U.S. With respect to any dividend paid for any taxable year, the U.S. source ratio of our dividends for foreign tax credit purposes would be equal to the portion of Euronav’s earnings and profits from sources within the U.S. for such taxable year divided by the total amount of Euronav’s earnings and profits for such taxable year. The rules related to U.S. foreign tax credits are complex and U.S. holders should consult their tax advisors to determine whether and to what extent a credit would be available.
Special rules may apply to any “extraordinary dividend” generally, a dividend paid by us in an amount which is equal to or in excess of ten percent of a U.S. Non-Corporate Holder’s adjusted tax basis (or fair market value in certain circumstances) in a share of ordinary shares paid by us. If we pay an “extraordinary dividend” on our ordinary shares that is treated as “qualified dividend income,” then any loss derived by a U.S. Non-Corporate Holder from the sale or exchange of such ordinary 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 Ordinary shares
Subject to the discussion of passive foreign investment companies below, a U.S. Holder generally will recognize taxable gain or loss upon a sale, exchange or other disposition of our ordinary 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 tax basis in such shares. The U.S. Holder’s initial tax basis in its shares generally will be the U.S. Holder’s purchase price for the shares and that tax basis will be reduced (but not below zero) by the amount of any distributions on the shares that are treated as non-taxable returns of capital (as discussed above under “-United States Federal Income Taxation of U.S. Holders-Distributions”). Such gain or loss will be treated as long-term capital gain or loss if the U.S. Holder’s holding period 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 United States source income or loss, as applicable, for United States foreign tax credit purposes. A U.S. Holder’s ability to deduct capital losses is subject to certain limitations.
Passive Foreign Investment Company
Special United States 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 United States federal income tax purposes. In general, a foreign corporation will be treated as a PFIC with respect to a United States shareholder in such foreign corporation, if, for any taxable year in which such shareholder holds stock in such foreign corporation, either:
•
at least 75 percent of the corporation’s gross income for such taxable year consists of passive income (e.g., dividends, interest, capital gains and rents derived other than in the active conduct of a rental business); or
•
at least 50 percent of the average value of the assets held by the corporation during such taxable year produce, or are held for the production of, passive income.
For purposes of determining whether a foreign corporation is a PFIC, it will be treated as earning and owning its proportionate share of the income and assets, respectively, of any of its subsidiary corporations in which it owns at least 25 percent of the value of the subsidiary’s stock.

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Income earned by a foreign corporation in connection with the performance of services would not constitute passive income. By contrast, rental income would generally constitute “passive income” unless the foreign corporation is treated under specific rules as deriving its rental income in the active conduct of a trade or business or receiving the rental income from a related party.
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 our wholly-owned subsidiaries should constitute services income, rather than rental income. Correspondingly, such income should not constitute passive income, and the assets that we or our wholly-owned 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 believe there is substantial legal authority supporting our position consisting of case law and IRS pronouncements concerning the characterization of income derived from time charters and voyage charters as services income for other tax purposes. We have not sought, and we do not expect to seek, a ruling from the Internal Revenue Service, or the IRS, on this matter. As a result, the IRS or a court could disagree with our position. No assurance can be given that this result will not occur. In addition, although we intend to conduct our affairs in a manner to avoid, to the extent possible, being classified as a PFIC with respect to any taxable year, we cannot assure you that the nature of our operations will not change in the future, or that we can avoid PFIC status 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 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 ordinary shares, as discussed below.
If we were to be treated as a PFIC for any taxable year, a U.S. Holder would be required to file an annual report with the IRS for that year with respect to such U.S. Holder’s ordinary shares.
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 United States federal income tax purposes his pro rata share of our ordinary earnings and our 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 from us by the Electing Holder. The Electing Holder’s adjusted tax basis in the ordinary 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 ordinary shares and will not be taxed again once distributed. An Electing Holder would generally recognize capital gain or loss on the sale, exchange or other disposition of our ordinary shares. A U.S. Holder would make a QEF election with respect to any year that our company is a PFIC by filing IRS Form 8621 with his United States federal income tax return. If we were aware that we or any of our subsidiaries were to be treated as a PFIC for any taxable year, we would, if possible, provide each U.S. Holder with all necessary information in order to make the QEF election described above. If we were to be treated as a PFIC, a U.S. Holder would be treated as owning his proportionate share of stock in each of our subsidiaries which is treated as a PFIC and such U.S. Holder would need to make a separate QEF election for any such subsidiaries. It should be noted that we may not be able to provide such information if we did not become aware of our status as a PFIC in a timely manner.
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, as we anticipate, our shares are treated as “marketable stock,” a U.S. Holder would be allowed to make a “mark-to-market” election with respect to our ordinary shares, provided the U.S. Holder completes and files IRS Form 8621 in accordance with the relevant instructions and related Treasury Regulations. The “mark-to-market” election will not be available for any of our subsidiaries. If that election is made, the U.S. Holder generally would include as ordinary income in each taxable year the excess, if any, of the fair market value of the ordinary shares at the end of the taxable year over such holder’s adjusted tax basis in the ordinary 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 ordinary shares over its fair market 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 his ordinary shares would be adjusted to reflect any such income or loss amount. Gain realized on the sale, exchange or other disposition of our ordinary shares would be treated as ordinary income, and any loss realized on the sale, exchange or other disposition of the ordinary 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. It should be noted that the mark-to-market election would likely not be available for any of our subsidiaries which are treated as PFICs.

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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 (the portion of any distributions received by the Non-Electing Holder on our ordinary shares in a taxable year in excess of 125 percent 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 before the taxable year for the ordinary shares), and (2) any gain realized on the sale, exchange or other disposition of our ordinary shares. Under these special rules:
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the excess distribution or gain would be allocated ratably over the Non-Electing Holders’ aggregate holding period for the ordinary shares;
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the amount allocated to the current taxable year and any taxable year before we became a PFIC would be taxed as ordinary income; and
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the amount allocated to each of the other taxable years would be subject to tax at the highest rate of tax 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 rules 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 ordinary shares. If a Non-Electing Holder who is an individual dies while owning our ordinary shares, such holder’s successor generally would not receive a step-up in tax basis with respect to such shares.
United States Federal Income Taxation of “Non-U.S. Holders”
A beneficial owner of our ordinary shares that is not a U.S. Holder or an entity treated as a partnership is referred to herein as a “Non-U.S. Holder.”
If a partnership holds our ordinary shares, the 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 ordinary shares, you are encouraged to consult your tax advisor.
Dividends on Ordinary shares
Non-U.S. Holders generally will not be subject to United States federal income tax or withholding tax on dividends received from us with respect to our ordinary shares, unless that income is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States. If the Non-U.S. Holder is entitled to the benefits of a United States income tax treaty with respect to those dividends, that income may be taxable only if it is also attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States.
Sale, Exchange or Other Disposition of Ordinary shares
Non-U.S. Holders generally will not be subject to United States federal income tax or withholding tax on any gain realized upon the sale, exchange or other disposition of our ordinary shares, unless:
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the gain is effectively connected with the Non-U.S. Holder’s conduct of a trade or business in the United States. If the Non-U.S. Holder is entitled to the benefits of an income tax treaty with respect to that gain, that gain may be taxable only if it is also attributable to a permanent establishment maintained by the Non-U.S. Holder in the United States or
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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 United States trade or business for United States federal income tax purposes, the income from the ordinary shares, including dividends and the gain from the sale, exchange or other disposition of the ordinary shares that are effectively connected with the conduct of that trade or business will generally be subject to regular United States federal income tax in the same manner as discussed in the previous section relating to the taxation of U.S. Holders. In addition, in the case of a corporate Non-U.S. Holder, its earnings and profits that are attributable to the effectively connected income, subject to certain adjustments, may be subject to an additional branch profits tax at a rate of 30 percent, or at a lower rate as may be specified by an applicable United States income tax treaty.

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Backup Withholding and Information Reporting
In general, dividend payments, or other taxable distributions, made within the United States to you will be subject to information reporting requirements. Such payments will also be subject to backup withholding tax if paid to a non-corporate U.S. Holder who:
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fails to provide an accurate taxpayer identification number;
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is notified by the IRS that he has failed to report all interest or dividends required to be shown on his federal income tax returns; or
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in certain circumstances, fails 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 a Non-U.S. Holder sells his ordinary shares to or through a United States office of a broker, the payment of the proceeds is subject to both United States backup withholding and information reporting unless the Non-U.S. Holder certifies that he is a non-U.S. person, under penalties of perjury, or otherwise establishes an exemption. If a Non-U.S. Holder sells his ordinary shares through a non-United States office of a non-United States broker and the sales proceeds are paid to the Non-U.S. Holder outside the United States then information reporting and backup withholding generally will not apply to that payment. However, United States information reporting requirements, but not backup withholding, will apply to a payment of sales proceeds, even if that payment is made to a Non-U.S. Holder outside the United States, if the Non-U.S. Holder sells ordinary shares through a non-United States office of a broker that is a United States person or has some other contacts with the United States.
Backup withholding is not an additional tax. Rather, a taxpayer generally may obtain a refund of any amounts withheld under backup withholding rules that exceed the taxpayer’s income tax liability by filing a refund claim with the IRS.
Individuals who are U.S. Holders (and to the extent specified in applicable Treasury Regulations, certain individuals who are Non-U.S. Holders and certain United States entities) who hold “specified foreign financial assets” (as defined in Section 6038D of the Code) are required to file IRS Form 8938 with information relating to the 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 (or such higher dollar amount as prescribed by applicable Treasury Regulations). Specified foreign financial assets would include, among other assets, our ordinary shares, unless the shares are held through an account maintained with a United States financial institution. Substantial penalties apply to any failure to timely file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, in the event an individual U.S. Holder (and to the extent specified in applicable Treasury Regulations, an individual Non-U.S. Holder or a United States entity) that is required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of United States federal income taxes of such holder for the related tax year may not close until three years after the date that the required information is filed. U.S. Holders (including United States entities) and Non-U.S. Holders are encouraged to consult their own tax advisors regarding their reporting obligations under this legislation.
Belgian Tax Considerations
In the opinion of Argo Law, our Belgian counsel, the following are the material Belgian federal income tax consequences of the acquisition, ownership and disposal of ordinary shares by an investor, but this summary does not purport to address all tax consequences of the ownership and disposal of ordinary shares, and does not take into account the specific circumstances of particular investors, some of which may be subject to special rules, or the tax laws of any country other than Belgium. This summary does not describe the tax treatment of investors that are subject to special rules, such as banks, insurance companies, collective investment undertakings, dealers in securities or currencies, persons that hold, or will hold, ordinary shares as a position in a straddle, share-repurchase transaction, conversion transactions, synthetic security or other integrated financial transactions. This summary does not address the tax regime applicable to ordinary shares held by Belgian tax residents through a fixed basis or a permanent establishment situated outside Belgium. This summary does principally not address the local taxes that may be due in connection with the ownership and disposal of ordinary shares, other than Belgian local surcharges which generally vary from 0% to 9% of the investor's income tax liability.
For purposes of this summary, a Belgian resident is:
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an individual subject to Belgian personal income tax, i.e., an individual who is domiciled in Belgium or has his seat of wealth in Belgium or a person assimilated to a resident for purposes of Belgian tax law;
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a company (as defined by Belgian tax law) subject to Belgian corporate income tax, i.e., a corporate entity that has its statutory seat, its main establishment, its administrative seat or seat of management in Belgium;
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an Organization for Financing Pensions subject to Belgian corporate income tax, i.e., a Belgian pension fund incorporated under the form of an Organization for Financing Pensions; or

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a legal entity subject to Belgian income tax on legal entities, i.e., a legal entity other than a company subject to Belgian corporate income tax, that has its statutory seat, its main establishment, its administrative seat or seat of management in Belgium.
A non-resident is any person that is not a Belgian resident.
Investors should consult their own advisers regarding the tax consequences of the acquisition, ownership and disposal of the ordinary shares in the light of their particular circumstances, including the effect of any state, local or other national laws.
Dividends
For Belgian income tax purposes, the gross amount of all benefits paid on or attributed to the ordinary shares is generally treated as a dividend distribution. By way of exception, the repayment of capital carried out in accordance with the Belgian Companies Code is not treated as a dividend distribution to the extent that such repayment is imputed to the fiscal capital. This fiscal capital includes, in principle, the actual paid-up statutory share capital and, subject to certain conditions, the paid-up issuance premiums and the cash amounts subscribed to at the time of the issue of profit sharing certificates. However, a repayment of capital decided upon by the shareholder’s meeting as of 1 January 2018 and which is carried out in accordance with the Belgian Companies Code is partly considered to be a dividend distribution, more specifically with respect to the portion that is deemed to be the distribution of the existing taxed retained earnings (irrespective of whether they are incorporated into the capital) and/or of the tax-free retained earnings incorporated into the capital. Such portion is determined on the basis of the ratio of the taxed retained earnings (except for the legal reserve up to the legal minimum and certain unavailable retained earnings) and the tax-free retained earnings incorporated into the capital (with a few exceptions) over the aggregate of such retained earnings and the fiscal capital
Belgian withholding tax of 30% is normally levied on dividends, subject to such relief as may be available under applicable domestic or tax treaty provisions.
If the Company redeems its own ordinary shares, the redemption gain (i.e. the redemption proceeds after deduction of the portion of fiscal capital represented by the redeemed ordinary shares) will be treated as a dividend subject to a Belgian withholding tax of 30%, subject to such relief as may be available under applicable domestic or tax treaty provisions. No withholding tax will be triggered if such redemption is carried out on a stock exchange and meets certain conditions.
In case of liquidation of the Company, the liquidation gain (i.e. the amount distributed in excess of the fiscal capital will in principle be subject to Belgian withholding tax at a rate of 30%, subject to such relief as may be available under applicable domestic or tax treaty provisions.
As mentioned above any dividends or other distributions made by the Company to shareholders owning its ordinary shares will, in principle, be subject to withholding tax in Belgium at a rate of 30%, except for shareholders which qualify for an exemption of withholding tax such as, among others, qualifying pension funds or a company qualifying as a parent company in the sense of the Council Directive (90/435/EEC) of July 23, 1990, or the Parent-Subsidiary Directive, or that qualify for a lower withholding tax rate or an exemption by virtue of a tax treaty. Various conditions may apply and shareholders residing in countries other than Belgium are advised to consult their advisers regarding the tax consequences of dividends or other distributions made by the Company. Shareholders of the Company residing in countries other than Belgium may not be able to credit the amount of such withholding tax to any tax due on such dividends or other distributions in any other country than Belgium. As a result, such shareholders may be subject to double taxation in respect of such dividends or other distributions.
Belgium and the United States have concluded a double tax treaty concerning the avoidance of double taxation, or the U.S.-Belgium Tax Treaty. The U.S.-Belgium Tax Treaty reduces the applicability of Belgian withholding tax to 15%, 5% or 0% for U.S. taxpayers, provided that the U.S. taxpayer meets the limitation of benefits conditions imposed by the U.S.-Belgium Tax Treaty. The Belgian withholding tax is generally reduced to 15% under the U.S.-Belgium Tax Treaty. The 5% withholding tax applies in case where the U.S. shareholder is a company which holds at least 10% of the ordinary shares in the Company. A 0% Belgian withholding tax applies when the shareholder is a U.S. company which has held at least 10% of the ordinary shares in the Company for a period of at least 12 months ending on the date the dividend is declared, or is, subject to certain conditions, a U.S. pension fund. The U.S. shareholders are encouraged to consult their own tax advisers to determine whether they can invoke the benefits and meet the limitation of benefits conditions as imposed by the U.S.-Belgium Tax Treaty.

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Belgian resident individuals
For Belgian resident individuals who acquire and hold the ordinary shares as a private investment, the Belgian dividend withholding tax fully discharges their personal income tax liability. They may nevertheless elect to report the dividends in their personal income tax return. Where such individual opts to report them, dividends will normally be taxable at the lower of the generally applicable 30% withholding tax rate on dividends or at the progressive personal income tax rates applicable to the taxpayer’s overall declared income (local surcharges will not apply). The first EUR 800 (amount applicable for income year 2019) of reported ordinary dividend income will be exempt from tax. For the avoidance of doubt, all reported dividends are taken into account to assess whether said maximum amount is reached. In addition, if the dividends are reported, the dividend withholding tax withheld at source may be credited against the income tax due and is reimbursable to the extent that it exceeds the final income tax liability with at least EUR 2.50, provided that the dividend distribution does not result in a reduction in value of or a capital loss on the ordinary shares. This condition is not applicable if the individual can demonstrate that he has held the ordinary shares in full legal ownership for an uninterrupted period of twelve months prior to the attribution of the dividends.
For Belgian resident individuals who acquire and hold the ordinary shares for professional purposes, the Belgian withholding tax does not fully discharge their income tax liability. Dividends received must be reported by the investor and will, in such case, be taxable at the investor’s personal income tax rate increased with local surcharges. Withholding tax withheld at source may be credited against the income tax due and is reimbursable to the extent that it exceeds the income tax due with at least EUR 2.50, subject to two conditions: (1) the taxpayer must own the ordinary shares in full legal ownership on the day of the beneficiary of the dividend is identified and (2) the dividend distribution may not result in a reduction in value of or a capital loss on the ordinary shares. The latter condition is not applicable if the investor can demonstrate that he has held the full legal ownership of the ordinary shares for an uninterrupted period of twelve months prior to the attribution of the dividends.
Belgian resident companies
For Belgian resident companies, the dividend withholding tax does not fully discharge the corporate income tax liability. For such companies, the gross dividend income (including withholding tax) must be declared in the corporate income tax return and will be subject to a corporate income tax rate of currently 29.58% for assessment year 2019 in relation to financial years starting as of 1 January 2018, unless the reduced corporate income tax rates apply. Subject to certain conditions, a reduced corporate income tax rate of (i) 20.4% (including the 2% crisis surcharge) as of 2018 (i.e. for financial years starting on or after 1 January 2018) and of (ii) 20% as of 2020 (i.e. for financial years starting on or after 1 January 2020) applies for Small and Medium Sized Enterprises (as defined by Article 15, §1 to §6 of the Belgian Companies Code) on the first EUR 100,000 of taxable profits. The corporate income tax rate will be reduced to 25% as of assessment year 2021 for financial years starting as of 1 January 2020. The dividends received during a financial year starting before 1 January 2018 or ending before 31 December 2018 will be subject to the standard corporate income tax rate of 33.99%, unless the reduced corporate income tax rates apply.
Any Belgian dividend withholding tax levied at source may be credited against the corporate income tax due and is reimbursable to the extent that it exceeds the corporate income tax due, subject to two conditions: (1) the taxpayer must own the ordinary shares in full legal ownership on the day the beneficiary of the dividend is identified; and (2) the dividend distribution may not result in a reduction in value of or a capital loss on the ordinary shares. The latter condition is not applicable (a) if the taxpayer can demonstrate that it has held the ordinary shares in full legal ownership for an uninterrupted period of twelve months prior to the attribution of the dividends; or (b) if, during said period, the ordinary shares never belonged to a taxpayer other than a resident company or a non-resident company which has, in an uninterrupted manner, invested the ordinary shares in a permanent establishment or “PE” in Belgium.
As a general rule, Belgian resident companies can (as of assessment year 2019 and subject to certain limitations) deduct 100% of gross dividends received from their taxable income or dividend received deduction, provided that at the time of a dividend payment or attribution: (1) the Belgian resident company holds ordinary shares representing at least 10% of the share capital of the Company or a participation in the Company with an acquisition value of at least EUR 2,500,000; (2) the ordinary shares have been held or will be held in full ownership for an uninterrupted period of at least one year; and (3) the conditions relating to the taxation of the underlying distributed income, as described in Article 203 of the Belgian Income Tax Code or the Article 203 ITC Taxation Condition are met; and (4) the anti-abuse provision contained in Article 203, §1, 7° of the Belgian Income Tax Code is not applicable (together, the “Conditions for the application of the dividend received deduction regime”). Under certain circumstances the conditions referred to under (1) and (2) do not need to be fulfilled in order for the dividend received deduction to apply. Dividends received during a financial year starting before 1 January 2018 or ending before 31 December 2018 are only be deductible up to 95%.
The Conditions for the application of the dividend received deduction regime depend on a factual analysis, upon each dividend distribution, and for this reason the availability of this regime should be verified upon each dividend distribution.

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Dividends distributed to a Belgian resident company will be exempt from Belgian withholding tax provided that the Belgian resident company holds, upon payment or attribution of the dividends, at least 10% of the share capital of the Company and such minimum participation is held or will be held during an uninterrupted period of at least one year.
In order to benefit from this exemption, the Belgian resident company must provide the Company or its paying agent with a certificate confirming its qualifying status and the fact that it meets the required conditions. If the Belgian resident company holds the required minimum participation for less than one year, at the time the dividends are paid on or attributed to the ordinary shares, the Company will levy the withholding tax but will not transfer it to the Belgian Treasury provided that the Belgian resident company certifies its qualifying status, the date from which it has held such minimum participation, and its commitment to hold the minimum participation for an uninterrupted period of at least one year.
The Belgian resident company must also inform the Company or its paying agent if the one-year period has expired or if its shareholding will drop below 10% of the share capital of the Company before the end of the one-year holding period. Upon satisfying the one-year shareholding requirement, the dividend withholding tax which was temporarily withheld, will be refunded to the Belgian resident company.
Please note that the above described dividend received deduction regime and the withholding tax exemption will not be applicable to dividends which are connected to an arrangement or a series of arrangements or “rechtshandeling of geheel van rechtshandelingen”/”acte juridique ou un ensemble d’actes juridiques” for which the Belgian tax administration, taking into account all relevant facts and circumstances, has proven, unless evidence to the contrary, that this arrangement or this series of arrangements is not genuine or “kunstmatig”/”non authentique” and has been put in place for the main purpose or one of the main purposes of obtaining the dividend received deduction, the above dividend withholding tax exemption or one of the advantages of the EU Parent-Subsidiary Directive of November 30, 2011 (2011/96/EU) or Parent-Subsidiary Directive in another EU Member State. An arrangement or a series of arrangements is regarded as not genuine to the extent that they are not put into place for valid commercial reasons which reflect economic reality.
Belgian resident organizations for financing pensions
For organizations for financing pensions or OFPs, i.e., Belgian pension funds incorporated under the form of an OFP or “organismen voor de financiering van pensioenen”/”organismes de financement de pensions” within the meaning of Article 8 of the Belgian Act of October 27, 2006, the dividend income is generally tax exempt.
Subject to certain limitations, any Belgian dividend withholding tax levied at source may be credited against the corporate income tax due and is reimbursable to the extent that it exceeds the corporate income tax due.
The Belgian Parliament recently adopted a law pursuant to which Belgian (or foreign) OFPs not holding the ordinary shares - which give rise to dividends - for an uninterrupted period of 60 days in full ownership are subject to a rebuttable presumption that the arrangement or series of arrangements (‘‘rechtshandeling of geheel van rechtshandelingen’’/‘‘acte juridique ou un ensemble d’actes juridiques’’) which are connected to the dividend distributions, are not genuine (‘‘kunstmatig’’/‘‘non authentique’’). The withholding tax exemption will in such case not apply and/or any Belgian dividend withholding tax levied at source on the dividends will in such case not be credited against the corporate income tax, unless counterproof is provided by the OFP that the arrangement or series of arrangements are genuine.
Other Belgian resident legal entities subject to Belgian legal entities tax
For taxpayers subject to the Belgian income tax on legal entities, the Belgian dividend withholding tax in principle fully discharges their income tax liability.
Non-resident individuals or non-resident companies
For non-resident individuals and companies, the dividend withholding tax will be the only tax on dividends in Belgium, unless the non-resident holds the ordinary shares in connection with a business conducted in Belgium through a fixed base in Belgium or a Belgian PE.

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If the ordinary shares are acquired by a non-resident in connection with a business in Belgium, the investor must report any dividends received, which will be taxable at the applicable non-resident personal or corporate income tax rate, as appropriate. Belgian withholding tax levied at source may be credited against non-resident personal or corporate income tax and is reimbursable to the extent that it exceeds the income tax due with at least EUR 2.50 and, subject to two conditions: (1) the taxpayer must own the ordinary shares in full legal ownership at the time the dividends are paid or attributed and (2) the dividend distribution may not result in a reduction in value of or a capital loss on the ordinary shares. The latter condition is not applicable if (a) the non-resident individual or the non-resident company can demonstrate that the ordinary shares were held in full legal ownership for an uninterrupted period of twelve months prior to the payment or attribution of the dividends or (b) with regard to non-resident companies only, if, during said period, the ordinary shares have not belonged to a taxpayer other than a resident company or a non-resident company which has, in an uninterrupted manner, invested the ordinary shares in a Belgian PE.
Non-resident companies whose ordinary shares are invested in a Belgian PE may, as of assessment year 2019, deduct 100% of the gross dividends received from their taxable income if, at the date the dividends are paid or attributed, the Conditions for the application of the dividend received deduction regime are met. Application of the dividend received deduction regime depends, however, on a factual analysis to be made upon each distribution and its availability should be verified upon each dividend distribution.
Dividends distributed to non-resident individuals who do not use the ordinary shares in the exercise of a professional activity, may be eligible for the newly introduced tax exemption with respect to ordinary dividends in an amount of up to EUR 800 (amount applicable for income year 2019) per year. For the avoidance of doubt, all dividends paid or attributed to such non-resident individual (and hence not only dividends paid or attributed on the Shares) are taken into account to assess whether said maximum amount is reached. Consequently, if Belgian withholding tax has been levied on dividends paid or attributed to the ordinary shares, such non-resident individual may request in its Belgian non-resident income tax return that any Belgian withholding tax levied is credited and, as the case may be, reimbursed. However, if no Belgian non-resident income tax return has to be filed by the non-resident individual, any Belgian withholding tax levied could in principle be reclaimed by filing a request thereto addressed to the tax official to be appointed in a Royal Decree. Such a request has to be filed at the latest on 31 December of the calendar year following the calendar year in which the relevant dividend(s) have been received, together with an affidavit confirming the non-resident individual status and certain other formalities which are still to be determined in a Royal Decree.
Under Belgian tax law, withholding tax is not due on dividends paid to a foreign pension fund which satisfies the following conditions: (i) it is a non-resident saver in the meaning of Article 227, 3° of the ITC which implies that it has separate legal personality and fiscal residence outside of Belgium; (ii) whose corporate purpose consists solely in managing and investing funds collected in order to pay legal or complementary pensions; (iii) whose activity is limited to the investment of funds collected in the exercise of its statutory mission, without any profit making aim; (iv) which is exempt from income tax in its country of residence; and (v) except in specific circumstances, provided that it is not contractually obligated to redistribute the dividends to any ultimate beneficiary of such dividends for whom it would manage the ordinary shares, nor obligated to pay a manufactured dividend with respect to the ordinary shares under a securities borrowing transaction. The exemption will only apply if the foreign pension fund provides a certificate confirming that it is the full legal owner or usufruct holder of the ordinary shares and that the above conditions are satisfied. The organization must then forward that certificate to the Company or its paying agent.
As mentioned above, the Belgian Parliament recently adopted a law pursuant to which a pension fund not holding the ordinary shares - which give rise to dividends - for an uninterrupted period of 60 days in full ownership are subject to a rebuttable presumption that the arrangement or series of arrangements (‘‘rechtshandeling of geheel van rechtshandelingen’’/’’acte juridique ou un ensemble d’actes juridiques’’) which are connected to the dividend distributions, are not genuine (‘‘kunstmatig’’/‘‘non authentique’’). The withholding tax exemption will in such case be rejected, unless counterproof is provided by the OFP that the arrangement or series of arrangements are genuine.
Dividends distributed to non-resident qualifying parent companies established in a Member State of the EU or in a country with which Belgium has concluded a double tax treaty that includes a qualifying exchange of information clause, will, under certain conditions, be exempt from Belgian withholding tax provided that the ordinary shares held by the non-resident company, upon payment or attribution of the dividends, amount to at least 10% of the share capital of the Company and such minimum participation is held or will be held during an uninterrupted period of at least one year. A non-resident company qualifies as a parent company provided that (i) for companies established in a Member State of the EU, it has a legal form as listed in the annex to the EU Parent-Subsidiary Directive of July 23, 1990 (90/435/EC), as amended by Directive 2003/123/EC of December 22, 2003, or, for companies established in a country with which Belgium has concluded a qualifying double tax treaty, it has a legal form similar to the ones listed in such annex; (ii) it is considered to be a tax resident according to the tax laws of the country where it is established and the double tax treaties concluded between such country and third countries; and (iii) it is subject to corporate income tax or a similar tax without benefiting from a tax regime that derogates from the ordinary tax regime.

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In order to benefit from this exemption, the non-resident company must provide the Company or its paying agent with a certificate confirming its qualifying status and the fact that it meets the three abovementioned conditions.
If the non-resident company holds a minimum participation for less than one year at the time the dividends are paid on or attributed to the ordinary shares, the Company must deduct the withholding tax but does not need to transfer it to the Belgian Treasury provided that the non-resident company provides the Company or its paying agent with a certificate confirming, in addition to its qualifying status, the date as of which it has held the ordinary shares, and its commitment to hold the ordinary shares for an uninterrupted period of at least one year. The non-resident company must also inform the Company or its paying agent when the one-year period has expired or if its shareholding drops below 10% of the Company’s share capital before the end of the one-year holding period. Upon satisfying the one-year shareholding requirement, the deducted dividend withholding tax which was temporarily withheld, will be refunded to the non-resident company.
Please note that the above withholding tax exemption will not be applicable to dividends which are connected to an arrangement or a series of arrangements (‘‘rechtshandeling of geheel van rechtshandelingen’’/’’acte juridique ou un ensemble d’actes juridiques’’) for which the tax Belgian tax administration, taking into account all relevant facts and circumstances, has proven, unless evidence to the contrary, that this arrangement or this series of arrangements is not genuine (‘‘kunstmatig’’/’’non authentique’’) and has been put in place for the main purpose or one of the main purposes of obtaining the dividend received deduction, the above dividend withholding tax exemption or one of the advantages of the Parent-Subsidiary Directive in another EU Member State. An arrangement or a series of arrangements is regarded as not genuine to the extent that they are not put into place for valid commercial reasons which reflect economic reality.
Dividends paid or attributed to a non-resident company will be exempt from withholding tax, provided that (i) the non-resident company is established in the European Economic Area or in a country with whom Belgium has concluded a tax treaty that includes a qualifying exchange of information clause, (ii) the non-resident company is subject to corporate income tax or a similar tax without benefiting from a tax regime that derogates from the ordinary tax regime, (iii) the non-resident company does not satisfy the 10%-participation threshold but has a participation in the Belgian company with an acquisition value of at least EUR 2,500,000 upon the date of payment or attribution of the dividend, (iv) the dividends relate to ordinary shares which are or will be held in full ownership for at least one year without interruption; (v) the non-resident company has a legal form as listed in the annex to the Parent-Subsidiary Directive, as amended from time to time, or, has a legal form similar to the ones listed in such annex and that is governed by the laws of another Member State of the EEA, or, by the law of a country with whom Belgium has concluded a qualifying double tax treaty, (vi) the ordinary Belgian withholding tax is, in principle, neither creditable nor reimbursable in the hands of the non-resident company.
In order to benefit from the exemption of withholding tax, the non-resident company must provide the Company or its paying agent with a certificate confirming (i) it has the above described legal form, (ii) it is subject to corporate income tax or a similar tax without benefiting from a tax regime that deviates from the ordinary domestic tax regime, (iii) it holds a participation of less than 10% in the capital of the Company but with an acquisition value of at least EUR 2,500,000 upon the date of payment or attribution of the dividend, (iv) the dividends relate to ordinary shares in the Company which it has held or will hold in full legal ownership for an uninterrupted period of at least one year, (v) to which extent it could in principle, would this exemption not exist, credit the levied Belgian withholding tax or obtain a reimbursement according to the legal provisions applicable upon 31 December of the year preceding the year of the payment or attribution of the dividends, and (vi) its full name, legal form, address and fiscal identification number, if applicable.
Belgian dividend withholding tax is subject to such relief as may be available under applicable double tax treaty provisions. Belgium has concluded double tax treaties with more than 95 countries, reducing the dividend withholding tax rate to 20%, 15%, 10%, 5% or 0% for residents of those countries, depending on conditions, among others, related to the size of the shareholding and certain identification formalities.
Prospective holders should consult their own tax advisors to determine whether they qualify for a reduction in withholding tax upon payment or attribution of dividends, and, if so, to understand the procedural requirements for obtaining a reduced withholding tax upon the payment of dividends or for making claims for reimbursement.
Capital gains and losses
Belgian resident individuals
In principle, Belgian resident individuals acquiring ordinary shares as a private investment should not be subject to Belgian capital gains tax on a later disposal of the ordinary shares and capital losses will not be tax deductible.

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Capital gains realised by a Belgian resident individual are however taxable at 33% (plus local surcharges) if the capital gain on the ordinary shares is deemed to be realised outside the scope of the normal management of its private estate. Capital losses are, however, not tax deductible. Moreover, capital gains realised by Belgian resident individuals on the disposal of the ordinary shares to a non-resident company (or body constituted in a similar legal form), to a foreign State (or one of its political subdivisions or local authorities) or to a non-resident legal entity, each time established outside the European Economic Area, are in principle taxable at a rate of 16.5% (plus local surcharges) if, at any time during the five years preceding the sale, the Belgian resident individual has owned, directly or indirectly, alone or with his/her spouse or with certain relatives, a substantial shareholding in the Company (i.e., a shareholding of more than 25% in the Company). Capital losses arising from such transactions are, however, not tax deductible.
Capital gains realised by Belgian resident individuals in case of redemption of the ordinary shares or in case of liquidation of the Company will generally be taxable as a dividend.
Belgian resident individuals who hold the ordinary shares for professional purposes are taxable at the ordinary progressive personal income tax rates (plus local surcharges) on any capital gains realised upon the disposal of the ordinary shares, except for the ordinary shares held for more than five years, which are taxable at a separate rate of, in principle, 10% (capital gains realised in framework of cessation of activities in certain circumstances) or 16.5% (other occasions), both plus local surcharges. Capital losses on the ordinary shares incurred by Belgian resident individuals who hold the ordinary shares for professional purposes are in principle tax deductible.
Belgian resident companies
Belgian resident companies are normally not subject to Belgian capital gains taxation on gains realised upon the disposal of the ordinary shares provided that the Conditions for the application of the dividend received deduction regime are met.
If the one-year minimum holding period condition is not met (but the other Conditions for the application of the dividend received deduction regime are met), the capital gains realised upon the disposal of the ordinary shares by Belgian resident companies are taxable at a separate corporate income tax rate of 25.50%. From assessment year 2019 (financial years from 1 January 2018) this separate rate for the non-fulfillment of the one-year detention condition does not apply to SMEs, insofar as the capital gain qualifies for the reduced rate of 20.40% (this is, with a taxable basis up to 100,000 EUR). This separate rate will be fully abolished as of the assessment year 2021 (financial years from 1 January 2020), since at that time the standard corporate tax rate will be reduced to 25% (or 20% for qualifying SMEs).
If the Conditions for the application of the dividend received deduction regime would not be met (other than the one-year minimum holding period condition), any capital gain realised would be taxable at the standard corporate income tax rate of 29.58%, unless the reduced corporate income tax rates apply. The corporate income tax rate will be reduced to 25% as of assessment year 2021 for financial years starting on or after 1 January 2020.
Capital losses on the ordinary shares incurred by Belgian resident companies are as a general rule not tax deductible.
Ordinary shares held in the trading portfolios of Belgian qualifying credit institutions, investment enterprises and management companies of collective investment undertakings are subject to a different regime. The capital gains on such ordinary shares are taxable at the ordinary corporate income tax rate of 29.58% unless the reduced corporate income tax rate of 20.4% applies and the capital losses on such ordinary shares are tax deductible. Internal transfers to and from the trading portfolio are assimilated to a realization. The corporate income tax rate will be reduced to 25% as of assessment year 2021 for financial years starting as of 1 January 2020.
Capital gains realised by Belgian resident companies in case of redemption of the ordinary shares or in case of liquidation of the Company will, in principle, be subject to the same taxation regime as dividends.
Belgian resident organizations for financing pensions
Capital gains on the ordinary shares realised by OFPs within the meaning of Article 8 of the Belgian Act of October 27, 2006 are exempt from corporate income tax and capital losses are not tax deductible.
Other Belgian resident legal entities subject to Belgian legal entities tax
Capital gains realised upon disposal of the ordinary shares by Belgian resident legal entities are in principle not subject to Belgian income tax and capital losses are not tax deductible.

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Capital gains realised upon disposal of (part of) a substantial participation in a Belgian company (i.e., a participation representing more than 25% of the share capital of the Company at any time during the last five years prior to the disposal) may, however, under certain circumstances be subject to income tax in Belgium at a rate of 16.5% (plus crisis surcharge of 2%; such surcharge will however be abolished as of 1 January 2020).
Capital gains realised by Belgian resident legal entities in case of redemption of the ordinary shares or in case of liquidation of the Company will, in principle, be subject to the same taxation regime as dividends.
Non-resident individuals, non-residual companies or non-resident entities
Non-resident individuals or companies are, in principle, not subject to Belgian income tax on capital gains realised upon disposal of the ordinary shares, unless the ordinary shares are held as part of a business conducted in Belgium through a fixed base in Belgium or a Belgian PE. In such a case, the same principles apply as described with regard to Belgian individuals (holding the ordinary shares for professional purposes), Belgian companies, Belgian resident organizations for financing pensions or other Belgian resident legal entities subject to Belgian legal entities tax.
Non-resident individuals who do not use the ordinary shares for professional purposes and who have their fiscal residence in a country with which Belgium has not concluded a tax treaty or with which Belgium has concluded a tax treaty that confers the authority to tax capital gains on the ordinary shares to Belgium, might be subject to tax in Belgium if the capital gains arise from transactions which are to be considered speculative or beyond the normal management of one’s private estate or in case of disposal of a substantial participation in a Belgian company as mentioned in the tax treatment of the disposal of the ordinary shares by Belgian individuals. Such non-resident individuals might therefore be obliged to file a tax return and should consult their own tax advisor.
Annual tax on securities accounts
As of 10 March 2018, a new annual tax on securities accounts has been introduced, whereby both (i) Belgian resident private individuals holding one or more securities accounts via a financial intermediary based in Belgium or abroad, and (ii) non-resident private individuals holding one or more securities accounts via a financial intermediary based in Belgium, are subject to tax at a rate of 0.15 % on the total amount of qualifying assets (including listed ordinary shares, bonds, funds) held on these securities accounts if during the preceding reference period of 12 months the combined average value of qualifying assets across all securities accounts exceeded EUR 500,000 per individual account holder (i.e., EUR 1,000,000 for a married couple holding a common securities account). Pension savings accounts and life insurances are excluded.
The tax is, in principle, collected by the intermediary financial institution, established or located in Belgium if (i) the holder’s share in the average value of the qualifying financial instruments held on one or more securities accounts with said intermediary amounts to EUR 500,000 or more; or (ii) the holder instructed the financial intermediary to levy the tax on securities accounts due (e.g. in case such holder holds qualifying financial instruments on several securities accounts held with multiple intermediaries of which the average value does not amount to EUR 500,000 or more but of which the holder’s share in the total average value of these accounts exceeds EUR 500,000 EUR).
Otherwise, the tax on securities accounts has to be declared and is due by the holder itself, unless the holder provides evidence that the tax on securities accounts has already been withheld, declared and paid by an intermediary which is not established or located in Belgium. In that respect, intermediaries located or established outside of Belgium could appoint a tax on securities accounts representative in Belgium, subject to certain conditions and formalities (‘‘Tax on the Securities Accounts Representative’’). Such a Tax on the Securities Accounts Representative will then be liable towards the Belgian Treasury for the tax on securities accounts due and for complying with certain reporting obligations in that respect.
Belgian resident individuals have to report in their annual income tax return various securities accounts held with one or more financial intermediaries of which they are considered as a holder within the meaning of the tax on securities accounts. Non-resident individuals have to report in their annual Belgian non-resident income tax return various securities accounts held with one or more financial intermediaries established or located in Belgium of which they are considered as a holder within the meaning of the tax on securities accounts.
Investors should consult their own professional advisors in relation to the annual tax on securities accounts.

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Belgian tax on stock exchange transactions
The purchase and the sale and any other acquisition or transfer for consideration of existing ordinary shares (secondary market transactions) is subject to the Belgian tax on stock exchange transactions or “taks op de beursverrichtingen” / “taxe sur les opérations de bourse” if (i) it is executed in Belgium through a professional intermediary, or (ii) deemed to be executed in Belgium, which is the case if the order is directly or indirectly made to a professional intermediary established outside of Belgium, either by private individuals with habitual residence in Belgium, or legal entities for the account of their seat or establishment in Belgium (both referred to as a “Belgian Investor”). The tax on stock exchange transactions is not due upon the issuance of new ordinary shares (primary market transactions).
The tax on stock exchange transactions is levied at a rate of 0.35% of the purchase price, capped at EUR 1,600 per transaction and per party.
A separate tax is due by each party to the transaction, and both taxes are collected by the professional intermediary. However, if the intermediary is established outside of Belgium, the tax will in principle be due by the Belgian Investor, unless that Belgian Investor can demonstrate that the tax has already been paid. Professional intermediaries established outside of Belgium can, subject to certain conditions and formalities, appoint a Belgian stock exchange tax representative or “Stock Exchange Tax Representative”, which will be liable for the tax on stock exchange transactions in respect of the transactions executed through the professional intermediary. If such a Stock Exchange Tax Representative would have paid the tax on stock exchange transactions due, the Belgian Investor will, as per the above, no longer be the debtor of the tax on stock exchange transaction.
No tax on stock exchange transactions is due on transactions entered into by the following parties, provided they are acting for their own account: (i) professional intermediaries described in Article 2.9° and 10° of the Belgian Law of August 2, 2002 on the supervision of the financial sector and financial services; (ii) insurance companies defined in Article 5 of the Belgian Law of March 13, 2016 on the supervision of insurance companies; (iii) pension institutions referred to in Article 2,1° of the Belgian Law of October 27, 2006 concerning the supervision of pension institutions; (iv) undertakings for collective investment; (v) regulated real estate companies; and (vi) Belgian non-residents provided they deliver a certificate to their financial intermediary in Belgium confirming their non-resident status.
Application of the tonnage tax regime to the Company
The Belgian Ministry of Finance approved our application on October 23, 2013 for beneficial tax treatment of certain of our vessel operations income.
Under this Belgian tax regime, our taxable basis is determined on a lump-sum basis (Tonnage Tax Regime - An alternative way of calculating taxable income of operating qualifying ships. Taxable profits are calculated by reference to the net tonnage of the qualifying vessels a company operates, independent of the actual earnings (profit or loss) for Belgian corporate income tax purposes). This tonnage tax regime was initially granted for 10 years and was renewed for an additional 10-year period in 2013.
The subsidiaries Euronav Shipping NV and Euronav Tankers NV that were formed in connection with our acquisition of the 2014 Fleet Acquisition Vessels applied for the Belgian tonnage tax regime and obtained approval effective January 1, 2016.
We cannot assure the Company will be able to continue to take advantage of these tax benefits in the future or that the Belgian Ministry of Finance will approve the Company’s future applications. Changes to the tax regimes applicable to the Company, or the interpretation thereof, may impact the future net results of the Company.
Other income tax considerations
In addition to the income tax consequences discussed above, the Company may be subject to tax in one or more other jurisdictions where the Company conducts activities. The amount of any such tax imposed upon our operations may be material.
The proposed Financial Transaction Tax (FTT)
On February 14, 2013 the EU Commission adopted a Draft Directive on a common Financial Transaction Tax, or the FTT. Earlier negotiations for a common transaction tax among all 28 EU Member States had failed. The current negotiations between Austria, Belgium, France, Germany, Greece, Italy, Portugal, Slovakia, Slovenia and Spain or the Participating Member States are seeking a compromise under “enhanced cooperation” rules, which require consensus from at least nine nations. Earlier Estonia dropped out of the negotiations by declaring it would not introduce the FTT.

136
                                    

                

The Draft Directive currently stipulates that once the FTT enters into force, the Participating Member States shall not maintain or introduce taxes on financial transactions other than the FTT (or VAT as provided in the Council Directive 2006/112/EC of November 28, 2006 on the common system of value added tax). For Belgium, the tax on stock exchange transactions should thus be abolished once the FTT enters into force.
However, the Draft Directive on the FTT remains subject to negotiations between the Participating Member States. It may therefore be altered prior to any implementation, of which the eventual timing and outcome remains unclear. Additional EU Member States may decide to participate or drop out of the negotiations. If the number of Participating Member States would fall below nine, it would put an end to the project.
Prospective investors should consult their own professional advisors in relation to the FTT.

F.            Dividends and paying agents.
Not applicable.
G.            Statement by experts.
Not applicable.
H.            Documents on display.
We are subject to the informational requirements of the Exchange Act. In accordance with these requirements 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 Commission at 100 F Street, N.E., 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 Commission at its principal office in Washington, D.C. 20549. The SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information that we and other registrants have filed electronically with the SEC. Our filings are also available on our website at www.euronav.com.  This web address is provided as an inactive textual reference only.  Information contained on our website does not constitute part of this annual report.
Shareholders may also request a copy of our filings at no cost, by writing or telephoning us at the following address:
Euronav NV
De Gerlachekaai 20, 2000 Antwerpen
Belgium
Telephone: 011-32-3-247-4411
I.            Subsidiary Information
Not applicable.


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ITEM 11.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We are exposed to market risk from changes in interest rates related to the variable rate of the borrowings under our secured and unsecured credit facilities. Amounts borrowed under the credit facilities bear interest at a rate equal to LIBOR plus a margin. Increasing interest rates could affect our future profitability. In certain situations, we may enter into financial instruments to reduce the risk associated with fluctuations in interest rates. A one percentage point increase in LIBOR would have increased our interest expense for the year ended December 31, 2018 by approximately $8.5 million ($9.4 million in 2017).
We are exposed to currency risk related to our operating expenses and treasury notes expressed in euros. In 2018, about 12.8% of the total operating expenses were incurred in euros (2017: 16.5%). Revenue and the financial instruments are expressed in U.S. dollars only. A 10 percent strengthening of the Euro against the dollar at December 31, 2018 would have decreased our profit or loss by $7.9 million (2017: $7.1 million). A 10 percent weakening of the euro against the dollar at December 31, 2017 would have had the equal but opposite effect.
We are exposed to credit risk from our operating activities (primarily for trade receivables and available liquidity under our credit revolving facilities) and from our financing activities, including credit risk related to undrawn portions of our facilities and deposits with banks and financial institutions. We seek to diversify the credit risk on our cash deposits by spreading the risk among various financial institutions. The cash and cash equivalents are held with bank and financial institution counterparties, which are rated A- to AA+, based on the rating agency, Standard & Poor's Financial Services LLC.
Historically, the tanker markets have been volatile as a result of the many conditions and factors that can affect the price, supply and demand for tanker capacity. Changes in demand for transportation of oil over longer distances and supply of tankers to carry that oil may materially affect our revenues, profitability and cash flows. A significant part of our vessels are currently exposed to the spot market. Every increase (decrease) of $1,000 on a spot tanker freight market (VLCC and Suezmax) per day would have increased (decreased) profit or loss by $19.3 million in 2018 (2017: $13.4 million).
For further information, please see Note 18 to our consolidated financial statements included herein.
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 of controls and procedures.
We evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2018. Based on that evaluation, our Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by the Company in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. 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.

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(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 disposition 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.
The attestation report of the registered public accounting firm is presented on page F-2 of the financial statements as filed as part of this annual report.
(d)            Changes in internal control over financial reporting.
There were no changes in our internal controls over financial reporting that occurred during the period covered by this annual report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 16A.    AUDIT COMMITTEE FINANCIAL EXPERT
In accordance with the rules of the NYSE, the exchange on which our ordinary shares are listed, we have appointed an audit committee, referred to as Audit and Risk Committee, whose members as of December 31, 2018 are Ms. Monsellato, as Chairman, Mr. Steen, Mr. Smith and Mr. Bradshaw. Ms. Monsellato has been determined to be a financial expert by our board of directors and independent, as that term is defined in the listing standards of the NYSE.
ITEM 16B.    CODE OF ETHICS
We have adopted a code of conduct that applies to our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions. A copy of our code of conduct has been filed as an exhibit to our annual report on Form 20-F for the fiscal year ended December 31, 2014 and is also available on our website at www.euronav.com.  We will also provide a hard copy of our code of conduct free of charge upon written request of a shareholder.
Shareholders may also request a copy of our code of conduct at no cost, by writing or telephoning us at the following address:
Euronav NV
De Gerlachekaai 20, 2000 Antwerpen
Belgium
Telephone: 011-32-3-247-4411

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ITEM 16C.    PRINCIPAL ACCOUNTING FEES AND SERVICES
Our principal accountants for the years ended December 31, 2018 and 2017 were KPMG Bedrijfsrevisoren—Réviseurs d' Entreprises   CVBA (KPMG). The following table sets forth the fees related to audit and other services provided by KPMG.
(in U.S. dollars)
 
December 31, 2018
 
December 31, 2017
Audit fees
 
1,006,077

 
870,324

Audit-related fees
 
313,180

 
7,987

Taxation fees
 
6,180

 
22,104

All other fees
 
10,076

 
—

Total
 
1,335,513

 
900,415

Audit Fees
Audit fees are fees billed for services that provide assurance on the fair presentation of financial statements and encompass the following specific elements:
•
An audit opinion on our consolidated financial statements and our internal controls over financial reporting;
•
An audit opinion on the statutory financial statements of individual companies within our consolidated group of companies, where legally required;
•
A review opinion on interim financial statements;
•
In general, any opinion assigned to the statutory auditor by local legislation or regulations.
Audit-Related Fees
Audit-related fees are fees for assurance or other work traditionally provided to us by external audit firms in their role as statutory auditors. These services usually result in a certification or specific opinion on an investigation or specific procedures applied, and include opinion/audit reports on information provided by us at the request of a third party (for example, prospectuses, comfort letters).
Tax Fees
Tax fees in 2018 and 2017 were related to tax compliance services.
ITEM 16D.    EXEMPTIONS FROM LISTING STANDARDS FOR AUDIT COMMITTEES
None.
ITEM 16E.    PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASES
2018
Total number of shares purchased
Average Price Paid per share in €
Total Price Paid in €
Average Price Paid per share in $
Total Price Paid in $
December 19, 2018
142,081

6.5598

932,023

7.4513

1,058,685

December 20, 2018
105,835

6.4072

678,106

7.2779

770,261

December 21, 2018
85,000

6.2678

532,763

7.1196

605,165

December 24, 2018
27,500

6.2902

172,981

7.2023

198,063

December 27, 2018
127,500

6.2765

800,254

7.1866

916,291

December 28, 2018
37,500

6.1482

230,558

7.0397

263,988

December 31, 2018
20,070

6.2194

124,823

7.1212

142,923

Total
545,486


3,471,508

 
3,955,376

 
 
 
 
 
 

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ITEM 16F.    CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT
None.
ITEM 16G.    CORPORATE GOVERNANCE
Pursuant to an exception for foreign private issuers, we, as a Belgian company, are not required to comply with the corporate governance practices followed by U.S. companies under the NYSE listing standards.  Set forth below is a list of what we believe to be the significant differences between our corporate governance practices and those applicable to U.S. companies under the NYSE listing standards.
Independence of Directors.     The NYSE requires that a U.S. listed company maintain a majority of independent directors. Our Board of Directors currently consists of seven directors, five of which are considered "independent" according to NYSE's standards for independence. However, as permitted under Belgian law, our Board of Directors may in the future not consist of a majority of independent directors. 
Compensation Committee and Nominating/Corporate Governance Committee .     The NYSE requires that a listed U.S. company have a compensation committee and a nominating/corporate governance committee of independent directors. As permitted under Belgian law, our Remuneration Committee, unlike the Company's Corporate Governance and Nomination Committee, does not currently, and may not in the future, consist entirely of independent directors. Nevertheless, in accordance with Belgian corporate law, both Committees must at all times maintain a majority of independent directors (in accordance with Belgian independence standards).
Audit Committee .    The NYSE requires, among other things, that a listed U.S. company have an audit committee comprised of three entirely independent directors. Under Belgian law, our Audit and Risk Committee need not be comprised of three entirely independent directors, but it must at all times consist of a majority of independent directors (in accordance with Belgian independence standards). Although we are not required to do so under Rule 10A-3 under the Exchange Act, our Audit and Risk Committee is currently comprised of four independent directors in accordance with the Exchange Act and NYSE rules, three of whom are also independent according to Belgian independence standards.
Corporate Governance Guidelines .    The NYSE 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. We are not required to adopt such guidelines under Belgian law, but we have adopted a corporate governance charter in compliance with Belgian law requirements.
Shareholder Approval of Securities Issuances. The NYSE 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 under the laws of Belgian for authorizing issuances of securities.
Proxies. As a foreign private issuer, we are not required to solicit proxies or provide proxy statements in connection with meetings of the Company’s shareholders as required by U.S. companies under the NYSE listing standards. As provided in our Coordinated Articles of Association, the designation of a proxy holder by a shareholder will occur as stated in the convening notice for the respective meeting of shareholders. The Board of Directors of the Company may decide on the form of the proxies and may stipulate that the same be deposited at the place it indicates, within the period it fixes and that no other forms will be accepted.
Information about our corporate governance practices may also be found on our website, http://www.euronav.com, in the section "Investors" under "Corporate Governance."
ITEM 16H.    MINE SAFETY DISCLOSURE
Not applicable.
PART III

ITEM 17.    FINANCIAL STATEMENTS
See "Item 18. Financial Statements."

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ITEM 18.    FINANCIAL STATEMENTS
The financial statements, together with the report of KPMG Bedrijfsrevisoren—Réviseurs d'Entreprises Burg. CVBA (KPMG) thereon, are set forth on page F-2 and are filed as a part of this report.

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ITEM 19.    EXHIBITS
Exhibit Number
Description
 
 
1.1
 
 
2.1
 
 
4.1
 
 
4.2
 
 
4.3
 
 
4.4
 
 
4.5
 
 
4.6
 
 
4.7
 
 
4.8
 
 
4.10
 
 
4.11
 
 
4.12
 
 
4.13
 
 
4.14

 
 
4.15

 
 
4.16

 
 
4.17
 
 
4.18

 
 
4.19
 
 
4.20
 
 
4.21

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4.22
 
 
4.23
 
 
4.24
 
 
4.25
 
 
4.26
 
 
4.27
 
 
4.28
 
 
4.29
 
 
4.30
 
 
4.31
 
 
4.32
 
 
4.33
 
 
4.34
 
 
8.1
 
 
11.1
 
 
12.1
 
 
12.2
 
 
13.1
 
 
13.2
 
 
15.1
 
 
15.2
 
 
15.3
 
 

144
                                    

                

15.4
 
 
15.5
 
 
101
The following financial information from the registrant's annual report on Form 20-F for the fiscal year ended December 31, 2017, formatted in Extensible Business Reporting Language (XBRL):
 
    (1) Consolidated Statement of Financial Position as of December 31, 2017, 2016 and 2015
 
    (2) Consolidated Statement of Profit or Loss for the years ended December 31, 2017, 2016 and 2015
 
    (3) Consolidated Statement of Comprehensive Income as of December 31, 2017, 2016 and 2015
 
    (4) Consolidated Statements of Changes in Equity as of December 31, 2017, 2016 and 2015
 
    (5) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015
 
    (6) Notes to the Consolidated Financial Statements.
 
(1)
Filed as an exhibit to the Company's Registration Statement on Form F-1, Registration No. 333-198625 and incorporated by reference herein.
(2)
Filed as an exhibit to the Company's Annual Report on Form 20-F for the year ended December 31, 2014 and incorporated by reference herein.
(3)
Filed as an exhibit to the Company's Annual Report on Form 20-F for the year ended December 31, 2015 and incorporated by reference herein.
(4)
Filed as an exhibit to the Company’s Annual Report on Form 20-F for the year ended December 31, 2016 and incorporated by reference herein.
(5)
Filed as an exhibit to the Company’s Report of Foreign Private Issuer on Form 6-K filed with the SEC on December 22, 2017 and incorporated by reference herein.
(6)
Filed as an exhibit to the Company's Registration Statement on Form F-4, Registration No. 333-223039 and incorporated by reference herein.
(7)
Filed as an exhibit to the Company’s Annual Report on Form 20-F for the year ended December 31, 2017 and incorporated by reference herein.

145
                                    

                

SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
 
EURONAV NV
 
 
 
 
 
 
 
 
 
 
By:
/s/ Hugo De Stoop
 
 
Name:  Hugo De Stoop
Title:    Chief Financial Officer
Date: April 30, 2019
 
 


146
                                    

                

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
Page
 
 

F-1
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors     
Euronav NV:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated statements of financial position of Euronav NV and subsidiaries (the Company) as of December 31, 2018 and 2017, the related consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2018 and the related notes (collectively, the consolidated financial statements). We also have audited the Company’s internal control over financial reporting as of December 31, 2018, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above 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 years in the three-year period ended December 31, 2018, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

The Company acquired Gener8 Maritime Inc. during 2018, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2018, Gener8 Maritime Inc.’s internal control over financial reporting associated with total assets of USD 76.3 million and revenue of USD 16.5 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2018. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Gener8 Maritime Inc.
Change in Accounting Principle
As discussed in Note 1 to the consolidated financial statements, the Company changed its method of accounting for revenue from contracts with customers effective January 1, 2018 due to the adoption of International Financial Reporting Standard 15 Revenue from Contracts with Customers .
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting 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 audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our

F-2
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) 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 (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Patricia Leleu
KPMG Bedrijfsrevisoren/ Réviseur d’Entreprises
We have served as the Company’s auditor since 2004.
Zaventem, Belgium     
April 30, 2019



F-3
Table of Contents
Consolidated Statement of Financial Position
(in thousands of USD)

 
 
December 31, 2018
 
December 31, 2017 *
ASSETS
 
 
 
 
Non-current assets
 
 
 
 
Vessels (Note 8)
 
3,520,067

 
2,271,500

Assets under construction (Note 8)
 
—

 
63,668

Other tangible assets (Note 8)
 
1,943

 
1,663

Intangible assets
 
105

 
72

Receivables (Note 10)
 
38,658

 
160,352

Investments in equity accounted investees (Note 25)
 
43,182

 
30,595

Deferred tax assets  (Note 9)
 
2,255

 
2,487

 
 
 
 
 
Total non-current assets
 
3,606,210

 
2,530,337

 
 
 
 
 
Current assets
 
 

 
 

Trade and other receivables  (Note 11)
 
305,726

 
136,797

Current tax assets
 
282

 
191

Cash and cash equivalents (Note 12)
 
173,133

 
143,648

Non-current assets held for sale (Note 3)
 
42,000

 
—

 
 
 
 
 
Total current assets
 
521,141

 
280,636

 
 
 
 
 
TOTAL ASSETS
 
4,127,351

 
2,810,973

 
 
 
 
 
 
 
 
 
 
EQUITY and LIABILITIES
 
 
 
 
 
 
 
 
 
Equity
 
 
 
 
Share capital (Note 13)
 
239,148

 
173,046

Share premium (Note 13)
 
1,702,549

 
1,215,227

Translation reserve
 
411

 
568

Hedging reserve (Note 13)
 
(2,698
)
 
—

Treasury shares (Note 13)
 
(14,651
)
 
(16,102
)
Retained earnings
 
335,764

 
473,622

 
 
 
 
 
Equity attributable to owners of the Company
 
2,260,523

 
1,846,361

 
 
 
 
 
Non-current liabilities
 
 

 
 

Bank loans (Note 15)
 
1,421,465

 
653,730

Other notes (Note 15)
 
148,166

 
147,619

Other payables (Note 17)
 
1,451

 
539

Employee benefits (Note 16)
 
4,336

 
3,984

Provisions (Note 20)
 
4,288

 
—

 
 
 
 
 
Total non-current liabilities
 
1,579,706

 
805,872

 
 
 
 
 
Current liabilities
 
 

 
 

Trade and other payables (Note 17)
 
87,225

 
61,355

Current tax liabilities
 
41

 
11

Bank loans (Note 15)
 
138,537

 
47,361

Other borrowings (Note 15)
 
60,342

 
50,010

Provisions (Note 20)
 
977

 
3

 
 
 
 
 
Total current liabilities
 
287,122

 
158,740

 
 
 
 
 
TOTAL EQUITY and LIABILITIES
 
4,127,351

 
2,810,973

 
 
 
 
 
* The Group has initially applied IFRS 15 and IFRS 9 at January 1, 2018. Under the transition methods chosen, comparative information is not restated.
The accompanying notes on page F-11 to F-98 are an integral part of these consolidated financial statements.

F-4
Table of Contents
Consolidated Statement of Profit or Loss
(in thousands of USD except per share amounts)

 
 
2018
 
2017 *
 
2016 *
 
 
Jan. 1 - Dec 31, 2018
 
Jan. 1 - Dec 31, 2017
 
Jan. 1 - Dec 31, 2016
Shipping income
 
 
 
 
 
 
Revenue (Note 4)
 
600,024

 
513,368

 
684,265

Gains on disposal of vessels/other tangible assets (Note 8)
 
19,138

 
36,538

 
50,397

Other operating income (Note 4)
 
4,775

 
4,902

 
6,996

Total shipping income
 
623,937

 
554,808


741,658

 
 
 
 
 
 
 
Operating expenses
 
 

 
 

 
 

Voyage expenses and commissions (Note 5)
 
(141,416
)
 
(62,035
)
 
(59,560
)
Vessel operating expenses (Note 5)
 
(185,792
)
 
(150,427
)
 
(160,199
)
Charter hire expenses (Note 5)
 
(31,114
)
 
(31,173
)
 
(17,713
)
Loss on disposal of vessels/other tangible assets (Note 8)
 
(273
)
 
(21,027
)
 
(2
)
Impairment on non-current assets held for sale (Note 3)
 
(2,995
)
 
—

 
—

Loss on disposal of investments in equity accounted investees (Note 24)
 
—

 
—

 
(24,150
)
Depreciation tangible assets (Note 8)
 
(270,582
)
 
(229,777
)
 
(227,664
)
Depreciation intangible assets
 
(111
)
 
(95
)
 
(99
)
General and administrative expenses (Note 5)
 
(66,232
)
 
(46,868
)
 
(44,051
)
Total operating expenses
 
(698,515
)
 
(541,402
)

(533,438
)
 
 
 
 
 
 
 
RESULT FROM OPERATING ACTIVITIES
 
(74,578
)
 
13,406

 
208,220

 
 
 
 
 
 
 
Finance income (Note 6)
 
15,023

 
7,266

 
6,855

Finance expenses (Note 6)
 
(89,412
)
 
(50,729
)
 
(51,695
)
Net finance expenses
 
(74,389
)
 
(43,463
)

(44,840
)
 
 
 
 
 
 
 
Gain on bargain purchase (Note 24)
 
23,059

 
—

 
—

Share of profit (loss) of equity accounted investees (net of income tax) (Note 25)
 
16,076

 
30,082

 
40,495

 
 
 
 
 
 
 
PROFIT (LOSS) BEFORE INCOME TAX
 
(109,832
)
 
25

 
203,875

 
 
 
 
 
 
 
Income tax benefit (expense) (Note 7)
 
(238
)
 
1,358

 
174

 
 
 
 
 
 
 
PROFIT (LOSS) FOR THE PERIOD
 
(110,070
)
 
1,383

 
204,049

 
 
 
 
 
 
 
Attributable to:
 
 

 
 

 
 

Owners of the company
 
(110,070
)
 
1,383

 
204,049

 
 
 
 
 
 
 
Basic earnings per share (Note 14)
 
(0.57
)
 
0.01

 
1.29

Diluted earnings per share (Note 14)
 
(0.57
)
 
0.01

 
1.29

 
 
 
 
 
 
 
Weighted average number of shares (basic) (Note 14)
 
191,994,398

 
158,166,534

 
158,262,268

Weighted average number of shares (diluted) (Note 14)
 
191,994,398

 
158,297,057

 
158,429,057


* The Group has initially applied IFRS 15 and IFRS 9 at January 1, 2018. Under the transition methods chosen, comparative information is not restated.
The accompanying notes on page F-11 to F-98 are an integral part of these consolidated financial statements.

F-5
Table of Contents
Consolidated Statement of Comprehensive Income
(in thousands of USD)


 
 
2018
 
2017 *
 
2016 *
 
 
Jan. 1 - Dec 31, 2018
 
Jan. 1 - Dec 31, 2017
 
Jan. 1 - Dec 31, 2016
Profit/(loss) for the period
 
(110,070
)
 
1,383

 
204,049

 
 
 
 
 
 
 
Other comprehensive income/(expense), net of tax
 
 

 
 

 
 

Items that will never be reclassified to profit or loss:
 
 

 
 

 
 

Remeasurements of the defined benefit liability (asset) (Note 16)
 
120

 
64

 
(646
)
 
 
 
 
 
 
 
Items that are or may be reclassified to profit or loss:
 
 

 
 

 
 

Foreign currency translation differences (Note 6)
 
(157
)
 
448

 
170

Cash flow hedges - effective portion of changes in fair value (Note 13)
 
(2,698
)
 
—

 
—

Equity-accounted investees - share of other comprehensive income (Note 25)
 
(459
)
 
483

 
1,224

 
 
 
 
 
 
 
Other comprehensive income/(expense), net of tax
 
(3,194
)
 
995

 
748

 
 
 
 
 
 
 
Total comprehensive income/(expense) for the period
 
(113,264
)
 
2,378

 
204,797

 
 
 
 
 
 
 
Attributable to:
 
 

 
 

 
 

Owners of the company
 
(113,264
)
 
2,378

 
204,797

* The Group has initially applied IFRS 15 and IFRS 9 at January 1, 2018. Under the transition methods chosen, comparative information is not restated.
The accompanying notes on page F-11 to F-98 are an integral part of these consolidated financial statements.


F-6
Table of Contents
Consolidated Statement of Changes in Equity
(in thousands of USD)


 
 
Share capital
 
Share premium
 
Translation reserve
 
Hedging reserve
 
Treasury shares
 
Retained earnings
 
Total equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2016
 
173,046

 
1,215,227

 
(50
)
 
—

 
(12,283
)
 
529,809

 
1,905,749

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Profit (loss) for the period
 
—

 
—

 
—

 
—

 
—

 
204,049

 
204,049

Total other comprehensive income
 
—

 
—

 
170

 
—

 
—

 
578

 
748

Total comprehensive income
 
—

 
—

 
170

 
—

 
—

 
204,627

 
204,797

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transactions with owners of the company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends to equity holders
 
—

 
—

 
—

 
—

 
—

 
(216,838
)
 
(216,838
)
Treasury shares acquired (Note 13)
 
—

 
—

 
—

 
—

 
(6,889
)
 
—

 
(6,889
)
Treasury shares sold (Note 13)
 
—

 
—

 
—

 
—

 
3,070

 
(2,339
)
 
731

Equity-settled share-based payment (Note 22)
 
—

 
—

 
—

 
—

 
—

 
406

 
406

Total transactions with owners
 
—

 
—

 
—

 
—

 
(3,819
)
 
(218,771
)
 
(222,590
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2016
 
173,046

 
1,215,227

 
120

 
—

 
(16,102
)
 
515,665

 
1,887,956

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2017
 
173,046

 
1,215,227

 
120

 
—

 
(16,102
)
 
515,665

 
1,887,956

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Profit (loss) for the period
 
—

 
—

 
—

 
—

 
—

 
1,383

 
1,383

Total other comprehensive income
 
—

 
—

 
448

 
—

 
—

 
547

 
995

Total comprehensive income
 
—

 
—

 
448

 
—

 
—

 
1,930

 
2,378

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transactions with owners of the company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dividends to equity holders
 
—

 
—

 
—

 
—

 
—

 
(44,286
)
 
(44,286
)
Equity-settled share-based payment (Note 22)
 
—

 
—

 
—

 
—

 
—

 
313

 
313

Total transactions with owners
 
—

 
—

 
—

 
—

 
—

 
(43,973
)
 
(43,973
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
 
173,046

 
1,215,227

 
568

 
—

 
(16,102
)
 
473,622

 
1,846,361







F-7
                                    

                

Consolidated Statement of Changes in Equity (Continued)
(in thousands of USD)
 
 
Share capital
 
Share premium
 
Translation reserve
 
Hedging reserve
 
Treasury shares
 
Retained earnings
 
Total equity
Balance at January 1, 2018
 
173,046

 
1,215,227

 
568

 
—

 
(16,102
)
 
473,622

 
1,846,361

Adjustment on initial application of IFRS 15 (net of tax) (Note 1)
 
—

 
—

 
—

 
—

 
—

 
(1,729
)
 
(1,729
)
Adjustment on initial application of IFRS 9 (net of tax) (Note 1)
 
—

 
—

 
—

 
—

 
—

 
(16
)
 
(16
)
Balance at January 1, 2018 adjusted *
 
173,046

 
1,215,227

 
568

 
—

 
(16,102
)
 
471,877

 
1,844,616

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Profit (loss) for the period
 
—

 
—

 
—

 
—

 
—

 
(110,070
)
 
(110,070
)
Total other comprehensive income / (expense)
 
—

 
—

 
(157
)
 
(2,698
)
 
—

 
(339
)
 
(3,194
)
Total comprehensive income / (expense)
 
—

 
—

 
(157
)
 
(2,698
)
 
—

 
(110,409
)
 
(113,264
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transactions with owners of the company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Issue of ordinary shares related to business combinations (Note 13)
 
66,102

 
487,322

 
—

 
—

 
—

 
—

 
553,424

Dividends to equity holders (Note 13)
 
—

 
—

 
—

 
—

 
—

 
(22,629
)
 
(22,629
)
Treasury shares acquired (Note 13)
 
—

 
—

 
—

 
—

 
(3,955
)
 
—

 
(3,955
)
Treasury shares sold (Note 13)
 
—

 
—

 
—

 
—

 
5,406

 
(3,112
)
 
2,294

Equity-settled share-based payment (Note 22)
 
—

 
—

 
—

 
—

 
—

 
37

 
37

Total transactions with owners
 
66,102

 
487,322

 
—

 
—

 
1,451

 
(25,704
)
 
529,171

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
 
239,148

 
1,702,549

 
411

 
(2,698
)
 
(14,651
)
 
335,764

 
2,260,523

* The Group has initially applied IFRS 15 and IFRS 9 at January 1, 2018. Under the transition methods chosen, comparative information is not restated but the opening balance of 2018 has been adjusted following the application of IFRS 15 on Revenue Recognition.

The accompanying notes on page F-11 to F-98 are an integral part of these consolidated financial statements.


F-8
Table of Contents
Consolidated Statement of Cash Flows
(in thousands of USD)

 
 
2018
 
2017 *
 
2016 *
 
 
Jan. 1 - Dec 31, 2018
 
Jan. 1 - Dec 31, 2017
 
Jan. 1 - Dec 31, 2016
Cash flows from operating activities
 
 
 
 
 
 
Profit (loss) for the period
 
(110,070
)
 
1,383

 
204,049

 
 
 
 
 
 
 
Adjustments for:
 
289,311

 
225,527

 
205,457

Depreciation of tangible assets (Note 8)
 
270,582

 
229,777

 
227,664

Depreciation of intangible assets
 
111

 
95

 
99

Impairment on non-current assets held for sale (Note 3)
 
2,995

 
—

 
—

Loss (gain) on disposal of investments in equity accounted investees (Note 24)
 
—

 
—

 
24,150

Provisions
 
(42
)
 
(160
)
 
(603
)
Income tax (benefits)/expenses (Note 7)
 
239

 
(1,358
)
 
(174
)
Share of profit of equity-accounted investees, net of tax (Note 25)
 
(16,076
)
 
(30,082
)
 
(40,495
)
Net finance expenses (Note 6)
 
74,389

 
43,463

 
44,839

(Gain)/loss on disposal of assets (Note 8)
 
(18,865
)
 
(15,511
)
 
(50,395
)
Equity-settled share-based payment transactions (Note 5)
 
37

 
313

 
406

Amortization of deferred capital gain
 
(1,000
)
 
(1,010
)
 
(34
)
Gain on bargain purchase (Note 24)
 
(23,059
)
 
—

 
—

 
 
 
 
 
 
 
Changes in working capital requirements
 
(114,533
)
 
22,083

 
38,487

Change in cash guarantees
 
33

 
(52
)
 
107

Change in trade receivables (Note 11)
 
(23,589
)
 
5,938

 
(755
)
Change in accrued income (Note 11)
 
(6,393
)
 
(1,499
)
 
21,049

Change in deferred charges (Note 11)
 
(3,413
)
 
(3,648
)
 
239

Change in other receivables (Note 10-11)
 
(77,876
)
 
28,773

 
35,905

Change in trade payables (Note 17)
 
(8,181
)
 
1,165

 
(6,817
)
Change in accrued payroll (Note 17)
 
(11,000
)
 
1,014

 
(138
)
Change in accrued expenses (Note 17)
 
18,839

 
(6,727
)
 
(7,547
)
Change in deferred income (Note 17)
 
(2,265
)
 
(3,726
)
 
(3,591
)
Change in other payables (Note 17)
 
(1,304
)
 
18

 
(226
)
Change in provisions for employee benefits (Note 16)
 
616

 
827

 
261

 
 
 
 
 
 
 
Income taxes paid during the period
 
(67
)
 
11

 
(100
)
Interest paid (Note 6-18)
 
(67,209
)
 
(39,595
)
 
(33,378
)
Interest received (Note 6-11)
 
3,409

 
636

 
209

Dividends received from equity-accounted investees (Note 25)
 
—

 
1,250

 
23,478

 
 
 
 
 
 
 
Net cash from (used in) operating activities
 
841

 
211,295

 
438,202

 
 
 
 
 
 
 
Acquisition of vessels (Note 8)
 
(237,476
)
 
(176,687
)
 
(342,502
)
Proceeds from the sale of vessels (Note 8)
 
26,762

 
96,880

 
223,016

Acquisition of other tangible assets and prepayments (Note 8)
 
(588
)
 
(1,203
)
 
(178
)
Acquisition of intangible assets
 
(1
)
 
(11
)
 
(18
)
Proceeds from the sale of other (in)tangible assets
 
—

 
29

 
38

Loans from (to) related parties (Note 25)
 
134,097

 
40,750

 
22,047

Proceeds from capital decreases in joint ventures (Note 25)
 
—

 
—

 
3,737

Acquisition of subsidiaries or from business combinations, net of cash acquired (Note 24)
 
126,288

 
—

 
(6,755
)
Proceeds from sale of subsidiaries (Note 24)
 
140,960

 
—

 
—

 
 
 
 
 
 
 
Net cash from (used in) investing activities
 
190,042

 
(40,242
)
 
(100,615
)
 
 
 
 
 
 
 
(Purchase of) Proceeds from sale of treasury shares (Note 13)
 
(1,661
)
 
—

 
(6,157
)
Proceeds from new borrowings (Note 15)
 
983,882

 
526,024

 
740,286

Repayment of borrowings (Note 15)
 
(1,115,894
)
 
(710,993
)
 
(774,015
)
Transaction costs related to issue of loans and borrowings (Note 15)
 
(3,849
)
 
(5,874
)
 
(4,436
)
Dividends paid (Note 13)
 
(22,643
)
 
(44,133
)
 
(216,838
)
 
 
 
 
 
 
 
Net cash from (used in) financing activities
 
(160,165
)
 
(234,976
)
 
(261,160
)
 
 
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents
 
30,718

 
(63,923
)
 
76,427

 
 
 
 
 
 
 
Net cash and cash equivalents at the beginning of the period (Note 12)
 
143,648

 
206,689

 
131,663


F-9
Table of Contents
Consolidated Statement of Cash Flows
(in thousands of USD)

Effect of changes in exchange rates
 
(1,233
)
 
882

 
(1,401
)
 
 
 
 
 
 
 
Net cash and cash equivalents at the end of the period (Note 12)
 
173,133

 
143,648

 
206,689

of which restricted cash
 
79

 
115

 
146

* The Group has initially applied IFRS 15 and IFRS 9 at January 1, 2018. Under the transition methods chosen, comparative information is not restated.
The accompanying notes on page F-11 to F-98 are an integral part of these consolidated financial statements.

F-10


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018




Notes to the consolidated financial statements for the year ended December 31, 2018


F-11
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 1 - Significant accounting policies
1.
Reporting Entity
Euronav NV (the "Company") is a company domiciled in Belgium. The address of the Company's registered office is De Gerlachekaai 20, 2000 Antwerpen, Belgium. The consolidated financial statements of the Company comprise the Company and its subsidiaries (together referred to as the "Group") and the Group's interests in associates and joint ventures.
Euronav NV is a fully-integrated provider of international maritime shipping and offshore services engaged in the transportation and storage of crude oil. The Company was incorporated under the laws of Belgium on June 26, 2003, and grew out of three companies that had a strong presence in the shipping industry; Compagnie Maritime Belge NV, ("CMB"), formed in 1895, Compagnie Nationale de Navigation SA, ("CNN"), formed in 1938, and Ceres Hellenic formed in 1950. The Company started doing business under the name "Euronav" in 1989 when it was initially formed as the international tanker subsidiary of CNN.
Euronav NV charters its vessels to leading international energy companies. The Company pursues a chartering strategy of primarily employing its vessels on the spot market, including through the Tankers International (TI) Pool (the "TI Pool") and also under fixed-rate contracts and long-term time charters, which typically include a profit sharing component.
A spot market voyage charter is a contract to carry a specific cargo from a load port to a discharge port for an agreed freight per ton of cargo or a specified total amount. Under spot market voyage charters, the Company pays voyage expenses such as port, canal and bunker costs. Spot charter rates have historically been volatile and fluctuate due to seasonal changes, as well as general supply and demand dynamics in the crude oil marine transportation sector. Although the revenues generated by the Company in the spot market are less predictable, the Company believes their exposure to this market provides them with the opportunity to capture better profit margins during periods when vessel demand exceeds supply leading to improvements in tanker charter rates. The Company principally employs and commercially manages their VLCCs through the TI Pool, a leading spot market-oriented VLCC pool in which other shipowners with vessels of similar size and quality participate along with the Company. The Company participated in the formation of the TI Pool in 2000 to allow themselves and other TI Pool participants, consisting of third-party owners and operators of similarly sized vessels, to gain economies of scale, obtain increased cargo flow of information, logistical efficiency and greater vessel utilization.
Time charters provide the Group with a fixed and stable cash flow for a known period of time. Time charters may help the Group mitigate, in part, its exposure to the spot market, which tends to be volatile in nature, being seasonal and generally weaker in the second and third quarters of the year due to refinery shutdowns and related maintenance during the warmer summer months. The Group may when the cycle matures or otherwise opportunistically employ more of its vessels under time charter contracts as the available rates for time charters improve. The Group may also enter into time charter contracts with profit sharing arrangements, which the Group believes will enable it to benefit if the spot market increases above a base charter rate as calculated either by sharing sub charter profits of the charterer or by reference to a market index and in accordance with a formula provided in the applicable charter contract.
The Group currently deploys its two FSOs as floating storage units under service contracts with North Oil Company, in the offshore services sector.
2.
Basis of preparation
(a)
Statement of compliance
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB).
This is the first set of the consolidated financial statements in which IFRS 15 Revenue from Contracts with Customers and IFRS 9 Financial Instruments have been applied. Changes to significant accounting policies are described in Note 2.(e). All other accounting policies have been consistently applied for all periods presented in the consolidated financial statements unless disclosed otherwise.

The consolidated financial statements were authorized for issue by the Board of Directors on April 30, 2019.

F-12
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

(b)
Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following material items in the statement of financial position:
•
Derivative financial instruments are measured at fair value
•
Non-current assets held for sale are recognized at fair value if it is lower than their carrying amount
(c)
Functional and presentation currency
The consolidated financial statements are presented in USD, which is the Company's functional and presentation currency. All financial information presented in USD has been rounded to the nearest thousand except when otherwise indicated.
(d)
Use of estimates and judgements
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which are the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.  Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statement is included in the following note:
•
Note 8 – Impairment
•
Note 24 - Business Combination
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is included in the following note:
•
Note 8 – Impairment test: key assumptions underlying the recoverable amount
Measurement of fair values
A number of the Group's accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities.
The Group has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the CFO.
The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified. Significant valuation issues are reported to the Group Audit and Risk Committee.
When measuring the fair value of an asset or a liability, the Group uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

F-13
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

•
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e.as prices) or indirectly (i.e. derived from prices).
•
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability might be categorized in different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Group recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair values is included in Note 18.
(e)
Changes in accounting policies
T he Group adopted IFRS 15 Revenue from Contracts with Customers (see A) and IFRS 9 Financial Instruments (see B) on January 1, 2018. A number of other new standards are effective from January 1, 2018 but they do not have a material effect on the Group's financial statements.
The effect of initially applying these standards is mainly attributed to the following:
•
recognizing revenue for spot voyages on a load-to-discharge basis instead of a discharge-to-discharge basis (see A);
•
capitalizing the voyage expenses incurred between the date on which the contract was concluded and the next load port if they qualify as fulfillment costs and if they are expected to be recovered (see A);
•
an increase in impairment losses recognized on financial assets (see B).
Costs incurred to fulfill a contract are recognized as an asset if and only if all of the following criteria are met:

•
the costs relate directly to a contract;
•
the costs generate or enhance resources of the entity that will be used in satisfying performance obligations in the future; and
•
the costs are expected to be recovered.
A.
IFRS 15 Revenue from Contracts with Customers
IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaced IAS 18 Revenue, IAS 11 Construction Contracts and related interpretations. The Group has adopted IFRS 15 using the cumulative effect method (without practical expedients), with the effect of initially applying this standard recognized at the date of initial application (i.e. January 1, 2018). Accordingly, the information presented for 2017 has not been restated - i.e. it is presented, as previously reported, under IAS 18, IAS 11 and related interpretations. Additionally, the disclosure requirements in IFRS 15 have not been applied to comparative information.
The following table summarizes the impact, net of tax, of transition to IFRS 15 on retained earnings at January 1, 2018.
(in thousands of USD)
Impact of adopting IFRS 15 at January 1, 2018
 
 
Retained earnings
 
Revenue for spot voyages
(4,422
)
Recognition capitalized fulfillment costs
2,693

Impact at January 1, 2018
(1,729
)
 
 


F-14
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

The following tables summarize the impacts of adopting IFRS 15 on the Group's statement of financial position as at December 31, 2018 and its statement of profit or loss and OCI for the year then ended for each of the line items affected. There was no material impact on the Group's statement of cash flows for the year ended December 31, 2018 .

Impact on the consolidated statement of financial position    
31 December 2018
(in thousands of USD)
Amounts without adoption of IFRS 15
Adjustments
As reported
 
 
 
 
ASSETS
 
 
 
Non-current assets
3,606,210

—

3,606,210

Current assets
532,894

(11,753
)
521,141

Trade and other receivables
317,479

(11,753
)
305,726

TOTAL ASSETS
4,139,104

(11,753
)
4,127,351

 
 
 
 
EQUITY AND LIABILITIES
 
 
 
Equity
 
 
 
Retained earnings
347,517

(11,753
)
335,764

Equity attributable to owners of the Company
2,272,276

(11,753
)
2,260,523

Non-current liabilities
1,579,706

—

1,579,706

Current liabilities
287,122

—

287,122

Trade and other payables
87,225

—

87,225

TOTAL EQUITY AND LIABILITIES
4,139,104

(11,753
)
4,127,351


    
Impact on the consolidated statement of profit or loss and OCI
For the year ended 31 December 2018
(in thousands of USD)
Amounts without adoption of IFRS 15
Adjustments
As reported
 
 
 
 
Shipping income
 
 
 
Revenue
610,549
(10,525)
600,024
Total shipping income
634,462
(10,525)
623,937
 
 
 
 
Operating expenses
 
 
 
Voyage expenses and commissions
(141,917)
501
(141,416)
Total operating expenses
(699,016)
501
(698,515)
 
 
 
 
RESULT FROM OPERATING ACTIVITIES
(64,554)
(10,024)
(74,578)
 
 
 
 
PROFIT (LOSS) FOR THE PERIOD
(100,046)
(10,024)
(110,070)
 
 
 
 
TOTAL COMPREHENSIVE INCOME (LOSS) FOR THE PERIOD
(103,240)
(10,024)
(113,264)

Spot voyages: under IAS 18, revenue for these contracts was recognized over time on discharge-to-discharge basis and the expenses were recognized over the same period. Under IFRS 15, revenue from spot voyages is also recognized over time but on a load-to-discharge basis. Therefore, revenue is recognized later under IFRS 15 than under IAS 18. The impacts of these changes on items other than revenue are a decrease in trade and other receivables. Furthermore the voyage expenses incurred between the date on which the contract was concluded and the next load port are capitalized if they qualify as fulfillment costs and if they are expected to be recovered.
IFRS 15 did not have a significant impact on the Group’s accounting policies with respect to other revenue streams and revenue recognition (see Note 1 - 2.(o) and Note 4).

B.    IFRS 9 Financial Instruments

IFRS 9 sets out requirements for recognizing and measuring financial assets, financial liabilities and some contracts to buy or sell non-financial items. This standard replaces IAS 39 Financial Instruments: Recognition and Measurement.

F-15
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

As a result of the adoption of IFRS 9, the Group has adopted consequential amendments to IAS 1 Presentation of Financial Statements, which require impairment of financial assets to be presented in a separate line item in the statement of profit or loss. Impairment losses on financial assets are not presented separately in the statement of profit or loss, because the amount is not material. The impairment loss on trade receivables has been presented in 'general and administrative expenses'. The impairment loss on the other financial assets has been presented as part of the line 'finance expenses'.
Additionally, the Group has adopted consequential amendments to IFRS 7 Financial Instruments: Disclosures that are applied to disclosures about 2018 but have not been applied to comparative information.
The Group has applied the exemption not to restate comparative information for prior periods with respect to classification and measurement (including impairment). Differences in the carrying amounts of financial assets and financial liabilities resulting from the adoption of IFRS 9 are recognized in retained earnings as at 1 January 2018. Accordingly, the information presented for 2017 has not been restated and does not generally reflect the requirements of IFRS 9, but rather those of IAS 39.
The following table summarizes the impact, net of tax, of transition to IFRS 9 on the opening balance of retained earnings.
(in thousands of USD)
Impact of adopting IFRS 9 at January 1, 2018
 
 
Retained earnings
 
Recognition of expected credit losses under IFRS 9
(16)
Impact at January 1, 2018
(16)
 
 
The details of new significant accounting policies and the nature and effect of the changes to previous accounting policies are set out below.

i.    Classification and measurement of financial assets and financial liabilities
IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost, fair value through other comprehensive income ('FVOCI') and fair value through profit or loss ('FVTPL'). The classification of financial assets under IFRS 9 is generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics. IFRS 9 eliminates the previous IAS 39 categories of held to maturity, loans and receivables and available for sale. Under IFRS 9, derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification.
IFRS 9 largely retains the existing requirements in IAS 39 for the classification and measurement of financial liabilities.
The adoption of IFRS 9 has not had a significant effect on the Group's accounting policies related to financial liabilities and derivative financial instruments.
The following table and the accompanying notes below explain the original measurement categories under IAS 39 and the new measurement categories under IFRS 9 for each class of the Group's financial assets and financial liabilities as at January 1, 2018.

F-16
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

(in thousands of USD)
Original classification under IAS 39
New classification under IFRS 9
Original carrying amount under IAS 39
New carrying amount under IFRS 9
Financial assets
 
 
 
 
Forward exchange contracts used for hedging
Fair value - hedging instrument
Fair value - hedging instrument
467

467

Non-current receivables
Loans and receivables
Amortized cost
160,352

160,352

Trade and other receivables
Loans and receivables
Amortized cost
112,000

111,984

Cash and cash equivalents
Loans and receivables
Amortized cost
143,648

143,648

Total financial assets
 
 
416,467

416,451

(in thousands of USD)
Original classification under IAS 39
New classification under IFRS 9
Original carrying amount under IAS 39
New carrying amount under IFRS 9
Financial liabilities
 
 
 
 
Secured bank loans
Other financial liabilities
Other financial liabilities
701,091

701,091

Unsecured notes
Other financial liabilities
Other financial liabilities
147,619

147,619

Unsecured other borrowings
Other financial liabilities
Other financial liabilities
50,010

50,010

Trade and other payables
Other financial liabilities
Other financial liabilities
51,335

51,335

Advances received on contracts
Other financial liabilities
Other financial liabilities
539

539

Total financial liabilities
 
 
950,594

950,594

The effect of adopting IFRS 9 on the carrying amounts of financial assets at January 1, 2018 relates solely to the new impairment requirements, as described further below.

Trade and other receivables that were classified as loans and receivables under IAS 39 are now classified at amortized cost. An increase of USD 16 thousand in the allowance for impairment over these receivables was recognized in opening retained earnings at January 1, 2018 on transition to IFRS 9.

The USD 16 thousand is the only difference between the carrying amount of financial assets under IAS39 to the carrying amount under IFRS9 on transition to IFRS9 on 1 January 2018.


ii.    Impairment of financial assets

IFRS 9 replaces the 'incurred loss' model in IAS 39 with an 'expected credit loss' (ECL) model. The new impairment model applies to financial assets measured at amortized cost, contract assets and debt investments at FVOCI, but not to investments in equity instruments. Under IFRS 9, credit losses are recognized earlier than under IAS 39.

Impact of the new impairment model
For assets in the scope of the IFRS 9 impairment model, impairment losses are generally expected to increase and become more volatile. The Group has determined that the application of IFRS 9's impairment requirements at January 1, 2018, results in an additional impairment allowance as follows.
(in thousands of USD)
 
Loss allowance at December 31, 2017 under IAS 39
—

Additional impairment recognized at January 1, 2018 on:
 
    Trade and other receivables as at December 31, 2017
16

    Additional trade receivables recognized on adoption of IFRS 15
—

Loss allowance at January 1, 2018 under IFRS 9
16


F-17
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

Trade and other receivables
The ECLs were calculated based on actual credit loss experience over the past ten years , taking into account reasonable and supportable forecast of future economic conditions.


ii i.     Hedge accounting

The Group has elected to adopt the new general hedge accounting model in IFRS 9. This requires the Group to ensure that hedge accounting relationships are aligned with its risk management objectives and strategy and to apply a more qualitative and forward-looking approach to assessing hedge effectiveness.

There were no instruments designated as hedging instrument as at December 31, 2017 and accordingly there is no impact on the Group's consolidated financial statements for the year ended December 31 2017.

(f)
Basis of Consolidation
(i)
Business Combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
For acquisitions on or after January 1, 2010, the Group measures goodwill at the acquisition date as:
•
the fair value of the consideration transferred; plus 
•
the recognized amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
•
the net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss.
The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts generally are recognized in profit or loss. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is measured at fair value at the acquisition date. If the contingent consideration is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes in the fair value of the contingent consideration are recognized in profit or loss.
(ii)
Non-controlling interests (NCI) 
NCI are measured at their proportionate share of the acquiree's identifiable net assets at the date of acquisition. Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
(iii)
Subsidiaries 
Subsidiaries are those entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which the control commences until the date on which control ceases.
(iv)
Loss of control
On the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognized in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity-accounted investee or as a FVOCI or FVTPL financial asset depending on the level of influence retained.

F-18
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

(v)
Interests in equity-accounted investees
The Group's interests in equity-accounted investees comprise interest in associates and joint ventures.
Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.
Interests in associates and joint ventures are accounted for using the equity method. They are recognized initially at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group's share of the profit or loss and other comprehensive income ("OCI") of equity-accounted investees, until the date on which significant influence or joint control ceases.
Interests in associates and joint ventures include any long-term interests that, in substance, form part of the Group's investment in those associates or joint ventures and include unsecured shareholder loans for which settlement is neither planned nor likely to occur in the foreseeable future, which, therefore, are an extension of the Group's investment in those associates and joint ventures. The Group's share of losses that exceeds its investment is applied to the carrying amount of those loans. After the Group's interest is reduced to zero, a liability is recognized to the extent that the Group has a legal or constructive obligation to fund the associates' or joint ventures' operations or has made payments on their behalf.
(vi)
Transactions eliminated on consolidation 
Intragroup balances and transactions, and any unrealized gains arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with equity-accounted investees are eliminated against the underlying asset to the extent of the Group's interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
(g)
Foreign currency
(i)
Foreign currency transactions
Transactions in foreign currencies are translated to USD at the foreign exchange rate applicable at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to USD at the foreign exchange rate applicable at that date. Foreign exchange differences arising on translation are recognized in profit or loss. Non-monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign exchange differences arising from the translation of the following items are recognized in OCI:
•
a financial liability desginated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; and
•
qualifying cash flow hedges to the extent that the hedges are effective.
(ii)
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to USD at exchange rates at the reporting date. The income and expenses of foreign operations are translated to USD at rates approximating the exchange rates at the dates of the transactions.
Foreign currency differences are recognized directly in equity (Translation reserve). When a foreign operation is disposed of, in part or in full, the relevant amount in the translation reserve is transferred to profit or loss.
(h)
Financial Instruments
(i)
Non-derivative financial assets
The group initially recognizes loans and receivables on the date that they are originated. All other financial assets are recognized initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.

F-19
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in such transferred financial assets that is created or retained by the Group is recognized as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
The fair values of quoted investments are based on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm's length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer's specific circumstances.
The Group classifies non-derivative financial assets into the following categories: financial assets at fair value through profit or loss, loans and receivables, cash and cash equivalents, held-to-maturity financial assets and available-for-sale financial assets. The Company determines the classification of its investments at initial recognition and re-evaluates this designation at every reporting date.
Non-derivative financial assets - Policy applicable from 1 January 2018

On initial recognition, a financial asset is classified as measured at: amortized cost; FVOCI - debt investment; FVOCI - equity instrument; or FVTPL.

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
• it is held within a business model whose objectives is to hold assets to collect contractual cash flows; and
• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:
• it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition.


Non-derivative financial assets - Assessment whether contractual cash flows are solely payments of principal and interest: Policy applicable from 1 January 2018

For the purposes of this assessment, 'principal' is defined as the fair value of the financial asset on initial recognition. 'Interest' is defined as consideration for the time value of money and for the credit risk associated with the principal

F-20
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

amount outstanding during a particular period of time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
 
In assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Group considers:
• contingent events that would change the amount or timing of cash flows;
• terms that may adjust the contractual coupon rate, including variable-rate features;
• prepayment and extension features; and
• terms that limit the Group's claim to cash flows from specified assets (e.g. non-resource features).

A prepayment feature is consistent with the solely payments of principal and interest criterion if the prepayment amount substantially represents unpaid amounts of principal and interest on the principal amount outstanding, which may include reasonable additional compensation for early termination of the contract. Additionally, for a financial asset acquired at a discount or premium to its contractual par amount, a feature that permits or requires prepayment at an amount that substantially represents the contractual par amount plus accrued (but unpaid) contractual interest (which may also include reasonable additional compensation for early termination) is treated as consistent with this criterion if the fair value of the prepayment feature is insignificant at initial recognition.


Non-derivative financial assets - Subsequent measurement and gains and losses: Policy applicable from 1 January 2018
 
 
Financial assets at FVTPL
These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.
Financial assets at amortized cost
These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses (see (ii) below). Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
Debt investments at FVOCI
These assets are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI
These assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are never reclassified to profit or loss.
 
 

Non-derivative financial assets - Policy applicable before 1 January 2018

The Group classified its non-derivative financial assets into the following categories: financial assets at fair value through profit or loss, loans and receivables, cash and cash equivalents, held-to-maturity financial assets and available-for-sale financial assets. The Company determined the classification of its investments at initial recognition and re-evaluated this designation at every reporting date.

Loans and receivables
Loans and receivables were financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.
They arose when the Group provided money, goods or services directly to a debtor with no intention of trading the receivable. They were included in current assets, except for maturities greater than 12 months after the balance sheet date. These were classified as non-current assets. Loans and receivables were included in trade and other receivables in the statement of financial position.

F-21
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

Held-to-maturity financial assets
If the Group had the positive intent and ability to hold debt securities to maturity, then such financial assets were classified as held-to-maturity. Held-to-maturity financial assets were recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, held-to-maturity financial assets were measured at amortized cost using the effective interest method, less any impairment losses. Held-to-maturity financial assets comprised debentures.
(ii) Non-derivative financial liabilities
The Group initially recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated as at fair value through profit or loss) are recognized initially on the trade date, which is the date that the Group becomes a party to the contractual provisions of the instrument.
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled, expired or substantially modified.
Non-derivative financial liabilities are recognized initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortized cost using the effective interest method.
Non-derivative financial liabilities comprise loans and borrowings, bank overdrafts, and trade and other payables.
Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
(iii)
Share capital
Ordinary share capital
Ordinary share capital is classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects.
Repurchase of share capital
When share capital recognized as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and presented in the reserve for own shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is presented in retained earnings.
(iv)
Derivative financial instruments
Derivative financial instruments and hedge accounting - Policy applicable from 1 January 2018

The Group from time to time may enter into derivative financial instruments to hedge its exposure to market fluctuations, foreign exchange and interest rate risks arising from operational, financing and investment activities.
On initial designation of the derivative as hedging instrument, the Group formally documents the economic relationship between the hedging instrument(s) and hedged item(s), including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of the hedging relationship. The Group makes an assessment, at the inception of the hedge relationship, whether the hedging instruments are expected to be "highly effective" in offsetting the changes in the fair value or cash flows of the respective hedged items during the period for which the hedge is designated. On an ongoing basis, the Group assesses whether the hedge relationship continues and is expected to continue to remain highly effective using retrospective and prospective quantitative and qualitative analyses.


F-22
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

Derivative financial instruments are recognized initially at fair value; attributable transaction costs are expensed as incurred. Subsequent to initial recognition, all derivatives are remeasured to fair value, and changes therein are accounted for as follows:
Cash flow hedges
When a derivative is designated as the hedging instrument in a hedge of the variability in cash flows attributable to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction that could affect profit or loss, the effective portion of changes in the fair value of the derivative is recognized in OCI and presented in the hedging reserve in equity. The amount recognized in OCI is removed and included in profit or loss in the same period as the hedged cash flows affect profit or loss under the same line item in the statement of profit or loss as the hedged item. Any ineffective portion of changes in the fair value of the derivative is recognized immediately in profit or loss.
The Group designates only the change in fair value of the spot element of forward exchange contracts as the hedging instrument in cash flow hedging relationships. The change in fair value of the forward element of forward exchange contracts ('forward points') is separately accounted for as a cost of hedging and recognized in a costs of hedging reserve within equity.

If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated, exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedging reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial item's cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss. If the hedged future cash flows are no longer expected to occur, then the balance in equity is reclassified to profit or loss.

Other non-trading derivatives
When a derivative financial instrument is not held for trading, and is not designated in a qualifying hedge relationship, all changes in its fair value are recognized immediately in profit or loss.

Derivative financial instruments and hedge accounting - Policy applicable before 1 January 2018

The policy applied in the comparative information presented for 2017 is similar to that applied for 2018. However, for all cash flow hedges, including hedges of transactions resulting in the recognition of non-financial items, the amounts accumulated in the cash flow hedge reserve were reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affected profit or loss.

(v)
Compound financial instruments
Compound financial instruments issued by the Group comprise Notes denominated in USD that can be converted to ordinary shares at the option of the holder, when the number of shares is fixed and does not vary with changes in fair value.
The liability component of compound financial instruments is initially recognized at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognized at the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity component in proportion to their initial carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortized cost using the effective interest method. The equity component of a compound financial instrument is not remeasured.
Interest related to the financial liability is recognized in profit and loss. On conversion, the financial liability is reclassified to equity and no gain or loss is recognized.

F-23
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

(i)
Goodwill and intangible assets
(i)
Goodwill
Goodwill that arises on the acquisition of subsidiaries is presented as an intangible asset. For the measurement of goodwill at initial recognition, see accounting policy (f).
After initial recognition goodwill is measured at cost less accumulated impairment losses (refer to accounting policy (k)). In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity accounted investee as a whole.
(ii)
Intangible assets 
Intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and impairment losses (see accounting policy k).
The cost of an intangible asset acquired in a separate acquisition is the cash paid or the fair value of any other consideration given. The cost of an internally generated intangible asset includes the directly attributable expenditure of preparing the asset for its intended use.
(iii)
Subsequent expenditure 
Subsequent expenditure on intangible assets is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates and its cost can be measured reliably. All other expenditure is expensed as incurred.
(iv)
Amortization 
Amortization is charged to the income statement on a straight-line basis over the estimated useful lives of the intangible assets from the date they are available for use. The estimated useful lives are as follows:
Software:           3 - 5 years
Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(j)
Vessels, property, plant and equipment
(i)
Owned assets
Vessels and items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation (see below) and impairment losses (refer to accounting policy (k)).
Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the following:
•
The cost of materials and direct labor;
•
Any other costs directly attributable to bringing the assets to a working condition for their intended use;
•
When the Group has an obligation to remove the asset or restore the site, an estimate of the costs of dismantling and removing the items and restoring the site on which they are located; and
•
Capitalized borrowing costs.
Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as separate items of property, plant and equipment (refer to accounting policy (j) vii).
Gains and losses on disposal of a vessel or of another item of property, plant and equipment are determined by comparing the net proceeds from disposal with the carrying amount of the vessel or the item of property, plant and equipment and are recognized in profit or loss.

F-24
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

For the sale of vessels, transfer of risk and rewards usually occurs upon delivery of the vessel to the new owner.
(ii)
Leased assets 
Leases in terms of which the Group assumes substantially all of the risks and rewards of ownership are classified as finance leases. Vessels, property, plant and equipment acquired by way of finance lease is stated at an amount equal to the lower of its fair value and the present value of the minimum lease payments at inception of the lease, less accumulated depreciation (see below) and impairment losses (refer accounting policy (k)). Lease payments are accounted for as described in accounting policy (q). Other leases are operating leases and are not recognized in the Group's statement of financial position.
(iii)      Assets under construction
Assets under construction, especially newbuilding vessels, are accounted for in accordance with the stage of completion of the newbuilding contract. Typical stages of completion are the milestones that are usually part of a newbuilding contract: signing or receipt of refund guarantee, steel cutting, keel laying, launching and delivery. All stages of completion are guaranteed by a refund guarantee provided by the shipyard.
(iv)
Subsequent expenditure 
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the item of property, plant and equipment and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. All other expenditure is recognized in the consolidated statement of profit or loss as an expense as incurred.
(v)
Borrowing costs 
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset.
(vi)
Depreciation 
Depreciation is charged to the consolidated statement of profit or loss on a straight-line basis over the estimated useful lives of vessels and items of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated.
Vessels and items of property, plant and equipment are depreciated from the date that they are available for use. Internally constructed assets are depreciated from the date that the assets are completed and ready for use.
The estimated useful lives of significant items of property, plant and equipment are as follows:
•
tankers
20 years
•
FSO/FpSO/FPSO
25 years
•
plant and equipment
5 - 20 years
•
fixtures and fittings
5 - 10 years
•
other tangible assets
3 - 20 years
•
dry-docking
2.5 - 5 years
Vessels are estimated to have a zero residual value.
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
(vii)
Dry-docking – component approach 
Where an item of property, plant and equipment comprises major components having different useful lives, they are accounted for as separate items of property, plant and equipment. Costs associated with routine repairs and maintenance are expensed as incurred including routine maintenance performed whilst the vessel is in dry-dock. Components installed during dry-dock with a useful life of more than 1 year are amortized over their estimated useful life.

F-25
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

(k)
Impairment
Policy applicable from 1 January 2018

IFRS 9 replaces the 'incurred loss' model in IAS 39 with an 'expected credit loss' (ECL) model. The new impairment model applies to financial assets measured at amortized cost, contract assets and debt investments at FVOCI, but not to investments in equity instruments. Under IFRS 9, credit losses are recognized earlier than under IAS 39.

The financial assets at amortized cost consist of trade and other receivables, cash and cash equivalents and non-current receivables.

Under IFRS 9, loss allowances are measured on either of the following bases:
• 12-month ECLs: these are ECLs that result from possible default events within the 12 months after the reporting date; and
• lifetime ECLs: these are ECLs that result from all possible default events over the expected life of a financial instrument.

The Group measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured as 12-month ECLs:
• debt securities that are determined to have low credit risk at the reporting date; and
• other debt securities and bank balances for which credit risk (i.e. the risk of default occuring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for trade receivables are measured at an amount equal to lifetime ECLs.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analyses, based on the Group's historical experience and informed credit assessment and including forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Group considers a financial asset to be in default when:
• the borrower is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); or
• the financial asset is more than 90 days past due.

The cash and cash equivalents are held with bank and financial institution counterparties, which are rated A- to AA+, based on rating agency S&P. Derivatives are entered into with banks and financial institution counterparties, which are rated A- to AA+, based on rating agency S&P.

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.


Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between cash flows due to the entity in accordance with the contract and cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.



Credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.




F-26
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

Presentation of impairment

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

For debt securities at FVOCI, the loss allowance is recognized in OCI, instead of being recorded in the statement of profit or loss.

Impairment losses related to trade and other receivables, including contract assets, are presented separately in the statement of profit or loss. However, due to the insignificant impact of IFRS 9 on the financial statements, no reclassification was done for the year ended December 31, 2018. Impairment losses on other financial assets are not presented separately in the statement of profit or loss and OCI, because the amount is not material. It has been presented as part of the line 'finance expenses'.


Policy before 1 January 2018
(i)
Non-derivative financial assets
A financial asset not classified as at fair value through profit or loss was assessed at each reporting date to determine whether there was objective evidence that it was impaired.
A financial asset was impaired if there was objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset, and that loss event(s) had an impact on the estimated future cash flows of that asset that could be estimated reliably.
Objective evidence that financial assets were impaired includes default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer would enter bankruptcy, adverse changes in the payment status of borrowers or issuers, economic conditions that correlated with defaults or the disappearance of an active market for a security. In addition, for an investment in an equity security a significant or prolonged decline in the fair value of the security below its cost was objective evidence of impairment.
Financial assets measured at amortized cost
The Group considered evidence of impairment for financial assets measured at amortized cost (loans and receivables and held-to-maturity financial assets) at both a specific asset and collective level. All individually significant assets were assessed for specific impairment. Those found not to be specifically impaired were then collectively assessed for any impairment that had been incurred but not yet identified. Assets that were not individually significant are collectively assessed for impairment by grouping together assets with similar risk characteristics.
In assessing collective impairment, the Group used historical trends of the probability of default, the timing of recoveries and the amount of loss incurred, adjusted for management's judgement as to whether current economic and credit conditions are such that the actual losses were likely to be greater or less than suggested by historical trends.
An impairment loss in respect of a financial asset measured at amortized cost was calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses were recognized in profit or loss and reflected in an allowance account against loans and receivables or held-to maturity financial assets. Interest on the impaired asset continues to be recognized. When an event occurring after the impairment was recognized causes the amount of impairment loss to decrease, the decrease in impairment loss was reversed through profit or loss.
Equity-accounted investees
An impairment loss in respect of an equity-accounted investee was measured by comparing the recoverable amount of the investment with its carrying amount. An impairment loss is recognized in profit or loss, and was reversed if there had been a favorable change in the estimates used to determine the recoverable amount.
(ii)
Non-financial assets 
The carrying amounts of the Group's non-financial assets, other than deferred tax assets (refer to accounting policy (s)), are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.

F-27
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

The recoverable amount of an asset or CGU is the greater of its fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. Future cash flows are based on current market conditions, historical trends as well as future expectations.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination.
Impairment losses are recognized in profit or loss.
An impairment loss recognized for goodwill shall not be reversed. For other assets, an impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.
(l)
Assets held for sale
Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than through continuing use are classified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group, are remeasured in accordance with the Group's accounting policies. Thereafter generally the assets or disposal group are measured at the lower of their carrying amount and fair value less cost to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets or investment property, which continue to be measured in accordance with the Group's accounting policies. Impairment losses on initial classification as held for sale and subsequent gains and losses on remeasurement are recognized in profit or loss. Gains are not recognized in excess of any cumulative impairment loss.
Once classified as held for sale, intangible assets and property, plant and equipment are no longer amortized or depreciated, and any equity-accounted investee is no longer equity accounted.
(m)
Employee benefits
(i)
Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in profit or loss in the periods during which related services are rendered by employees. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available. Contributions to a defined contribution plan that are due more than 12 months after the end of the period in which the employees render the services are discounted to their present value. The calculation of defined contribution obligations is performed annually by a qualified actuary using the projected unit credit method.
(ii)
Defined benefit plans 
The Group's net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.
Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return of plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in OCI. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual

F-28
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in profit and loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined plan when the settlement occurs.
(iii)
Other long term employee benefits
The Group's net obligation in respect of long-term employee benefits, other than pension plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using the projected unit credit method and is discounted to its present value and the fair value of any related assets is deducted. The discount rate is the yield at the reporting date on AA credit rated bonds that have maturity dates approximating the terms of the Group's obligations and that are denominated in the currency in which the benefits are expected to be paid. Remeasurements are recognized in profit or loss in the period in which they arise.
(iv)
Termination benefits 
Termination benefits are recognized as an expense when the Group is demonstrably committed, without realistic possibility or withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognized as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting date, then they are discounted to their present value.
(v)
Short-term employee benefit
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term cash bonus or profit-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.
(vi)
Share-based payment transactions 
The grant-date fair value of equity-settled share-based payment awards granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.
The fair value of the amount payable to beneficiaries in respect of "phantom stock unit" grants, which are settled in cash, is recognized as an expense with a corresponding increase in liabilities, over the period during which the beneficiaries become unconditionally entitled to payment. The amount is remeasured at each reporting date and at settlement based on the fair value of the phantom stock units. Any changes in the liability are recognized in profit or loss.
(n)
Provisions
A provision is recognized when the Group has a legal or constructive obligation that can be estimated reliably, as result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. The provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount is recognized as finance cost.
Restructuring
A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future operating costs are not provided for.

F-29
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

Onerous contracts
A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognizes any impairment loss on the assets associated with that contract.
(o)
Revenue
(i)
Pool Revenues
Aggregated revenue recognized on a daily basis from vessels operating on voyage charters in the spot market and on contract of affreightment ("COA") within the pool is converted into an aggregated net revenue amount by subtracting aggregated voyage expenses (such as fuel and port charges) from gross voyage revenue. These aggregated net revenues are combined with aggregated time charter revenues to determine aggregated pool Time Charter Equivalent revenue ("TCE"). Aggregated pool TCE revenue is then allocated to pool partners in accordance with the allocated pool points earned for each vessel that recognizes each vessel's earnings capacity based on its cargo, capacity, speed and fuel consumption performance and actual on hire days. The TCE revenue earned by our vessels operated in the pools is equal to the pool point rating of the vessels multiplied by time on hire, as reported by the pool manager.
(ii)
Time - and Bareboat charters
Revenues from time charters and bareboat charters are accounted for as operating leases and are recognized on a straight line basis over the periods of such charters, as service is performed. The Group does not recognize time charter revenues during periods that vessels are offhire. Payment is typically done on every first day of the upcoming month during the charter period. There is no significant financing component.
(iii)
Spot voyages
As from 1 January 2018, the Group applied IFRS 15. Voyage revenue is recognized over time for spot charters on a load-to-discharge basis. Progress is determined based on time elapsed. Voyage expenses are expensed as incurred unless they are incurred between the date on which the contract was concluded and the next load port. They are then capitalized if they qualify as fulfillment costs and if they are expected to be recovered. The effect of initially applying IFRS 15 is described in Note 1 - 2(e).

When our vessels cannot start or continue performing its obligation due to other factors such as port delays, a demurrage is paid, a day rate which is agreed in the time charter party. Demurrage which occurs at the discharge port is recognized as incurred. As demurrage is often a commercial discussion between Euronav and the charterer, the outcome and total compensation received for the delay is not always certain. As such, Euronav only recognizes the revenue which is highly probable to be received. No revenue is recognized if the collection of the consideration is not probable. The amount of revenue recognized is estimated based on historical data. The Group updates its estimate at each reporting date.

Payment is typically done at the end of the voyage. There is no specific financing component.

(p)
Gain and losses on disposal of vessels
In view of their importance the Group reports capital gains and losses on the sale of vessels as a separate line item in the consolidated statement of profit or loss. For the sale of vessels, transfer of control usually occurs upon delivery of the vessel to the new owner.


F-30
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

(q)
Leases
Lease payments
Payments made under operating leases are recognized in the income statement on a straight-line basis over the term of the lease. Lease incentives received are recognized as an integral part of the total lease expense, over the term of the lease.
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease term so as to produce a constant period rate of interest on the remaining balance of the liability.
(r)
Finance income and finance cost
Net financing costs comprise interest payable on borrowings calculated using the effective interest rate method, dividends on redeemable preference shares, interest receivable on funds invested, dividend income, foreign exchange gains and losses, and gains and losses on hedging instruments that are recognized in the consolidated statement of profit or loss (refer to accounting policy (h)).
The 'effective interest rate' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
• the gross carrying amount of the financial asset; or
• the amortized cost of the financial liability.

In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortized cost of the liability.

Interest income is recognized in the consolidated statement of profit or loss as it accrues, taking into account the effective yield on the asset. Dividend income is recognized in the consolidated statement of profit or loss on the date that the dividend is declared.
The interest expense component of finance lease payments is recognized in the consolidated statement of profit or loss using the effective interest rate method.
(s)
Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in OCI.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized using the balance sheet method, in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.  Deferred tax is not recognized for: the initial recognition of goodwill, the initial recognition of assets or liabilities that affect neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax recognized is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the balance sheet date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity.
A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
In application of an IFRIC agenda decision on IAS 12 Income taxes, tonnage tax is not accounted for as income taxes in accordance with IAS 12 and is not presented as part of income tax expense in the income statement but is shown as an administrative expense under the heading Other operating expenses.

F-31
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

(t)
Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group's other components. The Group distinguishes two segments: the operation of crude oil tankers in the international markets and the floating storage and offloading operations (FSO/FpSO). The Group's internal organizational and management structure does not distinguish any geographical segments.
(u)
Discontinued operations
A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of profit or loss is represented as if the operation had been discontinued from the start of the comparative period.
(v)
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are not yet effective for the year ended 31 December, 2018 , and have not been applied in preparing these consolidated financial statements:
IFRS 16 Leases published on January 13, 2016 makes a distinction between a service contract and a lease based on whether the contract conveys the right to control the use of an identified asset and introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognizes a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are optional exemptions for short term leases and leases of low value items. Lessor accounting remains similar to the current standard - i.e. lessors continue to classify leases as finance or operating leases. For lessors, there is little change to the existing accounting in IAS 17 Leases. IFRS 16 replaces existing leases guidance including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard is effective for annual periods beginning on or after January 1, 2019. The Group doesn't expect the adoption of IFRS 16 to impact its ability to comply with loan covenants.


Leases where the Group is a lessee

The Group will adopt IFRS 16 as of January 1, 2019, using the modified retrospective approach with optional practical expedients and where comparative figures remain the same as presented before. The Group will apply the practical expedient not to recognize leases with a remaining lease term less than one year as of January 1, 2019. The practical expedients low value leases, hindsight, discount rate and no initial direct costs will not be used. Lease and non-lease components in the contracts will be separated. The Group expects to recognize new assets and liabilities for its operating leases for bare boat charters, office rental and company cars. In addition, the nature and recognition of expenses related to those leases will change as IFRS 16 replaces the straight-line operating lease expense with a depreciation charge for the right-of-use of the underlying assets and interest expense on lease liabilities.

For the four bare boat charters for the vessels Nautilus, Nucleus, Neptun and Navarin, the Group expects to recognize a right of use asset and lease liability of USD 86.7 M which is the present value at January 1, 2019 of the future lease payments. The right of use asset was measured based on the option of right of use asset equalizing with the lease liability. The right of use asset will be corrected for the effect of a previously deferred gain on the sale and leaseback of these vessels for USD 3.0 million and will be depreciated over the remaining lease term till December 15, 2021.

For the office leases, the Group expects to recognize a right of use asset and lease liability of USD 18.4 M. The right of use asset will be corrected by the practical expedient impairment assessment based on the onerous contract analysis option for USD 5.3 million . The right of use assets will also be reduced by USD 11.4 million which represents the lease receivable related to subleases that qualify as finance lease under IFRS 16. Company cars are not expected to have a material impact. The Group will use the short-term lease exemption for all the lease contracts with a remaining lease term of less than one year. Accordingly, those lease payments will be recognized as an expense and there will be no impact on transition.

Leases where the Group is a lessor


F-32
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

As a lessor the Group leases out some of its vessels under long-term time charter agreements and a number of vessels are employed in the TI Pool under floating time charter agreements. Further the Group subleases office space to third parties in certain leased offices of Euronav UK and Euronav MI II Inc (formerly Gener8 Maritime Inc.). The Group expects to recognize USD 11.4 M lease receivable related to sublease agreements that qualify as finance lease.

Vessels employed by the TI Pool do not meet the definition of a lease under IFRS 16 and accordingly will be accounted for under IFRS 15 Revenue from Contracts with Customers. This will not have a material impact on the Group’s consolidated revenue.

For certain vessels employed under long-term time charter agreements, the adoption of IFRS 16 will require the Group to separate the lease and non-lease component in the contract, with the lease component qualified as operating lease and the non-lease component accounted for under IFRS 15. While additional disclosure might be required, this will not have a material impact for the Group.

Long-term Interests in Associates and Joint Ventures (Amendments to IAS 28) issued on 12 October 2017, clarifies how companies should account for long-term interests in an associate or joint venture, to which the equity method is not applied, using IFRS 9. The amendments are effective for annual periods beginning on or after 1 January 2019, with early adoption permitted. The amendments are not expected to have a material impact on the Group’s consolidated financial statements.

IFRIC 23 Uncertainty over Income Tax Treatments issued on 7 June 2017, clarifies how to apply the recognition and measurement requirements in IAS 12 when there is uncertainty over income tax treatments. In such a circumstance, an entity shall recognize and measure its current or deferred tax asset or liability applying the requirements in IAS 12 based on taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates determined applying this Interpretation. An entity is required to assume that a tax authority with the right to examine and challenge tax treatments will examine those treatments and have full knowledge of all related information. Detection risk is not considered in the recognition and measurement of uncertain tax treatments. The entity should measure the impact of the uncertainty using the method that best predicts the resolution of the uncertainty; either the most likely amount method or the expected value method. The interpretation is effective for annual periods beginning on or after 1 January 2019, with earlier adoption permitted. The amendments are not expected to have a material impact on the Group’s consolidated financial statements.

Annual improvements to IFRSs 2015-2017 Cycle , issued on 12 December 2017, covers the following minor amendments:
• IFRS 3 Business Combinations: the amendments clarify that a company remeasures its previously held interest in a joint operation when it obtains control of the business.
• IFRS 11 Joint Arrangements: the amendments clarify that a company does not remeasure its previously held interest in a joint operation when it obtains joint control of the business.
• IAS 12 Income Taxes: the amendments clarify that a company accounts for all income tax consequences of dividend payments consistently with the transactions that generated the distributable profits - i.e. in profit or loss, OCI or equity.
• IAS 23 Borrowing Costs: the amendments clarify that a company treats as part of general borrowings any borrowing originally made to develop an asset when the asset is ready for its intended use or sale.  
The amendments are effective for annual reporting periods beginning on or after 1 January 2019 with earlier application permitted. The amendments are not expected to have a material impact on the Group’s consolidated financial statements.

Plan Amendment, Curtailment or Settlement (Amendments to IAS 19) issued on 7 February 2018, clarifies that on amendment, curtailment or settlement of a defined benefit plan, the current service cost and net interest for the remainder of the annual reporting period are calculated using updated actuarial assumptions - i.e. consistent with the calculation of a gain or loss on the plan amendment, curtailment or settlement.

The amendment also clarifies that an entity first determines any past service cost, or a gain or loss on settlement, without considering the effect of the asset ceiling. This amount is recognized in profit or loss. The entity then determines the effect of the asset ceiling after plan amendment, curtailment or settlement. Any change in that effect is recognized in other comprehensive income (except for amounts included in net interest). The amendments are effective for annual periods beginning on or after 1 January 2019 and are applied prospectively. The amendments are not expected to have a material impact on the Group’s consolidated financial statements.


F-33
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 1 - Significant accounting policies (Continued)

Amendment to IFRS 3 Business Combinations , issued on 22 October 2018, provides more guidance on the definition of a business. The amendment includes an election to use a concentration test. This is a simplified assessment that will result in an asset acquisition if substantially all of the fair value of the gross assets is concentrated in a single identifiable asset or a group of similar identifiable assets. If one does not apply the concentration test, or the test is failed, then the assessment focuses on the existence of substantive process.

The amendment applies to businesses acquired in annual periods beginning on or after 1 January 2020 with earlier application permitted.

Amendments to IAS 1 and IAS 8: Definition of Material was issued on 31 October 2018 clarifying the definition of ‘Material’ and aligning the definition of ‘material’ across the standards. The new definition states that “information is considered material, if omitting, misstating or obscuring it could reasonably be expected to influence decisions that primarily users of general purpose financial statements make on the basis of those financial statements, which provide information about a specific reporting entity”. The amendments clarify that materiality will depend on the nature or magnitude of information. The amendments are effective prospectively for annual periods beginning on or after 1 January 2020 with earlier application permitted.

On 29 March 2018, the IASB has issued Amendments to References to the Conceptual Framework in IFRS Standards (Amendments to CF) . The Conceptual Framework sets out the fundamental concepts of financial reporting that guides the Board in developing IFRS Standards. It helps to ensure that the Standards are conceptually consistent and that similar transactions are treated the same way, providing useful information for investors and others. The Conceptual Framework also assists companies in developing accounting policies when no IFRS Standard applies to a particular transaction; and it helps stakeholders to understand the Standards better. Key changes include:
• Increasing the prominence of stewardship in the objective of financial reporting, which is to provide information that is useful in making resource allocation decisions.
• Reinstating prudence, defined as the exercise of caution when making judgements under conditions of uncertainty, as a component of neutrality.
• Defining a reporting entity, which might be a legal entity or a portion of a legal entity.
• Revising the definition of an asset as a present economic resource controlled by the entity as a result of past events.
• Revising the definition of a liability as a present obligation of the entity to transfer an economic resource as a result of past events.
• Removing the probability threshold for recognition, and adding guidance on derecognition.
• Adding guidance on the information provided by different measurement bases, and explaining factors to consider when selecting a measurement basis.
• Stating that profit or loss is the primary performance indicator and that, in principle, income and expenses in other comprehensive income should be recycled where the relevance or faithful representation of the financial statements would be enhanced.

The amendments are effective for annual periods beginning on or after 1 January 2020, whereas the Board will start using the revised Conceptual Framework immediately.







F-34
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 2 - Segment reporting
The Group distinguishes two operating segments: the operation of crude oil tankers in the international markets (the Tankers Segment) and the floating production, storage and offloading operations (the FSO/FpSO Segment). These two divisions operate in completely different markets, where in the latter the assets are tailor made or converted for specific long term projects. The tanker market requires a different marketing strategy as this is considered a very volatile market, contract duration is often less than two years and the assets are to a large extent standardized. The segment profit or loss figures and key assets as set out below are presented to the executive committee on at least a quarterly basis to help the key decision makers in evaluating the respective segments. The Chief Operating Decision Maker (CODM) also receives the information per segment based on proportionate consolidation for the joint ventures and not by applying equity accounting. The reconciliation between the figures of all segments combined on the one hand and with the consolidated statements of financial position and profit or loss on the other hand is presented in a separate column Equity-accounted investees.
The Group has one client in the Tankers segment that represented 7% of the Tankers segment total revenue in 2018 ( 2017 : one client which represented 10% and in 2016 two clients which represented 10% ). All the other clients represent less than 7% of total revenues of the Tankers segment.
The Group has a unique client in the FSO segment.
The Group's internal organizational and management structure does not distinguish any relevant geographical segments.

F-35
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 2 - Segment reporting (Continued)




Consolidated statement of financial position
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
ASSETS
 
Tankers
 
FSO
 
Less: Equity-accounted investees
 
Total
 
Tankers
 
FSO
 
Less: Equity-accounted investees
 
Total
Vessels
 
3,520,067

 
150,029

 
(150,029
)
 
3,520,067

 
2,271,500

 
168,100

 
(168,100
)
 
2,271,500

Assets under construction
 
—

 
—

 
—

 
—

 
63,668

 
—

 
—

 
63,668

Other tangible assets
 
1,943

 
—

 
—

 
1,943

 
1,663

 
—

 
—

 
1,663

Intangible assets
 
105

 
—

 
—

 
105

 
72

 
—

 
—

 
72

Receivables
 
38,658

 
—

 
—

 
38,658

 
163,382

 
10,739

 
(13,769
)
 
160,352

Investments in equity accounted investees
 
1,915

 
—

 
41,267

 
43,182

 
1,695

 
—

 
28,900

 
30,595

Deferred tax assets
 
2,255

 
1,229

 
(1,229
)
 
2,255

 
2,487

 
223

 
(223
)
 
2,487

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-current assets
 
3,564,943

 
151,258

 
(109,991
)
 
3,606,210

 
2,504,467

 
179,062

 
(153,192
)
 
2,530,337

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total current assets
 
521,536

 
15,784

 
(16,179
)
 
521,141

 
281,132

 
11,581

 
(12,077
)
 
280,636

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL ASSETS
 
4,086,479

 
167,042

 
(126,170
)
 
4,127,351

 
2,785,599

 
190,643

 
(165,269
)
 
2,810,973

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EQUITY and LIABILITIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total equity
 
2,219,648

 
40,874

 
1

 
2,260,523

 
1,820,887

 
25,473

 
1

 
1,846,361

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bank and other loans
 
1,421,465

 
97,480

 
(97,480
)
 
1,421,465

 
653,730

 
162,762

 
(162,762
)
 
653,730

Convertible and other Notes
 
148,166

 
—

 
—

 
148,166

 
147,619

 
—

 
—

 
147,619

Other payables
 
1,451

 
355

 
(355
)
 
1,451

 
539

 
—

 
—

 
539

Deferred tax liabilities
 
—

 
4,283

 
(4,283
)
 
—

 
—

 
1,680

 
(1,680
)
 
—

Employee benefits
 
4,336

 
—

 
—

 
4,336

 
3,984

 
—

 
—

 
3,984

Amounts due to equity-accounted joint ventures
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Provisions
 
4,288

 
—

 
—

 
4,288

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total non-current liabilities
 
1,579,706

 
102,118

 
(102,118
)
 
1,579,706

 
805,872

 
164,442

 
(164,442
)
 
805,872

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total current liabilities
 
287,125

 
24,050

 
(24,053
)
 
287,122

 
158,840

 
728

 
(828
)
 
158,740

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TOTAL EQUITY and LIABILITIES
 
4,086,479

 
167,042

 
(126,170
)
 
4,127,351

 
2,785,599

 
190,643

 
(165,269
)
 
2,810,973

Consolidated statement of profit or loss
(in thousands of USD)
 
2018
 
2017
 
2016

F-36
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 2 - Segment reporting (Continued)




 
 
Tankers
FSO
Less: Equity-accounted investees
Total
 
Tankers
FSO
Less: Equity-accounted investees
Total
 
Tankers
FSO
Less: Equity-accounted investees
Total
Shipping income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
600,024

49,155

(49,155
)
600,024

 
513,399

59,513

(59,544
)
513,368

 
704,766

65,125

(85,626
)
684,265

Gains on disposal of vessels/other tangible assets
 
19,138

—

—

19,138

 
36,538

—

—

36,538

 
50,397

—

—

50,397

Other operating income
 
4,775

72

(72
)
4,775

 
4,902

234

(234
)
4,902

 
6,765

327

(96
)
6,996

Total shipping income
 
623,937

49,227

(49,227
)
623,937

 
554,839

59,747

(59,778
)
554,808

 
761,928

65,452

(85,722
)
741,658

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Voyage expenses and commissions
 
(141,416
)
(1
)
1

(141,416
)
 
(62,035
)
(304
)
304

(62,035
)
 
(63,305
)
(476
)
4,221

(59,560
)
Vessel operating expenses
 
(185,792
)
(9,637
)
9,637

(185,792
)
 
(150,391
)
(9,157
)
9,121

(150,427
)
 
(164,478
)
(9,679
)
13,958

(160,199
)
Charter hire expenses
 
(31,114
)
—

—

(31,114
)
 
(31,173
)
—

—

(31,173
)
 
(17,713
)
—

—

(17,713
)
Losses on disposal of vessels/other tangible assets
 
(273
)
—

—

(273
)
 
(21,027
)
—

—

(21,027
)
 
(1
)
—

(1
)
(2
)
Impairment on non-current assets held for sale
 
(2,995
)
—

—

(2,995
)
 
—

—

—

—

 
—

—

—

—

Loss on disposal of investments in equity accounted investees
 
—

—

—

—

 
—

—

—

—

 
(24,150
)
—

—

(24,150
)
Depreciation tangible assets
 
(270,582
)
(18,071
)
18,071

(270,582
)
 
(229,777
)
(18,071
)
18,071

(229,777
)
 
(233,368
)
(18,071
)
23,775

(227,664
)
Depreciation intangible assets
 
(111
)
—

—

(111
)
 
(95
)
—

—

(95
)
 
(99
)
—

—

(99
)
General and administrative expenses
 
(66,235
)
(425
)
428

(66,232
)
 
(46,871
)
(30
)
33

(46,868
)
 
(44,152
)
(80
)
181

(44,051
)
Total operating expenses
 
(698,518
)
(28,134
)
28,137

(698,515
)
 
(541,369
)
(27,562
)
27,529

(541,402
)
 
(547,266
)
(28,306
)
42,134

(533,438
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
RESULT FROM OPERATING ACTIVITIES
 
(74,581
)
21,093

(21,090
)
(74,578
)
 
13,470

32,185

(32,249
)
13,406

 
214,662

37,146

(43,588
)
208,220

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finance income
 
15,023

160

(160
)
15,023

 
7,267

197

(198
)
7,266

 
6,864

57

(66
)
6,855

Finance expenses
 
(89,412
)
(3,795
)
3,795

(89,412
)
 
(50,730
)
(1,026
)
1,027

(50,729
)
 
(52,420
)
(2,552
)
3,277

(51,695
)
Net finance expenses
 
(74,389
)
(3,635
)
3,635

(74,389
)
 
(43,463
)
(829
)
829

(43,463
)
 
(45,556
)
(2,495
)
3,211

(44,840
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on bargain purchase
 
23,059

—

—

23,059

 
—

—

—

—

 
—

—

—

—

Share of profit (loss) of equity accounted investees (net of income tax)
 
220

—

15,856

16,076

 
150

—

29,932

30,082

 
334

—

40,161

40,495

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Profit (loss) before income tax
 
(125,691
)
17,458

(1,599
)
(109,832
)
 
(29,843
)
31,356

(1,488
)
25

 
169,440

34,651

(216
)
203,875

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income tax expense
 
(238
)
(1,599
)
1,599

(238
)
 
1,358

(1,488
)
1,488

1,358

 
174

(216
)
216

174

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

F-37
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 2 - Segment reporting (Continued)




Profit (loss) for the period
 
(125,929
)
15,859

—

(110,070
)
 
(28,485
)
29,868

—

1,383

 
169,614

34,435

—

204,049

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Attributable to:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owners of the company
 
(125,929
)
15,859

—

(110,070
)
 
(28,485
)
29,868

—

1,383

 
169,614

34,435

—

204,049


Summarized consolidated statement of cash flows
(in thousands of USD)
 
2018
 
2017
 
2016
 
 
Tankers
 
FSO
 
Less: Equity-accounted investees
 
Total
 
Tankers
 
FSO
 
Less: Equity-accounted investees
 
Total
 
Tankers
 
FSO
 
Less: Equity-accounted investees
 
Total
Net cash from (used in) operating activities
 
843

 
40,672

 
(40,674
)
 
841

 
211,310

 
49,684

 
(49,698
)
 
211,295

 
427,926

 
49,013

 
(38,737
)
 
438,202

Net cash from (used in) investing activities
 
190,042

 
—

 
—

 
190,042

 
(40,243
)
 
—

 
1

 
(40,242
)
 
(90,891
)
 
—

 
(9,724
)
 
(100,615
)
Net cash from (used in) financing activities
 
(160,165
)
 
(42,164
)
 
42,164

 
(160,165
)
 
(234,921
)
 
(78,421
)
 
78,367

 
(234,976
)
 
(264,714
)
 
(32,929
)
 
36,483

 
(261,160
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capital expenditure
 
(238,065
)
 
—

 
—

 
(238,065
)
 
(177,901
)
 
—

 
—

 
(177,901
)
 
(342,698
)
 
—

 
—

 
(342,698
)

F-38
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 3 Assets and liabilities held for sale and discontinued operations
Assets held for sale
The assets held for sale can be detailed as follows:
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
 
December 31, 2016
Vessels
 
42,000

 
—

 
—

Of which in Tankers segment
 
42,000

 
—

 
—

Of which in FSO segment
 
—

 
—

 
—

(in thousands of USD)
 
(Estimated) Sale price
 
Book Value
 
Asset Held For Sale
 
Impairment Loss
 
(Expected) Loss
At January 1, 2018
 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
Assets sold from assets held for sale
 
 
 
 
 
 
 
 
 
 
Felicity
 
42,000

 
44,995

 
42,000

 
(2,995
)
 
—

 
 
 
 
 
 
 
 
 
 
 
At December 31, 2018
 
—

 
—

 
42,000

 
(2,995
)
 
—

 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2017 and per December 31, 2016, the Group had no assets held for sale.
On October 31, 2018, the Company sold the Suezmax Felicity (2009 - 157,667 dwt), for USD 42.0 million . This vessel was accounted for as a non-current asset held for sale as at December 31, 2018, and had a carrying value of USD 45.0 million as of that date. The vessel was delivered to its new owner on January 9, 2019. The impairment loss on this vessel amounted to USD (3.0) million and has been recorded in the consolidated statement of profit or loss for the twelve months ended December 31, 2018.

Discontinued operations
As of December 31, 2018 and December 31, 2017 , the Group had no operations that meet the criteria of a discontinued operation.


F-39
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 4 – Revenue and other operating income

The Group has adopted IFRS 15 using the cumulative effect method (without practical expedients), with the effect of initially applying this standard recognized at the date of initial application (i.e. January 1, 2018). Accordingly, the information presented for 2017 has not been restated - i.e. it is presented, as previously reported, under IAS 18, IAS 11 and related interpretations (Note 1 - 2.(e).A).

In the following table, revenue is disaggregated by type of contract.
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands of USD)
 
2018
 
 
2017
 
 
Tankers

FSO

Less: Equity-accounted investees

Total

 
 
Tankers

FSO

Less: Equity-accounted investees

Total

 
 
 
 
 
 
 
 
 
 
 
 
Pool Revenue
 
277,394

—

—

277,394

 
 
249,334

—

(31
)
249,303

Spot Voyages
 
247,392

—

—

247,392

 
 
145,360

—

—

145,360

Time Charters (Note 19)
 
75,238

49,155

(49,155
)
75,238

 
 
118,705

59,513

(59,513
)
118,705

Total revenue
 
600,024

49,155

(49,155
)
600,024

 
 
513,399

59,513

(59,544
)
513,368

 
 
 
 
 
 
 
 
 
 
 
 
Other operating income
 
4,775

72

(72
)
4,775

 
 
4,902

234

(234
)
4,902

 
 
 
 
 
 
 
 
 
 
 
 

For the accounting treatment of revenue, we refer to the accounting policies (o) - Revenue. Revenue from spot voyages falls within the scope of IFRS 15 'Revenue from Contracts with Customers'. Pool revenue and time charters are lease income in scope of IAS 17.

The increase in revenue is mostly related to the increase in pool and spot voyage revenue which is due to an increase in the fleet size as a consequence of the business combination with Gener8 Maritime Inc. (Note 24). This increase was partially offset by lower revenue from time charters due to unfavorable market conditions and a lower number of vessels on time charter.

Other operating income includes revenues related to the daily standard business operation of the fleet and that are not directly attributable to an individual voyage.

F-40
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 5 - Expenses for shipping activities and other expenses from operating activities
Voyage expenses and commissions
(in thousands of USD)
 
2018
 
2017
 
2016
Commissions paid
 
(8,193
)
 
(4,895
)
 
(6,724
)
Bunkers
 
(103,920
)
 
(45,249
)
 
(36,372
)
Other voyage related expenses
 
(29,303
)
 
(11,891
)
 
(16,464
)
Total voyage expenses and commissions
 
(141,416
)
 
(62,035
)
 
(59,560
)
The voyage expenses and commissions increased in 2018 compared to 2017 because a lower proportion of vessels were on time charter contract in 2018 and due to an increase in the fleet size as a consequence of the business combination with Gener8 Maritime Inc. (Note 24). For vessels operated on the spot market, voyage expenses are paid by the shipowner while voyage expenses for vessels under a time charter contract, are paid by the charterer. Voyage expenses for vessels operated in a Pool, are paid by the Pool.

The majority of other voyage expenses are port costs, agency fees and agent fees paid to operate the vessels on the spot market. Port costs vary depending on the number of spot voyages performed, number and type of ports.

Vessel operating expenses
(in thousands of USD)
 
2018
 
2017
 
2016
Operating expenses
 
(172,589
)
 
(139,832
)
 
(148,554
)
Insurance
 
(13,203
)
 
(10,595
)
 
(11,645
)
Total vessel operating expenses
 
(185,792
)
 
(150,427
)
 
(160,199
)
The operating expenses relate mainly to the crewing, technical and other costs to operate tankers. In 2018 these expenses were higher compared to 2017 due to an increase in the fleet size as a consequence of the business combination with Gener8 Maritime Inc. (Note 24).

Charter hire expenses
(in thousands of USD)
 
2018
 
2017
 
2016
Charter hire (Note 19)
 
6

 
(62
)
 
(16,921
)
Bare boat hire (Note 19)
 
(31,120
)
 
(31,111
)
 
(792
)
Total charter hire expenses
 
(31,114
)
 
(31,173
)
 
(17,713
)
The bareboat charter-hire expenses in 2018 and 2017 are entirely attributable to the sale and leaseback agreement of four VLCCs ( Nautilus, Navarin, Neptun and Nucleus) , under a five year bareboat contract agreed on December 16, 2016.




F-41
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 5 - Expenses for shipping activities and other expenses from operating activities (Continued)

General and administrative expenses
(in thousands of USD)
 
2018
 
2017
 
2016
Wages and salaries
 
(16,247
)
 
(12,853
)
 
(12,754
)
Social security costs
 
(3,746
)
 
(2,511
)
 
(2,532
)
Provision for employee benefits (Note 16)
 
(616
)
 
(827
)
 
(261
)
Equity-settled share-based payments (Note 22)
 
(37
)
 
(313
)
 
(406
)
Other employee benefits
 
(7,607
)
 
(3,148
)
 
(3,178
)
Employee benefits
 
(28,253
)
 
(19,652
)
 
(19,131
)
Administrative expenses
 
(33,485
)
 
(22,579
)
 
(21,264
)
Tonnage Tax
 
(4,436
)
 
(4,772
)
 
(4,246
)
Claims
 
(100
)
 
(25
)
 
(13
)
Provisions
 
42

 
160

 
603

Total general and administrative expenses
 
(66,232
)
 
(46,868
)
 
(44,051
)
 
 
 
 
 
 
 
Average number of full time equivalents (shore staff)
 
161.77

 
150.49

 
139.44


The general and administrative expenses which include amongst others: shore staff wages, director fees, office rental, consulting and audit fees and Tonnage Tax, increased in 2018 compared to 2017.

This increase was mainly related to the merger with Gener8 Maritime Inc., which had an impact on wages and salaries and other employee benefits due to a higher number of staff and severance payments and an impact on administrative expenses due to an increase in legal and other fees (USD 5.0 million, see Note 24) and additional office rent expenses.




F-42
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 6 - Net finance expense
Recognized in profit or loss
(in thousands of USD)
 
2018
 
2017
 
2016
Interest income
 
4,106

 
655

 
217

Foreign exchange gains
 
10,917

 
6,611

 
6,638

Finance income
 
15,023

 
7,266

 
6,855

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense on financial liabilities measured at amortized cost
 
(67,956
)
 
(38,391
)
 
(39,007
)
Fair value adjustment on interest rate swaps
 
(2,790
)
 
—

 
—

Other financial charges
 
(6,802
)
 
(5,819
)
 
(4,577
)
Foreign exchange losses
 
(11,864
)
 
(6,519
)
 
(8,111
)
Finance expense
 
(89,412
)
 
(50,729
)
 
(51,695
)
 
 
 
 
 
 
 
Net finance expense recognized in profit or loss
 
(74,389
)
 
(43,463
)
 
(44,840
)
Interest income, which mainly consists of interest income from bank deposits, increased due to the merger with Gener8 Maritime Inc. and due to an increase in deposit rates.
Interest expense on financial liabilities measured at amortized cost increased during the year ended December 31, 2018, compared to 2017. This increase was attributable to the interest on the senior unsecured bond of USD 150 million which was issued on May 31, 2017 and an increase in the average outstanding debt during the year as a result of the new credit facilities entered into 2018 (see Note 15) and credit facilities in relation to the merger with Gener8 Maritime Inc. combined with increased interest rates.
Fair value adjustment on interest rate swaps are interest rate swaps which were acquired in the Gener8 Maritime Inc. deal and of which the fair value at acquisition is amortized over the remaining duration of the swap via the fair value adjustment of interest rate swaps (see Note 13).
Other financial charges increased in 2018 compared to 2017, which was primarily attributable to commitment fees paid for available credit lines, of which the total availability increased in 2018.
The above finance income and expenses include the following in respect of assets (liabilities) not recognized at fair value through profit or loss:
 
 
2018
 
2017
 
2016
Total interest income on financial assets
 
4,106

 
655

 
217

Total interest expense on financial liabilities
 
(67,956
)
 
(38,391
)
 
(39,007
)
Total other financial charges
 
(6,802
)
 
(5,819
)
 
(4,577
)
Recognized directly in equity
(in thousands of USD)
 
2018
 
2017
 
2016
Foreign currency translation differences for foreign operations
 
(157
)
 
448

 
170

Cash flow hedges - effective portion of changes in fair value
 
(2,698
)
 
—

 
—

Net finance expense recognized directly in equity
 
(2,855
)
 
448

 
170

Attributable to:
 
 
 
 
 
 
Owners of the Company
 
(2,855
)
 
448

 
170

Net finance expense recognized directly in equity
 
(2,855
)
 
448

 
170

Recognized in:
 
 
 
 
 
 
Translation reserve
 
(157
)
 
448

 
170

Hedging reserve
 
(2,698
)
 
—

 
—


F-43
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 7 - Income tax benefit (expense)
(in thousands of USD)
 
2018
 
2017
 
2016
Current tax
 
 
 
 
 
 
Current period
 
(37
)
 
(85
)
 
60

Total current tax
 
(37
)
 
(85
)
 
60

 
 
 
 
 
 
 
Deferred tax
 
 
 
 
 
 
Recognition of unused tax losses/(use of tax losses)
 
(195
)
 
1,473

 
220

Other
 
(6
)
 
(30
)
 
(106
)
Total deferred tax
 
(201
)
 
1,443

 
114

 
 
 
 
 
 
 
Total tax benefit/(expense)
 
(238
)
 
1,358

 
174

Reconciliation of effective tax
 
2018
 
2017
 
2016
Profit (loss) before tax
 
 
 
(109,832
)
 
 
 
25

 
 
 
203,875

 
 
 
 
 
 
 
 
 
 
 
 
 
Tax at domestic rate
 
(29.58
)%
 
32,488

 
(33.99
)%
 
(8
)
 
(33.99
)%
 
(69,297
)
Effects on tax of :
 
 
 
 
 
 
 
 
 
 
 
 
Tax exempt profit / loss
 
 
 
(50
)
 
 
 
499

 
 
 
(8,090
)
Tax adjustments for previous years
 
 
 
9

 
 
 
10

 
 
 
70

Loss for which no DTA (*) has been recognized
 
 
 
(1,037
)
 
 
 
—

 
 
 
—

Use of previously unrecognized tax losses
 
 
 
—

 
 
 
7,146

 
 
 
1,118

Non-deductible expenses
 
 
 
(962
)
 
 
 
(710
)
 
 
 
(1,718
)
Tonnage Tax regime
 
 
 
(33,602
)
 
 
 
(13,918
)
 
 
 
64,637

Effect of share of profit of equity-accounted investees
 
 
 
4,690

 
 
 
10,175

 
 
 
13,761

Effects of tax regimes in foreign jurisdictions
 
 
 
(1,774
)
 
 
 
(1,836
)
 
 
 
(307
)
Total taxes
 
0.22
 %
 
(238
)
 
5,430.01
 %
 
1,358

 
0.09
 %
 
174

In application of an IFRIC agenda decision on 'IAS 12 Income taxes', tonnage tax is not accounted for as income taxes in accordance with IAS 12 and is not presented as part of income tax expense in the consolidated statement of profit or loss but has been shown as an administrative expense under the heading General and administrative expenses. The amount paid for tonnage tax in the year ended December 31, 2018 was USD 4.4 million (see Note 5).
* Deferred Tax Asset

F-44
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 8 - Property, plant and equipment
(in thousands of USD)
 
Vessels
 
Vessels under construction
 
Other tangible assets
 
Prepayments
 
Total PPE
At January 1, 2016
 
 
 
 
 
 
 
 
 
 
Cost
 
3,477,605

 
93,890

 
2,482

 
2

 
3,573,979

Depreciation & impairment losses
 
(1,189,569
)
 
—

 
(1,434
)
 
—

 
(1,191,003
)
Net carrying amount
 
2,288,036

 
93,890

 
1,048

 
2

 
2,382,976

 
 
 
 
 
 
 
 
 
 
 
Acquisitions
 
250,912

 
86,944

 
175

 
3

 
338,034

Acquisitions through business combinations (Note 24)
 
120,280

 
—

 
—

 
—

 
120,280

Disposals and cancellations
 
(143,457
)
 
—

 
(7
)
 
—

 
(143,464
)
Depreciation charges
 
(227,306
)
 
—

 
(358
)
 
—

 
(227,664
)
Transfers
 
94,698

 
(94,698
)
 
5

 
(5
)
 
—

Translation differences
 
—

 
—

 
(86
)
 
—

 
(86
)
Balance at December 31, 2016
 
2,383,163

 
86,136

 
777

 
—

 
2,470,076

 
 
 
 
 
 
 
 
 
 
 
At January 1, 2017
 
 

 
 

 
 

 
 

 
 

Cost
 
3,748,135

 
86,136

 
2,373

 
—

 
3,836,644

Depreciation & impairment losses
 
(1,364,972
)
 
—

 
(1,596
)
 
—

 
(1,366,568
)
Net carrying amount
 
2,383,163

 
86,136

 
777

 
—

 
2,470,076

 
 
 
 
 
 
 
 
 
 
 
Acquisitions
 
125,486

 
51,201

 
1,203

 
—

 
177,890

Disposals and cancellations
 
(81,389
)
 
—

 
(9
)
 
—

 
(81,398
)
Depreciation charges
 
(229,429
)
 
—

 
(348
)
 
—

 
(229,777
)
Transfers
 
73,669

 
(73,669
)
 
—

 
—

 
—

Translation differences
 
—

 
—

 
40

 
—

 
40

Balance at December 31, 2017
 
2,271,500

 
63,668

 
1,663

 
—

 
2,336,831

 
 
 
 
 
 
 
 
 
 
 
At January 1, 2018
 
 
 
 
 
 
 
 
 
 
Cost
 
3,595,692

 
63,668

 
3,545

 
—

 
3,662,905

Depreciation & impairment losses
 
(1,324,192
)
 
—

 
(1,882
)
 
—

 
(1,326,074
)
Net carrying amount
 
2,271,500

 
63,668

 
1,663

 
—

 
2,336,831

 
 
 
 
 
 
 
 
 
 
 
Acquisitions
 
45,750

 
191,726

 
588

 
—

 
238,064

Acquisitions through business combinations (Note 24)
 
1,704,250

 
—

 
345

 
—

 
1,704,595

Disposals and cancellations
 
(7,814
)
 
—

 
(75
)
 
—

 
(7,889
)
Disposals and cancellations through business combinations (Note 24)
 
(434,000
)
 
—

 
—

 
—

 
(434,000
)
Depreciation charges
 
(270,018
)
 
—

 
(564
)
 
—

 
(270,582
)
Transfer to assets held for sale (Note 3)
 
(44,995
)
 
—

 
—

 
—

 
(44,995
)
Transfers
 
255,394

 
(255,394
)
 
—

 
—

 
—

Translation differences
 
—

 
—

 
(14
)
 
—

 
(14
)
Balance at December 31, 2018
 
3,520,067

 
—

 
1,943

 
—

 
3,522,010

 
 
 
 
 
 
 
 
 
 
 
At December 31, 2018
 
 

 
 

 
 

 
 

 
 

Cost
 
4,927,324

 
—

 
4,274

 
—

 
4,931,598

Depreciation & impairment losses
 
(1,407,257
)
 
—

 
(2,331
)
 
—

 
(1,409,588
)
Net carrying amount
 
3,520,067

 
—

 
1,943

 
—

 
3,522,010

On March 26, April 25, August 8 and August 29, 2018, Euronav took delivery of the Suezmaxes Cap Quebec (2018 – 156,600 dwt), Cap Pembroke (2018 – 156,600 dwt), Cap Port Arthur (2018 - 156,600 dwt) and the Cap Corpus Christi (2018 - 156,600 dwt) respectively. These were the 4 vessels under construction as at December 31, 2017 from Hyundai Heavy Industries.


F-45
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 8 - Property, plant and equipment (Continued)

On June 29, 2018, Euronav announced that it has acquired the ULCC Seaways Laura Lynn from Oceania Tanker Corporation, a subsidiary of International Seaways. Euronav renamed the ULCC as Oceania and registered it under the Belgian flag. Euronav Tankers bought the Seaways Laura Lynn (2003 - 441,561 dwt) from International Seaways for USD 32.5 million .

In 2018, the Finesse, Nautic, Noble, Hojo, Cap Felix, Newton and Cap Leon have been dry-docked. The cost of planned repairs and maintenance is capitalized and included under the heading acquisitions and is depreciated over their estimated useful life ( 2.5 - 5 years).


Disposal of assets – Gains/losses
(in thousands of USD)
 
Sale price
 
Book Value
 
Gain
 
Deferred Gain
Loss
Famenne - Sale
 
38,016

 
24,195

 
13,821

 
—

—

Nautilus - Sale
 
43,250

 
32,208

 
11,042

 
(500
)
—

Navarin - Sale
 
47,250

 
36,739

 
10,511

 
(1,500
)
—

Neptun - Sale
 
47,250

 
37,534

 
9,716

 
(1,500
)
—

Nucleus - Sale
 
47,250

 
36,974

 
10,276

 
(1,500
)
—

Other
 
38

 
9

 
31

 
—

(2
)
At December 31, 2016
 
223,054

 
167,659

 
55,397

 
(5,000
)
(2
)
 
 
 
 
 
 
 
 
 
 
 
 
Sale price
 
Book Value
 
Gain
 
Deferred Gain
Loss
TI Topaz - Sale
 
20,790

 
41,817

 
—

 
—

(21,027
)
Flandre - Sale
 
45,000

 
24,693

 
20,307

 
—

—

Cap Georges - Sale
 
9,310

 
801

 
8,509

 
—

—

Artois - Sale
 
21,780

 
14,077

 
7,703

 
—

—

Other
 
29

 
9

 
20

 
—

—

At December 31, 2017
 
96,909

 
81,398

 
36,538

 
—

(21,027
)
 
 
 
 
 
 
 
 
 
 
 
 
Sale price
 
Book Value
 
Gain
 
Deferred Gain
Loss
Cap Jean - Sale
 
10,175

 
—

 
10,175

 
—

—

Cap Romuald - Sale
 
10,282

 
1,319

 
8,963

 
—

—

Gener8 Companion - Sale
 
6,305

 
6,495

 
—

 
—

(190
)
Other
 
—

 
—

 
—

 
—

(83
)
At December 31, 2018
 
26,762

 
7,814

 
19,138

 
—

(273
)
On May 8, 2018, the Group sold the Suezmax Cap Jean (1998 – 146,643 dwt) for a net sale price of USD 10.2 million . The gain on that sale of USD 10.2 million was recorded upon delivery of the vessel to its new owner in the second quarter of 2018.
On June 25, 2018, the Group sold the Suezmax Cap Romuald (1998 - 146,643 dwt) for a net sale price of USD 10.3 million . The Company recorded a gain of USD 9.0 million on the sale upon delivery to its new owner on August 22, 2018.

On November 1, 2018, the Group sold the LR1 Companion (2004 - 72,749 dwt) for USD 6.3 million . The vessel came as part of the Gener8 transaction and was a non-core asset. The Company recorded a loss of USD 0.2 million on the sale upon delivery to its new owner on November 29, 2018.


Impairment
Tankers

F-46
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 8 - Property, plant and equipment (Continued)

Euronav defines its cash generating unit as a single vessel, unless such vessel is operated in a pool, in which case such vessel, together with the other vessels in the pool, are collectively treated as a cash generating unit.
The Group has performed an impairment test for tankers whereby the carrying amount of an asset or CGU is compared to its recoverable amount, which is the greater of its value in use and its fair value less cost to sell. In assessing value in use, the following assumptions were used:
- Weighted average of past and ongoing shipping cycles and for the weighting factors applied, including management judgement for the ongoing cycle, is used as forecast charter rates
- Weighted Average Cost of Capital ("WACC") of 7.70% ( 2017 : 9.70% and 2016 : 6.43% )
- 20 year useful life with residual value equal to zero
Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assumptions are subject to judgment. In the past, the Group used a fixed cut of 10 years to define a shipping cycle. As management is assessing continuously the resilience of its projections to the business cycles that can be observed in the tankers market, it concluded that a business cycle approach provided a better long-term view of the dynamics at play in the industry. By defining a shipping cycle from peak to peak over the last 20 years and including management's expectation of the completion of the current cycle, management is better able to capture the full length of a business cycle while also giving more weight to recent and current market experience. The current cycle is forecasted based on management judgement, analyst reports and past experience.
The impairment test did not result in a requirement to record an impairment loss in 2018 . With an increase of the WACC of 300 bps to 10.70% , the analysis would also indicate that the carrying amount of the vessels as of December 31, 2018 is not impaired. This weighting and forecasting of the ongoing cycle is based on management judgement, but none of the full cycles, with or without management forecasting of the ongoing cycle or the sole use of the ongoing cycle would lead to an impairment.
When using 10 -year historical charter rates in this impairment analysis, the impairment analysis indicates that an impairment is required for the tanker fleet of USD 47.9 million (2017 and 2016: no impairment). When using 5 -year historical charter rates in this impairment analysis, the impairment analysis indicates that no impairment is required for the tanker fleet ( 2017 : 5.7 million impairment and 2016 : no impairment), and when using 1 -year historical charter rates in this impairment analysis, the impairment analysis indicates that an impairment is required for the tanker fleet of USD 92.7 million ( 2017 : USD 427.3 million and 2016 : no impairment).
FSO
In the context of the valuation of the Group's investments in the respective joint ventures, the Group also performed an impairment test on the FSO vessels owned by TI Asia Ltd and TI Africa Ltd. For FSOs the impairment assessment has been based on a value in use calculation to estimate the recoverable amount from the vessel. This method is chosen as there is no efficient market for transactions of FSO vessels as each vessel is often purposely built for specific circumstances. In assessing value in use, the following assumptions were used:
- Weighted Average Cost of Capital ('WACC') of 7.70% ( 2017 : 9.70% and 2016 : 6.43% )
- 25 year useful life with residual value equal to zero
This assessment did not result in a requirement to record an impairment loss in 2018 . Even with an increase of the WACC of 300 bps, there was no need to record an impairment loss in 2018 . The value in use calculation for FSOs is based on the remaining useful life of the vessels as of the reporting date, and is based on fixed daily rates as well as management's best estimate of daily rates for future unfixed periods. The FSO Asia and the FSO Africa were on a timecharter contract to Maersk Oil Qatar until July 22, 2017 and September 22, 2017, respectively. On May 14, 2017, the joint ventures between the Group and International Seaways, signed a contract for five years for the FSO Africa and FSO Asia in direct continuation of the current contractual service. The contract was signed with North Oil Company, the new operator of the Al-Shaheen oil field, whose shareholders are Qatar Petroleum Oil & gas Limited and Total E&P Golfe Limited.
Security

F-47
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 8 - Property, plant and equipment (Continued)

All tankers financed are subject to a mortgage to secure bank loans (see Note 15).
Vessels on order or under construction
The group has no vessels under construction as at December 31, 2018 . As at December 31, 2017 the Group had four vessels under construction for an aggregate amount of USD 63.7 million ( 2016 : USD 86.1 million). The amounts presented within "Vessels under construction" related to the four Ice Class Suezmax vessels from Hyundai Heavy Industries. These vessels were delivered during 2018.
Capital commitment
As at December 31, 2018 the Group had no capital commitments. As at December 31, 2017 the Group's total capital commitment amounted to USD 185.9 million. These can be detailed as follows:
(in thousands of USD)
 
As at December 31, 2017 payments scheduled for
 
 
TOTAL
 
2018
 
2019
 
2020
Commitments in respect of VLCCs
 
—

 
—

 
—

 
—

Commitments in respect of Suezmaxes
 
185,922

 
185,922

 
—

 
—

Commitments in respect of FSOs
 
—

 
—

 
—

 
—

Total
 
185,922

 
185,922

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
As at December 31, 2018 payments scheduled for
 
 
TOTAL
 
2019

 
2020

 
2021

Commitments in respect of VLCCs
 
—

 
—

 
—

 
—

Commitments in respect of Suezmaxes
 
—

 
—

 
—

 
—

Commitments in respect of FSOs
 
—

 
—

 
—

 
—

Total
 
—

 
—

 
—

 
—



F-48
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 9 - Deferred tax assets and liabilities
Recognized deferred tax assets and liabilities
Deferred tax assets and liabilities are attributable to the following:
(in thousands of USD)
 
ASSETS

 
LIABILITIES

 
NET

Provisions
 
1

 
—

 
1

Employee benefits
 
44

 
—

 
44

Unused tax losses & tax credits
 
2,442

 
—

 
2,442

 
 
2,487

 
—

 
2,487

Offset
 
—

 
—

 
 

Balance at December 31, 2017
 
2,487

 
—

 
 

 
 
 
 
 
 
 
Employee benefits
 
37

 
—

 
37

Unused tax losses & tax credits
 
2,218

 
—

 
2,218

 
 
2,255

 
—

 
2,255

Offset
 
—

 
—

 
 
Balance at December 31, 2018
 
2,255

 
—

 
 
Unrecognized deferred tax assets and liabilities
Deferred tax assets and liabilities have not been recognized in respect of the following items:
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
 
 
ASSETS

 
LIABILITIES

 
ASSETS

 
LIABILITIES

Deductible temporary differences
 
274

 
—

 
357

 
—

Taxable temporary differences
 
8

 
(12,162
)
 
7

 
(14,231
)
Tax losses & tax credits
 
86,568

 
—

 
89,528

 
—

 
 
86,850

 
(12,162
)
 
89,892

 
(14,231
)
Offset
 
(12,162
)
 
12,162

 
(14,231
)
 
14,231

Total
 
74,688

 
—

 
75,661

 
—

The unrecognized deferred tax assets in respect of tax losses and tax credits relates to tax losses carried forward, investment deduction allowances and excess dividend received deduction. Tax losses and tax credits have no expiration date.

A deferred tax asset ('DTA') is recognized for unused tax losses and tax credits carried forward, to the extent that it is probable that future taxable profits will be available. The Group considers future taxable profits as probable when it is more likely than not that taxable profits will be generated in the foreseeable future. When determining whether probable future taxable profits are available the probability threshold is applied to portions of the total amount of unused tax losses or tax credits, rather than the entire amount.

Given the nature of the tonnage tax regime, the Group has a substantial amount of unused tax losses and tax credits for which no future taxable profits are probable and therefore no DTA has been recognized.

No deferred tax liabilities have been recognized for temporary differences related to vessels for which the Group expects that the reversal of these differences will not have a tax effect.

In December 2017, changes to the Belgian corporate income tax rate were enacted, lowering the rate to 29.58% as from 2018 and to 25% from 2020. These changes have been reflected in the calculation of the amounts of deferred tax assets and liabilities in respect of Belgian Group entities as at December 31, 2018 and December 31, 2017.




F-49
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 9 - Deferred tax assets and liabilities (Continued)

Movement in deferred tax balances during the year
(in thousands of USD)
 
Balance at Jan 1, 2016

 
Recognized in income

 
Recognized in equity

 
Translation differences

 
Balance at Dec 31, 2016

Provisions
 
169

 
(121
)
 
—

 
(17
)
 
31

Employee benefits
 
23

 
15

 
—

 
(1
)
 
37

Unused tax losses & tax credits
 
743

 
220

 
—

 
(67
)
 
896

Total
 
935

 
114

 
—

 
(85
)
 
964

 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at Jan 1, 2017

 
Recognized in income

 
Recognized in equity

 
Translation differences

 
Balance at Dec 31, 2017

Provisions
 
31

 
(32
)
 
—

 
2

 
1

Employee benefits
 
37

 
2

 
—

 
5

 
44

Unused tax losses & tax credits
 
896

 
1,473

 
—

 
73

 
2,442

Total
 
964

 
1,443

 
—

 
80

 
2,487

 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at Jan 1, 2018

 
Recognized in income

 
Recognized in equity

 
Translation differences

 
Balance at Dec 31, 2018

Provisions
 
1

 
(1
)
 
—

 
—

 
—

Employee benefits
 
44

 
(5
)
 
—

 
(2
)
 
37

Unused tax losses & tax credits
 
2,442

 
(195
)
 
—

 
(29
)
 
2,218

Total
 
2,487

 
(201
)
 
—

 
(31
)
 
2,255


F-50
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 10 - Non-current receivables
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
Shareholders loans to joint ventures
 
28,665

 
159,733

Derivatives
 
7,930

 
—

Other non-current receivables
 
2,062

 
618

Investment
 
1

 
1

Total non-current receivables
 
38,658

 
160,352

The shareholders loans to joint ventures as of December 31, 2018 and December 31, 2017 did not bear interest. Please refer to Note 25 for more information on the shareholders loans to joint ventures.
The derivatives relates to the fair market value of the Interest Rate Swaps, acquired through the acquisition of Gener8 Maritime Inc. and two forward cap contracts which were entered into 2018 (see Note 13).

The increase in other non-current receivables relates to an increase of cash guarantees and deposits, acquired in the merger with Gener8 Maritime Inc.

The maturity date of the non-current receivables is as follows:
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
Receivable:
 


 


Within two years
 
7,206

 
—

Between two and three years
 
—

 
—

Between three and four years
 
725

 
—

Between four and five years
 
541

 
—

More than five years
 
30,186

 
160,352

Total non-current receivables
 
38,658

 
160,352

Because the shareholders loans are perpetual non-amortizing loans, these non-current receivables are presented as maturing after 5 years.

F-51
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 11 - Trade and other receivables - current
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
Trade receivables
 
64,923

 
32,758

Accrued income
 
17,765

 
12,465

Accrued interest
 
750

 
52

Deferred charges
 
39,734

 
24,797

Deferred fulfillment costs
 
2,140

 
—

Other receivables
 
180,414

 
66,725

Total trade and other receivables
 
305,726

 
136,797

The increase in trade receivables mainly relates to the merger with Gener8 Maritime Inc. and due to the increase in market freight rates compared to prior year-end.
The increase in accrued income and deferred charges relates to a higher number of vessels on the spot market, primarily as a result of the merger with Gener8 Maritime Inc.

Fulfillment costs represent primarily bunker costs incurred between the date on which the contract of a spot voyage charter was concluded and the next load port. These expenses are deferred according to IFRS 15 Revenue from Contracts with Customers and are amortized on a systematic basis consistent with the pattern of transfer of service.

The increase in other receivables relates to income to be received by the Group from the Tankers International Pool. These amounts increased in 2018 due to a higher number of vessels in the Pool as a result of the merger with Gener8 Maritime Inc. and improving freight market conditions at the end of 2018.

For currency and credit risk, we refer to Note 18.



Note 12 - Cash and cash equivalents
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
Bank deposits
 
62,500

 
102,200

Cash at bank and in hand
 
110,633

 
41,448

TOTAL
 
173,133

 
143,648

Of which restricted cash
 
79

 
115

 
 
 
 
 
NET CASH AND CASH EQUIVALENTS
 
173,133

 
143,648

The bank deposits as at December 31, 2018 had an average maturity of 6 days ( 2017 : 16 days).

F-52
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 13 - Equity
Number of shares issued
(in shares)
 
December 31, 2018
 
December 31, 2017
 
December 31, 2016
On issue at 1 January
 
159,208,949

 
159,208,949

 
159,208,949

Issued in business combination
 
60,815,764

 
—

 
—

On issue at 31 December - fully paid
 
220,024,713

 
159,208,949

 
159,208,949

Upon the completion of the merger transaction with Gener8 Maritime Inc. on June 12, 2018 60,815,764 new ordinary shares were issued at a stock price of USD 9.10 each (see Note 24) increasing the number of shares issued to 220,024,713 shares (see Note 14). This resulted in an increase of USD 66.1 million in share capital and USD 487.3 million share premium.
As at December 31, 2018 , the share capital is represented by 220,024,713 shares. The shares have no nominal value.
As at December 31, 2018 , the authorized share capital not issued amounts to USD 83,898,616 ( 2017 and 2016: USD 150,000,000 ) or the equivalent of 77,189,888 shares ( 2017 and 2016 : 138,005,652 shares).
The holders of ordinary shares are entitled to receive dividends when declared and are entitled to one vote per share at the shareholders' meetings of the Group.
Translation reserve
The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations.
Hedging reserve
The Group, through two of its JV companies in connection to the USD 220.0 million facility raised in March 2018 (Note 15), entered on June 29, 2018 in several Interest Rate Swaps (IRSs) for a combined notional value of USD 208.8 million (Euronav’s share amounts to 50% ). These IRSs are used to hedge the risk related to the fluctuation of the Libor rate and qualify as hedging instruments in a cash flow hedge relationship under IFRS 9. These instruments have been measured at their fair value; effective changes in fair value have been recognized in OCI and the ineffective portion has been recognized in profit or loss. These IRSs have a remaining duration between three and four years matching the repayment profile of that facility and mature on July 21, 2022 and September 22, 2022 for FSO Asia and FSO Africa respectively. The fair value of these instruments at December 31, 2018 amounted to USD (0.9) million (100%), which was entirely reflected in OCI at the level of the JV companies (Note 25).

The Group, through the acquisition of Gener8 Maritime Inc. on June 12, 2018, acquired several IRSs for a combined notional value of USD 668.0 million . These IRSs are used to hedge the risk related to the fluctuation of the Libor rate and qualify as hedging instruments in a cash flow hedge relationship under IFRS 9. These instruments have been measured at their fair value; effective changes in fair value have been recognized in OCI and the ineffective portion has been recognized in profit or loss. These IRSs have a remaining duration between one and two years matching the repayment profile of that facility and mature in September 2020. The fair value of these instruments at December 31, 2018 amounted to USD 7.2 million and USD (1.2) million has been recognized in OCI.

The Group, through the long term charter parties with Valero for two Suezmaxes (Cap Quebec and Cap Pembroke), entered on March 28, 2018 and April 20, 2018, in two IRSs for a combined notional value of USD 86.8 million . These IRSs are used to hedge the risk related to the fluctuation of the Libor rate and qualify as hedging instruments in a cash flow hedge relationship under IFRS 9. These instruments have been measured at their fair value; effective changes in fair value have been recognized in OCI and the ineffective portion has been recognized in profit or loss. These IRSs have the same duration as the long term charter parties matching the repayment profile of the underlying USD 173.6 million facility and mature on March 28, 2025. The fair value of these instruments at December 31, 2018 amounted to USD (1) million (see Note 17) and USD (1) million has been recognized in OCI.

The Group entered on December 7, 2018 into two forward cap contracts (CAPs) with a strike at 3.25% starting on October 1, 2020, to hedge against future increase of interest rates with a notional value of USD 200.0 million and qualify as hedging instruments in a cash flow hedge relationship under IFRS 9. These instruments have been measured at their fair value; effective changes in fair value have been recognized in OCI and the ineffective portion has been recognized in profit or loss. These CAPs have a maturity date at October 3, 2022. The fair value of these instruments at December 31, 2018 amounted to USD 0.7 million (see Note 10) and USD (0.5) million has been recognized in OCI.

F-53
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 13 - Equity (Continued)

Treasury shares
As of December 31, 2018 Euronav owned 1,237,901 of its own shares, compared to 1,042,415 of shares owned on December 31, 2017 . In the twelve months period ended December 31, 2018 , Euronav bought back 545,486 shares at an aggregate cost of USD 4.0 million and delivered 350,000 shares upon the exercise of share options. These 350,000 treasury shares had an aggregate weighted average cost of USD 5.4 million and Euronav recognized a loss of USD 3.1 million in retained earnings upon the delivery of these treasury shares to the share option holders. The total net proceeds amounted to USD 2.3 million.
Dividends
On May 9, 2018, the Annual Shareholders' meeting approved a full year dividend of USD 0.12 per share. Taking into account the interim dividend approved in August 2017 in the amount of USD 0.06 per share, the dividend paid after the AGM was USD 0.06 per share. The dividend to holders of Euronav shares trading on Euronext Brussels was paid in EUR at the USD/EUR exchange rate of the record date.
During its meeting of August 8, 2018, the Board of Directors of Euronav approved an interim dividend for the first semester 2018 of USD 0.06 per share. The interim dividend of USD 0.06 per share was payable as from October 8, 2018. The interim dividend to holders of Euronext shares was paid in EUR at the USD/EUR exchange rate of the record date.

On March 19, 2019, the Board of Directors decided to propose to the Annual Shareholders' meeting to be held on May 9, 2018, to approve a full year dividend of USD 0.12 per share. Taking into account the interim dividend approved in August 2018 in the amount of USD 0.06 per share, the expected dividend payable after the AGM should be USD 0.06 per share.
The total amount of dividends paid in 2018 was USD 22.6 million .
Share-based payment arrangements
On December 16, 2013, the Group established a share option program that entitles key management personnel to purchase existing shares in the Company. Under the program, holders of vested options are entitled to purchase shares at the market price of the shares at the grant date. Currently this program is limited to key management personnel. In December 2018, the holders exercised the remaining 350,000 options and a corresponding number of treasury shares were sold. The key terms and conditions did not change after December 31, 2013. The compensation expense related to this share option program was recognized in prior periods and therefore, this program did not have any impact on the consolidated statement of profit or loss for 2018 .
Long term incentive plan 2015
The Group's Board of Directors implemented in 2015 a long term incentive plan ('LTIP') for key management personnel. Under the terms of this LTIP, the beneficiaries will obtain 40% of their respective LTIP in the form of Euronav stock options, with vesting over three years and 60% in the form of restricted stock units ('RSU's'), with cliff vesting on the third anniversary. In total 236,590 options and 65,433 RSU's were granted on February 12, 2015. Vested stock options may be exercised until 13 years after the grant date. The stock options have an exercise price of EUR 10.0475 and are equity-settled. This has been converted into a cash-settled incentive plan in the course of 2018. As of December 31, 2018 , all the stock options remained outstanding but all remaining RSUs were exercised in the first quarter of 2018. The fair value of the stock options was measured using the Black Scholes formula. The fair value of the RSUs was measured with reference to the Euronav share price at the grant date. The total employee benefit expense recognized in the consolidated statement of profit or loss during 2018 with respect to the LTIP 2015 was USD 37 thousand .
Long term incentive plan 2016
The Group's Board of Directors implemented in 2016 an additional long term incentive plan for key management personnel. Under the terms of this LTIP, key management personnel is eligible to receive phantom stock unit grants. Each phantom stock unit grants the holder a conditional right to receive an amount of cash equal to the fair market value of one share of the company on the settlement date. The phantom stock units will mature one-third each year on the second, third and fourth anniversary of the award. In total a number of 54,616 phantom stocks were granted on February 2, 2016 and one-third was vested on the second anniversary. As of December 31, 2018, 36,411 phantom stocks were outstanding. The LTIP 2016 qualifies as a cash-settled share-based payment transaction. The Company recognizes a liability in respect of its obligations under the LTIP 2016, measured based on the Company's share price at the reporting date, and taking into account the extent to which the services have been rendered to date. The compensation income recognized in the consolidated statement of profit or loss during 2018 was USD 0.2 million .

F-54
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 13 - Equity (Continued)

Long term incentive plan 2017
The Group's Board of Directors implemented in 2017 an additional long term incentive plan for key management personnel. Under the terms of this LTIP, key management personnel are eligible to receive phantom stock unit grants. Each phantom stock unit grants the holder a conditional right to receive an amount of cash equal to the fair market value of one share of the company on the settlement date. The phantom stock units will mature one-third each year on the second, third and fourth anniversary of the award. In total a number of 66,449 phantom stock units were granted on February 9, 2017 and all remain outstanding as of December 31, 2018 . The LTIP 2017 qualifies as a cash-settled share-based payment transaction. The Company recognizes a liability in respect of its obligations under the LTIP 2017, measured based on the Company’s share price at the reporting date, and taking into account the extent to which the services have been rendered to date. The compensation expense recognized in the consolidated statement of profit or loss during 2018 was USD 0.2 million.
Long term incentive plan 2018
The Group's Board of Directors implemented in 2018 an additional long term incentive plan for key management personnel. Under the terms of this LTIP, key management personnel are eligible to receive phantom stock unit grants. Each phantom stock unit grants the holder a conditional right to receive an amount of cash equal to the fair market value of one share of the company on the settlement date. The phantom stock units will mature one-third each year on the second, third and fourth anniversary of the award. In total a number of 154,432 phantom stock units were granted on February 16, 2018 and all remain outstanding as of December 31, 2018 . The LTIP 2018 qualifies as a cash-settled share-based payment transaction. The Company recognizes a liability in respect of its obligations under the LTIP 2018, measured based on the Company’s share price at the reporting date, and taking into account the extent to which the services have been rendered to date. The compensation expense recognized in the consolidated statement of profit or loss during 2018 was USD 0.5 million.


F-55
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 14 - Earnings per share
Basic earnings per share
The calculation of basic earnings per share at December 31, 2018 was based on a result attributable to ordinary shares of USD (110,069,928) ( December 31, 2017 : USD 1,382,530 and December 31, 2016 : USD 204,049,212 ) and a weighted average number of ordinary shares outstanding during the period ended December 31, 2018 of 191,994,398 ( December 31, 2017 : 158,166,534 and December 31, 2016 : 158,262,268 ), calculated as follows:
Result attributable to ordinary shares
(in thousands of USD except share and per share information)
 
2018
 
2017
 
2016
Result for the period
 
(110,070
)
 
1,383

 
204,049

Weighted average number of ordinary shares
 
191,994,398

 
158,166,534

 
158,262,268

Basic earnings per share (in USD)
 
(0.57
)
 
0.01

 
1.29

Weighted average number of ordinary shares
(in shares)
 
Shares issued
 
Treasury shares
 
Shares outstanding
 
Weighted number of shares
On issue at January 1, 2016
 
159,208,949

 
466,667

 
158,742,282

 
158,742,282

Issuance of shares
 
—

 
—

 
—

 
—

Purchases of treasury shares
 
—

 
692,415

 
(692,415
)
 
(575,005
)
Withdrawal of treasury shares
 
—

 
—

 
—

 
—

Sales of treasury shares
 
—

 
(116,667
)
 
116,667

 
94,991

On issue at December 31, 2016
 
159,208,949

 
1,042,415

 
158,166,534

 
158,262,268

 
 
 
 
 
 
 
 
 
On issue at January 1, 2017
 
159,208,949

 
1,042,415

 
158,166,534

 
158,166,534

Issuance of shares
 
—

 
—

 
—

 
—

Purchases of treasury shares
 
—

 
—

 
—

 
—

Withdrawal of treasury shares
 
—

 
—

 
—

 
—

Sales of treasury shares
 
—

 
—

 
—

 
—

On issue at December 31, 2017
 
159,208,949

 
1,042,415

 
158,166,534

 
158,166,534

 
 
 
 
 
 
 
 
 
On issue at January 1, 2018
 
159,208,949

 
1,042,415

 
158,166,534

 
158,166,534

Issuance of shares
 
60,815,764

 
—

 
60,815,764

 
33,823,562

Purchases of treasury shares
 
—

 
545,486

 
(545,486
)
 
(13,917
)
Withdrawal of treasury shares
 
—

 
—

 
—

 
—

Sales of treasury shares
 
—

 
(350,000
)
 
350,000

 
18,219

On issue at December 31, 2018
 
220,024,713

 
1,237,901

 
218,786,812

 
191,994,398

Diluted earnings per share
For the twelve months ended December 31, 2018 , the diluted earnings per share (in USD) amount to (0.57) ( 2017 : 0.01 and 2016 : 1.29 ). At December 31, 2018 and December 31, 2017 , 236,590 options issued under the LTIP 2015 were excluded from the calculation of the diluted weighted average number of shares because their effect would have been anti-dilutive.



F-56
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 14 - Earnings per share (Continued)

Weighted average number of ordinary shares (diluted)
The table below shows the potential weighted number of shares that could be created if all stock options, restricted stock units, convertible notes and PCPs were to be converted into ordinary shares.
(in shares)
 
2018
 
2017
 
2016
Weighted average of ordinary shares outstanding (basic)
 
191,994,398

 
158,166,534

 
158,262,268

 
 
 
 
 
 
 
Effect of Share-based Payment arrangements
 
—

 
130,523

 
166,789

 
 
 
 
 
 
 
Weighted average number of ordinary shares (diluted)
 
191,994,398

 
158,297,057

 
158,429,057

There are no more remaining outstanding instruments at December 31, 2018 and December 31, 2017 which can give rise to dilution, except for the Euronav stock options of LTIP 2015.


F-57
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 15 - Interest-bearing loans and borrowings
(in thousands of USD)
 
Bank loans
 
Other notes
 
Total
More than 5 years
 
330,491

 
—

 
330,491

Between 1 and 5 years
 
635,952

 
—

 
635,952

More than 1 year
 
966,443

 
—

 
966,443

Less than 1 year
 
119,119

 
—

 
119,119

At January 1, 2017
 
1,085,562

 
—

 
1,085,562

 
 
 
 
 
 
 
New loans
 
326,014

 
150,000

 
476,014

Scheduled repayments
 
(43,743
)
 
—

 
(43,743
)
Early repayments
 
(667,250
)
 
—

 
(667,250
)
Other changes
 
508

 
(2,381
)
 
(1,873
)
Balance at December 31, 2017
 
701,091

 
147,619

 
848,710

 
 
 
 
 
 
 
More than 5 years
 
157,180

 
—

 
157,180

Between 1 and 5 years
 
496,550

 
147,619

 
644,169

More than 1 year
 
653,730

 
147,619

 
801,349

Less than 1 year
 
47,361

 
—

 
47,361

Balance at December 31, 2017
 
701,091

 
147,619

 
848,710

 
 
 
 
 
 
 
 
 
Bank loans
 
Convertible and other Notes
 
Total
More than 5 years
 
157,180

 
—

 
157,180

Between 1 and 5 years
 
496,550

 
147,619

 
644,169

More than 1 year
 
653,730

 
147,619

 
801,349

Less than 1 year
 
47,361

 
—

 
47,361

At January 1, 2018
 
701,091

 
147,619

 
848,710

 
 
 
 
 
 
 
New loans
 
973,550

 
—

 
973,550

Scheduled repayments
 
(84,493
)
 
—

 
(84,493
)
Early repayments (Note 24)
 
(825,691
)
 
(205,710
)
 
(1,031,401
)
Acquisitions through business combinations (Note 24)
 
1,106,736

 
205,710

 
1,312,446


F-58
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 15 - Interest-bearing loans and borrowings (Continued)

Other changes (Note 24)
 
(311,191
)
 
547

 
(310,644
)
Balance at December 31, 2018
 
1,560,002

 
148,166

 
1,708,168

 
 
 
 
 
 
 
More than 5 years
 
433,662

 
—

 
433,662

Between 1 and 5 years
 
987,803

 
148,166

 
1,135,969

More than 1 year
 
1,421,465

 
148,166

 
1,569,631

Less than 1 year
 
138,537

 
—

 
138,537

Balance at December 31, 2018
 
1,560,002

 
148,166

 
1,708,168

The amounts shown under "New Loans" and "Early Repayments" include drawdowns and repayments under revolving credit facilities during the year.
Bank Loans
On October 13, 2014, the Group entered into a USD 340.0 million senior secured credit facility with a syndicate of banks. Borrowings under this facility have been used to partially finance the acquisition of the four ( 4 ) modern Japanese built VLCC vessels ('the VLCC Acquisition Vessels') from Maersk Tankers Singapore Pte Ltd and to repay USD 153.1 million of outstanding debt and retire the Group's USD 300.0 million Secured Loan Facility dated April 3, 2009. This facility is comprised of (i) a USD 148.0 million non-amortizing revolving credit facility and (ii) a USD 192.0 million term loan facility. This facility has a term of 7 years and bears interest at LIBOR plus a margin of 2.25% per annum. This credit facility is secured by eight of our wholly-owned vessels, the Fraternity, Felicity, Cap Felix, Cap Theodora, Hojo, Hakone, Hirado and Hakata. On October 22, 2014 a first drawdown under this facility was made to repay a former USD 300 million secured loan facility, followed by additional drawdowns on December 22, 2014 and December 23, 2014 for an amount of 60.3 million and 50.3 million following the delivery of the Hojo and Hakone respectively. On March 3, 2015 and April 13, 2015 additional drawdowns of 53.4 million and 50.4 million were made following the delivery of the Hirado and Hakata respectively. As of December 31, 2018 and December 31, 2017 , the outstanding balances on this facility were USD 184.8 million and USD 111.7 million, respectively.
On August 19, 2015, the Group entered into a USD 750.0 million senior secured amortizing revolving credit facility with a syndicate of banks. The facility is available for the purpose of (i) refinancing 21 vessels; (ii) financing four newbuilding VLCCs vessels as well as (iii) Euronav's general corporate and working capital purposes. The credit facility will mature on 1 July 2022 and carries a rate of LIBOR plus a margin of 195 bps. As of December 31, 2018 and December 31, 2017 , the outstanding balances under this facility were USD 165.0 million and USD 330.0 million , respectively. This facility is currently secured by 17 of our wholly-owned vessels.
On November 9, 2015, the Group entered into a USD 60.0 million unsecured revolving credit facility which will mature on November 9, 2020 carrying a rate of LIBOR plus a margin of 2.25% . As of December 31, 2018 and December 31, 2017 , there were no outstanding balances under this facility.
On June 2, 2016, the Group entered into a share swap and claim transfer agreement (see Note 24) whereby as of that date, Fiorano Shipholding Ltd. and Larvotto Shipholding Ltd. were fully consolidated and all assets acquired and liabilities assumed were recognized. Their respective loans were related to, and were secured by, the vessels owned by Fiorano and Larvotto at the date of the aforementioned transaction. As of December 31, 2018 and December 31, 2017 , the outstanding balances on these facilities were USD 0.0 million and 48.7 million, respectively. Both loan facilities were repaid in full on September 25, 2018 and December 11, 2018, respectively.
On December 16, 2016, the Group entered into a USD 409.5 million senior secured amortizing revolving credit facility for the purpose of refinancing 11 vessels as well as Euronav's general corporate purposes. The credit facility was used to refinance the USD 500 million senior secured credit facility dated March 25, 2014 and will mature on January 31, 2023 carrying a rate of LIBOR plus a margin of 2.25% . As of December 31, 2018 and December 31, 2017 , the outstanding balances on this facility were USD 150 million and 118.0 million, respectively. The credit facility is secured by the aforementioned 11 vessels.

F-59
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 15 - Interest-bearing loans and borrowings (Continued)

On January 30, 2017, the Group signed a loan agreement for a nominal amount of USD 110.0 million with the purpose of financing the Ardeche and the Aquitaine, as mentioned in Note 8. On April 25, 2017, following a successful syndication, the loan was replaced with a new Korean Export Credit facility for a nominal amount of USD 108.5 million with Korea Trade Insurance Corporation or “K-sure” as insurer. The new facility is comprised of (i) a USD 27.1 million commercial tranche, which bears interest at LIBOR plus a margin of 1.95% per annum and (ii) a USD 81.4 million tranche insured by K-sure which bears interest at LIBOR plus a margin of 1.50% per annum. The facility is repayable over a term of 12 years, in 24 installments at successive six month intervals, each in the amount of USD 3.6 million together with a balloon installment of USD 21.7 million payable with the 24th installment on January 12, 2029. The K-sure insurance premium and other related transaction costs for a total amount of USD 3.2 million are amortized over the lifetime of the instrument using the effective interest rate method. As of December 31, 2018 and December 31, 2017, the outstanding balances on this facility were USD 97.7 million and USD 104.9 million, respectively in aggregate. This facility is secured by the VLCCs the Ardeche and the Aquitaine. The facility agreement also contains a provision that entitles the lenders to require us to prepay to the lenders, on January 12, 2024, with 180 days’ notice, their respective portion of any advances granted to us under the facility. The facility agreement also contains provisions that allow the remaining lenders to assume an outgoing lender’s respective portion(s) of the advances made to us or to allow us to suggest a replacement lender to assume the respective portion of such advances.
On March 22, 2018, the Group signed a senior secured credit facility for an amount of USD 173.6 million with Kexim, BNP and Credit Agricole Corporate and Investment bank acting also as Agent and Security Trustee. The purpose of the loan was to finance up to 70 per cent of the aggregate contract price of the four Ice Class Suezmax vessels that have been delivered over the course of 2018. The new facility was comprised of (i) a USD 69.4 million commercial tranche, which bears interest at LIBOR plus a margin of 2.0% per annum and (ii) a USD 104.2 million ECA tranche which bears interest at LIBOR plus a margin of 2.0% per annum. The commercial tranche is repayable by 24 equal consecutive semi-annual installments, each in the amount of USD 0.6 million per vessel together with a balloon installment of USD 3.5 million payable with the 24 th and last installment on August 24, 2030. The ECA tranche is repayable by 24 consecutive semi-annual installments, each in the amount of USD 1.1 million per vessel and last installment on August 24, 2030. Transaction costs for a total amount of USD 1.6 million are amortized over the lifetime of the instrument using the effective interest rate method. As of December 31, 2018 the outstanding balance on this facility was USD 170.2 million in aggregate. Lenders of the facility have a put option on the 7th anniversary of the facility, for which a notice has to be served 13 months in advance requesting a prepayment of their remaining contribution. After receiving notice, the Group will have to either repay the relevant contribution on the 7th year anniversary or to transfer this contribution to another acceptable lender. The put option can only be exercised if the employment of the vessel at that time is not satisfactory to the lenders.

As a result of the business combination on June 12, 2018, Euronav assumed the USD 633.0 million senior secured loan facility from Gener8 Maritime Inc. This facility provided for term loans up to the aggregate approximate amount of USD 963.7 million , which is comprised of a tranche of term loans to be made available by a syndicate of commercial lenders up to the aggregate approximate amount of USD 282.0 million (the “Commercial Tranche”), a tranche of term loans to be fully guaranteed by the Export-Import Bank of Korea (“KEXIM”) up to the aggregate approximate amount of up to USD 139.7 million (the “KEXIM Guaranteed Tranche”), a tranche of term loans to be made available by KEXIM up to the aggregate approximate amount of USD 197.4 million (the “KEXIM Funded Tranche”) and a tranche of term loans insured by Korea Trade Insurance Corporation (“K-Sure”) up to the aggregate approximate amount of USD 344.6 million (the “K-Sure Tranche”). The Commercial Tranche with a final maturity on September 28, 2022, bears interest at LIBOR plus a margin of 2.75% per annum and is reduced in 10 remaining installments of consecutive three -month interval and a balloon repayment at maturity in 2022. The KEXIM Guaranteed Tranche, with a final maturity on February 28, 2029, bears interest at LIBOR plus a margin of 1.50% per annum and is reduced in 39 remaining installments of consecutive three -month interval. The KEXIM Funded Tranche, with a final maturity on February 28, 2029, bears interest at LIBOR plus a margin of 2.60% per annum and is reduced in 39 remaining installments of consecutive three -month interval. The K-Sure Tranche, with a final maturity on February 28, 2029, bears interest at LIBOR plus a margin of 1.70% per annum and is reduced in 39 remaining installments of consecutive three -month interval. This facility is secured by 13 of our wholly-owned vessels. As of December 31, 2018 , the outstanding balance on this facility was USD 604.8 million in aggregate.

As a result of the business combination on June 12, 2018, Euronav assumed the USD 581.0 million senior secured loan facility from Gener8 Maritime Inc. This facility with a final maturity on September 3, 2020 bears interest at LIBOR plus a margin of 3.75%  per annum and was reduced in 9 remaining installments of consecutive six -month interval and a final USD 77.4 million repayment is due at maturity in 2020. This facility was secured by 10 of our wholly-owned vessels and a pledge of certain of our and Gener8 Maritime Sub II vessel owning subsidiaries’ respective bank accounts. On September 17, 2018, the Group repaid this facility in full (USD - 139.7 million ) using a portion of the borrowings under the new USD 200.0 million senior secured credit facility.


F-60
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 15 - Interest-bearing loans and borrowings (Continued)

On September 7, 2018, the Group signed a senior secured credit facility for an amount of USD 200.0 million . The Group used the proceeds of this facility to refinance all remaining indebtedness under the USD 581.0 million senior secured loan facility, the USD 67.5 million secured loan facility (Larvotto), and the USD 76.0 million secured loan facility (Fiorano). This facility is secured by 9 of our wholly-owned vessels. This revolving credit facility is reduced in 12 installments of consecutive six-month interval and a final USD 55.0 million repayment is due at maturity in 2025. This facility bears interest at LIBOR plus a margin of 2.0% per annum plus applicable mandatory costs. As of December 31, 2018 , the outstanding balance on this facility was USD 200.0 million .

Undrawn borrowing facilities
At December 31, 2018 , Euronav and its fully-owned subsidiaries have undrawn credit line facilities amounting to USD 498.9 million committed for at least one year ( 2017 : USD 607.4 million).

Terms and debt repayment schedule
The terms and conditions of outstanding loans were as follows:

F-61
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 15 - Interest-bearing loans and borrowings (Continued)

(in thousands of USD)
 
 
 
 
 
 
 
December 31, 2018
 
December 31, 2017
 
 
Curr
 
Nominal interest rate
 
Year of mat.
 
Facility size
 
Drawn
 
Carrying value
 
Facility size
 
Drawn
 
Carrying value
Secured vessels loan 192M
 
USD
 
libor +2.25%
 
2021
 
79,762

 
79,762

 
78,746

 
111,666

 
111,666

 
110,156

Secured vessels Revolving loan 148M*
 
USD
 
libor +2.25%
 
2021
 
147,559

 
105,000

 
105,000

 
147,559

 
—

 
—

Secured vessels Revolving loan 750M*
 
USD
 
libor +1.95%
 
2022
 
395,289

 
165,000

 
162,002

 
485,017

 
330,000

 
325,519

Secured vessels Revolving loan 409.5M*
 
USD
 
libor +2.25%
 
2023
 
316,060

 
150,000

 
147,541

 
362,780

 
118,000

 
114,634

Secured vessels loan 76M
 
USD
 
libor +1.95%
 
2020
 
—

 
—

 
—

 
23,563

 
23,563

 
23,563

Secured vessels loan 67.5M
 
USD
 
libor +1.5%
 
2020
 
—

 
—

 
—

 
25,173

 
25,173

 
25,173

Secured vessels loan 27.1M
 
USD
 
libor +1.95%
 
2029
 
26,459

 
26,459

 
24,711

 
26,911

 
26,911

 
24,876

Secured vessels loan 81.4M
 
USD
 
libor +1.50%
 
2029
 
71,236

 
71,236

 
70,507

 
78,020

 
78,020

 
77,171

Secured vessels loan 69.4M
 
USD
 
libor + 2.0%
 
2030
 
68,263

 
68,263

 
68,263

 
—

 
—

 
—

Secured vessels loan 104.2M
 
USD
 
libor +2.0%
 
2030
 
101,961

 
101,961

 
100,490

 
—

 
—

 
—

Secured vessels loan 89.7M
 
USD
 
libor +1.5%
 
2029
 
85,295

 
85,295

 
85,295

 
—

 
—

 
—

Secured vessels loan 221.4M
 
USD
 
libor +1.7%
 
2029
 
210,459

 
210,459

 
210,459

 
—

 
—

 
—

Secured vessels loan 126.8M
 
USD
 
libor +2.6%
 
2029
 
120,553

 
120,553

 
120,553

 
—

 
—

 
—

Secured vessels loan 195.7M
 
USD
 
libor +2.75%
 
2022
 
188,481

 
188,481

 
188,481

 
—

 
—

 
—

Secured vessels Revolving loan 200.0M*
 
USD
 
libor +2.0%
 
2025
 
200,000

 
200,000

 
197,955

 
—

 
—

 
—

Unsecured bank facility 60M
 
USD
 
libor +2.25%
 
2020
 
60,000

 
—

 
—

 
60,000

 
—

 
—

Total interest-bearing bank loans
 
 
 
2,071,375

 
1,572,467

 
1,560,002

 
1,320,688

 
713,332

 
701,091

The facility size of the vessel loans can be reduced if the value of the collateralized vessels falls under a certain percentage of the outstanding amount under that loan.
* The total amount available under the revolving loan Facilities depends on the total value of the fleet of tankers securing the facility.






F-62
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 15 - Interest-bearing loans and borrowings (Continued)

Other notes
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(in thousands of USD)
 
 
 

 

 
December 31, 2018
 
December 31, 2017

 
Curr
 
Nominal interest rate
 
Year of mat.
 
Facility size
 
Drawn
 
Carrying value
 
Facility size
 
Drawn
 
Carrying value
Unsecured notes
 
USD
 
7.50%
 
2022
 
150,000

 
150,000

 
148,166

 
150,000

 
150,000

 
147,619

Total other notes
 

 
150,000

 
150,000

 
148,166

 
150,000

 
150,000

 
147,619

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

On May 31, 2017, the Group successfully completed a new senior unsecured bond issue of USD 150.0 million with a fixed coupon of 7.50% and maturity in May 2022. The net proceeds from the bond issue are being used for general corporate purposes. The related transaction costs for a total of USD 2.7 million are amortized over the lifetime of the instrument using the effective interest rate method. Since October 23, 2017, these unsecured bonds are listed on the Oslo stock exchange.

Other borrowings
On June 6, 2017, the Group signed an agreement with BNP to act as dealer for a Treasury Notes Program with a maximum outstanding amount of 50 million Euro. On October 1, 2018, KBC has been appointed as an additional dealer in the agreement and the maximum amount has been increased from 50 million Euro to 150 million Euro. As of December 31, 2018, the outstanding amount was USD 60.3 million or 52.7 million Euro (December 31, 2017: USD 50.0 million or 41.7 million Euro). The Treasury Notes are issued on an as needed basis with different durations not exceeding 1 year, and initial pricing is set to 60 bps over Euribor. The company enters into FX forward contracts to manage the currency risks related to these instruments issued in Euro compared to the USD Group functional currency. The FX contracts have the same nominal amount and duration as the issued Treasury Notes and they are measured at fair value with changes in fair value recognized in the consolidated statement of profit or loss. On December 31, 2018, the fair value of these forward contracts amounted to USD 0.5 million . The change in fair value of these derivatives was recorded in the consolidated statement of profit or loss.


Transaction and other financial costs
The heading 'Other changes' in the first table of this footnote reflects the sale of certain subsidiaries to International Seaways (see Note 24) and the recognition of directly attributable transaction costs as a deduction from the fair value of the corresponding liability, and the subsequent amortization of such costs. In 2018, the Group recognized USD 4.2 million of amortization of financing costs. The Group recognized USD 1.6 million of directly attributable transaction costs as a deduction from the fair value of the USD 173.6 million senior secured amortizing loan facility entered into March 22, 2018 and USD 2.2 million of directly attributable transaction costs as a deduction from the fair value of the USD 200.0 million senior secured amortizing loan facility entered into September 7, 2018.
Interest expense on financial liabilities measured at amortized cost increased during the year ended December 31, 2018, compared to 2017 ( 2018 : USD - 68.0 million, 2017 : USD - 38.4 million). This increase was attributable to the interest on the senior unsecured bond of USD 150 million which was issued on May 31, 2017 and an increase in the average outstanding debt during the year as a result of the new credit facilities entered into 2018 and credit facilities in relation to the merger with Gener8 Maritime Inc. Other financial charges increased in 2018 compared to 2017 (2018: USD - 6.8 million , 2017: USD - 5.8 million ) which was primarily attributable to commitment fees paid for available credit lines.


F-63
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 15 - Interest-bearing loans and borrowings (Continued)

Reconciliation of movements of liabilities to cash flows arising from financing activities
 
Liabilities
Equity
 
 
Loans and borrowings

Other Notes

Other borrowings

Share capital / premium

Reserves

Treasury shares

Retained earnings

Total

Balance at January 1, 2017
1,085,562

—

—

1,388,273

120

(16,102
)
515,665

2,973,518

 
 
 
 
 
 
 
 
 
Changes from financing cash flows
 
 
 
 
 
 
 
 
Proceeds from issue of other notes (Note 15)
—

150,000

—

—

—

—

—

150,000

Proceeds from loans and borrowings (Note 15)
326,014

—

—

—

—

—

—

326,014

Proceeds from issue of other borrowings (Note 15)
—

—

50,010

—

—

—

—

50,010

Transaction costs related to loans and borrowings (Note 15)
(3,174
)
(2,700
)
—

—

—

—

—

(5,874
)
Repayment of borrowings (Note 15)
(710,993
)
—

—

—

—

—

—

(710,993
)
Dividend paid
—

—

—

—

—

—

(44,133
)
(44,133
)
Total changes from financing cash flows
(388,153
)
147,300

50,010

—

—

—

(44,133
)
(234,976
)
 
 
 
 
 
 
 
 
 
Other changes
 
 
 
 
 
 
 
 
Liability-related
 
 
 
 
 
 
 
 
Amortization of transaction costs (Note 15)
3,682

319

—

—

—

—

—

4,001

Total liability-related other changes
3,682

319

—

—

—

—

—

4,001

Total equity-related other changes
—

—

—

—

448

—

2,090

2,538

 
 
 
 
 
 
 
 
 
Balance at December 31, 2017
701,091

147,619

50,010

1,388,273

568

(16,102
)
473,622

2,745,081




F-64
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 15 - Interest-bearing loans and borrowings (Continued)

 
Liabilities
Equity
 
 
Loans and borrowings

Other Notes

Other borrowings

Share capital / premium

Reserves

Treasury shares

Retained earnings

Total

Restated balance at January 1, 2018
701,091

147,619

50,010

1,388,273

568

(16,102
)
471,877

2,743,336

 
 
 
 
 
 
 
 
 
Changes from financing cash flows
 
 
 
 
 
 
 
 
Proceeds from loans and borrowings (Note 15)
973,550

—

—

—

—

—

—

973,550

Proceeds from issue of other borrowings (Note 15)
—

—

10,332

—

—

—

—

10,332

Proceeds from sale of treasury shares (Note 13)
—

—

—

—

—

5,406

(3,112
)
2,294

Purchase treasury shares (Note 13)
—

—

—

—

—

(3,955
)
—

(3,955
)
Transaction costs related to loans and borrowings (Note 15)
(3,849
)
—

—

—

—

—

—

(3,849
)
Repayment of borrowings (Note 15)
(910,184
)
(205,710
)
—

—

—

—

—

(1,115,894
)
Dividend paid
—

—

—

—

—

—

(22,643
)
(22,643
)
Total changes from financing cash flows
59,517

(205,710
)
10,332

—

—

1,451

(25,755
)
(160,165
)
 
 
 
 
 
 
 
 
 
Other changes
 
 
 
 
 
 
 
 
Liability-related
 
 
 
 
 
 
 
 
Acquisitions through business combinations (Note 24)
1,106,736

205,710

—

—

—

—

—

1,312,446

Sale of loans through disposal of subsidiaries (Note 24)
(310,968
)
—

—

—

—

—

—

(310,968
)
Amortization of transaction costs (Note 15)
3,626

547

—

—

—

—

—

4,173

Total liability-related other changes
799,394

206,257

—

—

—

—

—

1,005,651

Total equity-related other changes
—

—

—

553,424

(2,855
)
—

(110,358
)
440,211

 
 
 
 
 
 
 
 
 
Balance at December 31, 2018
1,560,002

148,166

60,342

1,941,697

(2,287
)
(14,651
)
335,764

4,029,033



F-65
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 16 - Employee benefits
The amounts recognized in the balance sheet are as follows:
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
 
December 31, 2016
NET LIABILITY AT BEGINNING OF PERIOD
 
(3,984
)
 
(2,846
)
 
(2,038
)
Recognized in profit or loss
 
(616
)
 
(827
)
 
(261
)
Recognized in other comprehensive income
 
120

 
64

 
(646
)
Foreign currency translation differences
 
144

 
(375
)
 
99

NET LIABILITY AT END OF PERIOD
 
(4,336
)
 
(3,984
)
 
(2,846
)
 
 
 
 
 
 
 
Present value of funded obligation
 
(3,538
)
 
(3,537
)
 
(2,846
)
Fair value of plan assets
 
2,970

 
2,760

 
2,117

 
 
(568
)
 
(777
)
 
(729
)
Present value of unfunded obligations
 
(3,768
)
 
(3,207
)
 
(2,117
)
NET LIABILITY
 
(4,336
)
 
(3,984
)
 
(2,846
)
 
 
 
 
 
 
 
Amounts in the balance sheet:
 
 
 
 
 
 
Liabilities
 
(4,336
)
 
(3,984
)
 
(2,846
)
Assets
 
—

 
—

 
—

NET LIABILITY
 
(4,336
)
 
(3,984
)
 
(2,846
)
Liability for defined benefit obligations
The Group makes contributions to three defined benefit plans that provide pension benefits for employees upon retirement.
One plan - the Belgian plan - is fully insured through an insurance company. The second and third - French and Greek plans - are uninsured and unfunded. The unfunded obligations include provisions in respect of LTIP 2016, LTIP 2017 and LTIP 2018 (see Note 13).
The Group expects to contribute the following amount to its defined benefit pension plans in 2019 : USD 284,722 .
Note 17 - Trade and other payables
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
Advances received on contracts in progress, between 1 and 5 years
 
402

 
539

Derivatives
 
1,049

 
—

Total non-current other payables
 
1,451

 
539

Trade payables
 
16,266

 
19,274

Accrued expenses
 
42,524

 
22,518

Accrued payroll
 
5,595

 
3,596

Dividends payable
 
146

 
160

Accrued interest
 
10,833

 
1,762

Deferred income
 
7,754

 
10,020

Other payables
 
4,107

 
4,025

Total current trade and other payables
 
87,225

 
61,355

The derivatives relate to the interest rate swap derivatives in connection to the USD 173.6 million facility related to the two Suezmaxes Cap Quebec and Cap Pembroke .

The increase in accrued expenses is mainly related to a higher proportion of vessels on the spot market and a higher number of bunkers already delivered in 2018 but not invoiced yet.

The increase in accrued payroll is mainly due to the merger with Gener8 Maritime Inc. (see Note 24).

The increase in accrued interest is related to the new credit facilities entered into 2018.

F-66
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


Note 18 - Financial instruments - Fair values and risk management

The effect of initially applying IFRS 9 on the Group's financial instruments is described in Note 1. Due to the transition method chosen, comparative information has not been restated to reflect the new requirements.

Accounting classifications and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value, such as trade and other receivables and payables.
 
 
Carrying amount
 
Fair value
 
 
Fair value - Hedging instruments
 
Financial assets at amortized cost
 
Other financial liabilities
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial assets measured at fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forward exchange contracts
 
467

 
—

 
—

 
467

 
—

 
467

 
—

 
467

 
 
467

 
—

 
—

 
467

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial assets not measured at fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-current receivables (Note 10)
 
—

 
160,352

 
—

 
160,352

 
—

 
—

 
128,427

 
128,427

Trade and other receivables * (Note 11)
 
—

 
112,000

 
—

 
112,000

 
—

 
—

 
—

 
—

Cash and cash equivalents (Note 12)
 
—

 
143,648

 
—

 
143,648

 
—

 
—

 
—

 
—

 
 
—

 
416,000

 
—

 
416,000

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial liabilities not measured at fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured bank loans (Note 15)
 
 
 
—

 
701,091

 
701,091

 
—

 
706,056

 
—

 
706,056

Unsecured other notes (Note 15)
 
—

 
—

 
147,619

 
147,619

 
149,630

 
—

 
—

 
149,630

Unsecured other borrowings (Note 15)
 
—

 
—

 
50,010

 
50,010

 
—

 
—

 
—

 
—

Trade and other payables * (Note 17)
 
 
 
—

 
51,335

 
51,335

 
—

 
—

 
—

 
—

Advances received on contracts (Note 17)
 
 
 
—

 
539

 
539

 
—

 
—

 
—

 
—

 
 
 
 
—

 
950,594

 
950,594

 
 
 
 
 
 
 
 



F-67
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


 
 
Carrying amount
 
Fair value
 
 
Fair value - Hedging instruments
 
Financial assets at amortized cost
 
Other financial liabilities
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial assets measured at fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forward exchange contracts (Note 15)
 
484

 
—

 
—

 
484

 
—

 
484

 
—

 
484

Interest rate swaps (Note 10)
 
7,205

 
—

 
—

 
7,205

 
—

 
7,205

 
—

 
7,205

Forward cap contracts (Note 10)
 
725

 
—

 
—

 
725

 
—

 
725

 
—

 
725

Non-current assets held for sale (Note 3)
 
—

 
42,000

 
—

 
42,000

 
—

 
42,000

 
—

 
42,000

 
 
8,414

 
42,000

 
—

 
50,414

 
 
 
 
 
 
 
 
Financial assets not measured at fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-current receivables (Note 10)
 
—

 
30,728

 
—

 
30,728

 
—

 
—

 
26,047

 
26,047

Trade and other receivables * (Note 11)
 
—

 
263,186

 
—

 
263,186

 
—

 
—

 
—

 
—

Cash and cash equivalents (Note 12)
 
—

 
173,133

 
—

 
173,133

 
—

 
—

 
—

 
—

 
 
—

 
467,047

 
—

 
467,047

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial liabilities measured at fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
1,049

 
—

 
—

 
1,049

 
—

 
1,049

 
—

 
1,049

 
 
1,049

 
—

 
—

 
1,049

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financial liabilities not measured at fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured bank loans (Note 15)
 
—

 
—

 
1,560,002

 
1,560,002

 
—

 
1,575,196

 
—

 
1,575,196

Unsecured other notes (Note 15)
 
—

 
—

 
148,166

 
148,166

 
144,156

 
—

 
—

 
144,156

Unsecured other borrowings (Note 15)
 
—

 
—

 
60,342

 
60,342

 
—

 
—

 
—

 
—

Trade and other payables * (Note 17)
 
—

 
—

 
79,442

 
79,442

 
—

 
—

 
—

 
—

Advances received on contracts (Note 17)
 
—

 
—

 
402

 
402

 
—

 
—

 
—

 
—

 
 
—

 
—

 
1,848,354

 
1,848,354

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
* Deferred charges, deferred fulfillment costs and VAT receivables (included in other receivables) (see Note 11), deferred income and VAT payables (included in other payables) (see Note 17), which are not financial assets (liabilities) are not included.
Measurement of fair values
Valuation techniques and significant unobservable inputs

F-68
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


Level 1 fair value was determined based on the actual trading of the unsecured notes, due in 2022, and the trading price on December 26, 2018. The following tables show the valuation techniques used in measuring Level 1, Level 2 and Level 3 fair values, as well as the significant unobservable inputs used.
Financial instruments measured at fair value
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Type
 
Valuation Techniques
 
 
Significant unobservable inputs
 
 
 
 
 
 
 
 
Forward exchange contracts
 
Forward pricing: the fair value is determined using quoted forward exchange rates at the reporting date and present value calculations based on high credit quality yield curve in the respective currencies.
 
Not applicable
 
 
 
 
 
 
 
 
Interest rate swaps
 
Swap models: the fair value is calculated as the present value of the estimated future cash flows. Estimates of future floating-rate cash flows are based on quoted swap rates, futures prices and interbank borrowing rates.
 
Not applicable
 
 
 
 
 
 
 
 
Forward cap contracts
 
Fair values for both the derivative and the hypothetical derivative will be determined based on a software used to calculate the net present value of the expected cash flows using LIBOR rate curves, futures and basis spreads.
 
Not applicable
 
 
 
 
 
 
 
 
Non-current assets held for sale
 
Sales price
 
Not applicable
 
 
 
 
 
 
 
 
Financial instruments not measured at fair value
 
 
 
 
 
 
 
 
 
Type
 
Valuation Techniques
 
Significant unobservable inputs
Non-current receivables (consisting primarily of shareholders' loans)
 
Discounted cash flow
 
Discount rate and forecasted cash flows
Other financial liabilities (consisting of secured and unsecured bank loans)
 
Discounted cash flow
 
Discount rate
Other financial notes (consisting of unsecured notes)
 
Not applicable
 
Not applicable
Transfers between Level 1, 2 and 3
There were no transfers between these levels in 2017 and 2018 .

F-69
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


Financial risk management
In the course of its normal business, the Group is exposed to the following risks:
•
Credit risk
•
Liquidity risk
•
Market risk (Tanker market risk, interest rate risk and currency risk)
The Company's Board of Directors has overall responsibility for the establishment and oversight of the Group's risk management framework. The Board of Directors has established the Audit and Risk Committee, which is responsible for developing and monitoring the Group's risk management policies. The Committee reports regularly to the Board of Directors on its activities.
The Group's risk management policies are established to identify and analyze the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group's activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Group's Audit and Risk Committee oversees how management monitors compliance with the Group's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group's Audit and Risk Committee is assisted in its oversight role by internal audit. Internal audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit and Risk Committee.
Credit risk
Trade and other receivables
The Group has a formal credit policy. Credit evaluations - when necessary - are performed on an ongoing basis. At the balance sheet date there were no significant concentrations of credit risk. In particular, the one client representing 7% each of the Tankers segment's total revenue in 2018 (see Note 2) only represented 0.54% of the total trade and other receivables at December 31, 2018 ( 2017 : one client representing 0.03% ). The maximum exposure to credit risk is represented by the carrying amount of each financial asset.
The ageing of current trade and other receivables is as follows:
(in thousands of USD)
 
2018
 
2017
Not past due
 
262,795

 
124,243

Past due 0-30 days
 
19,463

 
2,071

Past due 31-365 days
 
20,169

 
9,784

More than one year
 
3,299

 
699

Total trade and other receivables
 
305,726

 
136,797


F-70
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


Past due amounts are not impaired as collection is still considered to be likely and management is confident the outstanding amounts can be recovered. As at December 31, 2018 52.24% ( 2017 : 45.37% ) of the total current trade and other receivables relate to TI Pool which are paid after completion of the voyages but which only deals with oil majors, national oil companies and other actors of the oil industry whose credit worthiness is very high. Amounts not past due are also with customers with very high credit worthiness and are therefore not credit impaired.
Non-current receivables
Non-current receivables mainly consist of shareholder's loans to joint ventures (see Note 10). As at December 31, 2018 and December 31, 2017 , these receivables had no maturity date and were not impaired.
Cash and cash equivalents
The Group held cash and cash equivalents of USD 173.1 million at December 31, 2018 ( 2017 : USD 143.6 million ). The cash and cash equivalents are held with bank and financial institution counterparties, which are rated A- to AA+, based on rating agency S&P (see Note 12).
Derivatives
Derivatives are entered into with banks and financial institution counterparties, which are rated A- to AA+, based on rating agency S&P.
Guarantees
The Group's policy is to provide financial guarantees only for subsidiaries and joint ventures. At December 31, 2018 , the Group has issued a guarantee to certain banks in respect of the new credit facilities entered into 2018 which were granted to 2 joint ventures (see Note 25). At December 31, 2017, there were no outstanding guarantees towards joint ventures.

Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group's reputation. The sources of financing are diversified and the bulk of the loans are irrevocable, long-term and maturities are spread over different years.


F-71
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


The following are the remaining contractual maturities of financial liabilities
 
 
Contractual cash flows December 31, 2017
(in thousands of USD)
 
Carrying Amount
 
Total
 
Less than 1 year
 
Between 1 and 5 years
 
More than 5 years
Non derivative financial liabilities
 
 
 
 
 
 
 
 
 
 
Bank loans and other notes (Note 15)
 
848,710

 
1,009,508

 
83,039

 
750,722

 
175,747

Other borrowings (Note 15)
 
50,010

 
50,010

 
50,010

 
 
 
 
Current trade and other payables * (Note 17)
 
51,335

 
51,335

 
51,335

 
—

 
—

Non-current other payables (Note 17)
 
—

 
—

 
—

 
—

 
—

 
 
950,055

 
1,110,853

 
184,384

 
750,722

 
175,747

 
 
 
 
 
 
 
 
 
 
 
Derivative financial liabilities
 
 
 
 
 
 
 
 
 
 
Interest rate swaps (Note 17)
 
—

 
—

 
—

 
—

 
—

Forward exchange contracts (Note 17)
 
—

 
—

 
—

 
—

 
—

 
 
—

 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Contractual cash flows December 31, 2018
 
 
Carrying Amount
 
Total
 
Less than 1 year
 
Between 1 and 5 years
 
More than 5 years
Non derivative financial liabilities
 
 

 
 

 
 

 
 

 
 

Bank loans and other notes (Note 15)
 
1,708,168

 
2,034,794

 
364,122

 
1,176,317

 
494,355

Other borrowings (Note 15)
 
60,342

 
60,342

 
60,342

 
—

 
—

Current trade and other payables * (Note 17)
 
79,471

 
79,471

 
79,471

 
—

 
—

Non-current other payables (Note 17)
 
—

 
—

 
—

 
—

 
—

 
 
1,847,981

 
2,174,607

 
503,935

 
1,176,317

 
494,355

 
 
 
 
 
 
 
 
 
 
 
Derivative financial liabilities
 
 
 
 
 
 
 
 
 
 
Interest rate swaps (Note 17)
 
—

 
2,627

 
461

 
1,628

 
538

Forward exchange contracts (Note 17)
 
—

 
—

 
—

 
—

 
—

 
 
—

 
2,627

 
461

 
1,628

 
538




F-72
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


* Deferred income (see Note 17), which are not financial liabilities, are not included.
The Group has secured bank loans that contain loan covenants. A future breach of covenant may require the Group to repay the loan earlier than indicated in the above table. For more details on these covenants, please see "capital management" below.
The interest payments on variable interest rate loans in the table above reflect market forward interest rates at the reporting date and these amounts may change as market interest rates change. It is not expected that the cash flows included in the table above (the maturity analysis) could occur significantly earlier, or at significantly different amounts than stated above.
Market risk
Tanker market risk
The spot tanker freight market is a highly volatile global market and the Group cannot predict what the market will be. The Group has a strategy of operating the majority of its fleet on the spot market but tries to keep a certain part of the fleet under fixed time charter contracts. The proportion of vessels operated on the spot will vary according to the many factors affecting both the spot and fixed time charter contract markets.
Every increase (decrease) of 1,000 USD on the spot tanker freight market (VLCC and Suezmax) per day would have increased (decreased) profit or loss by the amounts shown below:
(effect in thousands of USD)
 
2018
 
2017
 
2016
 
 
Profit or loss
 
Profit or loss
 
Profit or loss
 
 
1,000 USD
 
1,000 USD
 
1,000 USD
 
1,000 USD
 
1,000 USD
 
1,000 USD
 
 
Increase
 
Decrease
 
Increase
 
Decrease
 
Increase
 
Decrease
 
 
19,332

 
(19,323
)
 
13,420

 
(13,420
)
 
14,140

 
(14,140
)
Interest rate risk
Euronav interest rate management general policy is to borrow at floating interest rates based on LIBOR plus a margin. The Euronav Corporate Treasury Department monitors the Group's interest rate exposure on a regular basis. From time to time and under the responsibility of the Chief Financial Officer, different strategies to reduce the risk associated with fluctuations in interest rates can be proposed to the Board of Directors for their approval. In the past the Group hedged part of its exposure to changes in interest rates on borrowings. All borrowings contracted for the financing of vessels are on the basis of a floating interest rate, increased by a margin. On a regular basis the Group may use various interest rate related derivatives (interest rate swaps, caps and floors) to achieve an appropriate mix of fixed and floating rate exposure as defined by the Group. On December 31, 2018 , the Group had such instruments in place (December 31, 2017: no instruments) and approximately 50% of the floating interest rates have been hedged.
At the reporting date the interest rate profile of the Group's interest-bearing financial instruments was:

F-73
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


(in thousands of USD)
 
2018
 
2017
FIXED RATE INSTRUMENTS
 
 
 
 
Financial assets
 
—

 
—

Financial liabilities
 
148,166

 
147,619

 
 
148,166

 
147,619

 
 
 
 
 
VARIABLE RATE INSTRUMENTS
 
 
 
 
Financial liabilities
 
1,620,344

 
751,101

 
 
1,620,344

 
751,101

Fair value sensitivity analysis for fixed rate instruments
The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives (interest rate swaps) as hedging instruments under a fair value hedge accounting model. Therefore a change in interest rates at the reporting date would not affect profit or loss nor equity as of that date.
Cash flow sensitivity analysis for variable rate instruments
A change of 50 basis points in interest rates at the reporting date would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

F-74
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


 
 
Profit or Loss
 
Equity
 
 
50 BP
 
50 BP
 
50 BP
 
50 BP
(effect in thousands of USD)
 
Increase
 
Decrease
 
Increase
 
Decrease
December 31, 2016
 
 
 
 
 
 
 
 
Variable rate instruments
 
(5,315
)
 
5,315

 
—

 
—

Interest rate swaps
 
—

 
—

 
—

 
—

Cash Flow Sensitivity (Net)
 
(5,315
)
 
5,315

 
—

 
—

 
 
 
 
 
 
 
 
 
December 31, 2017
 
 

 
 

 
 

 
 

Variable rate instruments
 
(4,685
)
 
4,685

 
—

 
—

Interest rate swaps
 
—

 
—

 
—

 
—

Cash Flow Sensitivity (Net)
 
(4,685
)
 
4,685

 
—

 
—

 
 
 
 
 
 
 
 
 
December 31, 2018
 
 

 
 

 
 

 
 

Variable rate instruments
 
(4,238
)
 
4,238

 
—

 
—

Interest rate swaps
 
—

 
—

 
6,201

 
(6,116
)
Cash Flow Sensitivity (Net)
 
(4,238
)
 
4,238

 
6,201

 
(6,116
)
 
 
 
 
 
 
 
 
 
Currency risk
The Group policy is to monitor its material non-functional currency transaction exposure so as to allow for natural coverage (revenues in the same currency than the expenses) whenever possible. When natural coverage is not deemed reasonably possible (for example for long term commitments), the Company manages its material non-functional currency transaction exposure on a case-by-case basis, either by entering into spot foreign currency transactions, foreign exchange forward, swap or option contracts. The Group's exposure to currency risk is related to its operating expenses expressed in Euros and to Treasury Notes denominated in Euros. In 2018 about 12.85% ( 2017 : 16.49% and 2016 : 17.40% ) of the Group's total operating expenses were incurred in Euros. Revenue and borrowings are expressed in USD only, except for instruments issued under the Treasury Notes Program (Note 15).
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
 
December 31, 2016
 
 
EUR

 
USD

 
EUR

 
USD

 
EUR

 
USD

Trade payables
 
(6,311
)
 
(9,955
)
 
(7,891
)
 
(11,383
)
 
(8,725
)
 
(9,383
)
Operating expenses
 
(89,761
)
 
(608,754
)
 
(89,289
)
 
(452,113
)
 
(92,608
)
 
(440,830
)
Treasury Notes
 
(60,342
)
 
—

 
(50,010
)
 
—

 
—

 
—

For the average and closing rates applied during the year, we refer to Note 27.
In the past, Euronav had entered into an agreement with a third party financial advisor with the aim to manage the risk from adverse movements in EUR/USD exchange rates. The program used a financial trading strategy called Currency Overlay Management Strategy which managed the equivalent of EUR 40.0 million exposures on a yearly basis. The currency overlay

F-75
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


manager conducted foreign-exchange hedging by selectively placing and removing hedges to achieve the objectives set by us. On July 29, 2016, Euronav terminated this agreement. As such there is no impact of this program on the Group's consolidated statement of profit or loss for the year ending December 31, 2018 ( 2017 : no impact and 2016 : loss of USD 0.9 million ).
Sensitivity analysis
A 10 percent strengthening of the EUR against the USD at December 31, would have increased (decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
(in thousands of USD)
 
2018
 
2017
 
2016
Equity
 
491

 
211

 
532

Profit or loss
 
(7,888
)
 
(7,113
)
 
(10,025
)
A 10 percent weakening of the EUR against the USD at December 31, would have had the equal but opposite effect to the amounts shown above, on the basis that all the other variables remain constant.
Cash flow hedges
At December 31, 2018, the Group held the following instruments to hedge exposures to changes in interest rates.
 
 
 
 
 
 
 
 
 
Maturity
(in thousands of USD)
 
1-6 months
 
6-12 months
 
More than 1 year
 
 
 
 
 
 
 
Interest rate risk
 
 
 
 
 
 
Interest rate swaps
 
 
 
 
 
 
Net exposure
 
(23,895
)
 
(23,921
)
 
(199,565
)
Average fixed interest rate
 
1.95
%
 
1.95
%
 
1.95
%
 
 
 
 
 
 
 

At December 31, 2018, the Group has 2 forward interest cap options with a notional amount of USD 200.0 million starting on October 1, 2020.

At December 31, 2017, the Group held no instruments to hedge exposures to changes in interest rates.

F-76
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


The amounts at the reporting date relating to items designated as hedged items were as follows.
 
 
 
 
 
(in thousands of USD)
 
Change in value used for calculating hedge ineffectiveness
 
Cash flow hedge reserve
 
 
 
 
 
Interest rate risk
 
 
 
 
Variable-rate instruments
 
2,191

 
(2,191
)
Cap option
 
507

 
(507
)
 
 
 
 
 

The amounts relating to items designated as hedging instruments and hedge ineffectiveness were as follows.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
 
During the period 2018
(in thousands of USD)
 
Nominal amount
 
Carrying amount - Assets
 
Carrying amount - Liabilities
 
Line item in the statement of financial position where the hedging instrument is included
 
Changes in the value of the hedging instrument recognized in OCI
 
Hedge ineffectiveness recognized in profit or loss
 
Line item in profit or loss that includes hedge ineffectiveness
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate risk
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swaps
 
707,871

 
7,205

 
1,049

 
Receivables, other payables
 
(2,191
)
 
(2,783
)
 
Finance expenses
Forward cap options
 
200,000

 
725

 
—

 
Receivables
 
(507
)
 
(7
)
 
Finance expenses
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

D uring 2018, no amounts were reclassified from hedging reserve to profit or loss.

The following table provides a reconciliation by risk category of components of equity and analysis of OCI items, net of tax, resulting from cash flow hedge accounting.
 
 
 
 
(in thousands of USD)
 
Hedging reserve
 
 
 
 
 
Balance at January 1, 2018
 
—

 
Cash flow hedges
 
 
 
Change in fair value interest rate risk
 
(2,698
)
 
Balance at December 31, 2018
 
(2,698
)
 
 
 
 
 







F-77
Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


Master netting or similar agreements
The Group enters into derivative transactions under International Swaps and Derivatives Association (ISDA) master netting agreements. In general, under such agreements the amounts owned by each counterparty on a single day in respect of all transactions outstanding in the same currency are aggregated into a single net amount that is payable by one party to the other.
Capital management
Euronav is continuously optimizing its capital structure (mix between debt and equity). The main objective is to maximize shareholder value while keeping the desired financial flexibility to execute the strategic projects. Some of the Group's other key drivers when making capital structure decisions are pay-out restrictions and the maintenance of the strong financial health of the Group. Besides the statutory minimum equity funding requirements that apply to the Group's subsidiaries in the various countries, the Group is also subject to covenants in relation to some of its senior secured credit facilities:
•
an amount of current assets that, on a consolidated basis, exceeds current liabilities. Current assets may include undrawn amounts of any committed revolving credit facilities and credit lines having a maturity of more than one year;
•
an aggregate amount of cash, cash equivalents and available aggregate undrawn amounts of any committed loan of at least USD 50.0 million or 5% of the Group's total indebtedness (excluding guarantees), depending on the applicable loan facility, whichever is greater;
•
an amount of cash of at least USD 30.0 million ; and
•
a ratio of Stockholders' Equity to Total Assets of at least 30%
Further, the Group's loan facilities generally include an asset protection clause whereby the fair market value of collateral vessels should be at least between 125% and 145% of the aggregate principal amount outstanding under the respective loan.
The credit facilities discussed above also contain restrictions and undertakings which may limit the Group and the Group's subsidiaries' ability to, among other things:
•
effect changes in management of the Group's vessels;
•
transfer or sell or otherwise dispose of all or a substantial portion of the Group's assets;
•
declare and pay dividends (with respect to each of the Group's joint ventures, other than Seven Seas Shipping Limited, no dividend may be distributed before its loan agreement, as applicable, is repaid in full); and
•
incur additional indebtedness.
A violation of any of these financial covenants or operating restrictions contained in the credit facilities may constitute an event of default under these credit facilities, which, unless cured within the grace period set forth under the applicable credit facility, if applicable, or waived or modified by the Group's lenders, provides them with the right to, among other things, require the Group to post additional collateral, enhance equity and liquidity, increase interest payments, pay down indebtedness to a level where the Group is in compliance with loan covenants, sell vessels in the fleet, reclassify indebtedness as current liabilities and accelerate indebtedness and foreclose liens on the vessels and the other assets securing the credit facilities, which would impair the Group's ability to continue to conduct business.

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Table of contents EURONAV NV
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 18 - Financial instruments - Fair values and risk management (Continued)


Furthermore, certain of our credit facilities contain a cross-default provision that may be triggered by a default under one of our other credit facilities. A cross-default provision means that a default on one loan would result in a default on certain other loans. Because of the presence of cross-default provisions in certain of our credit facilities, the refusal of any one lender under our credit facilities to grant or extend a waiver could result in certain of our indebtedness being accelerated, even if our other lenders under our credit facilities have waived covenant defaults under the respective credit facilities. If our secured indebtedness is accelerated in full or in part, it would be very difficult in the current financing environment for us to refinance our debt or obtain additional financing and we could lose our vessels and other assets securing our credit facilities if our lenders foreclose their liens, which would adversely affect our ability to conduct our business.
As of December 31, 2018 , December 31, 2017 and December 31, 2016 , the Group was in compliance with all of the covenants contained in the debt agreements. With respect to the quantitative covenants as of December 31, 2018 , as described above:
1.
current assets on a consolidated basis (including available credit lines of USD 498.9 million ) exceeded current liabilities by USD 741.1 million
2.
aggregated cash was USD 672.0 million
3.
cash was USD 173.1 million
4.
ratio of Stockholders' Equity to Total Assets was 54.8%
In the course of 2017, the Company updated its dividend policy which is still applied in 2018.

The Board has adopted the following current dividend payment policy: the Company intends to pay a minimum fixed dividend of at least USD 0.12 in total per share per year provided (a) the Company has in the view of management and the board, sufficient balance sheet strength and liquidity combined (b) with sufficient earnings visibility from fixed income contracts. In addition, if the results per share are positive and exceed the amount of the fixed dividend, that additional income* will be allocated to either: additional cash dividends, share buy-back, accelerated amortization of debt or the acquisition of vessels which we consider at that time to be accretive to shareholders’ value.

*Treatment of capital losses and capital gains
As part of its distribution policy Euronav will continue to include exceptional capital losses when assessing additional dividends but also continue to exclude exceptional capital gains when assessing additional dividend payments.
*Treatment of Deferred Tax Assets (DTA) and Deferred Tax Liabilities (DTL)
As part of its distribution policy Euronav will not include non-cash items affecting the results such as DTA or DTL.
As part of its capital allocation strategy, Euronav has the option of buying its own shares back should the Board and Management believe that there is a substantial value disconnect between the share price and the real value of the Company. This return of capital is in addition to the fixed dividend of USD 0.12 per share paid each year. On December 31, 2018, the Company had purchased 545,486 of its own shares on Euronext Brussels. Following these transactions, the Company owned 1,237,901 own shares ( 0.56% of the total outstanding shares) at year-end.  
The Company started buying back shares on December 19, 2018 and has announced several additional share buybacks since January 2, 2019. Euronav may continue to buy back its own shares opportunistically. The extent to which it does and the timing of these purchases, will depend upon a variety of factors, including market conditions, regulatory requirements and other corporate considerations.

F-79
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 19 - Operating leases (Continued)

Note 19 - Operating leases
Leases as lessee
Future minimum lease payments
The Group leases in some of its vessels under time charter and bare boat agreements (operating leases). The future minimum lease payments with an average duration of 3 years under non-cancellable leases are as follows:
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
Less than 1 year
 
(32,120
)
 
(32,120
)
Between 1 and 5 years
 
(63,404
)
 
(95,524
)
More than 5 years
 
—

 
—

 
 
 
 
 
Total future lease payments
 
(95,524
)
 
(127,644
)
Options to extend the charter period, if any, have not been taken into account when calculating the future minimum lease payments.
The Group entered into five year leaseback agreement for four VLCCs on December 16, 2016. The sale of the vessels occurred on December 22, 2016 and the charter period has a duration of 5 years , therefore ending on December 22, 2021. Under these leaseback agreements there is a seller's credit of USD 4.5 million of the sale price that becomes immediately due and payable by the owners upon sale of the vessel during the charter period and shall be paid out of the sales proceeds. It also becomes due to the extent of 50% of the (positive) difference between the fair market value of the vessels at the end of the leaseback agreements and USD 17.5 million (for the oldest VLCC) or USD 19.5 million (for the other vessels). Furthermore, the Group provides a residual guarantee to the owners in the aggregate amount of up to USD 20.0 million in total at the time of redelivery of the four vessels. The parties also agreed a profit split, if the vessel is sold at charter expiry they shall share the net proceeds of the sale, 75% for owners and 25% for charterers, between USD 26.5 million and USD 32.5 million (for the oldest VLCC) or between USD 28.5 million and USD 34.5 million (for the other vessels).
The Group analyzed the classification of the leaseback agreements based on the primary lease classification criteria and the supplemental indicators in IAS 17, and determined that these agreements qualified as operating leases.
The future minimum lease payments under non-cancellable operating lease rentals for office space and company cars with an average duration of 3 years are payable as follows:
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
Less than 1 year
 
(4,213
)
 
(2,287
)
Between 1 and 5 years
 
(15,757
)
 
(7,224
)
More than 5 years
 
(4,810
)
 
(1,227
)
 
 
 
 
 
Total non-cancellable operating lease rentals
 
(24,780
)
 
(10,738
)
Due to the merger with Gener8 Maritime Inc., the lease rentals for office space as at December 31, 2018 include the leased office in New York (see Note 20).
Amounts recognized in profit and loss
(in thousands of USD)
 
2018
 
2017
 
2016
Bareboat charter
 
(31,120
)
 
(31,111
)
 
(792
)
Time charter
 
6

 
(62
)
 
(16,921
)
Office rental
 
(3,484
)
 
(2,136
)
 
(2,219
)
 
 
 
 
 
 
 
Total recognized in profit and loss
 
(34,598
)
 
(33,309
)
 
(19,932
)

F-80
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 19 - Operating leases (Continued)

Leases as lessor
Future minimum lease receivables
The Group leases out some of its vessels under time charter agreements (operating leases). The future minimum lease receivables with an average duration of 4 years under non-cancellable leases are as follows:
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
Less than 1 year
 
151,039

 
103,007

Between 1 and 5 years
 
394,721

 
147,967

More than 5 years
 
113,721

 
31,793

 
 
 
 
 
Total future lease receivables
 
659,482

 
282,767

The amounts shown in the table above include the Group's share of operating leases of joint ventures.
On some of the abovementioned vessels the Group has granted the option to extend the charter period. These option periods have not been taken into account when calculating the future minimum lease receivables.
At December 31, 2018 , Euronav and its subsidiaries, without joint ventures, have future minimum lease receivables less than one year of USD 53.1 million ( 2017 : USD 54.4 million ), future minimum lease receivables between 1 and 5 years of USD 133.1 million ( 2017 : USD 0 million ) and future minimum lease receivables of more than 5 years of USD 113.7 million (2017: USD 0.0 million ).
Following the rationalization of the TI Pool structure in 2017 (see Note 23), Tankers International Ltd. ("TIL") became the disponent owner of all of the vessels in the TI Pool as all the vessels are now time chartered with a duration of 1 year to TIL at a floating rate equivalent to the average spot rate achieved by the pool times the pool points assigned to each vessel. At December 31, 2018, 41 of our VLCC vessels were employed in the TI Pool under such floating time charters. Given the variable nature of the time charter rates, there are no minimum lease receivables for these contracts and therefore, these floating time charters are not included in the table above.

The future minimum lease receivables under non-cancellable operating lease rentals for office space with an average duration of 5 years are receivable as follows:
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
Less than 1 year
 
1,741

 
726

Between 1 and 5 years
 
8,918

 
2,903

More than 5 years
 
3,216

 
233

 
 
 
 
 
Total future lease receivables
 
13,876

 
3,862

The above operating lease rentals receivable relate entirely to the Group's leased offices for Euronav UK and Gener8 Maritime Subsidiary II Inc. Euronav UK has sublet part of the office space to four different subtenants, starting in 2014 and Gener8 Maritime Subsidiary II Inc. has sublet their entire office starting in December 2018.
Amounts recognized in profit and loss
(in thousands of USD)
 
2018
 
2017
 
2016
Bareboat charter
 
—

 
—

 
—

Time charter
 
75,238

 
118,705

 
140,227

Office rental
 
846

 
840

 
878

 
 
 
 
 
 
 
Total recognized in profit and loss
 
76,084

 
119,545

 
141,105


F-81
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 20 - Provisions and contingencies
(in thousands of USD)
 
Onerous contract

Total

 
 
 
 
Balance at January 1, 2018
 
—

—

 
 
 
 
Assumed in a business combination (Note 24)
 
5,303

5,303

Provisions used during the year
 
(38
)
(38
)
Balance at December 31, 2018
 
5,265

5,265

 
 
 
 
Non-current
 
4,288

4,288

Current
 
977

977

Total
 
5,265

5,265

 
 
 
 

In 2004, Gener8 Maritime Subsidiary II Inc. entered into a non-cancellable lease for office space. This lease started on December 1, 2004 and would have expired on September 30, 2020. On July 14, 2015 this lease was extended for an additional 5 years until September 30, 2025. The facilities have been sub-let for the remaining lease term, but changes in market conditions have meant that the rental income is lower than the rental expense. The obligation for the future payments, net of expected rental income, has been provided for.

The Group is involved in a number of disputes in connection with its day-to-day activities, both as claimant and defendant. Such disputes and the associated expenses of legal representation are covered by insurance. Moreover, they are not of a magnitude that lies outside the ordinary, and their scope is not of such a nature that they could jeopardize the Group's financial position.

F-82
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 21 - Related parties
Identity of related parties
The Group has a related party relationship with its subsidiaries (see Note 23) and equity-accounted investees (see Note 25) and with its directors and executive officers (see Note 22).
Transactions with key management personnel
The total amount of the remuneration paid to all non-executive directors for their services as members of the board and committees (if applicable) is as follows:
(in thousands of EUR)
 
2018
 
2017
 
2016
Total remuneration
 
1,035

 
1,015

 
1,145

The Remuneration Committee annually reviews the remuneration of the members of the Executive Committee. The remuneration (excluding the CEO) consists of a fixed and a variable component and can be summarized as follows:
(in thousands of EUR)
 
2018
 
2017
 
2016
Total fixed remuneration
 
1,231

 
1,176

 
1,175

of which
 
 
 
 
 
 
Cost of pension
 
39

 
35

 
35

Other benefits
 
75

 
58

 
57

 
 
 
 
 
 
 
Total variable remuneration
 
1,153

 
1,331

 
1,042

of which
 
 
 
 
 
 
Share-based payments
 
299

 
597

 
351

All amounts mentioned refer to the Executive Committee in its official composition throughout 2018 .
The remuneration of the CEO can be summarized as follows:
(in thousands of GBP)
 
2018
 
2017
 
2016
Total fixed remuneration
 
537

 
407

 
405

of which
 
 
 
 
 
 
Cost of pension
 
—

 
—

 
—

Other benefits
 
40

 
13

 
11

 
 
 
 
 
 
 
Total variable remuneration
 
1,866

 
528

 
437

of which
 
 
 
 
 
 
Share-based payments
 
118

 
233

 
171

Within the framework of a stock option plan, the board of directors has granted on December 16, 2013 options on its 1,750,000 treasury shares to the members of the Executive Committee for no consideration but with conditions (see Note 22). 525,000 options were granted to the CEO and 1,225,000 options were granted to the other members of the Executive Committee. The exercise price of the options is EUR 5.7705 . All of the beneficiaries have accepted the options granted to them. In 2016 the Company bought back 692,415 shares and delivered 116,667 shares upon the exercise of share options. In 2018 the Company bought back 545,486 shares and delivered 350,000 shares upon the exercise of share options. In addition, the board of directors has granted on February 12, 2015 236,590 options and 65,433 restricted stock units within the framework of a long term incentive plan. Vested stock options may be exercised until 13 years after the grant date. As of December 31, 2018, all the stock options remained outstanding but all RSUs were exercised in 2018. On February 2, 2016, the board of directors granted 54,616 phantom stock units within the framework of an additional long term incentive plan. Each unit gives a conditional right to receive an amount of cash equal to the fair market value of one share of the company on the settlement date. The phantom stock units will mature one-third each year on the second, third and fourth anniversary of the award. One-third was vested on the second anniversary. On February 9, 2017 the board of directors granted 66,449 phantom stock units within the framework

F-83
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 21 - Related parties (Continued)

of an additional long term incentive plan. Each unit gives a conditional right to receive an amount of cash equal to the fair market value of one share of the company on the settlement date. The phantom stock units will mature one-third each year on the second, third and fourth anniversary of the award. On February 16, 2018 the board of directors granted 154,432 phantom stock units within the framework of an additional long term incentive plan. Each unit gives a conditional right to receive an amount of cash equal to the fair market value of one share of the company on the settlement date. The phantom stock units will mature one-third each year on the second, third and fourth anniversary of the award (see Note 22).

Relationship with CMB
In 2004, Euronav split from Compagnie Maritime Belge (CMB). CMB renders some administrative and general services to Euronav. In 2018 CMB invoiced a total amount of USD 1,151 ( 2017 : USD 34,928 and 2016 : USD 17,731 ).
Properties
The Group leases office space in Belgium from Reslea N.V., an entity jointly controlled by CMB and Exmar. Under this lease, the Group paid an annual rent of USD 185,326 in 2018 ( 2017 : USD 179,079 and 2016 : USD 175,572 ). This lease expires on August 31, 2021.
The Company subleases office space in its London, United Kingdom office, through its subsidiary Euronav (UK) Agencies Limited, pursuant to a sublease agreement, dated 25 September 2014, with Tankers (UK) Agencies Limited, a 50-50 joint venture with International Seaways. Under this sublease, the Company received in 2018 a rent of USD 227,089 ( 2017 : USD 218,894 and 2016 : USD 232,882 ). This sublease expires on April 27, 2023.
Registration Rights
On January 28, 2015 the Group entered into a registration rights agreement with companies affiliated with our former Vice Chairman, Marc Saverys, or the Saverco Shareholders.

Pursuant to the registration rights agreement, each of the Saverco Shareholders as a group were able to piggyback on the others’ demand registration. The Saverco Shareholders were only treated as having made their request if the registration statement for such shareholder group’s shares was declared effective. Once Euronav is eligible to do so, commencing 12 calendar months after the Ordinary Shares had been registered under the Exchange Act, the Saverco Shareholders could require Euronav to file shelf registration statements permitting sales by them of ordinary shares into the market from time to time over an extended period. The Saverco Shareholders could also exercise piggyback registration rights to participate in certain registrations of ordinary shares by Euronav. All expenses relating to the registrations, including the participation of Euronav's executive management team in two marketed roadshows and a reasonable number of marketing calls in connection with one-day or overnight transactions, can be borne by Euronav. The registration rights agreement also contained provisions relating to indemnification and contribution. There were no specified financial remedies for non-compliance with the registration rights agreement. At December 31, 2018 , no rights were exercised by any of the parties under the registration rights agreement.
Transactions with subsidiaries and joint ventures
The Group has supplied funds in the form of shareholder's advances to some of its joint ventures at pre-agreed conditions which are always similar for the other party involved in the joint venture in question (see below and Note 25).
On 20 May, 2016, the Group announced that it had agreed with Bretta Tanker Holdings Inc. ("Bretta") to terminate its Suezmax joint ventures and to enter into a share swap and claims transfer agreement. The joint ventures covered four Suezmax vessels: the Captain Michael (2012 - 157,648 dwt), the Maria (2012 - 157,523 dwt), the Eugenie (2010 - 157,672 dwt) and the Devon (2011 - 157,642 dwt). Euronav assumed full ownership of the two companies owning the two youngest vessels, the Captain Michael and the Maria , and Bretta assumed full ownership of the two companies owning the Eugenie and the Devon (see Note 24).
Balances and transactions between the Group and its subsidiaries have been eliminated on consolidation and are not disclosed in this note. Details of outstanding balances and transactions between the Group and its joint ventures are disclosed below:

F-84
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 21 - Related parties (Continued)

As of end for the year ended December 31, 2017
 
 
 
 
 
 
(in thousands of USD)
 
Trade receivables

 
Trade payables

 
Shareholders Loan

 
Turnover

 
Dividend Income

TI Africa Ltd
 
30

 
50

 
100,115

 
372

 
—

TI Asia Ltd
 
130

 
—

 
62,647

 
372

 
—

Kingswood Co. Ltd
 
—

 
—

 
—

 
—

 
1,250

Tankers Agencies (UK) Ltd
 
134

 
137

 
—

 
—

 
—

Total
 
294

 
187

 
162,762

 
744

 
1,250

 
 
 
 
 
 
 
 
 
 
 
As of end for the year ended December 31, 2018
 
 
 
 
 
 
(in thousands of USD)
 
Trade receivables

 
Trade payables

 
Shareholders Loan

 
Turnover

 
Dividend Income

 
 
 
 
 
 
 
 
 
 
 
TI Africa Ltd
 
66

 
25

 
28,665

 
381

 
—

TI Asia Ltd
 
79

 
—

 
—

 
381

 
—

Tankers Agencies (UK) Ltd
 
—

 
70

 
—

 
—

 
—

Tankers International LLC
 
46

 
—

 
—

 
—

 
—

Total
 
191

 
95

 
28,665

 
762

 
—

Guarantees
The Group provided guarantees to financial institutions that provided credit facilities to joint ventures of the Group. As of December 31, 2018 , the total amount outstanding under these credit facilities was USD 186.1 million, of which the Group guaranteed 93.0 million. As of December 31, 2017 , there were no outstandings under JV loan agreements and there were no guarantees (see Note 25).

F-85
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 22 - Share-based payment arrangements
Description of share-based payment arrangements:
At December 31, 2018 , the Group had the following share-based payment arrangements:
Share option programs (Equity-settled)
On December 16, 2013, the Group established a share option program that entitles key management personnel to purchase existing shares in the Company. Under the program, holders of vested options are entitled to purchase shares at the market price of the shares at the grant date. Currently this program is limited to key management personnel.
The Group intends to use its treasury shares to settle its obligations under this program. The key terms and conditions related to the grants under these programs are as follows:
Grant date/employees entitled
 
Number of instruments
 
Vesting Conditions
 
Contractual life of Options
Options granted to key management personnel
 
 
 
 
 
 
December 16, 2013 ("Tranche 1")
 
583,000
 
Share price to be at least EUR 7.5
 
5 years
December 16, 2013 ("Tranche 2")
 
583,000
 
Share price to be at least EUR 8.66
 
5 years
December 16, 2013 ("Tranche 3")
 
583,000
 
Share price to be at least EUR 11.54 and US listing
 
5 years
Total Share options
 
1,750,000
 
 
 
 
In addition, 50% of the options can only be exercised at the earliest if the shares of the Group are admitted for listing in a recognized US listing exchange platform (the "listing event"). The other 50% can only be exercised 1 year after the listing event. If the Group's shares had not been listed on a US listing exchange, then only 2/3 of the shares would be exercisable and would had to meet the first 2 vesting conditions listed above.
Long term incentive plan 2015 (Cash-settled)
The Group's Board of Directors implemented in 2015 a long term incentive plan ('LTIP') for key management personnel. Under the terms of this LTIP, the beneficiaries will obtain 40% of their respective LTIP in the form of Euronav stock options, with vesting over three years at anniversary date and 60% in the form of restricted stock units ('RSU's'), which will be paid out in cash with cliff vesting on the third anniversary. In total 236,590 options and 65,433 RSU's were granted on February 12, 2015. Vested stock options may be exercised until 13 years after the grant date. In the course of 2018, this long term incentive plan has been converted into a cash-settled plan. As of December 31, 2018, all the stock options remained outstanding but all RSU's were exercised.
Long term incentive plan 2016 (Cash-settled)
The Group's Board of Directors implemented in 2016 an additional long term incentive plan for key management personnel. Under the terms of this LTIP, the beneficiaries will obtain their respective LTIP in cash, based on the volume weighted average price of the shares on Euronext Brussels over the 3 last business days of the relevant vesting period. The phantom stock units will mature one-third each year on the second, third and fourth anniversary of the award. In total a number of 54,616 phantom stocks were granted on February 2, 2016.
Long term incentive plan 2017 (Cash-settled)
The Group's Board of Directors implemented in 2017 an additional long term incentive plan for key management personnel. Under the terms of this LTIP, the beneficiaries will obtain their respective LTIP in cash, based on the volume weighted average price of the shares on Euronext Brussels over the 3 last business days of the relevant vesting period. The phantom stock units will mature one-third each year on the second, third and fourth anniversary of the award. In total a number of 66,449 phantom stock units were granted on February 9, 2017.

Long term incentive plan 2018 (Cash-settled)
The Group's Board of Directors implemented in 2018 an additional long term incentive plan for key management personnel. Under the terms of this LTIP, the beneficiaries will obtain their respective LTIP in cash, based on the volume weighted average price of the shares on Euronext Brussels over the 3 last business days of the relevant vesting period. The phantom stock units

F-86
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 22 - Share-based payment arrangements (Continued)

will mature one-third each year on the second, third and fourth anniversary of the award. In total a number of 154,432 phantom stock units were granted on February 16, 2018.


Measurement of Fair Value

The fair value of the employee share options under the 2013 program and the 2015 LTIP has been measured using the Black-Scholes formula. Service and non-market performance conditions attached to the transactions were not taken into account in measuring fair value.
The inputs used in measurement of the fair values at grant date for the equity-settled share option programs were as follows:
 
 
Share option program 2013
 
LTIP 2015
(figures in EUR)
 
Tranche 1
 
Tranche 2
 
Tranche 3
 
Tranche 1
 
Tranche 2
 
Tranche 3
Fair value at grant date
 
2.270

 
2.260

 
2.120

 
1.853

 
1.853

 
1.853

Share price at grant date
 
6.070

 
6.070

 
6.070

 
10.050

 
10.050

 
10.050

Exercise price
 
5.770

 
5.770

 
5.770

 
10.0475

 
10.0475

 
10.0475

Expected volatility (weighted average)
 
40
%
 
40
%
 
40
%
 
39.63
%
 
39.63
%
 
39.63
%
Expected life (Days) (weighted average)
 
303

 
467

 
730

 
365

 
730

 
1,095

Expected dividends
 
—

 
—

 
—

 
8
%
 
8
%
 
8
%
Risk-free interest rate
 
1
%
 
1
%
 
1
%
 
0.66
%
 
0.66
%
 
0.66
%
Expected volatility has been based on an evaluation of the historical volatility of the Company's share price, particularly over the historical periods commensurate with the expected term. The expected term of the instruments has been based on historical experience and general option holder behavior using a Monte Carlo simulation.
The fair value of the RSUs under the 2015 LTIP was measured with reference to the Euronav share price at the grant date. All the RSUs under the LTIP 2015 and the remaining options under the sahre option program were exercised in 2018.
The liability in respect of its obligations under the LTIP 2016, LTIP 2017 and LTIP 2018 is measured based on the Company's share price at the reporting date and taking into account the extent to which the services have been rendered to date. One-third of the phantom stocks granted on February 2, 2016 was vested on the second anniversary, 36,411 phantom stocks remained outstanding as of December 31, 2018. All of the phantom stocks granted on February 9, 2017 and February 16, 2018 respectively, remained outstanding as of December 31, 2018 . The Company's share price was EUR 10.613 at the grant date of the LTIP 2016, EUR 7.268 at the grant date of the LTIP 2017 and EUR 7.237 at the grant date of the LTIP 2018, and was EUR 6.22 as at December 31, 2018 .
Expenses recognized in profit or loss
For details on related employee benefits expenses see Note 5 and Note 16. The expenses related to the LTIP 2016, LTIP 2017 and LTIP 2018 (USD 0.5 million ) are included in the Provision for employee benefits.
Reconciliation of outstanding share options
The number and weighted-average exercise prices of options under the 2013 share option program and the 2015 LTIP are as follows:

F-87
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 22 - Share-based payment arrangements (Continued)

(figures in EUR)
 
Number of options 2018
 
Weighted average exercise price 2018
 
Number of options 2017
 
Weighted average exercise price 2017
Outstanding at January 1
 
586,590

 
7.495

 
586,590

 
7.495

Forfeited during the year
 
0

 
0

 
0

 
0

Exercised during the year
 
(350,000
)
 
7.335

 
0

 
0

Granted during the year
 
0

 
0

 
0

 
0

Outstanding at December 31
 
236,590

 
7.732

 
586,590

 
7.495

Vested at December 31
 
236,590

 
0

 
507,726

 
0

In 2018 the Company bought back 545,486 shares and delivered 350,000 shares upon the exercise of share options under the 2013 program. In 2017 Euronav did not buy back or dispose of any own shares.
The weighted-average share price at the date of exercise for the share options exercised in 2018 was EUR 7.335 .

F-88
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 23 - Group entities
 
 
Country of incorporation
 
Consolidation method
 
Ownership interest
 
 
 
 
 
 
December 31, 2018

 
December 31, 2017

 
December 31, 2016

Parent
 
 
 
 
 
 
 
 
 
 
Euronav NV
 
Belgium
 
full
 
100.00
%
 
100.00
%
 
100.00
%
 
 
 
 
 
 
 
 
 
 
 
Subsidiaries
 
 
 
 
 
 
 
 
 
 
Euronav Tankers NV
 
Belgium
 
full
 
100.00
%
 
100.00
%
 
100.00
%
Euronav Shipping NV
 
Belgium
 
full
 
100.00
%
 
100.00
%
 
100.00
%
Euronav (UK) Agencies Limited
 
UK
 
full
 
100.00
%
 
100.00
%
 
100.00
%
Euronav Luxembourg SA
 
Luxembourg
 
full
 
100.00
%
 
100.00
%
 
100.00
%
Euronav sas
 
France
 
full
 
100.00
%
 
100.00
%
 
100.00
%
Euronav Ship Management sas
 
France
 
full
 
100.00
%
 
100.00
%
 
100.00
%
Euronav Ship Management Antwerp (branch office)
 
 
 
 
 
 
 
 
 
 
Euronav Ship Management Ltd
 
Liberia
 
full
 
100.00
%
 
100.00
%
 
100.00
%
Euronav Ship Management Hellas (branch office)
 
 
 
 
 
 
 
 
 
 
Euronav Hong Kong
 
Hong Kong
 
full
 
100.00
%
 
100.00
%
 
100.00
%
Euro-Ocean Ship Management (Cyprus) Ltd
 
Cyprus
 
full
 
100.00
%
 
100.00
%
 
100.00
%
Euronav Singapore
 
Singapore
 
full
 
100.00
%
 
100.00
%
 
100.00
%
Fiorano Shipholding Ltd
 
Hong Kong
 
full
 
NA

 
100.00
%
 
100.00
%
Larvotto Shipholding Ltd
 
Hong Kong
 
full
 
NA

 
100.00
%
 
100.00
%
Euronav MI II Inc
 
Marshall Islands
 
full
 
100.00
%
 
100.00
%
 
NA

Gener8 Maritime Subsidiary II Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Maritime Subsidiary New IV Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Maritime Management LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Maritime Subsidiary V Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Maritime Subsidiary VIII Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Maritime Subsidiary Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Zeus LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Atlas LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Hercules LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Ulysses LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Posseidon LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Victory Ltd.
 
Bermuda
 
full
 
100.00
%
 
NA

 
NA

Vision Ltd.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Spartiate LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Maniate LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR St Nikolas LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR George T LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Kara G LLC
 
Liberia
 
full
 
100.00
%
 
NA

 
NA

GMR Harriet G LLC
 
Liberia
 
full
 
100.00
%
 
NA

 
NA

GMR Orion LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Argus LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Spyridon LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Horn LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Phoenix LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

GMR Strength LLC
 
Liberia
 
full
 
100.00
%
 
NA

 
NA

GMR Daphne LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA


F-89
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 23 - Group entities (Continued)

GMR Defiance LLC
 
Liberia
 
full
 
100.00
%
 
NA

 
NA

GMR Elektra LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Companion Ltd.
 
Bermuda
 
full
 
100.00
%
 
NA

 
NA

Compatriot Ltd.
 
Bermuda
 
full
 
100.00
%
 
NA

 
NA

Consul Ltd.
 
Bermuda
 
full
 
100.00
%
 
NA

 
NA

GMR Agamemnon LLC
 
Liberia
 
full
 
100.00
%
 
NA

 
NA

Gener8 Neptune LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Athena LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Apollo LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Ares LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Hera LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Constantine LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Oceanus LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Nestor LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Nautilus LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Macedon LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Noble LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Ethos LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Perseus LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Theseus LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Hector LLC
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Strength Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Supreme Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Andriotis Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Militiades Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Success Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Chiotis Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Tankers 1 Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Tankers 2 Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Tankers 3 Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Tankers 4 Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Tankers 5 Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Tankers 6 Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Tankers 7 Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

Gener8 Tankers 8 Inc.
 
Marshall Islands
 
full
 
100.00
%
 
NA

 
NA

 
 
 
 
 
 
 
 
 
 
 
Joint ventures
 
 
 
 
 
 
 
 
 
 
Kingswood Co. Ltd
 
Marshall Islands
 
equity
 
50.00
%
 
50.00
%
 
50.00
%
TI Africa Ltd
 
Hong Kong
 
equity
 
50.00
%
 
50.00
%
 
50.00
%
TI Asia Ltd
 
Hong Kong
 
equity
 
50.00
%
 
50.00
%
 
50.00
%
Tankers Agencies (UK) Ltd
 
UK
 
equity
 
50.00
%
 
50.00
%
 
NA

Tankers International LLC
 
Marshall Islands
 
equity
 
50.00
%
 
50.00
%
 
NA

 
 
 
 
 
 
 
 
 
 
 
Associates
 
 
 
 
 
 
 
 
 
 
Tankers International LLC
 
Marshall Islands
 
equity
 
NA

 
NA

 
40.00
%
In 2016, the Group transferred its equity interests in Moneghetti Shipholding Ltd. and Fontvieille Shipholding Ltd. and acquired Bretta Tanker Holdings' equity interests in Fiorano Shipholding Ltd. and Larvotto Shipholding Ltd. As a result, the Group's equity interest in Fiorano Shipholding Ltd. and Larvotto Shipholding Ltd. increased from 50% to 100% (see Note 24). In 2016 one joint venture, Great Hope Enterprises Ltd was dissolved.
In the fourth quarter of 2017, Euronav NV incorporated a new subsidiary, Euronav MI Inc.


F-90
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 23 - Group entities (Continued)

In 2017, the corporate structure of Tankers International pool (“TI Pool”) was rationalized. Under the new structure, the shares of Tankers UK Agencies (“TUKA”), fully held at the time by Tankers International LLC (“TI LLC”), an entity incorporated under the laws of the Marshall Islands, were distributed to the two remaining founding members of the TI Pool (namely Euronav NV and International Seaways INC), to form a 50-50 joint venture.

Further, following the withdrawal in December 2017 of one of its members, TI LLC, which was previously an associate of the Group, became a joint venture of the Group as from that time.

Additionally, a new company, Tankers International Ltd. ("TIL"), was incorporated under the laws of the United Kingdom, and is fully owned by TUKA. TIL is the disponent owner of all of the vessels in the TI Pool as all the vessels are now time chartered to TIL at a floating rate equivalent to the average spot rate achieved by the pool times the pool points assigned to each vessel.

This new structure allowed the TI Pool to arrange for a credit line financing in order to lower the working capital requirement for the Pool participants which potentially can attract additional pool participants.

At December 31, 2018, the Group held 50% of the voting rights in TUKA but held 61% of the outstanding shares that participate in the result of the entity.

At December 31, 2018, the Group held 50% of the voting rights in TI LLC but held 59% of the outstanding shares that participate in the result of the entity.

I n 2018 two subsidiaries, Fiorano Shipholding Ltd and Larvotto Shipholding Ltd were dissolved.

Due to the merger with Gener8 Maritime Inc. on June 12, 2018 as set out in Note 24, the Group acquired new subsidiaries. Those subsidiaries were used by Gener8 mostly as SPV to own individual vessels. All of the vessels have been transferred to Euronav NV in 2018. The Group intends to liquidate a majority of those subsidiaries as soon as possible.

The Group holds 100% of the voting rights in all of its subsidiaries.

F-91
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 24 - Business combinations
On May 20, 2016, the Group announced the termination of the joint ventures with Bretta Tanker Holdings, Inc. covering four Suezmax vessels. Euronav assumed full ownership of the companies owning the two youngest vessels, the Captain Michael (2012 - 157,648 dwt) and the Maria (2012 - 157,523 dwt) on June 2, 2016.
Share swap
On June 2, 2016, the Group entered into a share swap and claims transfer agreement whereby:
•
The Group transferred its equity interests in Moneghetti Shipholding Ltd. (hereafter 'Moneghetti') and Fontvieille Shipholding Ltd. (hereafter 'Fontvieille') and acquired Bretta Tanker Holdings' equity interests in Fiorano Shipholding Ltd. (hereafter 'Fiorano') and Larvotto Shipholding Ltd. (hereafter 'Larvotto'); and
•
The Group transferred its claims arising from the shareholder loans to Moneghetti and Fontvieille and acquired Bretta Tanker Holdings' claims arising from the shareholder loans to Fiorano and Larvotto.
As a result, the Group's equity interest in both Fiorano and Larvotto increased from 50% to 100% giving the Group control of both companies. The Group no longer has an equity interest in Moneghetti and Fontvieille. Before the swap agreement, the Group accounted for the four entities using the equity method. Following the acquisition, Fiorano and Larvotto were fully consolidated as from June 2, 2016 until their liquidation in 2018.
With this transaction, the Group became the full owner of the two youngest vessels, the Captain Michael and the Maria , while Bretta has become the full owner of the Devon and the Eugenie .
Consideration transferred
(in thousands of USD)
Fair value at acquisition date
Cash
15,110

Shares in Fontvieille and Moneghetti
(21,498
)
Shareholders' loan receivable
39,973

 
 
Total consideration transferred
33,585

Contribution to revenue and profit/loss
Since their acquisition by the Group on June 2, 2016, the 2 acquired companies contributed revenue of USD 4.8 million and a profit of USD 0.1 million to the Group's consolidated results for the year ended December 31, 2016. If the acquisition had occurred on 1 January 2016, management estimates that the Group's consolidated revenue for the year ended December 31, 2016 would have been USD 698.3 million and consolidated profit for the twelve month period ended December 31, 2016 would have been USD 205.1 million . In determining these amounts, management has assumed that the fair value adjustments, that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2016.
Acquisition related costs
The Group did not incur any material acquisition-related costs for the business combination and these costs were expensed as incurred.
Step acquisition
The transaction resulted in a loss of USD 24.2 million . This loss was recognized in the consolidated statement of profit or loss for the year ended December 31, 2016 under the heading 'Loss on disposal of investments in equity accounted investees'. In accordance with IFRS 3 (Business Combinations), Euronav accounted for this transaction as a step acquisition and therefore had to re-measure at the acquisition date to fair value Euronav's non-controlling equity interest in the two joint ventures it acquired (loss of USD 13.5 million ) as well as to measure at fair value the consideration transferred, including Euronav's interest in the other two joint ventures (loss of USD 10.7 million ). At acquisition date, the fair value of the Group's non-controlling interest in the two acquired joint ventures amounted to USD (18.6) million .


EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 24 - Business combinations (Continued)


Identifiable assets acquired and liabilities assumed
The following table summarizes the recognized amounts of assets acquired and liabilities assumed at the acquisition date.
(in thousands of USD)
Fair value at acquisition date
Property, plant and equipment (Note 8)
120,280

Trade receivables
3,685

Cash and cash equivalents
8,355

Loans and borrowings (Note 15)
(61,065
)
Trade and other payables
(4,086
)
 
 
Total identifiable net assets acquired
67,169

Measurement of fair values
Assets acquired
Valuation techniques
Property, plant and equipment
The price was agreed among parties by reference to valuation reports by brokers
Goodwill
The transaction did not give rise to the recognition of any goodwill:
(in thousands of USD)
Fair value at acquisition date
Consideration transferred
33,585

Fair value of pre-existing interests in Larvotto and Fiorano
(18,633
)
Fair value of identifiable net assets
(67,169
)
Fair value of shareholders' loan liabilities versus Bretta Tanker Holdings, transferred to Euronav
52,217

 
 

Goodwill
—

Merger with Gener8 Maritime, Inc. ('Gener8')
On June 11, 2018, the Group announced that Gener8's shareholders approved the merger that day between the two companies by which Gener8 became a wholly-owned subsidiary of Euronav. Gener8 Maritime Inc. a corporation incorporated under the laws of the Republic of the Marshall Islands, was a leading U.S.-based provider of international seaborne crude oil transportation services, resulting from a transformative merger between General Maritime Corporation, a well-known tanker owner, and Navig8 Crude Tankers Inc., a company sponsored by the Navig8 Group, an independent vessel pool manager. General Maritime Corporation was founded in 1997 and has been an active owner and operator in the crude tanker sector. At the date of the merger, Gener8 owned a fleet of 29 tankers on the water, consisting of 21  VLCC vessels, 6 Suezmax vessels, and 2 Panamax vessels, with an aggregate carrying capacity of approximately 7.4 million dwt, which includes 19  “eco” VLCC newbuildings delivered from 2015 through 2017 equipped with advanced, fuel-saving technology, that were constructed at highly reputable shipyards.

Euronav believes that the merger will be accretive to the shareholders of both companies and is consistent with previously set expansion criteria of Euronav. The merger created the world’s leading independent crude tanker operator with 72 large crude tankers focused predominately on the VLCC and Suezmax asset classes and two FSO vessels in joint venture and provide tangible economies of scale via pooling arrangements, procurement opportunities, reduced overhead and enhanced access to capital.

Furthermore it will offer a well-capitalised, highly liquid company for investors to participate in the tanker market. and through commitment to the Tankers International Pool (a spot market-oriented tanker pool), provide the lowest commercial fees as a percentage of revenue in the sector upon closing of the merger.

The “Exchange Ratio“ of 0.7272 Euronav shares for each share of Gener8 resulted in the issuance 60,815,764 new ordinary shares on June 12, 2018. The Exchange Ratio implied a premium of 35% paid on Gener8 shares based on the closing share prices on 20 December 2017. The merger resulted in Euronav shareholders owning approximately 72% of the issued share capital of the combined entity and Gener8 shareholders owning approximately 28% (based on the fully diluted share capital

F-93
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 24 - Business combinations (Continued)


of Euronav and the fully diluted share capital of Gener8). Euronav as the combined entity remain listed on NYSE and Euronext under the symbol "EURN".
Subsequently, Euronav sold certain subsidiaries owning six VLCCs to International Seaways ("INSW") for a total cash payment of USD 141.0 million of which USD 120.0 million was received on June 14, 2018, the date of closing. The remaining balance of USD 20.9 million was paid in Q4. This sale was an important part of the wider merger with Gener8 Maritime transaction as it allows Euronav to retain leverage around a level of 50% and to retain substantial liquidity going forward. The six vessels are the Gener8 Miltiades (2016 – 301,038 dwt), Gener8 Chiotis (2016 – 300,973 dwt), Gener8 Success (2016 – 300,932 dwt), Gener8 Andriotis (2016 – 301,014 dwt), Gener8 Strength (2015 – 300,960 dwt) and Gener8 Supreme (2016 – 300,933 dwt). The assets and liabilities of these companies were recognized at fair value on the date of the closing of the merger. This fair value took into consideration the provisions of the sale and purchase agreement with INSW and accordingly, no result was recorded on this transaction.
Consideration transferred
(in USD)
 
Total Business combinations

 
 
 
Gener8 shares outstanding
 
83,267,426

RSU
 
362,613

Total Gener8 shares
 
83,630,039

Ratio
 
0.7272

Issued Euronav shares
 
60,815,764

Closing price Euronav on June 11, 2018
 
9.1

 
 
 
Total consideration transferred
 
553,423,452



Contribution to revenue and profit/loss
Since their acquisition by the Group on June 12, 2018, the acquired companies contributed revenue of USD 16.5 million and a loss of USD 43.7 million to the Group’s consolidated results for the year ended December 31, 2018. If the acquisition had occurred on 1 January 2018, management estimates that the Group’s consolidated revenue for the year ended December 31, 2018 would have been USD 665.5 million and consolidated loss for the twelve month period ended December 31, 2018 would have been USD (160.1) million. In determining these amounts, management has assumed that the fair value adjustments, that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2018.


Acquisition related costs
The Group incurred approximately USD 5.0 million relating to external legal fees, due to dilligence costs and advisory fees. These acquisition-related costs for the business combination were expensed as incurred and are included in 'General and administrative expenses'.


Repayment Blue mountain note
As part of the Merger Agreement and the Letter agreement between Gener8 and certain affiliates of BlueMountain Capital Management LLC, the Senior Note with a carrying value of  USD 205.7  million was prepaid on June 12, 2018. The repayment of the Senior Notes was financed in full by Euronav under its existing liquidity (cash at hands and credit facilities) (see Note 15).


Bank loans
At the time of the merger, Gener8 had three senior secured credit facilities: (i) the KEXIM Credit Agreement, (ii) the Nordea Credit Agreement and (iii) the Sinosure Credit Agreement of which the first two were assumed by Euronav in the merger and the latter was acquired by INSW when they acquired certain subsidiaries owning six VLCCs. Prior to the merger, Gener8 was not in compliance with the interest expense coverage ratio covenant for which they obtained short-term waivers from its lenders. Following the merger, the Kexim Credit Agreement was amended to align the covenants with the other senior credit facilities of the Group, resolving the non compliance. The Group, in advance negotiations to refinance the Nordea Credit Agreement, decided not to amend this senior secured credit facility and as such, given the non compliance and remaining duration of the short-term waiver, classified the entire facility as short term. On September 17, 2018, this facility was repaid in full.


F-94
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 24 - Business combinations (Continued)


Identifiable assets acquired and liabilities assumed
The following table summarizes the recognized amounts of assets acquired and liabilities assumed at the acquisition date.
(in thousands of USD)
 
Total
 
Gener8 Subsidiaries
INSW Subsidiaries
Vessels (Note 8)
 
1,704,250

 
1,270,250

434,000

Other tangible assets
 
345

 
345

—

Intangible assets
 
152

 
152

—

Receivables
 
16,750

 
9,599

7,151

Current assets
 
79,459

 
64,829

14,629

Cash and cash equivalents
 
126,288

 
126,288

—

Loans and borrowings (Note 15)
 
(1,312,446)

 
(1,001,478)

(310,968)

Provision onerous contracts (Note 20)
 
(5,303)

 
(5,303)

—

Current liabilities
 
(33,012)

 
(29,160)

(3,852)

 
 
 
 
 
 
Total identifiable net assets acquired
 
576,482

 
435,522

140,960

 
 
 
 
 
 
 
 
 
 
 
 
(in thousands of USD)
 
Fair value at acquisition date
 
 
 
Consideration transferred
 
553,423

 
 
 
Total identifiable net assets acquired
 
576,482

 
 
 
 
 
 
 
 
 
Bargain Purchase
 
23,059

 
 
 

The transaction resulted in a bargain purchase gain of USD 23.1 million as the fair value of assets acquired and liabilities assumed exceeded the total of the fair value of consideration paid. Euronav’s management has reassessed whether they had correctly identified all of the assets acquired and all of the liabilities assumed and this excess remains.

Euronav’s management believes that the bargain purchase price is a direct consequence of Gener8 limited liquidity and its shares trading under the net asset value per share prior to and at the time of the agreed ratio as well as a small uptick in the fair value of the vessels between the time of the agreed exchange ratio and the date of the merger when the valuation of the vessels was assessed.

This gain was recognized in the consolidated statement of profit or loss for 2018, under the heading ‘Gain on bargain purchase’.

As at June 12, 2018, the gross contractual amounts receivable acquired amounted to USD 98.2 million and the amounts expected not to collect amounted to USD 2.0 million which gives a net amount receivable of USD 96.2 million (see table above, sum of receivables and current assets).


F-95
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 25 - Equity-accounted investees
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
Assets
 
 
 
 
Interest in joint ventures
 
43,182

 
30,595

Interest in associates
 
—

 
—

TOTAL ASSETS
 
43,182

 
30,595

 
 
 
 
 
Liabilities
 
 
 
 
Interest in joint ventures
 
—

 
—

Interest in associates
 
—

 
—

TOTAL LIABILITIES
 
—

 
—

Associates
(in thousands of USD)
 
December 31, 2018
 
December 31, 2017
Carrying amount of interest at the beginning of the period
 
—

 
1,546

Group's share of profit (loss) for the period
 
—

 
149

Dividend in kind (shares TUKA) distributed by associate (Note 23)
 
—

 
(1,559
)
Reclassification of associate to joint venture (Note 23)
 
—

 
(136
)
Carrying amount of interest at the end of the period
 
—

 
—



F-96
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 25 - Equity-accounted investees (Continued)

Joint Ventures
The following table contains a roll forward of the balance sheet amounts with respect to the Group's joint ventures:
 
 
ASSET
 
LIABILITY
(in thousands of USD)
 
Investments in equity accounted investees
 
Shareholders loans
 
Investments in equity accounted investees
 
Shareholders loans
Gross balance
 
(38,095
)
 
317,749

 
—

 
—

Offset investment with shareholders loan
 
58,520

 
(58,520
)
 
—

 
—

Balance at January 1, 2016
 
20,425

 
259,229

 
—

 
—

 
 
 
 
 
 
 
 
 
Group's share of profit (loss) for the period
 
40,161

 
—

 
—

 
—

Group's share of other comprehensive income
 
1,224

 
—

 
—

 
—

Group's share on upstream transactions
 
4,646

 
—

 
—

 
—

Capital increase/(decrease) in joint ventures
 
(3,737
)
 
—

 
—

 
—

Dividends received from joint ventures
 
(23,478
)
 
—

 
—

 
—

Movement shareholders loans to joint ventures
 
—

 
(18,499
)
 
—

 
—

Business Combinations
 
15,981

 
(95,738
)
 
—

 
—

 
 
 
 
 
 
 
 
 
Gross balance
 
(3,298
)
 
203,512

 
—

 
—

Offset investment with shareholders loan
 
20,165

 
(20,165
)
 
—

 
—

Balance at December 31, 2016
 
16,867

 
183,348

 
—

 
—

 
 
 
 
 
 
 
 
 
Group's share of profit (loss) for the period
 
29,933

 
—

 
—

 
—

Group's share of other comprehensive income
 
483

 
—

 
—

 
—

Dividends received from joint ventures
 
(1,250
)
 
—

 
—

 
—

Dividend in kind (shares TUKA) received from associate (Note 23)
 
1,559

 
—

 
—

 
—

Reclassification of associate to joint venture (Note 23)
 
136

 
—

 
—

 
—

Movement shareholders loans to joint ventures
 
—

 
(40,750
)
 
—

 
—

 
 
 
 
 
 
 
 
 
Gross balance
 
27,565

 
162,763

 
—

 
—

Offset investment with shareholders loan
 
3,030

 
(3,030
)
 
—

 
—

Balance at December 31, 2017
 
30,595

 
159,733

 
—

 
—


F-97
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 25 - Equity-accounted investees (Continued)

 
 
ASSET
 
LIABILITY
(in thousands of USD)
 
Investments in equity accounted investees
 
Shareholders loans
 
Investments in equity accounted investees
 
Shareholders loans
Group's share of profit (loss) for the period
 
16,076

 
—

 
—

 
—

Group's share of other comprehensive income
 
(459
)
 
—

 
—

 
—

Movement shareholders loans to joint ventures
 
—

 
(134,097
)
 
—

 
—

 
 
 
 
 
 
 
 
 
Gross balance
 
43,182

 
28,666

 
—

 
—

Offset investment with shareholders loan
 
—

 
—

 
—

 
—

Balance at December 31, 2018
 
43,182

 
28,666

 
—

 
—

The Group's share on upstream transactions in 2016 related to the buy-out of the joint venture partner to obtain full control of the VLCC V.K. Eddie . On November 23, 2016, the Group purchased the VLCC V.K. Eddie from its 50% joint venture Seven Seas Shipping Ltd. In the Group's consolidated financial statements, 50% of the gain recognized on this transaction by Seven Seas Shipping Ltd. was eliminated.
The decrease in the balance of shareholders' loans to joint ventures in 2016 is primarily due to the disposal of two joint ventures and the acquisition of two other joint ventures on June 2, 2016, as set out in Note 24, resulting in the settlement or consolidation, respectively, of the Group's shareholders' loan balances versus these entities. For more details, we refer to the table summarizing the financial information of the Groups' joint ventures further below.
The decrease in the balance of shareholders’ loans to joint ventures in 2018 is primarily due to the USD 220.0 million senior secured credit facility which TI Asia Ltd. and TI Africa Ltd. entered into March 29, 2018. The shareholders loans were partially repaid by using a part of the proceeds of this new borrowing. In this context, the Company provided a guarantee for the revolving tranche of the above credit facility.

Joint venture
Segment
Description
Great Hope Enterprises Ltd
Tankers
No operating activities, liquidated in 2016
Kingswood Co. Ltd
Tankers
Holding company; parent of Seven Seas Shipping Ltd. and to be liquidated in the future
Seven Seas Shipping Ltd
Tankers
Formerly owner of 1 VLCC bought in 2016 by Euronav. Wholly owned subsidiary of Kingswood Co. Ltd.
Fiorano Shipholding Ltd
Tankers
Single ship company, owner of 1 Suezmax, acquired Bretta's equity interest in 2016 (liquidated in 2018)
Larvotto Shipholding Ltd
Tankers
Single ship company, owner of 1 Suezmax, acquired Bretta's equity interest in 2016 (liquidated in 2018)
Fontvieille Shipholding Ltd
Tankers
Single ship company, owner of 1 Suezmax, sold our equity interest to Bretta in 2016
Moneghetti Shipholding Ltd
Tankers
Single ship company, owner of 1 Suezmax, sold our equity interest to Bretta in 2016
Tankers Agencies (UK) Ltd
Tankers
Parent company of Tankers International Ltd
Tankers International LLC
Tankers
The manager of the Tankers International Pool who commercially manages the majority of the Group's VLCCs

TI Africa Ltd
FSO
Operator and owner of a single floating storage and offloading facility (FSO Africa) *
TI Asia Ltd
FSO
Operator and owner of a single floating storage and offloading facility (FSO Asia) *
* FSO Asia and FSO Africa are on a time charter contract to North Oil Company (NOC), the new operator of Al Shaheen field, until mid 2022.

F-98
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 25 - Equity-accounted investees (Continued)

The following table contains summarized financial information for all of the Group's joint ventures:
 
 
Asset
(in thousands of USD)
 
Great Hope Enterprises Ltd

 
Kingswood Co. Ltd

 
Seven Seas Shipping Ltd

 
Fiorano Shipholding Ltd

 
Fontvieille Shipholding Ltd

 
Larvotto Shipholding Ltd

 
Moneghetti Shipholding Ltd

 
TI Africa Ltd

 
TI Asia Ltd

 
Total

At December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage ownership interest
 
50
%
 
50
%
 
50
%
 
50
%
 
50
%
 
50
%
 
50
%
 
50
%
 
50
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Current assets
 
—

 
946

 
—

 
—

 
—

 
—

 
—

 
198,826

 
192,344

 
392,116

of which Vessel
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
189,821

 
182,519

 
372,340

Current Assets
 
—

 
76

 
3,221

 
—

 
—

 
—

 
—

 
38,206

 
47,889

 
89,392

of which cash and cash equivalents
 
—

 
—

 
555

 
—

 
—

 
—

 
—

 
26,928

 
36,591

 
64,074

Non-Current Liabilities
 
—

 
—

 
946

 
—

 
—

 
—

 
—

 
276,498

 
132,763

 
410,207

Of which bank loans
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Current Liabilities
 
—

 
2

 
132

 
—

 
—

 
—

 
—

 
863

 
76,899

 
77,896

Of which bank loans
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
75,343

 
75,343

Net assets (100%)
 
—

 
1,020

 
2,143

 
—

 
—

 
—

 
—

 
(40,329
)
 
30,571

 
(6,595
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group's share of net assets
 
—

 
510

 
1,072

 
—

 
—

 
—

 
—

 
(20,165
)
 
15,285

 
(3,298
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders loans to joint venture
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
137,615

 
65,897

 
203,512

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Carrying amount of interest in joint venture
 
—

 
510

 
1,072

 
—

 
—

 
—

 
—

 
—

 
15,285

 
16,867

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining shareholders loan to joint venture
 
—

 
—


—

 
—

 
—

 
—

 
—


117,451

 
65,897

 
183,348

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
—

 
—

 
13,646

 
7,182

 
6,404

 
6,901

 
7,471

 
65,188

 
65,063

 
171,855

Depreciations and amortization
 
—

 
—

 
(3,344
)
 
(2,047
)
 
(2,037
)
 
(1,929
)
 
(2,049
)
 
(18,209
)
 
(17,933
)
 
(47,548
)
Interest Expense
 
—

 
—

 
(3
)
 
(223
)
 
(377
)
 
(288
)
 
(537
)
 
(400
)
 
(4,703
)
 
(6,531
)
Income tax expense
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
(326
)
 
(106
)
 
(432
)
Profit (loss) for the period (100%)
 
(32
)
 
12

 
7,469

 
1,146

 
500

 
1,082

 
1,270

 
36,515

 
32,359

 
80,322

Other comprehensive income (100%)
 
—

 
—

 
—

 
—

 
—

 
 
 
—

 
—

 
2,448

 
2,448

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group's share of profit (loss) for the period
 
(16
)
 
6

 
3,735

 
573

 
250

 
541

 
635

 
18,257

 
16,180

 
40,161

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group's share of other comprehensive income
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
1,224

 
1,224


F-99
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 25 - Equity-accounted investees (Continued)

 
 
 
(in thousands of USD)
 
Kingswood Co. Ltd

 
Seven Seas Shipping Ltd

 
TI Africa Ltd

 
TI Asia Ltd

 
Tankers Agencies (UK) Ltd (see Note 23)

 
TI LLC (see Note 23)

 
Total

At December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage ownership interest
 
50
%
 
50
%
 
50
%
 
50
%
 
50
%

50
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Current assets
 
629

 
—

 
182,298

 
175,826

 
363


98

 
359,214

of which Vessel
 
—

 
—

 
171,612

 
164,587

 
—


—

 
336,199

Current Assets
 
—

 
993

 
12,639

 
10,521

 
149,650


1,108

 
174,912

of which cash and cash equivalents
 
—

 
689

 
4,062

 
1,968

 
1,889


—

 
8,608

Non-Current Liabilities
 
—

 
629

 
200,231

 
128,653

 
—


—

 
329,514

Of which bank loans
 
—

 
—

 
—

 
—

 
—


—

 
—

Current Liabilities
 
111

 
91

 
766

 
687

 
147,453


975

 
150,083

Of which bank loans
 
—

 
—

 
—

 
—

 
43,000


—

 
43,000

Net assets (100%)
 
518

 
273

 
(6,060
)
 
57,007

 
2,560


232

 
54,530

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group's share of net assets
 
259

 
137

 
(3,030
)
 
28,503

 
1,559


136

 
27,565

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders loans to joint venture
 
—

 
—

 
100,115

 
62,647

 
—


—

 
162,762

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Carrying amount of interest in joint venture
 
259

 
137

 
—

 
28,503

 
1,559


136

 
30,595

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining shareholders loan to joint venture
 
—

 
—

 
97,085

 
62,647

 
—


—

 
159,732

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
—

 
61

 
61,015

 
58,011

 
—


—

 
119,087

Depreciations and amortization
 
—

 
—

 
(18,209
)
 
(17,933
)
 
—


—

 
(36,142
)
Interest Expense
 
—

 
—

 
(90
)
 
(1,961
)
 
—


—

 
(2,052
)
Income tax expense
 
—

 
—

 
383

 
(3,359
)
 
—


—

 
(2,976
)
Profit (loss) for the period (100%)
 
(2
)
 
130

 
34,269

 
25,467

 
—


—

 
59,865

Other comprehensive income (100%)
 
—

 
—

 
—

 
966

 
—


—

 
966

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group's share of profit (loss) for the period
 
(1
)
 
65

 
17,135

 
12,734

 
—


—

 
29,932

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group's share of other comprehensive income
 
—

 
—

 
—

 
483

 
—


—

 
483



F-100
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 25 - Equity-accounted investees (Continued)

 
 
 
(in thousands of USD)
 
Kingswood Co. Ltd

 
Seven Seas Shipping Ltd

 
TI Africa Ltd

 
TI Asia Ltd

 
Tankers Agencies (UK) Ltd (see Note 23)

 
TI LLC (see Note 23)

 
Total

At December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Percentage ownership interest
 
50
%
 
50
%
 
50
%
 
50
%
 
50
%
 
50
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Current assets
 
522

 
—

 
154,553

 
147,962

 
306

 
—

 
303,343

of which Vessel
 
—

 
—

 
153,404

 
146,654

 
—

 
—

 
300,058

Current Assets
 
—

 
792

 
9,119

 
22,450

 
289,431

 
288

 
322,080

of which cash and cash equivalents
 
—

 
696

 
484

 
2,561

 
2,487

 
—

 
6,227

Non Current Liabilities
 
—

 
522

 
130,068

 
74,171

 
—

 
—

 
204,760

Of which bank loans
 
—

 
—

 
70,080

 
67,551

 
—

 
—

 
137,630

Current Liabilities
 
5

 
1

 
24,400

 
23,699

 
286,825

 
48

 
334,978

Of which bank loans
 
—

 
—

 
23,867

 
23,015

 
64,500

 
—

 
111,382

Net assets (100%)
 
517

 
269

 
9,205

 
72,543

 
2,912

 
240

 
85,685

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group's share of net assets
 
258

 
134

 
4,603

 
36,271

 
1,774

 
141

 
43,182

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shareholders loans to joint venture
 
—

 
—

 
28,665

 
—

 
—

 
—

 
28,665

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net Carrying amount of interest in joint venture
 
258

 
134

 
4,603

 
36,271

 
1,774

 
141

 
43,182

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining shareholders loan to joint venture
 
—

 
—


28,665

 
—

 
—

 
—

 
28,665

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
—

 
1

 
49,129

 
49,180

 
749,229

 
—

 
847,540

Depreciations and amortization
 
—

 
—

 
(18,209
)
 
(17,933
)
 
(71
)
 
—

 
(36,213
)
Interest Expense
 
—

 
—

 
(3,857
)
 
(3,733
)
 
(2,571
)
 
—

 
(10,161
)
Income tax expense
 
—

 
—

 
(1,585
)
 
(1,611
)
 
(216
)
 
—

 
(3,412
)
Profit (loss) for the period (100%)
 
(2
)
 
(5
)
 
15,742

 
15,977

 
352

 
10

 
32,074

Other comprehensive income (100%)
 
—

 
—

 
(477
)
 
(441
)
 
—

 
—

 
(918
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group's share of profit (loss) for the period
 
(1
)
 
(2
)
 
7,871

 
7,989

 
214

 
6

 
16,076

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Group's share of other comprehensive income
 
—

 
—

 
(239
)
 
(220
)
 
—

 
—

 
(459
)

F-101
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 25 - Equity-accounted investees (Continued)

Loans and borrowings
On March 29, 2018, TI Asia Ltd. and TI Africa Ltd. entered into a USD 220.0 million senior secured credit facility. The facility consists of a term loan of USD 110.0 million and a revolving loan of USD 110.0 million for the purpose of refinancing the two FSOs as well as for general corporate purposes. The Company provided a guarantee for the revolving credit facility tranche. The fair value of this guarantee is not significant given the long term contract both FSOs have with North Oil Company, which results in sufficient repayment capacity under these facilities. Transaction costs for a total amount of USD 2.2 million are amortized over the lifetime of the instrument using the effective interest rate method. As of December 31, 2018 the outstanding balance on this facility was USD 186.1 million in aggregate.
All bank loans in the joint ventures are secured by the underlying vessel or FSO.
The following table summarizes the terms and debt repayment profile of the bank loans held by the joint ventures:
(in thousands of USD)
 
 
 
 
 
 
 
December 31, 2018
 
December 31, 2017
 
 
Curr.
 
Nominal interest rate
 
Year of mat.
 
Facility size
 
Drawn
 
Carrying value
 
Facility size
 
Drawn
 
Carrying value
TI Asia Ltd revolving loan 54M*
 
USD
 
libor +2.0%
 
2022

 
45,671

 
45,671

 
45,283

 
—

 
—

 
—

TI Asia Ltd loan 54M
 
USD
 
libor +2.0%
 
2022

 
45,671

 
45,671

 
45,283

 
—

 
—

 
—

TI Africa Ltd revolving loan 56M*
 
USD
 
libor +2.0%
 
2022

 
47,362

 
47,362

 
46,974

 
—

 
—

 
—

TI Africa Ltd loan 56M*
 
USD
 
libor +2.0%
 
2022

 
47,362

 
47,362

 
46,974

 
—

 
—

 
—

Total interest-bearing bank loans
 
 
 
186,067

 
186,067

 
184,513

 
—

 
—

 
—

* The mentioned secured bank loans are subject to loan covenants.
Loan covenant
As of December 31, 2018, all joint ventures were in compliance with the covenants, as applicable, of their respective loans.

Interest rate swaps
In connection to the USD 220.0 million facility, the JV's entered in several Interest Rate Swap (IRSs) instruments for a combined notional value of USD 208.8 million (Euronav’s share amounts to 50% ). These IRSs are used to hedge the risk related to the fluctuation of the Libor rate and qualify as hedging instruments in a cash flow hedge relationship under IFRS 9. These instruments are measured at their fair value; effective changes in fair value have been recognized in OCI and the ineffective portion has been recognized in profit or loss. These IRSs have a remaining duration between three and four years matching the repayment profile of that facility and mature on July 21, 2022 and September 22, 2022 for FSO Asia and FSO Africa respectively (see Note 13).


F-102
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018
Note 25 - Equity-accounted investees (Continued)

Vessels
On June 2, 2016, the Group entered into a share swap and claims transfer agreement (see Note 24). As a result, the Group became the full owner of the two youngest vessels, the Captain Michael (2012 – 157,648 dwt) and the Maria (2012 – 157,523 dwt), while Bretta became the full owner of the Devon and the Eugenie .
On November 23, 2016, Seven Seas Shipping Ltd delivered the VLCC V.K. Eddie (2005 – 305,261 dwt) to the Group after the sale announced on November 2, 2016 for USD 39.0 million . Seven Seas Shipping Ltd recognized a gain of USD 9.3 million on this transaction in the last quarter of 2016. In the Group's consolidated financial statements, 50% of this gain was eliminated.
There were no capital commitments as of December 31, 2018 , December 31, 2017 and December 31, 2016 .
Cash and cash equivalents
(in thousands of USD)
 
2018
 
2017
 
 
 
 
 
Cash and cash equivalents of the joint ventures
 
6,227

 
8,608

Group's share of cash and cash equivalents
 
3,385

 
4,304

of which restricted cash
 
—

 
—


F-103
EURONAV NV
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2018


Note 26 - Major exchange rates
The following major exchange rates have been used in preparing the consolidated financial statements:
 
 
closing rates
 
average rates
1 XXX = x,xxxx USD
 
December 31, 2018
 
December 31, 2017
 
December 31, 2016
 
2018
 
2017
 
2016
EUR
 
1.1450

 
1.1993

 
1.0541

 
1.1838

 
1.1249

 
1.1061

GBP
 
1.2800

 
1.3517

 
1.2312

 
1.3374

 
1.2880

 
1.3662


Note 27 - Subsequent events
Since the start of 2019, Euronav continued to buy back its own shares and owns on March 18, 2019 a total of 3,370,544 shares ( 1.53% of the total outstanding shares).
On October 31, 2018, the Company sold the Suezmax Felicity (2009 - 157,667 dwt), for USD 42.0 million . This vessel was accounted for as a non-current asset held for sale as at December 31, 2018. The vessel was delivered to its new owner on January 9, 2019.

A transaction-based bonus plan in relation to the Gener8 transaction has been offered to key management personnel and has been accepted by the beneficiaries in January 2019.

On February 4, 2019, Euronav announced that Patrick Rodgers has decided to step down from his role as Chief Executive Officer or CEO during 2019 and on March 28, 2019, Euronav announced that Hugo De Stoop, our current Chief Financial Officer or CFO, will succeed Patrick Rodgers as our CEO after a brief handover period which is expected to take place in the course of the second quarter of 2019. As a result, we have commenced a recruitment process for a new replacement CFO. Patrick Rodgers is leaving Euronav in a strong position with sector low leverage, substantial liquidity and operational flexibility to take on the challenges from the tanker market going forward.

On February 11, 2019, Euronav sold the LR1 Genmar Compatriot (2004 – 72,768 dwt) for USD 6.75 million . The Company will record a capital gain of approximately USD 0.4 million in the second quarter of 2019 upon delivery to its new owner.



F-104

Exhibit 1.1
TRANSLATION














EURONAV NV

Limited Liability Company (under Belgian Law)








Registered office: De Gerlachekaai 20, 2000 Antwerpen

Registered within the jurisdiction of the Commercial Court of Antwerp
Enterprise number 0860.402.767













COORDINATED ARTICLES OF ASSOCIATION
of 12 June 2018




SECTION 1
LEGAL FORM - NAME – REGISTERED OFFICE – OBJECT – DURATION

Article 1.
The company has the form of a limited liability company (naamloze vennootschap). Its denomination is “ EURONAV ”. It is a commercial company which does a public recourse to the savings capital.

The registered office of the company is established at Antwerp, at De Gerlachekaai 20. The registered office of the company may be transferred to any other location in Belgium by decision of the board of directors.

The board of directors is permitted to set up administrative offices, branches and agencies both in Belgium and abroad.

Article 2.
The object of the company consists of all operations related to the maritime transport and ship owning, particularly chartering in and out, acquisition and sale of ships, opening and operation of regular shipping lines.

This enumeration is not restrictive.

Furthermore, the object of the company also comprises the acquisition, the management, the sale and transfer of participating interests in all existing or still to be incorporated companies, with industrial, financial or commercial activities.

The company is also authorised to associate with any private person, companies or associations having a similar object, to merge with them and to bring in or to transfer to them, temporarily or definitely, the whole or part of its assets.

The company may carry out, both in Belgium and abroad, all operations involving real and immovable property, all financial, commercial and industrial operations, which have a direct or indirect connection with its object and namely all operations concerning the transport of all kind, by air, by sea and waterways, and by land.

The company is also entitled to provide its assets as collateral security for financing granted to the group of companies to which it belongs, to the extent that such financing is useful for its activity or the activity of the companies belonging its group or the realisation of its corporate objects.

The general meeting of shareholders is entitled to modify the object under the conditions of the Code of Companies.

Article 3.
The company is founded for an unlimited period of time.

The company may be wound up by decision of the general meeting of shareholders taken in accordance with the prescriptions required for an amendment of the articles of association.







- 1 -

SECTION 2
SHARE CAPITAL, SHAREHOLDERS

Article 4.
The share capital of the company amounts to two hundred thirty-nine million one hundred forty-seven thousand five hundred and six US Dollars and eighty-two cents (USD 239,147,505.82) and is represented by two hundred twenty million twenty-four thousand seven hundred thirteen (220,024,713) shares without par value. This capital is paid up in full.

The reference value of the capital for purposes of implementing the provisions of the Code of Companies amounts to two hundred and three million four hundred sixty thousand five hundred twenty-nine euro and three cents (EUR 203,460,529.03). This value is based on the exchange rate of the US Dollar on the eleventh of June two thousand eighteen (14h15) published by the European Central Bank, as it appears from the bank statement delivered by BNP Paribas Fortis on the eleventh of June two thousand eighteen, attached to the authentic deed executed on the twelfth of June two thousand eighteen before the Civil Law Notary Van Ooteghem, in Temse, containing modification of the articles of association.

The board of directors may authorise the division of shares into denominations.

Article 5.
By decision of the shareholders' meeting held on the thirteenth of May two thousand fifteen, the board of directors has been authorised to increase the share capital of the company in one or several times by a total maximum amount of one hundred fifty million (150,000,000) US Dollars during a period of five years as from the date of publication of such decision, subject to the terms and conditions to be determined by the board of directors.
The reference value of the capital by implementation of the Code of Companies amounts to one hundred thirty-three million four hundred sixty-three thousand eight hundred thirty-one euro and thirty cents (EUR 133,463,831.30). This value is based on the exchange rate of the US Dollar on the twelfth of May two thousand fifteen (14h15) published by the European Central Bank, as it appears from the bank statement delivered by BNP Paribas Fortis Bank on the twelfth of May two thousand fifteen, attached to the authentic deed executed on the thirteenth of May two thousand and fifteen before The Civil Law Notary De Cleene, in Antwerp, replacing the Civil Law Notary Patrick Van Ooteghem of Temse, unable to so act by reasons of ratione loci.

This amount constitutes the authorised capital. It is to be distinguished from the issued share capital of the company.

Within the above-mentioned limits, the board of directors may decide to increase the share capital of the company, either by way of a contribution in cash, or, subject to relevant legal restrictions, by way of a contribution in kind, or by way of an incorporation of reserves of any kind and/or issue premiums into the share capital, all the foregoing with or without the issuing of new shares.

The board of directors may enter into agreements with respect to the paying up of the capital increase which it has decided upon.


- 2 -

In the event the board requires the subscribers to the capital increase to pay a share premium, such premium shall be automatically recorded in the company's accounts as an unavailable reserve called "share premium", which shall form part of the shareholders' equity in the same way as the company's share capital, and which can only be reduced or deleted by a decision of the shareholders' meeting in accordance with the provisions of the Code of Companies, except if it is incorporated in the company's share capital, which decision can be taken by the board of directors.

In accordance with the provisions of the Code of Companies, the board of directors has the authority to limit or abolish the preferential right of the shareholders in the interest of the company; this limitation or abolition can also be decided upon in favour of one or more particular persons other than members of the personnel of the company or one of its subsidiaries.

When abolishing the preferential right of the shareholders, the board of directors may give priority to the existing shareholders for the allocation of the newly issued shares.
    
Within the limits of the authorised capital, the board of directors is also competent to issue convertible bonds or warrants.

When issuing convertible bonds, the limitation or abolition of the preferential right can be decided upon by the board of directors in favour of one or more particular persons other than members of the personnel of the company or one of its subsidiaries.    
The board of directors is also competent to make use of the authorization to increase the company's share capital by virtue of this article after the date on which the company has been notified by the Financial Services and Markets Authority that a public purchase offer has been launched on its securities, provided that the decision to increase the capital has been adopted by the board of directors before the thirteenth of May two thousand eighteen and provided that such decision is being taken in accordance with all applicable legal provisions.

Article 6.
Whenever the capital is increased, and except when the remuneration of contributions in kind is concerned, the owners of shares will have an application right for new shares, depending on the amount of shares in their possession.

However, notwithstanding the foregoing, the general shareholders’ meeting can at all times decide, under the terms provided for amendments to the articles of association, that the whole or part of the new shares to be subscribed in cash, will not be offered by preference to the shareholders.

Whilst eliminating or limiting the preferential right, the general shareholders’ meeting may give the existing shareholders a right of priority on the attribution of new shares.

In all cases, the board of directors is empowered, under the terms and conditions it thinks fit, to enter into agreements in order to ensure the subscription of the whole or part of the shares to be issued.


- 3 -

Article 7.
The calls are done by registered letter, at least one month before their payability. The board of directors fixes the amount and the due date of the calls

By default of payment on calls on the fixed date of maturity the interest rate due to the company will be the rate of interest of the marginal lending facility of the European Central Bank increased by one per cent, to be calculated as from the date of payability, without summons nor claims before court. In case the payment is not carried out within one month from the date of payability and within a week after the publication of a simple notice in the Belgian Official Gazette, the board of directors is empowered to have the shares that are in arrears with calls to be sold on the stock exchange through a stockbroker, for account and risk of the defaulting shareholders.
    
The defaulting shareholders will have to make up for the difference between the subscription price and the price obtained, less the payments already made.

The right to have the shares sold will not bar the company to exercise simultaneously other means provided by law.

Article 8.
The shares are at the option of the shareholder, registered shares or dematerialized shares.
    
Each shareholder may at all times and at his own expense request the conversion of his shares into registered or dematerialized shares.
    
Shares shall remain registered until they are fully paid up. As from 1 January 2008, and in accordance with the law of 14 December 2005, bearer securities booked on a securities account are deemed to exist in dematerialized form. After the term set out by the law of 14 December 2005 with regard to the abolition of bearer securities, all bearer securities still existing and the conversion of which was not requested, were automatically converted into dematerialized securities.

Article 9.
A share register is kept at the registered office of the company and may be split by decision of the board of directors in accordance with the provisions of the Code of Companies.

Certificates stating the inscription may be delivered to the shareholders; these certificates are signed by two directors.

The register of registered shares, the register of any registered bonds or any other registered securities or financial instruments issued by the company may be held in electronic form. The board of directors may decide to outsource the maintenance and administration of any electronic register to a third party. All entries in the registers, including transfers, conversions and pledges, can validly be made on the basis of documents or instructions which the transferor, transferee and/or holder of the securities, as applicable, may send electronically or by other means, and the company may accept and enter any transfer in the registers resulting from correspondence or other documents evidencing the consent of the transferor and the transferee.

Article 10.
The dematerialised share is represented by an entry on the named account of the owner or holder with a recognised settlement

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organisation. The dematerialised share is transferred by transfer from one account to another.

Article 11.
The owners of shares are only liable for the loss of the amount of their subscription.

The possession of a share implies the agreement with the articles of association and with the decisions of the general shareholders’ meeting.

Article 12.
The rights and obligations attached to a share follow the latter in whatever hands same may pass. The company recognises only one owner for each share.

In case several persons are the owners of a share, the company is entitled to suspend the exercise of the rights attached thereto until one person only has been appointed to act as the owner of the share in respect of the company.

The heirs, assigns, or creditors of a shareholder can under no circumstances cause the sealing of the goods and values of the company, nor in whatever way interfere in its management. In order to exercise their rights they must abide by the company's balance sheets and by the decisions of the general shareholders’ meeting.

Article 13.
The company is authorised to issue bonds or certificates, whether on mortgage or not, by decision of the board of directors. The latter fixes the interest rate, the amount of the issue and of the refund, the duration and the manner of amortisation and of refund, the guarantees given to the certificates as well as any other condition regarding the issue of same.

Article 14.
Every individual person or legal entity acquiring, directly or indirectly, securities with voting rights attached, must notify the company and the Financial Services and Markets Authority of the number and percentage of voting rights which he possesses if as a consequence of such acquisition the voting rights attached to these securities have reached a proportion of five percent or more of the total number of voting rights existing at the time when the event occurred which gave rise to such notification obligation.

The same notification must be made in the event of an additional acquisition, directly or indirectly, of voting securities as defined in the first paragraph, when as a consequence of this acquisition, the voting rights attached to the securities he possesses, reach a proportion of ten, fifteen and twenty percent, and so on for each increment of five percentage points of the total number of voting rights existing at the time when the event occurred which gave rise to such notification obligation.

The same notification must be made in the event of a transfer of securities, directly or indirectly, when as a consequence of this transfer, the voting rights attached to these securities fall below the thresholds referred to in paragraph one and two above.
The same notification must also be made in the event that the percentage of voting rights attached to the securities, directly or indirectly held, reach, exceed or fall below the thresholds referred to

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in paragraph one and two above as a result of an event that is not an acquisition or transfer.

The notifications referred to above should be addressed to the Financial Services and Markets Authority and the company in compliance with the applicable legal provisions, and preferably by email and fax.

No person may participate in the voting at the general shareholders’ meeting for a number of votes above the number of votes accruing to the shares the possession of which has, pursuant to above paragraphs, been notified at least twenty days before the date of the general shareholders’ meeting.

The notifications provided for in this article are subject to the provisions of the Law of 2 May 2007 and the Royal Decree of 14 February 2008 on the disclosure of major shareholdings in issuers whose shares are admitted to trading on a regulated market, subject to the provisions contained in the preceding paragraphs.

Article 15.
Pursuant to a decision of the extraordinary shareholders' meeting of twenty-four February two thousand fourteen which has been adopted in accordance with the relevant legal provisions, the company and its direct subsidiaries have been authorised, during a period of three years as from the publication of the decision in the Annexes to the Belgian Official Gazette, to acquire the company's own shares or profit shares, whether or not the holders of the latter are entitled to vote, by way of a purchase or an exchange, directly or through the intermediary of a person acting in its own name but for the account of the company or its direct subsidiaries. Such acquisition may be decided upon by the board of directors if the acquisition is necessary to prevent imminent and serious harm to the company, including a public purchase offer for the company’s securities. When deciding upon the acquisition of own shares or profit shares, the applicable legal provisions shall be complied with.

In such case the first shareholders' meeting following such acquisition shall be informed by the board of directors of the reasons for the acquisition and the objectives pursued, as well as of the number and nominal value or, in the absence of a nominal value, the accountable part of the acquired securities, of the proportion of the subscribed capital which they represent, and of the consideration for these shares.

The voting rights, to which the shares or profit shares forming part of the company's assets are entitled, shall be suspended. They shall not be taken into account for the purpose of determining a quorum.

Article 16.
The board of directors can, in accordance with the Code of Companies, without prior permission of the general meeting, sell the acquired shares of the company which are quoted on the first market of a stock exchange or on the official quotation of a stock exchange of a Member State of the European Union. This authorisation is also valid for the direct subsidiaries of the company.
        
The board of directors can, in accordance with the Code of Companies, without prior permission of the general meeting, to prevent imminent and serious harm to the company, including a public purchase offer for the company’s securities, sell acquired shares or profit shares of the company on the stock exchange or by way of an offer to sell,

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addressed to all shareholders under the same conditions, during a period of three years as from the publication in the Annexes to the Belgian Official Gazette, of the decision, taken by the general meeting of the twenty-fourth of February two thousand and fourteen.


SECTION THREE

BOARD OF DIRECTORS AND AUDITORS

Article 17.
The company is managed by a board of at least five and maximum twelve directors, whether shareholders or not, appointed for a term of maximum four years by the general shareholders’ meeting and at any time removable by it.

They are re-eligible. The mandates of the retiring directors come to an end immediately after the ordinary general shareholders’ meeting.
    
At least three of the thus appointed directors shall meet the criteria stated in the Code of Companies with respect to independent directors.
    
If a directorship is entrusted to a body corporate, it appoints one physical person as its permanent representative in accordance with the provisions of the Code of Companies, subject to acceptance of this person by the other members of the board of directors of the managed company.

Article 18.
On proposal of the board of directors, the general shareholders’ meeting may grant to the resigning directors the title of honorary chairman, honorary vice-chairman, honorary managing director, or honorary director of the company.

Whenever he deems it advisable, the chairman of the board of directors may invite the honorary directors to attend the meetings of the board, but with advisory vote only.

Article 19.
In case of vacancy of a director's mandate due to the death, resignation or another reason, the remaining members of the board of directors may provisionally fill the vacancies until the following general shareholders’ meeting when the final replacement may be proceeded to.

A director nominated under the circumstances mentioned here above, is only appointed for the time required to terminate the office of the director whose place he takes.

Article 20.
The board of directors elects a chairman among its members and may also elect one or more vice-chairmen.

The board of directors shall set up in its midst and under its responsibility an audit and risk committee in accordance with article 526bis of the Companies Code.

The activities of the audit and risk committee shall in any event include those referred to in article 526bis, paragraph four, of the Companies Code. The audit and risk committee can autonomously take decisions in relation to article 133, paragraph 6, 1° of the Companies Code and can thus allow for exceptions to the one-to-one rule applicable to the

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remuneration for services of the statutory auditors, other than those that fall within their statutory duties as statutory auditor of the company and of which the amount to be borne by the company exceeds the remuneration fixed for the exercise of their services as statutory auditor of the company.

The board of directors shall set up in its midst and under its responsibility a remuneration committee. The composition, powers, tasks and working procedures, as far as its power related to remuneration are concerned; need to be in accordance with the provisions of article 526quater of the Code of Companies.

The board of directors further has the power to set up one or more additional advisory committees in its midst and under its responsibility. The board decides on the composition, powers, tasks and, if necessary, the remuneration of the members of these committees and determines their working procedures in accordance with the applicable legal provisions.

The board of directors can delegate its management powers to an executive committee in accordance with the provisions of the Code of Companies, provided that this delegation does not relate to general company policy or any activities reserved for the board of directors pursuant to other legal provisions. The board itself, however, remains competent to perform all acts for which it may have delegated powers to the executive committee.

If an executive committee is set up, the board of directors is charged with its supervision. The executive committee is accountable to and reports to the board of directors at each board meeting.

The executive committee consists of at least two members, who may or may not be directors. The powers, the conditions for the appointment of the members of the executive committee, their dismissal, their remuneration, the term of their appointment, the discharge and the working procedures of the executive committee are determined by the board of directors.

If a body corporate is appointed as a member of the executive committee, it appoints one physical person as its permanent representative in accordance with the provisions of the Code of Companies, subject to acceptance of this person by the other members of the board of directors of the managed company.

Moreover, the board of directors may delegate the daily management of the company, as well as the representation of the company regarding this management to one or more delegates, whether directors or not, also entrusted with the execution of the decisions of the board, delegate the management of the whole or of a definite part or a specific branch of the company's affairs to one or more managers and delegate specific powers to any proxy.

The board determines their powers, duties, salaries or allowances. These agents, delegates, managers or proxies are responsible for their management. The board may dismiss them at any time.

Article 21.
The board of directors meets at the request and under the chairmanship of its chairman, or in case of impediment of the latter, of a vice-

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chairman, or in their absence, of a director who is appointed by his colleagues, whenever this is required by the company's interest and whenever three directors at least are requesting it.
    
Notices of the meetings of the board of directors are properly given in writing, by telecopy, by electronic mail or by phone. The meeting is held at the place mentioned in the convening notices.

The board meeting may be held by telephone conference call or any other means of communication. In such case, it is deemed to take place at the registered offices unless agreed upon differently by the board.

In any case, the director who may not physically attend the board meeting may participate in the deliberation and decision making by phone, video conference or any other similar means of communication.

Article 22.
Except for cases or circumstances beyond one's control, the board of directors can only deliberate and decide validly when at least half of its members are present or represented. However, this requisite has not to be met in the cases where the legal provisions concerning conflicting interests of a financial nature are applicable.

A director, who is prevented or absent may give a proxy in writing or by telegram, telex or telefax to any of his colleagues of the board to represent him at a determined meeting of the board and to vote in his place.

However, no member is allowed to represent more than one director in this way.

A director is equally permitted, but only in cases when at least half of the members of the board are present in person, to give his opinion and express his vote in writing or by telegram, telex or telefax.

All decisions of the board of directors are taken by absolute majority of the votes. In case of equality of votes he who chairs the meeting of the board has a casting vote.

In exceptional circumstances, when required by urgent necessity and in the interest of the company, a written decision, signed and approved by all directors, is as valid and binding as a decision taken in a meeting of the board of directors, regularly convoked and held; any such decision may be constituted out of several documents, in similar form, each signed or authenticated by one or more directors. A written decision is not permitted for establishing the annual accounts and for the application of the authorised capital. A fax from a director is equal to a written decision; however, its text will have to be signed afterwards by this director. When a director is legally prevented from participating in the deliberation and/or voting (for instance when provisions concerning conflicting interests of a financial nature are applicable), the written board decision shall be adopted and signed by the other directors who are not prevented from participating. A copy of the adopted decision shall be sent to the director(s) who could not participate for his (their) information.

Article 23.
If a member of the executive committee has a direct or indirect interest which conflicts with a decision or activity falling within the scope of

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the powers of the executive committee, the executive committee will follow the procedure stated in §1 and §3 of article 524ter of the Code of Companies.

Article 24.
With respect to intra-group transactions and decisions, in particular, the transactions of the company with an affiliated company (other than a subsidiary), and the transactions between a subsidiary of the company and a company affiliated with that subsidiary (other than a subsidiary of the latter), the procedure stated in the Code of Companies is applied.
All decisions and transactions of a non-listed subsidiary of the company with companies affiliated with the company may only be taken or take place after prior approval by the board of directors of the company, in accordance with the provisions of the Code of Companies.
The procedure mentioned does not apply to the exceptions stated in the Code of Companies.

Article 25.
The deliberations of the board of directors are recorded in minutes, signed by the members who took part in the deliberation and taken down in a special register kept at the registered office of the company.

The copies and extracts of the minutes of meetings, to be produced in court cases or elsewhere, are certified and signed by the chairman, by two directors or by the secretary general.

Article 26.
The board of directors has the power to carry out all acts necessary or useful to the realisation of the company's object with the exception of those reserved by law to the general shareholders’ meeting. The board of directors remains competent to perform all acts for which it may have delegated powers to the executive committee in accordance with article twenty of these articles of association.

Article 27.
The representation of the company in all deeds or in court is ensured either by two directors, or by one director and one member of the executive committee, or, in the event of delegation of powers to an executive committee, pursuant to article twenty of these articles of association, by two members of the executive committee, or by any other persons appointed for this purpose.

Article 28.
The control over the financial situation, the annual accounts, and the regularity, from the legal point of view and according to the articles of association, of the transactions to be recorded in the annual accounts, is entrusted to one or several auditors.

The auditors are appointed by the general shareholders’ meeting among the members, individuals or body corporates – provided that a permanent representative is appointed -, of the Institute of Auditors.

The auditors are appointed for a period of three years and are re-eligible.

The number of auditors and their allowance are determined by the general shareholders’ meeting. The allowances will only consist in a fixed amount determined by the general shareholders’ meeting at the beginning and for the duration of the mandate. They can only be altered with the agreement of the parties involved.


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The mandates of the retiring auditors expire immediately after the ordinary general shareholders’ meeting.

Article 29.
Independently from the share in the profits stipulated by article forty, the directors and the auditors may receive a fixed allowance to be charged to the general expenses, which amount is fixed by the general shareholders’ meeting.

The board of directors is empowered to grant allowances to directors who are entrusted with special functions or missions; these will be charged to the general expenses.

Article 30.
The directors, members of the executive committee and auditors are not bound by any personal obligation regarding the commitments of the company.

They are only responsible for the execution of their mandate and for the shortcomings which occurred during the execution of their task, in accordance with the legal provisions.



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SECTION FOUR

GENERAL SHAREHOLDERS’ MEETING

Article 31.
The regularly convened general shareholders’ meeting represents the whole of the shareholders. Its decisions are binding upon all of them, even upon the absent or dissenting shareholders.

Article 32.
The ordinary general shareholders’ meeting is held in Antwerp, on the second Thursday of the month of May, at eleven a.m., in the place mentioned in the convening notices.

If that day is a legal holiday, the meeting will be held on the first preceding working day.

Article 33.
The board of directors or the auditors may convene a general shareholders’ meeting.
The board of directors and the auditor(s) need to convene a general shareholders’ meeting at the request of one or more shareholders, who represent – alone or together - one fifth of the share capital. The request to convene a shareholders’ meeting should mention the items to be put on the agenda of the meeting.
One or more shareholders holding solely or together at least 3% of the share capital may, in accordance with the provisions of the Code of Companies, put forward agenda items for the general meeting or file resolution proposals relating to items included or to be included in the agenda. This right does not apply to general meetings convened following a first general meeting that could not validly deliberate due to lack of quorum. All requests must be received in writing by the company at the latest on the twenty-second calendar day preceding the date of the shareholders’ meeting, the day of the meeting not included, in the way mentioned in the convening notice. The agenda items and the resolution proposals added to the agenda on the basis of this article will only be discussed at the general meeting if the required part of the capital has been registered on the record date as provided for by article 34 of these articles of association.

Article 34.
General shareholders’ meetings are convened in accordance with the relevant provisions of the Code of Companies.

A shareholder only has the right to be admitted to and to vote at the general meeting on the basis of the registration of the shares on the fourteenth calendar day at 12 p.m. (Belgian time) preceding the date of the general meeting, the day of the meeting not included (the “record date”), either by registration in the company’s register of registered shares, either by their registration in the accounts of an authorised custody account keeper or clearing institution, regardless of the number of shares owned by the shareholder on the day of the general meeting.

The shareholder notifies the company or a designated person of its intention to take part in the general meeting at the latest on the sixth calendar day preceding the date of the general meeting, the day of the meeting not included, in the way mentioned in the convening notice.

The financial intermediary or the authorised custody account keeper or clearing institution delivers a certificate to the shareholders of

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dematerialized shares which are tradable on Euronext Brussels stating the number of dematerialised shares which are registered in the name of the shareholder on its accounts at the record date and with which the shareholder intends to take part in the general meeting.

A shareholder of shares which are listed on the New York Stock Exchange only has the right to be admitted to and vote at the general meeting if such shareholder complies with the conditions and formalities set out in the convening notice, as decided upon by the board of directors in compliance with all applicable legal provisions.

The board of directors may, in compliance with all applicable legal provisions, establish means for determination of record ownership of shares reflected directly or indirectly on the part of the company’s share register maintained in the United States and listed on the New York Stock Exchange.

Unless provided for differently in the Code of Companies, a shareholder may designate, for a given meeting, only one person as a proxy holder.

A proxy holder may represent more than one shareholder.

The joint owners, usufructuaries and bare owners, the pledgees and the pledgers must respectively be represented by one and the same person.

The designation of a proxy holder by a shareholder will occur as stated in the convening notice. The board of directors may decide on the form of the proxies and may stipulate that same be deposited at the place it indicates, within the period it fixes and that no other forms will be accepted.

Article 35.
The chairman of the board of directors or another member of the board delegated for this purpose by his colleagues presides over the general shareholders’ meeting; he appoints the secretary and the meeting chooses two tellers among its attendants. The other attending directors complete the bureau.

An attendance sheet showing the identity of the shareholders and the number of shares they represent, must be signed by each of them or by their proxy before entering the general meeting.

The minutes of the general shareholders’ meeting are signed by the chairman, the secretary, the two tellers and by those shareholders who ask to do so.

The board of directors has the right to adjourn at once for a maximum of five weeks, any general meeting, whether ordinary or extraordinary. This adjournment has no consequences for the decisions already adopted, unless the general meeting decides otherwise.

Article 36.
In the votes at the general meeting, each share entitles to one vote, subject to the application of the provisions of the Code of Companies.

Except for the cases referred to in article thirty-eight hereafter, the decisions are taken, whatever the number of shares being presented at the meeting, at the absolute majority of the votes participating at the voting.

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The voting is done by show of hands or by call-over, unless the general meeting would decide otherwise by the majority of the votes.

In case of an appointment and when no candidate secures the absolute majority at the first voting, there will be a second balloting among the two candidates who secured the highest number of votes. In case of equality of votes, after a second balloting, the elder candidate is chosen.

If permitted by the convening notice, the shareholders who have complied with the attendance formalities referred to in article thirty-four can participate in the shareholders meeting by electronic means upon satisfaction of the conditions and formalities set out in the convening notice. This notice will provide indications as to the means used by the company to identify the shareholders participating by electronic means and whether they can take part to the deliberations of the shareholders meeting and/or ask questions.
    
If permitted by the convening notice, the shareholders who have complied with the attendance formalities referred to in article thirty-four can vote remotely at any shareholders meeting by completing a form provided by the company, either by correspondence or by electronic means, in accordance with the instructions included in the convening notice. Possible reports provided to the company by its U.S. transfer agent and other service providers that reflect the votes issued by the company’s shareholders as at the record date, may be accepted by the company as valid for the purposes of issuing votes through letter for shares listed on the New York Stock Exchange. Shares will be taken into account for the computation of the quorum and the votes only if the applicable form provided by the company has been duly completed and returned to the company no later than six days before the date of the meeting. Where the convening notice permits shareholders to vote remotely by electronic means, this notice will provide indications as to the means used by the company to identify the shareholders voting remotely.

Article 37.
The general shareholders’ meeting deliberates on all the proposals of the board of directors, of the examining auditor(s) or of the other auditors provided that these items figure on the agenda and are inserted in the convening notices.

Article 38.
Subject to the provisions provided in the Code of Companies when the general shareholders’ meeting has to decide on : 1. an amendment to the articles of association; 2. an increase or reduction of the company's share capital; 3. the merger of the company in accordance with article two of the present articles of association, or of the total alienation of its property; 4. the dissolution of the company; 5. the transformation of the company into another of a different form; 6. the issuing of convertible bonds or of bonds with application right; it can only validly deliberate or decide under the following conditions:

Those who attend the meeting or are represented at the meeting must account for at least half of the number of shares.

Should these conditions not be fulfilled, a second convocation is necessary and the new meeting deliberates validly whatever the quorum of capital present or represented might be.

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In either case the decision is only valid when it is taken at a three fourth majority of the votes participating at the voting.





SECTION FIVE

BALANCE SHEET, PROFIT, APPROPRIATION
OF RESULTS

Article 39.
The financial year begins on the first of January and ends on the thirty-first of December of each year. The documents required by law are prepared within the prescribed terms through the care of the board of directors.

Moreover, in relation with these documents and within the legal terms, the inspection and communication measures prescribed by the Code of Companies, will be undertaken.

The annual accounts, the directors' report and the auditors' report are sent, together with the convening notice, to the registered shareholders.

Each shareholder has the right to receive free of charge, on presentation of his share or the certificate referred to in article 474 of the Code of Companies, as soon as the convocation for the general meeting is published, a copy of the documents mentioned in the preceding paragraph.

Article 40.
The credit balance of the income statement is the net profit. From this profit, a minimum of five percent shall first be taken of for the legal reserve; this deduction is no longer compulsory when the reserve reaches one tenth of the company's share capital.

The board of directors may propose to the general shareholders’ meeting to allocate the whole or part of the profit, after deduction for the legal reserve, either to a balance brought forward, or to the formation of a special reserve fund.

The dividends are paid at the times and places indicated by the board of directors. On his own responsibility, the latter can decide to distribute interim payments on dividends, subject to the provisions provided in the Code of Companies.


SECTION SIX

DISSOLUTION, POWERS OF THE LIQUIDATORS

Article 41 .
In case of dissolution of the company, irrespective of whether carried out by court order or following a decision of the general meeting of shareholders, it continues to exist as a legal person for the purpose of its liquidation until the liquidation is closed.


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In case of premature dissolution, the general shareholders’ meeting has the widest powers to regulate the mode of dissolution, to choose the liquidators and to fix their powers.

After the settlement of all debts and charges, as well as of the liquidation expenses or after deposits which have been made to provide therefore, the net assets are divided among all the shares in cash or in securities.

In case all the shares should not be paid-up to an equal extent, the liquidators, prior to proceeding to the division foreseen in the preceding paragraph, will take this diversity into account and restore the balance by putting all the shares on an absolute equality, either by making complementary callings on the insufficiently paid-up shares or by means of preliminary refunds, in cash or in securities, to the shares that are paid-up to a higher proportion.


SECTION SEVEN

REMUNERATION

Article 42.
In accordance with article 520ter of the Code of Companies, the shareholders’ meeting of the twenty-sixth of April two thousand and eleven expressly resolved to exercise its right to opt out from the regime related to (i) the applicability of the provisions in relation to the final acquisition of shares and share options by a director or a member of the executive committee; and (ii) the dispersion in time of the payment of the variable remuneration of executive directors and members of the executive committee. The company will as such not be bound by any of the limitations provided for in article 520ter of the Code of Companies.


SECTION EIGHT

GENERAL PROVISIONS

Article 43.
For the purpose of the implementation of the present articles of association, every director, member of the executive committee, auditor and liquidator, residing abroad, hereby elects domicile at the registered office of the company where all communications, summons, demands or notifications may be validly sent to him, without any other obligation for the company than to hold such documents at the disposal of the addressee.

Article 44.
The shareholders undertake to abide entirely by the Code of Companies, and in consequence, the provisions of these acts that are not licitly departed from by the present articles of association, are deemed to be contained therein, and the clauses that might be contrary to the imperative provisions of said acts are regarded as not having been written.


SECTION NINE

TRANSITORY PROVISIONS


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Article 45.
Any renewal of existing authorisations to the board of directors, specific or general, as may be the case, shall remain in force until the publication of the new authorisations granted by the general meeting of shareholders.

* * * *

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Execution Version

Exhibit 4.3
Dated September 2018
EURONAV NV
as Borrower
and
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 1
as Lenders
and
THE BANKS AND FINANCIAL INSTITUTIONS
listed in Schedule 2
as Swap Banks
and
DNB (UK) LIMITED
NORDEA BANK AB (PUBL), FILIAL I NORGE
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
BNP PARIBAS FORTIS SA/NV
as Mandated Lead Arrangers
and
BNP PARIBAS FORTIS SA/NV
DNB (UK) LIMITED
NORDEA BANK AB (PUBL), FILIAL I NORGE
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
as Bookrunners
and
NORDEA BANK AB (PUBL), FILIAL I NORGE
as Co-ordinator
and
NORDEA BANK AB (PUBL), FILIAL I NORGE
as Agent and Security Trustee

LOAN AGREEMENT
relating to
a revolving credit facility of up to $200,000,000








Index
Clause    Page

1 Interpretation    1
2 Facility    24
3 Position of the Lenders and Swap Banks    25
4 Drawdown    26
5 Interest    27
6 Interest Periods    31
7 Default Interest    32
8 Reduction, Repayment, Prepayment and Cancellation    33
9 Conditions Precedent    38
10 Representations and Warranties    39
11 General Undertakings    42
12 Corporate Undertakings    47
13 Insurance    50
14 Ship Covenants    54
15 Security Cover    59
16 Payments and Calculations    60
17 Application of Receipts    63
18 Application of Earnings    64
19 Events of Default    65
20 Fees and Expenses    69
21 Indemnities    70
22 No Set-Off or Tax Deduction    73
23 Illegality, etc.    75
24 The Agent, the Mandated Lead Arrangers and the Reference Banks    76
25 The Security Trustee    86
26 Conduct of Business by the Creditor Parties    101
27 Sharing among the Creditor Parties    101
28 Increased Costs    102
29 Set‑ Off    105
30 Transfers and Changes in Lending Offices    106
31 Confidential Information    111
32 Confidentiality of Funding Rates and Reference Bank Quotations    114
33 Variations and Waivers    116
34 Bail-In    117
35 Notices    118
36 Supplemental    120
37 Law and Jurisdiction    121


Schedule 1 Lenders and Commitments 122
Schedule 2 Swap Banks 125
Schedule 3 Drawdown Notice 126
Schedule 4 Condition Precedent Documents 127
Part A 127
Part B 128
Part C 130
Schedule 5 Transfer Certificate 132
Schedule 6 Details of Ships 136
Schedule 7 Designation Notice 137
Schedule 8 Form of Certificate of Compliance 138
Schedule 9 Timetables 140

EUROPE/62530140v12




Execution Pages 141





EUROPE/62530140v12


THIS AGREEMENT is made on September 2018
PARTIES
(1)
EURONAV NV , as Borrower
(2)
THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 ( Lenders and Commitments ), as Lenders
(3)
THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 2 ( Swap Banks ), as Swap Banks
(4)
DNB (UK) LIMITED, NORDEA BANK AB (PUBL), FILIAL I NORGE and SKANDINAVISKA ENSKILDA BANKEN AB (PUBL), BNP PARIBAS FORTIS SA/NV as Mandated Lead Arrangers
(5)
BNP PARIBAS FORTIS SA/NV , DNB (UK) LIMITED, NORDEA BANK AB (PUBL), FILIAL I NORGE and SKANDINAVISKA ENSKILDA BANKEN AB (PUBL) as Bookrunners
(6)
NORDEA BANK AB (PUBL), FILIAL I NORGE , as Co-ordinator
(7)
NORDEA BANK AB (PUBL), FILIAL I NORGE , as Agent
(8)
NORDEA BANK AB (PUBL), FILIAL I NORGE , as Security Trustee
BACKGROUND
(A)
The Lenders have agreed to make available to the Borrower a revolving credit facility of up to $200,000,000 for the purpose of providing the Borrower with funds for general corporate and working capital purposes.
(B)
The Swap Banks may agree to enter into interest rate swap transactions with the Borrower from time to time to hedge the Borrower's exposure under this Agreement to interest rate fluctuations.
(C)
The Lenders and the Swap Banks have agreed to share in the security to be granted to the Security Trustee pursuant to this Agreement on the terms described herein.
OPERATIVE PROVISIONS
IT IS AGREED as follows:
1
INTERPRETATION
1.1
Definitions
Subject to Clause 1.5 ( General Interpretation ), in this Agreement:
" Account Pledge " means a deed or pledge creating security in respect of the Earnings Account to be executed by the Borrower in favour of the Security Trustee in the Agreed Form.
" Advance " means the principal amount of each borrowing by the Borrower under this Agreement.
" Affected Lender " has the meaning given in Clause 5.9 ( Market disruption ).

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" 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.
" Agent " means Nordea Bank AB (publ), filial i Norge, acting in such capacity through its office at Essendropsgate 7, Oslo, Norway, or any successor of it.
" Agreed Form " means in relation to any document, that document in a form agreed in writing by the Agent (acting on the instructions of the Lenders or, if agreed in the Finance Documents, the Majority Lenders), or if otherwise approved in accordance with any other procedure specified in the relevant provision of any Finance Document.
" Anti-Corruption Laws " means the England and Wales Bribery Act 2010, the United States Foreign Corrupt Practices Act 1977 or other applicable anti-corruption legislation in any other jurisdictions.
" Approved Classification Society " means any of DNV GL, Bureau Veritas, Lloyds Register of Shipping, American Bureau of Shipping, Nippon Kaiji Kyokai or such other classification society which the Agent has approved or selected (with the authorisation of the Majority Lenders).
" Approved Flag " means Belgian, French, Greek, Hong Kong, Liberian and Marshall Islands flags and any other flag approved by the Agent (acting on the instructions of the Majority Lenders).
" Approved Manager " means:
(a)
in relation to the technical management of each Ship:
(i)
Euronav Ship Management SAS of 15 Quai Ernest Renaud, Immeuble Les Salorges 1, 44000 Nantes, France (with a Belgian branch office at De Gerlachekaai 20, B 2000 Antwerp 1, Belgium); or
(ii)
Anglo Eastern Ship Management Ltd, 23/F, 248 Queen's Road, East Wanchai, Hong Kong or any Affiliate of it; or
(iii)
Wallem of 9/F Dorset House, Taikou Place, 979 King's Road, Quarry Bay, Hong Kong or any affiliate of it; or
(iv)
V. Ships of 63 Queen Victoria Street, EC4N 4UA, London, England or any Affiliate of it; or
(v)
Euronav Ship Management (Hellas) Ltd. (Greek Branch) of 69 Akti Miaouli Str, Piraeus 185 37, Greece; or
(vi)
Northern Marine Limited, of Alba House, 2 Central Avenue, Clydebank, Glasgow, G81 2QR, Scotland or any Affiliate of it; and
(b)
in relation to the commercial management of each Ship:
(i)
the Borrower; or
(ii)
any wholly owned subsidiary of the Borrower,
or, in each case, any other company which the Agent may, with the authorisation of the Majority Lenders, approve from time to time as the technical or commercial manager of that Ship (such approval not to be unreasonably withheld).

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" Approved Shipbroker " means Clarksons Platou Securities AS, Arrow Sale & Purchase (UK) Limited, Braemar ACM, Fearnleys, Maersk Broker K/S or such other independent sale and purchase shipbrokers which the Agent has approved or selected (with the authorisation of the Majority Lenders) and the Borrower may agree.
" Authorisation " means an authorisation, consent, approval, resolution, licence, permit, ruling, exemption, filing, notarisation, legalisation or registration.
" Available Commitment " means, in relation to a Lender and at any time, its Commitment less its Contribution at that time (and " Total Available Commitments " means the aggregate of the Available Commitments of all the Lenders).
" Availability Period " means the period commencing on the date of this Agreement and ending on the earlier of:
(a)
the Maturity Date; or
(b)
if earlier, the date on which the Total Commitments are fully cancelled or terminated.
" 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.
" Bookrunners " means BNP Paribas Fortis SA/NV, DNB (UK) Limited, Nordea Bank AB (publ), filial i Norge and Skandinaviska Enskilda Banken AB (publ).
" Borrower " means Euronav NV, a company incorporated in Belgium whose registered office is at De Gerlachekaai 20, B-2000 Antwerp, Belgium.
" Break Costs " means the amount (if any) by which:
(a)
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 relation to 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 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 on which banks are open in London, Oslo and Antwerp and, in respect of a day on which a payment is required to be made under a Finance Document, also in Stockholm and New York City.
" Change of Control " means, in relation to the Borrower, if 2 or more persons acting in concert or any individual person in each case other than the Permitted Holders:

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(a)
acquires legally and/or beneficially, and either directly or indirectly, in excess of 50 per cent. of the issued share capital or voting rights of the Borrower; or
(b)
has the right or the ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors (or equivalent) of the Borrower.
" Code " means the United States Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder.
" Commitment " means, in relation to a Lender, the amount set opposite its name in Schedule 1 ( Lenders and Commitments ), or, as the case may require, the amount specified in the relevant Transfer Certificate, as that amount may be reduced, cancelled or terminated in accordance with this Agreement (and " Total Commitments " means the aggregate of the Commitments of all the Lenders).
" Confidential Information " means all information relating to the Borrower, the Group, the Finance Documents or the Loan of which a Creditor Party becomes aware in its capacity as, or for the purpose of becoming, a Creditor Party or which is received by a Creditor Party in relation to, or for the purpose of becoming a Creditor Party under, the Finance Documents or the Loan from either:
(a)
any member of the Group or any of its advisers; or
(b)
another Creditor Party, if the information was obtained by that Creditor Party directly or indirectly from any member of the Group 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:
(i)
information that
(A)
is or becomes public information other than as a direct or indirect result of any breach by that Creditor Party of Clause 31.2 ( Disclosure of Confidential Information ); or
(B)
is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
(C)
is known by that Creditor Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Creditor Party after that date, from a source which is, as far as that Creditor Party is aware, unconnected with the Group and which, in either case, as far as that Creditor 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 Reference Bank Quotation.
" Confidentiality Undertaking " means a confidentiality undertaking in substantially the appropriate form recommended by the Loan Market Association from time to time (as logically amended to reflect the terms of this Agreement) or in any other form agreed between the Borrower and the Agent.

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" Confirmation ", in relation to any continuing Designated Transaction, has the meaning given in the relevant Master Agreement.
" Contractual Currency " has the meaning given in Clause 21.4 ( Currency indemnity ).
" Contribution " means, in relation to a Lender, the part of the Loan which is owing to that Lender.
" Co-ordinator " means Nordea Bank AB (publ), filial i Norge, acting in such capacity through its office at Essendropsgate 7, Oslo, Norway, or any successor of it.
" Corresponding Debt " means any amount, other than any Parallel Debt, which the Borrower owes to a Creditor Party under or in connection with the Finance Documents.
" Creditor Party " means the Agent, the Security Trustee, the Mandated Lead Arrangers, any Lender or any Swap Bank, whether as at the date of this Agreement or at any later time.
" Deed of Covenant " means, in relation to each Ship and where (in the opinion of the Agent) it is appropriate in the context of the relevant Approved Flag, a deed of covenant collateral to the Mortgage on that Ship to be executed by the Borrower in favour of the Security Trustee in the Agreed Form.
" Defaulting Lender " means any Lender:
(a)
which has failed to make available the relevant proportion of its Commitment in respect of any Advance or has given notice to the Agent that it will not make such amount available by the relevant Drawdown Date pursuant to Clause 4.3 ( Notification to Lenders of receipt of a Drawdown Notice ); 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 paragraph (a) above:
(i)
its failure to pay is caused by:
(A)
administrative or technical error; or
(B)
a Disruption Event; and
payment is made within 5 Business Days of its due date; or
(ii)
the Lender is disputing in good faith whether it is contractually obliged to make the relevant payment.
" Designated Transaction " means a Transaction which fulfils the following requirements:
(a)
it is entered into by the Borrower pursuant to a Master Agreement with a Swap Bank;
(b)
its purpose is the hedging of the exposure of the Borrower under this Agreement to fluctuations in LIBOR arising from the funding of the Loan (or any part thereof) for a period expiring no later than the Maturity Date;
(c)
which is for a period expiring no later than the Maturity Date; and

5     EUROPE/62530140v12


(d)
it is designated by the Borrower and/or by the relevant Swap Bank, by delivery by the Borrower and/or that Swap Bank to the Agent of a notice of designation in the form set out in Schedule 7 ( Designation Notice ), as a Designated Transaction for the purposes of the Finance Documents.
" 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, a party to this Agreement (a " Party "); or
(b)
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 each case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
" Dollars " and " $ " means the lawful currency for the time being of the United States of America.
" Drawdown Date " means, in relation to an Advance, the date requested by the Borrower for the Advance to be made, or (as the context requires) the date on which the Advance is actually made.
" Drawdown Notice " means a notice in the form set out in Schedule 3 ( Drawdown Notice ) (or in any other form which the Agent approves or reasonably requires).
" Earnings " means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Borrower and which arise out of the use or operation of that Ship, including (but not limited to):
(a)
all freight, hire and passage moneys, compensation payable to the Borrower in the event of requisition of that Ship for hire, remuneration for salvage and towage services, demurrage and detention moneys and damages for breach (or payments for variation or termination) of any charterparty or other contract for the employment of that Ship;
(b)
all moneys which are at any time payable under Insurances in respect of loss of earnings; and
(c)
if and whenever that Ship is employed on terms whereby any moneys falling within paragraphs (a) or (b) are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship.
" Earnings Account " means an account in the name of the Borrower with the Agent in Oslo designated "Euronav NV - Earnings Account", or any other account (with that or another office of the Agent or with a bank or financial institution other than the Agent) which is agreed by the Agent and the Borrower as the Earnings Account for the purposes of this Agreement.

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" Environmental Approval " means any present or future permit, ruling, variance or other Authorisation required under Environmental Laws.
" Environmental Claim " means:
(a)
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
(b)
any claim by any other 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:
(a)
any release of Environmentally Sensitive Material from a Ship; or
(b)
any incident in which Environmentally Sensitive Material is released from a vessel other than a Ship and which involves a collision between a Ship and such other vessel or some other incident of navigation or operation, in either case, in connection with which a Ship is actually or is reasonably likely to be arrested, attached, detained or injuncted and/or a Ship and/or the Borrower and/or any operator or manager of a Ship is at fault or allegedly at fault or is reasonably likely to be subject to any legal or administrative action; or
(c)
any other incident in which Environmentally Sensitive Material is released otherwise than from a Ship and in connection with which a Ship is actually or reasonably likely to be arrested and/or where the Borrower and/or any operator or manager of a Ship is at fault or allegedly at fault or is reasonably likely to be subject to any legal or administrative action.
" Environmental Law " means any law relating to pollution or protection of the environment, to the carriage of Environmentally Sensitive Material or to actual or threatened releases of Environmentally Sensitive Material.
" Environmentally Sensitive Material " means oil, oil products 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.
" 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.
" Event of Default " means any of the events or circumstances described in Clause 19.1 ( Events of Default ).
" 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 5 Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement.

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" 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 paragraph (a) above; or
(c)
any agreement pursuant to the implementation of 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:
(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 2019; or
(c)
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 or under FATCA.
" FATCA Exempt Party " means a party to a Finance Document that is entitled to receive payments free from any FATCA Deduction.
" Fair Market Value " means, in relation to a Ship, a valuation of its market price as determined in accordance with Clause 15.3 ( Valuation of Ships ).
" Fee Letter " means any letter or letters dated on or about the date of this Agreement between any of the Mandated Lead Arrangers, the Agent, the Co-ordinator and the Security Trustee and the Borrower setting out any of the fees referred to in Clause 20.1 ( Fees ).
" Finance Documents " means:
(a)
this Agreement;
(b)
any Fee Letter;
(c)
each Drawdown Notice;
(d)
the Mortgages;
(e)
the Deeds of Covenant;
(f)
the General Assignments;

8     EUROPE/62530140v12


(g)
the Account Pledges;
(h)
the Master Agreement Assignments;
(i)
any other document (whether creating a Security Interest or not, other than a Manager's Undertaking) which is executed at any time by the Borrower or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders and/or the Swap Banks under this Agreement or any of the other documents referred to in this definition; or
(j)
any other document designated as such by the Agent and the Borrower.
" Financial Indebtedness " means, in relation to a person (the " debtor "), a liability of the debtor:
(a)
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
(b)
under any loan stock, bond, note or other security issued by the debtor;
(c)
under any acceptance credit, guarantee or letter of credit facility made available to the debtor;
(d)
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 IFRS;
(e)
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(f)
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
(g)
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or
(h)
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (e) if the references to the debtor referred to the other person.
" Fleet Age " means, as at any date, the mean age of the Ships then subject to a Mortgage.
" Funding Rate" means any individual rate notified by a Lender to the Agent pursuant to sub-paragraph (ii) of paragraph (a) of Clause 5.10 ( Cost of funds ).
" General Assignment " means, in relation to each Ship, a deed to be executed by the Borrower in favour of the Security Trustee creating security in respect of the Earnings, the Insurances and any Requisition Compensation relating to that Ship and any Long Term Charter in relation to that Ship and any guarantee of such charter in the Agreed Form.
" Green Passport " means, in relation to a Ship, a green passport statement of compliance issued by that Ship's classification society which includes a list of any and all materials known to be potentially hazardous and listed in the construction or on board that Ship.

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" Group " means the Borrower and each of its subsidiaries.
" Holding Company " means, in relation to a person, any other person in relation to which it is a subsidiary.
" Hong Kong Convention " means the International Maritime Organization's convention for the Safe and Environmentally Sound Recycling of Ships, 2009 together with the guidelines to be issued by the International Maritime Organization in connection with such convention.
" IFRS " means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements but, for the purposes of Clause 12.5 ( Financial covenants ) only, disregarding any changes to the treatment of operating leases effective after the date of this Agreement.
" Impaired Agent " means the Agent at any time when:
(a)
it has failed to make (or has notified a party to a Finance Document 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 paragraph (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 paragraph (a) above:
(i)
its failure to pay is caused by:
(A)
administrative or technical error; or
(B)
a Disruption Event; and
(ii)
payment is made within 10 Business Days of its due date; or
(iii)
the Agent is disputing in good faith whether it is contractually obliged to make the payment in question.
" Insolvency Event " in relation to a Lender means that Lender:
(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

10     EUROPE/62530140v12


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 paragraph (d) above 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 a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);
(g)
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);
(h)
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;
(i)
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
(j)
takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts.
" Insurances " means, in relation to a Ship:
(a)
all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, which are effected in respect of that Ship, its Earnings or otherwise in relation to it; and
(b)
all rights and other assets relating to, or derived from, any of the foregoing, including any rights to a return of a premium.
" Interest Period " means a period determined in accordance with Clause 6 ( Interest Periods ).
" Interpolated Screen Rate " means, in relation to the Loan or any part of 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:

11     EUROPE/62530140v12


(a)
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of the Loan or that part of the Loan; and
(b)
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of the Loan or that part of the Loan,
each as of the Specified Time for dollars.
" 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 (and the terms " safety management system ", " Safety Management Certificate " and " Document of Compliance " have the same meanings as are given to them in the ISM Code).
" 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.
" ISSC " means an International Ship Security Certificate issued under the ISPS Code.
" Lender " means a bank or financial institution listed in Schedule 1 ( Lenders and Commitments ) and acting through its branch indicated in Schedule 1 ( Lenders and Commitments ) (or through another branch notified to the Borrower under Clause 30.13 ( Change of lending office ) or its transferee, successor or assign.
" LIBOR " means, in relation to the Loan or any part of the Loan:
(a)
the applicable Screen Rate as of the Specified Time for dollars and for a period equal in length to the Interest Period of the Loan or that part of the Loan; or
(b)
as otherwise determined pursuant to Clause 5.7 ( Unavailability of Screen Rate ),
and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.
" Loan " means the principal amount for the time being outstanding under this Agreement.
" Long Term Charter " means any charter or other contract of employment for a Ship which is entered into by the Borrower with a person other than a wholly-owned subsidiary of the Borrower and for a term which exceeds 36 months' duration.
" Manager's Undertaking " means, in relation to a Ship, the undertaking to be given by the Approved Manager in favour of the Security Trustee in the Agreed Form.
" Mandated Lead Arrangers " means DNB (UK) Limited, Nordea Bank AB (publ), filial i Norge, BNP Paribas Fortis SA/NV and Skandinaviska Enskilda Banken AB (publ).
" Major Casualty " means, in relation to a Ship, any casualty to that Ship in respect of which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $5,000,000 or the equivalent in any other currency.
" Majority Lenders " means Lenders the aggregate of whose Commitments total at least 66 2 / 3 per cent. of the Total Commitments.
" Margin " means 2.00 per cent. per annum.

12     EUROPE/62530140v12


" Master Agreement " means each master agreement (on the 1992 or 2002 (as the case may be) ISDA (Multicurrency-Crossborder) form) in an agreed form made or to be made between the Borrower and a Swap Bank and includes all Designated Transactions from time to time.
" Master Agreement Assignment " means, in relation to each Master Agreement, the assignment of the Master Agreement in the Agreed Form.
" Maturity Date " means 31 January 2025.
" Mortgage " means, in relation to each Ship, a first priority or preferred (as the case may be) mortgage on that Ship in the form appropriate to the relevant Approved Flag in each case executed by the Borrower owning that Ship in favour of the Security Trustee (and/or such other Creditor Parties as may be appropriate in the opinion of the Agent and in the context of the relevant Approved Flag), each such mortgage to be in the Agreed Form and, where the relevant Approved Flag is Belgian or French flag, the amount secured by such mortgage shall be limited to 125 per cent. of the Fair Market Value of the relevant Ship as at the date of the relevant mortgage.
" Non-Consenting Lender " means any Lender which does not and continues not to consent or agree to:
(a)
a request of the Borrower or the Agent (at the request of the Borrower) to give a consent in relation to, or to agree to a waiver or amendment of, any provision of the Finance Documents;
(b)
the consent, waiver or amendment in question requires the approval of all of the Lenders; and
(c)
Lenders whose commitments aggregate more than 66 2 / 3 per cent. of the Total Commitments have consented or agreed to such waiver or amendment.
" Notifying Lender " has the meaning given in Clause 23 ( Illegality, etc. ) or Clause 28.1 ( Increased costs ) as the context requires.
" Payment Currency " has the meaning given in Clause 21.4 ( Currency indemnity ).
" Parallel Debt " means any amount which the Borrower owes to the Security Trustee under Clause 25.2 ( Parallel Debt (Covenant to pay the Security Trustee) ) or under that clause as incorporated by reference or in full in any other Finance Document.
" Party " means a party to this Agreement.
" Permitted Holders " means each of Saverco and Victrix (and (in each case) any parallel vehicle thereof and their respective alternative investment vehicles) and their affiliates.
" Permitted Security Interests " means:
(a)
Security Interests created by the Finance Documents;
(b)
liens for unpaid master's and crew's wages in accordance with usual maritime practice, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower in good faith by appropriate steps);
(c)
liens for salvage;

13     EUROPE/62530140v12


(d)
liens arising by operation of law for not more than 2 months' prepaid hire under any charter in relation to a Ship not prohibited by this Agreement;
(e)
liens for master's disbursements incurred in the ordinary course of trading and any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of a Ship, provided such liens do not secure amounts more than 30 days overdue (unless the overdue amount is being contested by the Borrower in good faith by appropriate steps);
(f)
any Security Interest created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where the Borrower is prosecuting or defending such proceedings or arbitration in good faith by appropriate steps provided such Security Interest does not (and is not likely to) result in any sale, forfeiture or loss of a Ship; and
(g)
Security Interests arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made.
" Pertinent Document " means:
(a)
any Finance Document;
(b)
any Master Agreement;
(c)
any policy or contract of insurance contemplated by or referred to in Clause 13 ( Insurance ) or any other provision of this Agreement or another Finance Document or Master Agreement;
(d)
any other document contemplated by or referred to in any Finance Document; and
(e)
any document which has been or is at any time sent by or to a Servicing Bank in contemplation of or in connection with any Finance Document or Master Agreement or any policy, contract or document falling within paragraphs (c) or (d).
" Pertinent Jurisdiction " in relation to a company, means:
(a)
England and Wales;
(b)
the country under the laws of which the company is incorporated or formed;
(c)
a country in which the company has the centre of its main interests or in which the company's central management and control is or has recently been exercised;
(d)
a country in which the overall net income of the company is subject to corporation tax, income tax or any similar tax;
(e)
a country in which assets of the company (other than securities issued by, or loans to, related companies) having a substantial value are situated, in which the company maintains a branch or a permanent place of business, or in which a Security Interest created by the company must or should be registered in order to ensure its validity or priority; and

14     EUROPE/62530140v12


(f)
a country the courts of which have jurisdiction to make a winding up, administration or similar order in relation to the company, whether as main or territorial or ancillary proceedings or which would have such jurisdiction if their assistance were requested by the courts of a country referred to in paragraphs (b) or (c).
" Pertinent Matter " means:
(a)
any transaction or matter contemplated by, arising out of, or in connection with a Pertinent Document; or
(b)
any statement relating to a Pertinent Document or to a transaction or matter falling within paragraph (a);
and covers any such transaction, matter or statement, whether entered into, arising or made at any time before the signing of this Agreement or on or at any time after that signing.
" Potential Event of Default " means an event or circumstance which, with the giving of any notice, the lapse of time, a reasonable determination of the Majority Lenders and/or the satisfaction of any other condition, would constitute an Event of Default.
" Quotation Date " means, in relation to any Interest Period (or any other period for which an interest rate is to be determined under any provision of a Finance Document), 3 Business days before the first day of that period or the day on which quotations would ordinarily be given by leading banks in the London Interbank Market for deposits in the currency in relation to which such rate is to be determined for delivery on the first day of that Interest Period or other period.
" Receiver " means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.
" Reduction Amount " means the amount resulting from the following formula:
Total Commitments x 0.5
18 – Fleet Age
" Reference Banks " means Nordea Bank AB (publ), filial i Norge, its successors and assigns and/or such other entities as may be appointed by the Agent in consultation with the Borrower.
" Reference Bank Quotation " means any quotation supplied to the Agent by a Reference Bank.
" Relevant Person " means:
(a)
the Borrower;
(b)
each subsidiary of the Borrower; and
(c)
all respective directors, officers, employees, agents and representatives of each of the persons mentioned in paragraphs (a) to (b) above;
" Repayment Date " means a date on which a repayment is required to be made under Clause 8 ( Reduction, Repayment, Prepayment and Cancellation).
" Replacement Finance Documents " means, in relation to a Ship, a Mortgage, Deed of Covenant (if applicable) and General Assignment in relation to the relevant Ship executed by the Borrower.

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" Replacement Ship " means a Ship nominated by the Borrower and approved by the Agent (acting on the instructions of the Lenders) which is:
(a)
a double hull crude oil tanker;
(b)
between 150,000 dwt and 325,000 dwt;
(c)
no more than 7 years of age when it becomes a Ship and is financed under this Agreement;
(d)
classed with an Approved Classification Society;
(e)
registered under an Approved Flag;
(f)
built at a reputable yard; and
(g)
owned by the Borrower.
" Requisition Compensation " includes all compensation or other moneys payable by reason of any act or event such as is referred to in paragraph (b) of the definition of " Total Loss ".
" Resolution Authority " means any body which has authority to exercise any Write-down and Conversion Powers.
" Restricted Amount " means the aggregate of the parts of the Total Commitments which have been designated Restricted Amounts in accordance with paragraph (b) of Clause 8.8 ( Mandatory prepayment and cancellation on sale or Total Loss ) as may be reduced pursuant to Clause 8.9 ( Replacement Ships following a sale or Total Loss).
" 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);
(b)
that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to Sanctions Laws which attach legal effect to being domiciled, registered as located or having its main place of business in such country; or
(c)
that is directly or indirectly owned or controlled by a person referred to in paragraph (a) and/or (b) above; or
(d)
with which any member of the Group is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws;
" Sanctions Authority " means the Norwegian State, the United Nations, the United Kingdom, the European Union, the member states of the European Union and the United States of America and any authority acting on behalf of any of them in connection with Sanctions Laws.
" 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, adapted, imposed, administered, enacted and/or enforced by any Sanctions Authority.

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" Sanctions List " means any list of persons or entities published in connection with Sanctions Laws by or on behalf of any Sanctions Authority as amended, revised, supplemented or substituted from time to time.
" Saverco " means Saverco NV, a company incorporated in Belgium whose registered office is at de Gerlachekaai 20, B-2000 Antwerp, Belgium.
" 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 dollars for the relevant period displayed (before any correction, recalculation or republication by the administrator) on page LIBOR01 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 Liabilities " means all liabilities which the Borrower, the Security Parties or any of them have, at the date of this Agreement or at any later time or times, under or in connection with any Finance Document or the Master Agreements or any judgment relating to any Finance Document or the Master Agreements; and for this purpose, there shall be disregarded any total or partial discharge of these liabilities, or variation of their terms, which is effected by, or in connection with, any bankruptcy, liquidation, arrangement or other procedure under the insolvency laws of any country.
" Security Assets " means all of the assets of the Borrower which from time to time are, or are expressed to be, the subject of the Transaction Security.
" Security Interest " means:
(a)
a mortgage, charge (whether fixed or floating) or pledge, any maritime or other lien or any other security interest of any kind;
(b)
the security rights of a plaintiff under an action in rem; and
(c)
any arrangement entered into by a person (A) the effect of which is to place another person (B) in a position which is similar, in economic terms, to the position in which B would have been had he held a security interest over an asset of A; but this paragraph (c) does not apply to a right of set off or combination of accounts conferred by the standard terms of business of a bank or financial institution.
" Security Party " means any person other than the Borrower (except a Creditor Party) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within paragraph (i) of the definition of "Finance Documents".
" Security Period " means the period commencing on the date of this Agreement and ending on the date on which the Agent notifies the Borrower, the Security Parties and the other Creditor Parties that:
(a)
all amounts which have become due for payment by the Borrower or any Security Party under the Finance Documents and the Master Agreements have been paid;
(b)
no amount is owing or has accrued (without yet having become due for payment) under any Finance Document or the Master Agreements and all Commitments have terminated;

17     EUROPE/62530140v12


(c)
neither the Borrower nor any Security Party has any future or contingent liability under Clause 20 ( Fees and Expenses ), Clause 21 ( Indemnities ) or Clause 22 ( No Set-Off or Tax Deduction ) or any other provision of this Agreement or another Finance Document or a Master Agreement; and
(d)
the Agent, the Security Trustee and the Majority Lenders, acting reasonably, consider that there is no significant risk that any payment or transaction under a Finance Document or a Master Agreement would be set aside, or would have to be reversed or adjusted, in any present or possible future bankruptcy of the Borrower or a Security Party or in any present or possible future proceeding relating to a Finance Document or a Master Agreement or any asset covered (or previously covered) by a Security Interest created by a Finance Document.
" Security Property " means:
(a)
the Transaction Security expressed to be granted in favour of the Security Trustee as trustee for the Creditor Parties and all proceeds of that Transaction Security;
(b)
all obligations expressed to be undertaken by the Borrower to pay amounts in relation to the Secured Liabilities to the Security Trustee as trustee for the Creditor Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by the Borrower or any other person in favour of the Security Trustee as trustee for the Creditor Parties;
(c)
the Security Trustee's interest in any turnover trust created under the Finance Documents;
(d)
any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Trustee is required by the terms of the Finance Documents to hold as trustee on trust for the Creditor Parties,
except:
(i)
rights intended for the sole benefit of the Security Trustee; and
(ii)
any moneys or other assets which the Security Trustee has transferred to the Agent or (being entitled to do so) has retained in accordance with the provisions of this Agreement.
" Security Trustee " means Nordea Bank AB (publ), filial i Norge, acting in such capacity through its office at Essendropsgate 7, Oslo, Norway, or any successor of it.
" Servicing Bank " means the Agent or the Security Trustee.
" Ship " means:
(a)
each of the two VLCC and seven Suezmax type vessels listed in Schedule 6 ( Details of Ships ) which are owned by the Borrower (and which are also sometimes referred to in this Agreement by their individual names listed in Schedule 6 ( Details of Ships ); and
(b)
each Replacement Ship that has become a Ship in accordance with Clause 8.9 ( Replacement Ships following a sale or Total Loss ).
" Ship Loan Amount " means, in respect of a Ship, the amount given under the heading Ship Loan Amount against that Ship's name in Schedule 6 ( Details of Ships ).

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" Specified Time " means a day or time determined in accordance with Schedule 9 ( Timetables ).
" Swap Bank " means a bank or financial institution listed in Schedule 2 ( Swap Banks ) and acting through its branch indicated in that Schedule.
" Swap Counterparty " means, at any relevant time and in relation to a continuing Designated Transaction, the Swap Bank which enters into that Designated Transaction.
" Tankers International Pool " means the Tankers International tanker pool governed by Tankers International Limited with its registered office at 81 Kings Road, London SW3 4NX, United Kingdom.
" Tax Deduction " has the meaning given in Clause 22.5 ( Tax Deduction ).
" Third Parties Act " has the meaning given in Clause 36.4 ( Third Party rights ).
" Total Loss " means, in relation to a Ship:
(a)
actual, constructive, compromised, agreed or arranged total loss of that Ship;
(b)
any expropriation, confiscation, requisition or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected by any government or official authority or by any person or persons claiming to be or to represent a government or official authority (excluding a requisition for hire for a fixed period not exceeding 1 year without any right to an extension) unless it is within 90 days redelivered to the Borrower's full control;
(c)
any condemnation of that Ship by any tribunal or by any person claiming to be a tribunal; and
(d)
any arrest, capture, seizure or detention of that Ship (including piracy or theft) unless it is within 90 days redelivered to the Borrower's (as the case may be) full control.
" Total Loss Date " means, in relation to a Ship:
(a)
in the case of an actual loss of that Ship, the date on which it occurred or, if that is unknown, the date when that Ship was last heard of;
(b)
in the case of a constructive, compromised, agreed or arranged total loss of that Ship, the earliest of:
(i)
the date on which a notice of abandonment is given to the insurers; and
(ii)
the date of any compromise, arrangement or agreement made by or on behalf of the Borrower with that Ship's insurers in which the insurers agree to treat that Ship as a total loss; and
(c)
in the case of any other type of total loss, on the date (or the most likely date) on which it appears to the Agent that the event constituting the total loss occurred.
" Transaction " has the meaning given in each Master Agreement.
" Transaction Security " means the Security Interest created or evidenced or expressed to be created or evidenced under the Finance Documents.

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" Transfer Certificate " has the meaning given in Clause 30.2 ( Transfer by a Lender ).
" Unpaid Sum " means any sum due and payable but unpaid by the Borrower under the Finance Documents.
" 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 paragraph (a) above, or imposed elsewhere.
" Victrix " means Victrix NV, a company incorporated in Belgium whose registered office is at Le Grellelei 20, 2600 Berchem, Belgium.
" 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 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.
1.2
Construction of certain terms
In this Agreement:
" administration notice " means a notice appointing an administrator, a notice of intended appointment and any other notice which is required by law (generally or in the case concerned) to be filed with the court or given to a person prior to, or in connection with, the appointment of an administrator.
" approved " means, for the purposes of Clause 13 ( Insurance ), approved in writing by the Agent acting with the authorisation of the Majority Lenders (which authorisation shall not be unreasonably withheld).
" asset " includes every kind of property, asset, interest or right, including any present, future or contingent right to any revenues or other payment.

20     EUROPE/62530140v12


" company " includes any partnership, joint venture and unincorporated association.
" consent " includes an authorisation, consent, approval, resolution, licence, exemption, filing, registration, notarisation and legalisation.
" contingent liability " means a liability which is not certain to arise and/or the amount of which remains unascertained.
" document " includes a deed; also a letter or fax.
" excess risks " means, in relation to a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of the Ship in consequence of its insured value being less than the value at which the Ship is assessed for the purpose of such claims.
" expense " means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable value added or other tax.
" law " includes any order or decree, any form of delegated legislation, any treaty or international convention and any regulation or resolution of the Council of the European Union, the European Commission, the United Nations or its Security Council.
" legal or administrative action " means any legal proceeding or arbitration and any administrative or regulatory action or investigation.
" liability " includes every kind of debt or liability (present or future, certain or contingent), whether incurred as principal or surety or otherwise.
" months " shall be construed in accordance with Clause 1.3 ( Meaning of "month" ).
" Nordea Bank AB (publ) " (either directly or indirectly in its capacity as Swap Bank or any other capacity) in the Finance Documents shall be automatically construed as a reference to Nordea Bank Abp in the event of any corporate reconstruction, merger, amalgamation, consolidation between Nordea Bank AB (publ) and Nordea Bank Abp where Nordea Bank Abp is the surviving entity and acquires all the rights of and assumes all the obligations of Nordea Bank AB (publ) and nothing in the Finance Documents shall be construed so as to restrict, limit or impose any notification or other requirement or condition on either Nordea Bank AB (publ) or Nordea Bank Abp in respect of the acquisition of rights to or assumption of obligations by Nordea Bank Abp hereunder pursuant to such merger.
" Nordea Bank AB (publ), filial i Norge " (either directly or indirectly in its capacity as Lender, Agent and/or Security Agent or any other capacity) in the Finance Documents shall be automatically construed as a reference to Nordea Bank Abp, filial i Norge in the event of any corporate reconstruction, merger, amalgamation, consolidation between Nordea Bank AB (publ) and Nordea Bank Abp where Nordea Bank Abp is the surviving entity and acquires all the rights of and assumes all the obligations of Nordea Bank AB (publ), filial i Norge and nothing in the Finance Documents shall be construed so as to restrict, limit or impose any notification or other requirement or condition on either Nordea Bank AB (publ), filial i Norge or Nordea Bank Abp, filial i Norge in respect of the acquisition of rights to or assumption of obligations by Nordea Bank Abp, filial i Norge hereunder pursuant to such merger.
" obligatory insurances " means, in relation to a Ship, all insurances effected, or which the Borrower in relation to that Ship is obliged to effect or procure are effected, under Clause 13 ( Insurance ) or any other provision of this Agreement or another Finance Document.

21     EUROPE/62530140v12


" parent company " has the meaning given in Clause 1.4 ( Meaning of "subsidiary" ).
" person " includes any company; any state, political sub-division of a state and local or municipal authority; and any international organisation.
" policy ", in relation to any insurance, includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms.
" protection and indemnity risks " means the usual risks covered by a protection and indemnity association including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (01/11/02 or 01/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/11/1995 or 1/10/83) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision.
" 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.
" subsidiary " has the meaning given in Clause 1.4 ( Meaning of "subsidiary" ).
" tax " includes any present or future tax, duty, impost, levy or charge of any kind which is imposed by any state, any political sub-division of a state or any local or municipal authority (including any such imposed in connection with exchange controls), and any connected penalty, interest or fine.
" war risks " includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls) (1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83).
1.3
Meaning of "month"
A period of 1 or more " months " ends on the day in the relevant calendar month numerically corresponding to the day of the calendar month on which the period started (" the numerically corresponding day "), but:
(a)
on the Business Day following the numerically corresponding day if the numerically corresponding day is not a Business Day or, if there is no later Business Day in the same calendar month, on the Business Day preceding the numerically corresponding day; or
(b)
on the last Business Day in the relevant calendar month, if the period started on the last Business Day in a calendar month or if the last calendar month of the period has no numerically corresponding day;
and " month " and " monthly " shall be construed accordingly.
1.4
Meaning of "subsidiary"
A company (S) is a subsidiary of another company (P) if:
(a)
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or

22     EUROPE/62530140v12


(b)
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
(c)
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
(d)
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;
and any company of which S is a subsidiary is a parent company of S.
1.5
General Interpretation
In this Agreement:
(a)
references in Clause 1.1 ( Definitions ) to a Finance Document or any other document being in an " agreed form " are to the form agreed between the Agent (acting with the authorisation of each of the other Creditor Parties) and the Borrower;
(b)
references to, or to a provision of, a Finance Document or any other document are references to it as amended or supplemented, whether before the date of this Agreement or otherwise;
(c)
references to, or to a provision of, any law include any amendment, extension, re-enactment or replacement, whether made before the date of this Agreement or otherwise;
(d)
words denoting the singular number shall include the plural and vice versa;
(e)
Clauses 1.1 ( Definitions ) to 1.5 ( General Interpretation ) apply unless the contrary intention appears; and
(f)
an Event of Default or Potential Event of Default is " continuing " if it has not been remedied or waived in writing.
1.6
Headings
In interpreting a Finance Document or any provision of a Finance Document, all clause, sub‑clause and other headings in that and any other Finance Document shall be entirely disregarded.
2
FACILITY
2.1
Amount of facility
Subject to the other provisions of this Agreement, the Lenders shall make available to the Borrower a revolving credit facility not exceeding $200,000,000.
2.2
Lenders' participations
Subject to the other provisions of this Agreement, each Lender shall participate in each Advance in the proportion which, as at the relevant Drawdown Date, its Commitment bears to the Total Commitments.
2.3
Purpose of Advances
The Borrower undertakes with each Creditor Party to use each Advance only for the purposes stated in the preamble to this Agreement.

23     EUROPE/62530140v12


3
POSITION OF THE LENDERS AND SWAP BANKS
3.1
Interests several
The rights of the Lenders and the Swap Banks under this Agreement are several.
3.2
Individual right of action
Each Lender and each Swap Bank shall be entitled to sue for any amount which has become due and payable by the Borrower to it under a Finance Document or by the Borrower under a Master Agreement without joining the Agent, the Security Trustee, any Arranger, any other Lender or any other Swap Bank as additional parties in the proceedings.
3.3
Proceedings requiring Majority Lender consent
Except as provided in Clause 3.2 ( Individual right of action ), no Lender and no Swap Bank may commence proceedings against the Borrower or any Security Party in connection with a Finance Document or a Master Agreement without the prior consent of the Majority Lenders.
3.4
Obligations several
The obligations of the Lenders under this Agreement and of the Swap Banks under the Master Agreement to which it is a party are several; and a failure of a Lender to perform its obligations under this Agreement or a failure by a Swap Bank to perform its obligations under the Master Agreement to which it is a party shall not result in:
(a)
the obligations of the other Lenders or other Swap Banks being increased; nor
(b)
the Borrower, any Security Party, any other Lender or any other Swap Bank being discharged (in whole or in part) from its obligations under any Finance Document or under any Master Agreement;
and in no circumstances shall a Lender or a Swap Bank have any responsibility for a failure of another Lender or another Swap Bank to perform its obligations under this Agreement or the Master Agreement to which it is a party.
3.5
Security Trustee as joint and several creditor
(a)
The Borrower and each of the Creditor Parties agrees that the Security Trustee shall be the joint creditor (" hoofdelijke schuldeiser ") together with each other Creditor Party of each liability and obligation of the Borrower towards any Creditor Party under any Finance Document, and that accordingly the Security Trustee will have its own independent right to demand performance by the Borrower of those liabilities and obligations. However, any discharge of any liability or obligation of the Borrower to one of the Security Trustee or another Creditor Party shall, to the same extent, discharge the corresponding liability or obligation owing to the others.
(b)
Without limiting or affecting the Security Trustee's rights against the Borrower (whether under this paragraph or under any other provision of the Finance Documents), the Security Trustee agrees with each other Creditor Party (on a several and separate basis) that, subject as set out in the next sentence, it will not exercise its rights as a joint creditor with a Creditor Party except with the consent of the relevant Creditor Party. However, for the avoidance of doubt, nothing in the previous sentence shall in any way limit the Security Trustee's right to act in the protection or preservation of rights under or to enforce any Finance Document (or to do any act reasonably incidental to any of the foregoing).

24     EUROPE/62530140v12


(c)
Subject to the provisions of this Clause 3.5 ( Security Trustee as joint and several creditor ), the Security Trustee holds any security created by a Finance Document in its name and the Security Trustee shall have full and unrestricted title to and authority in respect of that security, subject always to the terms of the Finance Documents.
4
DRAWDOWN
4.1
Request for Advance
Subject to the following conditions, the Borrower may request that an Advance be made by ensuring that the Agent receives a completed Drawdown Notice not later than 11.00 a.m. (London time) 3 Business Days prior to the intended Drawdown Date.
4.2
Availability
The conditions referred to in Clause 4.1 ( Request for Advance ) are that:
(a)
a Drawdown Date has to be a Business Day during the Availability Period and the first Drawdown Date will be on or before 30 September 2018;
(b)
the first Advance in respect of any Ship shall not be after 20 December 2018;
(c)
there shall be no more than ten Advances outstanding at any one time;
(d)
there shall be a minimum Advance of $1,000,000; and
(e)
the aggregate amount of the Advances outstanding at any time shall not exceed the Total Commitments minus the Restricted Amount at that time.
4.3
Notification to Lenders of receipt of a Drawdown Notice
The Agent shall promptly notify the Lenders that it has received a Drawdown Notice and shall inform each Lender of:
(a)
the amount of the Advance and the Drawdown Date;
(b)
the amount of that Lender's participation in the Advance; and
(c)
the duration of the Interest Period for that Advance.
4.4
Drawdown Notice irrevocable
A Drawdown Notice must be signed by a duly authorised person on behalf of the Borrower; and once served, a Drawdown Notice cannot be revoked without the prior consent of the Agent, acting with the authorisation of the Majority Lenders.
4.5
Lenders to make available Contributions
Subject to the provisions of this Agreement, each Lender shall, on and with value on each Drawdown Date, make available to the Agent for the account of the Borrower the amount due from that Lender on that Drawdown Date under Clause 2.2 ( Lenders' participations ).
4.6
Disbursement of Advances

25     EUROPE/62530140v12


Subject to the provisions of this Agreement, the Agent shall on each Drawdown Date pay to the Borrower the amounts which the Agent receives from the Lenders under Clause 4.5 ( Lenders to make available Contributions ); and that payment to the Borrower shall be made to the account which the Borrower specifies in the Drawdown Notice.
4.7
Disbursement of Advances to third party
A payment by the Agent under Clause 4.6 ( Disbursement of Advances ) shall constitute the making of the relevant Advance and the Borrower shall thereupon become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender's Contribution.
5
INTEREST
5.1
Payment of normal interest
Subject to the provisions of this Agreement, interest on each Advance in respect of an Interest Period shall be paid by the Borrower on the last date of that Interest Period.
5.2
Normal rate of interest
Subject to the provisions of this Agreement, the rate of interest on each Advance in respect of an Interest Period shall be the aggregate of the Margin and LIBOR for that Interest Period.
5.3
Payment of accrued interest
In the case of an Interest Period longer than 3 months, accrued interest shall be paid every 3 months during that Interest Period and on the last day of that Interest Period.
5.4
Notification of rates of interest
(a)
The Agent shall notify the Borrower and each Lender of each rate of interest as soon as practicable after each is determined.
(b)
The Agent shall promptly notify the Borrower of each Funding Rate relating to the Loan, any part of the Loan or any Unpaid Sum.
5.5
Role of Reference Banks
(a)
No Reference Bank is under any obligation to provide a quotation or any other information to the Agent.
(b)
No Reference Bank will be liable for any action taken by it under or in connection with any Finance Document, or for any Reference Bank Quotation, unless directly caused by its gross negligence or wilful misconduct.
(c)
No Party (other than the relevant Reference Bank) may take any proceedings against any officer, employee or agent of any Reference Bank in respect of any claim it might have against that 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 Reference Bank Quotation, and any officer, employee or agent of each Reference Bank may rely on this Clause 5.5 ( Role of Reference Banks ) subject to Clause 36.4 ( Third Party rights ) and the provisions of the Third Parties Act.
5.6
Third Party Reference Banks

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A Reference Bank which is not a Party may rely on Clause 5.5 ( Role of Reference Banks ), Clause 5.14 ( Replacement of Screen Rate ) and Clause 32 ( Confidentiality of Funding Rates and Reference Bank Quotations ) subject to Clause 36.4 ( Third Party rights ) and the provisions of the Third Parties Act.
5.7
Unavailability of Screen Rate
(a)
Interpolated Screen Rate : If no Screen Rate is available for LIBOR for the Interest Period of the Loan or any part of the Loan, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of the Loan or that part of the Loan.
(b)
Reference Bank Rate : If no Screen Rate is available for LIBOR for:
(i)
dollars; or
(ii)
the Interest Period of the Loan or any part of the Loan and it is not possible to calculate the Interpolated Screen Rate,
the applicable LIBOR shall be the Reference Bank Rate as of the Specified Time and for a period equal in length to the Interest Period of the Loan or that part of the Loan.
(c)
Cost of funds : If paragraph (b) above applies but no Reference Bank Rate is available for dollars or the relevant Interest Period there shall be no LIBOR for the Loan or that part of the Loan (as applicable) and Clause 5.10 ( Cost of funds ) shall apply to the Loan or that part of the Loan for that Interest Period.
5.8
Calculation of Reference Bank Rate
(a)
Subject to paragraph (b) below, if LIBOR is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by the Specified Time, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks.
(b)
If at or about noon on the Quotation Date none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.
5.9
Market disruption
If before close of business in London on the Quotation Date for the relevant Interest Period the Agent receives notification from a Lender or Lenders (whose participations in the Loan or the relevant part of the Loan exceed 50 per cent. of the Loan or the relevant part of the Loan as appropriate) (the " Affected Lender ") that the cost to it of funding its participation in the Loan or that part of the Loan from whatever source it may reasonably select would be in excess of LIBOR then Clause 5.10 ( Cost of funds ) shall apply to the Loan or that part of the Loan (as applicable) for the relevant Interest Period.
5.10
Cost of funds
(a)
If this Clause 5.10 ( Cost of funds ) applies, the rate of interest on each Lender's share of the Loan or the relevant part of the Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
(i)
the Margin; and

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(ii)
the rate notified to the Agent by that Lender as soon as practicable and in any event before 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 the relevant Lender of funding its participation in the Loan or that part of the Loan from whatever source it may reasonably select.
(b)
If paragraph (c) below does not apply and any rate notified to the Agent under sub-paragraph (ii) of paragraph (a) above is less than zero, the relevant rate shall be deemed to be zero.
(c)
If this Clause ‎5.10 ( Cost of funds ) applies pursuant to Clause 5.9 ( Market disruption ) and:
(i)
a Lender's Funding Rate is less than LIBOR; or
(ii)
a Lender does not supply a quotation by the time specified in sub-paragraph ‎(ii) of paragraph (a) above,
the cost to that Lender of funding its participation in the Loan or the relevant part of the Loan for that Interest Period shall be deemed, for the purposes of paragraph (a) above, to be LIBOR.
5.11
Break Costs
(a)
The Borrower shall, within three Business Days of demand by a Creditor Party, pay to that Creditor Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for the Loan, the relevant part of the Loan or that Unpaid Sum.
(b)
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.
5.12
Notification of market disruption
The Agent shall notify the Borrower and each of the Lenders stating the circumstances falling within Clause 5.9 ( Market disruption ) which have caused its notice to be given.
5.13
Suspension of drawdown
If the Agent's notice under Clause 5.12 ( Notification of market disruption ) is served before an Advance is to be made the Lenders' obligations to make or participate in that Advance (as the case may be) shall be suspended while the circumstances referred to in the Agent's notice continue.
5.14
Replacement of Screen Rate
(a)
If the Screen Rate is not available for dollars, any amendment or waiver which relates to providing for another benchmark rate to apply in relation to dollars, in place of that Screen Rate (or which relates to aligning any provision of a Finance Document to the use of that benchmark rate) may be made with the consent of the Majority Lenders and the Borrower.
(b)
If any Lender fails to respond to a request for an amendment or waiver described in paragraph (a) above within three Business Days (unless the Borrower and the Agent agree to a longer time period in relation to any request) of that request being made:
(i)
its Commitment shall not be included for the purpose of calculating the Total Commitments when ascertaining whether any relevant percentage of Total Commitments has been obtained to approve that request; and

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(ii)
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.
5.15
Negotiation of alternative rate of interest
If the Agent's notice under Clause 5.12 ( Notification of market disruption ) is served after an Advance has been made, the Borrower, the Agent and the Lenders or (as the case may be) the Affected Lender shall use reasonable endeavours to agree, within the 15 days after the date on which the Agent serves its notice under Clause 5.12 ( Notification of market disruption ) (the " Negotiation Period "), an alternative interest rate or (as the case may be) an alternative basis for the Lenders or (as the case may be) the Affected Lender to fund or continue to fund their or its Contribution during the relevant Interest Period concerned.
5.16
Application of agreed alternative rate of interest
Any alternative interest rate or an alternative basis which is agreed during the Negotiation Period shall take effect in accordance with the terms agreed and shall, with the prior consent of all the Lenders and the Borrower, be binding on all Parties.
5.17
Alternative rate of interest in absence of agreement
If an alternative interest rate or alternative basis is not agreed within the Negotiation Period, and the relevant circumstances are continuing at the end of the Negotiation Period, then the Agent shall, with the agreement of each Lender or (as the case may be) the Affected Lender, set an interest period and interest rate representing the cost of funding of the Lenders or (as the case may be) the Affected Lender in Dollars or in any available currency of their or its Contribution plus the Margin; and the procedure provided for by this Clause 5.17 ( Alternative rate of interest in absence of agreement ) shall be repeated if the relevant circumstances are continuing at the end of the interest period so set by the Agent.
5.18
Notice of prepayment
If the Borrower does not agree with an interest rate set by the Agent under Clause 5.17 ( Alternative rate of interest in absence of agreement ), the Borrower may give the Agent not less than 10 Business Days' notice of its intention to prepay the relevant Advance at the end of the interest period set by the Agent.
5.19
Prepayment
A notice under Clause 5.18 ( Notice of prepayment ) shall be irrevocable; the Agent shall promptly notify the Lenders or (as the case may require) the Affected Lender of the Borrower's notice of intended prepayment; and on the last Business Day of the interest period set by the Agent, the Borrower shall prepay (without premium or penalty) the relevant Advance, together with accrued interest thereon at the applicable rate plus the Margin.
5.20
Application of prepayment
The provisions of Clause 8 ( Reduction, Repayment, Prepayment and Cancellation ) shall apply in relation to the prepayment.
6
INTEREST PERIODS
6.1
Commencement of Interest Periods

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The first Interest Period applicable to an Advance shall commence on the Drawdown Date relating to that Advance and each subsequent Interest Period shall commence on the expiry of the preceding Interest Period.
6.2
Duration and consolidation of normal Interest Periods
Subject to Clauses 6.3 ( Duration of Interest Periods for repayment instalments ) and 6.4 ( No Interest Period to extend beyond final Maturity Date ), each Interest Period shall be:
(a)
1, 3 or 6 months as notified by the Borrower to the Agent not later than 11.00 a.m. (London time) 3 Business Days before the commencement of the Interest Period; or
(b)
in the case of the first Interest Period applicable to the second and any subsequent Advance and if the Borrower notifies the Agent in the Drawdown Notice for such Advance, a period ending on the last day of the Interest Period applicable to the Advance then current, whereupon that Advance and the Advance then current shall be consolidated and treated as a single Advance and if more than one Advance has been made at the time the Borrower notifies the Agent that it wishes to consolidate the Interest Periods of the Advances, the relevant Interest Periods shall be consolidated with the Interest Period applicable to the first Advance so that the Interest Period for that Advance expires on the same date as the Interest Period for the Advance then current; or
(c)
3 months, if the Borrower fails to notify the Agent by the time specified in paragraph (a); or
(d)
such other period as the Agent may, with the authorisation of all the Lenders, agree with the Borrower.
6.3
Duration of Interest Periods for repayment instalments
In respect of an amount due to be repaid under Clause 8 ( Reduction, Repayment, Prepayment and Cancellation ) on a particular Repayment Date, an Interest Period shall end on that Repayment Date.
6.4
No Interest Period to extend beyond final Maturity Date
No Interest Period shall end after the Maturity Date and any Interest Period which would otherwise extend beyond the Maturity Date shall instead end on the Maturity Date.
6.5
Non-availability of matching deposits for Interest Period selected
If, after the Borrower has selected and the Lenders have agreed an Interest Period longer than 3 months, any Lender notifies the Agent by 11.00 a.m. (London time) on the second Business Day before the commencement of that Interest Period that it is not satisfied that deposits in Dollars for a period equal to that Interest Period will be available to it in the London Interbank Market when that Interest Period commences, that Interest Period shall be of 3 months unless otherwise agreed by the Agent (acting on the instructions of the Lenders) and the Borrower.
6.6
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 precedent Business Day (if there is not).
7
DEFAULT INTEREST

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7.1
Default interest
(a)
If the Borrower fails to pay any amount payable by it under a Finance Document other than a Master Agreement on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two percentage points. per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Agent. Any interest accruing under this Clause 7.1 ( Default interest ) shall be immediately payable by the Borrower on demand by the Agent.
(b)
If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan or that part of the Loan:
(i)
the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan or that part of the Loan; and
(ii)
the rate of interest applying to that Unpaid Sum during that first Interest Period shall be two percentage points. per annum higher than the rate which would have applied if that Unpaid Sum had not become due.
(c)
Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
8
REDUCTION, REPAYMENT, PREPAYMENT AND CANCELLATION
8.1
Reduction of Total Commitments
The Total Commitments shall be reduced by equal consecutive semi-annual reductions, each in the amount of the Reduction Amount as at the date of the first reduction and:
(a)
the first reduction shall take place on 30 June 2019 and the last reduction shall take place on or before the Maturity Date;
(b)
each reduction in the Total Commitments pursuant to this Clause 8.1 ( Reduction of Total Commitments ) shall cause the amount of the Total Commitments to be permanently reduced by the amount of the reduction pro rata between any Restricted Amount and the other part of the Total Commitments; and
(c)
the Borrower shall ensure that at all times the aggregate outstanding amount of the Advances is not greater than the then applicable Total Commitments and, without prejudice to the generality of the foregoing, the Borrower shall if necessary immediately prepay some or all of the outstanding Advances so that the aggregate outstanding amount of the Advances does not (taking into account the scheduled reduction of the Total Commitments) exceed the Total Commitments as reducing from time to time thereafter pursuant to this Clause 8.1 ( Reduction of Total Commitments ).
8.2
Repayment of Advances
Subject to the provisions of Clause 8.1 ( Reduction of Total Commitments ):
(a)
each Advance shall be repaid in full on the last day of its Interest Period; and

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(b)
unless the Borrower notifies the Agent to the contrary not later than 11.00 a.m. (London time) 3 Business Days prior to the Repayment Date applicable to an Advance, then, notwithstanding paragraph (a) of Clause 8.2 ( Repayment of Advances ), where that Repayment Date is also a Drawdown Date in respect of another Advance, the Agent shall, on behalf of the Borrower, apply the Advance which would otherwise have been paid to the Borrower on that Drawdown Date in or towards the discharge of the amount payable by the Borrower on that Repayment Date pursuant to paragraph (a) of Clause 8.2 ( Repayment of Advances ) (but without prejudice to the obligation of the Borrower to pay any balance due after application of such amount).
8.3
Maturity Date
On the Maturity Date, any undrawn Commitments shall be cancelled and the Borrower shall additionally pay to the Agent for the account of the Creditor Parties all other sums then accrued or owing under any Finance Document.
8.4
Voluntary prepayment
(a)
Subject to the following conditions in Clauses 8.5 ( Conditions for voluntary prepayment ), 8.6 ( Effect of notice of prepayment ) and 8.7 ( Notification of notice of prepayment ), the Borrower may prepay the whole or any part of the Loan.
(b)
Any voluntary prepayment pursuant to this Clause 8.4 ( Voluntary prepayment ) shall be applied pro rata to any Advances then outstanding.
8.5
Conditions for voluntary prepayment
The conditions referred to in Clause 8.4 ( Voluntary prepayment ) are that:
(a)
a partial prepayment shall be $1,000,000 or a higher integral multiple of $1,000,000;
(b)
the Agent has received from the Borrower at least 3 Business Days' prior written notice specifying the amount to be prepaid and the date on which the prepayment is to be made; and
(c)
the Borrower has provided evidence satisfactory to the Agent that any consent required by the Borrower or any Security Party in connection with the prepayment has been obtained and remains in force, and that any requirement relevant to this Agreement which affects the Borrower or any Security Party has been complied with.
8.6
Effect of notice of prepayment
A prepayment notice may not be withdrawn or amended without the consent of the Agent, given with the authorisation of the Majority Lenders, and the amount specified in the prepayment notice shall become due and payable by the Borrower on the date for prepayment specified in the prepayment notice.
8.7
Notification of notice of prepayment
The Agent shall notify the Lenders promptly upon receiving a prepayment notice, and shall provide any Lender which so requests with a copy of any document delivered by the Borrower under paragraph (c) of Clause 8.5 ( Conditions for voluntary prepayment ).
8.8
Mandatory prepayment and cancellation on sale or Total Loss

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(a)
The relevant proportion of the Total Commitments shall be cancelled (and the Borrower shall be obliged to prepay any part of the Advances which exceeds the reduced Total Commitments):
(i)
if a Ship which is subject to a Mortgage is sold, on or before the date on which the sale is completed by delivery of the Ship to the buyer; or
(ii)
if a Ship which is subject to a Mortgage becomes a Total Loss, on the earlier of the date falling 90 days after the Total Loss Date and the date of receipt by the Security Trustee of the proceeds of insurance relating to such Total Loss.
In this Clause 8.8 ( Mandatory prepayment and cancellation on sale or Total Loss ), " relevant proportion " means a fraction of which the numerator is the Fair Market Value of the Ship (determined as at the date of the most recent appraisal and not more than 6 months prior to the date of the sale or Total Loss) which is to be sold or the subject of Total Loss and the denominator is the aggregate of the most recently determined Fair Market Values of the Ships (determined on the same basis) mortgaged pursuant to this Agreement immediately prior to the sale or Total Loss.
Any cancellation and/or prepayment pursuant to paragraph (a) of Clause 8.8 ( Mandatory prepayment and cancellation on sale or Total Loss ) shall be applied pro rata to any Advances then outstanding and pro rata against the future reductions of the Total Commitments pursuant to Clause 8.1 ( Reduction of Total Commitments ).
If any Advance is cancelled and/or prepaid pursuant to paragraph (a) of Clause 8.8 ( Mandatory prepayment and cancellation on sale or Total Loss ), then that amount may not be reborrowed and the Total Commitments will be permanently reduced by the amount of the cancellation and/or prepayment applicable to the Advance and future reductions pursuant to Clause 8.1 ( Reduction of Total Commitments ) shall be reduced on a pro rata basis.
(b)
At the time of the cancellation of the Total Commitments and prepayment of the Advances pursuant to paragraph (a), an amount of the Total Commitments shall become a Restricted Amount in the amount required to ensure that the aggregate of the Fair Market Values (determined as provided in Clause 15.3 ( Valuation of Ships ) of each Ship subject to a Mortgage is not below 175 per cent. of the Total Commitments less the Restricted Amounts (and the Borrower shall be obliged to prepay any part of the Advances which exceed the Total Commitments minus the Restricted Amounts).
(c)
This Clause 8.8 ( Mandatory prepayment and cancellation on sale or Total Loss ) is without prejudice to the provisions of Clause 15.1 ( Minimum required security cover ).
8.9
Replacement Ships following a sale or Total Loss
(a)
Where there is a Restricted Amount following the sale or Total Loss of a Ship, the Borrower shall within 30 Business Days of such sale or Total Loss notify the Agent if it intends to provide a Replacement Ship or Replacement Ships as security for the Secured Liabilities in substitution for the Ship which has been sold or become a Total Loss.
(b)
If the Borrower does not provide such notification, the Restricted Amount will not be available for re-borrowing.
(c)
If the Borrower does provide such notification, the Borrower shall:
(i)
provide such Replacement Ship or Replacements Ships; or

33     EUROPE/62530140v12


(ii)
notify the Agent that it no longer intends to provide a Replacement Ship or Replacement Ships,
within 12 months of such sale or Total Loss and, if the Borrower gives a notification pursuant to paragraph (c)(ii), it shall simultaneously give the Agent notice of the date on which an amount of the Total Commitments equal to the Restricted Amount is to be cancelled pursuant to Clause 8.14 ( Voluntary cancellation of Commitments ) and, upon such cancellation of the Total Commitments becoming effective, the Restricted Amount shall be reduced by an equal amount.
(d)
The Restricted Amount, or part thereof, shall be reduced in accordance with paragraph (e) subject to the following conditions:
(i)
the Agent confirms to the Borrower that the Replacement Ship satisfies the requirements listed in the definition of Replacement Ship;
(ii)
no Potential Event of Default or Event of Default has occurred and is continuing at such time or would, in the reasonable opinion of the Majority Lenders, arise from such Replacement Ship becoming a Ship;
(iii)
the Agent has received the documents described in Part C of Schedule 4 ( Condition Precedent Documents ) in relation to a Replacement Ship in form and substance satisfactory to the Agent and its lawyers.
(e)
Upon satisfaction of the conditions under paragraph (d):
(i)
the relevant Replacement Ship shall become a Ship for the purposes of this Agreement; and
(ii)
the Restricted Amount shall be reduced to such amount as is required to ensure that the aggregate of the Fair Market Values (determined as provided in Clause 15.3 ( Valuation of Ships ) of each Ship subject to a Mortgage is not below 175 per cent. of the Total Commitments minus any remaining Restricted Amount.
8.10
Mandatory prepayment and cancellation on Change of Control
If there is a Change of Control, the Borrower shall be obliged to prepay the Loan in full and the Commitments shall terminate not later than 60 days following the occurrence of the Change of Control.
8.11
Mandatory prepayment and cancellation on breach of financial covenants
If the Borrower is not in compliance with the financial covenants in Clause 12.5 ( Financial Covenants ) at any time during the Security Period, the Borrower shall be obliged to repay the Loan in full (and the Commitments shall be cancelled) not later than 5 days following a request in writing from the Agent (acting on the instructions of the Majority Lenders) to the Borrower to repay the Loan.
8.12
Amounts payable on prepayment
A prepayment shall be made together with accrued interest (and any other amount payable under Clause 21 ( Indemnities ) or otherwise) in respect of the amount prepaid and, if the prepayment is not made on the last day of an applicable Interest Period, together with any sums payable under Clause 21.1(b) but without premium or penalty.

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8.13
Reborrowing
Subject to the terms of this Agreement, any amount repaid may be reborrowed.
8.14
Voluntary cancellation of Commitments
Subject to the following conditions, the Borrower may cancel the whole or any part of the Total Available Commitments.
8.15
Conditions for cancellation of Commitments
The conditions referred to in Clause 8.14 ( Voluntary cancellation of Commitments ) are that:
(a)
a partial cancellation shall be either:
(i)
$1,000,000 or a higher integral multiple of $1,000,000; or
(ii)
where the Borrower is obliged to make such cancellation pursuant to paragraph (c) of Clause 8.9 ( Replacement Ships following a sale or Total Loss ), equal to the Restricted Amount in relation to the corresponding Ship that has been sold; and
(b)
the Agent has received from the Borrower at least 3 Business Days' prior written notice specifying the amount of the Total Commitments to be cancelled and the date on which the cancellation is to take effect.
8.16
Effect of notice of cancellation
The service of a cancellation notice given under Clause 8.15 ( Conditions for cancellation of Commitments ) shall cause the amount of the Total Commitments specified in the notice to be permanently cancelled and any partial cancellation shall be applied against the Commitment of each Lender pro rata and also on a pro rata basis against the future instalments repayable pursuant to Clause 8.1 ( Reduction of Total Commitments ).
8.17
Unwinding of Designated Transactions
On or prior to any full or partial repayment or prepayment of the Loan under this Clause 8 ( Reduction, Repayment, Prepayment and Cancellation ) or any other provision of this Agreement, the Borrower shall wholly or partially reverse, offset, unwind or otherwise terminate one or more of the continuing Designated Transactions so that the notional principal amount of the continuing Designated Transactions thereafter remaining does not and will not in the future (taking into account the scheduled amortisation) exceed the amount of the Loan as reducing from time to time thereafter pursuant to Clause 8.1 ( Reduction of Total Commitments ).
8.18
Right of replacement or repayment and cancellation in relation to a single Lender
(a)
So long as no Potential Event of Default or Event of Default has occurred and is continuing, if:
(i)
any sum payable to any Lender by the Borrower is required to be increased under paragraph (c) of Clause 22.2 ( Grossing-up for taxes ) or under that clause as incorporated by reference or in full in any other Finance Document; or
(ii)
any Lender claims indemnification from the Borrower under Clause 21.1 (e) ( Indemnities regarding borrowing and repayment of Loan ) or Clause 28 ( Increased Costs );

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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 of that Lender and its intention to procure the repayment of that Lender's participation in the Loan.
(b)
On receipt of a notice of cancellation referred to in paragraph (a) above, any Commitment of that Lender shall immediately be reduced to zero.
(c)
On the last day of each Interest Period which ends after the Borrower has given notice of cancellation under paragraph (a) 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.
9
CONDITIONS PRECEDENT
9.1
Documents, fees and no default
Each Lender's obligation to contribute to an Advance is subject to the following conditions precedent:
(a)
that, on or before the date of this Agreement, the Agent receives the documents and fees described in Part A of Schedule 4 ( Condition Precedent Documents ) in form and substance satisfactory to the Agent and its lawyers;
(b)
that, on or before the initial Drawdown Date and each Drawdown Date that relates to a Ship:
(i)
the Agent receives the documents described in Part B of Schedule 4 ( Condition Precedent Documents ) in form and substance satisfactory to the Agent and its lawyers; and
(ii)
during the period from 31 December 2017 to the date of the initial Drawdown Notice and the relevant Drawdown Date, nothing shall have occurred (and neither the Agent nor any of the Lenders shall have become aware of any condition or circumstance not previously known to it or them) which the Agent or the Lenders shall determine has had, or could reasonably be expected to have, a material adverse effect (A) on the rights or remedies of the Lenders, (B) on the performance of the Borrower or the Group of their respective obligations to the Lenders, (C) with respect to the Loan or (D) on the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower or the Group;
(c)
that both at the date of each Drawdown Notice and at each Drawdown Date:
(i)
no Event of Default or Potential Event of Default has occurred and is continuing or would result from the borrowing of the relevant Advance;
(ii)
the representations and warranties in Clause 10 ( Representations and Warranties ) and those of the Borrower or any Security Party which are set out in the other Finance Documents would be true and not misleading if repeated on each of those dates with reference to the circumstances then existing; and
(iii)
none of the circumstances contemplated by Clause 5.9 ( Market disruption ) has occurred and is continuing; and
(iv)
since the filing of the latest audited financial statements, nothing shall have occurred (and neither the Facility Agent nor any of the Lenders shall have become aware of any condition or circumstance not previously known to it or them) which the Lenders shall determine has had, or could reasonably be expected to have, a material adverse effect

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(v) on the rights or remedies of the Lenders, (w) on the performance of the Borrower or the Borrower and its subsidiaries of their obligations to the Lenders, (x) with respect to this Agreement or (y) on the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower or the Borrower and its subsidiaries.
(d)
that, if the ratio set out in Clause 15.1 ( Minimum required security cover ) were applied on the basis of the most recently provided valuations and immediately following the making of the relevant Advance, the Borrower would not be obliged to provide additional security or prepay part of the Loan under that Clause; and
(e)
that the Agent has received, and found to be acceptable to it, any further opinions, consents, agreements and documents in connection with the Finance Documents which the Agent may, with the authorisation of the Majority Lenders, reasonably request by notice to the Borrower prior to the relevant Drawdown Date.
9.2
Waiver of conditions precedent
If the Majority Lenders, at their discretion, permit an Advance to be borrowed before certain of the conditions referred to in Clause 9.1 ( Documents, fees and no default ) are satisfied, the Borrower shall ensure that those conditions are satisfied within 5 Business Days after the relevant Drawdown Date (or such other period as the Agent may, with the authorisation of the Majority Lenders, specify).
10
REPRESENTATIONS AND WARRANTIES
10.1
General
The Borrower represents and warrants to each Creditor Party as follows.
10.2
Status
The Borrower is duly incorporated, validly existing and in good standing under the laws of, and has the centre of its main interests in, Belgium.
10.3
Corporate power
The Borrower has the corporate capacity, and has taken all corporate action and obtained all consents necessary for it:
(a)
to execute the Finance Documents and the Master Agreements to which the Borrower is a party; and
(b)
to borrow under this Agreement, to enter into Designated Transactions under the Master Agreements to which the Borrower is a party and to make all the payments contemplated by, and to comply with, those Finance Documents and those Master Agreements.
10.4
Consents in force
All the consents referred to in Clause 10.3 ( Corporate power ) remain in force and nothing has occurred which makes any of them liable to revocation.
10.5
Legal validity; effective Security Interests

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The Finance Documents and the Master Agreements to which the Borrower is a party, do now or, as the case may be, will, upon execution and delivery (and, where applicable, registration as provided for in the Finance Documents):
(a)
constitute the Borrower's legal, valid and binding obligations enforceable against the Borrower in accordance with their respective terms; and
(b)
create legal, valid and binding Security Interests enforceable in accordance with their respective terms over all the assets to which they, by their terms, relate;
subject to any relevant mandatory insolvency laws affecting creditors' rights generally and to general equity principles.
10.6
No third party Security Interests
Without limiting the generality of Clause 10.5 ( Legal validity; effective Security Interests ), at the time of the execution and delivery of each Finance Document and each Master Agreement:
(a)
the Borrower that is a party to that Finance Document or Master Agreement will have the right to create all the Security Interests which that Finance Document or Master Agreement purports to create; and
(b)
no third party will have any Security Interest (except for Permitted Security Interests) or any other interest, right or claim over, in or in relation to any asset to which any such Security Interest, by its terms, relates.
10.7
No conflicts
The execution by the Borrower of each Finance Document and each Master Agreement to which it is a party, and the borrowing by the Borrower of the Loan, and the Borrower's compliance with each Finance Document and each Master Agreement to which it is a party will not involve or lead to a contravention of:
(a)
any law or regulation; or
(b)
the constitutional documents of the Borrower; or
(c)
any contractual or other obligation or restriction which is binding on the Borrower or any of its subsidiaries or any of their respective assets.
10.8
No default
No Event of Default or Potential Event of Default has occurred and is continuing.
10.9
Information
All information which has been provided in writing by or on behalf of the Borrower or any Security Party to the Mandated Lead Arrangers or any other Creditor Party in connection with any Finance Document satisfied the requirements of Clause 11.4 ( Information provided to be accurate ); all audited and unaudited accounts which have been so provided satisfied the requirements of Clause 11.6 ( Form of financial statements ); and there has been no material adverse change in the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower and its subsidiaries since 31 December 2017.

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10.10
No litigation
No litigation, arbitration or administrative proceedings (including, but not limited to, investigative proceedings) involving the Borrower has been commenced or taken or, to the Borrower's knowledge, is likely to be commenced or taken which, in any case, would be likely to have a material adverse effect on the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower and its subsidiaries or on the ability of the Borrower to perform its obligations under the Finance Documents.
10.11
Compliance with certain undertakings
At the date of this Agreement, the Borrower is in compliance with Clauses 11.2 ( Title; negative pledge ) and 11.12 ( Principal place of business ).
10.12
Taxes paid
The Borrower has paid all taxes applicable to, or imposed on or in relation to, the Borrower and its business.
10.13
No money laundering
Without prejudice to the generality of Clause 2.3 ( Purpose of Advances ), in relation to the utilisation by the Borrower of the Advances granted or to be granted to it under this Agreement, the performance and discharge of its obligations and liabilities under the Finance Documents to which it is a party, and the transactions and other arrangements effected or contemplated by the Finance Documents to which it is a party, the Borrower confirms that it is acting for its own account and that the foregoing will not involve or lead to contravention of any law, official requirement or other regulatory measure or procedure implemented to combat "money laundering" (as defined in Article 1 of the Directive 2015/849/EC of the European Parliament and of the Council of the European Union of 20 May 2015).
10.14
Anti-Corruption Laws
The Borrower has conducted its business in compliance with all applicable Anti-Corruption Laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
10.15
Sanctions
Each Relevant Person has been and is in compliance with all Sanctions Laws and no Relevant Person:
(a)
is a Restricted Party, or is involved in any transaction through which it is likely to become a Restricted Party; or
(b)
has received formal notice in writing of any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws.
10.16
ISM Code and ISPS Code compliance
All requirements of the ISM Code and the ISPS Code as they relate to the Borrower, the Approved Manager and the Ships have been, or will be, complied with at the time of the Drawdown Date relating to each Ship.

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10.17
Pari passu obligations
The payment obligations of the Borrower under this Agreement, the Master Agreements and the other Finance Documents 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 the companies generally.
10.18
Environmental matters
Except as many have been disclosed by the Borrower in writing to, and acknowledged in writing by, the Agent:
(a)
the Borrower has complied with the provisions of all Environmental Laws;
(b)
the Borrower has obtained all Environmental Approvals and is in compliance with all Environmental Approvals;
(c)
the Borrower has not received notice of any Environmental Claim that alleges that it is not in compliance with any Environmental Law of any Environmental Approval;
(d)
there is no Environmental Claim pending or, to the best of the Borrower's knowledge and belief (having made due enquiry), threatened against the Borrower or any Ship; and
(e)
no Environmental Incident which could or might give rise to any Environmental Claim has occurred.
10.19
Deduction of Tax
The Borrower is not required to make any Tax Deduction from any payment it may make under any Finance Document.
10.20
US Tax Obligor
The Borrower is not a US Tax Obligor.
11
GENERAL UNDERTAKINGS
11.1
General
The Borrower undertakes with each Creditor Party to comply with the following provisions of this Clause 11 ( General Undertakings ) at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
11.2
Title; negative pledge
The Borrower shall hold the legal title to, and own the entire beneficial interest in any Ship owned by the Borrower, its Earnings and Insurances, free from all Security Interests and other interests and rights of every kind, except for those created by the Finance Documents and the effect of assignments contained in the Finance Documents and except for Permitted Security Interests.
11.3
Disposal of assets
The Borrower will not transfer, lease or otherwise dispose of all or a substantial part of its assets, whether by one transaction or a number of transactions, whether related or not except in the usual course of its business and for fair market value.

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11.4
Information provided to be accurate
All financial and other information which is provided in writing by or on behalf of the Borrower under or in connection with any Finance Document will be true, accurate and not misleading and will not omit any material fact or consideration.
11.5
Provision of financial statements
The Borrower will send to the Agent:
(a)
as soon as possible, but in no event later than 120 days after the end of each financial year of the Borrower from and including the financial year ending 31 December 2018, the audited consolidated accounts of the Group and audited individual accounts of the Borrower;
(b)
as soon as possible, but in no event later than 75 days after the end of each financial half-year of the Borrower (which half-year end shall, for the avoidance of doubt, occur annually), the audited consolidated balance sheet of the Group certified as to its correctness by the chief financial officer of the Borrower and the audited individual balance sheet of the Borrower certified as to its correctness by an officer or director of the Borrower;
(c)
as soon as possible, but in no event later than 60 days after the end of each financial quarter of the Borrower and provided that these documents have not been published on the Borrower's website or sent to the Lenders in the form of a press release, unaudited consolidated income statements of the Group certified as to their correctness by the chief financial officer of the Borrower and unaudited individual income statements of the Borrower certified as to their correctness by an officer or director of the Borrower;
(d)
as soon as possible, but not later than 120 days after the end of each financial year of the Borrower, a financial projection for the Borrower and the Group for the next 3 years in a format which is acceptable to the Agent; and
(e)
together with the annual audited consolidated accounts and with each balance sheet of the Group referred to in paragraphs (a) and (b), a compliance certificate (together with supporting schedules, if any) signed by the chief financial officer of the Borrower in the form attached as Schedule 8 ( Form of Certificate of Compliance ) (or in any other format which the Agent may approve and with such other information as the Agent may require) evidencing compliance with the financial undertakings in Clause 12.5 ( Financial Covenants ) and also listing the Fair Market Value of each of the Ships.
11.6
Form of financial statements
The audited accounts delivered under Clause 11.5 ( Provision of financial statements ) will:
(a)
be prepared in accordance with all applicable laws and IFRS consistently applied;
(b)
give a true and fair view of the state of affairs of the Group (or the Borrower, as the case may be) at the date of those accounts and of profit for the period to which those accounts relate; and
(c)
fully disclose or provide for all significant liabilities of the Group (or the Borrower, as the case may be).
11.7
Provision of further information

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(a)
The Borrower will, as soon as practicable after receiving a request from the Agent provide the Agent with such additional financial information in relation to the Group which may be reasonably requested by the Agent or any Lender through the Agent.
(b)
The Borrower shall supply to the Agent, promptly upon becoming aware of them, the details of any claim, action, suit, proceeding or investigation with respect to Sanctions Laws against it, any of its direct or indirect owners, subsidiaries or any of their respective directors, officers, employees, agents or representatives.
11.8
Creditor notices
The Borrower will send the Agent, at the same time as they are despatched, copies of all material communications which are despatched to all of the Borrower's shareholders or creditors or to the whole of any class of them.
11.9
Consents
The Borrower will maintain in force and promptly obtain or renew, and will promptly send certified copies to the Agent of, all consents required:
(a)
for the Borrower to perform its obligations under any Finance Document and any Master Agreement to which it is a party;
(b)
for the validity or enforceability of any Finance Document and any Master Agreement to which it is a party;
and the Borrower will comply with the terms of all such consents.
11.10
Maintenance of Security Interests
The Borrower will:
(a)
at its own cost, do all that it reasonably can to ensure that any Finance Document to which it is a party validly creates the obligations and the Security Interests which it purports to create; and
(b)
without limiting the generality of paragraph (a), at its own cost, promptly register, file, record or enrol any Finance Document to which it is a party with any court or authority in all Pertinent Jurisdictions, pay any stamp, registration or similar tax in all Pertinent Jurisdictions in respect of any Finance Document to which it is a party, give any notice or take any other step which, in the reasonable opinion of the Majority Lenders, is or has become necessary for any Finance Document to which it is a party to be valid, enforceable or admissible in evidence or to ensure or protect the priority of any Security Interest which it creates.
11.11
Notification of litigation
The Borrower will provide the Agent with details of any legal or administrative action involving the Borrower, any Security Party or any Ship as soon as such action is instituted or it becomes apparent to the Borrower that it is likely to be instituted, unless it is clear that the legal or administrative action cannot be considered material in the context of any Finance Document.
11.12
Principal place of business

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The Borrower will notify the Agent if it has a place of business in any jurisdiction which would require a Finance Document to which it is a party to be registered, filed or recorded with any court or authority in that jurisdiction or if the centre of its main interests changes.
11.13
Notification of default
The Borrower will notify the Agent as soon as the Borrower becomes aware of:
(a)
the occurrence of an Event of Default or Potential Event of Default; or
(b)
any matter which indicates that an Event of Default or Potential Event of Default may have occurred,
and will keep the Agent fully up‑to‑date with all developments.
11.14
Access to books and records
The Borrower shall permit one or more representatives of the Agent, at the request of the Agent, to have reasonable access to its books and records and to inspect the same during normal business hours at its offices upon reasonable prior written notice.
11.15
Press releases
The Borrower will send to the Agent, at the same time as they are dispatched, copies of all press releases which are issued by the Borrower.
11.16
Pari passu ranking
The Borrower's payment obligations under this Agreement and any other Finance Document to which it is a party shall 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.
11.17
Conduct of business; compliance with laws
The Borrower shall conduct its business in a proper and efficient manner in compliance with:
(a)
its constitutional documents;
(b)
all Sanctions Laws;
(c)
all Anti-Corruption Laws;
(d)
all Environmental Laws; and
(e)
all other laws and regulations applicable to its business,
and shall notify the Agent immediately upon becoming aware of any breach of any such document, law or regulation.
11.18
Know your customer requirements
Promptly upon the Agent's request the Borrower will supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent in order for each Creditor Party to carry out and be satisfied with the results of all necessary "know your customer"

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or other checks which it is required to carry out in relation to the transactions contemplated by the Finance Documents and to the identity of any parties to the Finance Documents (other than Creditor Parties) and their directors and officers.
11.19
Compliance with Sanctions Laws
The Borrower shall:
(a)
ensure that neither it nor any subsidiary of the Borrower is or will become a Restricted Party.
(b)
use reasonable endeavours to procure that no director, officer, employee, agent or representative of the Borrower or any subsidiary of the Borrower is or will become a Restricted Party; and
(c)
procure that no proceeds of any Advance shall be made available, directly or indirectly, to or for the benefit of a Restricted Party nor shall they otherwise be applied in a manner for a purpose prohibited by Sanctions Laws.
11.20
Documents to be provided following execution of a Master Agreement
Following the execution of each Master Agreement, the Borrower shall procure that promptly following the execution of such Master Agreement the Agent has received the following documents in form and substance satisfactory to the Agent and its lawyers:
(a)
a Master Agreement Assignment in relation to the relevant Master Agreement;
(b)
if required by the Agent and in the case of each Mortgage an amendment or addenda to that Mortgage specifying such consequential amendments to that Mortgage as may be required as a consequence of the entry by the Borrower and the relevant Swap Bank into the Master Agreement;
(c)
if required by the Agent and in the case of a Finance Document an amendment or addenda to that Finance Document specifying such consequential amendments to that Mortgage as may be required as a consequence of the entry by the Borrower and the relevant Swap Bank into the Master Agreement;
(d)
in each case if required for the provisions of the legal opinions referred to in paragraph (f), copies of the resolutions of the directors and shareholders of the Borrower authorising the execution of the Master Agreement Assignments, the Mortgage amendments and addenda referred to in paragraphs (a) to (c);
(e)
the original of any power of attorney under which any of the Master Agreement Assignments, the Mortgage amendments and addenda referred to in paragraphs (a) to (c) are to be executed on behalf of the Borrower;
(f)
documentary evidence that the Mortgage amendments and addenda referred to in paragraph (b) have been duly registered against that Ship as valid amendment or addenda to the Mortgage in accordance with the laws of the relevant Approved Flag;
(g)
if required by the Agent, favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of England, Belgium, the country where the Ship is registered and such other relevant jurisdictions as the Agent may require; and
(h)
if the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

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12
CORPORATE UNDERTAKINGS
12.1
General
The Borrower also undertakes with each Creditor Party to comply with the following provisions of this Clause 12 ( Corporate Undertakings ) at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
12.2
Maintenance of status
The Borrower will maintain its separate corporate existence under the laws of, and the centre of its main interests in, Belgium and the Borrower shall maintain its listing on the First Market of Euronext Brussels and the New York Stock Exchange or such other reputable international stock exchange approved by the Agent (acting on the instructions of the Majority Lenders) in writing, such approval not to be unreasonably withheld or delayed.
12.3
No change of business
The Borrower will not operate outside the scope of its Articles of Association as at the date of this Agreement.
12.4
No merger etc.
The Borrower will not, and the Borrower will procure that none of its subsidiaries will, enter into any form of merger, sub-division, amalgamation or other reorganisation which may, in the reasonable opinion of the Majority Lenders, have a material adverse effect on (A) on the rights or remedies of the Lenders, (B) on the performance of the Borrower or the Group of their respective obligations to the Lenders, (C) with respect to the Loan or (D) on the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower or the Group.
12.5
Financial Covenants
The Borrower will ensure that the consolidated financial position of the Group shall at all times during the Security Period be such that:
(a)
Consolidated Working Capital shall not be less than $0;
(b)
Free Liquid Assets are not less than the higher of:
(i)
$50,000,000; and
(ii)
5 per cent. of Total Indebtedness;
(c)
the amount of Cash shall equal or exceed US$30,000,000; and
(d)
the ratio of Stockholders' Equity to Total Assets is not less than 30 per cent.
In this Clause 12.5 ( Financial Covenants ):
" Cash " means, at any date of determination under this Agreement, the aggregate value of the Group's credit balances on any deposit, savings or current account and cash in hand with recognised and reputable banks or financial institutions but excluding any such credit balances and cash subject to a Security Interest at any time;

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" Consolidated Current Assets " means, at any date of determination under this Agreement, the amount of the current assets of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet and including any amounts available under committed credit lines having remaining maturities of more than 12 months;
" Consolidated Current Liabilities " means, at any date of determination under this Agreement, the amount of the current liabilities of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet;
" Consolidated Working Capital " means Consolidated Current Assets less Consolidated Current Liabilities;
" Free Liquid Assets " means, at any date of determination under this Agreement, the aggregate amount of cash and cash equivalents of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet but excluding any of those assets subject to a Security Interest (other than a Security Interest in favour of the Security Trustee pursuant to this Agreement) at any time and, for the avoidance of doubt, "cash and cash equivalents" include any amounts available under committed credit lines having remaining maturities of more than 6 months;
" Latest Balance Sheet " means, at any date, the consolidated balance sheet of the Group most recently delivered to the Agent pursuant to Clause 11.5 ( Provision of financial statements ) and/or most recently made publicly available;
" Stockholders' Equity " means, at any date of determination under this Agreement, the amount of the capital and reserves of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet;
" Total Assets " means, at any date of determination under this Agreement, the amount of the total assets of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet; and
" Total Indebtedness " means, at any date of determination under this Agreement, the amount of long-term loans (including finance leases, banks loans and other long-term loans) and short-term loans of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet.
12.6
Change in IFRS
If, at any time after the date of this Agreement, any mandatory change is made to IFRS or any applicable law relating to the financial reporting (including but not limited to accounting bases, policies, practices and procedures or reference periods) of the Group generally or any member of the Group individually and the effect of complying with that change would result in the value for "Cash", "Consolidated Current Assets", "Consolidated Current Liabilities", "Consolidated Working Capital", "Free Liquid Assets", "Stockholders' Equity", "Total Assets" and/or "Total Indebtedness" being materially different from its value if calculated in accordance with IFRS and all applicable laws in effect at the date of this Agreement and of which the Lenders would reasonably expect to have been informed, the Borrower shall immediately notify the Agent of that change and procure that, as soon as reasonably practicable thereafter, the Borrower's auditors deliver to the Agent:
(a)
a description of the change and what adjustments would need to be made to the financial statements of the Group following that change in order to reverse the effects of that change so that the values of "Cash", "Consolidated Current Assets", "Consolidated Current Liabilities", "Consolidated

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Working Capital", "Free Liquid Assets", "Stockholders' Equity", "Total Assets" and/or "Total Indebtedness" will be the same as if calculated in accordance with IFRS and all applicable laws in effect at the date of this Agreement; and
(b)
such information, in form and substance acceptable to the Agent, as may be required:
(i)
to enable the Lenders to determine whether there is a breach of any of the financial covenants in respect of the Group set out in Clause 12.5 ( Financial Covenants ) (based on IFRS and all applicable laws in effect at the date of this Agreement); and
(ii)
to assist the Lenders in making an accurate comparison between the financial position of the Group indicated in the financial statements prepared following the change and those prepared prior to it.
In the event that the Lenders are satisfied that, based on the information provided by the Borrower's auditors, the financial covenants in Clause 12.5 ( Financial Covenants ) have been complied with, the Lenders and the Borrower shall enter into discussions with a view to agreeing amendments to this Agreement so as to mitigate the effect of the change.
12.7
Change of accounting period
The Borrower shall not change its fiscal year end date being 31 December.
12.8
Restrictions on dividends
The Borrower may only pay a dividend or make a distribution and/or buy-back its own common stock subject to the following conditions:
(a)
no Event of Default has occurred and is continuing or would result upon payment of the proposed dividend, distribution or buy-back; and
(b)
the payment of such dividend or distribution would not cause any breach of any of the financial covenants set out in Clause 12.5 ( Financial Covenants ).
12.9
Payment of taxes
The Borrower shall pay when due all taxes applicable to, or imposed on or in relation to the Borrower, its business or any Ship owned by it.
12.10
Negative undertakings
The Borrower will not:
(a)
change its legal name, type of organisation or jurisdiction of incorporation; or
(b)
provide any form of credit or financial assistance to any person or enter into any transaction with or involving any person on terms which are, in any respect, less favourable to the Borrower than those which it could obtain in a bargain made at arms' length.
12.11
Notification of Sanctions
The Borrower shall:
(a)
supply to the Agent, promptly upon becoming aware of them, the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanction Laws against (a) the Borrower, (b)

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any other Relevant Person or (c) any owners of any Relevant Person (other than any owner of the Borrower), as well as information on what steps are being taken with regards to answering or opposing the same;
(b)
inform the Agent promptly upon becoming aware that any of (a) the Borrower, (b) any other Relevant Person or (c) any owners of any Relevant Person (other than any owner of the Borrower), has become or is likely to become a Restricted Party.
12.12
Incurrence of Financial Indebtedness
The Borrower shall not, without the prior consent of the Majority Lenders, incur any Financial Indebtedness or grant any guarantee in respect of Financial Indebtedness if, as a result of incurring that Financial Indebtedness or incurring the contingent liability under that guarantee (as assessed in accordance with IFRS), an Event of Default would occur, or one or more of the financial covenants in respect of the Borrower set out in Clause 12.5 ( Financial Covenants ) would be breached, on the date of such incurrence.
13
INSURANCE
13.1
General
The Borrower also undertakes with each Creditor Party to comply with the following provisions of Clause 13 ( Insurance ) at all times during the Security Period (in the case of any Ships owned by the Borrower) (in the case of each Ship after the Drawdown Date applicable to it) except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit.
13.2
Maintenance of obligatory insurances
The Borrower shall keep each Ship owned by it insured at the expense of the Borrower against:
(a)
fire and usual marine risks and war risks (including hull and machinery, hull and freight interest, piracy, terrorism, missing vessel cover, blocking and trapping and confiscation); and
(b)
protection and indemnity risks (including pollution risks), on "full entry terms".
13.3
Terms of obligatory insurances
The Borrower shall, effect such insurances in respect of each Ship owned by it:
(a)
in Dollars;
(b)
in the case of fire and usual marine risks and war risks (including coverage for war protection and indemnity with a separate limit for the same amounts insured under war hull), in an amount on an agreed value basis at least the greater of (i) when aggregated with such insurances on the other Ships which are subject to a Mortgage, 125 per cent. of the Loan and (ii) the Fair Market Value of that Ship;
(c)
in the case of hull and machinery insured values of each Ship in an amount not less than 70 per cent. of the total insured value of that Ship;
(d)
in the case of oil pollution liability risks, for an aggregate amount equal to the highest level of cover from time to time available under basic protection and indemnity club entry with a protection and indemnity association belonging to the International Group of Protection and Indemnity Associations;

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(e)
in relation to protection and indemnity risks in respect of the Ship's full tonnage on full entry terms;
(f)
on approved terms; and
(g)
through approved brokers and with approved insurance companies and/or underwriters or, in the case of war risks and protection and indemnity risks, in approved war risks and protection and indemnity risks associations.
13.4
Further protections for the Creditor Parties
In addition to the terms set out in Clause 13.3 ( Terms of obligatory insurances ), the Borrower shall procure that the obligatory insurances shall:
(a)
in relation to the obligatory insurances for fire and usual marine risks and war risks, whenever the Security Trustee requires, name (or be amended to name) the Security Trustee as additional named assured for its rights and interests, warranted no operational interest and with full waiver of rights of subrogation against the Security Trustee, but without the Security Trustee thereby being liable to pay (but having the right to pay) premiums, calls or other assessments in respect of such insurance;
(b)
name the Security Trustee as loss payee with such directions for payment as the Security Trustee may specify;
(c)
provide that all payments by or on behalf of the insurers under the obligatory insurances to the Security Trustee shall be made without set‑off, counterclaim or deductions or condition whatsoever;
(d)
provide that such obligatory insurances shall be primary without right of contribution from other insurances which may be carried by the Security Trustee or any other Creditor Party; and
(e)
provide that the Security Trustee may make proof of loss if the Borrower fails to do so.
13.5
Renewals
The Borrower shall ensure that:
(a)
before the expiry of any obligatory insurance, that obligatory insurance is renewed; and
(b)
promptly after each such renewal, there is provided to the Security Trustee details of the terms and conditions on which such obligatory insurances have been renewed.    
If there is a change in the insurers and/or markets through whom the obligatory insurances are placed the Borrower shall procure that the Security Trustee is notified within a reasonable time of the names of the insurers and/or markets employed for the purposes of the renewal of the obligatory insurance and of the amounts in which they are renewed.
13.6
Letters of undertaking
In relation to all obligatory insurances effected from time to time under Clause 13.2 ( Maintenance of obligatory insurances ), the Borrower shall ensure that all brokers and any protection and indemnity or war risks associations in which any Ship is entered, in each case being approved by the Security Trustee (such approval not to be unreasonably withheld), provide the Security Trustee with letters of undertaking:

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(a)
in the case of a broker, in a form standard in the insurance market in which such broker operates or any professional association of which that approved broker is a member;
(b)
in the case of a protection and indemnity or war risks association, in its standard form.
If any of the obligatory insurances referred to in paragraphs (a) and/or (b) of Clause 13.2 ( Maintenance of obligatory insurances ) form part of a fleet cover, the Borrower will procure that any letter of undertaking referred to in paragraph (a) of this Clause 13.6 ( Letters of undertaking ) is amended to provide that the relevant brokers shall undertake to the Security Trustee that they shall neither set-off against any claims in respect of the relevant Ship any premiums due in respect of other vessels under such fleet cover or any premiums due for other insurances, nor cancel the insurance for reason of non-payment of premiums for other vessels under such fleet cover or of premiums for such other insurances.
13.7
Copies of certificates of entry
The Borrower shall ensure that any protection and indemnity and/or war risks associations in which each Ship is entered provides the Security Trustee with a certified copy of the certificate of entry for that Ship.
13.8
Deposit of original policies
The Borrower shall ensure that all policies relating to obligatory insurances are deposited with the approved brokers through which the insurances are effected or renewed.
13.9
Payment of premiums
The Borrower shall ensure that (taking account of any applicable grace periods) all premiums, calls or contributions or other sums of money from time to time due in respect of any obligatory insurances are paid in full and produce all relevant receipts when so required by the Security Trustee.
13.10
Guarantees
The Borrower shall arrange for the execution and delivery of all guarantees and indemnities as may from time to time be required by any Ship's P&I Club or war risks association.
13.11
Compliance with terms of insurances
The Borrower shall neither do nor omit to do (nor permit to be done or not to be done) any act or thing which would or might render any obligatory insurance in relation to any Ship invalid, void, voidable or unenforceable or render any sum payable under an obligatory insurance repayable in whole or in part; and, in particular:
(a)
the Borrower shall (in the case of any Ships owned by the Borrower) take all necessary action and comply with all requirements which may from time to time be applicable to the obligatory insurances, and ensure that the obligatory insurances are not made subject to any exclusions or qualifications to which the Security Trustee has not given its prior approval;
(b)
the Borrower shall not make any changes relating to the classification or classification society or manager or operator of any Ship approved by the underwriters of the obligatory insurances;
(c)
the Borrower shall make (and on request promptly supply copies to the Agent of) all quarterly or other voyage declarations which may be required by the protection and indemnity risks

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association in which any Ship it is entered to maintain cover for trading to the United States of America and Exclusive Economic Zone (as defined in the United States Oil Pollution Act 1990 or any other applicable legislation); and
(d)
the Borrower shall not employ any Ship, nor allow it to be employed, otherwise than in conformity with the terms and conditions of the obligatory insurances, without first obtaining the consent of the insurers and complying with any requirements (as to extra premium or otherwise) which the insurers specify.
13.12
Alteration to terms of insurances
The Borrower will procure that:
(a)
no adverse alteration is made to any obligatory insurance (which alteration is, in the reasonable opinion of the Security Trustee, likely to materially adversely affect the Lenders) without the prior written consent of the Security Trustee; and
(b)
all the steps under its control are taken to seek to avoid the occurrence of any act or omission which would enable cancellation of any obligatory insurance or render any obligatory insurance invalid, void or unenforceable or render any sum paid out under any obligatory insurance repayable in whole or in part.
13.13
Settlement of claims
The Borrower shall not settle, compromise or abandon any claim under any obligatory insurance for Total Loss or for a Major Casualty, and the Borrower shall do all things necessary and provide all documents, evidence and information to enable the Security Trustee to collect or recover any moneys which at any time become payable in respect of the obligatory insurances.
13.14
Provision of information
The Borrower shall promptly provide the Security Trustee (or any persons which it may designate) with any information which the Security Trustee (or any such designated person) reasonably requests for the purpose of:
(a)
obtaining or preparing any report from an independent marine insurance broker as to the adequacy of the obligatory insurances effected or proposed to be effected; and/or
(b)
effecting or renewing any such insurances as are referred to in Clause 13.15 ( Mortgagee's interest and additional perils insurances ) or dealing with or considering any matters relating to any such insurances;
and the Borrower shall, forthwith upon demand, indemnify the Security Trustee in respect of all fees and other expenses reasonably incurred by or for the account of the Security Trustee in connection with any such report as is referred to in paragraph (a).
13.15
Mortgagee's interest and additional perils insurances
The Agent for the benefit of the Security Trustee, or the Security Trustee itself, shall effect, maintain and renew a mortgagee's interest additional perils insurance and a mortgagee's interest marine insurance in such amounts, on such terms reasonably available in the market, through such insurers and generally in such manner as the Security Trustee may from time to time consider appropriate and the Borrower shall upon demand fully indemnify the Agent or the Security Trustee (as the case may be) in respect of all reasonable premiums and other reasonable expenses which

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are incurred in connection with or with a view to effecting, maintaining or renewing any such insurance or dealing with, or considering, any matter arising out of any such insurance Provided that the cover in respect of the mortgagee's interest marine insurance shall not exceed 110 per cent. of the Loan.
Notwithstanding the above, if at any time the Agent or Security Trustee proposes to effect any insurances of the nature referred to in this Clause, it shall first notify the Borrower of the insurance which it proposes to effect, the terms on which it requires it to be effected and the date from which it requires it to be so effected. If, before the date on which the Agent or Security Trustee (as the case may be) requires that insurance to be effected, the Borrower can demonstrate to the Agent or Security Trustee (as the case may be) that a firm of insurance brokers with a reputation acceptable to the Agent or the Security Trustee (as the case may be) is able to arrange that insurance upon the same terms, before that date, for a price lower than that for which any firm of insurance brokers nominated by the Agent or Security Trustee is prepared to arrange that insurance and with underwriters acceptable to the Agent or Security Trustee (as the case may be), and if that firm of insurance brokers will enter into such agreements with the Agent or Security Trustee (as the case may be) as it may require taking into account the identity of that firm of insurance brokers, the Agent or Security Trustee (as the case may be) shall not unreasonably refuse to effect that insurance through that firm of insurance brokers so nominated by the Borrower.
14
SHIP COVENANTS
14.1
General
The Borrower also undertakes with each Creditor Party to comply with the provisions of this Clause 14 ( Ship Covenants ) at all times during the Security Period except as the Agent may, with the authorisation of the Majority Lenders, otherwise permit (such permission not to be unreasonably withheld in the case of Clause 14.2 ( Ship's name and registration ), 14.12 ( Restrictions on chartering, appointment of managers etc. ) and 14.14 ( Sharing of Earnings ).
14.2
Ship's name and registration
The Borrower shall keep each Ship owned by it registered in its name on an Approved Flag; and shall not do or allow to be done anything as a result of which such registration might be cancelled or imperilled and shall not change the name or country of registry of any Ship owned by it Provided that the Borrower may change the registry of a Ship owned by it to any Approved Flag without the consent of the Lenders subject to the Borrower providing the Creditor Parties with replacement security at the time of such transfer (in form and substance satisfactory to the Agent) so that the Creditor Parties have the same security on that Ship and subject to any appropriate consequential amendments to the Finance Documents.
14.3
Repair and classification
The Borrower shall keep each Ship owned by it in a good safe condition and state of repair:
(a)
consistent with first-class ship ownership and management practice;
(b)
so as to maintain that Ship's class as at the date of this Agreement free of overdue recommendations and conditions affecting that Ship's class with a classification society which has been approved by the Agent; and
(c)
so as to comply with all laws and regulations applicable to vessels registered on the applicable Approved Flag or to vessels trading to any jurisdiction to which that Ship may trade from time to time, including but not limited to the ISM Code and the ISPS Code.

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14.4
Modification
The Borrower shall not make any modification or repairs to, or replacement of, any Ship owned by it or equipment installed on it which would or might materially and adversely alter the structure, type or performance characteristics of any such Ship or reduce its value.
14.5
Removal of parts
The Borrower shall not remove any material part of any Ship owned by it, or any item of equipment installed on any such Ship, except in the normal course of maintenance and repair, unless the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security Interest or any right in favour of any person other than the Security Trustee and becomes on installation on the Ship the property of the Borrower and subject to the security constituted by the relevant Mortgage Provided that the Borrower may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship concerned.
14.6
Surveys
The Borrower shall submit each Ship owned by it regularly to such periodical or other surveys which may be required for that Ship's classification purposes and shall comply with all conditions and recommendations affecting that Ship's class of the relevant classification society in accordance with their terms unless waived.
14.7
Inspection
The Borrower shall permit the Agent (by surveyors or other persons appointed by it for that purpose, at the Borrowers' expense once per year) to board any Ship owned by it at all reasonable times to inspect its condition (without interfering with that Ship's operation) or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.
14.8
Prevention of and release from arrest
The Borrower shall promptly discharge, unless the same is being contested in good faith by the Borrower:
(a)
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against any Ship owned by it, its Earnings or the Insurances in relation any such Ship;
(b)
all taxes, dues and other amounts charged in respect of any such Ship, its Earnings or the Insurances in relation to any such Ship; and
(c)
all other outgoings whatsoever in respect of any such Ship, its Earnings or the Insurances in relation to any such Ship;
and, forthwith upon receiving notice of the arrest of any Ship, or of its detention in exercise or purported exercise of any lien or claim, unless the same is being contested in good faith by the Borrower, the Borrower shall as soon as possible or in any event within 30 days (or such greater period as may be agreed by the Agent) procure its release by providing bail or otherwise as the circumstances may require.
14.9
Compliance with laws etc.

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The Borrower shall:
(a)
comply, or procure compliance with all laws or regulations:
(i)
relating to its business generally; and
(ii)
relating to each Ship owned by the Borrower, its ownership, employment, operation, management and registration,
including the ISM Code, the ISPS Code, all Environmental Laws, all Sanctions Laws and the laws of the Approved Flag in relation to each Ship owned by the Borrower;
(b)
obtain, comply with and do all that is necessary to maintain in full force and effect any consents required to be obtained and maintained by the Borrower in connection with any Environmental Laws;
(c)
without limiting paragraph (a) above, not employ any Ship owned by the Borrower nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions Laws; and
(d)
procure that neither the Borrower nor any member of the Group is or becomes a Restricted Party.
14.10
Provision of information
The Borrower shall promptly provide the Agent with any information which it reasonably requests regarding:
(a)
any Ship, its employment, position and engagements;
(b)
the Earnings and payments and amounts due to any Ship's master and crew;
(c)
any expenses incurred, or likely to be incurred, in connection with the operation, maintenance or repair of any Ship and any payments made in respect of any Ship;
(d)
any towages and salvages;
(e)
the Borrower, the Approved Managers' or any Ship's compliance with the ISM Code and/or the ISPS Code,
and, upon the Agent's request, to provide copies of any current charter relating to any Ship and of any current charter guarantee (unless the Borrower is prohibited to do so under applicable confidentiality provisions and if there is any such confidentiality provision, the Borrower shall use all reasonable endeavours to provide such copies) and copies of any Ship's Safety Management Certificate.
14.11
Notification of certain events
The Borrower shall immediately notify the Agent by email, confirmed forthwith by letter, of:
(a)
any casualty of any Ship which is or is likely to be or to become a Major Casualty;
(b)
any occurrence as a result of which any Ship has become or is, by the passing of time or otherwise, likely to become a Total Loss;

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(c)
any requirement or recommendation made by any insurer or classification society or by any competent authority in respect of any Ship which is not complied with within the applicable time limit;
(d)
any arrest or detention of a Ship, any exercise of any lien on any Ship or its Earnings or any requisition of a Ship for hire which may be material in the context of this Agreement;
(e)
any Environmental Claim made against the Borrower or in connection with a Ship, or any Environmental Incident;
(f)
any claim for breach of the ISM Code or the ISPS Code being made against an Borrower, an Approved Manager or otherwise in connection with a Ship; or
(g)
any other matter, event or incident, actual or threatened, the effect of which will or could lead to the ISM Code or the ISPS Code not being complied with;
and the Borrower shall keep the Agent advised in writing on a regular basis and in such detail as the Agent shall require of the Borrower's, the Approved Manager's or any other person's response to any of those events or matters.
14.12
Restrictions on chartering, appointment of managers etc.
The Borrower shall not:
(a)
let any Ship on demise charter for any period;
(b)
enter into any charter in relation to any Ship under which more than 2 months' hire (or the equivalent) is payable in advance;
(c)
charter any Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed;
(d)
appoint a manager of any Ship other than the Approved Managers or agree to any material alteration to the terms of an Approved Manager's appointment; or
(e)
put any Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $5,000,000 (or the equivalent in any other currency) unless either:
(i)
that person has first given to the Security Trustee and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason; or
(ii)
the cost of such work is covered by insurances; or
(iii)
the Borrower owning the relevant Ship establishes to the reasonable satisfaction of the Agent that it has sufficient funds to pay for the cost of such work.
14.13
Notice of Mortgage
The Borrower shall keep each Mortgage registered against the relevant Ship as a valid first priority mortgage, carry on board each Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the Master's cabin of each Ship a framed printed notice stating that that Ship is mortgaged by the Borrower to the Security Trustee.

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14.14
Sharing of Earnings
The Borrower will not enter into any agreement or arrangement for the sharing of any Earnings other than pursuant to a pooling agreement relating to the Tankers International Pool.
14.15
Green Passport
The Borrower shall procure that each Ship has obtained a Green Passport, or equivalent document acceptable to the Agent, in respect of that Ship which shall be maintained throughout the Security Period and if such Green Passport is not available at the date of this Agreement it shall be obtained at the next special survey of that Ship.
14.16
Green scrapping
The Borrower shall maintain a policy that provides that each vessel owned by any member of the Group which is to be scrapped shall:
(a)
to the extent that the Hong Kong Convention is in force at the time of such scrapping, be scrapped in compliance with the Hong Kong Convention; or
(b)
to the extent that the Hong Kong Convention has not been ratified or otherwise is not yet in force at the time of such scrapping, the Borrower shall use reasonable endeavours to ensure that such vessel is scrapped in compliance with the Hong Kong Convention.
15
SECURITY COVER
15.1
Minimum required security cover
Clause 15.2 ( Provision of additional security; prepayment ) applies if the Agent notifies the Borrower that:
(a)
the aggregate of the Fair Market Values (determined as provided in Clause 15.3 ( Valuation of Ships ) of each Ship subject to a Mortgage; plus
(b)
the net realisable value of any additional security previously provided under this Clause 15 ( Security Cover );
is below 125 per cent. of the Loan.
15.2
Provision of additional security; prepayment
If the Agent serves a notice on the Borrower under Clause 15.1 ( Minimum required security cover ), the Borrower shall, within 30 days after the date on which the Agent's notice is served:
(a)
provide, or ensure that a third party provides, acceptable additional security which, in the reasonable opinion of the Majority Lenders, has a net realisable value (taking into account the amount of any prepayment made pursuant to paragraph (b) of Clause 15.2 ( Provision of additional security; prepayment ) in response to the same notice) at least equal to the shortfall and is documented in such terms as the Agent may, with the authorisation of the Majority Lenders, approve or require and, for this purpose, it is agreed that acceptable additional security shall include cash collateral in Dollars valued at par; and/or

56     EUROPE/62530140v12


(b)
prepay such part of the Loan as will eliminate the shortfall (taking into account the net realisable value of any additional security provided pursuant to paragraph (a) of Clause 15.2 ( Provision of additional security; prepayment ) in response to the same notice).
15.3
Valuation of Ships
The Fair Market Value of a Ship at any date is that shown by the average of 2 valuations:
(a)
in dollars;
(b)
as at a date not more than 30 days previously;
(c)
by an Approved Shipbroker;
(d)
without physical inspection of that Ship;
(e)
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any existing charter or other contract of employment;
(f)
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale.
The Borrower shall provide (at their own cost) the valuations addressed to the Agent of each Ship which are required to determine its Fair Market Value pursuant to this Clause 15.3 ( Valuation of Ships ) at the same time as the Borrower provides to the Agent the compliance certificates pursuant to paragraph (d) of Clause 11.5 ( Provision of financial statements ) and, after the occurrence of an Event of Default which is continuing, whenever requested by the Agent.
15.4
Value of additional vessel security
The net realisable value of any additional security which is provided under Clause 15.2 ( Provision of additional security; prepayment ) and which consists of a Security Interest over a vessel shall be that shown by a valuation complying with the requirements of Clause 15.3 ( Valuation of Ships ).
15.5
Valuations binding
Any valuation under Clause 15.2 ( Provision of additional security; prepayment ), 15.3 ( Valuation of Ships ) or 15.4 ( Value of additional vessel security ) shall be binding and conclusive as regards the Borrower and the Lenders, as shall be any valuation which the Majority Lenders make of any additional security which does not consist of or include a Security Interest over a vessel.
15.6
Provision of information
The Borrower shall promptly provide the Agent and any shipbroker or expert acting under Clause 15.3 ( Valuation of Ships ) or 15.4 ( Value of additional vessel security ) with any information which the Agent or the shipbroker or expert may reasonably request for the purposes of its valuation.
15.7
Payment of valuation expenses
Without prejudice to the generality of the Borrowers' obligations under Clauses 20.2 ( Costs of negotiation, preparation etc. ), 20.3 ( Costs of variations, amendments, enforcement etc. ) and 21.3 ( Miscellaneous indemnities ), the Borrower shall, on demand, pay the Agent the amount of the fees and expenses of any shipbroker or expert instructed by the Agent under this Clause and all

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legal and other expenses incurred by any Creditor Party in connection with any matter arising out of this Clause.
15.8
Application of prepayment
Clause 8 ( Reduction, Repayment, Prepayment and Cancellation) shall apply in relation to any prepayment pursuant to paragraph (b) of Clause 15.2 ( Provision of additional security; prepayment ).
16
PAYMENTS AND CALCULATIONS
16.1
Currency and method of payments
All payments to be made by the Lenders or by the Borrower under a Finance Document shall be made to the Agent or to the Security Trustee, in the case of an amount payable to it:
(a)
by not later than 11.00 a.m. (New York City time) on the due date;
(b)
in same day Dollar funds settled through the New York Clearing House Interbank Payments System (or in such other Dollar funds and/or settled in such other manner as the Agent shall specify as being customary at the time for the settlement of international transactions of the type contemplated by this Agreement);
(c)
in the case of an amount payable by a Lender to the Agent or by the Borrower to the Agent or any Lender, to such account with such bank as the Agent may from time to time notify to the Borrower and the other Creditor Parties; and
(d)
in the case of an amount payable to the Security Trustee, to such account as it may from time to time notify to the Borrower and the other Creditor Parties.
16.2
Payment on non-Business Day
If any payment by the Borrower under a Finance Document would otherwise fall due on a day which is not a Business Day:
(a)
the due date shall be extended to the next succeeding Business Day; or
(b)
if the next succeeding Business Day falls in the next calendar month, the due date shall be brought forward to the immediately preceding Business Day;
and interest shall be payable during any extension under paragraph (a) at the rate payable on the original due date.
16.3
Basis for calculation of periodic payments
All interest and commitment fee and any other payments under any Finance Document which are of an annual or periodic nature shall accrue from day to day and shall be calculated on the basis of the actual number of days elapsed and a 360 day year.
16.4
Distribution of payments to Creditor Parties
Subject to Clause 16.5 ( Permitted deductions by Agent ), Clause 16.6 ( Agent only obliged to pay when monies received ) and Clause 16.7 ( Refund to Agent of monies not received ):

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(a)
any amount received by the Agent under a Finance Document for distribution or remittance to a Lender, a Swap Counterparty or the Security Trustee shall be made available by the Agent to that Lender, that Swap Counterparty or, as the case may be, the Security Trustee by payment, with funds having the same value as the funds received, to such account as the Lender and the Swap Counterparty or the Security Trustee may have notified to the Agent not less than 5 Business Days previously; and
(b)
amounts to be applied in satisfying amounts of a particular category which are due to the Lenders and/or the Swap Counterparties generally shall be distributed by the Agent to each Lender and each Swap Counterparty pro rata to the amount in that category which is due to it.
16.5
Permitted deductions by Agent
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent may, before making an amount available to a Lender or a Swap Counterparty, deduct and withhold from that amount any sum which is then due and payable to the Agent from that Lender or that Swap Counterparty under any Finance Document or any sum which the Agent is then entitled under any Finance Document to require that Lender or that Swap Counterparty to pay on demand.
16.6
Agent only obliged to pay when monies received
Notwithstanding any other provision of this Agreement or any other Finance Document, the Agent shall not be obliged to make available to the Borrower or any Lender or that Swap Counterparty any sum which the Agent is expecting to receive for remittance or distribution to the Borrower or that Lender or that Swap Counterparty until the Agent has satisfied itself that it has received that sum.
16.7
Refund to Agent of monies not received
If and to the extent that the Agent makes available a sum to the Borrower or a Lender or a Swap Counterparty, without first having received that sum, the Borrower or (as the case may be) the Lender or the Swap Counterparty concerned shall, on demand:
(a)
refund the sum in full to the Agent; and
(b)
pay to the Agent the amount (as certified by the Agent) which will indemnify the Agent against any funding or other loss, liability or expense incurred by the Agent as a result of making the sum available before receiving it.
16.8
Agent may assume receipt
Clause 16.7 ( Refund to Agent of monies not received ) shall not affect any claim which the Agent has under the law of restitution, and applies irrespective of whether the Agent had any form of notice that it had not received the sum which it made available.
16.9
Creditor Party accounts
Each Creditor Party shall maintain accounts showing the amounts owing to it by the Borrower and each Security Party under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.
16.10
Agent's memorandum account

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The Agent shall maintain a memorandum account showing the amounts advanced by the Lenders and all other sums owing to the Agent, the Security Trustee and each Lender from the Borrower under the Finance Documents and all payments in respect of those amounts made by the Borrower and any Security Party.
16.11
Accounts prima facie evidence
If any accounts maintained under Clauses 16.9 ( Creditor Party accounts ) and 16.10 ( Agent's memorandum account ) show an amount to be owing by the Borrower or a Security Party to a Creditor Party, those accounts shall be prima facie evidence that that amount is owing to that Creditor Party.
16.12
Impaired Agent
(a)
If, at any time, the Agent becomes an Impaired Agent, the Borrower or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with Clause 16.1 ( Currency and method of payments ) may instead either pay that amount direct to the required recipient or pay that amount to an interest-bearing account held with 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 S&P or Fitch or A2 or higher by Moody's or a comparable rating from an internationally recognised credit rating agency and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Borrower or the Lender making the payment and designated as a trust account for the benefit of the Creditor Party or Creditor Parties beneficially entitled to that payment under the Finance Documents. In each case such payments must be made on the due date for payment under the Finance Documents.
(b)
All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the beneficiaries of that trust account pro rata to their respective entitlements.
(c)
Where the Borrower or a Lender has made a payment in accordance with this Clause 16.12 ( Impaired Agent ) it 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.
(d)
Promptly upon the appointment of a successor Agent in accordance with Clause 24 ( The Agent, the Mandated Lead Arrangers and the Reference Banks ) each party which has made a payment to a trust account in accordance with this Clause 16.12 ( Impaired Agent ) shall 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 in accordance with Clause 16.4 ( Distribution of payments to Creditor Parties ).
17
APPLICATION OF RECEIPTS
17.1
Normal order of application
Except as any Finance Document may otherwise provide, any sums which are received or recovered by any Creditor Party under or by virtue of any Finance Document shall be applied:
(a)
FIRST: in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and the Security Trustee under the Finance Documents;
(b)
SECONDLY: in or towards satisfaction of any amounts then due and payable to the Creditor Parties (other than the Swap Banks) under the Finance Documents (or any of them) in such order

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of application and/or such proportions as the Agent, acting with the authorisation of the Lenders, may specify by notice to the Borrower, the Security Parties and the other Creditor Parties,
(c)
THIRDLY: in retention of an amount equal to any amount not then due and payable to the Creditor Parties (other than the Swap Banks) under any Finance Document but which the Agent, by notice to the Borrower, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause (b);
(d)
FOURTHLY: in or towards satisfaction pro rata of any amount then due and payable under any Master Agreement which relates to a Designated Transaction;
(e)
FIFTHLY: in retention of an amount equal to any amount not then due and payable under any Master Agreement which relates to a Designated Transaction but which the Agent, by notice to the Borrower, the Security Parties and the other Creditor Parties, states in its opinion will or may become due and payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them in accordance with the provisions of Clause (d); and
(f)
SIXTHLY: any surplus shall be paid to the Borrower or to any other person appearing to be entitled to it.
17.2
Variation of order of application
The Agent may, with the authorisation of the Lenders and the Swap Banks, by notice to the Borrower, the Security Parties and the other Creditor Parties provide for a different manner of application from that set out in Clause 17.1 ( Normal order of application ) either as regards a specified sum or sums or as regards sums in a specified category or categories.
17.3
Notice of variation of order of application
The Agent may give notices under Clause 17.2 ( Variation of order of application ) from time to time; and such a notice may be stated to apply not only to sums which may be received or recovered in the future, but also to any sum which has been received or recovered on or after the third Business Day before the date on which the notice is served.
17.4
Appropriation rights overridden
This Clause 17 ( Application of Receipts ) and any notice which the Agent gives under Clause 17.2 ( Variation of order of application ) shall override any right of appropriation possessed, and any appropriation made, by the Borrower or any Security Party.
18
APPLICATION OF EARNINGS
18.1
Earnings
The Borrower undertakes with each Creditor Party to ensure that throughout the Security Period (and subject only to the provisions of the General Assignments) all the Earnings of each Ship owned by it and proceeds under any Insurances in relation to any Ship owned by is are paid to the Earnings Account in relation to the Borrower without delay or deductions Provided that the Earnings in respect of each Ship shall be available to the Borrower unless an Event of Default has occurred and is continuing.
18.2
Location of accounts

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The Borrower shall promptly:
(a)
comply with any requirement of the Agent as to the location or re‑location of the Earnings Account in relation to the Borrower; and
(b)
execute any documents which the Agent reasonably specifies to create or maintain in favour of the Security Trustee a Security Interest over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Account in relation to the Borrower.
19
EVENTS OF DEFAULT
19.1
Events of Default
An Event of Default occurs if:
(a)
the Borrower or any Security Party fails to when due or, if payable on demand, on such demand, any sum payable under a Finance Document or under any document relating to a Finance Document; unless:
(i)
its failure to pay is caused by:
(A)
administrative or technical error; or
(B)
a Disruption Event; and
(ii)
payment is made within 3 Business Days of its due date; or
(b)
any breach occurs of Clause 9.2 ( Waiver of conditions precedent ), Clause 10.15 ( Sanctions ), Clause 11.2 ( Title; negative pledge ), Clause 11.3 ( Disposal of assets ), Clause 11.17 ( Conduct of business; compliance with laws ) in so far as it relates to Sanctions Laws, Clause 11.19 ( Compliance with Sanctions Laws ), Clause 12.2 ( Maintenance of status ), Clause 12.3 ( No change of business ), Clause 12.4 ( No merger etc. ), Clause 12.8 ( Restrictions on dividends ), Clause 12.11 ( Notification of Sanctions), Clause 13 ( Insurance ), paragraph (c) of Clause 14.9 ( Compliance with laws etc. ), or Clause 15.2 ( Provision of additional security; prepayment ); or
(c)
(subject to any applicable grace period in the relevant Finance Documents) any breach by the Borrower or any Security Party occurs of any provision of a Finance Document (other than a breach covered by paragraphs (a) or (b)) and if, in the opinion of the Majority Lenders, such default is capable of remedy, such default continues unremedied 30 days after written notice from the Agent requesting action to remedy the same; or
(d)
any representation, warranty or statement made by, or by an officer of, the Borrower or a Security Party in a Finance Document or in a Drawdown Notice or any other notice or document relating to a Finance Document is untrue or misleading in any material respect when it is made; or
(e)
any of the following occurs in relation to a Relevant Person:
(i)
a Relevant Person becomes, in the opinion of the Majority Lenders, unable to pay its debts as they fall due; or
(ii)
a Relevant Person fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction or any assets of a Relevant Person are subject to any form of execution, attachment, arrest,

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sequestration or distress in respect of a sum of, or sums aggregating, $10,000,000 or more or the equivalent in another currency; or
(iii)
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person or any administrative or other receiver is appointed over any asset of a Relevant Person; or
(iv)
a Relevant Person makes any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent, or an administration notice is given or filed in relation to a Relevant Person, or a winding up or administration order is made in relation to a Relevant Person, or the members or directors of a Relevant Person pass a resolution to the effect that it should be wound up, placed in administration or cease to carry on business, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than the Borrower which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up; or
(v)
a petition is presented in any Pertinent Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of a Relevant Person unless the petition is being contested in good faith and on substantial grounds and is dismissed or withdrawn within 30 days of the presentation of the petition; or
(vi)
a Relevant Person petitions a court, or presents any proposal for, any form of judicial or non‑judicial suspension or deferral of payments, reorganisation of its debt (or certain of its debt) or arrangement with all or a substantial proportion (by number or value) of its creditors or of any class of them or any such suspension or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise; or
(vii)
any meeting of the members or directors of a Relevant Person is summoned for the purpose of considering a resolution or proposal to authorise or take any action of a type described in paragraphs (iii), (iv), (v) or (vi); or
(viii)
in a Pertinent Jurisdiction other than England, any event occurs or any procedure is commenced which, in the opinion of the Majority Lenders, is similar to any of the foregoing; or
(f)
any repayment of principal in respect of, or any payment of interest on, any Financial Indebtedness of the Borrower is not paid when due nor within any originally applicable grace period (unless the due date for payment thereof is rescheduled with the agreement of the relevant creditor before the expiry of such grace period); or
(g)
any Financial Indebtedness of the Borrower is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (howsoever described); or
(h)
any commitment to the Borrower for any Financial Indebtedness is cancelled by a creditor of the Borrower by reason of an event of default (however described); or
(i)
any Financial Indebtedness of the Borrower becomes capable of being declared due and payable prior to its specified maturity or any commitment to the Borrower for any Financial Indebtedness becomes capable of being cancelled in either case as a result of an event of default (howsoever described) and the event giving rise to that event of default is not waived or remedied to the satisfaction of the relevant creditor within 30 days of its occurrence;

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(j)
provided that (with respect to sub-paragraphs (f) to (i) above) no Event of Default will occur under these sub-paragraphs (f) to (i) above if the aggregate amount of the Financial Indebtedness or commitment for Financial Indebtedness falling within sub-paragraphs (f) to (i) above is less than $10,000,000 (or its equivalent in any other currency or currencies).
(k)
the Borrower ceases or suspends carrying on its business or a part of its business which, in the opinion of the Majority Lenders, is material in the context of this Agreement; or
(l)
it becomes unlawful in any Pertinent Jurisdiction or impossible:
(i)
for the Borrower or any Security Party to discharge any liability under a Finance Document or to comply with any other obligation which the Majority Lenders consider material under a Finance Document; or
(ii)
for the Agent, the Security Trustee or the Lenders to exercise or enforce any right under, or to enforce any Security Interest created by, a Finance Document; or
(m)
any provision which the Majority Lenders consider material of a Finance Document proves to have been or becomes invalid or unenforceable, or a Security Interest created by a Finance Document proves to have been or becomes invalid or unenforceable or such a Security Interest proves to have ranked after, or loses its priority to, another Security Interest or any other third party claim or interest; or
(n)
any event or circumstance occurs which the Majority Lenders determine has, or could reasonably be expected to have, a material adverse effect on:
(i)
the ability of the Borrower to perform its obligations under the Finance Documents; or
(ii)
the property, assets, nature of assets, operations, liabilities or condition (financial or otherwise) of the Borrower or any of their respective subsidiaries; or
(o)
at any time, the Borrower is not in compliance with all material Environmental Laws relating to each Ship, its ownership, operation and management or to the business of the Borrower; or
(p)
the Borrower rescinds or repudiates a Finance Document.
19.2
Actions following an Event of Default
On, or at any time after, the occurrence of an Event of Default which is continuing:
(a)
the Agent may, and if so instructed by the Majority Lenders, the Agent shall:
(i)
serve on the Borrower a notice stating that the Commitments and all other obligations of each Lender to the Borrower under this Agreement are terminated; and/or
(ii)
serve on the Borrower a notice stating that the Loan, all accrued interest and all other amounts accrued or owing under this Agreement are immediately due and payable or are due and payable on demand; and/or
(iii)
take any other action which, as a result of the Event of Default or any notice served under paragraph (i) or (ii), the Agent and/or the Lenders are entitled to take under any Finance Document or any applicable law; and/or

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(b)
the Security Trustee may, and if so instructed by the Agent, acting with the authorisation of the Majority Lenders, the Security Trustee shall take any action which, as a result of the Event of Default or any notice served under paragraph (a)(i) or (ii), the Security Trustee, the Agent and/or the Lenders and/or the Swap Counterparties are entitled to take under any Finance Document or any applicable law.
19.3
Termination of Commitments
On the service of a notice under paragraph (a)(i) of Clause 19.2 ( Actions following an Event of Default ), the Commitments and all other obligations of each Lender to the Borrower under this Agreement shall terminate.
19.4
Acceleration of Loan
On the service of a notice under paragraph (a)(ii) of Clause 19.2 ( Actions following an Event of Default ), the Loan, all accrued interest and all other amounts accrued or owing from the Borrower or any Security Party under this Agreement and every other Finance Document shall become immediately due and payable or, as the case may be, payable on demand.
19.5
Multiple notices; action without notice
The Agent may serve notices under paragraphs (a)(i) and (ii) of Clause 19.2 ( Actions following an Event of Default ) simultaneously or on different dates and it and/or the Security Trustee may take any action referred to in Clause 19.2 ( Actions following an Event of Default ) if no such notice is served or simultaneously with or at any time after the service of both or either of such notices.
19.6
Notification of Creditor Parties and Security Parties
The Agent shall send to each Lender, the Security Trustee and each Security Party a copy or the text of any notice which the Agent serves on the Borrower under Clause 19.2 ( Actions following an Event of Default ); but the notice shall become effective when it is served on the Borrower, and no failure or delay by the Agent to send a copy or the text of the notice to any other person shall invalidate the notice or provide the Borrower or any Security Party with any form of claim or defence.
19.7
Creditor Party rights unimpaired
Nothing in this Clause shall be taken to impair or restrict the exercise of any right given to individual Lenders or a Swap Counterparty under a Finance Document, a Master Agreement or the general law; and, in particular, this Clause is without prejudice to Clause 3.1 ( Interests several ).
19.8
Exclusion of Creditor Party liability
No Creditor Party, and no receiver or manager appointed by the Security Trustee, shall have any liability to the Borrower or a Security Party:
(a)
for any loss caused by an exercise of rights under, or enforcement of a Security Interest created by, a Finance Document or by any failure or delay to exercise such a right or to enforce such a Security Interest; or
(b)
as mortgagee in possession or otherwise, for any income or principal amount which might have been produced by or realised from any asset comprised in such a Security Interest or for any reduction (however caused) in the value of such an asset;

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except that this does not exempt a Creditor Party or a receiver or manager from liability for losses shown to have been directly and mainly caused by the dishonesty or the wilful misconduct of such Creditor Party's own officers and employees or (as the case may be) such receiver's or manager's own partners or employees.
In no event shall any Creditor Party be liable on any theory of liability for any special, indirect, consequential or punitive damages and the Borrower hereby waives, releases and agrees not to sue upon any such claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favour.
19.9
Relevant Persons
In this Clause 19 ( Events of Default ) a " Relevant Person " means the Borrower, a Security Party or any of the Borrower's subsidiaries, but excluding any company which is dormant and the value of whose gross assets is $5,000,000 or less.
19.10
Interpretation
In paragraph (e) of Clause 19.1 ( Events of Default ) references to an event of default or a termination event include any event, howsoever described, which is similar to an event of default in a facility agreement or a termination event in a finance lease; and in paragraph (e) of Clause 19.1 ( Events of Default ) " petition " includes an application.
19.11
Position of Swap Counterparties
Neither the Agent nor the Security Trustee shall be obliged, in connection with any action taken or proposed to be taken under or pursuant to the foregoing provisions of this Clause 19 ( Events of Default ), to have any regard to the requirements of a Swap Counterparty except to the extent that such Swap Counterparty is also a Lender.
20
FEES AND EXPENSES
20.1
Fees
The Borrower shall pay to the Agent:
(a)
on the date of this Agreement or as otherwise agreed, the fees in amounts previously agreed in writing between the Agent and the Borrower; and
(b)
quarterly in arrears on each 31 March, 30 June, 30 September and 31 December and on the first Drawdown Date (or, if earlier, the date on which this Agreement is terminated) during the period from the date of this Agreement to the last day of the Availability Period (or, if earlier, the date on which this Agreement is terminated), for the account of the Lenders, a commitment fee at the rate of 35 per cent. of the Margin per annum on the Total Available Commitments, for distribution among the Lenders pro rata to their Commitments.
20.2
Costs of negotiation, preparation etc.
The Borrower shall pay to the Agent on its demand the amount of all expenses incurred by the Agent or the Security Trustee in connection with the negotiation, preparation, execution or registration of any Finance Document or any related document or with any transaction contemplated by a Finance Document or a related document.
20.3
Costs of variations, amendments, enforcement etc.

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The Borrower shall pay to the Agent, on the Agent's demand, for the account of the Creditor Party concerned the amount of all expenses incurred by a Creditor Party in connection with:
(a)
any amendment or supplement to a Finance Document or any proposal for such an amendment to be made;
(b)
any consent or waiver by the Lenders, the Swap Banks, the Majority Lenders or the Creditor Party concerned under or in connection with a Finance Document, or any request for such a consent or waiver;
(c)
the valuation of any security provided or offered under Clause 15 ( Security Cover ) or any other matter relating to such security; or
(d)
any step taken by the Creditor Party concerned with a view to the protection, exercise or enforcement of any right or Security Interest created by a Finance Document or for any similar purpose.
There shall be recoverable under paragraph (d) the full amount of all legal expenses, whether or not such as would be allowed under rules of court or any taxation or other procedure carried out under such rules.
20.4
Documentary taxes
The Borrower shall promptly pay any tax payable on or by reference to any Finance Document, and shall, on the Agent's demand, fully indemnify each Creditor Party against any claims, expenses, liabilities and losses resulting from any failure or delay by the Borrower to pay such a tax.
20.5
Certification of amounts
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 20 ( Fees and Expenses ) and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
21
INDEMNITIES
21.1
Indemnities regarding borrowing and repayment of Loan
The Borrower shall fully indemnify the Agent and each Lender on the Agent's demand and the Security Trustee on its demand in respect of all claims, expenses, liabilities and losses which are made or brought against or incurred by that Creditor Party as a result of or in connection with:
(a)
an Advance not being borrowed on the date specified in the relevant Drawdown Notice for any reason other than a default by the Lender claiming the indemnity;
(b)
the receipt or recovery of all or any part of the Loan or an overdue sum otherwise than on the last day of the applicable Interest Period or other relevant period;
(c)
any failure (for whatever reason) by the Borrower to make payment of any amount due under a Finance Document on the due date or, if so payable, on demand (after giving credit for any default interest paid by the Borrower on the amount concerned under Clause 7 ( Default Interest ));

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(d)
the occurrence and/or continuance of an Event of Default or a Potential Event of Default and/or the acceleration of repayment of the Loan under Clause 19 ( Events of Default ); and
(e)
in respect of any tax (other than tax on its overall net income under the law of the jurisdiction in which that Creditor Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Creditor Party is treated as resident for tax purposes or to the extent a claim, liability or loss relates to a FATCA Deduction required to be made by a party to this Agreement) for which a Creditor Party is liable in connection with any amount paid or payable to that Creditor Party (whether for its own account or otherwise) under any Finance Document.
21.2
Breakage costs
Without limiting its generality, Clause 21.1 ( Indemnities regarding borrowing and repayment of Loan ) covers any Break Costs.
21.3
Miscellaneous indemnities
The Borrower shall fully indemnify each Creditor Party severally on their respective demands in respect of all claims, expenses, liabilities and losses which may be made or brought against or incurred by a Creditor Party, in any country, as a result of or in connection with:
(a)
any action taken, or omitted or neglected to be taken, under or in connection with any Finance Document by the Agent, the Security Trustee or any other Creditor Party or by any receiver appointed under a Finance Document; or
(b)
any other Pertinent Matter;
other than claims, expenses, liabilities and losses which are shown to have been caused by the gross negligence, dishonesty or wilful misconduct of the officers or employees of the Creditor Party concerned.
21.4
Currency indemnity
If any sum due from the Borrower or any Security Party to a Creditor Party under a Finance Document or under any order or judgment relating to a Finance Document has to be converted from the currency in which the Finance Document provided for the sum to be paid (the " Contractual Currency ") into another currency (the " Payment Currency ") for the purpose of:
(a)
making or lodging any claim or proof against the Borrower or any Security Party, whether in its liquidation, any arrangement involving it or otherwise; or
(b)
obtaining an order or judgment from any court or other tribunal; or
(c)
enforcing any such order or judgment;
the Borrower shall indemnify within 3 Business Days of demand the Creditor Party concerned against the loss arising when the amount of the payment actually received by that Creditor Party is converted at the available rate of exchange into the Contractual Currency.
In this Clause 21.4 ( Currency indemnity ), the " available rate of exchange " means the rate at which the Creditor Party concerned is able at the opening of business (London time) on the Business Day after it receives the sum concerned to purchase the Contractual Currency with the Payment Currency.

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This Clause 21.4 ( Currency indemnity ) creates a separate liability of the Borrower which is distinct from their other liabilities under the Finance Documents and which shall not be merged in any judgment or order relating to those other liabilities.
21.5
Sanctions and regulatory indemnities
The Borrower shall pay to the Agent on demand, and the Borrower shall indemnify each Lender against, all costs, charges, expenses, claims, liabilities, losses, duties and fees (including, but not limited to, legal fees and expenses on a full indemnity basis) and taxes thereon suffered or incurred by a Lender (other than in each case by reason of a Lender's gross negligence, dishonesty or wilful misconduct):
(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 Law; or
(b)
as a result of any claim, action, civil penalty or fine against, any settlement, and any other kind of loss or liability, and as a result of conduct of the Borrower or any of their partners, directors, officers, employees or agents that violates any Sanctions Laws.
21.6
Application to Master Agreements
For the avoidance of doubt, Clause 21.4 ( Currency indemnity ) does not apply in respect of sums due from the Borrower to a Swap Counterparty under or in connection with a Master Agreement as to which sums the provisions of section 8 ( Contractual Currency ) of that Master Agreement shall apply.
21.7
Certification of amounts
A notice which is signed by 2 officers of a Creditor Party, which states that a specified amount, or aggregate amount, is due to that Creditor Party under this Clause 21 ( Indemnities ) and which indicates (without necessarily specifying a detailed breakdown) the matters in respect of which the amount, or aggregate amount, is due shall be prima facie evidence that the amount, or aggregate amount, is due.
21.8
Sums deemed due to a Lender
For the purposes of this Clause 21 ( Indemnities ), a sum payable by the Borrower to the Agent or the Security Trustee for distribution to a Lender shall be treated as a sum due to that Lender.
22
NO SET-OFF OR TAX DEDUCTION
22.1
No deductions
All amounts due from the Borrower under a Finance Document shall be paid:
(a)
without any form of set‑off, cross-claim or condition; and
(b)
free and clear of any Tax Deduction except a Tax Deduction which the Borrower is required by law to make.
22.2
Grossing-up for taxes

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Subject as provided in Clause 30.17 ( Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office ), if the Borrower is required by law to make a Tax Deduction from any payment:
(a)
the Borrower shall notify the Agent as soon as it becomes aware of the requirement;
(b)
the Borrower shall pay the tax deducted to the appropriate taxation authority promptly, and in any event before any fine or penalty arises;
(c)
the amount due in respect of the payment shall be increased by the amount necessary to ensure that each Creditor Party receives and retains (free from any liability relating to the Tax Deduction) a net amount which, after the Tax Deduction, is equal to the full amount which it would otherwise have received; and
(d)
the Borrower shall, as soon as reasonably practicable after making the relevant Tax Deduction, deliver to the Agent a copy of the receipt from the relevant taxation authority evidencing that the tax had been paid to that authority.
22.3
Evidence of payment of taxes
Promptly, and in any event within 1 month after making any Tax Deduction, the Borrower concerned shall deliver to the Agent for the Creditor Party entitled to the payment an original receipt (or certified copy thereof) satisfactory to that Creditor Party evidencing that the tax had been paid to the appropriate taxation authority.
22.4
Tax credit
A Creditor Party which has obtained (and has derived full use and benefit, on an affiliated group basis, of) a repayment or credit in respect of tax on account of which the Borrower (or any of them) have made an increased payment under Clause 22.2 ( Grossing-up for taxes ) shall pay to the Borrower a sum equal to the proportion of the repayment or credit which that Creditor Party allocates to the amount due from the Borrower in respect of which the Borrower made the increased payment Provided that :
(a)
the Creditor Party shall not be obliged to allocate to this transaction any part of a tax repayment or credit which is referable to a class or number of transactions;
(b)
nothing in this Clause 22.4 ( Tax credit ) shall oblige a Creditor Party to arrange its tax affairs in any particular manner, to claim any type of relief, credit, allowance or deduction instead of, or in priority to, another or to make any such claim within any particular time;
(c)
nothing in this Clause 22.4 ( Tax credit ) shall oblige a Creditor Party to make a payment which would leave it in a worse position than it would have been in if the Borrower had not been required to make a Tax Deduction from a payment;
(d)
any allocation or determination made by a Creditor Party under or in connection with this Clause 22.4 ( Tax credit ) shall be conclusive and binding on the Borrower and the other Creditor Parties;
(e)
nothing in this Clause 22.4 ( Tax credit ) shall oblige any Creditor Party to disclose any information relating to its affairs (tax or otherwise) or those of its ultimate parent company (or any subsidiary thereof) or any computations in respect of tax; and
(f)
the Creditor Party's tax affairs for its tax year in respect of which such credit or repayment was obtained have been finally settled.

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22.5
Tax Deduction
In this Clause 22 ( No Set-Off or Tax Deduction ) " Tax Deduction " means any deduction or withholding for or on account of any present or future tax other than a FATCA Deduction.
22.6
Value Added Tax
(a)
All amounts expressed to be payable under a Finance Document by any party to a Creditor Party shall be deemed to be exclusive of any VAT. If VAT is chargeable on any supply made by any Creditor Party to any part in connection with a Finance Document, that party shall pay to the Creditor Party (in additional to and at the same time as paying the consideration) an amount equal to the amount of the VAT.
(b)
Where a Finance Document requires any party to reimburse a Creditor Party for any costs or expenses, that party shall also at the same time pay and indemnify the Creditor Party against all VAT incurred by the Creditor Party in respect of the costs or expenses to the extent that the Creditor Party reasonably determines that it is not entitled to credit or repayment of the VAT.
22.7
Application to Master Agreements
For the avoidance of doubt, Clause 22 ( No Set-Off or Tax Deduction ) does not apply in respect of sums due from the Borrower to a Swap Counterparty under or in connection with a Master Agreement as to which sums the provisions of section 2(d) ( Deduction or Withholding for Tax ) of that Master Agreement shall apply.
22.8
FATCA information
(a)
Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:
(i)
confirm to that other Party whether it is:
(A)
a FATCA Exempt Party; or
(B)
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; and
(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.
(b)
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.
(c)
Paragraph (a) above shall not oblige any Party to do anything, which would or might in its reasonable opinion constitute a breach of:
(i)
any law or regulation;
(ii)
any fiduciary duty; or

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(iii)
any duty of confidentiality.
(d)
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 paragraph (a)(i) or (ii) above (including, for the avoidance of doubt, where paragraph (c) 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.
22.9
FATCA Deduction
(a)
Each Party may make any FATCA Deduction 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.
(b)
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 Creditor Parties.
23
ILLEGALITY, ETC.
23.1
Illegality, etc.
This Clause 23 ( Illegality, etc. ) applies if a Lender (the " Notifying Lender ") notifies the Agent that it has become, or will with effect from a specified date, become:
(a)
unlawful or prohibited as a result of the introduction of a new law, an amendment to an existing law or a change in the manner in which an existing law is or will be interpreted or applied; or
(b)
contrary to, or inconsistent with, any regulation and/or contrary to or declared by any Sanctions Authority to be contrary to Sanctions Laws,
for the Notifying Lender to maintain or give effect to any of its obligations under this Agreement in the manner contemplated by this Agreement.
23.2
Notification of illegality
The Agent shall promptly notify the Borrower, the Security Parties, the Security Trustee and the other Lenders of the notice under Clause 23 ( Illegality , etc. ) which the Agent receives from the Notifying Lender.
23.3
Prepayment; termination of Commitment
On the Agent notifying the Borrower under Clause 23.2 ( Notification of illegality ), the Notifying Lender's Commitment shall terminate; and thereupon or, if later, on the date specified in the Notifying Lender's notice under Clause 23 ( Illegality, etc. ) as the date on which the notified event would become effective the Borrower shall prepay the Notifying Lender's Contribution in accordance with Clause 8 ( Reduction, Repayment, Prepayment and Cancellation ).
23.4
Mitigation

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If circumstances arise which would result in a notification under Clause 23 ( Illegality, etc. ) then, without in any way limiting the rights of the Notifying Lender under Clause 23.3 ( Prepayment; termination of Commitment ), the Notifying Lender shall use reasonable endeavours to transfer its obligations, liabilities and rights under this Agreement and the Finance Documents to another office or financial institution not affected by the circumstances but the Notifying Lender shall not be under any obligation to take any such action if, in its opinion, to do would or might:
(a)
have an adverse effect on its business, operations or financial condition; or
(b)
involve it in any activity which is unlawful or prohibited or any activity that is contrary to, or inconsistent with, any regulation; or
(c)
involve it in any expense (unless indemnified to its satisfaction) or tax disadvantage.
24
THE AGENT, THE MANDATED LEAD ARRANGERS AND THE REFERENCE BANKS
24.1
Appointment of the Agent
(a)
Each of the Mandated Lead Arrangers, the Lenders and the Swap Banks appoints the Agent to act as its agent under and in connection with the Finance Documents.
(b)
Each of the Mandated Lead Arrangers, the Lenders and the Swap Banks 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.
24.2
Instructions
(a)
The Agent shall:
(i)
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:
(A)
all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and
(B)
in all other cases, the Majority Lenders; and
(ii)
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or, if this Agreement stipulates the matter is a decision for any other Creditor Party or group of Creditor Parties, in accordance with instructions given to it by that Creditor Party or group of Creditor Parties).
(b)
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 Creditor Party or group of Creditor Parties, from that Creditor Party or group of Creditor Parties) 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 any such instructions or clarification that it has requested.
(c)
Save in the case of decisions stipulated to be a matter for any other Creditor Party or group of Creditor Parties under the relevant Finance Document and unless a contrary indication appears

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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 Creditor Parties.
(d)
Paragraph (a) above shall not apply:
(i)
where a contrary indication appears in a Finance Document;
(ii)
where a Finance Document requires the Agent to act in a specified manner or to take a specified action;
(iii)
in respect of any provision which protects the Agent's own position in its personal capacity as opposed to its role of Agent for the relevant Creditor Parties.
(e)
If giving effect to instructions given by the Majority Lenders would in the Agent's opinion have an effect equivalent to an amendment or waiver referred to in Clause 33 ( Variations and Waivers ), the Agent shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Agent) whose consent would have been required in respect of that amendment or waiver.
(f)
In exercising any discretion to exercise a right, power or authority under the Finance Documents where it has not received any instructions as to the exercise of that discretion the Agent shall do so having regard to the interests of all the Creditor Parties.
(g)
The Agent may refrain from acting in accordance with any instructions of any Creditor Party or group of Creditor Parties 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 (together with any applicable VAT) which it may incur in complying with those instructions.
(h)
Without prejudice to the remainder of this Clause 24.2 ( Instructions ), in the absence of instructions, the Agent shall not be obliged to take any action (or refrain from taking action) even if it considers acting or not acting to be in the best interests of the Creditor Parties. The Agent may act (or refrain from acting) as it considers to be in the best interest of the Creditor Parties.
(i)
The Agent is not authorised to act on behalf of a Creditor Party (without first obtaining that Creditor Party's consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (i) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Finance Documents or enforcement of the Finance Documents.
24.3
Duties of the Agent
(a)
The Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
(b)
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.
(c)
Without prejudice to Clause 30.3 ( Transfer Certificate, delivery and notification ), paragraph (b) above shall not apply to any Transfer Certificate.

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(d)
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.
(e)
If the Agent receives notice from a Party referring to any Finance Document, describing an Event of Default and stating that the circumstance described is an Event of Default, it shall promptly notify the other Creditor Parties.
(f)
If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Creditor Party (other than the Agent, the Arranger or the Security Trustee) under this Agreement, it shall promptly notify the other Creditor Parties.
(g)
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).
24.4
Role of the Arranger
Except as specifically provided in the Finance Documents, the Mandated Lead Arrangers have no obligations of any kind to any other Party under or in connection with any Finance Document.
24.5
No fiduciary duties
(a)
Nothing in any Finance Document constitutes the Agent or the Arranger as a trustee or fiduciary of any other person.
(b)
Neither the Agent nor the Arranger shall be bound to account to other Creditor Party for any sum or the profit element of any sum received by it for its own account.
24.6
Application of receipts
Except as expressly stated to the contrary in any Finance Document, any moneys which the Agent receives or recovers in its capacity as Agent shall be applied by the Agent in accordance with Clause 17 ( Application of Receipts ).
24.7
Business with the Group
The Agent and the Mandated Lead Arrangers may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any member of the Group.
24.8
Rights and discretions
(a)
The Agent may:
(i)
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;
(ii)
assume that:
(A)
any instructions received by it from the Majority Lenders, any Creditor Parties or any group of Creditor Parties are duly given in accordance with the terms of the Finance Documents; and
(B)
unless it has received notice of revocation, that those instructions have not been revoked; and

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(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,
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.
(b)
The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Creditor Parties) that:
(i)
no Event of Default has occurred (unless it has actual knowledge of an Event of Default arising under paragraph (a) of Clause 19.1 ( Events of Default ); and
(ii)
any right, power, authority or discretion vested in any Party or any group of Creditor Parties has not been exercised.
(c)
The Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.
(d)
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.
(e)
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.
(f)
The Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:
(i)
be liable for any error of judgment made by any such person; or
(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.
(g)
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 the Finance Documents.
(h)
Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Mandated Lead Arrangers are 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.
(i)
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

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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.
24.9
Responsibility for documentation
Neither the Agent nor the Mandated Lead Arrangers are responsible or liable for:
(a)
the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Agent, the Security Trustee, the Mandated Lead Arrangers, the Borrower 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
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Pertinent Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Pertinent Document or the Security Property.
24.10
No duty to monitor
The Agent shall not be bound to enquire:
(a)
whether or not any Event of Default has occurred;
(b)
as to the performance, default or any breach by the Borrower of its obligations under any Finance Document; or
(c)
whether any other event specified in any Finance Document has occurred.
24.11
Exclusion of liability
(a)
Without limiting paragraph (b) below (or any other provision of any Finance Document excluding or limiting the liability of the Agent), the Agent will not be liable for:
(i)
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 Security Property, 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 Security Property 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 Security Property; or
(iii)
any shortfall which arises on the enforcement or realisation of the Security Property; or
(iv)
without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:
(A)
any act, event or circumstance not reasonably within its control; or
(B)
the general risks of investment in, or the holding of assets in, any jurisdiction,

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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.
(b)
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 Security Property and any officer, employee or agent of the Agent may rely on this Clause.
(c)
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.
(d)
Nothing in this Agreement shall oblige the Agent or the Mandated Lead Arrangers to carry out:
(i)
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 Creditor Party,
on behalf of any Creditor Party and each Creditor Party confirms to the Agent and the Mandated Lead Arrangers 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 Mandated Lead Arrangers.
(e)
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 the Security Property 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.
24.12
Lenders' indemnity to the Agent
(a)
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 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 (unless the Agent has been reimbursed by the Borrower 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.

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(c)
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 the Borrower.
24.13
Resignation of the Agent
(a)
The Agent may resign and appoint one of its Affiliates acting through an office as successor by giving notice to the other Creditor Parties and the Borrower.
(b)
Alternatively, the Agent may resign by giving 30 days' notice to the other Creditor Parties and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint as a successor Agent any reputable financial institution.
(c)
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 (after consultation with the Borrower) may appoint as a successor Agent any reputable financial institution.
(d)
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.
(e)
The Agent's resignation notice shall only take effect upon the appointment of a successor.
(f)
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 (d) above) but shall remain entitled to the benefit of Clause 21.1 ( Indemnities regarding borrowing and repayment of Loan ) and this Clause 24 ( The Agent, the Mandated Lead Arrangers and the Reference Banks ) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Agent. Any 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.
(g)
After consultation with the Borrower, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with paragraph (b) above. In this event, the Agent shall resign in accordance with paragraph (b) above.
(h)
The consent of the Borrower is not required for an assignment or transfer of rights and/or obligations by the Agent.
(i)
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:
(i)
the Agent fails to respond to a request under Clause 22.8 ( FATCA information ) and 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 22.8 ( 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;

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and (in each case) 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 Lender, by notice to the Agent, requires it to resign.
24.14
Confidentiality
(a)
In acting as Agent for the Creditor 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.
(b)
If information is received by a division or department of the Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.
(c)
Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Mandated Lead Arrangers are 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 regulation or a breach of a fiduciary duty.
24.15
Relationship with the other Creditor Parties
(a)
The Agent may treat the person shown in its records as Lender or Swap Bank at the opening of business (in the place of the Agent's principal office as notified to the Creditor Parties from time to time) as the Lender acting through its Facility Office or, as the case may be, the Swap Bank:
(i)
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 or Swap Bank to the contrary in accordance with the terms of this Agreement.
(b)
Each Creditor Party shall supply the Agent with any information that the Security Trustee may reasonably specify (through the Agent) as being necessary or desirable to enable the Security Trustee to perform its functions as Security Trustee. Each Creditor Party shall deal with the Security Trustee exclusively through the Agent and shall not deal directly with the Security Trustee and any reference to any instructions being given by or sought from any Creditor Party or group of Creditor Parties by or to the Security Trustee in this Agreement must be given or sought through the Agent.
(c)
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, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 35.7 ( 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, fax number, electronic mail address (or such other information), department and officer by that Lender for the purposes of Clause 35.2 ( Addresses for communications ) and Clause 35.7 ( 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.
24.16
Credit appraisal by the Creditor Parties
Without affecting the responsibility of the Borrower for information supplied by it or on its behalf in connection with any Document, each Creditor Party confirms to the Agent and the Mandated Lead Arrangers 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 Document including but not limited to:
(a)
the financial condition, status and nature of each member of the Group;
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the Security Property 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 Security Property;
(c)
whether that Creditor 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 Security Property, 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 Security Property;
(d)
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
(e)
the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.
24.17
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.
24.18
Reliance and engagement letters
Each 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 Mandated Lead Arrangers or the Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports 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.
24.19
Full freedom to enter into transactions

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Without prejudice to Clause 24.7 ( Business with the Group ) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Agent shall be absolutely entitled:
(a)
to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting the Borrower or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security trustee for, and/or participating in, other facilities to such Borrower or any person who is party to, or referred to in, a Finance Document);
(b)
to deal in and enter into and arrange transactions relating to:
(i)
any securities issued or to be issued by the Borrower or any other person; or
(ii)
any options or other derivatives in connection with such securities; and
(c)
to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,
and, in particular, the Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.
25
THE SECURITY TRUSTEE
25.1
Trust
(a)
The Security Trustee declares that it holds the Security Property on trust for the Creditor Parties on the terms contained in this Agreement and shall deal with the Security Property in accordance with this Clause 25 ( The Security Trustee ) and the other provisions of the Finance Documents.
(b)
Each other Creditor Party authorises the Security Trustee to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Trustee under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions.
25.2
Parallel Debt (Covenant to pay the Security Trustee)
(a)
The Borrower irrevocably and unconditionally undertakes to pay to the Security Trustee its Parallel Debt which shall be amounts equal to, and in the currency or currencies of, its Corresponding Debt.
The Parallel Debt of the Borrower:
(i)
shall become due and payable at the same time as its Corresponding Debt;
(ii)
is independent and separate from, and without prejudice to, its Corresponding Debt.

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(b)
For purposes of this Clause 25.2 ( Parallel Debt (Covenant to pay the Security Trustee)) , the Security Trustee:
(i)
is the independent and separate creditor of each Parallel Debt;
(ii)
acts in its own name and not as agent, representative or trustee of the Creditor Parties and its claims in respect of each Parallel Debt shall not be held on trust; and
(iii)
shall have the independent and separate right to demand payment of each Parallel Debt in its own name (including, without limitation, through any suit, execution, enforcement of security, recovery of guarantees and applications for and voting in any kind of insolvency proceeding).
(c)
The Parallel Debt of the Borrower shall be:
(i)
decreased to the extent that its Corresponding Debt has been irrevocably and unconditionally paid or discharged; and
(ii)
increased to the extent that its Corresponding Debt has increased,
and the Corresponding Debt of the Borrower shall be:
(A)
decreased to the extent that its Parallel Debt has been irrevocably and unconditionally paid or discharged; and
(B)
increased to the extent that its Parallel Debt has increased,
in each case provided that the Parallel Debt of the Borrower shall never exceed its Corresponding Debt.
(d)
All amounts received or recovered by the Security Trustee in connection with this Clause 25.2 ( Parallel Debt (Covenant to pay the Security Trustee)) to the extent permitted by applicable law, shall be applied in accordance with Clause 17 ( Application of Receipts ).
(e)
This Clause 25.2 ( Parallel Debt (Covenant to pay the Security Trustee)) shall apply, with any necessary modifications, to each Finance Document.
25.3
Enforcement through Security Trustee only
The Creditor 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 Finance Documents except through the Security Trustee.
25.4
Instructions
(a)
The Security Trustee shall:
(i)
unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Security Trustee in accordance with any instructions given to it by:
(A)
all Lenders (or the Agent on their behalf) if the relevant Finance Document stipulates the matter is an all Lender decision; and
(B)
in all other cases, the Majority Lenders (or the Agent on their behalf); and

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(ii)
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or if this Agreement stipulates the matter is a decision for any other Creditor Party or group of Creditor Parties, in accordance with instructions given to it by that Creditor Party or group of Creditor Parties).
(b)
The Security Trustee shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or the Agent on their behalf) (or, if the relevant Finance Document stipulates the matter is a decision for any other Creditor Party or group of Creditor Parties, from that Creditor Party or group of Creditor Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Security Trustee may refrain from acting unless and until it receives any such instructions or clarification that it has requested.
(c)
Save in the case of decisions stipulated to be a matter for any other Creditor Party or group of Creditor Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Security Trustee by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Creditor Parties.
(d)
Paragraph (a) above shall not apply:
(i)
where a contrary indication appears in a Finance Document;
(ii)
where a Finance Document requires the Security Trustee to act in a specified manner or to take a specified action;
(iii)
in respect of any provision which protects the Security Trustee's own position in its personal capacity as opposed to its role of Security Trustee for the relevant Secured Parties.
(iv)
in respect of the exercise of the Security Trustee's discretion to exercise a right, power or authority under any of:
(A)
Clause 25.28 ( Application of receipts );
(B)
Clause 25.29 ( Permitted Deductions ); and
(C)
Clause 25.30 ( Prospective liabilities ).
(e)
If giving effect to instructions given by the Majority Lenders would in the Security Trustee's opinion have an effect equivalent to an amendment or waiver referred to in Clause 33 ( Variations and Waivers ), the Security Trustee shall not act in accordance with those instructions unless consent to it so acting is obtained from each Party (other than the Security Trustee) whose consent would have been required in respect of that amendment or waiver.
(f)
In exercising any discretion to exercise a right, power or authority under the Finance Documents where either:
(i)
it has not received any instructions as to the exercise of that discretion; or
(ii)
the exercise of that discretion is subject to sub-paragraph (iv) of paragraph (d) above,
the Security Trustee shall do so having regard to the interests of all the Creditor Parties.

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(g)
The Security Trustee may refrain from acting in accordance with any instructions of any Creditor Party or group of Creditor Parties 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 (together with any applicable VAT) which it may incur in complying with those instructions.
(h)
Without prejudice to the remainder of this Clause 25.4 ( Instructions ), in the absence of instructions, the Security Trustee may (but shall not be obliged to) take such action in the exercise of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.
(i)
The Security Trustee is not authorised to act on behalf of a Creditor Party (without first obtaining that Creditor Party's consent) in any legal or arbitration proceedings relating to any Finance Document. This paragraph (i) shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Finance Documents or enforcement of the Finance Documents.
25.5
Duties of the Security Trustee
(a)
The Security Trustee's duties under the Finance Documents are solely mechanical and administrative in nature.
(b)
The Security Trustee shall promptly forward to a Party the original or a copy of any document which is delivered to the Security Trustee for that Party by any other Party.
(c)
Except where a Finance Document specifically provides otherwise, the Security Trustee is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
(d)
If the Security Trustee receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Creditor Parties.
(e)
The Security Trustee 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).
25.6
No fiduciary duties
(a)
Nothing in any Finance Document constitutes the Security Trustee as an agent, trustee or fiduciary of the Borrower.
(b)
The Security Trustee shall not be bound to account to any other Secured Party for any sum or the profit element of any sum received by it for its own account.
25.7
Business with the Group
The Security Trustee may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any member of the Group.
25.8
Rights and discretions
(a)
The Security Trustee may:

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(i)
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;
(ii)
assume that:
(A)
any instructions received by it from the Majority Lenders, any Creditor Parties or any group of Creditor Parties are duly given in accordance with the terms of the Finance Documents;
(B)
unless it has received notice of revocation, that those instructions have not been revoked;
(C)
if it receives any instructions to act in relation to the Transaction Security, that all applicable conditions under the Finance Documents for so acting have been satisfied; 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,
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.
(b)
The Security Trustee shall be entitled to carry out all dealings with the other Creditor Parties through the Agent and may give to the Agent any notice or other communication required to be given by the Security Trustee to any Creditor Party.
(c)
The Security Trustee may assume (unless it has received notice to the contrary in its capacity as security trustee for the Creditor Parties) that:
(i)
no Event of Default has occurred; and
(ii)
any right, power, authority or discretion vested in any Party or any group of Creditor Parties has not been exercised.
(d)
The Security Trustee may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.
(e)
Without prejudice to the generality of paragraph (c) above or paragraph (f) below, the Security Trustee may at any time engage and pay for the services of any lawyers to act as independent counsel to the Security Trustee (and so separate from any lawyers instructed by the Agent or the Lenders) if the Security Trustee in its reasonable opinion deems this to be desirable.
(f)
The Security Trustee may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Security Trustee 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.
(g)
The Security Trustee may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:

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(i)
be liable for any error of judgment made by any such person; or
(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 Security Trustee's gross negligence or wilful misconduct.
(h)
Unless a Finance Document expressly provides otherwise the Security Trustee may disclose to any other Party any information it reasonably believes it has received as security trustee under the Finance Documents.
(i)
Notwithstanding any other provision of any Finance Document to the contrary, the Security Trustee 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.
(j)
Notwithstanding any provision of any Finance Document to the contrary, the Security Trustee 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.
25.9
Responsibility for documentation
None of the Security Trustee or any Receiver is responsible or liable for:
(a)
the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Agent, the Security Trustee, the Arranger, the Borrower 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
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or the Security Property 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 Security Property.
25.10
No duty to monitor
The Security Trustee shall not be bound to enquire:
(a)
whether or not any Event of Default has occurred;
(b)
as to the performance, default or any breach by the Borrower of its obligations under any Finance Document; or
(c)
whether any other event specified in any Finance Document has occurred.
25.11
Exclusion of liability
(a)
Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Security Trustee or any Receiver), none of the Security Trustee nor any Receiver will be liable for:

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(i)
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 Security Property, 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 Security Property 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 Security Property; or
(iii)
any shortfall which arises on the enforcement or realisation of the Security Property; or
(iv)
without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:
(A)
any act, event or circumstance not reasonably within its control; or
(B)
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.
(b)
No Party other than the Security Trustee or that Receiver (as applicable) may take any proceedings against any officer, employee or agent of the Security Trustee or a Receiver in respect of any claim it might have against the Security Trustee or a Receiver 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 Security Property.
(c)
The Security Trustee 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 Security Trustee if the Security Trustee 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 Security Trustee for that purpose.
(d)
Nothing in this Agreement shall oblige the Security Trustee to carry out:
(i)
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 Creditor Party,
on behalf of any Creditor Party and each Creditor Party confirms to the Security Trustee 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 Trustee.
(e)
Without prejudice to any provision of any Finance Document excluding or limiting the liability of the Security Trustee or any Receiver, any liability of the Security Trustee or any Receiver arising under or in connection with any Finance Document or the Security Property shall be

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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 Trustee or Receiver 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 Trustee or any Receiver at any time which increase the amount of that loss. In no event shall the Security Trustee or any Receiver 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 Trustee or the Receiver has been advised of the possibility of such loss or damages.
25.12
Lenders' indemnity to the Security Trustee
(a)
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 Security Trustee and every Receiver, within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason of the Security Trustee's or Receiver's gross negligence or wilful misconduct) in acting as Security Trustee or Receiver under the Finance Documents (unless the Security Trustee or Receiver has been reimbursed by the Borrower 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 Security Trustee pursuant to paragraph (a) above.
(c)
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 Security Trustee to the Borrower.
25.13
Resignation of the Security Trustee
(a)
The Security Trustee may resign and appoint one of its Affiliates acting through an office as successor by giving notice to the other Creditor Parties and the Borrower.
(b)
Alternatively, the Security Trustee may resign by giving 30 days' notice to the other Creditor Parties and the Borrower, in which case the Majority Lenders (after consultation with the Borrower) may appoint as a successor Security Trustee any reputable financial institution.
(c)
If the Majority Lenders have not appointed a successor Security Trustee in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Security Trustee (after consultation with the Borrower) may appoint as a successor Security Trustee any reputable financial institution.
(d)
The retiring Security Trustee shall make available to the successor Security Trustee such documents and records and provide such assistance as the successor Security Trustee may reasonably request for the purposes of performing its functions as Security Trustee under the Finance Documents. The Borrower shall, within three Business Days of demand, reimburse the retiring Security Trustee 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.
(e)
The Security Trustee's resignation notice shall only take effect upon:
(i)
the appointment of a successor; and
(ii)
the transfer, by way of a document expressed as a deed, of all the Security Property to that successor.

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(f)
Upon the appointment of a successor, the retiring Security Trustee shall be discharged, by way of a document executed as a deed, from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) of Clause 25.25 ( Winding up of trust ) and paragraph (d) above) but shall remain entitled to the benefit of Clause 21.1 ( Indemnities regarding borrowing and repayment of Loan ) and this Clause 25 ( The Security Trustee ) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Security Trustee. Any fees for the account of the retiring Security Trustee 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.
(g)
The Majority Lenders may, by notice to the Security Trustee, require it to resign in accordance with paragraph (b) above. In this event, the Security Trustee shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (d) above shall be for the account of the Borrower.
(h)
The consent of the Borrower is not required for an assignment or transfer of rights and/or obligations by the Security Trustee.
25.14
Confidentiality
(a)
In acting as Security Trustee for the Creditor Parties, the Security Trustee shall be regarded as acting through its trustee division which shall be treated as a separate entity from any other of its divisions or departments.
(b)
If information is received by a division or department of the Security Trustee other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Security Trustee shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.
(c)
Notwithstanding any other provision of any Finance Document to the contrary, the Security Trustee is not 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 regulation or a breach of a fiduciary duty.
25.15
Credit appraisal by the Creditor Parties
Without affecting the responsibility of the Borrower for information supplied by it or on its behalf in connection with any Finance Document, each Creditor Party confirms to the Security Trustee 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:
(a)
the financial condition, status and nature of each member of the Group;
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document, the Security Property 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 Security Property;
(c)
whether that Creditor 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 Security Property, the transactions contemplated by the Finance Documents or any other

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agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Security Property;
(d)
the adequacy, accuracy or completeness of any information provided by the Security Trustee, 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
(e)
the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.
25.16
Security Trustee's management time
(a)
In the event of:
(i)
an Event of Default;
(ii)
the Security Trustee being requested by the Borrower or the Majority Lenders to undertake duties which the Security Trustee and the Borrower agrees to be of an exceptional nature or outside the scope of the normal duties of the Security Trustee under the Finance Documents; or
(iii)
the Security Trustee and the Borrower agreeing that it is otherwise appropriate in the circumstances,
the Borrower shall pay to the Security Trustee any additional remuneration (together with any applicable VAT) that may be agreed between them or determined pursuant to paragraph (b) below.
(b)
If the Security Trustee and the Borrower fail to agree upon the nature of the duties, or upon the additional remuneration referred to in paragraph (a) 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 Trustee and approved by the Borrower or, failing approval, nominated (on the application of the Security Trustee) 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.
25.17
Reliance and engagement letters
Each Secured Party confirms that the Security Trustee has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Security Trustee) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports 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.
25.18
No responsibility to perfect Transaction Security
The Security Trustee shall not be liable for any failure to:

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(a)
require the deposit with it of any deed or document certifying, representing or constituting the title of the Borrower to any of the Security Assets;
(b)
obtain any licence, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document or the Transaction Security;
(c)
register, file or record or otherwise protect any of the Transaction Security (or the priority of any of the Transaction Security) under any law or regulation or to give notice to any person of the execution of any Finance Document or of the Transaction Security;
(d)
take, or to require the Borrower to take, any step to perfect its title to any of the Security Assets or to render the Transaction Security effective or to secure the creation of any ancillary Security under any law or regulation; or
(e)
require any further assurance in relation to any Finance Document.
25.19
Insurance by Security Trustee
(a)
The Security Trustee shall not be obliged:
(i)
to insure any of the Security Assets;
(ii)
to require any other person to maintain any insurance; or
(iii)
to verify any obligation to arrange or maintain insurance contained in any Finance Document,
(iv)
and the Security Trustee shall not be liable for any damages, costs or losses to any person as a result of the lack of, or inadequacy of, any such insurance.
(b)
Where the Security Trustee is named on any insurance policy as an insured party, it shall not be liable for any damages, costs or losses to any person as a result of 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 the Majority Lenders request it to do so in writing and the Security Trustee fails to do so within 14 days after receipt of that request.
25.20
Custodians and nominees
The Security Trustee may appoint and pay any person to act as a custodian or nominee on any terms in relation to any asset of the trust as the Security Trustee 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 Trustee 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.
25.21
Delegation by the Security Trustee
(a)
Each of the Security Trustee and any Receiver may, at any time, delegate by power of attorney or otherwise to any person for any period, all or any right, power, authority or discretion vested in it in its capacity as such.

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(b)
That delegation may be made upon any terms and conditions (including the power to sub delegate) and subject to any restrictions that the Security Trustee or that Receiver (as the case may be) may, in its discretion, think fit in the interests of the Secured Parties.
(c)
No Security Trustee or Receiver shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of any such delegate or sub delegate.
25.22
Additional Security Trustees
(a)
The Security Trustee may at any time 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 Creditor Parties; or
(ii)
for the purposes of conforming to any legal requirement, restriction or condition which the Security Trustee deems to be relevant; or
(iii)
for obtaining or enforcing any judgment in any jurisdiction,
and the Security Trustee shall give prior notice to the Borrower and the Creditor Parties of that appointment.
(b)
Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Trustee under or in connection with the Finance Documents) and the duties, obligations and responsibilities that are given or imposed by the instrument of appointment.
(c)
The remuneration that the Security Trustee may pay to that person (after consultation with the Borrower), 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 Trustee.
25.23
Acceptance of title
The Security Trustee shall be entitled to accept without enquiry, and shall not be obliged to investigate, any right and title that the Borrower may have to any of the Security Assets and shall not be liable for or bound to require the Borrower to remedy any defect in its right or title.
25.24
Releases
Upon a disposal of any of the Security Assets pursuant to the enforcement of the Transaction Security by a Receiver or the Security Trustee, the Security Trustee is irrevocably authorised (at the cost of the Borrower and without any consent, sanction, authority or further confirmation from any other Creditor Party) to release, without recourse or warranty, that property from the Transaction Security and to execute any release of the Transaction Security or other claim over that asset and to issue any certificates of non-crystallisation of floating charges that may be required or desirable.
25.25
Winding up of trust
If the Security Trustee, with the approval of the Agent determines that:
(a)
all of the Secured Liabilities and all other obligations secured by the Finance Documents have been fully and finally discharged; and

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(b)
no Secured Party is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to the Borrower pursuant to the Finance Documents,
then
(i)
the trusts set out in this Agreement shall be wound up and the Security Trustee shall release, without recourse or warranty, all of the Transaction Security and the rights of the Security Trustee under each of the Finance Documents; and
(ii)
any Security Trustee which has resigned pursuant to Clause 25.13 ( Resignation of the Security Trustee ) shall release, without recourse or warranty, all of its rights under each Finance Document.
25.26
Powers supplemental to Trustee Acts
The rights, powers, authorities and discretions given to the Security Trustee under or in connection with the Finance Documents 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 Trustee by law or regulation or otherwise.
25.27
Disapplication of Trustee Acts
Section 1 of the Trustee Act 2000 shall not apply to the duties of the Security Trustee in relation to the trusts constituted by this Agreement and the other Finance Documents. Where there are any inconsistencies between (i) the Trustee Acts 1925 and 2000 and (ii) the provisions of this Agreement and any other Finance Document, the provisions of this Agreement and any other Finance Document shall, to the extent permitted by law and regulation, prevail and, in the case of any inconsistency with the Trustee Act 2000, the provisions of this Agreement and any other Finance Document shall constitute a restriction or exclusion for the purposes of the Trustee Act 2000.
25.28
Application of receipts
All amounts from time to time received or recovered by the Security Trustee pursuant to the terms of any Finance Document, under Clause 25.2 ( Parallel Debt (Covenant to pay the Security Trustee) ) or in connection with the realisation or enforcement of all or any part of the Security Property (for the purposes of this Clause 25 ( The Security Trustee ), the " Recoveries ") shall be held by the Security Trustee on trust to apply them at any time as the Security Trustee (in its discretion) sees fit, to the extent permitted by applicable law (and subject to the remaining provisions of this Clause 25 ( The Security Trustee ), in the following order of priority:
(a)
in discharging any sums owing to the Security Trustee (in its capacity as such) (other than pursuant to Clause 25.2 ( Parallel Debt (Covenant to pay the Security Trustee) ) or any Receiver;
(b)
in payment or distribution to the Agent, on its behalf and on behalf of the other Creditor Parties, for application towards the discharge of all sums due and payable by the Borrower under any of the Finance Documents in accordance with Clause 17 ( Application of Receipts );
(c)
if the Borrower is not under any further actual or contingent liability under any Finance Document, in payment or distribution to any person to whom the Security Trustee is obliged to pay or distribute in priority to the Borrower; and
(d)
the balance, if any, in payment or distribution to the Borrower.

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25.29
Permitted Deductions
The Security Trustee may, in its discretion:
(a)
set aside by way of reserve amounts required to meet, and 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
(b)
pay all Taxes which may be assessed against it in respect of any of the Security Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Trustee under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).
25.30
Prospective liabilities
Following acceleration the Security Trustee may, in its discretion, or at the request of the Agent, hold any Recoveries in an interest bearing suspense or impersonal account(s) in the name of the Security Trustee with such financial institution (including itself) and for so long as the Security Trustee shall think fit (the interest being credited to the relevant account) for later payment to the Agent for application in accordance with Clause 25.28 ( Application of receipts ) in respect of:
(a)
any sum to the Security Trustee or any Receiver; and
(b)
any part of the Secured Liabilities,
that the Security Trustee or, in the case of paragraph (b) only, the Agent, reasonably considers, in each case, might become due or owing at any time in the future.
25.31
Investment of proceeds
Prior to the payment of the proceeds of the Recoveries to the Agent for application in accordance with Clause 25.28 ( Application of receipts ) the Security Trustee may, in its discretion, hold all or part of those proceeds in an interest bearing suspense or impersonal account(s) in the name of the Security Trustee with such financial institution (including itself) and for so long as the Security Trustee shall think fit (the interest being credited to the relevant account) pending the payment from time to time of those moneys in the Security Trustee's discretion in accordance with the provisions of Clause 25.28 ( Application of receipts ).
25.32
Currency conversion
(a)
For the purpose of, or pending the discharge of, any of the Secured Liabilities the Security Trustee may convert any moneys received or recovered by the Security Trustee from one currency to another, at a market rate of exchange.
(b)
The obligations of the Borrower 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.
25.33
Good discharge
(a)
Any payment to be made in respect of the Secured Liabilities by the Security Trustee may be made to the Agent on behalf of the Creditor Parties and any payment made in that way shall be a good discharge, to the extent of that payment, by the Security Trustee.

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(b)
The Security Trustee is under no obligation to make the payments to the Agent under paragraph (a) above in the same currency as that in which the obligations and liabilities owing to the relevant Creditor Party are denominated.
25.34
Amounts received by Borrower
If the Borrower receives or recovers any amount which, under the terms of any of the Finance Documents, should have been paid to the Security Trustee, the Borrower will hold the amount received or recovered on trust for the Security Trustee and promptly pay that amount to the Security Trustee for application in accordance with the terms of this Agreement.
25.35
Full freedom to enter into transactions
Without prejudice to Clause 25.7 ( Business with the Group ) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Security Trustee shall be absolutely entitled:
(a)
to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting the Borrower or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security trustee for, and/or participating in, other facilities to such Borrower or any person who is party to, or referred to in, a Finance Document);
(b)
to deal in and enter into and arrange transactions relating to:
(i)
any securities issued or to be issued by the Borrower or any other person; or
(ii)
any options or other derivatives in connection with such securities; and
(c)
to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,
and, in particular, the Security Trustee shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.
26
CONDUCT OF BUSINESS BY THE CREDITOR PARTIES
No provision of this Agreement will:
(a)
interfere with the right of any Creditor Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(b)
oblige any Creditor Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
oblige any Creditor Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.

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27
SHARING AMONG THE CREDITOR PARTIES
27.1
Payments to Creditor Parties
If a Creditor Party (a " Recovering Creditor Party ") receives or recovers any amount from the Borrower other than in accordance with Clause 16 ( Payments and Calculations ) (a " Recovered Amount ") and applies that amount to a payment due to it under the Finance Documents then:
(a)
the Recovering Creditor Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent;
the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Creditor Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 16 ( Payments and Calculations ), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and
(b)
the Recovering Creditor 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 Creditor Party as its share of any payment to be made, in accordance with Clause 17.1 ( Normal order of application ).
27.2
Redistribution of payments
The Agent shall treat the Sharing Payment as if it had been paid by the Borrower and distribute it among the Creditor Parties (other than the Recovering Creditor Party) (the " Sharing Creditor Parties ") in accordance with Clause 17.1 ( Normal order of application ) towards the obligations of the Borrower to the Sharing Creditor Parties.
27.3
Recovering Creditor Party's rights
On a distribution by the Agent under Clause 27.2 ( Redistribution of payments ) of a payment received by a Recovering Creditor Party from Borrower, as between the Borrower and the Recovering Creditor Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by the Borrower.
27.4
Reversal of redistribution
If any part of the Sharing Payment received or recovered by a Recovering Creditor Party becomes repayable and is repaid by that Recovering Creditor Party, then:
(a)
each Sharing Creditor Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Creditor 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 Creditor Party for its proportion of any interest on the Sharing Payment which that Recovering Creditor Party is required to pay) (the " Redistributed Amount "); and
(b)
as between the Borrower and each relevant Sharing Creditor Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by the Borrower.
27.5
Exceptions

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(a)
This Clause 27 ( Sharing among the Creditor Parties ) shall not apply to the extent that the Recovering Creditor Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the Borrower.
(b)
A Recovering Creditor Party is not obliged to share with any other Creditor Party any amount which the Recovering Creditor Party has received or recovered as a result of taking legal or arbitration proceedings, if:
(i)
it notified that other Creditor Party of the legal or arbitration proceedings; and
(ii)
that other Creditor 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.
28
INCREASED COSTS
28.1
Increased costs
(a)
Subject to Clause 28.3 ( Exceptions ), the Borrower shall, within three Business Days of a demand by the Agent, pay for the account of a Creditor Party the amount of any Increased Costs incurred by that Creditor 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 made,
in each case after the date of this Agreement; or
(iii)
the implementation, application of or compliance with Basel III or CRD IV or any law or regulation that implements or applies Basel III or CRD IV.
(b)
In this Agreement:
(i)
" Basel III " means:
(A)
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;
(B)
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
(C)
any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".
(ii)
" CRD IV " means:

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(A)
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;
(B)
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, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC; and
(C)
any other law or regulation which implements Basel III.
(iii)
" Increased Costs " means:
(A)
a reduction in the rate of return from a Facility or on a Creditor 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 Creditor Party or any of its Affiliates to the extent that it is attributable to that Creditor Party having entered into its Commitment or funding or performing its obligations under any Finance Document.
28.2
Increased cost claims
(a)
A Creditor Party intending to make a claim pursuant to Clause 28 ( Increased Costs ) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Borrower.
(b)
Each Creditor Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.
28.3
Exceptions
Clause 28 ( Increased Costs ) does not apply to the extent any Increased Cost is:
(a)
attributable to a Tax Deduction required by law to be made by the Borrower;
(b)
attributable to a FATCA Deduction required to be made by a Party;
(c)
compensated for by paragraph (e) of Clause 21.1 ( Indemnities regarding borrowing and repayment of Loan ), Clause 22.2 ( Grossing-up for taxes ) (or would have been compensated for under paragraph (e) of Clause 21.1 ( Indemnities regarding borrowing and repayment of Loan ) or Clause 22.2 ( Grossing-up for taxes ) but was not so compensated solely because of any of the exclusions therein applied), Clause 30.17 ( Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office ) (or would have been compensated for under Clause 30.17 ( Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office ) but was not so compensated solely because any of the exclusions in Clause 30.17 ( Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office ) applied);
(d)
attributable to the wilful breach by the relevant Creditor Party or its Affiliates of any law or regulation; or

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(e)
incurred by a Swap Bank in its capacity as such.
28.4
Notification to Borrower of claim for increased costs
The Agent shall promptly notify the Borrower and the Security Parties of the notice which the Agent received from the Notifying Lender under Clause 28.1 ( Increased costs ) and there shall then be a 60 day consultation period for the Borrower and Notifying Lender to discuss the particular increased cost and amount to be paid to the Notifying Lender.
28.5
Payment of increased costs
Unless something to the contrary is agreed by the Borrower and the Notifying Lender during the 60 day consultation period referred to in 28.4 ( Notification to Borrower of claim for increased costs ), the Borrower shall pay to the Agent, on the Agent's demand, for the account of the Notifying Lender the amounts which the Agent from time to time notifies the Borrower that the Notifying Lender has specified to be necessary to compensate the Notifying Lender for the increased cost.
28.6
Notice of prepayment
If the Borrower is not willing to continue to compensate the Notifying Lender for the increased cost under Clause 28.5 ( Payment of increased costs ), the Borrower may give the Agent not less than 5 Business Days' notice of their intention to prepay the Notifying Lender's Contribution or to procure a Transferee Lender.
28.7
Prepayment; termination of Commitment
A notice of prepayment under Clause 28.6 ( Notice of prepayment ) shall be irrevocable; the Agent shall promptly notify the Notifying Lender of the Borrower's notice of intended prepayment; and:
(a)
on the date on which the Agent serves that notice, the Commitment of the Notifying Lender shall be cancelled; and
(b)
on the date specified in its notice of intended prepayment, the Borrower shall prepay (without premium or penalty) the Notifying Lender's Contribution, together with accrued interest thereon at the applicable rate plus the applicable Margin.
28.8
Application of prepayment
Clause 8 ( Reduction, Repayment, Prepayment and Cancellation ) shall apply in relation to the prepayment.
29
SET‑ OFF
29.1
Application of credit balances
Each Creditor Party may, at any time after the occurrence of an Event of Default which is continuing, without prior notice:
(a)
apply any balance (whether or not then due) which at any time stands to the credit of any account in the name of the Borrower at any office in any country of that Creditor Party in or towards satisfaction of any sum then due from the Borrower to that Creditor Party under any of the Finance Documents; and

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(b)
for that purpose:
(i)
break, or alter the maturity of, all or any part of a deposit of the Borrower;
(ii)
convert or translate all or any part of a deposit or other credit balance into Dollars;
(iii)
enter into any other transaction or make any entry with regard to the credit balance which the Creditor Party concerned considers appropriate.
29.2
Existing rights unaffected
No Creditor Party shall be obliged to exercise any of its rights under Clause 29.1 ( Application of credit balances ); and those rights shall be without prejudice and in addition to any right of set‑off, combination of accounts, charge, lien or other right or remedy to which a Creditor Party is entitled (whether under the general law or any document).
29.3
Sums deemed due to a Lender
For the purposes of this Clause 29 ( Set‑Off ), a sum payable by the Borrower to the Agent or the Security Trustee for distribution to, or for the account of, a Lender shall be treated as a sum due to that Lender; and each Lender's proportion of a sum so payable for distribution to, or for the account of, the Lenders shall be treated as a sum due to such Lender.
29.4
No Security Interest
This Clause 29 ( Set‑Off ) gives the Creditor Parties a contractual right of set‑off only and does not create any equitable charge or other Security Interest over any credit balance of the Borrower.
30
TRANSFERS AND CHANGES IN LENDING OFFICES
30.1
Transfer by Borrower
The Borrower may not, without the consent of the Agent given on the instructions of all the Lenders, transfer any of its rights, liabilities or obligations under any Finance Document.
30.2
Transfer by a Lender
Subject to Clause 30.4 ( Effective Date of Transfer Certificate ), a Lender (the " Transferor Lender ") may, at its own cost, with the prior written consent of the Borrower (not to be unreasonably withheld or delayed) or without the consent of the Borrower if an Event of Default has occurred and is continuing or if to an Affiliate of the Lender, cause:
(a)
its rights in respect of all or pro rata parts of its Contribution; or
(b)
its obligations in respect of all or pro rata parts of its Commitment; or
(c)
a combination of (a) and (b);
to be (in the case of its rights) transferred to, or (in the case of its obligations) assumed by, another bank (a " Transferee Lender ") by delivering to the Agent a completed certificate in the form set out in Schedule 5 ( Transfer Certificate ) with any modifications approved or required by the Agent (a " Transfer Certificate ") executed by the Transferor Lender and the Transferee Lender Provided that a Lender may make such transfer to any wholly owned subsidiary of it, to its parent company or to another subsidiary of its parent company without the consent of the Borrower

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or the Agent and the fee referred to in Clause 30.11 ( Registration fee ) shall not apply in relation to any such transfer.
Without prejudice to the foregoing, any such transfer by a Lender shall be subject to the following further conditions:
(i)
the amount of the Contribution and/or Commitment of the Lender which is to be transferred shall not be less than $10,000,000 or, if less, the remaining amount of its Contribution and Commitment, unless the Agent agrees otherwise;
(ii)
where no Potential Event of Default has occurred and is continuing or Event of Default has occurred and is continuing, the Agent shall approve the transfer (such approval not to be unreasonably withheld);
(iii)
payment of the fee in accordance with Clause 30.11 ( Registration fee ).
30.3
Transfer Certificate, delivery and notification
As soon as reasonably practicable after a Transfer Certificate is delivered to the Agent, it shall (unless it has reason to believe that the Transfer Certificate may be defective):
(a)
sign the Transfer Certificate on behalf of itself, the Borrower, the Security Parties, the Security Trustee and each of the other Lenders and each of the Swap Banks;
(b)
on behalf of the Transferee Lender, send to the Borrower and each Security Party letters or faxes notifying them of the Transfer Certificate and attaching a copy of it;
(c)
send to the Transferee Lender copies of the letters or faxes sent under paragraph (b),
but the Agent shall only be obliged to execute a Transfer Certificate delivered to it once it is satisfied it has complied with all necessary "know your customer" other similar checks under all applicable laws and regulations in relation to the transfer to the Transferee Lender.
30.4
Effective Date of Transfer Certificate
A Transfer Certificate becomes effective on the date, if any, specified in the Transfer Certificate as its effective date Provided that it is signed by the Agent under Clause 30.3 ( Transfer Certificate, delivery and notification ) on or before that date.
30.5
No transfer without Transfer Certificate
No assignment or transfer of any right or obligation of a Lender under any Finance Document is binding on, or effective in relation to, the Borrower, any Security Party, the Agent or the Security Trustee unless it is effected, evidenced or perfected by a Transfer Certificate.
30.6
Lender re-organisation; waiver of Transfer Certificate
However, if a Lender enters into any merger, de-merger or other reorganisation as a result of which all its rights or obligations vest in another person (the " successor "), the Agent may, if it sees fit, by notice to the successor and the Borrower and the Security Trustee waive the need for the execution and delivery of a Transfer Certificate; and, upon service of the Agent's notice, the successor shall become a Lender with the same Commitment and Contribution as were held by the predecessor Lender.

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30.7
Effect of Transfer Certificate
A Transfer Certificate takes effect in accordance with English law as follows:
(a)
to the extent specified in the Transfer Certificate, all rights and interests (present, future or contingent) which the Transferor Lender has under or by virtue of the Finance Documents are assigned to the Transferee Lender absolutely, free of any defects in the Transferor Lender's title and of any rights or equities which the Borrower or any Security Party had against the Transferor Lender;
(b)
the Transferor Lender's Commitment is discharged to the extent specified in the Transfer Certificate;
(c)
the Transferee Lender becomes a Lender with a Contribution and Commitment of the amounts specified in the Transfer Certificate;
(d)
the Transferee Lender becomes bound by all the provisions of the Finance Documents which are applicable to the Lenders generally, including those about pro‑rata sharing and the exclusion of liability on the part of, and the indemnification of, the Agent and the Security Trustee and, to the extent that the Transferee Lender becomes bound by those provisions (other than those relating to exclusion of liability), the Transferor Lender ceases to be bound by them;
(e)
any part of the Loan which the Transferee Lender advances after the Transfer Certificate's effective date ranks in point of priority and security in the same way as it would have ranked had it been advanced by the transferor, assuming that any defects in the Transferor Lender's title and any rights or equities of the Borrower or any Security Party against the Transferor Lender had not existed;
(f)
the Transferee Lender becomes entitled to all the rights under the Finance Documents which are applicable to the Lenders generally, including but not limited to those relating to the Majority Lenders and those under Clause 5.9 ( Market disruption ) and Clause 20 ( Fees and Expenses ), and to the extent that the Transferee Lender becomes entitled to such rights, the Transferor Lender ceases to be entitled to them; and
(g)
in respect of any breach of a warranty, undertaking, condition or other provision of a Finance Document or any misrepresentation made in or in connection with a Finance Document, the Transferee Lender shall be entitled to recover damages by reference to the loss incurred by it as a result of the breach or misrepresentation, irrespective of whether the original Lender would have incurred a loss of that kind or amount.
The rights and equities of the Borrower or any Security Party referred to above include, but are not limited to, any right of set off and any other kind of cross‑claim.
30.8
Maintenance of register of Lenders
During the Security Period the Agent shall maintain a register in which it shall record the name, Commitment, Contribution and administrative details (including the lending office) from time to time of each Lender holding a Transfer Certificate and the effective date (in accordance with Clause 30.4 ( Effective Date of Transfer Certificate )) of the Transfer Certificate; and the Agent shall make the register available for inspection by any Lender, the Security Trustee and the Borrower during normal banking hours, subject to receiving at least 3 Business Days prior notice.
30.9
Reliance on register of Lenders

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The entries on that register shall, in the absence of manifest error, be conclusive in determining the identities of the Lenders and the amounts of their Commitments and Contributions and the effective dates of Transfer Certificates and may be relied upon by the Agent and the other parties to the Finance Documents for all purposes relating to the Finance Documents.
30.10
Authorisation of Agent to sign Transfer Certificates
The Borrower, the Security Trustee, each Lender and each Swap Bank irrevocably authorise the Agent to sign Transfer Certificates on its behalf.
30.11
Registration fee
In respect of any Transfer Certificate, the Agent shall be entitled to recover a registration fee of $5,000 from the Transferor Lender or (at the Agent's option) the Transferee Lender.
30.12
Sub-participation; subrogation assignment
(a)
A Lender may sub participate all or any part of its rights and/or obligations under or in connection with the Finance Documents without the consent of, or any notice to:
(i)
any Security Party, the Agent or the Security Trustee; or
(ii)
where (A) an Event of Default has occurred and is continuing; or (B) such sub-participation is in connection with that Lender's credit insurance arrangements, the Borrower.
Where (A) no Event of Default has occurred and is continuing or (B) such sub-participation is not in connection with that Lender's credit insurance arrangements, the Borrower's consent to such sub-participation shall be required, such consent not to be unreasonably withheld or delayed.
(b)
The Lenders may assign, in any manner and terms agreed by the Majority Lenders, the Agent and the Security Trustee, all or any part of those rights to an insurer or surety who has become subrogated to them.
30.13
Change of lending office
A Lender may change its lending office by giving notice to the Agent and the change shall become effective on the later of:
(a)
the date on which the Agent receives the notice; and
(b)
the date, if any, specified in the notice as the date on which the change will come into effect.
30.14
Notification
On receiving such a notice, the Agent shall notify the Borrower, each other Security Party and the Security Trustee; and, until the Agent receives such a notice, it shall be entitled to assume that a Lender is acting through the lending office of which the Agent last had notice.
30.15
Replacement of Reference Bank
If any Reference Bank ceases to be a Lender or is unable on a continuing basis to supply quotations for the purposes of Clause 5 ( Interest ) then, unless the Borrower, the Agent and the Majority Lenders otherwise agree, the Agent, acting on the instructions of the Majority Lenders, and after

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consulting the Borrower, shall appoint another bank (whether or not a Lender) to be a replacement Reference Bank; and, when that appointment comes into effect, the first‑mentioned Reference Bank's appointment shall cease to be effective.
30.16
Security over Lenders' rights
In addition to the other rights provided to Lenders under this Clause 30 ( Transfers and Changes in Lending Offices ), each Lender may without consulting with or obtaining consent from the Borrower or any Security Party, 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:
(a)
any charge, assignment or other Security Interest to secure obligations to a federal reserve or central bank; and
(b)
in the case of any Lender which is a fund, any charge, assignment or other Security Interest 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 Security Interest shall:
(i)
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
(ii)
require any payments to be made by the Borrower or any Security Party 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.
30.17
Tax indemnity, tax gross-up and increased costs on assignment, transfer and change of lending office
If:
(a)
a Lender assigns or transfers any rights or obligations under the Finance Documents pursuant to Clause 30.2 ( Transfer by a Lender ) or changes its lending office; and
(b)
as a result of circumstances existing at the date the assignment, transfer or change occurs the Borrower would be obliged to make a payment to the Transferee Lender or Lender acting through its new lending office under Clause 21.1 ( Indemnities regarding borrowing and repayment of Loan ) in respect of any tax, Clause 22 ( No Set-Off or Tax Deduction ) or Clause 28 ( Increased Costs ),
then the Transferee Lender or the Lender acting through its new lending office is only entitled to receive payment under those Clauses to the same extent as the Transferor Lender or the Lender acting through its previous lending office would have been if the assignment, transfer or change had not occurred.
30.18
Replacement of Lender by Borrower
The Borrower may, at any time unless a Potential Event of Default or Event of Default has occurred and is continuing in respect of:

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(a)
a Lender whose costs of funds charged to the Borrower are (in the Borrower's reasonable opinion) materially higher than those of the other Lenders generally;
(b)
a Lender which is a Defaulting Lender; or
(c)
a Lender which is a Non-Consenting Lender,
by giving 10 Business Days' notice to the Agent and that Lender (the " Outgoing Lender ") replace the Outgoing Lender by requiring it to (and the Outgoing Lender must) transfer in accordance with Clause 30 ( Transfers and Changes in Lending Offices ) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank (a " Replacement Lender ") selected by the Borrower and (unless the Agent is an Impaired Agent) which is acceptable to the Agent (acting reasonably) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of the Outgoing Lender's Contribution and all accrued interest, break costs and other amounts payable in relation to that Contribution under this Agreement and the other Finance Documents.
Any transfer of rights and obligations of an Outgoing Lender under this Clause is subject to the following conditions:
(i)
neither the Agent nor the Outgoing Lender will have any obligation to the Borrower to find a Replacement Lender;
(ii)
the transfer must take place no later than 10 Business Days after the Borrower's notice referred to above;
(iii)
in no event will the Outgoing Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Outgoing Lender under this Agreement and the other Finance Documents; and
(iv)
the Outgoing Lender shall only be obliged to transfer its rights and obligations under this Clause 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 and the Outgoing Lender shall perform the checks described in this paragraph (iv) above as soon as reasonably practicable following delivery of a notice referred to in this Clause and shall notify the Agent and the Borrower when it is satisfied that it has complied with those checks.
31
CONFIDENTIAL INFORMATION
31.1
Confidentiality
Each Creditor Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 31.2 ( Disclosure of Confidential Information ) and Clause 31.3 ( 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.
31.2
Disclosure of Confidential Information
Any Creditor Party may disclose:
(a)
to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as

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that Creditor Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) 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;
(b)
to any person:
(i)
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 Trustee and, in each case, to any of that person's Affiliates, Related Funds, 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 the Borrower and to any of that person's Affiliates, Related Funds, Representatives and professional advisers;
(iii)
appointed by any Creditor Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) 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 paragraph (c) of Clause 24.15 ( Relationship with the other Creditor Parties );
(iv)
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;
(v)
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, arbitrations, administrative or other investigations, proceedings or disputes;
(vii)
to whom or for whose benefit that Creditor Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 30.16 ( Security over Lenders' rights );
(viii)
who is a Party, a member of the Group or any related entity of the Borrower;
(ix)
as a result of the registration of any Finance Document as contemplated by any Finance Document or any legal opinion obtained in connection with any Finance Document; or
(x)
with the consent of the Borrower;
in each case, such Confidential Information as that Creditor Party shall consider appropriate if:
(A)
in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) above, the person to whom the Confidential Information is to be given has entered into a

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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;
(B)
in relation to sub-paragraph (iv) of paragraph (b) 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;
(C)
in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) 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 may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Creditor Party, it is not practicable so to do in the circumstances;
(c)
to any person appointed by that Creditor Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) 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 paragraph (c) if the service provider to whom the Confidential Information is to be given has entered in to 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 Creditor Party.
31.3
Disclosure to numbering service providers
(a)
Any Creditor Party may disclose to any national or international numbering service provider appointed by that Creditor Party to provide identification numbering services in respect of this Agreement, the Loan and the Borrower the following information:
(i)
name of the Borrower;
(ii)
country of domicile of the Borrower;
(iii)
place of incorporation of the Borrower;
(iv)
date of this Agreement;
(v)
Clause 37 ( Law and Jurisdiction );
(vi)
the names of the Agent and the Mandated Lead Arrangers;
(vii)
date of each amendment and restatement of this Agreement;
(viii)
amounts of, and names of, the relevant Loan;
(ix)
amount of Total Commitments;
(x)
currency of the relevant Loan;

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(xi)
type of the relevant Loan;
(xii)
ranking of the relevant Loan;
(xiii)
Maturity Date(s) for the Loan;
(xiv)
changes to any of the information previously supplied pursuant to sub-paragraphs (i) to (xiii) above; and
(xv)
such other information agreed between such Creditor Party and the Borrower,
to enable such numbering service provider to provide its usual syndicated loan numbering identification services.
(b)
The Parties acknowledge and agree that each identification number assigned to this Agreement, the Loan and/or the Borrower 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.
(c)
The Borrower represents that none of the information set out in sub-paragraphs (i) to (xv) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.
31.4
Entire agreement
This Clause 31 ( Confidential Information ) constitutes the entire agreement between the Parties in relation to the obligations of the Creditor Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
31.5
Inside information
Each of the Creditor 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 Creditor Parties undertakes not to use any Confidential Information for any unlawful purpose.
31.6
Notification of disclosure
Each of the Creditor Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:
(a)
of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (v) of paragraph (b) of Clause 31.2 ( Disclosure of Confidential Information ) 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
(b)
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 31 ( Confidential Information ).
31.7
Continuing obligations

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The obligations in this Clause 31 ( Confidential Information ) are continuing and, in particular, shall survive and remain binding on each Creditor Party for a period of 12 months from the earlier of:
(a)
the date on which all amounts payable by the Borrower 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
(b)
the date on which such Creditor Party otherwise ceases to be a Creditor Party.
32
CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS
32.1
Confidentiality and disclosure
(a)
The Agent and the Borrower agree to keep each Funding Rate (and, in the case of the Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b), (c) and (d) below.
(b)
The Agent may disclose:
(i)
any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the Borrower pursuant to Clause 5.4 ( Notification of rates of interest ); and
(ii)
any Funding Rate or any 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 Reference Bank, as the case may be.
(c)
The Agent may disclose any Funding Rate or any Reference Bank Quotation, and the Borrower may disclose any Funding Rate, to:
(i)
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 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 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 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 Borrower, as the case may be, it is not practicable to do so in the circumstances;

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(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 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 Borrower, 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 Reference Bank, as the case may be.
(d)
The Agent's obligations in this Clause 32 ( Confidentiality of Funding Rates and Reference Bank Quotations ) relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause 5.4 ( Notification of rates of interest ) provided that (other than pursuant to sub-paragraph (i) of paragraph (b) above) the Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification.
32.2
Related obligations
(a)
The Agent and the Borrower acknowledge that each Funding Rate (and, in the case of the Agent, each 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 the Borrower undertake not to use any Funding Rate or, in the case of the Agent, any Reference Bank Quotation for any unlawful purpose.
(b)
The Agent and the Borrower agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be:
(i)
of the circumstances of any disclosure made pursuant to sub-paragraph (ii) of paragraph (c) of Clause 32.1 ( 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 32 ( Confidentiality of Funding Rates and Reference Bank Quotations).
33
VARIATIONS AND WAIVERS
33.1
Variations, waivers etc. by Majority Lenders
Subject to Clause 33.2 ( Variations, waivers etc. requiring agreement of all Lenders ), a document shall be effective to vary, waive, suspend or limit any provision of a Finance Document, or any Creditor Party's rights or remedies under such a provision or the general law, only if the document is signed by the Borrower, by the Agent on behalf of the Majority Lenders, by the Agent and the Security Trustee in their own rights, and, if the document relates to a Finance Document to which a Security Party is party, by that Security Party.
The consent of the Borrower or any Security Party shall not be required to any amendment or variation to a Finance Document if such amendment or variation does not, in the opinion of the Agent (acting reasonably), materially and adversely affect the rights or interests of the Borrower or the Security Parties.
33.2
Variations, waivers etc. requiring agreement of all Lenders

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However, as regards the following, Clause 33.1 ( Variations, waivers etc. by Majority Lenders ) applies as if the words "by the Agent on behalf of the Majority Lenders" were replaced by the words "by or on behalf of every Lender":
(a)
a reduction in the Margin;
(b)
a change to the date for, the amount of, any payment of principal, interest, fees, or other sum payable under this Agreement;
(c)
a change to any Lender's Commitment;
(d)
a change to the definition of "Majority Lenders" or "Finance Documents";
(e)
a change to the preamble or to Clause 2 ( Facility ), Clause 3 ( Position of the Lenders and Swap Banks ), Clause 4 ( Drawdown ), Clause 5.1 ( Payment of normal interest ), paragraph (b) of Clause 16.1 ( Currency and method of payments ), Clause 17 ( Application of Receipts ), Clause 18 ( Application of Earnings ) or Clause 37 ( Law and Jurisdiction );
(f)
a change to this Clause 33 ( Variations and Waivers );
(g)
any release of, or material variation to, a Security Interest, guarantee, indemnity or subordination arrangement set out in a Finance Document;
(h)
a change to the identity of the Borrower; and
(i)
any other change or matter as regards which this Agreement or another Finance Document expressly provides that each Lender's consent is required.
33.3
Exclusion of other or implied variations
Except for a document which satisfies the requirements of Clauses 33.1 ( Variations, waivers etc. by Majority Lenders ) and 33.2 ( Variations, waivers etc. requiring agreement of all Lenders ), no document, and no act, course of conduct, failure or neglect to act, delay or acquiescence on the part of the Creditor Parties or any of them (or any person acting on behalf of any of them) shall result in the Creditor Parties or any of them (or any person acting on behalf of any of them) being taken to have varied, waived, suspended or limited, or being precluded (permanently or temporarily) from enforcing, relying on or exercising:
(a)
a provision of this Agreement or another Finance Document; or
(b)
an Event of Default; or
(c)
a breach by the Borrower or a Security Party of an obligation under a Finance Document or the general law; or
(d)
any right or remedy conferred by any Finance Document or by the general law;
and there shall not be implied into any Finance Document any term or condition requiring any such provision to be enforced, or such right or remedy to be exercised, within a certain or reasonable time.
34
BAIL-IN

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Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document 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.
35
NOTICES
35.1
General
Unless otherwise specifically provided, any notice under or in connection with any Finance Document shall be given by letter or fax and references in the Finance Documents to written notices, notices in writing and notices signed by particular persons shall be construed accordingly.
35.2
Addresses for communications
A notice shall be sent:
(a)
to the Borrower:    de Gerlachekaai 20
B-2000 Antwerp
Belgium
Fax No: 32 3 247 4409
Attn: Chief Financial Officer
(b)
to a Lender:    At the address below its name in Schedule 1 ( Lenders and Commitments ) or (as the case may require) in the relevant Transfer Certificate.
(c)
to a Swap Bank:    At the address below its name in Schedule 2 ( Swap Banks ).
(d)
to the Agent and
the Security Trustee:    Essendropsgate 7
Oslo

    Norway
Loan administration matters:
Fax No: (47) 22 48 66 88
Attn: International Loans Administration

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Credit matters:
Fax No: (47) 22 48 44 91
Attn: Shipping, Offshore and Oil Services
or to such other address as the relevant party may notify the Agent or, if the relevant party is the Agent or the Security Trustee, the Borrower, the Lenders, the Swap Banks and the Security Parties.
35.3
Effective date of notices
Subject to Clauses 35.4 ( Service outside business hours ) and 35.5 ( Illegible notices ):
(a)
a notice which is delivered personally or posted shall be deemed to be served, and shall take effect, at the time when it is delivered;
(b)
a notice which is sent by fax shall be deemed to be served, and shall take effect, 2 hours after its transmission is completed.
35.4
Service outside business hours
However, if under Clause 35.3 ( Effective date of notices ) a notice would be deemed to be served:
(a)
on a day which is not a business day in the place of receipt; or
(b)
on such a business day, but after 5 p.m. local time;
the notice shall (subject to Clause 35.5 ( Illegible notices ) be deemed to be served, and shall take effect, at 9 a.m. on the next day which is such a business day.
35.5
Illegible notices
Clauses 35.3 ( Effective date of notices ) and 35.4 ( Service outside business hours ) do not apply if the recipient of a notice notifies the sender within 1 hour after the time at which the notice would otherwise be deemed to be served that the notice has been received in a form which is illegible in a material respect.
35.6
Valid notices
A notice under or in connection with a Finance Document shall not be invalid by reason that its contents or the manner of serving it do not comply with the requirements of this Agreement or, where appropriate, any other Finance Document under which it is served if:
(a)
the failure to serve it in accordance with the requirements of this Agreement or other Finance Document, as the case may be, has not caused any party to suffer any significant loss or prejudice; or
(b)
in the case of incorrect and/or incomplete contents, it should have been reasonably clear to the party on which the notice was served what the correct or missing particulars should have been.
35.7
Electronic communication
Any communication to be made between the Agent and another Creditor Party or the Borrower 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 Debtdomain system), if the Agent and the relevant Creditor Party or Borrower:

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(a)
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
(b)
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
(c)
notify each other of any change to their respective addresses or any other such information supplied to them.
Any electronic communication made between the Agent and another Creditor Party or the Borrower will be effective only when actually received in readable form and, in the case of any electronic communication made by a Creditor Party or the Borrower to the Agent, only if it is addressed in such a manner as the Agent shall specify for this purpose.
All Creditor Parties confirm that they have consented to the use of the Agent's Debtdomain systems as an accepted method of communication under or in connection with the Finance Documents and agree that the Debtdomain system (or another electronic collaborative website) will be the primary method of communication between the Agent and the other Creditor Parties. The Creditor Parties acknowledge that a communication via Debtdomain (or such other electronic collaborative website) will be effective once the communication is posted (in a readable form) to Debtdomain (or such other electronic collaborative website) by the Agent.
35.8
English language
Any notice under or in connection with a Finance Document shall be in English.
35.9
Meaning of "notice"
In this Clause 35 ( Notices ), " notice " includes any demand, consent, authorisation, approval, instruction, waiver or other communication.
36
SUPPLEMENTAL
36.1
Rights cumulative, non-exclusive
The rights and remedies which the Finance Documents give to each Creditor Party are:
(a)
cumulative;
(b)
may be exercised as often as appears expedient; and
(c)
shall not, unless a Finance Document explicitly and specifically states so, be taken to exclude or limit any right or remedy conferred by any law.
36.2
Severability of provisions
If any provision of a Finance Document is or subsequently becomes void, unenforceable or illegal, that shall not affect the validity, enforceability or legality of the other provisions of that Finance Document or of the provisions of any other Finance Document.
36.3
Counterparts
A Finance Document may be executed in any number of counterparts.
36.4
Third Party rights

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A person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Agreement.
37
LAW AND JURISDICTION
37.1
English law
This Agreement (other than Clause 3.5 ( Security Trustee as joint and several creditor ) and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law. Clause 3.5 ( Security Trustee as joint and several creditor ) shall be governed by, and construed in accordance with, Belgian law.
37.2
Exclusive English jurisdiction
Subject to Clause 37.3 ( Choice of forum for the exclusive benefit of the Creditor Parties ), the courts of England shall have exclusive jurisdiction to settle any Dispute.
37.3
Choice of forum for the exclusive benefit of the Creditor Parties
Clause 37.2 ( Exclusive English jurisdiction ) is for the exclusive benefit of the Creditor Parties, each of which reserves the right:
(a)
to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and
(b)
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
The Borrower shall not commence any proceedings in any country other than England in relation to a Dispute.
37.4
Process agent
The Borrower irrevocably appoints Euronav (UK) Agencies Limited at its registered office for the time being, presently at 99 King's Road, London, SW3 4PA, England, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with this Agreement.
37.5
Creditor Party rights unaffected
Nothing in this Clause 37 ( Law and Jurisdiction ) shall exclude or limit any right which any Creditor Party may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
37.6
Meaning of "proceedings"
In this Clause 37 ( Law and Jurisdiction ), " proceedings " means proceedings of any kind, including an application for a provisional or protective measure and a " Dispute " means any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement.


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THIS AGREEMENT has been entered into on the date stated at the beginning of this Agreement.

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Schedule 1

LENDERS AND COMMITMENTS


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Lender
Lending Office
Total Commitment
($)
BNP Paribas Fortis SA/NV
3, Montagne du Parc/1KA1D,  
1000 Brussels,  
Belgium
Geert Sterck
Tel: +32 2 565 2355  
Fax: +32 2 565 3403  
Email: geert.sterck@bnpparibasfortis.com  
Laura Falzone
Tel: +32 2 312 07 30  
Fax: +32 2 565 3403  
Email: laura.falzone@bnpparibasfortis.com
Credit Matters:
Hélène Pantalacci  
37 Place du Marché Saint Honoré  
75001 Paris  
France
Tel: +33 (0) 1 58 16 03 97  
Email: Helene.pantalacci@bnpparibas.com  
Guy Haesevoets
3, Montagne du Parc/1KA2E,  
1000 Brussels,  
Belgium
Tel: +32 (0) 2 565 8219  
Fax: +32 2 565 9593  
Email: guy.haesevoets@bnpparibasfortis.com   
Operations / Administrations:
Geert Sterck
3, Montagne du Parc/1KA1D,  
1000 Brussels,  
Belgium
Tel: +32 2 565 2355  
Fax: +32 2 565 3403  
Email: geert.sterck@bnpparibasfortis.com  
Laura Falzone/Davina Staessen
3, Montagne du Parc/1KA1D,  
1000 Brussels,  
Belgium
Tel: +32 2 312 07 30 / +32 2 565 10 49
50,000,000

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Lender
Lending Office
Total Commitment
($)
DNB (UK) Limited
8 th  Floor, The Walbrook Building, 25 Walbrook, London 8AF
Credit Matters
Telephone: 0207 621 6010
Telefax: 0207 283 6931
E-mail: Shipping Offshore and Logistics
Admin Matters
Telephone: 0207 621 6048
Telefax: 0207 283 5935
E-mail: cmoalondon@dnb.no   
50,000,000
Nordea Bank AB (publ), filial i Norge
Essendropsgate 7
0368 Oslo
Norway
Credit Matters:
Tel: (47) 22 48 50 00
Fax: (47) 22 36 97 31
Email: sls.shipping.norway@nordea.com
Attn: Shipping, Offshore and Oil Services
Administration Matters:
Tel: (47) 22 48 50 00
Fax: (47) 22 36 97 31
Email: sls.shipping.norway@nordea.com
Attn: International Loans Administration
50,000,000
Skandinaviska Enskilda Banken AB (publ)
Filipstad Brygge 1, Pb 18473 Vika, 0123 Oslo
Tel: + 47 22827000
Credit Matters:
Egil Aarrestad (Client Executive)  
Filipstad Brygge 1, Pb 1843 Vika, 0123 Oslo
Norway
Tel: +47 22827021
Email: egil.aarrestad@seb.no
Cecilie Landberg (Account Manager)  
Filipstad Brygge 1, Pb 1843 Vika, 0123 Oslo  
Telephone: +47 22827105  
E-mail: cecilie.landberg@seb.no
Operations / Administrations:
Structured Credits Operations / Pumputienė, leva  
Postal Address: SE-106 40 Stockholm
Office Address: Stjärntorget 4, Solna  
Tel: +37052594821
Email: sco@seb.se
50,000,000

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SCHEDULE 2     

SWAP BANKS
Swap Bank
Booking Office
BNP Paribas Fortis SA/NV
3, Montagne du Parc,
1000 Brussels,  
Belgium
Hilde Van Verre/1KL1A
Tel: +32 2 565 85 33  
Email: hilde.vanverre@bnpparibasfortis.com  
DNB Bank ASA
8 th  Floor, The Walbrook Building,
25 Walbrook,
London 8AF
Nordea Bank AB (publ)
c/o Nordea Danmark, filial af Nordea Bank AB (publ), Sverige
7288 Derivatives Services
Postbox 805
DK-0900 Copenhagen K, Denmark
Skandinaviska Enskilda Banken AB (publ)
Kungsträdgårdsgatan 8
SE-106 40 Stockholm
Sweden
Credit Matters:
Tel: +47 22 82 70 21
Attn: Egil Aarrestad
Administration Matters:
Tel: +46 8 763 8551
Fax: +46 8 611 0384
Attn: Structured Credits Operations



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SCHEDULE 3     

DRAWDOWN NOTICE
To:
Nordea Bank AB (publ), filial i Norge
Essendropsgate 7
Oslo
Norway
Attn:    Loans Administration
[ — ]
DRAWDOWN NOTICE
1
We refer to the loan agreement (the " Loan Agreement ") dated [ — ] September 2018 and made between ourselves, as Borrower, the Lenders referred to therein, the Swap Banks referred to therein, the Mandated Lead Arrangers and Bookrunners referred to therein, yourselves as Co-ordinator, Agent and Security Trustee in connection with a revolving credit facility of US$200,000,000. Terms defined in the Loan Agreement have their defined meanings when used in this Drawdown Notice.
2
We request to borrow the Advance [in respect of the Ship[s] "[ — ]", "[ — ]" and "[ — ]"] as follows:
(a)
Amount: US$[ — ];
(b)
Drawdown Date: [ — ];
(c)
Duration of the [first] Interest Period shall be [ — ] months;
(d)
Payment instructions: account of [ — ] and numbered [ — ] with [ — ] of [ — ].
3
We represent and warrant that:
(a)
the representations and warranties in Clause 10 ( Representations and Warranties ) of the Loan Agreement would remain true and not misleading if repeated on the date of this notice with reference to the circumstances now existing;
(b)
no Event of Default or Potential Event of Default has occurred or will result from the borrowing of the Advance.
4
This notice cannot be revoked without the prior consent of the Majority Lenders.
[Name of Signatory]



                                                            
for and on behalf of
EURONAV NV

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SCHEDULE 4     

CONDITION PRECEDENT DOCUMENTS
Part A
The following are the documents and fees referred to in Clause 9.1(a).
1
A duly executed original of this Agreement.
2
Copies of the certificate of incorporation and constitutional documents of the Borrower and each Security Party.
3
In each case if required for the provisions of the legal opinions referred to in paragraph 11, copies of the resolutions of the directors and shareholders of the Borrower and each Security Party authorising the execution of each of the Finance Documents to which the Borrower or Security Party (as the case may be) is a party.
4
The original of any power of attorney under which any Finance Document is to be executed on behalf of the Borrower or Security Party.
5
The originals of any mandates or other documents required in connection with the opening or operation of the Earnings Accounts.
6
Copies of all consents which the Borrower or Security Party requires to enter into, or make any payment under any Finance Document.
7
Documentary evidence that the agent for service of process named in Clause 37 ( Law and Jurisdiction ) has accepted its appointment.
8
The Agent and Lenders have been provided with all information and documentation they have requested in order to carry out and be reasonably satisfied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated by this Agreement and to satisfy all internal compliance policies of the Agent and the Lenders in relation to "know you customer" requirements.
9
The Agent has received all fees pursuant to the Fee Letter or Fee Letters separately agreed between the Borrower and the Agent.
10
The Agent has received all fees pursuant to the Fee Letter or Letters separately agreed between the Borrower and the Co-ordinator.
11
Evidence that all other fees, costs and expenses then due from the Borrower pursuant to Clause 20 ( Fees and Expenses ) have been paid or will be paid by the Drawdown Date.
12
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of England, Belgium and such other relevant jurisdictions as the Agent may require.


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PART B     
The following are the documents referred to in Clause 9.1(b). The " Ship " means the particular Ship to which the Advance relates.
1
In respect of the documents delivered by the Borrower to the Agent pursuant to Part A of this Schedule 4 ( Condition Precedent Documents ), such other updating documents as the Agent may require (including but not limited to a written confirmation from the Borrower stating that none of the documents delivered by it to the Agent under Part A of this Schedule 4 ( Condition Precedent Documents ) have been modified, amended or supplemented, or if any such document has been revoked, attaching a certified copy of any document replacing the one that has been revoked).
2
A duly executed original of the Mortgage, the Deed of Covenant (if applicable) and the General Assignment in relation to the relevant Ship and the Account Pledge each executed on or prior to the relevant Drawdown Date (and of each document required to be delivered by their respective terms).
3
Written confirmation from the Borrower stating that, other than as disclosed to the Agent, no Long Term Charter has been entered into by it in respect of any Ship.
4
In each case if required for the provisions of the legal opinions referred to in paragraph 10, copies of the resolutions of the directors of the Borrower authorising the execution of each of the Finance Documents to which the Borrower is a party.
5
The original of any power of attorney under which any Finance Document is to be executed on behalf of the Borrower.
6
The Agent and Lenders have been provided with all information and documentation they have requested in order to carry out and be reasonably satisfied with all further necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated by this Agreement and to satisfy all internal compliance policies of the Agent and the Lenders in relation to "know you customer" requirements.
7
Documentary evidence that the relevant Ship:
(a)
is definitively and permanently registered in the name of the Borrower under the relevant Approved Flag;
(b)
is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents;
(c)
maintains class acceptable to the Agent free of all overdue recommendations and conditions of an Approved Classification Society;
(d)
the Mortgage in relation to it has been duly registered against that Ship as valid first priority or preferred (as the case may be) ship mortgage in accordance with the laws of the relevant Approved Flag; and
(e)
it is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.

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8
Documents establishing that the Ship will, as from the relevant Drawdown Date, be managed by the Approved Manager on terms acceptable to the Lenders, together with:
(a)
the Manager's Undertaking in respect of the Ship; and
(b)
copies of the relevant Approved Manager's Document of Compliance and of that Ship's Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires) and ISSC.
9
Valuations of each Ship to determine its Fair Market Value, addressed to the Agent and the Lenders, stated to be for the purposes of this Agreement and dated not earlier than the date falling 30 days prior to the date of this Agreement and obtained in accordance with Clause 15 ( Security Cover ) and showing that the aggregate Fair Market Value of the Ships is equal to or greater than 125 per cent. of the Total Commitments. It being understood that the valuation provided by Braemar ACM Valuations Limited dated 12 June 2018 and the valuation provided by Clarksons Valuations Limited dated 11 June 2018 shall be satisfactory.
10
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of England, Belgium and, if a different jurisdiction, the country where the Ship is registered and, in relation to the first Advance only, Norway and such other relevant jurisdictions as the Agent may require.
11
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the relevant Ship as the Agent may require.
12
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.


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PART C     
The following are the documents referred to in Clause 8.9 ( Replacement Ships following a sale or Total loss ).
1
In respect of the documents delivered by the Borrowers to the Agent pursuant to Part A of this Schedule 4 ( Condition Precedent Documents ), such other updating documents as the Agent may require (including but not limited to a written confirmation from the Borrower stating that none of the documents delivered by it to the Agent under Part A of this Schedule 4 ( Condition Precedent Documents ) have been modified, amended or supplemented, or if any such document has been revoked, attaching a certified copy of any document replacing the one that has been revoked).
2
A duly executed original of the Mortgage, the Deed of Covenant (if applicable) and the General Assignment in relation to the Replacement Ship (and of each document required to be delivered by their respective terms).
3
Written confirmation from the Borrower stating that no Long Term Charter has been entered into by it in respect of the Replacement Ship.
4
In each case if required for the provisions of the legal opinions referred to in paragraph 9, copies of the resolutions of the directors of the Borrower authorising the execution of each of the Finance Documents to which the Borrower is a party.
5
The original of any power of attorney under which any Finance Document is to be executed on behalf of the Borrower.
6
Documentary evidence that the Replacement Ship:
(a)
is definitively and permanently registered in the name of the Borrower under the relevant Approved Flag;
(b)
is in the absolute and unencumbered ownership of the Borrower save as contemplated by the Finance Documents;
(c)
maintains class acceptable to the Agent free of all overdue recommendations and conditions of an Approved Classification Society;
(d)
the Mortgage in relation to it has been duly registered against that Replacement Ship as valid first priority or preferred (as the case may be) ship mortgage in accordance with the laws of the relevant Approved Flag; and
(e)
it is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.
7
Documents establishing that the Replacement Ship will, as from the date on which it becomes a Ship, be managed by the Approved Manager on terms acceptable to the Lenders, together with:
(a)
the Manager's Undertaking in respect of the Replacement Ship; and
(b)
copies of the relevant Approved Manager's Document of Compliance and of that Ship's Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires) and ISSC.

131     EUROPE/62530140v12


8
Valuations of each Ship to determine its Fair Market Value, addressed to the Agent and the Lenders, stated to be for the purposes of this Agreement and dated not earlier than the date falling 30 days prior to the date on which the Replacement Ship becomes a Ship for the purposes of this Agreement.
9
Favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of England, Belgium and, if a different jurisdiction, the country where the Replacement Ship is registered and such other relevant jurisdictions as the Agent may require.
10
A favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the Replacement Ship as the Agent may require.
11
If the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.

132     EUROPE/62530140v12




133     EUROPE/62530140v12


SCHEDULE 5     

TRANSFER CERTIFICATE
The Transferor and the Transferee accept exclusive responsibility for ensuring that this Certificate and the transaction to which it relates comply with all legal and regulatory requirements applicable to them respectively.
To:    [Name of Agent] for itself and for and on behalf of the Borrower, each Security Party, the Security Trustee, each Lender, each Swap Bank and each Arranger, as defined in the Loan Agreement referred to below.
1
This Certificate relates to a loan agreement (the " Loan Agreement ") dated [ — ] September 2018 and made between (1) Euronav NV (the " Borrower "), (2) the banks and financial institutions named therein as Lenders, (3) the banks and financial institutions named therein as Swap Banks, (4) the Mandated Lead Arrangers as defined therein, (5) BNP Paribas Fortis SA/NV, DNB (UK) Limited, Nordea Bank AB (publ), filial i Norge and Skandinaviska Enskilda Banken AB (publ) as Bookrunners, (6) Nordea Bank AB (publ), filial i Norge as Co-ordinator and Nordea Bank AB (publ), filial i Norge as Agent and Security Trustee for a revolving credit facility of US$200,000,000.
2
In this Certificate, terms defined in the Loan Agreement shall, unless the contrary intention appears, have the same meanings and:
" Relevant Parties " means the Agent, the Borrower, each Security Party, the Security Trustee, each Arranger and each Lender and each Swap Bank;
" Transferor " means [full name] of [lending office]; and
" Transferee " means [full name] of [lending office].
3
The effective date of this Certificate is [ — ] Provided that this Certificate shall not come into effect unless it is signed by the Agent on or before that date.
4
The Transferor assigns to the Transferee absolutely all rights and interests (present, future or contingent) which the Transferor has as Lender under or by virtue of the Loan Agreement and every other Finance Document in relation to [ — ] per cent. of its Contribution, which percentage represent $[ — ].
5
By virtue of this Transfer Certificate and Clause 30 ( Transfers and Changes in Lending Offices ) of the Loan Agreement, the Transferor is discharged [entirely from its Commitment which amount to $[ — ] [from [ — ] per cent. of its Commitment, which percentage represent $[ — ]], and the Transferee acquires a Commitment of $[ — ].
6
The Transferee undertakes with the Transferor and each of the Relevant Parties that the Transferee will observe and perform all the obligations under the Finance Documents which Clause 30 ( Transfers and Changes in Lending Offices ) of the Loan Agreement provides will become binding on it upon this Certificate taking effect.
7
The Agent, at the request of the Transferee (which request is hereby made) accepts, for the Agent itself and for and on behalf of every other Relevant Party, this Certificate as a Transfer Certificate taking effect in accordance with Clause 30 ( Transfers and Changes in Lending Offices ) of the Loan Agreement.

134     EUROPE/62530140v12


8
The Transferor:
(a)
warrants to the Transferee and each Relevant Party that:
(i)
the Transferor has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which are required in connection with this transaction; and
(ii)
this Certificate is valid and binding as regards the Transferor;
(b)
warrants to the Transferee that the Transferor is absolutely entitled, free of encumbrances, to all the rights and interests covered by the assignment in paragraph 4; and
(c)
undertakes with the Transferee that the Transferor will, at its own expense, execute any documents which the Transferee reasonably requests for perfecting in any relevant jurisdiction the Transferee's title under this Certificate or for a similar purpose.
9
The Transferee:
(a)
confirms that it has received a copy of the Loan Agreement and each other Finance Document;
(b)
agrees that it will have no rights of recourse on any ground against either the Transferor, the Agent, the Security Trustee, any Arranger, any Lender or any Swap Bank in the event that:
(i)
any of the Finance Documents prove to be invalid or ineffective,
(ii)
the Borrower or any Security Party fails to observe or perform its obligations, or to discharge its liabilities, under any of the Finance Documents;
(iii)
it proves impossible to realise any asset covered by a Security Interest created by a Finance Document, or the proceeds of such assets are insufficient to discharge the liabilities of the Borrower or Security Party under the Finance Documents;
(c)
agrees that it will have no rights of recourse on any ground against the Agent, the Security Trustee, any Arranger, any Lender or any Swap Bank in the event that this Certificate proves to be invalid or ineffective;
(d)
warrants to the Transferor and each Relevant Party that:
(i)
it has full capacity to enter into this transaction and has taken all corporate action and obtained all consents which it needs to take or obtain in connection with this transaction; and
(ii)
this Certificate is valid and binding as regards the Transferee; and
(e)
confirms the accuracy of the administrative details set out below regarding the Transferee.
10
The Transferor and the Transferee each undertake with the Agent and the Security Trustee severally, on demand, fully to indemnify the Agent and/or the Security Trustee in respect of any claim, proceeding, liability or expense (including all legal expenses) which they or either of them may incur in connection with this Certificate or any matter arising out of it, except such as are shown to have been mainly and directly caused by the gross and culpable negligence or dishonesty of the Agent's or the Security Trustee's own officers or employees.

135     EUROPE/62530140v12


11
The Transferee shall repay to the Transferor on demand so much of any sum paid by the Transferor under paragraph 10 as exceeds one-half of the amount demanded by the Agent or the Security Trustee in respect of a claim, proceeding, liability or expense which was not reasonably foreseeable at the date of this Certificate; but nothing in this paragraph shall affect the liability of each of the Transferor and the Transferee to the Agent or the Security Trustee for the full amount demanded by it.
12
The Transferee confirms to the Transferor and each of the Creditor Parties that it:
(a)
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of the Borrower and its related entities in connection with its participation in the Loan and has not relied exclusively on any information provided to it by the Transferor or any other Creditor Party in connection with any Finance Document or the Security Interests created by the Finance Documents; and
(b)
will continue to make its own independent appraisal of the creditworthiness of the Borrower and its related entities throughout the Security Period.
13
The Transferor makes no representation or warranty and assumes no responsibility to the Transferee for 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.
[Name of Transferor]    [Name of Transferee]
By:    By:
Date:    Date:


Agent
Signed for itself and for and on behalf of itself
as Agent and for every other Relevant Party
[Name of Agent]
By:
Date:

136     EUROPE/62530140v12



Administrative Details of Transferee

Name of Transferee:
Lending Office:
Contact Person
(Loan Administration Department):
Telephone:
Telex:
Fax:
Contact Person
(Credit Administration Department):
Telephone:
Telex:
Fax:
Account for payments:


Note :    This Transfer Certificate alone may not be sufficient to transfer a proportionate share of the Transferor's interest in the security constituted by the Finance Documents in the Transferor's or Transferee's jurisdiction. It is the responsibility of each Lender to ascertain whether any other documents are required for this purpose.



137     EUROPE/62530140v12


SCHEDULE 6     

DETAILS OF SHIPS
Ship name
To be renamed
Type
DWT
Built
Current flag
Flag to be registered on
Ship Loan Amount ($)
 
 
 
 
 
 
 
 
GENER8 GEORGE T
SIENNA
Suezmax
149 847
2007
Marshall Islands
Belgium
16,816,326
GENER8 ST. NIKOLAS
SAPPHIRA
Suezmax
149 876
2008
Marshall Islands
Belgium
18,122,448
GENER8 KARA G
SELENA
Suezmax
150 296
2007
Liberia
Belgium
16,816,326
GENER8 MANIATE
SOFIA
Suezmax
164 715
2010
Marshall Islands
Greek
22,857,143
GENER8 SPARTIATE
STELLA
Suezmax
164 925
2011
Marshall Islands
Greek
24,816,327
CAPTAIN MICHAEL
N/A
Suezmax
157 648
2012
Greek
Greek
26,448,980
MARIA
N/A
Suezmax
157 523
2012
Greek
Greek
26,448,980
GENER8 ATLAS
DAISHAN
VLCC
306 005
2007
Marshall Islands
Liberia
23,836,735
GENER8 HERCULES
DALMA
VLCC
306 543
2007
Marshall Islands
Liberia
23,836,735




138     EUROPE/62530140v12


SCHEDULE 7     

DESIGNATION NOTICE
To:    Nordea Bank AB (publ), filial i Norge
Essendropsgate 7
Oslo
Norway
[ date ]
Dear Sirs
Loan Agreement dated [ — ] September 2018 made between (i) Euronav NV as Borrower, (ii) the Lenders as referred to therein, (iii) the Swap Banks as referred to therein, (iv) the Mandated Lead Arrangers as referred to therein and (v) yourselves as Co-ordinator, Agent and Security Trustee for a revolving credit facility of up to US$200,000,000 (the "Loan Agreement")
We refer to:
1
the Loan Agreement;
2
the Master Agreement dated as of [ — ] made between [ — ] [and [ — ]]; and
3
a Confirmation delivered pursuant to the said Master Agreement dated [ — ] and addressed by [ — ] to [ — ].
In accordance with the terms of the Loan Agreement, we hereby give you notice of the said Confirmation and hereby confirm that the Transaction evidenced by it will be designated as a "Designated Transaction" for the purposes of the Loan Agreement and the Finance Documents.
Yours faithfully





.................................................    .................................................
for and on behalf of    for and on behalf of
[ — ]    [SWAP BANK]


139     EUROPE/62530140v12




140     EUROPE/62530140v12


SCHEDULE 8     

FORM OF CERTIFICATE OF COMPLIANCE
To:    Nordea Bank AB (publ), filial i Norge
Essendropsgate 7
Oslo
Norway
From:     Euronav NV
[Date]
OFFICER'S CERTIFICATE
This Certificate is rendered pursuant to clause 11.6(e) of the loan agreement dated [ — ] September 2018 (the " Loan Agreement ") and entered into between (i) Euronav NV as Borrower, (ii) the banks and financial institutions listed in Schedule 1 therein as Lenders, (iii) the banks and financial institutions listed in Schedule 2 therein as Swap Banks, (iv) the Mandated Lead Arrangers as referred to therein, (v) Nordea Bank AB (publ), filial i Norge as Co-ordinator and (vi) Nordea Bank AB (publ), filial i Norge as Agent and Security Trustee, relating to a revolving credit facility of up to US$200,000,000. Words and expressions defined in the Loan Agreement shall have the same meanings when used herein.
I, the Chief Financial Officer of the Borrower, hereby certify that:
1
Attached to this Certificate [are][is] the latest [audited consolidated accounts of the Group and audited individual accounts of the Borrower for the financial year ending on [ — ]] [unaudited consolidated balance sheet of the Group and the unaudited individual balance sheet of the Borrower in relation to the [first] [second] six months of the financial year ending on [ — ]] (the " Accounts ").
2
Set out below are the respective amounts, in US Dollars, of the Cash, Consolidated Current Assets, Consolidated Current Liabilities, Free Liquid Assets, Stockholders' Equity, Total Assets and Total Indebtedness of the Group as at [ — ]:
 
US Dollars
Cash
[ ó ]
Consolidated Current Assets
[ ó ]
Consolidated Current Liabilities
[ ó ]
Free Liquid Assets
[ ó ]
Stockholders' Equity
[ ó ]
Total Assets
[ ó ]
Total Indebtedness
[ ó ]
3
Accordingly, as at the date of this Certificate the financial covenants set out in Clause 12.5 ( Financial Covenants ) of the Loan Agreement [are] [are not] complied with, in that as at [ — ]:
(a)
Consolidated Working Capital is US$[ — ];
(b)
Free Liquid Assets are US$[ — ];
(c)
Cash is US$[ — ]; and

141     EUROPE/62530140v12


(d)
the ratio of Stockholders' Equity to Total Assets is [ — ] per cent.;
[or, as the case may be, specify in what respect any of the financial covenants are not complied with.]
4
As at [ — ] no Event of Default has occurred and is continuing.
[or, specify/identify any Event of Default]
The Borrower is are in compliance with clause 15.1 of the Loan Agreement.
[ If not, specify this and what is proposed as regards Clause 15.2 ]
The Fair Market Value of the Ships which are subject to a Mortgage is as follows as at [ date ]:
Name of Ship
Name of first shipbroker
providing valuation
Name of second shipbroker
providing valuation
Average market value
[ ó ]
[ ó ]
[ ó ]
[ ó ]



…………………………………………
Chief Financial Officer
EURONAV NV
Note: Supporting Schedules to be attached.


142     EUROPE/62530140v12




143     EUROPE/62530140v12


SCHEDULE 9     

TIMETABLES

LIBOR is fixed
Quotation Date as of 11:00 am London time
 
 
Reference Bank Rate calculated by reference to available quotations in accordance with Clause 5.8 ( Calculation of Reference Bank Rate )
Noon on the Quotation Date




144     EUROPE/62530140v12




145     EUROPE/62530140v12


EXECUTION PAGES

BORROWER
SIGNED by
)
 
/s/ Alice Lightfoot
 
 
)
 
Alice Lightfoot
 
for and on behalf of
)
 
Attorney-in-FACT
 
EURONAV NV
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 

LENDERS
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
BNP PARIBAS FORTIS SA/NV
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 


146     EUROPE/62530140v12


SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
DNB (UK) LIMITED
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
NORDEA BANK AB (PUBL), FILIAL I NORGE
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
SKANDINAVISKA ENSKILDA     ) BANKEN AB (PUBL)
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 





147     EUROPE/62530140v12



SWAP BANKS
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
BNP PARIBAS FORTIS SA/NV
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
DNB (UK) LIMITED
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
NORDEA BANK AB (PUBL), FILIAL I NORGE
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 


148     EUROPE/62530140v12


SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
SKANDINAVISKA ENSKILDA     ) BANKEN AB (PUBL)
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 




149     EUROPE/62530140v12


MANDATED LEAD ARRANGERS
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
DNB (UK) LIMITED
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
NORDEA BANK AB (PUBL), FILIAL I NORGE
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 


150     EUROPE/62530140v12


SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
SKANDINAVISKA ENSKILDA     ) BANKEN AB (PUBL)
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
BNP PARIBAS FORTIS SA/NV
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 

BOOKRUNNERS

SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
BNP PARIBAS FORTIS SA/NV
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 

151     EUROPE/62530140v12


SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
DNB (UK) LIMITED
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
NORDEA BANK AB (PUBL), FILIAL I NORGE
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 

SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
SKANDINAVISKA ENSKILDA     ) BANKEN AB (PUBL)
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 



152     EUROPE/62530140v12


CO-ORDINATOR
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
NORDEA BANK AB (PUBL), FILIAL I NORGE
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 




AGENT
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
NORDEA BANK AB (PUBL), FILIAL I NORGE
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 






153     EUROPE/62530140v12


SECURITY TRUSTEE
SIGNED  by
)
 
/s/ Laura Caines
 
 
)
 
Laura Caines
 
for and on behalf of
)
 
Attorney-in-FACT
 
NORDEA BANK AB (PUBL), FILIAL I NORGE
)
 
Watson Farley & Williams LLP
in the presence of:
)
 
15 Appold Street
 
 
 
 
London EC2A 2HB
 
 
 
 
 
 
 
 
 
/s/ S Sadhika
 
 
 
 
S Sadhika
 
 
 
 
Trainee Solicitor
 
 
 
 
Watson Farley & Williams LLP
 
 
 
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154     EUROPE/62530140v12
EXECUTION VERSION


Exhibit 4.4
Dated June 2018
$963,743,455
$633,549,299.38 outstanding
AMENDMENT NO. 4 TO TERM LOAN FACILITY
GENER8 MARITIME SUBSIDIARY VIII INC.
as Original Borrower
and
EURONAV NV
as Additional Borrower
and
THE COMPANIES listed in Schedule 3
as joint and several Owner Guarantors and
joint and several Hedge Guarantors
and
EURONAV NV
as Ultimate Parent Guarantor
and
GENER8 MARITIME, INC.
as Parent Guarantor
and
GENER8 MARITIME SUBSIDIARY V INC.
as Shareholder
and
THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1
as Lenders
and
CITIBANK, N.A., LONDON BRANCH
as ECA Co-ordinator and ECA Agent
and
NORDEA BANK AB (PUBL), NEW YORK BRANCH
as Commercial Tranche Co-ordinator, Facility Agent and Security Agent
and
THE EXPORT-IMPORT BANK OF KOREA
as KEXIM
AMENDING AND RESTATING AGREEMENT
relating to
the term loan facility of up to $963,743,455






Index
Clause    Page

1 Definitions and Interpretation     2
2 Agreement of the Finance Parties     4
3 Conditions Precedent     4
4 Representations     5
5 Accession of Acceding Parties     5
6 Amendment and Restatement of Facility Agreement and other Finance Documents     6
7 Further Assurance     8
8 Fees     9
9 Costs and Expenses     9
10 Notices     9
11 Counterparts     10
12 Governing Law     10
13 Enforcement     10

Schedules

Schedule 1 The Lenders 11
Schedule 2 Conditions Precedent 21
Schedule 3 The Parties 23
Schedule 4 Form of Effective Date Notice 24

Execution

Execution Pages 25

Appendices

Appendix Part A Form of Amended and Restated Facility Agreement marked to indicate amendments to the Facility Agreement
Appendix Part B Form of clean copy Amended and Restated Facility Agreement



THIS AGREEMENT is made on June 2018
PARTIES
(1)
GENER8 MARITIME SUBSIDIARY VIII INC. , a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as original borrower (the " Original Borrower ")
(2)
EURONAV NV , a company incorporated in Belgium whose registered address is at de Gerlachekaai 20, B-2000 Antwerp, Belgium as additional borrower (the " Additional Borrower ")
(3)
The limited liability companies listed in Schedule 3 ( The Parties ) therein as joint and several owner guarantors (the " Owner Guarantors ") and as joint and several hedge guarantors (the " Hedge Guarantors ")
(4)
EURONAV NV , a company incorporated in Belgium whose registered address is at de Gerlachekaai 20, B-2000 Antwerp, Belgium as ultimate parent guarantor (the " Ultimate Parent Guarantor ")
(5)
GENER8 MARITIME, INC. , a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as the parent guarantor (the " Parent Guarantor ")
(6)
GENER8 MARITIME SUBSIDIARY V INC. , a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as the parent guarantor (the " Shareholder ")
(7)
THE BANKS AND FINANCIAL INSTITUTIONS listed in Schedule 1 ( The Lenders ) as lenders (the " Lenders " and each, a " Lender ")
(8)
CITIBANK, N.A., LONDON BRANCH as ECA agent (the " ECA Agent ") and as ECA co-ordinator (the " ECA Co-ordinator ")
(9)
NORDEA BANK AB (PUBL), NEW YORK BRANCH as commercial tranche co-ordinator (the " Commercial Tranche Co-ordinator ")
(10)
NORDEA BANK AB (PUBL), NEW YORK BRANCH as agent of the other Finance Parties (the " Facility Agent ")
(11)
NORDEA BANK AB (PUBL), NEW YORK BRANCH as security agent for the Secured Parties (the " Security Agent ")
(12)
THE EXPORT-IMPORT BANK OF KOREA as KEXIM (" KEXIM ")
BACKGROUND
(A)
By the Facility Agreement, the Lenders agreed to make available to the Borrower a facility of (originally) up to $963,743,455.
(B)
Pursuant to a consent letter dated 28 March 2018, the Finance Parties consented to the proposed stock-for-stock merger of the entire issued and outstanding share capital of the Parent Guarantor to Euronav NV.
(C)
This Agreement sets out the terms and conditions on which the Finance Parties agree, with effect on and from the Effective Date to the proposed amendments to the Facility Agreement to (i) permit Euronav NV to accede as a borrower in relation to each Vessel Loan as and when Euronav NV becomes the owner of the Ship associated with that Vessel Loan, (ii) add Euronav NV as a guarantor until the sale of the last Ship to Euronav NV, (iii) allow, after the sale of the last Ship to Euronav NV, for the liquidation and winding up of each of the Parent Guarantor, the Shareholder, Gener8 Maritime Subsidiary VIII Inc. and each Owner Guarantor, (iv) to make such other amendments as may be required to bring the Facility Agreement in line with Euronav NV standard loan agreements and (v) all consequential amendments relating to the foregoing.
OPERATIVE PROVISIONS
1
DEFINITIONS AND INTERPRETATION
1.1
Definitions
In this Agreement:
" Acceding Parties" means collectively, the Ultimate Parent Guarantor and the Additional Borrower (and each or any of them as the context may require, an " Acceding Party" ).
" Addendum " means the Addendum to the Mortgages in the agreed form.
" Amended and Restated Facility Agreement " means the Facility Agreement as amended and restated by this Agreement in the form set out in the Appendix.
" Beneficial Ownership Certification " means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
" Beneficial Ownership Regulation " means 31 C.F.R. § 1010.230.
" Blue Mountain Indebtedness " means unsecured Financial Indebtedness incurred by the Parent Guarantor, pursuant to that certain note and guarantee agreement, dated as of March 28, 2014, among the Parent Guarantor, as borrower and Blue Mountain Capital Management, LLC and certain of its affiliates, as purchasers (as amended by the Closing Date Blue Mountain Amendment and as further amended, restated, replaced or modified from time to time provided that after giving effect to any such amendment, restatement, replacement or modification (including in respect of any Permitted Blue Mountain Refinancing Indebtedness) the Blue Mountain Indebtedness Requirements shall be satisfied), in an initial aggregate principal amount not to exceed $131,600,000, as such amount may have been increased or decreased pursuant to the Facility Agreement.
" Effective Date " means the date specified on the Effective Date Notice, such date being the date on which the conditions precedent in Clause 3 ( Conditions Precedent ) are satisfied.
" Effective Date Notice " means a notice in the form set out in Schedule 4.
" Euronav Earnings Account Security " means a document creating Security over the Earnings Account of the Additional Borrower.
" Facility Agreement " means the facility agreement, dated as of 31 August 2015 (as amended by Amendment No. 1, dated as of October 20, 2016, Amendment No.2, dated as of March 24, 2017 and Amendment No.3, dated as of June 1, 2017, and as the same may be further amended or supplemented from time to time), and made between (i) Gener8 Maritime Subsidiary VIII Inc., as Borrower, (ii) the companies listed therein as joint and several Owner Guarantors and Hedge Guarantors, (iii) Gener8 Maritime Subsidiary V Inc., as Shareholder, (iv) Gener8 Maritime, Inc., as Parent Guarantor, (v) Citibank, N.A. and Nordea Bank AB (publ), New York Branch as Global Co-ordinators, (vi) Citibank, N.A. and Nordea Bank AB (publ), New York Branch as Bookrunners, (vii) ABN AMRO Capital USA LLC, DNB Markets, Inc., DVB Bank SE and Skandinaviska Enskilda Banken AB (publ) as Commercial Tranche Bookrunners (viii) Citibank, N.A., Nordea Bank AB (publ), New York Branch, ABN AMRO Capital USA LLC, Banco Bilbao Vizcaya Argentina, S.A., Hong Kong Branch, DNB Markets, Inc., DVB Bank SE, Skandinaviska Enskilda Banken AB (publ) and The Export-Import Bank of Korea as Mandated Lead Arrangers, (ix) CaixaBank, S.A. and Landesbank Hessen-Thueringen Girozentrale as Lead Arrangers, (x) the banks and financial institutions listed in Part B of Schedule 1 therein as Original Lenders, (xi) the banks and financial institutions listed in Part C of Schedule 1 therein as Hedge Counterparties, (xii) Citibank, N.A., London Branch as ECA Co-ordinator and ECA Agent, (xiii) Nordea Bank AB (publ), New York Branch as Commercial Tranche Co-ordinator, Facility Agent and Security Agent and (xiv) The Export-Import Bank of Korea as Kexim, upon the terms and subject to the conditions of which the Original Lenders made available to the Borrower a term loan facility of up to (originally) $963,743,455.
" Party " means a party to this Agreement.
1.2
Defined expressions
Defined expressions in the Facility Agreement shall have the same meanings when used in this Agreement unless the context otherwise requires or unless otherwise defined in this Agreement.
1.3
Application of construction and interpretation provisions of Facility Agreement
Clause 1.2 ( construction ) of the Facility Agreement applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
1.4
Agreed forms of new, and supplements to, Finance Documents
References in Clause 1.1 ( Definitions ) to any new or supplement to a Finance Document being in "agreed form" are to that Finance Document:
(a)
in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrower and the Facility Agent); or
(b)
in any other form agreed in writing between the Borrower and the Facility Agent acting with the authorisation of the Majority Lenders or, where clause 42.2 ( exceptions ) of the Facility Agreement applies, all the Lenders.
1.5
Designation as a Finance Document
The Borrower and the Facility Agent designate this Agreement as a Finance Document.
1.6
Third party rights
Unless provided to the contrary in a Finance Document, a person who is not a Party has no right under the Third Parties Act to enforce or to enjoy the benefit of any term of this Agreement.
2
AGREEMENT OF THE FINANCE PARTIES
2.1
Agreement of the Lenders
The Lenders agree, subject to and upon the terms and conditions of this Agreement, to (i) permit Euronav NV to accede as a borrower in relation to each Vessel Loan as and when Euronav NV becomes the owner of the Ship associated with that Vessel Loan, (ii) add Euronav NV as a guarantor until the sale of the last Ship to Euronav NV, (iii) allow, after the sale of the last Ship to Euronav NV, for the liquidation and winding up of each of the Parent Guarantor, the Shareholder, Gener8 Maritime Subsidiary VIII Inc. and each Owner Guarantor, (iv) to make such other amendments as may be required to bring the Facility Agreement in line with Euronav NV standard loan agreements and (v) all consequential amendments relating to the foregoing.
2.2
Agreement of the Finance Parties
The Finance Parties agree, subject to and upon the terms and conditions of this Agreement, to the consequential amendment of the Facility Agreement and the other Finance Documents in connection with the matters referred to in Clause 2.1 ( Agreement of the Lenders ).
2.3
Effective Date
The agreement of the Lenders and the other Finance Parties contained in Clause 2.1 ( Agreement of the Lenders ) and Clause 2.2 ( Agreement of the Finance Parties ) shall have effect on and from the Effective Date.
3
CONDITIONS PRECEDENT
3.1
Agreement of the Lenders and the Other Finance Parties
The agreement of the Lenders and the other Finance Parties contained in Clause 2.1 ( Agreement of the Lenders ) and Clause 2.2 ( Agreement of the Finance Parties ) is subject to:
(a)
no Default continuing on the date of this Agreement and the Effective Date or resulting from the occurrence of the Effective Date;
(b)
the representations and warranties set out in clause 18 ( representations ) (save for clause 18.7 (a) to (d) ( Financial Statements; Financial Condition; Undisclosed Liabilities )) of the Facility Agreement, as amended and restated by this Agreement and updated with appropriate modifications to refer to this Agreement, to be made by each Obligor and the Ultimate Parent Guarantor being true on the date of this Agreement and the Effective Date; and
(c)
the Facility Agent having received all of the documents and other evidence listed in Schedule 2 ( Conditions Precedent ) in form and substance satisfactory to the Facility Agent on or before 30 June 2018 or such later date as the Facility Agent may agree with the Borrower.
3.2
Effective Date Notice
On satisfaction or waiver of the conditions precedent specified in Clause 3.1 ( Agreement of the Lenders and the other Finance Parties ), the Effective Date Notice shall be completed and signed by the Facility Agent and the Facility Agent shall provide a copy of the Effective Date Notice to the Original Borrower, the Owner Guarantors, the Parent Guarantor, the Shareholder, the Acceding Parties and the Lenders.
3.3
Condition Subsequent
The Borrower undertakes to deliver or cause to be delivered to the Facility Agent within fifteen Business Days after the Effective Date:
(a)
evidence of full and final repayment of the Blue Mountain Indebtedness; and
(b)
evidence that all of the conditions precedent to the effectiveness in relation to the amendment and restatement of the Sinosure Facility have been met, or waived to the satisfaction of the Lenders or confirmation of repayment in full of the Sinosure Facility.
4
REPRESENTATIONS
4.1
Representation
Each Obligor and the Ultimate Parent Guarantor that qualifies as a "legal entity customer" under the Beneficial Ownership Certification confirms that on the Effective Date the information provided in such Beneficial Ownership Certification is true and correct in all respects.
4.2
Facility Agreement representations
Each Obligor that is a party to the Facility Agreement makes the representations and warranties set out in clause 18 ( representations ) of the Facility Agreement, as amended and restated by this Agreement and updated with appropriate modifications to refer to this Agreement and, where appropriate, the Mortgage Addenda, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.
4.3
Finance Document representations
Each Obligor makes the representations and warranties set out in the Finance Documents (other than the Facility Agreement) to which it is a party, as amended and restated by this Agreement and updated with appropriate modifications to refer to this Agreement and, where appropriate, the Mortgage Addenda, by reference to the circumstances then existing on the date of this Agreement and on the Effective Date.
5
ACCESSION OF ACCEDING PARTIES
5.1
Accession of Acceding Parties
The Acceding Parties each agree to be bound by the terms of the Amended and Restated Facility Agreement as a Borrower in respect of the Additional Borrower or a Guarantor in respect of the Ultimate Parent Guarantor, and by signing this Deed each of the Acceding Parties undertakes to perform all liabilities and to make all payments and to comply with all other obligations under the Amended and Restated Facility Agreement as if named as a party to it as a Borrower or Guarantor (as relevant).
6
AMENDMENT AND RESTATEMENT OF FACILITY AGREEMENT AND OTHER FINANCE DOCUMENTS
6.1
Specific amendments to the Facility Agreement
With effect on and from the Effective Date the Facility Agreement shall be, and shall be deemed by this Agreement to be, amended and restated in the form of the Amended and Restated Facility Agreement and, as so amended and restated, the Facility Agreement shall continue to be binding on each of the parties to it in accordance with its terms as so amended and restated.
6.2
Amendments to Finance Documents
With effect on and from the Effective Date each of the Finance Documents other than the Facility Agreement and the Mortgages which are amended and supplemented by the Mortgage Addenda, shall be, and shall be deemed by this Agreement to be, amended as follows:
(a)
each Shares Security to each of the Borrower, the Shareholder shall be amended to include at clause 11.1 ( incorporation of specific provisions ) a cross reference to clause 38 ( bail-in ) of the Facility Agreement as amended and supplemented by this Agreement;
(b)
each Assignment, Account Security and Shares Security to each of the Owner Guarantors shall be amended as follows:
(i)
a new Section 1 ( definitions and interpretation) shall be added in respect of each Assignment and Account Security as follows and in respect of each Shares Security to each of the Owner Guarantors the following definitions shall be added:
"SECTION 1. Definition and Interpretation
" 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 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;
(ii)
a new section 9 ( Bail-In ) in respect of each Assignment, a new section 15 ( Bail-In ) in respect of each Account Security and a new section 19 ( Bail-In ) of each Shares Security to each of the Owner Guarantors shall be added as follows:
"[ 9] / [15] / [19]    Bail-In
[9.1] / [15.1] / [19.1]     Contractual recognition of bail-in
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document 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,
(iii)
and the remaining clauses will be renumbered and all relevant cross references will be updated accordingly;
(c)
the definition of, and references throughout each of the Finance Documents to, the Facility Agreement and any of the other Finance Documents shall be construed as if the same referred to the Facility Agreement and those Finance Documents as amended and restated by this Agreement;
(d)
the definition of, and references throughout each of the Finance Documents to, the Mortgage shall be construed as if the same referred to the Mortgage as amended and supplemented by the Mortgage Addendum; and
(e)
by construing references throughout each of the Finance Documents to "this Agreement", "this Deed" and other like expressions as if the same referred to such Finance Documents as amended and supplemented by this Agreement.
6.3
Finance Documents to remain in full force and effect
The Finance Documents shall remain in full force and effect:
(a)
in the case of the Facility Agreement as amended and restated pursuant to Clause 6.1 ( Specific amendments to the Facility Agreement );
(b)
in the case of the Finance Documents other than the Facility Agreement as amended and restated pursuant to Clause 6.2 ( Amendments to Finance Documents ) and the Mortgage Addendum,
subject to such further or consequential modifications as may be necessary to give full effect to the terms of this Agreement.
7
FURTHER ASSURANCE
7.1
Further assurance
(a)
Each Obligor shall promptly, and in any event within the time period specified by the Facility Agent do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgements, proxies and powers of attorney), as the Facility Agent may specify (and in such form as the Facility Agent may require in favour of the Facility Agent or its nominee(s)) to implement the terms and provisions of this Agreement.
(b)
Each Obligor shall promptly, and in any event within the time period specified by the Security Agent do all such acts (including procuring or arranging any registration, notarisation or authentication or the giving of any notice) or execute or procure execution of all such documents (including assignments, transfers, mortgages, charges, notices, instructions, acknowledgments, proxies and powers of attorney), as the Security Agent may specify (and in such form as the Security Agent may require in favour of the Security Agent or its nominee(s)):
(i)
to create, perfect, vest in favour of the Security Agent or protect the priority of the Security or any right or any kind created or intended to be created under or evidenced by the Finance Documents as amended and restated and/or supplemented by this Agreement or by the Mortgage Addenda (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 Transaction Security) or for the exercise of any rights, powers and remedies of the Security Agent, any Receiver or the Secured Parties provided by or pursuant to the Finance Documents as amended and restated by the Agreement or by the Mortgage Addenda or by law;
(ii)
to confer on the Security Agent or confer on the Secured Parties Security over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Finance Documents as amended and restated by this Agreement or by the Mortgage Addenda;
(iii)
to facilitate or expedite the realisation and/or sale of, the transfer of title to or the grant of, any interest in or right relating to the assets which are, or are intended to be, the subject of the Transaction Security or to exercise any power specified in any Finance Document as amended and restated by this Agreement or by the Mortgage Addenda in respect of which the Security has become enforceable; and/or
(iv)
to enable or assist the Security Agent to enter into any transaction to commence, defend or conduct any proceedings and/or to take any other action relating to any item of the Security Property.
(c)
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 conferred or intended to be conferred on the Security Agent or the Secured Parties by or pursuant to the Finance Documents as amended and restated by this Agreement or by the Mortgage Addenda.
7.2
Additional corporate action
At the same time as an Obligor delivers to the Facility Agent or Security Agent any document executed under this Clause 7 ( Further Assurance ), that Obligor shall deliver to the Facility Agent or Security Agent as applicable, reasonable evidence that that Obligor's execution of such document has been duly authorised by it.
8
FEES
The Borrower shall pay to the Facility Agent (for the account of each Lender) an amendment fee in the amount and at the times specified in the Fee Letter.
9
COSTS AND EXPENSES
Clause 16.2 ( amendment costs ) of the Facility Agreement, as amended and restated by this Agreement, applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
10
NOTICES
Clause 38 ( notices ) of the Facility Agreement, as amended and restated by this Agreement, applies to this Agreement as if it were expressly incorporated in it with any necessary modifications.
11
COUNTERPARTS
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.
12
GOVERNING LAW
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
13
ENFORCEMENT
13.1
Jurisdiction
(a)
The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a " Dispute ").
(b)
The Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.
(c)
This Clause 13.1 ( Jurisdiction ) is for the benefit of the Secured Parties only. As a result, no Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of jurisdictions.
13.2
Service of process
(a)
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):
(i)
irrevocably appoints Euronav (UK) Agencies Limited at its registered office for the time being, presently at 99 King's Road, London SW3 4PA, England as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
(ii)
agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.
(b)
If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Additional Borrower (on behalf of all the Obligors) must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Facility Agent. Failing this, the Facility Agent may appoint another agent for this purpose.
This Agreement has been entered into on the date stated at the beginning of this Agreement.
Schedule 1

THE LENDERS
 
 
Name of Commercial Lender
Address for Communication
ABN AMRO CAPITAL USA LLC
100 Park Avenue,
New York, New York 10017 - 0002
Attention: Rajbir Talwar,
Director of Transportation Clients
Telephone: 917 284 6850
Facsimile: N/A
E-mail: rajbir.talwar@abnamro.com

With a copy to:
Attention: Eden Rahman,
Vice President
Telephone: +1 212 931 9714
Facsimile: N/A
E-mail: Eden.rahman@abnamro.com

And to:
Attention: Lilla Engelsbel-Sporysheva,
Director Trade Finance Operations
Telephone: 917 284 6962
Facsimile: 917 284 6697
E-mail: tradefinance@abnamro.com  /

And to:
Attention: Maria Pina,
Vice President  
Telephone: 917 284 6917
Facsimile: 917 284 6683  
E-mail: middleoffice@abnamro.com  

CITIBANK, N.A., LONDON BRANCH
Citibank N.A., London Branch,
Citigroup Centre, Canada Square,
London, E14 5LB
c/o Citibank International Limited,
Poland Branch  
7/9 Traugutta str., 1 st  Floor  
00-985 Warsaw, Poland
Attention: Loan Operations Department
(Kara Catt / Romina Coates – EAF Middle Office)
Telephone: +44 207986 4881
Facsimile: +44 207 655 2380
E-mail: cibuk.loans@citi.com

With a copy to:
388 Greenwich Street,
New York, NY, 10013
Attention: Meghan O'Connor
Telephone: +1 212 816 8557
Facsimile: N/A
E-mail: meghan.oconnor@citi.com

DNB CAPITAL LLC
200 Park Avenue,
31st Floor New York,
NY 10166
Attention: Cathleen Buckley
Telephone: 212 681 3861
Facsimile: 212 681 3900
E-mail: Cathleen.buckley@dnb.no

With a copy to:
Attention: Sybille Andaur
Telephone: 212 681 3878
Facsimile: 212 681 3900
E-mail: Sybille.Andaur@dnb.no

DVB BANK SE
DVB Bank SE
Platz der Republik 6
60325  Frankfurt
Germany

For admin matters:
TLS - Transaction Management
DVB Bank SE | WTC Schiphol Tower F 6th Floor, Schiphol Boulevard 255 | 1118 BH Schiphol | The Netherlands  
tls.tm.amsterdam@dvbbank.com  
For commercial matters:
Wijnand Botman
Shipping Finance Europe
DVB Bank SE | WTC Schiphol Tower F 6th Floor, Schiphol Boulevard 255 | 1118 BH Schiphol | The Netherlands  
Wijnand.Botman@dvbbank.com

With a copy to:
609 Fifth Avenue; 5th Floor;
New York, NY 10017 - 0002
Attention: DVB Transport (US) LLC
(Jurek Bochner)
Telephone: +1 212 858 2609
Facsimile: +1 212 858 2673
E-mail: Jurek.Bochner@dvbbank.com
Attention: Christiane Lombardi
Telephone:+1 212 858 2608
Facsimile: +1 212 858 2693
E-mail: Christiane.Lombardi@dvbbank.com

NORDEA BANK AB (PUBL), NEW YORK BRANCH
1211 Avenue of the Americas
23 rd   Floor
New York, NY  10036
Attention: Shipping Offshore and Oil Services
Telephone:  +1 212 318 9636
Facsimile:   +1 212 421 4420
E-mail: dlny-ny-cadloan@nordea.com

With a copy to:
Essendropsgate 7
0368 Oslo
Norway
Facsimile: +47 22 48 66 78  
E-mail: agency.soosid@nordea.com

SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
Skandinaviska Enskilda Banken AB (publ)  
Filipstad Brygge 1, Pb 18473 Vika, 0123 Oslo  
Attention: Egil Aarrestad (Client Executive) / Cecilie Landberg (Account Manager)
Telephone: +22827021 / +22827105
Facsimile: N/A
E-mail: egil.aarrestad@seb.no   / cecilie.landberg@seb.no  
 

With a copy to:
Attention: Structured Credit Operations
Telephone: +370 521 90485
Facsimile: N/A
E-mail: sco@seb.se  





















Name of KEXIM Guaranteed Lender
Address for Communication

BANCO BILBAO VIZCAYA ARGENTARIA, S.A., HONG KONG BRANCH
Unit 9507, Level 95, International Commerce Centre,
One Austin Road West,
Kowloon, Hong Kong
Attention: Grace Li / Weilei Song / Winnie Chung
Telephone: +852 2582 3278 / +852 2582 3110 / +852 2582 3145 /+8210 4665 1079
Facsimile: +852 2587 3199
E-mail: gracel@bbva.com.hk  / weilei.song@bbva.com .hk / winniec@bbva.com.hk
With a copy to:
Attention: Shirin Arabsolghar / Lucie Court / Maggie Siu
 
Telephone: +34 91 537 0006 / +852 2582 3216
 
Facsimile: + 34 91 537 0040 / +852 2582 3199
 
E-mail:

CITIBANK, N.A., LONDON BRANCH
Citibank N.A., London Branch,
Citigroup Centre, Canada Square,
London, E14 5LB
c/o Citibank International Limited,
Poland Branch  
7/9 Traugutta str., 1 st  Floor  
00-985 Warsaw, Poland
Attention: Loan Operations Department
(Kara Catt / Romina Coates – EAF Middle Office)
Telephone: +44 207986 4881
Facsimile: +44 207 655 2380
E-mail: cibuk.loans@citi.com

With a copy to:
388 Greenwich Street,
New York, NY, 10013
Attention: Meghan O'Connor
Telephone: +1 212 816 8557
Facsimile: N/A
E-mail: meghan.oconnor@citi.com

INDUSTRIAL AND COMMERCIAL BANK OF CHINA, BUSAN BRANCH
1205-10, Choryang 1-dong,
Dong-gu, Busan, Korea, 601-839  
Attention: Byung-joo, Seo  
Telephone: 82-51-463-8707  
Facsimile: 82-51-463-6880
E-mail: seobj@kr.icbc.com.cn

With a copy to:
18th Floor, Taepyeongno Bldg.,  
#73 Sejongdaero, Jung-gu,
Seoul, Korea 100-767  
Attention: Hyun-il, Sohn  
Telephone: 82-2-3788-6692  
Facsimile: 82-2-3783-6735
E-mail: sohnhi@kr.icbc.com.cn

KOMMUNAL LANDSPENSJONSKASSE GJENSIDIG FORSIKRINGSSELSKAP
Dronning Eufemias gate 10,
Pb.400 Sentrum, 0103 OSLO
Attention: Anne Kristine Skappel
Telephone: +47 900 65 243
Facsimile: +47 22 03 36 00
E-mail: anne.kristine.skappel@klp.no

 
With a copy to:
Attention: Christian Dahl
Telephone:+47 411 022 86
Facsimile:+47 22 03 36 00
E-mail: Christian.dahl@klp.no

 
And to:
Trondheim
Attention: Linda Bruneel / Birgitte Elvrum
Telephone: +4798623977 / +4790774226
Facsimile: +4773533839
E-mail: okontrd@klp.no

 
And to:
Trondheim
Attention: Oddvar Engelsastro / Anette Christensen
Telephone: +4748186935
Facsimile: +4773533839
E-mail: Oddvar.Engelsaastro@klp.no  / Anette.Christensen@klp.no

MITSUBISHI UFJ TRUST AND BANKING CORPORATION
4-5, Marunouchi 1-Chome,
Chiyoda-ku, Tokyo 100-8212, Japan
Attention: Corporate Business Planning Division
(Takashi Tomioka / Yoshitake Tanaka)
Telephone: +81-3-6256-1460
Facsimile: +81-3-6214-8199
E-mail: :takashi_tomioka@tr.mufg.jp  /  
yoshitake_tanaka@tr.mufg.jp  
 
With a copy to:
Attention: Takeshi Sugiyama
Telephone: +81-3-6250-3967
Facsimile : +81-3-6214-8199
E-mail: mutbsf2_post@tr.mufg.jp

NONGHYUP BANK
120 Tongil-Ro, Jung-Gu,
Seoul, Korea 04517
Attention : Young Jin Choi
Telephone : +822 2080-8116
Facsimile : +822 2080-8130
 
With a copy to:
 
Attention : Young Ho Jung
Telephone : +822 2080-8119
Facsimile : +822 2080-8130
 
SAMBA FINANCIAL GROUP, LONDON BRANCH
Nightingale House, 65 Curzon Street,
London, W1 8PF, UK  
Attention: Sherif Atef  
Telephone: +44 207 659 8235  
Facsimile: +44 207 355 4416  
E-mail: sherif.atef@samba.com

With a copy to:
Attention: Keith Clay  
Telephone: +44 207 659 8237  
Facsimile: +44 207 355 4416  
E-mail: keith.clay@samba.com

Name of K-Sure Lender
Address for Communication

ABN AMRO CAPITAL USA LLC
100 Park Avenue,
New York, New York 10017 - 0002
Attention: Rajbir Talwar,
Director of Transportation Clients
Telephone: 917 284 6850
Facsimile: N/A
E-mail: rajbir.talwar@abnamro.com

 
With a copy to:
Attention: Eden Rahman,
Vice President
Telephone: +1 212 931 9714
Facsimile: N/A
E-mail: Eden.Rahman@abnamro.com

 
And to:
Attention: Lilla Engelsbel-Sporysheva,
Director Trade Finance Operations
Telephone: 917 284 6962
Facsimile: 917 284 6697
E-mail: tradefinance@abnamro.com  

 
And to:
Attention: Maria Pina,
Vice President  
Telephone: 917 284 6917
Facsimile: 917 284 6683
E-mail: middleoffice@abnamro.com

BANCO BILBAO VIZCAYA ARGENTARIA, S.A., HONG KONG BRANCH
Unit 9507, Level 95, International Commerce Centre,
One Austin Road West,
Kowloon, Hong Kong
Attention: Grace Li / Weilei Song / Winnie Chung
Telephone: +852 2582 3278 / +852 2582 3110 / +852 2582 3145 /+8210 4665 1079
Facsimile: +852 2587 3199
E-mail: gracel@bbva.com.hk  / weilei.song@bbva.com .hk / winniec@bbva.com.hk
With a copy to:
Attention: Shirin Arabsolghar / Lucie Court / Maggie Siu
 
Telephone: +34 91 537 0006 / +852 2582 3216
 
Facsimile: + 34 91 537 0040 / +852 2582 3199
 
E-mail:

CAIXABANK, S.A.
Av. Diagonal 615, planta 5, 08028 Barcelona; Spain  
Attention: Isabel Marquez Buey
Telephone: +34 628 22 43 46  
Facsimile: +34 93 404 67 94  
E-mail: imarquez@caixabank.com
 
With a copy to:
Attention: Eduard Sin / Susanna Farnós
Telephone: + 34 93 404 41 39 / +34 93 297 46 63
Facsimile: +34 93 404 64 66
E-mail:  creditos.sindicados@lacaixa.es
 
And to:
Attention: Maria Carmen Utrilla
Telephone: +34 93 404 44 32  
Facsimile: N/A
E-mail: Carmen.utrilla@caixabank.com
CITIBANK, N.A., LONDON BRANCH
Citibank N.A., London Branch,
Citigroup Centre, Canada Square,
London, E14 5LB
c/o Citibank International Limited,
Poland Branch  
7/9 Traugutta str., 1 st  Floor  
00-985 Warsaw, Poland
Attention: Loan Operations Department
(Kara Catt / Romina Coates – EAF Middle Office)
Telephone: +44 207986 4881
Facsimile: +44 207 655 2380

 
With a copy to:
388 Greenwich Street,
New York, NY, 10013
Attention: Meghan O'Connor
Telephone: +1 212 816 8557
Facsimile: N/A
E-mail: meghan.oconnor@citi.com

LANDESBANK HESSEN-THUERINGEN GIROZENTRALE
Landesbank Hessen-Thueringen Girozentrale,
MT-259300, Neue Mainzer Strasse
52-58, 60311 Frankfurt am Main
Attention: Navina Lucke
Telephone: +49 69 9132-4830
Facsimile: +49 69 9132- 84830
E-mail: Navina.Lucke@helaba.de
 
With a copy to:
Attention: Stefan Kroth
Telephone: +49 69 9132-2165
Facsimile: +49 69 9132-82165
E-mail: Stefan.Kroth@helaba.de
MITSUBISHI UFJ TRUST AND BANKING CORPORATION
4-5, Marunouchi 1-Chome,
Chiyoda-ku, Tokyo 100-8212, Japan
Attention: Corporate Business Planning Division
(Takashi Tomioka / Yoshitake Tanaka)
Telephone: +81-3-6256-1460
Facsimile: +81-3-6214-8199
E-mail: :takashi_tomioka@tr.mufg.jp  /  
yoshitake_tanaka@tr.mufg.jp  
 
With a copy to:
Attention: Takeshi Sugiyama
Telephone: +81-3-6250-3967
Facsimile : +81-3-6214-8199
E-mail: mutbsf2_post@tr.mufg.jp
 
 
THE EXPORT-IMPORT BANK OF KOREA
BIFC 20th floor,  
40 Munhyeongeumyung-ro, Nam-gu
Busan, 48400
Korea  
Attention: Hanie(Okju) Jang  
Telephone: +82 51 922 8830  
Facsimile: +82 51 922 8849  
E-mail: okju@koreaexim.go.kr
 
With a copy to:
Attention: Eva(Hae Jeong) Cho
Telephone: +82 51 922 8828  
Facsimile: +82 51 922 8849  
E-mail: hj.cho@koreaexim.go.kr

Schedule 2     

CONDITIONS PRECEDENT
1
Obligors and Ultimate Parent Guarantor
Documents of the kind specified in Schedule 2 Part A paragraph 1 of the Facility Agreement.
2
Security
2.1
A duly executed original of each Mortgage Addenda together with documentary evidence that each Mortgage Addenda has been duly recorded as a valid addendum to the Mortgage in accordance with the laws of the jurisdiction of the Approved Flag.
2.2
A duly executed original of the Euronav Earnings Account Security (and of each document to be delivered under it).
3
Legal opinions
3.1
A legal opinion of Watson Farley & Williams LLP, legal advisers to the Facility Agent and the Security Agent in England, substantially in the form distributed to the Lenders before signing this Agreement.
3.2
A legal opinion of Watson Farley & Williams LLP which shall be addressed to the Facility Agent, the Security Agent, the Lenders and K-Sure on such matters concerning the laws of the Marshall Islands and the Republic of Liberia.
3.3
A legal opinion of Fransen Luyten which shall be addressed to the Facility Agent, the Security Agent, the Lenders and K-Sure on such matters concerning the laws of Belgium.
3.4
Favourable legal opinions by lawyers appointed by the Facility Agent on such matters concerning the laws of such relevant jurisdictions as the Facility Agent may require, substantially in the form distributed to the Original Lenders before signing this Agreement.
4
Other documents and evidence
4.1
A copy of any other Authorisation or other document, opinion or assurance which the Facility 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 this Agreement and the Mortgage Addenda or for the validity and enforceability of any Finance Document as amended, restated by this Agreement or by the Mortgage Addenda.
4.2
Evidence that any process agent referred to in clause 49.2 ( Service of process ) of the Amended and Restated Facility Agreement has accepted its appointment.
4.3
Confirmation from the relevant ECA that they have consented to the amendments and waivers contemplated by, and have approved the form of, the Amended and Restated Facility Agreement.
4.4
A favourable opinion from an independent insurance consultant acceptable to the Facility Agent on such matters relating to the insurances for the Ships as the Facility Agent may require;
4.5
Such evidence as the Facility Agent and the Lenders may require for the Finance Parties to be able to satisfy each of their "know your customer" or similar identification procedures in relation to the transactions contemplated by the Finance Documents.
4.6
Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 8 ( Fees ) and Clause 9 ( Costs and Expenses ) have been paid or will be paid by the Effective Date.
Schedule 3     

THE PARTIES
Name of Owner Guarantor / Hedge Guarantor
Place of Incorporation or Formation
Registration number
(or equivalent, if any)
Address for Communication
GENER8 NEPTUNE LLC
GENER8 ATHENA LLC
GENER8 APOLLO LLC
GENER8 ARES LLC
GENER8 HERA LLC
GENER8 CONSTANTINE LLC
GENER8 OCEANUS LLC
GENER8 NAUTILUS LLC
GENER8 MACEDON LLC
GENER8 ETHOS LLC
GENER8 PERSEUS LLC
GENER8 HECTOR LLC
GENER8 NESTOR LLC
REPUBLIC OF MARSHALL ISLANDS
963422
963429
963436
963437
963441
963438
963446
963443
963442
963439
963447
963440
963444
299 PARK AVENUE,
2 nd  Floor
NEW YORK, NY 10017 - 0002
Attention: Chief Financial Officer  
Telephone: (212) 763-5600
Facsimile: (212) 763-5608
E-mail: finance@gener8maritime.com
With a copy to:
Euronav NV
de Gerlachekaai 20
B-2000 Antwerp
Belgium
Tel No: 32 3 247 4411
Fax No: 32 3 247 4409
Attn: Chief Financial Officer


Schedule 4     

FORM OF EFFECTIVE DATE NOTICE


Amending and Restating Agreement
dated [ l ] 2018 (the "Agreement")


In accordance with clause 3 ( conditions precedent ) of the Agreement, the Facility Agent hereby confirms that all the conditions set out in clause 3 ( conditions precedent ) of the Agreement have been satisfied in full or, to the extent not so satisfied, waived in writing on ___________________.

Accordingly, the Effective Date shall be ____________________.




THE FACILITY AGENT



                                                                               
For and on behalf of
NORDEA BANK AB (PUBL), NEW YORK BRANCH



EUROPE/61906920v7


EXECUTION PAGES
ORIGINAL BORROWER

SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 MARITIME SUBSIDIARY VIII INC.
)
 
 



ADDITIONAL BORROWER

SIGNED  by
)
 
/s/ Roeland Neyrinck
duly authorised
)
 
 
for and on behalf of
)
 
 
EURONAV NV
)
 
 




ULTIMATE PARENT GUARANTOR

SIGNED  by
)
 
/s/ Roeland Neyrinck
duly authorised
)
 
 
for and on behalf of
)
 
 
EURONAV NV
)
 
 


PARENT GUARANTOR

SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 MARITIME SUBSIDIARY VIII INC.
)
 
 




SHAREHOLDER
SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 MARITIME SUBSIDIARY VIII INC.
)
 
 




EUROPE/61614181v9







OWNER GUARANTORS AND HEDGE GUARANTORS
SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 NEPTUNE LLC
)
 
 

SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 ATHENA LLC
)
 
 

SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 APOLLO LLC
)
 
 

SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 ARES LLC
)
 
 


SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 HERA LLC
)
 
 


SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 CONSTANTINE LLC
)
 
 









EUROPE/61614181v9



SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 OCEANUS LLC
)
 
 

SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 NAUTILUS LLC
)
 
 

SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 MACEDON LLC
)
 
 


SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 ETHOS LLC
)
 
 

SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 PERSEUS LLC
)
 
 


SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 HECTOR LLC
)
 
 














EUROPE/61614181v9


SIGNED  by
)
 
/s/ Dean Scaglione
duly authorised
)
 
 
for and on behalf of
)
 
 
GENER8 NESTOR LLC
)
 
 


COMMERCIAL TRANCHE CO-ORDINATOR,
FACILITY AGENT AND SECURITY AGENT


SIGNED  by
)
 
/s/ Erik Havnik
duly authorised
)
 
Director
for and on behalf of
)
 
 
NORDEA BANK AB (PUBL),
)
 
/s/ Martin Lunder
NEW YORK BRANCH
)
 
Managing Director




FACILITY AGENT ACTING FOR AND ON BEHALF
OF THE COMMERCIAL LENDERS

SIGNED  by
)
 
/s/ Erik Havnik
duly authorised
)
 
Director
for and on behalf of
)
 
 
NORDEA BANK AB (PUBL),
)
 
/s/ Martin Lunder
NEW YORK BRANCH
)
 
Managing Director


ECA CO-ORDINATOR AND ECA AGENT

SIGNED  by
)
 
/s/ Kara Catt
duly authorised
)
 
Vice President
for and on behalf of
)
 
Citibank N.A London
CITIBANK, N.A.,
)
 
 
LONDON BRANCH
)
 
 


ECA AGENT FOR AND ON BEHALF OF KEXIM, THE KEXIM GUARANTEED LENDERS AND THE K-SURE LENDERS

SIGNED  by
)
 
/s/ Kara Catt
duly authorised
)
 
Vice President
for and on behalf of
)
 
Citibank N.A London
CITIBANK, N.A.,
)
 
 
LONDON BRANCH
)
 
 

EUROPE/61614181v9




LENDERS


SIGNED  by
)
 
/s/ Francis Birkeland
duly authorised
)
 
Managing Director
for and on behalf of
)
 
 
ABN AMRO CAPITAL USA LLC
)
 
 
as Commercial Lender and K-Sure Lender
)
 
 
SIGNED  by
)
 
/s/
duly authorised
)
 
 
for and on behalf of
)
 
 
CITIBANK, N.A., LONDON BRANCH

)
 
 
as Commercial Lender, KEXIM Guaranteed Lender and K-Sure Lender
)
 
 
SIGNED  by
)
 
/s/
duly authorised
)
 
 
for and on behalf of
)
 
 
DNB CAPITAL LLC

)
 
 
as Commercial Lender
)
 
 
SIGNED  by
)
 
/s/ Georg Junginger
duly authorised
)
 
Senior Vice President
for and on behalf of
)
 
Legal Counsel
DVB BANK SE

)
 
 
as Commercial Lender
)
 
/s/ Lucia Ainsworth
 
 
 
Senior Vice President
SIGNED  by
)
 
/s/ Erik Havnik
duly authorised
)
 
Director
for and on behalf of
)
 
 
NORDEA BANK AB (PUBL), NEW YORK BRANCH
)
 
/s/ Martin Lunder
as Commercial Lender

)
 
Managing Director
SIGNED  by
)
 
/s/ Erling Amundsen
duly authorised
)
 
 
for and on behalf of
)
 
 
SKANDINAVISKA ENSKILDEN BANKEN AB (PUBL)
)
 
/s/ John Turesson
as Commercial Lender

)
 
 




EUROPE/61614181v9



SIGNED  by
)
 
/s/ Winnie Tse
duly authorised
)
 
Vice President
for and on behalf of
)
 
 
BANCO BILBAO VIZCAYA ARGENTARIA, S.A., HONG KONG BRANCH

)
 
/s/
as KEXIM Guaranteed Lender and K-Sure Lender


)
 
Managing Director

SIGNED  by
)
 
/s/
duly authorised
)
 
 
for and on behalf of
)
 
 
INDUSTRIAL AND COMMERCIAL BANK OF CHINA, BUSAN BRANCH

)
 
/s/
as KEXIM Guaranteed Lender



)
 
 

SIGNED  by
)
 
/s/
duly authorised
)
 
 
for and on behalf of
)
 
 
KOMMUNAL LANDSPENSJONSKASSE GJENSIDIG FORSIKRINGSSELSKAP


)
 
/s/
as KEXIM Guaranteed Lender



)
 
 

SIGNED  by
)
 
/s/
duly authorised
)
 
 
for and on behalf of
)
 
 
MITSUBISHI UFJ TRUST AND BANKING CORPORATION


)
 
/s/
as KEXIM Guaranteed Lender and K-Sure Lender




)
 
 

SIGNED  by
)
 
/s/ Lee Heon Koo
duly authorised
)
 
General Manager
for and on behalf of
)
 
Investment banking dept.
NONGHYUP BANK
)
 
 
as KEXIM Guaranteed Lender





)
 
 


SIGNED  by
)
 
/s/
duly authorised
)
 
 
for and on behalf of
)
 
 
CAIXABANK, S.A.
)
 
/s/
as K-Sure Lender






)
 
 



EUROPE/61614181v9




SIGNED  by
)
 
/s/ Stefan Kroth
duly authorised
)
 
 
for and on behalf of
)
 
 
LANDESBANK HESSENTHUERINGEN GIROZENTRALE
)
 
/s/ Navina Lucke
as K-Sure Lender






)
 
 


KEXIM
SIGNED  by
)
 
/s/
duly authorised
)
 
 
for and on behalf of
)
 
 
THE EXPORT-IMPORT BANK OF KOREA
)
 
/s/

APPENDIX

PART A

FORM OF AMENDED AND RESTATED FACILITY AGREEMENT MARKED TO
INDICATE AMENDMENTS TO THE FACILITY AGREEMENT
Amendments are indicated as follows:
1
additions are indicated by underlined text; and
2
deletions are shown by strike-through text.

APPENDIX


EUROPE/61614181v9


PART B

FORM OF CLEAN COPY AMENDED AND RESTATED FACILITY AGREEMENT


EUROPE/61614181v9



GENER8 MARITIME SUBSIDIARY VIII INC.
as Original Borrower
EURONAV NV
as Additional Borrower
THE COMPANIES listed in Part A of Schedule 1
as joint and several Owner Guarantors and
joint and several Hedge Guarantors
EURONAV NV
as Ultimate Parent Guarantor
GENER8 MARITIME, INC.
as Parent Guarantor
GENER8 MARITIME SUBSIDIARY V INC.
as Shareholder
CITIBANK, N.A.
NORDEA BANK AB (PUBL), NEW YORK BRANCH
as Global Co-ordinators
CITIBANK, N.A.
NORDEA BANK AB (PUBL), NEW YORK BRANCH
as Bookrunners
ABN AMRO CAPITAL USA LLC
DNB MARKETS, INC.
DVB BANK SE
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
as Commercial Tranche Bookrunners
CITIBANK, N.A.
NORDEA BANK AB (PUBL), NEW YORK BRANCH
ABN AMRO CAPITAL USA LLC
BANCO BILBAO VIZCAYA ARGENTARIA, S.A., HONG KONG BRANCH
DNB MARKETS, INC.
DVB BANK SE
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
THE EXPORT-IMPORT BANK OF KOREA
as Mandated Lead Arrangers
CAIXABANK, S.A.
LANDESBANK HESSEN-THUERINGEN GIROZENTRALE
as Lead Arrangers
THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1
as Original Lenders
THE BANKS AND FINANCIAL INSTITUTIONS listed in Part C of Schedule 1
as Hedge Counterparties
CITIBANK, N.A., LONDON BRANCH
as ECA Co-ordinator and ECA Agent
NORDEA BANK AB (PUBL), NEW YORK BRANCH
as Commercial Tranche Co-ordinator, Facility Agent and Security Agent

EUROPE/61614181v9


THE EXPORT-IMPORT BANK OF KOREA
as KEXIM
FACILITY AGREEMENT DATED AS OF 31 AUGUST 2015
AS AMENDED AND RESTATED ON JUNE 2018
TERM LOAN FACILITY OF UP TO $963,743,455

EUROPE/61614181v9


Index
Clause    Page

Section 1 Interpretation     4
1 Definitions and Interpretation     4
Section 2 The Facility     44
2 The Facility     44
3 Purpose     45
4 Conditions of Utilization     47
Section 3 Utilization     49
5 Utilization     49
Section 4 Repayment, Prepayment and Cancellation 52
6 Repayment     52
7 Prepayment and Cancellation     53
Section 5 Costs of Utilization     59
8 Interest     59
9 Interest Periods     62
10 Changes to the Calculation of Interest     62
11 Fees, KEXIM Premium and K-Sure Premium     64
Section 6 Additional Payment Obligations     66
12 Tax Gross Up and Indemnities; FATCA     66
13 Increased Costs     70
14 Other Indemnities     71
15 Mitigation by the Finance Parties     74
16 Costs and Expenses     75
Section 7 Guarantees     77
17 Guarantee and Indemnity     77
Section 8 Representations, Undertakings and Events of Default     85
18 Representations     85
19 Information Undertakings     93
20 Financial Covenants     97
21 General Undertakings     99
22 Insurance Undertakings     113
23 Shipbuilding Contract Undertakings     118
24 General Ship Undertakings     119
25 Security Cover     129
26 Application of Earnings     130
27 Events of Default     132
Section 9 Changes to Parties     138
28 Changes to the Lenders     138
29 Changes to the Obligors     143
Section 10 The Finance Parties     145
30 The Facility Agent, the Lead Arrangers and the Mandated Lead Arrangers     145
31 The Security Agent     155
32 ECA Agent     168
33 ECA Specific Provisions     169
34 Conduct of Business by the Finance Parties     182
35 Sharing among the Finance Parties     182
Section 11 Administration     184
36 Payment Mechanics     184

EUROPE/61614181v9


37 Set-Off     192
38 Bail-In     192
39 Notices     192
40 Calculations and Certificates     195
41 Partial Invalidity     195
42 Remedies and Waivers     195
43 Settlement or Discharge Conditional     195
44 Irrevocable Payment     196
45 Amendments and Waivers     196
46 Confidential Information     198
47 Counterparts     201
Section 12 Governing Law and Enforcement     202
48 Governing Law     202
49 Enforcement     202
50 Patriot Act Notice     202

Schedules

Schedule 1 The Parties     205
Part A The Obligors     205
Part B The Original Lenders 207
Part C The Hedge Counterparties 217
Part D The Servicing Parties 220
Schedule 2 Conditions Precedent     222
Part A Conditions Precedent to Initial Utilization Request     222
Part B Conditions Precedent to Utilization – Advance     225
Schedule 3 Utilization Requests     228
Schedule 4 Tranches and Commitments     229
Schedule 5 Form of Transfer Certificate     235
Schedule 6 Form of Assignment Agreement     238
Schedule 7 Form of Compliance Certificate     241
Schedule 8 Details of Ships 243
Schedule 9 245
Schedule 10 Subsidiaries 246
Schedule 11 Financial Indebtedness     252
Schedule 12 253
Schedule 13 Existing Transactions 254
Schedule 14 Non-Cash Charges     255
Schedule 15 Timetables     256
Schedule 16 Form of MT 199     257

Execution

Execution Pages 204




THIS AGREEMENT is made on 31 August 2015 as amended and restated by the Amending and Restating Agreement on June 2018
PARTIES
(1)
GENER8 MARITIME SUBSIDIARY VIII INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as original borrower (the " Original Borrower ")
(2)
EURONAV NV , a company incorporated in Belgium whose registered address is at de Gerlachekaai 20, B-2000 Antwerp, Belgium as additional borrower (the " Additional Borrower ")
(3)
The limited liability companies listed in Part A of Schedule 1 ( The Parties ) therein as joint and several owner guarantors (the " Owner Guarantors ") and as joint and several hedge guarantors (the " Hedge Guarantors ")
(4)
EURONAV NV , a company incorporated in Belgium whose registered address is at de Gerlachekaai 20, B-2000 Antwerp, Belgium as ultimate parent guarantor (the " Ultimate Parent Guarantor ")
(5)
GENER8 MARITIME, INC. , a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as the parent guarantor (the " Parent Guarantor ")
(6)
GENER8 MARITIME SUBSIDIARY V INC., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960 as the parent guarantor (the " Shareholder ")
(7)
CITIBANK, N.A. and NORDEA BANK AB (PUBL), NEW YORK BRANCH as global co-ordinators (the " Global Co-ordinators " and each, a " Global Co-ordinator ")
(8)
CITIBANK, N.A. and NORDEA BANK AB (PUBL), NEW YORK BRANCH as bookrunners (the " Bookrunners " and each, a " Bookrunner ")
(9)
ABN AMRO CAPITAL USA LLC, DNB MARKETS, INC., DVB BANK SE, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL) as commercial tranche bookrunners (the " Commercial Tranche Bookrunners " and each, a " Commercial Tranche Bookrunner ")
(10)
CITIBANK, N.A., NORDEA BANK AB (PUBL), NEW YORK BRANCH, ABN AMRO CAPITAL USA LLC, BANCO BILBAO VIZCAYA ARGENTARIA, S.A., HONG KONG BRANCH, DNB MARKETS, INC., DVB BANK SE, SKANDINAVISKA ENSKILDA BANKEN AB (PUBL) and THE EXPORT-IMPORT BANK OF KOREA as mandated lead arrangers (the " Mandated Lead Arrangers " and each, a " Mandated Lead Arranger ")
(11)
CAIXABANK, S.A. and LANDESBANK HESSEN-THUERINGEN GIROZENTRALE as lead arrangers (the " Lead Arrangers " and each, a " Lead Arranger ")
(12)
THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 ( The Parties ) as commercial lenders (the " Commercial Lenders " and each, a " Commercial Lender ")
(13)
THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 ( The Parties ) as KEXIM guaranteed lenders (the " KEXIM Guaranteed Lenders " and each, a " KEXIM Guaranteed Lender ")
(14)
THE BANKS AND FINANCIAL INSTITUTIONS listed in Part B of Schedule 1 ( The Parties ) as K-Sure lenders (the " K-Sure Lenders " and each a, " K-Sure Lender " and collectively with the Commercial Lenders, the KEXIM Guaranteed Lenders and KEXIM (as defined below), the " Original Lenders " and each, an " Original Lender ")
(15)
THE BANKS AND FINANCIAL INSTITUTIONS listed in Part C of Schedule 1 ( The Parties ) as hedge counterparties (the " Hedge Counterparties " and each a, " Hedge Counterparty ")
(16)
CITIBANK, N.A., LONDON BRANCH as ECA agent (the " ECA Agent ") and as ECA co-ordinator (the " ECA Co-ordinator ")
(17)
NORDEA BANK AB (PUBL), NEW YORK BRANCH as commercial tranche co-ordinator (the " Commercial Tranche Co-ordinator ")
(18)
NORDEA BANK AB (PUBL), NEW YORK BRANCH as agent of the other Finance Parties (the " Facility Agent ")
(19)
NORDEA BANK AB (PUBL), NEW YORK BRANCH as security agent for the Secured Parties (the " Security Agent ")
(20)
THE EXPORT-IMPORT BANK OF KOREA as KEXIM (" KEXIM ")
BACKGROUND
(A)
By a facility agreement dated 31 August 2015, the Lenders have agreed to make available to the Borrower a term loan facility of up to $963,743,455 (which includes the KEXIM Premium and K-Sure Premium) comprising of (a) the Commercial Tranche, to be made available by the Commercial Lenders in an aggregate principal amount of up to $282,017,190; (b) the KEXIM Guaranteed Tranche to be made available by the KEXIM Guaranteed Lenders and fully guaranteed by KEXIM of an aggregate principal amount of up to $ 139,675,594 (which includes the KEXIM Premium); (c) the KEXIM Funded Tranche to be made available by KEXIM in an aggregate principal amount of up to $197,412,033; and (d) the K-Sure Tranche to be made available by the K-Sure Lenders (and which are subject to coverage of the K-Sure Insurance Policies) in an aggregate principal amount of up to $344,638,638 (which includes the K-Sure Premium).
(B)
The Hedge Counterparties may enter into interest rate swap transactions with the Borrower from time to time to hedge the Borrower's exposure under this Agreement to interest rate fluctuations.
(C)
By the Amending and Restating Agreement, the Finance Parties have agreed to certain amendments to the facility agreement and the other Finance Documents. This Agreement sets out the terms of the facility agreement as amended and restated by the Amending and Restating Agreement.
OPERATIVE PROVISIONS
Section 1

INTERPRETATION
1
DEFINITIONS AND INTERPRETATION
1.1
Definitions
In this Agreement:
" Acceptable Accounting Firm " means such accounting firm in place as at the Effective Date or such other recognized accounting firm as the Facility Agent may, with the consent of the Majority Lenders, approve from time to time in writing, such approval not to be unreasonably withheld.
" Account Bank " means Nordea Bank AB (publ), filial i Norge acting through its office at Essendropsgate 7, 0368 Oslo, Norway.
" Accounts " means the Earnings Accounts, the Minimum Liquidity Account and the Debt Service Reserve Account.
" Account Security " means a document creating Security over any Account in agreed form.
" Additional Collateral " shall mean additional Security satisfactory to the Majority Lenders created in favour of the Security Agent to cure non-compliance with Clause 25 ( Security Cover ) (it being understood that cash collateral comprised of Dollars (which shall be valued at par) shall be deemed satisfactory), pursuant to security documentation in agreed form, in an aggregate amount at least sufficient to cure such non-compliance.
" Advance " means the borrowing of all or part of a Vessel Loan under this Agreement.
" Affected Lender " has the meaning given to it in paragraph (b) of Clause 10.2 ( Market disruption ).
" Affiliate " means, with respect to any Person, any other Person (including, for purposes of Clause 21.30 ( Other transactions ), all directors, officers and partners of such Person) directly or indirectly controlling, controlled by, or under direct or indirect common control with, such Person; provided however, that for purposes of Clause 21.30 ( Other transactions ), an Affiliate of the Ultimate Parent Guarantor shall include any Person that directly or indirectly owns more than 10% of any class of the capital stock of the Ultimate Parent Guarantor and any officer or director of the Ultimate Parent Guarantor or any of its Subsidiaries. A Person shall be deemed to control another Person if such Person possesses, directly or indirectly, the power to direct or cause the direction of the management and policies of such other Person, whether through the ownership of voting securities, by contract or otherwise. Notwithstanding anything to the contrary contained above, neither the Facility Agent, nor the Security Agent, the ECA Agents nor the Lead Arrangers, the Mandated Lead Arrangers nor any Lender (or any of their respective Affiliates) shall be deemed to constitute an Affiliate of the Ultimate Parent Guarantor or its Subsidiaries in connection with the Finance Documents or its dealings or arrangements relating thereto.
" Aggregate Collateral Vessel Value " means at any time, the aggregate of the Fair Market Value of all the Ships which are, in each case, subject to a Mortgage.
" Aggregate Collateral Vessel Value of ECA Ships " means the aggregate Fair Market Value of the ECA Ships which are, in each case, subject to a Mortgage.
" Amending and Restating Agreement " means the amending and restating agreement dated     June 2018 and made between, amongst others, (i) the Original Borrower, (ii) the Additional Borrower, (iii) the Parent Guarantor, (iv) the Ultimate Parent Guarantor, (v) the Original Lenders, (vi) the Hedge Counterparties, (vii) the ECA Agent, (viii) the Facility Agent, (ix) the Security Agent and (x) KEXIM.
" Anti-Bribery and Corruption Laws " means the US Foreign Corrupt Practices Act of 1977 as amended and the rules and regulations thereunder, the UK Bribery Act of 2010, and/or any similar laws, rules or regulations issued, administered or enforced by the United States, United Kingdom, the European Union or any of its member states, or any other country or Governmental Agency having jurisdiction over any Finance Party, an ECA or any Obligor.
" Appraisal " means, with respect to a Ship, a written appraisal provided by an Approved Appraiser in favour of the Facility Agent for the purposes of determining the Fair Market Value of such Ship.
" Approved Appraiser " means Arrow Sale & Purchase (UK) Limited, Barry Rogliano Salles, Fearnleys, Clarksons Platou Securities AS, Braemar ACM, Maersk Broker K.S., Lorentzen & Stemoco and Simpson Spence & Young (or any Affiliate of such person through which valuations are commonly issued) and any other firm or firms of independent sale and purchase shipbrokers approved in writing by the Facility Agent.
" Approved Classification " means, in relation to a Ship, as at the date of this Agreement, the classification in relation to that Ship specified in Schedule 8 ( Details of the Ships ) or the equivalent classification with another Approved Classification Society.
" Approved Classification Society " means American Bureau of Shipping (" ABS "), DNV GL Group (" DNV "), Lloyd's Register (" LR "), Nippon Kaiji Kyokai (" NKK "), Bureau Veritas (" BV ") or Korean Register of Shipping (" KS ") or any other classification society which is a member of the International Association of Classification Societies and which the Facility Agent has approved in writing (with the authorisation of the Majority Lenders).
" Approved Commercial Manager " means, in relation to a Ship, Navig8 Pte. Ltd., Navig8 Asia Pte. Ltd., VL8 Management Inc., Tankers International Pool, the Ultimate Parent Guarantor, any wholly owned subsidiary of the Ultimate Parent Guarantor, or such other person approved in writing by the Facility Agent acting with the authorization of the Majority Lenders as the commercial manager of that Ship, any of whom may also engage reputable third-parties to perform specific tasks or, if such Ship is entered into a Pool Agreement, the Pool Manager.
" Approved Flag " shall have the meaning provided in Clause 24.2 ( Flag of Ships; Citizenship; Ship Classification ).
" Approved Insurance Broker " means Bankserve, Willis, Aon, Marsh, Leeds and Leeds, Proteus, Belgibo and any other firm or firms of insurance brokers approved in writing by the Facility Agent, acting with the authorization of the Majority Lenders.
" Approved Manager " means, in relation to a Ship, the Approved Commercial Manager or the Approved Technical Manager of that Ship.
" Approved Technical Manager " means, in relation to a Ship, Euronav Ship Management (Hellas) Ltd., Northern Marine Management Ltd., Anglo-eastern Shipmanagement (Singapore) Pte. Ltd., Anglo-eastern International (Macao Commercial Offshore) Limited, Wallem Shipmanagement Limited, Selandia Ship Management Pte. Ltd., Selandia Ship Management (India) Pvt. Ltd., Selmar Ltd, the Ultimate Parent Guarantor and any of its wholly owned subsidiaries or such other person approved in writing by the Facility Agent acting with the authorization of the Majority Lenders as the technical manager of that Ship, any of whom may also engage reputable third-parties to perform specific tasks.
" Assignment " means each, or any, as the context may require of:
(a)
any Assignment of Builder's Warranties;
(b)
any Assignment of Charter Agreement;
(c)
any Assignment of Earnings;
(d)
any Assignment of Hedging Agreement;
(e)
any Assignment of Insurances;
(f)
any Assignment of Pool Agreement; and
(g)
any Assignment of Ship Management Agreement.
" Assignment of Builder's Warranties" means in relation to a Ship, the assignment of builder's warranties in respect of that Ship entered into or to be entered into by the Owner Guarantor owning that Ship and the Security Agent in the agreed form.
" Assignment of Charter Agreement " means in relation to a Ship, (a) the assignment of the charter agreement entered or to be entered into by the Owner Guarantor or Additional Borrower (as the case may be) owning that Ship with the relevant Pool Manager pursuant to the relevant Pool Agreement; (b) the assignment of any other Charter of a duration of at least 24 months (including any optional extensions or renewals) entered into or to be entered into by the Owner Guarantor or Additional Borrower (as the case may be) owning that Ship with any party (other than a member of the Group) as charterer and (c) the assignment of any charter entered into or to be entered into by the Owner Guarantor or Additional Borrower (as the case may be) owning that Ship with any other member of the Group as charterer, in respect of that Ship, entered into or to be entered into by the Owner Guarantor or Additional Borrower (as the case may be) owning that Ship and the Security Agent in the agreed form.
" Assignment of Earnings " means, in relation to a Ship, the assignment of inter alia, that Ship's Earnings and Requisition Compensation in respect of that Ship entered into or to be entered into by the Owner Guarantor or Additional Borrower (as the case may be) owning that Ship and the Security Agent in the agreed form.
" Assignment of Hedging Agreement " means a first assignment of the rights and interests of the Parent Guarantor or the Borrower (as the case may be), in any Hedging Agreement entered into or to be entered into between the Parent Guarantor or the Borrower (as the case may be) and the Security Agent, in agreed form.
" Assignment of Insurances " means, in relation to a Ship, the assignment of that Ship's Insurances in respect of that Ship entered into or to be entered into by the Owner Guarantor or Additional Borrower (as the case may be) owning that Ship and the Security Agent in the agreed form.
" Assignment of Pool Agreement" means in relation to a Ship, the assignment of the relevant Pool Agreement in respect of that Ship entered into or to be entered into by the Owner Guarantor or Additional Borrower (as the case may be) owning that Ship and the Security Agent in the agreed form.
" Assignment of Ship Management Agreement" means in relation to a Ship, each assignment of the Ship Management Agreement in respect of that Ship entered into or to be entered into by the Owner Guarantor or Additional Borrower (as the case may be) owning that Ship and the Security Agent in the agreed form.
" Assignment Agreement " means an agreement substantially in the form set out in Schedule 6 ( Form of Assignment Agreement ) or any other form agreed between the relevant assignor and assignee.
" Authorization " means an authorization, consent, approval, resolution, license, exemption, filing, notarization, legalization or registration.
" Availability Period " means in relation to each Vessel Loan, the period from and including the date of this Agreement up to and including,
(a)
the earlier of:
(i)
the Delivery Date of the Ship to which that Vessel Loan relates; and
(ii)
30 September 2017, or
(b)
such later date as may be agreed by the Lenders and K-Sure with the Borrower.
" Available Commitment " means, in relation to a Lender in respect of a Vessel Loan, such Lender's Commitment minus:
(a)
the amount of its participation in such outstanding Vessel Loan; and
(b)
in relation to any proposed Utilization, the amount of its participation in any Advance that is due to be made on or before the proposed Utilization Date.
" Available Facility " means the aggregate for the time being of each Lender's Available Commitment under all Vessel Loans.
" 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.
" Balloon Repayment " means in relation to the Commercial Tranche for each Vessel Loan, an amount equal to the Commercial Tranche of such Vessel Loan as at the date of its Utilization Date minus all Commercial Tranche Repayment Instalments for such Vessel Loan.
" Bank Secrecy Act " means the U.S. Bank Secrecy Act of 1970.
" Basel II " has the meaning ascribed to it under Clause 13.3 ( Exceptions).
" Basel III " means:
(a)
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;
(b)
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
(c)
any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".
" Beneficial Ownership Certification " means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation.
" Beneficial Ownership Regulation " means 31 C.F.R. § 1010.230.
" Borrower " means the Original Borrower and, from the First Ship Transfer Date and in accordance with the provisions of Clause 29.2 ( Additional Borrower ), the Original Borrower and the Additional Borrower (and references to Borrower in the singular shall be interpreted to refer to the Original Borrower and the Additional Borrower) and from the Final Ship Transfer Date, the Additional Borrower.
" Break Costs " means other than the KEXIM Prepayment Fee, 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 Unpaid Sum to the last day of the current Interest Period in relation to the Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
(b)
exceeds:
(c)
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.
" Builder " means, in relation to a Ship, the shipbuilder set out in the corresponding column under the heading "Builder" in Schedule 8 ( Details of the Ships ).
" Builder's Bank " has the meaning given in paragraph (b) of Clause 5.8 ( Prepositioning of funds ).
" Business Day " means a day except Saturday, Sunday and any day which shall be in Antwerp, London, New York, Hong Kong, Oslo and Seoul, a legal holiday or a day in which banking institutions are authorized or required by law or other government action to close.
" Capitalized Lease Obligations " of any Person shall mean all rental obligations which, under IFRS, are or will be required to be capitalized on the books of such Person, in each case taken at the amount thereof accounted for as indebtedness in accordance with such principles.
" Cash Equivalents " means:
(a)
securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than one year from the date of acquisition;
(b)
time deposits, certificates of deposit or deposits in the interbank market of any commercial bank of recognized standing organized under the laws of the United States of America, any state thereof or any foreign jurisdiction having (x) capital and surplus in excess of $200,000,000 and (y) a long-term unsecured debt rating of at least "A" or the equivalent thereof from S&P or "A2" or the equivalent thereof from Moody's with maturities of not more than one year from the date of acquisition by such Person;
(c)
repurchase obligations with a term of not more than ninety (90) days for underlying securities of the types described in clause (a) above entered into with any bank meeting the qualifications specified in clause (b) above;
(d)
commercial paper issued by any Person incorporated in the United States rated at least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by Moody's and in each case maturing not more than one year after the date of acquisition by such Person;
(e)
investments in money market funds substantially all of whose assets are comprised of the types described in clauses (a) through (d) above; and
(f)
such other securities or instruments as the Majority Lenders shall agree in writing.
" Charter " means, in relation to a Ship, any charter relating to that Ship, or other contract for its employment, whether or not already in existence.
" Change of Control " means in relation to the Additional Borrower if 2 or more persons acting in concert or any individual person in each case other than the Permitted Holders:
(a)
acquires legally and/or beneficially, and either directly or indirectly, in excess of 50 per cent. of the issued share capital or voting rights of the Additional Borrower; or
(b)
has the right or the ability to control, either directly or indirectly, the affairs or composition of the majority of the board of directors (or equivalent) of the Additional Borrower.
" Code " means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated and rulings issued thereunder. Section references to the Code are to the Code, as in effect at the date of this Agreement and any subsequent provisions of the Code amendatory thereof, supplemental thereto or substituted therefor.
" Commercial Tranche " means the commercial term loan of an aggregate principal amount of up to $282,017,190 to be provided by the Commercial Lenders to the Borrower under the terms of this Agreement or as the context may require, in respect of a Vessel Loan, that portion of such aggregate amount corresponding to the relevant Ship as set out in Schedule 4 ( Tranches and Commitments) or, as the context may require, the principal amount outstanding thereunder at the relevant time.
" Commercial Tranche Commitments " means:
(a)
in relation to a Commercial Lender, the aggregate amount set forth opposite its name in Part A of Schedule 4 ( Tranches and Commitments ) in respect of the Commercial Tranche, or as the context may require, in relation to such Commercial Lender and a Vessel Loan, that amount corresponding to that Ship as set out in Schedule 4 ( Tranches and Commitments) ; and
(b)
in relation to any other Lender, such amount assigned to it under this Agreement in respect of the Commercial Tranche and in respect of each or any Vessel Loan (as the case may be),
(c)
in each case, to the extent not cancelled, reduced or transferred by it under this Agreement.
" Commercial Tranche Repayment Instalment " has the meaning given to it in Clause 6.1 ( Repayment of Loan).
" Commercial Management Agreement " means, in relation to a Ship, the form of agreement entered into between the relevant Owner Guarantor or Additional Borrower (as the case may be) and the Approved Commercial Manager regarding the commercial management of that Ship in agreed form.
" Commission " or " SEC " means the U.S. Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act.
" Commitment " means, in respect of the Facility:
(a)
in relation to an Original Lender, the amount set opposite its name in the 6th column in Part A of Schedule 4 ( Tranches and Commitments ) 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.
" Commodity Exchange Act " means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.
" Compliance Certificate " means a certificate in the form set out in Schedule 7 ( Form of Compliance Certificate ) or in any other form agreed between the Parent Guarantor and the Facility Agent.
" Confidential Information " means all information relating to any Transaction 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:
(a)
any member of the Group or any of its advisers; or
(b)
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group 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 any Funding Rate or 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 46 ( Confidential Information ); or
(ii)
is identified in writing at the time of delivery as non-confidential by any member of the Group 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 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.
" Confidentiality Undertaking " means a confidentiality undertaking in any form agreed between the Borrower and the Facility Agent.
" Constitutional Documents " with respect to any Obligor means the Memorandum of Association or Certificate of Incorporation, as the case may be, Certificate of Formation (including, without limitation, by the filing or modification of any certificate of designation made prior to the date of this Agreement), By-Laws, limited liability company agreement or partnership agreement (or equivalent organizational documents).
" Contingent Extras " means, in relation to a Ship, an amount equivalent to the aggregate of unforeseen costs and expenses (including the cost of extras) as permitted by the terms of the Shipbuilding Contract relating to such Ship incurred during the period commencing from the date of this Agreement up to and including the Delivery Date of such Ship and which are documented in such form and substance acceptable to the Facility Agent, provided that the aggregate of such amount shall not exceed $500,000 in relation to such Ship.
" Contingent Obligation " shall mean, as to any Person, any obligation of such Person guaranteeing or intended to guarantee any indebtedness ("primary obligations") of any other person (the "primary obligor") in any manner, whether directly or indirectly, including, without limitation, any obligation of such person, whether or not contingent, (i) to purchase any such primary obligation or any property constituting direct or indirect security therefor, (ii) to advance or supply funds (x) for the purchase or payment of any such primary obligation or (y) to maintain working capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency of the primary obligor, (iii) to purchase property, securities or services primarily for the purpose of assuring the owner of any such primary obligation of the ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to assure or hold harmless the holder of such primary obligation against loss in respect thereof; provided, however, that the term Contingent Obligation shall not include endorsements of instruments for deposit or collection in the ordinary course of business and any products warranties extended in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determinable amount of the primary obligation in respect of which such Contingent Obligation is made (or, if the less, the maximum amount of such primary obligation for which such person may be liable pursuant to the terms of the instrument evidencing such Contingent Obligation) or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof (assuming such Person is required to perform thereunder) as determined by such person in good faith.
" Contract Price " means, in relation to a Ship, the aggregate of (i) the price payable for that Ship under its Shipbuilding Contract and (ii) the Contingent Extras for that Ship, subject to adjustment as provided in such Shipbuilding Contract pursuant to the terms thereof.
" Contract Price Instalment " means, in relation to a Ship, each instalment of the Contract Price payable under the Shipbuilding Contract relating to that Ship.
" Debt Service Reserve Account " means:
(a)
an account in the name of the Parent Guarantor with the Account Bank designated "Gener8 Maritime, Inc. – Debt Service Reserve Account (KEXIM)"; or
(b)
any other account (with that or another office of the Account Bank or with a bank or financial institution other than the Account Bank) which is designated by the Facility Agent with the approval of the Parent Guarantor (such consent not to be unreasonably withheld or delayed), as such account for the purposes of this Agreement.
" Debtor Relief Laws " shall mean the U.S. Bankruptcy Code and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.
" Default " means an Event of Default or a Potential Event of Default.
" Default Period " means, with respect to any Lender, the period during which such Lender is a Defaulting Lender.
" Defaulting Lender " shall mean any Lender with respect to which a Lender Default is in effect.
" Delegate " means any delegate, agent, attorney, co-trustee or other person appointed by the Security Agent.
" Delivery Date " means, in relation to a Ship, the date on which that Ship is delivered by the relevant Builder to the relevant Owner Guarantor designated or to be designated as receiving delivery of such Ship pursuant to the Shipbuilding Contract.
" Delivery Instalment " means, in relation to a Ship, the delivery instalment of the relevant Contract Price payable under the Shipbuilding Contract.
" Demand Date " means the date on which the ECA Agent shall have properly documented its demand on KEXIM for payment in accordance with the procedures of the KEXIM Guarantee.
" Disbursement Authorization " has the meaning given in paragraph (b) of Clause 5.8 (Prepositioning of funds).
" 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 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 Obligor; or
(b)
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 or, if applicable, any Obligor preventing that, or any other, Party or, if applicable, any Obligor:
(i)
from performing its payment obligations under the Finance Documents; or
(ii)
from communicating with other Parties or, if applicable, any Obligor 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, any Obligor.
" Dividend " means, with respect to any Person, a dividend, distribution or return of any equity capital to its stockholders, partners or members, any other distribution, payment or delivery of property or cash to its stockholders, partners or members in their capacity as such (other than common stock, and the right to purchase any of such stock of such Person), the redemption, retirement, purchase or acquisition, directly or indirectly, for a consideration of any shares of any class of its capital stock or any other Equity Interests outstanding on or after the date of this Agreement (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests), including Stock Buy-Backs, or the setting aside of any funds for any of the foregoing purposes, or the granting of permission to any of its Subsidiaries to purchase or otherwise acquire for a consideration (other than common stock, Qualified Preferred Stock and the right to purchase any of such stock of such Person) any shares of any class of the capital stock or any other Equity Interests of such Person outstanding on or after the date of this Agreement (or any options or warrants issued by such Person with respect to its capital stock or other Equity Interests) except for share repurchases resulting from the unwinding of any share sale requiring the repayment of any advances in connection with such sale as a result of any default on payment on the part of the ultimate purchaser of such shares. Without limiting the foregoing, "Dividends" with respect to any Person shall also include all payments made or required to be made by such Person with respect to any stock appreciation rights, plans, equity incentive or achievement plans or any similar plans or setting aside of any funds for the foregoing purposes. For the avoidance of doubt, (i) any non-cash anti-dilution adjustments under the warrants listed on in Schedule 14 ( Non-cash charges ) shall not constitute a Dividend and (ii) payments under the indemnification provisions of the Previous Merger Agreement shall constitute a Dividend.
" Document of Compliance " has the meaning given to it in the ISM Code.
" dollars " and " $ " mean the lawful currency, for the time being, of the U.S.
" Early Termination Date ", in relation to any continuing Secured Transaction, has the meaning given in the relevant Hedging Agreement.
" Earnings " means, in relation to a Ship, all moneys whatsoever which are now, or later become, payable (actually or contingently) to the Owner Guarantor or Additional Borrower (as the case may be) owning that Ship or the Security Agent and which arise out of the use or operation of that Ship, including (but not limited to):
(a)
the following, save to the extent that any of them is, as of the date of this Agreement or with the prior written consent of the Facility Agent, pooled or shared with any other person:
(i)
all freight, hire and passage moneys;
(ii)
compensation payable to the Owner Guarantor or Additional Borrower (as the case may be) owning that Ship or the Security Agent in the event of requisition of that Ship for hire;
(iii)
remuneration for salvage and towage services;
(iv)
demurrage and detention moneys;
(v)
damages for breach (or payments for variation or termination) of any charter party or other contract for the employment of that Ship;
(vi)
all moneys which are at any time payable under any Insurances in relation to loss of hire;
(vii)
all monies which are at any time payable to the Owner Guarantor or Additional Borrower (as the case may be) owning that Ship in relation to general average contribution; and
(b)
if and whenever that Ship is employed on terms whereby any moneys falling within sub-paragraphs (i) to (vi) of paragraph (a) above are pooled or shared with any other person, that proportion of the net receipts of the relevant pooling or sharing arrangement which is attributable to that Ship.
" Earnings Account " means, in relation to an Owner Guarantor or the Additional Borrower:
(a)
an account in the name of that Owner Guarantor with the Account Bank designated "Earnings Account";
(b)
an account in the name of the Additional Borrower with the Account Bank designated "Euronav NV – Earnings Account"; or
(c)
any other account (with that or another office of the Account Bank or with a bank or financial institution other than the Account Bank) which is designated by the Facility Agent with the approval of the Parent Guarantor (such consent not to be unreasonably withheld or delayed), as such account for the purposes of this Agreement.
" ECAs " means KEXIM and K-Sure (and each, an " ECA ").
" ECA Ships " means Ship A, Ship B, Ship C, Ship D, Ship E, Ship F, Ship I, Ship J, Ship K, Ship L, Ship M, Ship N and Ship O (and each, an " ECA Ship ").
" ECA Vessel Loans " means the Vessel Loans in relation to the ECA Ships.
" ECP " means an "eligible contract participant" as defined in the Commodity Exchange Act and the regulations thereunder.
" EDGAR " means the Electronic Data Gathering, Analysis, and Retrieval system maintained by the SEC.
" Effective Date " has the meaning given to that term in the Amending and Restating Agreement.
" Environmental Claims " means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, directives, claims, liens, notices of noncompliance or violation, investigations or proceedings relating in any way to any Environmental Law or any permit issued, or any approval given, under any such Environmental Law (hereafter, "Claims"), including, without limitation:
(a)
any and all Claims by governmental or regulatory authorities for enforcement, cleanup, removal, response, remedial or other actions or damages pursuant to any applicable Environmental Law, and
(b)
any and all Claims by any third party seeking damages, contribution, indemnification, cost recovery, compensation or injunctive relief in connection with alleged injury or threat of injury to health, safety or the environment due to the presence of Hazardous Materials.
" Environmental Law " means any applicable federal, state, foreign, or local statute, legal requirements, law, treaty, protocol, rule, regulation, ordinance, code, binding and enforceable guideline, binding and enforceable written policy, deed or rule of common law, now or hereafter in effect and in each case as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment, to the extent binding on the Parent Guarantor or any of its Subsidiaries, relating to the environment or to Hazardous Materials, including, without limitation, OPA; in each case as amended from time to time; and any applicable rules, regulations or requirements of an Approved Classification Society in respect of any Ship.
" Equity Interests " of any person means:
(a)
any and all shares and other equity interests (including common stock, preferred stock, limited liability company interests and partnership interests) in such person; and
(b)
all rights to purchase, warrants or options or convertible debt (whether or not currently exercisable), participations or other equivalents of or interests in (however designated) such shares or other interests in such person.
" EU Bail-In Legislation Schedule " means the document described as such and published by the LMA from time to time.
" Event of Default " means any event or circumstance specified as such in Clause 27 ( Events of Default ).
" Exchange Act " means the U.S. Securities Exchange Act of 1934, as amended, and any successor act thereto, and (unless the context otherwise requires) includes the rules and regulations of the Commission promulgated thereunder.
" Excluded Hedging Obligation" means, with respect to a Hedge Guarantor, any Hedging Obligation if, and to the extent that, all or a portion of the guarantee of such Hedge Guarantor of, or the grant by such Hedge Guarantor of a security interest to secure, such Hedging Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Hedge Guarantor's failure for any reason to constitute an ECP at the time the guarantee of such Hedge Guarantor or the grant of such security interest becomes effective with respect to such Hedging Obligation. If a Hedging Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Hedging Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal.
" Excluded Taxes " means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient,
(a)
Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, imposed as a result of such Recipient being organized under the laws of, or having (or having had) its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof);
(b)
Taxes attributable to such Recipient's failure to comply with Clause 12.2(c) ( Tax Gross-up ); and
(c)
any U.S. federal withholding Taxes imposed under FATCA.
(d)
" Executive Order " has the meaning provided in paragraph (a) of Clause 18.17 ( Sanctions ).
" Existing Indebtedness " has the meaning provided in Clause 18.21 ( Indebtedness ).
" Facility " means the term loan facility made available under this Agreement as described in Clause 2 ( The Facility ).
" Facility Office " means the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than 5 Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement.
" Fair Market Value " means, in relation to a Ship or any other vessel, at any date, the fair market value of that Ship or vessel shown by the arithmetic mean of two valuations, each:
(a)
as at a date not more than 14 Business Days previously;
(b)
prepared by Approved Appraisers which shall be selected by the Parent Guarantor;
(c)
for and addressed to the Facility Agent;
(d)
with or without physical inspection of that Ship or vessel (as the Facility Agent may require); and
(e)
on the basis of a sale for prompt delivery for cash on normal arm's length commercial terms as between a willing seller and a willing buyer, free of any Charter or other contract of employment (and with no value to be given to any pooling arrangements),
after deducting the estimated amount of the usual and reasonable expenses which would be incurred in connection with the sale, provided that if a range of values is provided in a particular appraisal, then the Fair Market Value in such appraisal shall be deemed to be the median of such values and if such valuations differ by more than 15% of the lower valuation, a third valuation shall be obtained from another Approved Appraiser selected by the Facility Agent and the fair market value of that Ship or vessel shall be shown by the arithmetic mean of all three such valuations.
" FATCA " means Sections 1471 through 1474 of the Code, any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(i) of the Code and any legislation adopted pursuant to any intergovernmental agreement to implement the foregoing.
" Fee Letter " means any letter or letters dated on or about the date of this Agreement between any of the Mandated Lead Arrangers, the Facility Agent and the Security Agent and any Obligor setting out any of the fees referred to in Clause 11 ( Fees, KEXIM Premium and K-Sure Premium ).
" Final Ship Transfer Date " means the date on which the ownership of the final Ship is transferred from the relevant Owner Guarantor to the Additional Borrower in accordance with Clause 24.13 ( Transfer of Ships ).
" Finance Document " means:
(a)
this Agreement;
(b)
any Fee Letter;
(c)
each Utilization Request;
(d)
any Security Document;
(e)
any Hedging Agreement;
(f)
any other document which is executed for the purpose of establishing any priority or subordination arrangement in relation to the Secured Liabilities; or
(g)
any other document designated as such by the Facility Agent and the Borrower.
"Finance Party " means the Bookrunners, the Facility Agent, the Security Agent, the Lead Arrangers, the Mandated Lead Arrangers, the Global Co-ordinators, the ECA Co-ordinator, the ECA Agent, a Lender or a Hedge Counterparty.
" Financial Covenants " means the covenants set forth in Clause 20 ( Financial Covenants ).
" Financial Indebtedness " means, in relation to a person (the " debtor "), a liability of the debtor:
(a)
for principal, interest or any other sum payable in respect of any moneys borrowed or raised by the debtor;
(a)
under any loan stock, bond, note or other security issued by the debtor;
(b)
under any acceptance credit, guarantee or letter of credit facility made available to the debtor;
(c)
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 IFRS;
(d)
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);
(e)
under a financial lease, a deferred purchase consideration arrangement or any other agreement having the commercial effect of a borrowing or raising of money by the debtor;
(f)
under any foreign exchange transaction, any interest or currency swap or any other kind of derivative transaction entered into by the debtor or, if the agreement under which any such transaction is entered into requires netting of mutual liabilities, the liability of the debtor for the net amount; or
(g)
under a guarantee, indemnity or similar obligation entered into by the debtor in respect of a liability of another person which would fall within paragraphs (a) to (f) if the references to the debtor referred to the other person.
" First Advance " has the meaning given to it in Clause 6.3 ( Consolidation of Repayment Dates ).
" First Fiscal Quarter Date " means in relation to a Vessel Loan, the earliest Fiscal Quarter Date that occurs immediately following a period of three Months after the Utilization Date of such Advance.
" First Ship Transfer Date " means the date on which ownership of the first Ship is transferred from the relevant Owner Guarantor to the Additional Borrower in accordance with Clause 24.13 ( Transfer of Ships ).
" Fiscal Quarter Date " means in relation to a Vessel Loan, (i) 31 March, 30 June, 30 September and 31 December of each calendar year commencing from the Utilization Date of such Vessel Loan up to but excluding the Second Amendment Effective Date and (ii) 15 January, 15 April, 15 July and 15 October of each calendar year commencing from (and including) the Second Amendment Effective Date.
" Fiscal Year " means, in relation to any person, each period of one (1) year commencing on January 1 of each year and ending on December 31 of such year in respect of which its accounts are or ought to be prepared.
" Flag Jurisdiction Transfer " shall mean the transfer of the registration and flag of a Ship from one Approved Flag to another Approved Flag in accordance with Clause 24.3 ( Flag Jurisdiction Transfer ).
" Flag Jurisdiction Transfer Date " shall mean the date on which a Flag Jurisdiction Transfer occurs.
" GAAP " means generally accepted accounting principles in the U.S., including, without limitation, those set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as approved by a significant segment of the accounting profession.
" General Assignment " means, in relation to a Ship, the general assignment creating Security over that Ship's Earnings, its Insurances and any Requisition Compensation in relation to that Ship, in agreed form.
" Governmental Authority " means the government of the United States, any other nation or any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
" Group " means the Additional Borrower and its Subsidiaries.
" Guarantors " means the Ultimate Parent Guarantor, the Parent Guarantor, the Shareholder and the Owner Guarantors (and each, a " Guarantor ").
" Hazardous Materials " means:
(a)
any petroleum or petroleum products, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, transformers or other equipment that contain dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b)
any chemicals, materials or substances defined as or included in the definition of "hazardous substances," "hazardous waste," "hazardous materials," "extremely hazardous substances," "restricted hazardous waste," "toxic substances," "toxic pollutants," "contaminants," or "pollutants," or words of similar import, under any applicable Environmental Law; and
(c)
any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Governmental Authority under Environmental Laws.
" Hedging Agreement " means each ISDA master agreement (together with the schedule thereto) made between the Borrower or the Parent Guarantor (as the case may be) and a Hedge Counterparty for the hedging of the Borrower's interest rate exposure under this Agreement.
" Hedging Obligation " means, with respect to the Borrower, any obligation to pay or perform under any agreement, contract or transaction that constitutes a "swap" within the meaning of section 1a(47) of the Commodity Exchange Act.
" IFRS " means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
" Immaterial Subsidiary " means any Subsidiary of the Ultimate Parent Guarantor (other than an Obligor and any Subsidiary who is an obligor or security provider in relation to the Re-financing Facility) which is dormant and the value of whose gross assets is $5,000,000 or less provided that the Ultimate Parent Guarantor has not guaranteed the obligations of such Immaterial Subsidiary.
" Indemnified Person " has the meaning given to it in Clause 14.2(b) ( Other indemnities ).
" Indemnified Taxes " shall mean (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower under any Finance Document and (b) to the extent not otherwise described in (a), Other Taxes.
" Insurances " means, in relation to a Ship:
(a)
all policies and contracts of insurance, including entries of that Ship in any protection and indemnity or war risks association, effected in relation to that Ship, the Earnings or otherwise in relation to that Ship whether before, on or after the date of this Agreement; and
(b)
all rights and other assets relating to, or derived from, any of such policies, contracts or entries, including any rights to a return of premium and any rights in relation to any claim whether or not the relevant policy, contract of insurance or entry has expired on or before the date of this Agreement.
" Intercompany Ship Delivery Agreement " means in relation to a Navig8 Ship, the ship delivery agreement entered into between amongst others, Subsidiary Inc., the relevant Owner Guarantor, the relevant Builder and the Borrower, together with the relevant assignment (and if applicable, nomination) agreement referred to therein, in the agreed form.
" Interest Period " means, in relation to an Advance, the Loan or any part of 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 ).
" 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 Organization, 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.
" ISSC " means an International Ship Security Certificate issued under the ISPS Code.
" KEXIM Funded Tranche " means the term loan of an aggregate principal amount of up to $197,412,033 to be provided by KEXIM to the Borrower under the terms of this Agreement, or as the context may require, in respect of each Vessel Loan, that portion of such aggregate principal amount corresponding to the relevant Ship as set out in Schedule 4 ( Tranches and Commitments ) or, as the context may require, the principal amount outstanding thereunder at the relevant time.
" KEXIM Funded Tranche Commitments " means the amount of $197,412,033 or as the context may require, in relation to the Vessel Loan, the amount set out in Schedule 4 ( Tranches and Commitments ) corresponding to the relevant Ship's name.
" KEXIM Funded Tranche Repayment Instalment " has the meaning given to it in Clause 6.1 ( Repayment of Loan).
" KEXIM Guarantee " means an absolute, irrevocable and unconditional first demand guarantee issued by KEXIM in the maximum principal amount of $139,675,594 (which includes the KEXIM Premium) in favour of the KEXIM Guaranteed Lenders, guaranteeing the obligations of the Borrower in form and substance acceptable to the ECA Agent acting with the authorization of the KEXIM Guaranteed Lenders.
" KEXIM Guaranteed Tranche " means the term loan of an aggregate principal amount of up to $139,675,594 (which includes the KEXIM Premium), to be provided by the KEXIM Guaranteed Lenders to the Borrower under the terms of this Agreement and fully guaranteed under the terms of the KEXIM Guarantee or, as the context may require, the principal amount outstanding thereunder at the relevant time.
" KEXIM Guaranteed Tranche Commitments " means:
(a)
in relation to a KEXIM Guaranteed Lender, the aggregate amount set forth opposite its name in Part A of Schedule 4 ( Tranches and Commitments ) in respect of the KEXIM Guaranteed Tranche or as the context may require, in relation to a KEXIM Guaranteed Lender and a Vessel Loan, that amount corresponding to that Ship to set out in Schedule 4 ( Tranches and Commitments) ; and
(b)
in relation to any other Lender, such amount assigned to it under this Agreement in respect of the KEXIM Guaranteed Tranche,
(c)
in each case, to the extent not cancelled, reduced or transferred by it under this Agreement.
" KEXIM Guaranteed Tranche Repayment Instalment " has the meaning given to it in Clause 6.1 ( Repayment of Loan).
" KEXIM Matters " means all communications and dealings with KEXIM in connection with the KEXIM Guarantee, any Finance Document, the Borrower and/or any other Obligor or any matters relating thereto (including, without limitation, obtaining any approvals and/or instructions from KEXIM).
" KEXIM Premium " means in relation to an Advance, such percentage of the KEXIM Guaranteed Tranche as specified in the relevant Fee letter (and as calculated and confirmed by KEXIM), and which shall be payable to KEXIM from the proceeds of the KEXIM Guaranteed Tranche in relation to such Advance on the Utilisation Date of such Advance.
" KEXIM Prepayment Fee " means a non-refundable prepayment fee of an amount equivalent to 0.50% of the amount prepaid or cancelled under the KEXIM Funded Tranche.
" KEXIM Put Option " has the meaning given to it in Clause 7.8 ( KEXIM and K-Sure Put Options).
" K-Sure " means Korea Trade Insurance Corporation of 14 Jongno, Jongno-gu, Seoul 110-729, Republic of South Korea.
" K-Sure Insurance Policy " means, in respect of a Ship, the policy of the Medium and Long term Export Insurance Policy, incorporating (i) the general terms and conditions of the Medium and Long Term Export Insurance (Buyer's Credit, Standard Type) and (ii) the special terms and conditions attached thereto, and issued or to be issued by K-SURE, providing political and commercial risk cover in an amount of up to 95% of the relevant portion of the K-Sure Tranche utilized in respect of the Vessel Loan of such Ship (including for the avoidance of doubt, the K-Sure Premium) outstanding from time to time and accrued interest thereunder.
" K-Sure Matters " means all communications and dealings with K-Sure in connection with each K-Sure Insurance Policy, any Finance Document, the Borrower and/or any other Obligor or any matters relating thereto (including, without limitation, obtaining any approvals and/or instructions from K-Sure).
" K-Sure Notice " means the written notice issued by K-Sure confirming that it has obtained all relevant approvals and other necessary consents for the purpose of authorising the issuance of the K-Sure Insurance Policies.
" K-Sure Premium " means in relation to an Advance, subject to Clause 33.24 ( K-Sure Premium and K-Sure ), 4.747% of the K-sure Tranche (excluding such portion required for the funding thereof), as calculated and confirmed by K-Sure, and which shall be payable from the proceeds of the K-Sure Tranche in relation to each Advance on the date of Utilization of that Advance.
" K-Sure Put Option " has the meaning given to it in Clause 7.8 ( KEXIM and K-Sure Put Option) .
" K-Sure Tranche " means the term loan of an aggregate principal amount of up to $344,638,638 (which includes the K-Sure Premium), to be provided by the K-Sure Lenders to the Borrower under the terms of this Agreement and which is secured by the K-Sure Insurance Policies or, as the context may require, the principal amount outstanding thereunder at any relevant time.
" K-Sure Tranche Commitments " means:
(a)
in relation to a K-Sure Lender, the aggregate amount set forth opposite its name in Part A of Schedule 4 ( Tranches and Commitments ) in respect of the K-Sure Tranche or as the context may require, in relation to such K-Sure Lender and a Vessel Loan of a Ship, that amount corresponding to that Ship as set out in Schedule 4 ( Tranches and Commitments) ; and
(b)
in relation to any other Lender, such amount assigned to it under this Agreement in respect of the K-Sure Tranche,
(c)
in each case, to the extent not cancelled, reduced or transferred by it under this Agreement.
" K-Sure Tranche Repayment Instalment " has the meaning given to it in Clause 6.1 ( Repayment of Loan).
" Leaseholds " of any person shall mean all the right, title and interest of such person as lessee or licensee in, to and under leases or licenses of land, improvements and/or fixtures.
" Lender " means:
(a)
any Original Lender; and
(b)
any bank, financial institution, trust, fund or other entity which has become a Party in accordance with Clause 28 ( Changes to the Lenders ),
which in each case has not ceased to be a Party in accordance with this Agreement.
" Lender Default " means, as to any Lender:
(a)
the wrongful refusal (which has not been retracted) of such Lender make available its portion of any Utilization,
(b)
such Lender having been deemed insolvent or having become the subject of a bankruptcy or insolvency proceeding or a takeover by a regulatory authority, or
(c)
such Lender having notified the Facility Agent and/or any Obligor:
(i)
that it does not intend to comply with its obligations under Clause 5.4 ( Lender's participation ) in circumstances where such non-compliance would constitute a breach of such Lender's obligations under the respective Clause or
(ii)
of the events described in the preceding paragraph (b),
(iii)
provided that, no Lender Default shall occur under paragraph (b) solely as a result of the acquisition or maintenance of an ownership interest in such Lender or Person controlling such Lender or the exercise of control over such Lender or Person controlling such Lender by a Governmental Authority or an instrumentality thereof, so long as such ownership or controlling interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender.
" LIBOR " means, in relation to any Advance, the Loan, any part of the Loan or any Unpaid Sum:
(a)
the applicable Screen Rate as of the Specified Time for dollars and for a period equal in length to the Interest Period of the relevant Advance, the Loan, the relevant part of the Loan or the Unpaid Sum; or
(b)
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.
" LMA " means the Loan Market Association or any successor organisation.
" Loan " means the aggregate principal amount outstanding for the time being of the borrowings under this Agreement.
" Major Casualty " means, in relation to a Ship, any casualty to that Ship in relation to which the claim or the aggregate of the claims against all insurers, before adjustment for any relevant franchise or deductible, exceeds $5,000,000 or the equivalent in any other currency.
" Majority Lenders " means:
(a)
if no Advance has yet been made, or if only some of the Vessel Tranches (but not all of the Vessel Tranches) have been utilized, a Lender or Lenders whose Commitments aggregate more than 66⅔ percent of the Total Commitments; or
(b)
at any other time, a Lender or Lenders whose participations in the Loan aggregate more than 66⅔ percent of the amount of the Loan then outstanding, or, if the Loan has been repaid or prepaid in full, a Lender or Lenders whose participations in the Loan immediately before repayment or prepayment in full aggregate more than 66⅔ percent of the Loan immediately before such repayment,
(c)
provided that any Majority Lenders' decision shall always include at least one Commercial Lender and for the avoidance of doubt, KEXIM's decision alone shall not satisfy the requirement of 66⅔ for any Majority Lenders' decision, and provided, further, that if any Lender shall be a Defaulting Lender at such time, then such Defaulting Lender's Commitment or participation in the Loan shall be excluded from the determination of Majority Lenders for so long as such Lender is a Defaulting Lender.
" Manager's Undertaking " means, in relation to a Ship, the letter of undertaking from each of the relevant Approved Managers in respect of such Ship in agreed form.
" Margin " means:
(a)
in relation to the Commercial Tranche, 2.75% per annum;
(b)
in relation to the KEXIM Guaranteed Tranche, 1.50% per annum;
(c)
in relation to the KEXIM Funded Tranche, 2.60% per annum; and
(d)
in relation to the K-Sure Tranche, 1.70% per annum.
" Master Agreement " means in respect of a Scorpio Ship, the master agreement dated 18 March 2014 entered into between the Shareholder as buyer and Scorpio Tankers Inc. as seller, for the purchase by the Shareholder of the all the membership interests of each of the Owner Guarantors which is a party to the Shipbuilding Contract of that Ship.
" Material Adverse Effect " means a material adverse effect on:
(a)
the business, property, assets, liabilities, condition (financial or otherwise) of any Obligor and its Subsidiaries taken as a whole,
(b)
the validity or enforceability of, or the effectiveness or ranking of any Security granted or intended to be granted pursuant to any of, the Finance Documents or the rights and remedies of any Finance Party under any Finance Documents; or
(c)
the ability of any Obligor and its Subsidiaries, taken as a whole, to perform its or their obligations under any Finance Document.
" Maximum Contract Price " means, in relation to a Ship, the maximum contract price set out in the corresponding column under the heading "Maximum Contract Price" in Schedule 8 ( Details of the Ships ).
" Merger " means the stock-for-stock merger for the entire issued and outstanding share capital of Gener8 Maritime, Inc., pursuant to which Gener8 Maritime, Inc. would become a wholly-owned subsidiary of Euronav.
" Merger Agreement " means the merger agreement in respect of the Merger entered into between Euronav, Euronav MI Inc. and Gener8 Maritime, Inc..
" Minimum Liquidity Account " means the account in the name of the Parent Guarantor with the Account Bank designated "Gener8 Maritime, Inc. -Minimum Liquidity Account (KEXIM)".
" Minimum Liquidity Amount " means a pro rata amount corresponding with the proportion that the outstanding Vessel Loans of all the Lenders hereunder in relation to the Ships then owned by an Owner Guarantor bear to the aggregate outstanding loans of the Re-financing Facility and the outstanding Loan of all Lenders hereunder of an amount equivalent to the greater of:
(a)
$50,000,000; and
(b)
5.0% of Total Indebtedness.
" Moody's " means Moody's Investors Service, Inc., a subsidiary of Moody's Corporation, and its successors.
" Month " means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
(a)
(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(b)
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
(c)
if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
The above rules will only apply to the last Month of any period.
" Mortgage " means, in relation to a Ship, a first preferred or priority (as the case may be) mortgage on that Ship and as amended and supplemented by the Mortgage Addendum in the form appropriate to the relevant Approved Flag and such mortgage to be in agreed form. And, where the relevant Approved Flag is Belgian or French flag, the amount secured by a mortgage on such Ship shall be limited to 125 per cent. of the Fair Market Value of the relevant Ship as at the date of the relevant mortgage (provided always that it is acknowledged that if 125 per cent. of the Fair Market Value is less than 125 per cent. of the amount of the Loan made available for such Ship, the secured amount will be 125 per cent. of the aggregate Tranches applicable to that Ship).
" Mortgage Addendum " means the addendum to each Mortgage executed on or around the Effective Date.
" Navig8 Group " shall mean Navig8 Ltd. and its Affiliates.
" Navig8 Ship " means each of Ship A. Ship B, Ship C, Ship D, Ship E, Ship F, Ship G and Ship H (and any two or more collectively, the " Navig8 Ships ").
" Non-Defaulting Lenders " means all Lenders other than the Defaulting Lender(s).
" Non-ECA Ships " mean each of Ship G and Ship H (and each or either of them, a " Non-ECA Ship ").
" Non-ECA Vessel Loans " means the Vessel Loans in relation to the Non-ECA Ships.
" Non-Lender " means a bank or financial institution who is not a Lender or an Affiliate of a Lender.
" Non-Lender Designated Transaction " means, in relation to the Borrower, a transaction which fulfils the following requirements:
(a)
it is entered into by the Borrower pursuant to a Non-Lender Hedging Agreement with a Non-Lender; and
(b)
its purpose is the hedging of all or part of the Borrower's exposure to fluctuations in:
(i)
LIBOR arising from the funding of the Loan, or any part thereof for a period expiring no later than the final Termination Date or
(ii)
currency or any other purpose or risks as agreed by a Non-Lender.
" Non-Lender Hedging Agreement " means each ISDA master agreement (together with the schedule thereto)made or to be between the Borrower and a Non-Lender and includes all Non-Lender Designated Transactions from time to time entered into and Confirmations of Non-Lender Designated Transactions from time to time exchanged under such master agreement.
" Obligor " means the Borrower, the Parent Guarantor, the Shareholder, an Owner Guarantor or a Hedge Guarantor.
" OPA " means the Oil Pollution Act of 1990, as amended, 33 U.S.C. § 2701 et seq.
" Original Financial Statements " means, in relation to the Parent Guarantor, the audited consolidated financial statements of the Group for its Fiscal Year ended 2014.
" Other Hedging Agreement" means any foreign exchange contracts, currency swap agreements, commodity agreements or other similar agreement or arrangements designed to protect against fluctuations in currency and commodity values, and shall for the avoidance of doubt, exclude any agreement to hedge interest rate fluctuations.
" Other Permitted Security " has the meaning ascribed thereto in Clause 21.21(a) ( Negative pledge ).
" Owner Guarantor A ", " Owner Guarantor B ", " Owner Guarantor C ", " Owner Guarantor D ", " Owner Guarantor E ", " Owner Guarantor F ", " Owner Guarantor G ", " Owner Guarantor H ", " Owner Guarantor I ", " Owner Guarantor J ", " Owner Guarantor K ", " Owner Guarantor L ", " Owner Guarantor M ", " Owner Guarantor N " and " Owner Guarantor O " have the meanings set out in Schedule 8 ( Details of the Ships ).
" pari passu ", when used with respect to the ranking of any Financial Indebtedness of any person in relation to other Financial Indebtedness of such person, means that each such Financial Indebtedness:
(a)
either (i) is not subordinated in right of payment to any other Financial Indebtedness of such person or (ii) is subordinate in right of payment to the same Financial Indebtedness of such person as is the other and is so subordinate to the same extent; and
(b)
is not subordinate in right of payment to the other or to any Financial Indebtedness of such person as to which the other is not so subordinate.
" Participating Member State " means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.
" PATRIOT Act " means the United States Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001.
" Party " means a party to this Agreement.
" Permitted Encumbrance " means:
(a)
in relation to Real Property, easements, rights-of-way, restrictions, encroachments, exceptions to title and other similar charges or encumbrances; and
(b)
in relation to any Ship or any asset which is subject to Security under a Finance Document, any Permitted Security; and
(c)
in relation to any other property not referred to in paragraphs (a) and (b) above, charges or encumbrances over such property arising in the ordinary course of business which do not materially diminish the value of such property.
" Permitted Holders " means each of Saverco and Victrix (and (in each case) any parallel vehicle thereof and their respective alternative investment vehicles) and their affiliates.
" Permitted Security " means:
(a)
Security created by the Finance Documents;
(b)
any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;
(c)
liens for unpaid master's and crew's wages in accordance with usual maritime practice;
(d)
liens for salvage;
(e)
liens for master's disbursements incurred in the ordinary course of trading;
(f)
any Security created in favour of a plaintiff or defendant in any action of the court or tribunal before whom such action is brought as security for costs and expenses where the Borrower is prosecuting or defending such proceedings or arbitration in good faith by appropriate steps provided such Security does not (and is not likely to) result in any sale, forfeiture or loss of a Ship;
(g)
Security arising by operation of law in respect of taxes which are not overdue for payment or in respect of taxes being contested in good faith by appropriate steps and in respect of which appropriate reserves have been made; and
(h)
any other lien arising by operation of law or otherwise in the ordinary course of the operation, repair or maintenance of any Ship and not as a result of any default or omission by any Obligor,
provided that such liens do not secure amounts more than 30 days overdue and, in the case of liens for repair or maintenance, such liens do not secure any amounts exceeding $1,000,000.
" Person " means any individual, partnership, joint venture, firm, corporation, association, trust or other enterprise or any government or political subdivision or any agency, department or instrumentality thereof.
" Pool Agreement " means, in relation to a Ship, a pool management for a duration of 12 months or more entered into or to be entered into by (or as may be novated to) the relevant Owner Guarantor or Additional Borrower (as the case may be) of that Ship and a Pool Manager (as amended and/or supplemented from time to time).
" Pool Manager " means, in relation to a Ship, Tankers International Pool, VL8 Pool Inc., V8 Pool Inc., Unique Tankers LLC, any Affiliate of the Parent Guarantor (provided that the requirements of Clause 21.30 ( Other transactions ) shall be satisfied with respect thereto) or any other reputable pool manager (provided that the Parent Guarantor shall give the Facility Agent at least 30 days' prior written notice of the inclusion of the relevant Ship (to which such pool manager relates) in a new Pool Agreement).
" Potential Event of Default " means any event or circumstance specified in Clause 27 ( Events of Default ) 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.
" Previous Merger " means the merger of Gener8 Maritime Acquisition, Inc. into Navig8 Crude Tankers, Inc. with the Parent Guarantor as the surviving entity pursuant to the Merger Agreement.
" Previous Merger Agreement " means the agreement and plan of merger dated 24 February 2015 entered into between, amongst others, General Maritime Corporation, Gener8 Maritime Acquisition, Inc. and Navig8 Crude Tankers, Inc in connection with inter alia, the proposed reverse subsidiary merger between Navig8 Crude Tankers, Inc. and Gener8 Maritime Acquisition, Inc.
" Projections " means the Parent Guarantor's forecasted consolidated and consolidating:
(a)
balance sheets;
(b)
profit and loss statements;
(c)
cash flow statements; and
(d)
capitalization statements,
(e)
all prepared on a Subsidiary by Subsidiary basis and based upon good faith estimates and assumptions believed by the Parent Guarantor to be reasonable at the time made, together with appropriate supporting details and a statement of underlying assumptions.
" Put Options " means the KEXIM Put Option and the K-Sure Put Option (and each, a " Put Option ").
" Qualified ECP Guarantor " means, in respect of any Hedging Obligation, each Hedge Guarantor that has total assets exceeding $10,000,000 at the time the relevant guarantee or grant of the relevant security interest becomes effective with respect to such Hedging Obligation or such other person as constitutes an "eligible contract participant" under the Commodity Exchange Act or any regulations promulgated thereunder and can cause another person to qualify as an "eligible contract participant" at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
" Qualified Preferred Stock " means any preferred stock so long as the terms of any such preferred stock:
(a)
do not contain any mandatory put, redemption, repayment, sinking fund or other similar provision occurring no earlier than one year after the last Termination Date,
(b)
do not require the cash payment of dividends and
(c)
any other preferred stock that:
(i)
satisfies paragraph (a) of this definition of Qualified Preferred Stock and
(ii)
that is otherwise issuable or may be distributed pursuant to a shareholders' rights plan of the Parent Guarantor; provided, however, any Dividend or similar feature of such Qualified Preferred Stock shall only be declared and paid in accordance with Clause 21.28 ( Dividends ).
" Qualified Sanctions " means any economic or financial sanctions, regulations, trade embargoes or other restrictive measures imposed, administered, enacted or enforced from time to time by the United Nations Security Council, the European Union, the German Bundesbank , the Federal Ministry of Economics and Energy ( Bundesministerium für Wirtschaft und Energie ) or other competent authorities of the Federal Republic of Germany.
" Qualified Sanctions Lender " means Landesbank Hessen-Thueringen Girozentrale and any other Lender that has notified the Facility Agent in writing that it wishes to be treated as a Qualified Sanctions Lender.
" 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 Facility Agent in accordance with market practice in the Relevant 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).
" Rating Agencies " means:
(a)
S&P and Moody's; or
(b)
if S&P or Moody's or both of them are not making ratings of securities publicly available, a nationally recognized U.S. rating agency or agencies, as the case may be, selected by the Facility Agent with the consent of the Majority Lenders, which will be substituted for S&P or Moody's or both, as the case may be.
" Real Property " of any person shall mean all the right, title and interest of such person in and to land, improvements and fixtures, including Leaseholds.
" Receiver " means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.
" Re-financing Facility " means the term loan facility of up to $581,000,000 to be provided by certain banks and financial institutions to the Parent Guarantor and certain of its Subsidiaries to inter alia, re-finance certain loans obtained by the Parent Guarantor and certain of its Subsidiaries in respect of its existing fleet of ships.
" Re-financing Facility Credit Agreement " means the credit agreement dated on or about the date of this Agreement and to be executed by, inter alia, the Parent Guarantor and certain of its Subsidiaries in respect of the Re-financing Facility.
" Related Fund " in relation to a fund (the " first fund "), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
" Relevant Advance " has the meaning given to it in Part B of Schedule 2 ( Conditions Precedent ).
" Relevant Person " means:

(a)
the Ultimate Parent Guarantor;
(b)
each subsidiary of the Ultimate Parent Guarantor; and
(c)
all respective directors, officers, employees, agents and representatives of each of the persons mentioned in paragraphs (a) to (b) above;
" Relevant Interbank Market " means the London interbank market.
" Repayment Date " means each date on which a Repayment Instalment is required to be paid under Clause 6.1 ( Repayment of Loan).
" Repayment Instalments " means the Commercial Tranche Repayment Instalments, the KEXIM Guaranteed Tranche Repayment Instalments, the KEXIM Funded Tranche Repayment Instalments and the K-Sure Tranche Repayment Instalments (and each, a " Repayment Instalment ").
" Repeating Representation " means each of the representations set out in Clause 18.2 ( Corporate / Limited Liability Company/ Limited Partnership Status), 18.3 ( Corporate power and authority; legal validity and enforceability) , 18.4 ( Pari passu ranking) , 18.5 ( No violation), 18.6 ( Government approvals), 18.7 (Financial statements; Financial condition; Undisclosed Liabilities) 18.8 (Litigation), 18.10 ( Use of proceeds, Margin Regulations), 18.12 ( Subsidiaries) 18.14 (Compliance with statutes etc.) , Clause 18.15 ( Anti-money laundering; anti-corruption) and Clause 18.17 ( Sanctions) and any representation of any Obligor made in any other Finance Document that is expressed to be a "Repeating Representation" or is otherwise expressed to be repeated.
" Replacement Finance Documents " means, in relation to a Ship, a Mortgage, Deed of Covenant (if applicable), General Assignment and Manager's Undertaking (if applicable) in relation to the relevant Ship executed by the Additional Borrower.
" Representative " means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.
" Requisition " means, in relation to a Ship:
(a)
any expropriation, confiscation, requisition (excluding a requisition for hire or use which does not involve a requisition for title) or acquisition of that Ship, whether for full consideration, a consideration less than its proper value, a nominal consideration or without any consideration, which is effected (whether de jure or de facto ) by any government or official authority or by any person or persons claiming to be or to represent a government or official authority; and
(b)
any capture or seizure of that Ship (including any hijacking or theft) by any person whatsoever.
" Requisition Compensation " includes all compensation or other moneys payable to a Borrower by reason of any Requisition or any arrest or detention of a Ship in the exercise or purported exercise of any lien or claim.
" Required Insurance " means insurance as set forth in Clause 22 ( Insurance Undertakings ) hereto.
" Restricted Party " means any Person:
(a)
that is listed on any Sanctions List or against whom Sanctions Laws are directed (whether designated by name or by reason of being included in a class of person);
(b)
that is domiciled, registered as located or having its main place of business in, or is incorporated under the laws of, a country which is subject to Sanctions Laws which attach legal effect to being domiciled, registered as located or having its main place of business in such country; or
(c)
that is directly or indirectly owned or controlled by a person referred to in paragraph (a) and/or (b) above;
(d)
with which any member of the Group is prohibited from dealing or otherwise engaging in a transaction with by any Sanctions Laws.
" Restricted Payment " shall have the meaning provided in Clause 21.28 ( Dividends ).
" Returns " has the meaning provided in paragraph (b) of Clause 18.11 ( Tax Returns and Payments ).
" S&P " means Standard & Poor's Ratings Services, a division of The McGraw Hill Companies Inc., and its successors.
" Safety Management Certificate " has the meaning given to it in the ISM Code.
" Safety Management System " has the meaning given to it in the ISM Code.
" Sanctions Authority " means the United Nations, the United Kingdom, the European Union, the member states of the European Union, the United States of America and any authority acting on behalf of any of them in connection with Sanctions Laws.
" 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, vessels or entities published in connection with Sanctions Laws by or on behalf of any Sanctions Authority as amended, revised, supplemented or substituted from time to time.
" Saverco " means Saverco NV, a company incorporated in Belgium whose registered office is at de Gerlachekaai 20, B-2000 Antwerp, Belgium.
" Scheduled Delivery Date " means, in relation to a Ship, the scheduled date of delivery of that Ship as set out in the corresponding column under the heading "Scheduled Delivery Date" in Schedule 8 ( Details of the Ships ).
" Scorpio Ship " means each of Ship I. Ship J, Ship K, Ship L, Ship M, Ship N and Ship O (and any two or more collectively, the " Scorpio Ships ") .
" 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 dollars for the relevant period displayed on page LIBOR01 of the Thomson Reuters screen (or such other service as may be nominated by the ICE Benchmark Administration (or the successor thereto if the ICE Benchmark Administration is no longer making a London Interbank Offered Rate available)) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters; provided that if the Screen Rate shall be less than zero, such rate shall be deemed to be zero for the purpose of this Agreement. If such page or service ceases to be available, the Facility Agent may specify another page or service displaying the relevant rate after consultation with the Borrower.
" Second Amendment Effective Date " means the date on which the conditions precedent required pursuant to clause 5 of the Second Amendment Agreement were met.
" Second Amendment Agreement " means the second amendment agreement to this Agreement dated 24 March 2017 and entered into by and among (i) the Original Borrower, (ii) the Owner Guarantors and Hedge Guarantors, (iii) the Parent Guarantor, (iv) the Lenders, (v) KEXIM, (vi) the ECA Agent, (vii) the Facility Agent and (viii) the Security Agent.
" Secured Liabilities " means all present and future obligations and liabilities, (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Obligor to any Secured Party under or in connection with each Finance Document.
" Secured Party " means each Finance Party from time to time party to this Agreement and any Receiver or Delegate.
" Secured Transaction " means a Transaction which, at the time it was entered into, fulfilled the following requirements:
(a)
it is entered into by the Borrower pursuant to a Hedging Agreement with a Hedge Counterparty;
(b)
its purpose is to mitigate the Borrower's exposure under this Agreement to fluctuations in LIBOR in relation to the Loan;
(c)
as at the time the Transaction is entered into, the aggregate notional principal amount of all other continuing Secured Transactions, which are intended to provide a hedge with respect to the Loan, together with such Transaction, do not exceed the amount of the Loan; and
(d)
it is for a term not less than 12 months.
" Security " means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), preference, priority or other security interest of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the UCC or any other similar recording or notice statute, and any lease having substantially the same effect as any of the foregoing) or any other agreement or arrangement having the effect of conferring security.
" Security Assets " means all of the assets of the Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.
" Security Assets Disposition " means
(a)
the sale, lease, transfer, bareboat charter or other disposition of Security Assets by the Parent Guarantor or any of its Subsidiaries to any Person other than the Parent Guarantor or any Subsidiary of the Parent Guarantor or
(b)
any Total Loss of any Ship;
provided, however, that any charter of a Ship shall not be considered a Security Assets Disposition for purposes of Clause 7.6 ( Mandatory prepayment on sale or Total Loss ).
" Security Document " means:
(a)
any Shares Security;
(b)
any Assignment;
(c)
any General Assignment;
(d)
any Mortgage;
(e)
any Account Security;
(f)
any Manager's Undertaking;
(g)
any other document (whether or not it creates Security) which is executed as security for the Secured Liabilities; or
(h)
any other document designated as such by the Facility Agent and the Borrower.
" Security Period " means the period starting on or about the date of this Agreement (but no later than the first Utilization Date) and ending on the date on which the Facility Agent is satisfied that there is no outstanding Commitment in force and that the Secured Liabilities have been irrevocably and unconditionally paid and discharged in full.
" Security Property " means:
(a)
the Transaction Security expressed to be granted in favor of the Security Agent as security agent for the Secured Parties and all proceeds of that Transaction Security;
(b)
the Security Agent's interest in any trust created under the Finance Documents; and
(c)
any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Secured Parties,
except:
(i)
rights intended for the sole benefit of the Security Agent; and
(ii)
any moneys or other assets which the Security Agent has transferred to the Facility Agent or (being entitled to do so) has retained in accordance with the provisions of this Agreement.
" Security Requirements " means, with respect to a Ship, each of the requirements set out in Clause 24.4 ( Security Requirements ).
" Servicing Party " means the ECA Agent, the Facility Agent or the Security Agent.
" Shareholder " means Gener8 Maritime Subsidiary V Inc. (formerly known as VLCC Acquisition I Corporation), a corporation incorporated under the laws of Marshall Islands with registered number 67634 whose registered office is at Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, Marshall Islands MH96960.
" Shares Security " means, in relation to each of the Borrower, the Shareholder and the Owner Guarantors, a document creating Security over the Equity Interests of the Borrower, the Shareholder or as the case may be, such Owner Guarantor, in agreed form.
" Ship " means each of the ships set out in the corresponding column under the heading "Ship" in Schedule 8 ( Details of the Ships ).
" Ship A ", " Ship B " , " Ship C " , " Ship D " , " Ship E " , " Ship F " , " Ship G " , " Ship H " , " Ship I " , " Ship J " , " Ship K " , " Ship L " , " Ship M ", " Ship N " and " Ship O " have the meanings out in Schedule 8 ( Details of the Ships ).
" Shipbuilding Contract " means, in relation to a Ship, the relevant shipbuilding contract set out in the corresponding column under the heading "Shipbuilding Contract" in Schedule 8 ( Details of the Ships ) entered into or to be entered into by the relevant Builder and the relevant Owner Guarantor or its Affiliate, for the construction of that Ship (as amended and supplemented from time to time with the prior written consent of the Lenders) and:
(a)
including without limitation, in the case of each of the Navig8 Ship, supplemented by and read together with the Intercompany Ship Delivery Agreement relating to such Ship;  and
(b)
including without limitation, in the case of each of the Scorpio Ship, the Master Agreement and (if applicable) any novation or other agreement entered or to be entered into by the relevant Owner Guarantor and the relevant Builder.
" Ship Management Agreement " means a Technical Management Agreement or a Commercial Management Agreement.
" Solvent " shall mean, with respect to any Person on a particular date, that on such date:
(a)
the sum of the fair market value of the assets, at a fair valuation, of such Person (on a stand-alone basis) and of such Person and its Subsidiaries (taken as a whole) will exceed its or their respective debts;
(b)
the sum of the present fair saleable value of the assets of such Person (on a stand-alone basis) and of such Person and its Subsidiaries (taken as a whole) will exceed its or their respective debts;
(c)
such Person (on a stand-alone basis) and such Person and its Subsidiaries (taken as a whole) has or have not incurred and does or do not intend to incur, and does or do not believe that it or they will incur, debts beyond its or their respective ability to pay such debts as such debts mature; and
(d)
such Person (on a stand-alone basis) and such Person and its Subsidiaries (taken as a whole) will have sufficient capital with which to conduct its or their respective businesses,
and for purposes of this definition, "debt" means any liability on a claim, and "claim" means (x) right to payment, whether or not such a right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (y) right to an equitable remedy for breach of performance if such breach gives rise to a payment, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
" Specified Time " means a day or time determined in accordance with Schedule 14 ( Timetables ).
" Stock Buy-Back " shall mean, with respect to any Person, that such Person or any Subsidiary of such Person shall have redeemed, retired, purchased or otherwise acquired, directly or indirectly, for a consideration (other than common stock, Qualified Preferred Stock or the right to purchase any such stock of such Person), any shares of any class of its capital stock or membership interests outstanding on or after the date of this Agreement (or any options or warrants issued by such Persons with respect to its capital stock).
" Subsequent Ship Transfer Date " means the date on which ownership of each subsequent Ship is transferred from the relevant Owner Guarantor to the Additional Borrower in accordance with Clause 24.13 ( Transfer of Ships ).
" Subsidiary " a company (S) is a subsidiary of another company (P) if:
(a)
a majority of the issued shares in S (or a majority of the issued shares in S which carry unlimited rights to capital and income distributions) are directly owned by P or are indirectly attributable to P; or
(b)
P has direct or indirect control over a majority of the voting rights attaching to the issued shares of S; or
(c)
P has the direct or indirect power to appoint or remove a majority of the directors of S; or
(d)
P otherwise has the direct or indirect power to ensure that the affairs of S are conducted in accordance with the wishes of P;
and any company of which S is a subsidiary is a parent company of S.
" Subsidiary Inc." means Gener8 Maritime Subsidiary Inc., a corporation incorporated and existing under the laws of the Republic of the Marshall Islands.
" Swap Exposure " means, as at any relevant date, the aggregate of the amount certified by each of the Hedge Counterparties to the Facility Agent to be the net amount in Dollars (i) in relation to all Secured Transactions that have been closed out on or prior to the relevant date, that is due and owing by the Borrower to that Hedge Counterparty in respect of such Secured Transactions on the relevant date and (ii) in relation to all Secured Transactions that are continuing on the relevant date, that would be payable by the Borrower to that Hedge Counterparty under (and calculated in accordance with) the early termination provisions of the Hedging Agreement to which it is a party as if an Early Termination Date had occurred on the relevant date in relation to all such continuing Secured Transactions.
" Tankers International Pool " means the Tankers International tanker pool governed by Tankers International Limited with its registered office at 81 Kings Road, London SW3 4NX, United Kingdom.
" Taxes " means all taxes, levies, imposts, duties, fees, assessments, deductions, withholdings or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties imposed with respect thereto.
" Technical Management Agreement " means, in relation to a Ship, the agreement entered into between the relevant Owner Guarantor or Additional Borrower (as the case may be) and the Approved Technical Manager regarding the technical management of such Ship in agreed form.
" Termination Date " means in relation to a Vessel Loan:
(a)
in respect of the Commercial Tranche relating thereto, the date which is the earlier of (i) the date falling 60 Months from the Utilization Date of that Vessel Loan and (ii) 30 June 2022; and
(b)
in respect of each of the KEXIM Guaranteed Tranche, the KEXIM Funded Tranche and the K-Sure Tranche relating thereto, the date falling 144 Months from the Utilization Date of that Vessel Loan (subject to the Put Options).
" Total Commitments " means the aggregate of the Commercial Tranche Commitments, the KEXIM Guaranteed Tranche Commitments, the KEXIM Funded Tranche Commitments and the K-Sure Tranche Commitments, being $963,743,455 (which includes the relevant KEXIM Premium and K-Sure Premium) as at the date of this Agreement.
" Total Loss " means any of the following events:
(a)
the actual or constructive total loss of a Ship or the agreed or compromised total loss of a Ship; or
(b)
the capture, condemnation, confiscation, expropriation, requisition for title and not hire, purchase, seizure or forfeiture of, or any taking of title to, a Ship or any arrest or detention of that Ship (including any hijacking or theft) unless it is within 30 days redelivered to the full control of the relevant Owner Guarantor or Additional Borrower (as the case may be).
" Total Loss Date " means in relation to a "Total Loss" of a Ship:
(a)
in the event of an actual loss of a Ship, at the time and on the date of such loss or if that is not known at noon Greenwich Mean Time on the date which such Ship was last heard from;
(b)
in the event of damage which results in a constructive or compromised or arranged total loss of a Ship, at the time and on the date of the event giving rise to such damage; or
(c)
in the case of any other type of total loss, the date (or the most likely date) on which it appears to the Facility Agent that the event constituting the total loss occurred.
" Tranches " means the Commercial Tranche, the KEXIM Guaranteed Tranche, the KEXIM Funded Tranche and the K-Sure Tranche (and each, a " Tranche ").
" Transaction " has the meaning given in a Hedging Agreement.
" Transaction Document " means:
(a)
a Finance Document;
(b)
any Shipbuilding Contract;
(c)
any Charter or Pool Agreement; and
(d)
any other document designated as such by the Facility Agent and the Borrower.
" Transaction Obligor " means an Obligor, any Approved Manager or any other member of the Group who executes a Transaction Document.
" Transaction Security" means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.
" Transfer Certificate " means a certificate in the form set out in Schedule 5 ( Form of Transfer Certificate ) or any other form agreed between the Facility Agent and the Borrower.
" 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 Facility Agent executes the relevant Assignment Agreement or Transfer Certificate.
" UCC " means the Uniform Commercial Code of the State of New York.
" Unpaid Sum " means any sum due and payable but unpaid by an Obligor under the Finance Documents.
" Unrestricted Cash and Cash Equivalents " means, when referring to cash or Cash Equivalents of the Parent Guarantor or any of its Subsidiaries, that such cash or Cash Equivalents:
(a)
does not appear (or would not be required to appear) as "restricted" on a consolidated balance sheet of the Parent Guarantor or of any such Subsidiary;
(b)
are not subject to any Security in favor of any Person other than the Security Agent for the benefit of the Finance Parties and the Collateral Agent (as defined in the Re-financing Facility Credit Agreement) for the benefit of the Secured Creditors under and as defined in the Re-financing Facility Credit Agreement (provided that any cash or Cash Equivalents of the Parent Guarantor or any Subsidiary that are subject to such Security may be included in the calculation of Minimum Liquidity Amount); or
(c)
are otherwise generally available for use by the Parent Guarantor or such Subsidiary.
" U.S. " means the United States of America.
" Utilization " means a utilization of the Facility.
" Utilization Date " means the date of an Utilization, being the date on which the relevant Advance is to be made.
" Utilization Request " means a notice substantially in the form set out in Schedule 3 ( Utilization Requests ).
" 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 paragraph (a) above, or imposed elsewhere.
" Vessel Loan " means in relation to a Ship, the part of the Facility made or to be made available to the Borrower of up to the lowest of (i) 65 per cent of the Contract Price of that Ship; (ii) 65 per cent of the Maximum Contract Price of that Ship; and (iii) 60 percent of the Fair Market Value of that Ship, in any case, which includes the relevant K-Sure Premium and the relevant KEXIM Premium (if applicable) payable in relation to such Ship, or as the context may require, the aggregate principal amount outstanding in relation thereto.
" Victrix " means Victrix NV, a company incorporated in Belgium whose registered office is at Le Grellelei 20, 2600 Berchem, Belgium.
" Wholly-Owned Subsidiary " means, as to any Person,
(a)
any corporation 100% of whose capital stock (other than director's qualifying shares) is at the time directly or indirectly owned by such Person and/or one or more Wholly-Owned Subsidiaries of such Person; and
(b)
any partnership, limited liability company, association, joint venture or other entity in which such Person and/or one or more Wholly-Owned Subsidiaries of such Person has directly or indirectly a 100% equity interest at such time.
" 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 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.
1.2
Construction
(a)
Unless a contrary indication appears, a reference in this Agreement to:
(i)
the " Account Bank ", any " Mandated Lead Arranger ", any " Lead Arranger ", the " Facility Agent ", any " Finance Party ", any " Hedge Counterparty ", any " Lender ", any " Obligor ", any " Party ", any " Secured Party ", the " Security Agent ", the " ECA Agent ", either " Global Co-ordinator ", the " ECA Co-ordinator ", the " Commercial Tranche Co-ordinator ", any " Transaction Obligor " or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents;
(ii)
" assets " includes present and future properties, revenues and rights of every description;
(iii)
a liability which is " contingent " means a liability which is not certain to arise and/or the amount of which remains unascertained;
(iv)
" document " includes a deed and also a letter, email, fax or telex;
(v)
" expense " means any kind of cost, charge or expense (including all legal costs, charges and expenses) and any applicable Tax including VAT;
(vi)
a " Finance Document ", a " Security Document " or a " Transaction Document " or any other agreement or instrument is a reference to that Finance Document or Security Document or Transaction Document or other agreement or instrument as amended or novated, including, as amended by the Amending and Restating Agreement;
(vii)
" 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;
(viii)
" law " includes any order or decree, any form of delegated legislation, any treaty or international convention and any statute, regulation or resolution or Executive Order of the United States of America, any state thereof, the Council of the European Union, the European Commission, the United Nations or its Security Council;
(ix)
" proceedings " means, in relation to any enforcement provision of a Finance Document, proceedings of any kind, including an application for a provisional or protective measure;
(x)
a " person " includes any individual or natural person, firm, corporation, limited liability company, partnership, government, state or agency of a state or any association, trust, joint venture, consortium unincorporated association, joint stock company and trust (whether or not having separate legal personality);
(xi)
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 organization;
(xii)
a provision of law is a reference to that provision as amended or re-enacted from time to time;
(xiii)
a time of day is a reference to New York City time (unless otherwise indicated);
(xiv)
any New York legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any legal concept or thing shall, in respect of a jurisdiction other than the State of New York or a U.S. federal court, be deemed to include that which most nearly approximates in that jurisdiction to the New York legal term;
(xv)
words denoting the singular number shall include the plural and vice versa; and
(xvi)
" including " and " in particular " (and other similar expressions) shall be construed as not limiting any general words or expressions in connection with which they are used.
(b)
The determination of the extent to which a rate is " for a period equal in length " to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.
(c)
Section, Clause and Schedule headings are for ease of reference only and are not to be used for the purposes of construction or interpretation of the Finance Documents.
(d)
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.
(e)
An Event of Default or Potential Event of Default is "continuing" if it has not been remedied or waived in writing.
1.3
Construction of insurance terms
In this Agreement:
" approved " means, for the purposes of Clause 22 ( Insurance undertakings) , approved in writing by the Facility Agent;
" excess risks " means, in respect of a Ship, the proportion of claims for general average, salvage and salvage charges not recoverable under the hull and machinery policies in respect of that Ship in consequence of its insured value being less than the value at which that Ship is assessed for the purpose of such claims;
" obligatory insurances " means all insurances effected, or which any Owner Guarantor or Additional Borrower (as the case may be) is obliged to effect, under Clause 22 ( Insurance undertakings ) or any other provision of this Agreement or of another Finance Document;
" policy " includes a slip, cover note, certificate of entry or other document evidencing the contract of insurance or its terms;
" protection and indemnity risks " means the usual risks covered by a protection and indemnity association managed in London, including pollution risks and the proportion (if any) of any sums payable to any other person or persons in case of collision which are not recoverable under the hull and machinery policies by reason of the incorporation in them of clause 6 of the International Hull Clauses (1/11/02) (1/11/03), clause 8 of the Institute Time Clauses (Hulls) (1/10/83) (1/11/95) or the Institute Amended Running Down Clause (1/10/71) or any equivalent provision; and
" war risks " includes the risk of mines and all risks excluded by clause 29 of the International Hull Clauses (1/11/02 or 1/11/03), clause 24 of the Institute Time Clauses (Hulls) (1/11/95) or clause 23 of the Institute Time Clauses (Hulls) (1/10/83) and includes all risks as set out in the amended version of the AHIS Addendum (April 1, 1984).
1.4
Agreed forms of Finance Documents
References in Clause 1.1 ( Definitions ) to any Finance Document being in "agreed form" are to that Finance Document:
(a)
in a form attached to a certificate dated the same date as this Agreement (and signed by the Borrower and the Facility Agent); or
(b)
in any other form agreed in writing between the Borrower and the Facility Agent acting with the authorization of the Majority Lenders or, where Clause 45.1 ( Required consents ) applies, all the Lenders.
1.5
Third party rights
(a)
Unless expressly provided to the contrary in a Finance Document, a person who is not a Party 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 this Agreement.
(b)
Subject to Clause 45.3 ( Other exceptions ) but otherwise notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.
(c)
Any Receiver, Delegate or any other person described in paragraph (d) of Clause 14.2 ( Other indemnities ), paragraph (b) of Clause 30.11 ( Exclusion of liability ) or paragraph (b) of Clause 31.10 ( Exclusion of liability ) may, subject to this Clause 1.5 ( Third party rights ), rely on any Clause of this Agreement which expressly confers rights on it.
Section 2     

THE FACILITY
2
THE FACILITY
2.1
The Facility
Subject to the terms of this Agreement,
(a)
KEXIM, the KEXIM Guaranteed Lenders, the K-Sure Lenders and the Commercial Lenders agree to make available to the Borrower a dollar term loan facility in thirteen Vessel Loans (namely, the ECA Vessel Loans); and
(b)
additionally, the Commercial Lenders agree to make available to the Borrower a dollar term loan facility in two Vessel Loans (namely, the Non-ECA Vessel Loans),
(c)
and all the Vessel Loans shall be in an aggregate amount not exceeding $963,743,455 (which includes the KEXIM Premium and the K-Sure Premium).
2.2
Finance Parties' rights and obligations
(a)
The obligations of each Finance Party under the Finance Documents are several and not joint. 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.
(b)
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.
(c)
Except as otherwise provided in a Finance Document, a Finance Party may not separately sue for any Unpaid Sum due and payable to it or enforce any Security or any other right under a Finance Document.
2.3
Security Agent as joint and several creditor
(a)
The Borrower and each of the Finance Parties agrees that the Security Agent shall be the joint creditor (" hoofdelijke schuldeiser ") together with each other Finance Party of each liability and obligation of the Borrower towards any Finance Party under any Finance Document, and that accordingly the Security Agent will have its own independent right to demand performance by the Borrower of those liabilities and obligations. However, any discharge of any liability or obligation of the Borrower to one of the Security Agent or another Finance Party shall, to the same extent, discharge the corresponding liability or obligation owing to the others.
(b)
Without limiting or affecting the Security Agent's rights against the Borrower (whether under this paragraph or under any other provision of the Finance Documents), the Security Agent agrees with each other Finance Party (on a several and separate basis) that, subject as set out in the next sentence, it will not exercise its rights as a joint creditor with a Finance Party except with the consent of the relevant Finance Party. However, for the avoidance of doubt, nothing in the previous sentence shall in any way limit the Security Agent's right to act in the protection or preservation of rights under or to enforce any Finance Document (or to do any act reasonably incidental to any of the foregoing).
(c)
Subject to the provisions of this Clause 2.3 ( Security Agent as joint and several creditor ), the Security Agent holds any security created by a Finance Document in its name and the Security Agent shall have full and unrestricted title to and authority in respect of that security, subject always to the terms of the Finance Documents.
2.4
Borrower's Agent
(a)
The Borrower by its execution of this Agreement irrevocably appoints the Ultimate Parent Guarantor to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorizes:
(i)
the Ultimate Parent Guarantor on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including Utilization Requests), to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by the Borrower notwithstanding that they may affect the Borrower, without further reference to or the consent of the Borrower; and
(ii)
each Finance Party to give any notice, demand or other communication to the Borrower pursuant to the Finance Documents to the Ultimate Parent Guarantor,
and in each case the Borrower shall be bound as though the Borrower itself had given the notices and instructions (including, without limitation, any Utilization Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.
(b)
Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Ultimate Parent Guarantor or given to the Ultimate Parent Guarantor under any Finance Document on behalf of the Borrower or in connection with the Finance Document (whether or not known to the Borrower) shall be binding for all purposes on the Borrower as if the Borrower had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Ultimate Parent Guarantor and the Borrower, those of the Ultimate Parent Guarantor shall prevail.
3
PURPOSE
3.1
Purpose
The Borrower shall apply all amounts borrowed by it under the Facility and in respect of all Tranches in relation to each Vessel Loan only for the following purposes:
(a)
to on-lend or contribute by way of equity to the Owner Guarantor of the Ship to which such Vessel Loan relates, to finance (or in the case of the first Utilization, re-finance) the payment of Delivery Instalment of that Ship to the relevant Builder or to reimburse the Parent Guarantor or any of its Subsidiaries for its payment of such Delivery Instalment;
(b)
to re-finance the funding of the Contract Price Instalments (other than the Delivery Instalment) of the relevant Ship;
(c)
provided that the Parent Guarantor or any of its Subsidiaries has paid or has procured payment, in relation to a Ship, of an amount equivalent to the higher of (A) 35% of the Final Contract Price of that Ship and (B) the difference between the Final Contract Price of that Ship and 60% of the Fair Market Value of that Ship (where " Final Contract Price " means the lower of the Contract Price of that Ship and the Maximum Contract Price of that Ship), to be applied as directed by the Parent Guarantor to fund the Debt Service Reserve Account to the extent required by Clause 26.2 ( Debt Service Reserve Account) ;
(d)
in the case of the K-Sure Tranche, to finance the payment of K-Sure Premium in respect of such Vessel Loan; and
(e)
in the case of the KEXIM Guaranteed Tranche, to finance the payment of KEXIM Premium in respect of such Vessel Loan,
provided that each Advance shall not exceed the amount of the Vessel Loan to which it relates.
3.2
Monitoring
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
3.3
Obligors and the Shipbuilding Contracts
(a)
Each Obligor's obligations (including, without limitation, its payment obligations) under each Finance Document are not:
(i)
subject to or dependent upon the execution or performance by any Builder or any other person of its obligations under a Shipbuilding Contract (as applicable); and
(ii)
in any way affected, prejudiced, discharged or affected by reason of any matter affecting any Shipbuilding Contract and/or Builder,
(b)
and each Obligor hereby acknowledges that the foregoing is an essential condition of each Lender's entry into this Agreement and the other Finance Documents.
(c)
Without prejudice to the generality of paragraph (a) above, each Obligor agrees that it will not claim to be relieved of the performance of any of its obligations under this Agreement or any other Finance Document by reason of any failure, delay or default whatsoever on the part of any Builder or any Obligor in the performance of its obligations under any Shipbuilding Contract.
(d)
Each Obligor expressly acknowledges and agrees that its obligations under this Agreement and any other Finance Document are:
(i)
unconditional and irrevocable; and
(ii)
absolutely, totally and completely independent and separate from any other Obligor's obligations under any Shipbuilding Contract,
(e)
and each Obligor undertakes irrevocably and unconditionally to pay any and all amounts under this Agreement and any other Finance Document when they fall due and shall not raise any defences or exercise any rights against any Finance Party that it may have against any Builder in respect of any Shipbuilding Contract.
4
CONDITIONS OF UTILIZATION
4.1
Initial conditions precedent
The Borrower may not deliver a Utilization Request unless the Facility Agent has received or waived in accordance with Clause 4.4 ( Waiver of conditions precedent) , all of the documents and other evidence listed in Part A of Schedule 2 ( Conditions Precedent ) in form and substance satisfactory to the Facility Agent.
4.2
Further conditions precedent
The Lenders will be obliged to comply with Clause 5.4 ( Lenders' participation ) only if:
(a)
on the date of the Utilization Request and on the proposed Utilization Date and before the Advance is made available:
(i)
no Event of Default is continuing or would result from the proposed Advance;
(ii)
no event which would result in an Material Adverse Effect has occurred or would result from the proposed Advance;
(iii)
the Repeating Representations to be made by each Obligor are true and correct in all material respects it being understood and agreed that such representations and warranties shall be deemed to have been made on each of the date of the Utilization Request and the proposed Utilization Date with reference to the facts and circumstances existing as at such dates, except to the extent that such representations and warranties specifically refer to an earlier date, in which they shall be true and correct in all material respects as of such earlier date (but further provided that the representation made under Clause 18.17 ( Financial statements; Financial Condition; Undisclosed Liabilities ) which shall be made with reference to the latest financial statements provided under this Agreement and as at the last day of the financial period in relation to which such financial statements relate);
(iv)
a Change of Control has not occurred;
(v)
no event described in paragraphs (a) to (d) of Clause 7.5 ( Mandatory cancellation or prepayment on default under Shipbuilding Contract ) has occurred in respect of the Ship or Builder or Shipbuilding Contract to which the Utilization Request relates;
(vi)
the provisions of paragraph (b) of Clause 10.2 ( Market disruption) do not apply;
(vii)
the ECA Agent has not received any notice from K-Sure requesting the K-Sure Lenders to suspend the making of any Advance under the K-Sure Tranche and/or the K-Sure Lenders are not required by the terms of any of the K-Sure Insurance Policies to suspend the making of any Advance under the K-Sure Tranche;
(viii)
no occurrence, event or circumstances exist which prohibits any of the K-Sure Lenders from participating in any Advance under the K-Sure Tranche pursuant to the terms of any of the K-Sure Insurance Policies;
(ix)
none of the Obligors or the Finance Parties have received any notice from KEXIM suspending (or purporting to suspend) any Advance under the KEXIM Funded Tranche and/or the KEXIM Guarantee; and
(x)
the KEXIM Guarantee is in full force and effect and (i) has not been declared by KEXIM to be ineffective as to the coverage provided by KEXIM and (ii) has not ceased to be in full force and effect as to the full amount of coverage provided by KEXIM;
(b)
the Facility Agent and the ECA Agent have received on or before the relevant Utilization Date, or is satisfied that it will receive when the Advance is made available all of the documents and other evidence listed in Part B of Schedule 2 ( Conditions Precedent ) in form and substance reasonably satisfactory to the Facility Agent to the extent such documents or other evidence have not been waived in accordance with Clause 4.4 ( Waiver of conditions precedent) .
4.3
Notification of satisfaction of conditions precedent
(a)
The Facility Agent shall notify the Borrower and the Lenders promptly upon being satisfied as to the satisfaction of the conditions precedent referred to in Clause 4.1 ( Initial conditions precedent ) and Clause 4.2 ( Further conditions precedent ).
(b)
Other than to the extent that the Lenders notify the Facility Agent in writing to the contrary before the Facility Agent gives the notification described in paragraph (a) above, the Lenders authorize (but do not require) the Facility Agent to give that notification. The Facility Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
4.4
Waiver of conditions precedent
If the Lenders, at their discretion, permit an Advance to be borrowed before any of the conditions precedent referred to in Clause 4.1 ( Initial conditions precedent ) or Clause 4.2 ( Further conditions precedent ) has been satisfied, the Borrower shall ensure that such conditions are satisfied within five (5) Business Days after the relevant Utilization Date or such later date as the Facility Agent, acting with the authorization of the Lenders, may agree in writing with the Borrower, provided that in connection with the prepositioning of funds pursuant to Clause 5.8 ( Prepositioning of funds ), the Facility Agent and the Lenders agree to suspend fulfillment of certain conditions precedent set forth in paragraphs of Part B of Schedule 2 ( Conditions Precedent ) (the " Closing CPs ") solely for the time period commencing on the Utilization Date and ending on the relevant Delivery Date, and the Borrower acknowledges and agrees that fulfillment of the Closing CPs to the satisfaction of the Facility Agent (acting on the instructions of the Lenders) shall be required as a condition precedent to the countersignature by a representative of the Facility Agent of the Protocol of Delivery and Acceptance relating to the relevant Ship referred to in paragraph (b)(ii) of Clause 5.8 ( Prepositioning of funds ).

Section 3     

UTILIZATION
5
UTILIZATION
5.1
Delivery of a Utilization Request
(a)
The Borrower may utilize the Facility by delivery to the Facility Agent of a duly completed Utilization Request not later than the Specified Time.
(b)
The Borrower may not deliver more than one Utilization Request under each Vessel Loan.
5.2
Completion of a Utilization Request
(a)
Each Utilization Request is irrevocable and will not be regarded as having been duly completed unless:
(i)
the proposed Utilization Date is a Business Day within the relevant Availability Period relating to the relevant Vessel Loan;
(ii)
the currency and amount of the Utilization comply with Clause 5.3 ( Currency and amount ); and
(iii)
the proposed Interest Period complies with Clause 9 ( Interest Periods ).
(b)
Only one Advance may be requested in each Utilization Request.
5.3
Currency and amount
(a)
The currency specified in a Utilization Request must be dollars.
(b)
The amount of the proposed Advance must be an amount which is not more than the relevant Vessel Loan and not more than the Maximum Contract Price.
(c)
The amount of the proposed Advance must be an amount which is not more than the Available Commitment of all Lenders in relation to the relevant Vessel Loan.
(d)
The amount of the proposed Advance must be an amount which would not oblige the Borrower or any other Obligor to provide additional security or prepay part of the Advance if the ratio set out in Clause 25 ( Security Cover ) were applied and notice was given by the Facility Agent under Clause 25.1 ( Minimum required security cover ) immediately after the Advance was made.
5.4
Lenders' participation
(a)
If the conditions set out in this Agreement have been met or waived in accordance with Clause 4.4 ( Waiver of conditions precedent) , each Lender shall make its participation in each Advance available by the Utilization Date through its Facility Office.
(b)
The amount of each Lender's participation in each Advance will be equal to the proportion borne by its Commitment in relation to the relevant Vessel Loan to the Commitments allocated in respect of such Vessel Loan immediately before making that Advance. For the avoidance of doubt, each Advance shall comprise of the same proportion of each Tranche as such Tranche bears to the Facility.
(c)
The Facility Agent shall notify each Lender of the amount of each Advance and the amount of its participation in that Advance by the Specified Time.
5.5
Cancellation of Commitments
The Commitments allocated in respect of any Vessel Loan which are unutilized at the end of the Availability Period for such Vessel Loan shall then be cancelled at that time.
5.6
Payment to third parties
The Facility Agent shall, on each Utilization Date, pay to, or for the account of, the Borrower the amounts which the Facility Agent receives from the Lenders in respect of that Advance. That payment shall be made in like funds as the Facility Agent received from the Lenders in respect of each Advance to the account of the Builder and/or such other account which the Borrower specifies in the relevant Utilization Request.
5.7
Disbursement of Advance to third party
A payment by the Facility Agent as directed by the Borrower under Clause 5.6 ( Payment to third parties ) to a person other than the Borrower shall constitute the making of the relevant Advance and the Borrower shall at that time become indebted, as principal and direct obligor, to each Lender in an amount equal to that Lender's participation in that Advance.
5.8
Prepositioning of funds
(a)
If the Lenders, at the request of the Borrower and on terms acceptable to all the Lenders and in their absolute discretion, agree to preposition funds with any bank for the purposes of any Utilization of an Advance (such date, the " Preposition Date "):
(b)
each Lender agrees to fund its participation in such Advance on a day not more than three Business Days prior to the Delivery Date of the Ship to which that Advance relates;
(c)
on the relevant Preposition Date, the Facility Agent shall:
(i)
preposition an amount equal to the Delivery Instalment of the relevant Ship at a bank or other financial institution acceptable to the Facility Agent and the Majority Lenders (where such acceptable bank shall include, for the avoidance of doubt, the Export-Import Bank of Korea) (a " Builder's Bank ") as directed by the Borrower in the relevant Utilization Request and satisfactory to the Facility Agent (acting on instructions of the Majority Lenders), which funds shall be held at the relevant Builder's Bank in the name and under the sole control of the Facility Agent; and
(ii)
issue a SWIFT MT 199 or other similar communication in the form attached as Schedule 15 (Form of MT 199) of this Agreement or such other form and substance acceptable to the Facility Agent (acting on instructions of the Majority Lenders) (each such communication, a " Disbursement Authorization ") authorizing the release of such funds by the relevant Builder's Bank on the relevant Delivery Date upon receipt of a Protocol of Delivery and Acceptance in respect of such Ship duly executed by the relevant Builder and the relevant Owner Guarantor or its Affiliates and countersigned by a representative of the Facility Agent;
(d)
the date on which the Lenders fund the relevant Advance constitutes the Utilization Date in respect of such Advance and the Borrower agrees to pay interest on the amount of the funds so prepositioned at the rate described in Clause 8.1 ( Calculation of interest ) on the basis of successive interest periods of one day and so that interest shall be paid together with the first payment of interest on such Advance after the Utilization Date in respect of it or, if such Utilization Date does not occur, within three Business Days of demand by the Facility Agent;
(e)
from the date the proceeds of the relevant Advance are deposited at the relevant Builder's Bank to the relevant Delivery Date (or, if delivery of the relevant Ship does not occur within five (5) Business Days (or such other period as agreed by the Majority Lenders) of the Delivery Date specified in the relevant Disbursement Authorization, the date on which the funds are returned to the Facility Agent for redistribution to the Lenders), the Borrower shall be entitled to interest on such Advance at the applicable rate, if any, paid by such Builder's Bank for such deposited funds;
(f)
if the relevant Ship is not delivered five (5) Business Days (or such other period as agreed by the Majority Lenders) of the Delivery Date specified in the relevant Disbursement Authorization and the proceeds of the relevant Advance are returned to the Facility Agent and redistributed to the Lenders, (i) the Borrower shall pay all accrued interest and fees in respect of such returned proceeds on the date such proceeds are returned to the Facility Agent and (ii) the Available Commitment of the relevant Vessel Loan of all Lenders will be increased by an amount equal to the aggregate principal amount of the Utilized Advance so returned; and
(g)
the Borrower and the Parent Guarantor shall, without duplication, indemnify each Finance Party against any costs, loss or liability it may occur in connection with such prepositioning of funds arrangement (other than by reason of gross negligence or wilful misconduct of any Finance Party).
Section 4     

REPAYMENT, PREPAYMENT AND CANCELLATION
6
REPAYMENT
6.1
Repayment of Loan
(a)
Subject to Clause 6.3 ( Consolidation of Repayment Dates),
(b)
the Borrower shall repay the Commercial Tranche of each Vessel Loan by 20 equal consecutive quarterly instalments, each in an amount equal to 1- 2/3percent of such Vessel Loan (each, a " Commercial Tranche Repayment Instalment ") on each Fiscal Quarter Date, commencing on the First Fiscal Quarter Date of such Vessel Loan. On the Termination Date of the Commercial Tranche, the Borrower shall additionally repay (together with the final Commercial Tranche Repayment Instalment) the amount of the relevant Balloon Repayment for the Commercial Tranche.
(c)
the Borrower shall repay the KEXIM Guaranteed Tranche of each ECA Vessel Loan by 48 equal consecutive quarterly instalments, each in an amount equal to 2- 1/12 percent of such ECA Vessel Loan (each, a " KEXIM Guaranteed Tranche Repayment Instalment ") on each Fiscal Quarter Date, commencing on the First Fiscal Quarter Date of such ECA Vessel Loan and ending on the Termination Date of the KEXIM Guaranteed Tranche.
(d)
the Borrower shall repay the KEXIM Funded Tranche of each ECA Vessel Loan by 48 equal consecutive quarterly instalments, each in an amount equal to 2- 1/12 percent of such ECA Vessel Loan (each, a " KEXIM Funded Tranche Repayment Instalment ") on each Fiscal Quarter Date, commencing on the First Fiscal Quarter Date of such ECA Vessel Loan and ending on the Termination Date of the KEXIM Funded Tranche.
(e)
the Borrower shall repay the K-Sure Tranche of each ECA Vessel Loan by 48 equal consecutive quarterly instalments, each in an amount equal to 2- 1/12 percent of such ECA Vessel Loan (each, a " K-Sure Tranche Repayment Instalment ") on each Fiscal Quarter Date, commencing on the First Fiscal Quarter Date of such ECA Vessel Loan and ending on the Termination Date of the K-Sure Tranche.
(and each Commercial Tranche Repayment Instalment, each KEXIM Guaranteed Tranche Repayment Instalment, each KEXIM Funded Tranche Repayment Instalment and each K-Sure Tranche Repayment Instalment, shall each be a " Repayment Instalment ").
6.2
Termination Date
On each Termination Date, the Borrower shall additionally pay to the Facility Agent for the account of the Finance Parties all other sums then accrued and owing under the Finance Documents.
6.3
Consolidation of Repayment Dates
(a)
The first Repayment Date in relation to each Advance other than the first Advance drawn down under the Facility (the " First Advance ") shall fall on the next occurring Repayment Date of the First Advance falling after the Utilisation Date in respect of each such Advance and each subsequent Repayment Date for each such Advance shall fall quarterly thereafter, but shall not exceed the Termination Date relating to such Tranche, such that all Repayment Dates under all Vessel Loans shall be consolidated and shall be payable on a Fiscal Quarter Date.
6.4
Re-borrowing
The Borrower may not re-borrow any part of the Facility which is repaid.
7
PREPAYMENT AND CANCELLATION
7.1
Illegality
(a)
If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in an Advance or the Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:
(i)
that Lender shall promptly notify the Facility Agent upon becoming aware of that event;
(ii)
upon the Facility Agent notifying the Borrower, the Available Commitment in respect of any Vessel Loan of that Lender will be immediately cancelled; and
(iii)
the Borrower shall prepay that Lender's participation in the Loan on the last day of the Interest Period for the Loan occurring after the Facility Agent has notified the Borrower or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender's corresponding Commitment shall be cancelled in the amount of the participation prepaid.
(b)
Any partial prepayment under this Clause 7.1 ( Illegality ) shall apply pro rata among the Tranches to reduce pro rata the amount of each Repayment Instalment falling after that prepayment by the amount prepaid.
7.2
Change of control
(a)
If a Change of Control occurs:
(b)
the Parent Guarantor or the Borrower shall promptly notify the Facility Agent upon becoming aware of that event; and
(c)
if the Majority Lenders so require, the Facility Agent shall, by not less than ten Business Days' notice to the Borrower, cancel the Facility and declare the Loan, together with accrued interest, and all other amounts accrued under the Finance Documents due and payable, whereupon the Facility will be cancelled and all outstanding Loan and amounts will become due and payable not later than 60 days following the occurrence of the Change of Control.
7.3
Voluntary and automatic cancellation
(a)
The Borrower may, if it gives the Facility Agent not less than ten (10) Business Days' prior notice, and upon payment of all relevant fees in respect of such prepayment (including without limitation, the relevant KEXIM Prepayment Fee payable under Clause 11.4 ( KEXIM Prepayment Fee) in the case of any KEXIM Funded Tranche), cancel the whole or any part (being a minimum amount of $5,000,000, unless the cancelled amount relates solely to amounts which had been allocated for payment of Contingent Extras) of the Available Facility.
(b)
Any cancellation of a Vessel Loan under this Clause shall reduce the Commitments of the relevant Lenders and the amount of that Vessel Loan then unutilized pro rata.
(c)
The unutilized Commitment (if any) of each Lender in respect of a Vessel Loan shall be automatically cancelled at close of business on the last day of the Availability Period of that Vessel Loan.
7.4
Voluntary prepayment of Loan
(a)
The Borrower may, if it gives the Facility Agent and the ECA Agent not less than ten (10) Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay 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 $1,000,000).
(b)
Any partial prepayment of a Vessel Loan under this Clause 7.4 ( Voluntary prepayment of Loan ) shall reduce pro rata across each Tranche under such Vessel Loan in inverse chronological order the amount of each Repayment Instalment (other than the Balloon Repayment) falling after that prepayment by the amount prepaid or such other manner as the Lenders may otherwise agree.
7.5
Mandatory cancellation or prepayment on default under Shipbuilding Contract
If, in relation to a Ship:
(a)
any of the events specified in Clause 27.7 ( Insolvency Event ) occurs in relation to the relevant Builder; or
(b)
a party to the Shipbuilding Contract relating to that Ship cancels, rescinds, assigns, novates or terminates such Shipbuilding Contract or such Shipbuilding Contract otherwise ceases to remain in full force and effect for any reason; or
(c)
such Ship has not been delivered to, and accepted by, the relevant Owner Guarantor which either is a party to the Shipbuilding Contract relating to that Ship to receive the Ship, by the last day of the Availability Period of the Vessel Loan relating to that Ship; or
(d)
the relevant Owner Guarantor or its Affiliate which is a party to that Shipbuilding Contract ceases to be the sole legal and beneficial owner of all the rights of the buyer under such Shipbuilding Contract,
then:
(i)
the Borrower shall promptly notify the Facility Agent; and
(ii)
if the Majority Lenders so require, the Facility Agent shall cancel the Vessel Loan relating to that Ship and declare such Vessel Loan, together with interest accrued on it, and all other amounts relating to it and accrued under the Finance Documents immediately due and payable, whereupon such Vessel Loan will be cancelled and all such outstanding amounts relating thereto will become immediately due and payable.
7.6
Mandatory prepayment on sale or Total Loss
(a)
If a Ship is sold, or becomes a Total Loss, the Borrower shall on the Relevant Date prepay the Vessel Loan applicable to that Ship. Provided that the Original Borrower shall not be required to make any prepayment pursuant to this Clause 7.6 ( Mandatory prepayment on sale or Total Loss ) in connection with the sale of a Ship by an Owner Guarantor to the Additional Borrower pursuant to (and in accordance with) Clause 24.13 ( Transfer of Ships ).
(b)
On the Relevant Date, the Borrower shall also prepay such part of the Loan as shall eliminate any shortfall arising if the ratio set out in Clause 25.1 ( Minimum required security cover) were applied immediately following the payment referred to in paragraph (a) above.
(c)
In this Clause 7.6 ( Mandatory prepayment on sale or Total Loss ):
" Relevant Date " means:
(i)
in the case of a sale of a Ship, on the date on which the sale is completed by delivery of that Ship to the buyer of that Ship; and
(ii)
in the case of a Total Loss of a Ship, on the earlier of:
(A)
the date falling 120 days after the Total Loss Date; and
(B)
the date of receipt by the Security Agent of the proceeds of insurance relating to such Total Loss.
7.7
Termination etc. of KEXIM Guarantee and K-Sure Insurance Policies
(a)
If at any time the KEXIM Guarantee is cancelled, unenforceable, suspended, invalid or terminated (whether in whole or in part) while any amounts remain outstanding under the KEXIM Guaranteed Tranche, the Facility Agent shall immediately cancel the Total Commitments and declare that the entire Loan be payable on demand.
(b)
If at any time, in relation to an Advance, the relevant K-Sure Insurance Policy is cancelled, unenforceable, suspended, invalid or terminated (whether in whole or in part) while any amounts remain outstanding under the K-Sure Tranche in relation to such Advance, the Facility Agent shall immediately cancel the Commitments relating to that Advance and declare that such Advance be payable on demand.
7.8
KEXIM and K-Sure Put Options
(a)
Each of KEXIM and K-Sure shall have an option to require prepayment of the KEXIM Guaranteed Tranche and the KEXIM Funded Tranche (in the case of KEXIM) (the " KEXIM Put Option ") and the K-Sure Tranche (in the case of K-Sure)(the " K-Sure Put Option ") if KEXIM and K-Sure do not receive from the ECA Agent on a date no later than the date falling two months prior to the first Termination Date in respect of the Commercial Tranche to occur (the " Expiry Date "), a written notice from the ECA Agent confirming that the Commercial Tranche shall be, upon its Termination Date, fully refinanced or renewed by the Commercial Lenders or any other financial institutions.
(b)
A Put Option may be exercised by KEXIM or K-Sure by giving the Borrower written notice of its intention to exercise the same within 3 Business Days after the Expiry Date. For the avoidance of doubt, if no such written notice is received from KEXIM or K-Sure, it shall be hereby assumed no prepayment shall be required pursuant to Clause 7.8(a) ( KEXIM and K-Sure Put Options ) and its respective Put Option shall irrevocably lapse.
(c)
Upon exercise of either or each Put Option, all outstanding amounts under the KEXIM Funded Tranche and the KEXIM Guaranteed Tranche and/or, as the case may be, the K-Sure Tranche must be repaid on the final Repayment Date in respect of the Commercial Tranche.
7.9
Right of replacement and repayment and cancellation in relation to a single Lender
(a)
If:
(i)
any sum payable to any Lender by a Transaction Obligor is required to be increased under Clause 12.2 ( Tax gross-up ) or under that clause as incorporated by reference or in full in any other Finance Document; or
(ii)
any Lender claims indemnification from the Borrower under Clause 12.2 ( Tax gross-up ) or Clause 13.1 ( Increased costs );
(iii)
the Borrower may during, in the case of sub-paragraphs (i) and (ii) above, the circumstance giving rise to the requirement for that increase or indemnification continues, give the Facility Agent notice of cancellation of the Commitment of that Lender and/or its intention to procure the repayment of that Lender's participation in the Loan and give the Facility Agent notice of its intention to replace that Lender in accordance with paragraph (e) below.
(b)
On receipt of a notice of cancellation referred to in paragraph (a) above, the Commitment of that Lender shall immediately be reduced to zero.
(c)
On the last day of each Interest Period which ends after the Borrower has given notice of cancellation under paragraph (a) 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; provided that unless all Commitments have been utilised hereunder, the Borrower shall be required to replace such repaid Lender in accordance with paragraphs (e) and (f) below.
(d)
Any partial prepayment under this Clause 7.9 ( Right of replacement and repayment and cancellation in relation to a single Lender) shall reduce pro rata the amount of each Repayment Instalment falling after that prepayment by the amount prepaid.
(e)
The Borrower may, in the circumstances set out in paragraph (a) above and shall, under paragraph (c) above, if required, on thirty (30) Business Days' prior notice to the Facility Agent and that Lender, replace that Lender by requiring that Lender to (and, to the extent permitted by law, that Lender shall) transfer pursuant to Clause 28 ( 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 selected by the Borrower which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 28 ( Changes to the Lenders ) for a purchase price in cash or other cash payment payable at the time of the transfer equal to the outstanding principal amount of such Lender's participation in the Loan and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents.
(f)
The replacement of a Lender pursuant to paragraph (e) above shall be subject to the following conditions:
(i)
the Borrower shall have no right to issue the notice referred to in paragraph (a) if it results in the replacement of a Servicing Party;
(ii)
the Borrower shall have no right to issue the notice referred to in paragraph (a) if it results in the replacement of KEXIM acting in its capacity as a Lender for so long as any KEXIM Guaranteed Tranche has not been fully repaid;
(iii)
neither the Facility Agent nor any Lender shall have any obligation to find a replacement Lender;
(iv)
in no event shall the Lender replaced under paragraph (e) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents;
(v)
the Lender shall only be obliged to transfer its rights and obligations pursuant to paragraph (e) above 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; and
(vi)
the proposed replacement Lender may not be an affiliate or a subsidiary of the Parent Guarantor or the Ultimate Parent Guarantor.
(g)
A Lender shall perform the checks described in sub-paragraph (v) of paragraph (f) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (e) above and shall notify the Facility Agent and the Borrower when it is satisfied that it has complied with those checks.
7.10
Mandatory prepayment and cancellation on breach of financial covenants
If the Additional Borrower is not in compliance with the financial covenants in Clause 20.2 ( Financial Covenants ) at any time during the Security Period, the Borrower shall be obliged to repay the Loan in full (and the Commitments shall be cancelled) not later than 5 days following a request in writing from the Facility Agent (acting on the instructions of the Majority Lenders) to the Borrower to repay the Loan.
7.11
Restrictions
(a)
Any notice of cancellation or prepayment given by any Party under this Clause 7 ( Prepayment and Cancellation ) 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.
(b)
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and amounts (if any) payable under the Hedging Agreements in connection with that prepayment and, subject to the fee provided for in Clause 11.4 ( KEXIM Prepayment Fee ) and any Break Costs, without premium or penalty.
(c)
The Borrower may not re-borrow any part of the Facility which is prepaid.
(d)
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.
(e)
No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
(f)
If the Facility Agent receives a notice under this Clause 7 ( Prepayment and Cancellation ) it shall promptly forward a copy of that notice to the Borrower or the affected Lenders and/or Hedge Counterparties, as appropriate.
7.12
Refund of K-Sure Premium on voluntary prepayment
(a)
The Borrower may, upon any voluntary prepayment of the Loan (whether in whole or in part) in accordance with Clause 7.4 ( Voluntary prepayment of Loan ), request the ECA Agent to seek a refund from K-Sure of such portion of the K-Sure Premium paid by the Borrower in respect of the Advance prepaid pursuant to the terms of this Agreement.
(b)
In the event that K-Sure (in its absolute discretion) consents to such request and refunds such portion of the K-Sure Premium (which shall be determined and calculated by K-Sure pursuant to the terms of the relevant K-Sure Insurance Policy and K-Sure's own internal regulations) to the Facility Agent, the Facility Agent shall remit such refund to the Borrower in accordance with Clause 36 ( Payment Mechanics) .
(c)
K-Sure retains the right to refuse a request by the Borrower of a refund of the K-Sure Premium in respect of an Advance once the relevant Advance is made and shall not be obliged to give any reason for such refusal, and nothing shall oblige the Facility Agent or the ECA Agent to take any further action if K-Sure refuses or fails for whatever reason to refund any portion of the K-Sure Premium once such premium is paid.
7.13
Refund of KEXIM Premium
In the case of prepayment of the KEXIM Guaranteed Tranche, the unutilized portion of the KEXIM Premium shall be not be refunded to the Borrower except in accordance with the terms and conditions as contained in the KEXIM Guarantee and KEXIM's internal regulations.

Section 5     

COSTS OF UTILIZATION
8
INTEREST
8.1
Calculation of interest
The rate of interest on an Advance, the Loan, any part of the Loan or any Unpaid Sum for each Interest Period is the percentage rate per annum which is the aggregate of:
(a)
the relevant Margin; and
(b)
LIBOR.
8.2
Payment of interest
(a)
The Borrower shall pay accrued interest on each Advance, the Loan or any part of the Loan on each Repayment Date.
(b)
If an Interest Period is longer than three Months, the Borrower shall also pay interest then accrued on the Loan or the relevant part of the Loan on the next occurring Repayment Date.
8.3
Default interest
(a)
If an Obligor fails to pay any amount payable by it under a Finance Document (other than a Hedging Agreement) on its due date, interest shall accrue on the Unpaid Sum from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two percent per annum higher than the rate which would have been payable if the Unpaid Sum had, during the period of non-payment, constituted part of the Loan in the currency of the Unpaid Sum for successive Interest Periods, each of a duration selected by the Facility Agent. Any interest accruing under this Clause 8.3 ( Default interest ) shall be immediately payable by the Obligor on demand by the Facility Agent.
(b)
If an Unpaid Sum consists of all or part of the Loan which became due on a day which was not the last day of an Interest Period relating to the Loan:
(i)
the first Interest Period for that Unpaid Sum shall have a duration equal to the unexpired portion of the current Interest Period relating to the Loan; and
(ii)
the rate of interest applying to that Unpaid Sum during that first Interest Period shall be two percent per annum higher than the rate which would have applied if that Unpaid Sum had not become due.
(c)
Default interest (if unpaid) arising on an Unpaid Sum will be compounded with the Unpaid Sum at the end of each Interest Period applicable to that Unpaid Sum but will remain immediately due and payable.
8.4
Notification of rates of interest
(a)
The Facility Agent shall promptly notify the Lenders and the Borrower of the determination of a rate of interest under this Agreement.
8.5
Hedging
(a)
The Borrower or the Parent Guarantor may, but (subject to Clause 8.6 ( Hedging - First right to bid and Non-Lender Hedging Agreements )) is not obliged to, enter into Hedging Agreements from time to time and shall after that date maintain such Hedging Agreements in accordance with this Clause 8.5 ( Hedging) .
(b)
Each Hedging Agreement (and where applicable, each hedging transaction under such Hedging Agreement) shall:
(i)
be for a term ending on or prior to the relevant Termination Date in respect of each Tranche;
(ii)
have settlement dates coinciding with the Interest Payment Dates;
(iii)
be in agreed form;
(iv)
provide for two-way payments in the event of a termination of a transaction in respect of a Hedging Agreement, whether on a Termination Event (as defined in the relevant Hedging Agreement) or on an Event of Default (as defined in the relevant Hedging Agreement); and
(v)
provide that the Termination Currency (as defined in the relevant Hedging Agreement) shall be dollars.
(c)
The rights of the Borrower or the Parent Guarantor (as the case may be) under the Hedging Agreements shall be assigned by way of security under an Assignment of Hedging Agreement.
(d)
The parties to each Hedging Agreement must comply with the terms of that Hedging Agreement.
(e)
For so long as an Event of Default has occurred and is continuing, neither a Hedge Counterparty nor the Borrower may amend, supplement, extend or waive the terms of any Hedging Agreement without the consent of the Facility Agent (such consent not to be unreasonably withheld).
(f)
Paragraph (e) above shall not apply to an amendment, supplement or waiver that is administrative and mechanical in nature and does not give rise to a conflict with any provision of this Agreement.
(g)
If, at any time, the aggregate notional principal amount of the transactions in respect of the Hedging Agreements exceeds or, as a result of any repayment or prepayment under this Agreement, will exceed the Loan at that time, the Borrower or the Parent Guarantor (as the case may be) must promptly notify the Facility Agent and must, at the request of the Facility Agent, reduce the aggregate notional amount of those transactions by an amount and in a manner satisfactory to the Facility Agent so that it no longer exceeds or will not exceed the Loan then or that will be outstanding.
(h)
Any reductions in the aggregate notional amount of the transactions in respect of the Hedging Agreements in accordance with paragraph (g) above will be apportioned as between those transactions pro rata .
(i)
Paragraph (g) above shall not apply to any transactions in respect of any Hedging Agreement under which the Borrower or the Parent Guarantor (as the case may be) does not have any actual or contingent indebtedness.
(j)
Subject to paragraph (k) below, neither a Hedge Counterparty nor the Borrower or the Parent Guarantor (as the case may be) may terminate or close out any transactions in respect of any Hedging Agreement (in whole or in part) except:
(i)
in accordance with paragraph (g) above,
(ii)
on the occurrence of an Illegality (as such expression is defined in the relevant Hedging Agreement);
(iii)
if the Facility Agent serves notice or having served notice, makes a demand under Clause 27.20 ( Acceleration );
(iv)
with the consent of the Facility Agent (acting on instructions of the Majority Lenders) if an Event of Default has occurred; or
(v)
If the Secured Liabilities (other than in respect of the Hedging Agreements) have been irrevocably and unconditionally paid and discharged in full;
(k)
If a Hedge Counterparty is entitled to terminate or close out any transaction in respect of any Hedging Agreement under sub-paragraph (iii) of paragraph (j) above, such Hedge Counterparty shall promptly terminate or close out such transaction following a request to do so by the Security Agent.
(l)
A Hedge Counterparty may only suspend making payments under a transaction in respect of a Hedging Agreement if the Borrower or the Parent Guarantor (as the case may be) is in breach of its payment obligations under any transaction in respect of that Hedging Agreement.
(m)
Each Hedge Counterparty consents to, and acknowledges notices of, the assigning by way of security by the Borrower or the Parent Guarantor (as the case may be) pursuant to the relevant Assignment of Hedging Agreement of its rights under the Hedging Agreements to which it is party in favor of the Security Agent.
(n)
Any such assigning by way of security is without prejudice to, and after giving effect to, the operation of any payment or close-out netting in respect of any amounts owing under any Hedging Agreement.
(o)
Neither the Security Agent nor any other Finance Party shall be liable for or have any obligation in respect of the performance of any of the Borrower's or as the case may be, the Parent Guarantor's obligations under a Hedging Agreement.
8.6
Hedging - First right to bid and Non-Lender Hedging Agreements
(a)
Each of the Borrower and the Parent Guarantor undertakes with the Lenders and the Hedge Counterparties, that in the event it or the Parent Guarantor (as the case may be), intends to enter into hedging transactions or agreements for the purpose of hedging against the interest rate in connection with this Agreement, it shall provide the Lenders and the Hedge Counterparties with the first right to bid in relation to such potential hedging transactions or agreements, before it concludes the same with a Non-Lender.
(b)
The Borrower or the Parent Guarantor may only enter into a Non-Lender Hedging Agreement pursuant to this Clause on condition that such Non-Lender does not share in any Security provided under the Finance Documents and that no Security shall be granted by any Obligor in respect of the Borrower's or as the case may be, the Parent Guarantor's obligations to a Non-Lender under such Non-Lender Hedging Agreement.
9
INTEREST PERIODS
9.1
Interest Periods
(a)
Each Interest Period in respect of each Tranche relating to a Vessel Loan will, subject to paragraphs (d) and (f) below, be three Months.
(b)
An Interest Period in respect of a Tranche relating to a Vessel Loan shall always be the same period as the Interest Period of the other Tranches relating to such Vessel Loan.
(c)
An Interest Period in respect of each Tranche relating to a Vessel Loan shall not extend beyond the Termination Date relating to that Tranche and shall instead end on such Termination Date.
(d)
In respect of a Repayment Instalment, an Interest Period for a part of the Loan equal to such Repayment Instalment shall end on the Repayment Date relating to it if such date is before the end of the Interest Period then current.
(e)
Subject to paragraph (f) below, the first Interest Period for the Loan shall start on the first Utilization Date and each subsequent Interest Period in respect of the Loan shall start on the last day of the preceding Interest Period in respect of the Loan.
(f)
The first Interest Period for the second and any subsequent Advance shall start on the Utilization Date of such Advance and end on the last day of the prevailing Interest Period applicable to the Loan.
(g)
Except for the purposes of paragraph (d) and paragraph (f) above, the Loan shall have one Interest Period at any time.
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
Unavailability of Screen Rate
(a)
If no Screen Rate is available for LIBOR for:
(i)
dollars; or
(ii)
the Interest Period of an Advance, the Loan, any part of the Loan or any Unpaid Sum,
(b)
there shall be no LIBOR for that Advance, the Loan, that part of the Loan or that Unpaid Sum and Clause 10.3 ( Cost of funds ) shall apply to that Advance, the Loan, that part of the Loan or that Unpaid Sum for that Interest Period.
10.2
Market disruption
(a)
If before close of business in London on the Quotation Day for the relevant Interest Period the Facility Agent receives notification from a Lender or Lenders (whose participations in the relevant Advance or the Loan exceed fifty percent of the relevant Advance or the Loan as appropriate) (the " Relevant Lender(s) ") that the cost to it of funding its participation in that Advance or the Loan from whatever source it may reasonably select would be in excess of the LIBOR for such Interest Period, then Clause 10.3 ( Costs of funds) shall apply to that Advance or the Loan (as applicable) for that Interest Period.
(b)
If, at least one (1) Business Day before the start of an Interest Period, the Facility Agent receives notification from the Relevant Lender(s) (the " Affected Lender(s) ") that for any reason it is unable to obtain dollars in the Relevant Interbank Market in order to fund its participation in an Advance, each such Affected Lender's obligation to make that Advance shall be suspended while that situation continues.
10.3
Cost of funds
(a)
If this Clause 10.3 ( Cost of funds ) applies, the rate of interest on a Lender's share of an Advance, the Loan, any part of the Loan or any Unpaid Sum for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
(i)
the relevant Margin; and
(ii)
the rate notified to the Facility Agent by that Lender as soon as practicable before interest is due to be paid in respect of that Interest Period to be that which expresses as a percentage rate per annum the actual cost to the relevant Lender of funding its participation in that Advance, the Loan, that part of the Loan or that Unpaid Sum from whatever source it may reasonably select.
(b)
If this Clause 10.3 ( Cost of funds ) applies and the Facility Agent or the Borrower so require, the Facility 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 or (as the case may be) an alternative basis for funding.
(c)
Any substitute or 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.
10.4
Break Costs
(a)
The Borrower shall, within three Business Days of demand by a Finance Party (which request shall set forth in reasonable detail the basis for requesting and the calculation of such compensation, provided that no Finance Party shall be required to disclose any information that would be confidential or price sensitive), pay to that Finance Party its Break Costs attributable to all or any part of the Loan or Unpaid Sum being paid by the Borrower on a day other than the last day of an Interest Period for the Loan or Unpaid Sum.
11
FEES, KEXIM PREMIUM AND K-SURE PREMIUM
11.1
Commitment fee
(a)
The Borrower shall pay to the Facility Agent (for the account of each relevant Lender), in respect of each Vessel Loan, a fee computed at the rate of 40 percent of the applicable Margin per annum on such Lender's Available Commitment for that Vessel Loan for the period commencing from the date of this Agreement and up to and including, the last day of the Availability Period relating to such Vessel Loan.
(b)
The accrued commitment fee payable in respect of each Vessel Loan is payable on each Repayment Date which ends during the Availability Period of such Vessel Loan, on the last day of such Availability Period and, if cancelled, on the cancelled amount of each Lender's Commitment of such Vessel Loan, at the time the cancellation is effective.
11.2
Upfront fee
(a)
The Borrower shall pay to the Facility Agent (for the account of each of the Commercial Lenders), an upfront fee in the amount and at the times agreed in a Fee Letter.
(b)
The Borrower shall pay to the ECA Agent (for the account of each of KEXIM, the KEXIM Guaranteed Lenders and the K-Sure Lenders), an upfront fee in the amount and at the times agreed in a Fee Letter.
11.3
Facility Agent fee
The Borrower shall pay to the Facility Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.
11.4
KEXIM Prepayment Fee
(a)
Subject to paragraph (b) below, in the case of a voluntary prepayment pursuant to Clause 7.4 ( Voluntary prepayment of Loan ), the prepayment made under Clause 7.6 ( Mandatory prepayment on sale or Total Loss) but only in the case of a sale or disposal of a Ship, or the voluntary cancellation pursuant to Clause 7.3 ( Voluntary and automatic cancellation ), in each case in relation to any KEXIM Funded Tranche, the Borrower must pay to the Facility Agent for the account of KEXIM, the KEXIM Prepayment Fee on the date of prepayment and/or cancellation of the relevant portion of a Vessel Loan.
(b)
No fee shall be payable under this Clause if the prepayment and/or cancellation is made under Clause 7.1 ( Illegality ), Clause 7.6 ( Mandatory prepayment on sale or Total Loss) but only in the case of a Total Loss, Clause 7.8 ( KEXIM and K-Sure Put Options), Clause 7.9 ( Right of replacement and repayment and cancellation in relation to a single Lender ) and Clause 25 (Security cover) .
11.5
[Intentionally deleted]
11.6
KEXIM Premium
(a)
The Borrower shall pay KEXIM the KEXIM Premium for each ECA Vessel Loan in the amount and at the times agreed in a Fee Letter.
11.7
K-Sure Premium
The Borrower shall pay K-Sure the K-Sure Premium for each ECA Vessel Loan in the amount notified in writing to the Borrower by K-Sure on or prior to the Utilization of the relevant Advance.

Section 6     

ADDITIONAL PAYMENT OBLIGATIONS
12
TAX GROSS UP AND INDEMNITIES; FATCA
12.1
[Intentionally left blank]
12.2
Tax gross-up
(a)
All payments made by any Obligor hereunder or under any Finance Document (other than a Hedging Agreement) will be made without setoff, counterclaim or other defense. All such payments will be made free and clear of, and without deduction or withholding for any Taxes imposed with respect to such payments unless required by applicable law. If applicable law requires the deduction or withholding of any Taxes from or in respect of any sum payable under any Finance Document, then:
(i)
the Borrower shall be entitled to make such deduction or withholding,
(ii)
the Borrower shall pay the full amount deducted or withheld to the relevant taxing authority and
(iii)
in the case of any Indemnified Taxes, the Borrower agrees to pay the full amount of such Indemnified Taxes, and such additional amounts as may be necessary so that every payment of all amounts due under this Agreement or under any Finance Document, after withholding or deduction for or on account of any Indemnified Taxes, will not be less than the amount provided for herein or in such Finance Document.
The Borrower shall indemnify each Finance Party, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes payable or paid by such Finance Party or required to be withheld or deducted from a payment to such Finance Party, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Facility Agent), or by the Facility Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error. In the event the Borrower pays amounts deducted and withheld to the relevant taxing authority in respect of Indemnified Taxes, the Borrower will furnish to the Facility Agent within forty-five (45) days after the date of payment of any Indemnified Taxes is due pursuant to applicable law certified copies of Tax receipts evidencing such payment by the Borrower. The Borrower agrees to indemnify and hold harmless each Lender, and reimburse such Lender upon its written request, for the amount of any Indemnified Taxes so levied or imposed and paid by such Lender.
(b)
Without duplicating the payments under paragraph (a) above, the Borrower agrees to pay any and all present or future stamp, court or documentary Taxes and any other excise (in the nature of a documentary or similar Tax), property, intangible, filing or mortgage recording Taxes or charges or similar levies imposed by any Governmental Authority which arise from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Finance Document excluding such amounts imposed in connection with an Assignment Agreement, a Transfer Certificate, grant of a participation, transfer or assignment to or designation of a new applicable lending office or other office for receiving payments under any Finance Document, except to the extent that any such change is requested in writing by a Borrower (all such non-excluded Taxes described in this paragraph (b) of Clause 12.2 ( Tax gross-up ) being referred to as " Other Taxes ").
(c)
Any Finance Party that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Finance Document shall deliver to the Borrower and the Facility Agent, at the time or times reasonably requested by the Borrower or the Facility Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Facility Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Finance Party, if reasonably requested by the Borrower or the Facility Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Borrower or the Facility Agent as will enable the Borrower or the Facility Agent to determine whether or not such Finance Party is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation shall not be required if in the Finance Party's reasonable judgment such completion, execution or submission would subject such Finance Party to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Finance Party.
(d)
If the Facility Agent or a Lender determines in its sole discretion that it has actually received or realized a refund of any Indemnified Taxes or Other Taxes as to which it has been indemnified by an Obligor or with respect to which such Obligor has paid additional amounts pursuant to Clause 12.2(a) ( Tax Gross-up ), it shall pay over such refund to such Obligor (but only to the extent of indemnity payments made, or additional amounts paid, by such Obligor under Clause 12.2(a) ( Tax Gross-up ) with respect to the Indemnified Taxes or payments of Other Taxes pursuant to Clause 12.2(a) ( Tax Gross-up ) giving rise to such refund), net of all reasonable out-of-pocket expenses of the Facility Agent or such Lender (including any Taxes imposed with respect to such refund) as is determined in the sole discretion of the Facility Agent or Lender in good faith, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). In the event the Facility Agent or such Lender is required to repay such refund to such Governmental Authority, then such Obligor, upon the written request of the Facility Agent or such Lender, agrees to promptly repay the amount paid over to such Obligor (plus any penalties, interest or other charges imposed by the relevant Governmental Authority, but without any other interest, penalties or charges) to the Facility Agent or such Lender. Nothing in this Clause 12.2(d) ( Tax Gross-up ) shall require a Lender to disclose any confidential information (including, without limitation, its Tax returns or its calculations).
(e)
Each Party shall, within ten Business Days of a reasonable request by another Party:
(i)
confirm to that other Party whether or not it would be subject to withholding Tax imposed by FATCA if such Party were to fail to comply with the applicable reporting requirements of FATCA; and
(ii)
supply to that other Party such forms (including U.S. Internal Revenue Service Forms W-8 or W-9), 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)
If a Party confirms to another Party pursuant to the foregoing that it would not be subject to withholding Tax imposed by FATCA or provides a U.S. Internal Revenue Service Form W-8 or W-9 and it subsequently becomes aware that it may be subject to withholding Tax imposed by FATCA or that the Form has ceased to be accurate or valid, that Party shall notify that other Party reasonably promptly or provide a revised Form, respectively.
(iv)
Without duplication of the foregoing, if a payment made to a Lender under any Finance Document would be subject to withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Facility Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Facility Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code or an intergovernmental agreement) and such additional documentation reasonably requested by the Borrower or the Facility Agent as may be necessary for the Borrower and the Facility Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Each Party may make any deduction 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 deduction under FATCA (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 Facility Agent and the Facility Agent shall notify the other Finance Parties.
(f)
Each Lender shall severally indemnify the Facility Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes or Other Taxes attributable to such Lender (but only to the extent that the Borrower has not already indemnified the Facility Agent for such Indemnified Taxes or Other Taxes and without limiting the obligation of the Borrower to do so) and (ii) any Taxes excluded in Clause 12.2(a) ( Tax Gross-up ) attributable to such Lender, in each case, that are payable or paid by the Facility Agent in connection with any Finance Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Facility Agent shall be conclusive absent manifest error. Each Lender hereby authorizes the Facility Agent to set off and apply any and all amounts at any time owing to such Lender under any Finance Document (other than a Hedging Agreement) or otherwise payable by the Facility Agent to the Lender from any other source against any amount due to the Facility Agent under this paragraph (f).
(g)
Each party's obligations under this Clause 12.2( Tax Gross-up ) shall survive the resignation or replacement of the Facility Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Finance Document.
12.3
[Intentionally left blank]
12.4
[Intentionally left blank]
12.5
VAT
(a)
All amounts expressed to be payable under a Finance Document by any 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 paragraph (b) 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 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 that Party).
(b)
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):
(i)
(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 sub-paragraph (i) 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
(ii)
(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.
(c)
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 of it 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.
(d)
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.
13
INCREASED COSTS
13.1
Increased costs
(a)
Subject to Clause 13.3( Exceptions) , the Borrower shall, within three Business Days of written demand by the Facility 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:
(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 made,
after the date of this Agreement. Notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and (ii) Basel III, and all requests, rules, regulations, guidelines and directives promulgated pursuant to the foregoing, are deemed to have been introduced or adopted after the date hereof, regardless of the date enacted or adopted.
(b)
In this Agreement, " Increased Costs " means:
(i)
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.
13.2
Increased cost claims
(a)
A Finance Party intending to make a claim pursuant to Clause 13.1 ( Increased costs ) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Borrower (and such notification shall, to the extent commercially practicable, contain reasonable details of the calculation for such additional amounts).
(b)
Each Finance Party shall, as soon as practicable after a demand by the Facility 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:
(a)
attributable to an Excluded Tax or a change in the rate of tax on the overall net income of a Finance Party;
(b)
compensated for by Clause 12.2 ( Tax gross-up)
(c)
compensated for by any payment made pursuant to Clause 14.3 ( Mandatory Cost );
(d)
attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation;
(e)
incurred by a Hedge Counterparty in its capacity as such; or
(f)
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).
14
OTHER INDEMNITIES
14.1
Currency indemnity
(a)
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:
(i)
making or filing a claim or proof against that Obligor; 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, on demand, indemnify each Secured Party to which that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(b)
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.
(c)
This Clause 14.1 ( Currency indemnity ) does not apply to any sum due to a Hedge Counterparty in its capacity as such.
14.2
Other indemnities
(a)
Each Obligor shall, upon written request, indemnify each Secured Party against any cost, loss or liability incurred by it as a result of:
(i)
the occurrence of any Event of Default;
(ii)
a failure by an Obligor 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 35 (Sharing among the Finance Parties);
(iii)
funding, or making arrangements to fund, its participation in an Advance requested by the Borrower in a Utilization 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 Secured Party alone); or
(iv)
the Loan (or part of the Loan) not being prepaid in accordance with a notice of prepayment given by the Borrower.
(b)
Each Obligor shall, on demand, indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate (each such person for the purposes of this Clause 14.2 ( Other indemnities ) 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 inquiry, in connection with or arising out of the entry into and the transactions contemplated by the Finance Documents (other than a Hedging Agreement), having the benefit of any Security constituted by the Finance Documents or which relates to the condition or operation of, or any incident occurring in relation to, any Ship unless such cost, loss or liability is caused by the gross negligence or willful misconduct of that Indemnified Person.
(c)
Without limiting, but subject to any limitations set out in paragraph (b) above, the indemnity in paragraph (b) above shall cover any cost, loss or liability incurred by each Indemnified Person in any jurisdiction:
(i)
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
(ii)
in connection with any Environmental Claim.
(d)
Any Affiliate or any officer or employee of a Finance Party or of any of its Affiliates may rely on this Clause 14.2 ( Other indemnities ) subject to Clause 1.5 ( Third party rights ).
(e)
Notwithstanding the foregoing, this Clause 14.2 ( Other indemnities) shall not cover the types of costs, loss or liability covered by Clause 10.2 ( Market disruption ), Clause 12 ( Tax gross-up and indemnities, FATCA) , Clause 13 ( Increased costs) , Clause 16 (Costs and expenses) and the other provisions of this Clause 14 ( Other indemnities).
14.3
Mandatory Cost
Each Obligor shall, on demand by the Facility Agent, pay to the Facility Agent for the account of the relevant Lender, such amount which any Lender certifies in a notice to the Facility Agent to be its good faith determination of the amount necessary to compensate it for complying with:
(a)
in the case of a Lender lending from a Facility Office in a Participating Member State, the minimum reserve requirements (or other requirements having the same or similar purpose) of the European Central Bank or any other authority or agency which replaces all or any of its functions in respect of loans made from that Facility Office; and
(b)
in the case of any Lender lending from a Facility Office in the United Kingdom, any reserve asset, special deposit or liquidity requirements (or other requirements having the same or similar purpose) of the Bank of England (or any other governmental authority or agency) and/or paying any fees to the U.K. Financial Conduct Authority and/or the U.K. Prudential Regulation Authority (or any other governmental authority or agency which replaces all or any of their functions),
which, in each case, is referable to that Lender's participation in the Loan.
14.4
Indemnity to the Facility Agent
Each Obligor shall, on demand, jointly and severally indemnify the Facility Agent against:
(a)
any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:
(i)
investigating any event which it reasonably believes is a Default; or
(ii)
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorized; or
(iii)
instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents (other than a Hedging Agreement ); and
(b)
any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or wilful misconduct) but not including any claim based on the fraud of the Facility Agent in acting as Facility Agent under the Finance Documents (other than a Hedging Agreement).
14.5
Indemnity to the Security Agent
(a)
Each Obligor shall, on demand, jointly and severally indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them:
(i)
in relation to or as a result of:
(A)
any failure by the Borrower to comply with its obligations under Clause 16 ( Costs and Expenses );
(B)
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorized;
(C)
the taking, holding, protection or enforcement of the Finance Documents and the Transaction Security;
(D)
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 (other than a Hedging Agreement) or by law;
(E)
any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents (other than a Hedging Agreement);
(F)
any action by any Obligor which vitiates, reduces the value of, or is otherwise prejudicial to, the Transaction Security; and
(G)
instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under the Finance Documents (other than a Hedging Agreement).
(ii)
acting as Security Agent, Receiver or Delegate under the Finance Documents (other than a Hedging Agreement) or which otherwise relates to any of the Security Property or the performance of the terms of this Agreement or the other Finance Documents (other than a Hedging Agreement) (otherwise, in each case, than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct).
(b)
The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Security Assets in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.5 ( Indemnity to the Security Agent ) and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.
14.6
Indemnity to KEXIM and KEXIM Guaranteed Lenders
The Borrower shall promptly indemnify KEXIM and the KEXIM Guaranteed Lenders against any cost, loss or liability incurred by KEXIM and the KEXIM Guaranteed Lenders (acting reasonably) as a result of:
(a)
investigating any event which it reasonably believes is a covered risk (howsoever described) under the KEXIM Guarantee; or
(b)
exercising any of the rights, powers, discretions or remedies vested in it under the KEXIM Guarantee or by law.
15
MITIGATION BY THE FINANCE PARTIES
15.1
Mitigation
(a)
Each Finance Party shall, in consultation with the Borrower, take all commercially reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 ( Illegality ), Clause 12 ( Tax Gross Up and Indemnities; FATCA ), Clause 13 ( Increased Costs ) or paragraph (a) of Clause 14.3 ( Mandatory Cost ) including (but not limited to) transferring its rights and obligations under the Finance Documents (other than a Hedging Agreement) to another Affiliate or Facility Office.
(b)
Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.
15.2
Limitation of liability
(a)
Each Obligor shall, on demand, jointly and severally indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 ( Mitigation ).
(b)
A Finance Party is not obliged to take any steps under Clause 15.1 ( Mitigation ) if either:
(i)
a Default has occurred and is continuing; or
(ii)
in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it in any economic, legal or regulatory respect.
15.3
Defaulting Lender
(a)
Notwithstanding any other provision in this Agreement to the contrary, if at any time a Lender becomes a Defaulting Lender, so long as such Lender is a Defaulting Lender, fees pursuant to Clause 11.1 ( Commitment fee ) shall cease to accrue on such Defaulting Lender's unused Commitment until such time as such Lender is no longer a Defaulting Lender, at which time fees pursuant to Clause 11.1 ( Commitment fee ) shall resume to accrue and be payable in accordance with Clause 11.1 ( Commitment fee ).
(b)
Each Defaulting Lender shall indemnify the Borrower, the Facility Agent and each Non-Defaulting Lender from and against any and all loss, damage or expenses, including but not limited to reasonable legal fees and, in the case of the Facility Agent or any Non-Defaulting Lender, funds (if any) advanced by the Facility Agent or by any Non-Defaulting Lender, on account of such Defaulting Lender's failure to timely fund its applicable Commitment of an Advance or to otherwise perform its obligations under the Finance Documents (other than a Hedging Agreement).
(c)
In the event that the Facility Agent and the Borrower agree that a Defaulting Lender has adequately remedied all matters that caused such Lender to be a Defaulting Lender, then the participation of the Lenders in the Loan shall be readjusted to reflect the inclusion of such Lender's participation in the Loan and on such date such Lender shall purchase at par such of the Loan or participations therein of the other Lenders as the Facility Agent shall determine may be necessary in order for such Lender to hold its pro rata share of the participations in the Loan and/or the Commitments.
(d)
At any time during a Default Period, the Borrower may, upon three (3) Business Days prior notice to the applicable Defaulting Lender (so long as such Default Period remains in effect at the end of such notice period), require such Defaulting Lender to assign all right, title and interest that it may have in, and its participations in, its participation in the Loan and any other Obligations of the Borrower under this Agreement and the Finance Documents to another Lender (if another Lender will consent to purchase such right, title and interest and participations) or another Person in accordance with and subject to the terms of Clause 28 ( Changes to the Lenders ) of this Agreement, if such Person can be found by the Borrower, for a purchase price equal to 100% of the principal amount of participation in the Loan plus the amount of any interest and fees accrued and owing to such Defaulting Lender as of the date of such assignment.
16
COSTS AND EXPENSES
16.1
Transaction expenses
The Obligors shall, jointly and severally on demand, pay the Facility Agent, the Security Agent, the ECA Agent (for the account of K-Sure), the Lead Arrangers and the Mandated Lead Arrangers the amount of all documented costs and expenses (including reasonable legal fees) reasonably incurred by any Secured Party and/or K-Sure in connection with the negotiation, preparation, printing, execution, syndication and perfection of:
(a)
this Agreement and any other documents referred to in this Agreement;
(b)
the Transaction Security;
(c)
each of the K-Sure Insurance Policies and any other documents which may at any time be required by K-Sure to give effect to the terms of any K-Sure Insurance Policy or which K-Sure is entitled to call for or obtain pursuant to the terms of any K-Sure Insurance Policy; and
(d)
any other Finance Documents executed after the date of this Agreement.
16.2
Amendment costs
If:
(a)
an Obligor requests an amendment, waiver or consent; or
(b)
an amendment is required pursuant to Clause 36.9 ( Change of currency ); or
(c)
an Obligor requests, and the Security Agent agrees to, the release of all or any part of the Security Assets from the Transaction Security,
the Obligors shall, jointly and severally on demand, reimburse each of the Facility Agent, the ECA Agent (for the account of K-Sure) and the Security Agent for the amount of all costs and expenses (including reasonable legal fees) reasonably incurred by each Secured Party and/or K-Sure in responding to, evaluating, negotiating or complying with that request or requirement.
16.3
Enforcement and preservation costs
The Obligors shall, jointly and severally on demand, pay to:
(a)
each Secured Party the amount of all costs and expenses (including reasonable legal fees) incurred by that Secured Party in connection with any step taken with a view to the protection, the enforcement of, or the preservation of any rights under, any Finance Document (other than a Hedging Agreement) or the Transaction Security and with any proceedings instituted by or against that Secured Party as a consequence of it entering into a Finance Document (other than a Hedging Agreement), taking or holding the Transaction Security, or enforcing those rights; and
(b)
each K-Sure Lender and the ECA Agent (for the account of K-Sure) the amount of all costs and expenses (including reasonable legal fees) incurred by a K-Sure Lender and/or K-Sure in connection with or incidental to the enforcement or exercise of, or the preservation of, its rights, powers, discretions and remedies under any K-Sure Insurance Policy and any proceedings instituted by or against any K-Sure Lender and/or K-Sure in connection thereto.

Section 7     

GUARANTEES
17
GUARANTEE AND INDEMNITY
17.1
Guarantee and indemnity
(a)
In order to induce the Facility Agent, the Security Agent and the Lenders to enter into this Agreement and to extend credit hereunder, and induce the other Finance Parties to enter into Hedging Agreements and in recognition of the direct benefits to be received by the Guarantors from the continuation of the Loan and the entering into of such Hedging Agreements, until the Final Ship Transfer Date each of the Guarantors hereby unconditionally and irrevocably guarantees as primary obligor and not merely as surety, the full and prompt payment when due, whether upon maturity, acceleration or otherwise, of any and all of the obligations of the Borrower and each other Obligor under this Agreement and the other Finance Documents to the Finance Parties (the " Obligations ").
(b)
If any or all of such Obligations becomes due and payable hereunder, the Guarantors unconditionally and irrevocably, promise to pay such indebtedness to the Facility Agent and/or the other Finance Parties, or order, on demand, together with any and all reasonable documented out-of-pocket expenses which may be incurred by the Facility Agent and the other Finance Parties in collecting any of the Obligations.
(c)
This guarantee constitutes a guarantee of punctual performance and payment and not merely of collection. Notwithstanding the foregoing, any Hedging Obligations guaranteed by the Guarantors under this Clause 17 ( Guarantee and indemnity ) shall not include any Excluded Hedging Obligations.
(d)
If a claim is ever made upon any Finance Party for repayment or recovery of any amount or amounts received in payment or on account of any of the Obligations and any of the aforesaid Finance Party repays all or part of said amount by reason of:
(i)
any judgment, decree or order of any court or administrative body having jurisdiction over such Finance Party or any of its property; or
(ii)
any settlement or compromise of any such claim effected by such Finance Party with any such claimant (including the Borrower),
(iii)
then and in such event, each Guarantor agrees that any such judgment, decree, order, settlement or compromise shall be binding upon the such Guarantor, notwithstanding any revocation of the guarantee under this Clause or other instrument evidencing any liability of the Borrower, and the Guarantors shall be and remain liable to the aforesaid payees hereunder for the amount so repaid or recovered to the same extent as if such amount had never originally been received by any such Finance Party.
(e)
All liabilities of the Owner Guarantors and the Hedge Guarantors under this Agreement shall, whether expressed to be so or not, be joint and several.
17.2
Keepwell
Each Qualified ECP Guarantor hereby jointly and severally absolutely, unconditionally and irrevocably undertakes to provide such funds or other support as may be needed from time to time by each other Hedge Guarantor to honor all of its obligations under this Clause 17 ( Guarantee and indemnity ) in respect of the Hedging Obligations guaranteed hereby ( provided that each Qualified ECP Guarantor shall be liable under this Clause 17.2( Keepwell ) only for the maximum amount of such liability that can be hereby incurred without rendering its obligations under this Clause 17 ( Guarantee and indemnity ), or otherwise under the guarantee under this Clause, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer, and not for any greater amount). Each Qualified ECP Guarantor intends that this Clause 17.2( Keepwell ) constitute, and this Clause 17.2 ( Keepwell ) shall be deemed to constitute, a "keepwell, support, or other agreement" for the benefit of each other Hedge Guarantor for all purposes of Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.
17.3
Bankruptcy
Additionally, the Guarantors unconditionally and irrevocably guarantee the payment of any and all of the Obligations (including, without limitation, all interest accruing subsequent to the commencement of any case, proceeding or other action relating to any other Obligor under any Debtor Relief Laws, and all interest which, but for any such case, proceeding or other action would otherwise accrue) to the Finance Parties whether or not due or payable by the Borrower or any Obligor upon the occurrence of any of the events specified in Clause 27.7( Insolvency Event ), and irrevocably, unconditionally and jointly and severally promises to pay such indebtedness to the Finance Parties, or order, on demand, in lawful money of the U.S.
17.4
Nature of Liability
The liability of the Guarantors hereunder is primary, absolute and unconditional, exclusive and independent of any Security for or other guarantee of any of the Obligations, whether executed by the Guarantors, any other guarantor or by any other party, and the liability of the Guarantors hereunder shall not be affected or impaired by:
(a)
any direction as to application of payment by the Borrower or by any other party; or
(b)
any other continuing or other guarantee, undertaking or maximum liability of a guarantor or of any other party as to the Obligations; or
(c)
any payment on or in reduction of any such other guarantee or undertaking; or
(d)
any dissolution, termination or increase, decrease or change in personnel by the Borrower; or
(e)
any payment made to any Finance Party on any of the Obligations which any such Finance Party repays to the Borrower or any other Obligor pursuant to court order in any bankruptcy, reorganization, arrangement, moratorium or other debtor relief proceeding, and each Guarantor waives any right to the deferral or modification of its obligations hereunder by reason of any such proceeding; or
(f)
any action or inaction by the Finance Party as contemplated in Clause 17.6 ( Authorization ); or
(g)
any invalidity, irregularity or enforceability of all or any part of the Obligations or of any Security therefor.
17.5
Independent Obligation
The obligations of each Guarantor hereunder are several and are independent of the obligations of any other guarantor, any other party or the Borrower, and a separate action or actions may be brought and prosecuted against any Guarantor whether or not action is brought against any other guarantor, any other party or the Borrower and whether or not any other guarantor, any other party or the Borrower be joined in any such action or actions. Each Guarantor waives, to the fullest extent permitted by law, the benefit of any statute of limitations affecting its liability hereunder or the enforcement thereof. Any payment by the Borrower or other circumstance which operates to toll any statute of limitations as to the Borrower shall operate to toll the statute of limitations as to the Guarantors.
17.6
Authorization
The Guarantors authorize the Finance Parties without notice or demand (except as shall be required by applicable statute or this Agreement and cannot be waived), and without affecting or impairing its liability hereunder, from time to time to:
(a)
in accordance with the terms and provisions of this Agreement and the other Finance Documents, change the manner, place or terms of payment of, and/or change or extend the time of payment of, renew, increase, accelerate or alter, any of the Obligations (including any increase or decrease in the principal amount thereof or the rate of interest or fees thereon), any security therefor, or any liability incurred directly or indirectly in respect thereof, and the guarantee under this Clause shall apply to the Obligations as so changed, extended, renewed or altered;
(b)
take and hold security for the payment of the Obligations and sell, exchange, release, impair, surrender, realize upon or otherwise deal with in any manner and in any order any property by whomsoever at any time pledged or mortgaged to secure, or howsoever securing, any of the Obligations or any liabilities (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and/or any offset there against;
(c)
exercise or refrain from exercising any rights against the Borrower, any other Obligor or others or otherwise act or refrain from acting;
(d)
release or substitute any one or more endorsers, guarantors, the Borrower, or other Obligors;
(e)
settle or compromise any of the Obligations, any security therefor or any liability (including any of those hereunder) incurred directly or indirectly in respect thereof or hereof, and may subordinate the payment of all or any part thereof to the payment of any liability (whether due or not) of the Borrower to its creditors other than the Finance Parties;
(f)
apply any sums by whomsoever paid or howsoever realized to any liability or liabilities of the Borrower to the Finance Parties regardless of what liability or liabilities of the Borrower remain unpaid;
(g)
consent to or waive any breach of, or any act, omission or default under, this Agreement, any other Finance Document, any Hedging Agreement or any of the instruments or agreements referred to herein or therein, or, pursuant to the terms of the Finance Documents, otherwise amend, modify or supplement this Agreement, any other Finance Document, any Hedging Agreement or any of such other instruments or agreements; and/or
(h)
take any other action which would, under otherwise applicable principles of common law, give rise to a legal or equitable discharge of any Guarantor from its liabilities under this Guarantee.
17.7
Reliance
It is not necessary for any Finance Party to inquire into the capacity or powers of any Guarantor or any of their respective Subsidiaries or the officers, directors, partners or agents acting or purporting to act on their behalf, and any of the Obligations made or created in reliance upon the professed exercise of such powers shall be guaranteed hereunder.
17.8
Subordination
Any Financial Indebtedness of the Borrower now or hereafter owing to any Guarantor is hereby subordinated to the Obligations of the Borrower owing to the Finance Parties; and if the Facility Agent so requests at a time when an Event of Default exists, all such Financial Indebtedness of the Borrower to any Guarantor shall be collected, enforced and received by such Guarantor for the benefit of the Finance Parties and be paid over to the Facility Agent on behalf of the Finance Parties on account of the Obligations to the Finance Parties, but without affecting or impairing in any manner the liability of such Guarantor under the other provisions of this Guarantee. Prior to the transfer by any Guarantor of any note or negotiable instrument evidencing any such Financial Indebtedness of the Borrower to such Guarantor, such Guarantor shall mark such note or negotiable instrument with a legend that the same is subject to this subordination. Without limiting the generality of the foregoing, the Guarantors hereby agrees with the Finance Parties that they will not exercise any right of subrogation which they may at any time otherwise have as a result of this Guarantee (whether contractual, under Section 509 of the U.S. Bankruptcy Code or otherwise) until all the Obligations have been irrevocably paid in full in cash. If and to the extent required in order for the Obligations of the Guarantors to be enforceable under applicable federal, state and other laws relating to the insolvency of debtors, the maximum liability of each Guarantor hereunder shall be limited to the greatest amount which can lawfully be guaranteed by such Guarantor, under such laws, after giving effect to any rights of contribution, reimbursement and subrogation arising under this Clause 17.8( Subordination ).
17.9
Waiver
(a)
The Guarantors waive any right (except as shall be required by applicable law and cannot be waived) to require any Finance Party to:
(i)
proceed against the Borrower, any other guarantor or any other party;
(ii)
proceed against or exhaust any security held from the Borrower, any other guarantor or any other party; or
(iii)
pursue any other remedy in any Finance Party's power whatsoever.
(b)
The Guarantors hereby irrevocably waive any defences it may now or hereafter have in any way relating to any and all of the following:
(i)
based on or arising out of any defence of the Borrower, any other guarantor or any other party, other than payment in full in cash of the Obligations, based on or arising out of the disability of the Borrower, any other guarantor or any other party, or the validity, legality or unenforceability of such obligations or any part thereof from any cause, or the cessation from any cause of the liability of the Borrower other than payment in full in cash of such obligations;
(ii)
any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to departure from any Finance Document;
(iii)
any taking, exchange, release or non-perfection of any Security Assets, or any taking, release or amendment or waiver of or consent to departure from the guarantee under this Clause or any other guarantee, for all or any of the Obligations;
(iv)
any law or regulation of any foreign jurisdiction or any other event affecting any term of any of the Obligations;
(v)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect or delay in perfecting, or refusal or neglect to take up or enforce, or delay in taking or enforcing any rights against, or security over assets of, any Transaction 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;
(vi)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of a Transaction Obligor or any other person;
(vii)
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 any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
(viii)
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security;
(ix)
any insolvency or similar proceedings; or
(x)
any other circumstance (including, without limitation, any statute of limitations or any existence of or reliance on any representation by the Facility Agent or any other Finance Party) that might otherwise constitute a defence available to, or a discharge of, such Guarantor, the Borrower or any other guarantor or surety other than payment in full in cash of the Obligations. The Finance Parties may, at their election, foreclose on any security held by the Facility Agent, the Security Agent or any other Finance Party by one or more judicial or non-judicial sales, whether or not every aspect of any such sale is commercially reasonable (to the extent such sale is permitted by applicable law), or exercise any other right or remedy the Finance Parties may have against the Borrower, or any other party, or any security, without affecting or impairing in any way the liability of the Guarantors hereunder except to the extent the Obligations have been paid in cash. The Parent Guarantor waives any defence arising out of any such election by the Finance Parties, even though such election operates to impair or extinguish any right of reimbursement or subrogation or other right or remedy of the Guarantors against the Borrower or any other party or any security.
(c)
The Guarantors waive all presentments, demands for performance, protests and notices, including, without limitation, notices of non-performance, notices of protest, notices of dishonor, notices of acceptance of the guarantee under this Clause, and notices of the existence, creation or incurring of new or additional Obligations. The Guarantors assume all responsibility for being and keeping themselves informed of the Borrower's financial condition and assets, and of all other circumstances bearing upon the risk of nonpayment of the Obligations and the nature, scope and extent of the risks which each Guarantor assumes and incurs hereunder, and agrees that neither the Facility Agent nor any of the other Finance Parties shall have any duty to advise any Guarantor of information known to them regarding such circumstances or risks.
17.10
Judgement Shortfall
(a)
The obligations of the Guarantors under the guarantee under this Clause to make payments in the respective currency or currencies in which the respective obligations are required to be paid (such currency being herein called the " Obligation Currency ") shall not be discharged or satisfied by any tender or recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or recovery results in the effective receipt by the Facility Agent, the Security Agent or the respective other Finance Party of the full amount of the Obligation Currency expressed to be payable to the Facility Agent, the Security Agent or such other Finance party under the guarantee under this Clause or the other Finance Documents or any Hedging Agreements, as applicable. If for the purpose of obtaining or enforcing judgment against any Guarantor in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the Obligation Currency (such other currency being hereinafter referred to as the " Judgment Currency ") an amount due in the Obligation Currency, the conversion shall be made, at the rate of exchange (quoted by the Facility Agent, determined, in each case, as of the date immediately preceding the day on which the judgment is given (such Business Day being hereinafter referred to as the " Judgment Currency Conversion Date ")).
(b)
If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of the amount due, each Guarantor, covenants and agrees to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount), as may be necessary to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at the rate or exchange prevailing on the Judgment Currency Conversion Date.
17.11
Irrevocable Payment
The obligations of the Guarantors under the guarantee under this Clause shall remain in full force and effect until the irrevocable payment and performance in full by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
17.12
Appropriations
Until all amounts which may be or become payable by the Transaction Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Secured Party (or any trustee or agent on its behalf) may:
(a)
refrain from applying or enforcing any other moneys, security or rights held or received by that Secured 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
(b)
hold in an interest-bearing suspense account any moneys received from the Parent Guarantor or on account of the Guarantors' liability under this Clause 17 ( Guarantee and Indemnity ).
17.13
Deferral of Parent Guarantor's rights
All rights which the Guarantors at any time has (whether in respect of this guarantee, a mortgage or any other transaction) against the Borrower, any other Transaction Obligor or their respective assets shall be fully subordinated to the rights of the Secured Parties under the Finance Documents and until the end of the Security Period and unless the Facility Agent otherwise directs, the Guarantors will not exercise any rights which they may have (whether in respect of any Finance Document to which it is a Party or any other transaction) 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 ( Guarantee and Indemnity ):
(a)
to be indemnified by a Transaction Obligor;
(b)
to claim any contribution from any third party providing security for, or any other guarantor of, any Transaction Obligor's obligations under the Finance Documents;
(c)
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Secured Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Secured Party;
(d)
to bring legal or other proceedings for an order requiring any Transaction Obligor to make any payment, or perform any obligation, in respect of which the Guarantors have given a guarantee, undertaking or indemnity under Clause 17.1 ( Guarantee and indemnity );
(e)
to exercise any right of set-off against any Transaction Obligor; and/or
(f)
to claim or prove as a creditor of any Transaction Obligor in competition with any Secured Party.
If the Guarantors receive 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 Secured Parties by the Transaction Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Secured Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with Clause 36 ( Payment Mechanics ).
17.14
Additional security
This guarantee and any other Security given by the Guarantors are in addition to and is not in any way prejudiced by, and shall not prejudice, any other guarantee or Security or any other right of recourse now or subsequently held by any Secured Party or any right of set-off or netting or right to combine accounts in connection with the Finance Documents.
17.15
Applicability of provisions of Guarantee to other Security
Clauses 17.9 ( Waiver ), 17.12 ( Appropriations ), 17.13 ( Deferral of Parent Guarantor's rights ) and 17.14 ( Additional security ) shall apply, with any necessary modifications, to any Security which the Guarantors create (whether at the time at which it signs this Agreement or at any later time) to secure the Secured Liabilities or any part of them.


Section 8     

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
18
REPRESENTATIONS
18.1
General
Each Obligor and the Ultimate Parent Guarantor (where relevant) makes the representations and warranties set out in this Clause 18 ( Representations ) to each Finance Party on the date of this Agreement, provided that any representation made by an Obligor to a Qualified Sanctions Lender pursuant to this Clause shall be made to such Qualified Sanctions Lender only the extent that the making of and the compliance with this representation do not and will not result in a violation of or conflict with the EU Blocking Regulation, Section 7 of the German Foreign Trade Ordinance (§ 7 Aussenwirtschaftsverordnung) or a similar applicable anti-boycott statute.
18.2
Corporate/Limited Liability Company/Limited Partnership Status
(a)
Each Obligor and the Ultimate Parent Guarantor is a duly organized and validly existing corporation, limited liability company or limited partnership, as the case may be, in good standing under the laws of the jurisdiction of its incorporation or formation.
(b)
Each Obligor and the Ultimate Parent Guarantor has the corporate or other applicable power and authority to own its property and assets and to transact the business in which it is currently engaged and presently proposes to engage.
(c)
Each Obligor and the Ultimate Parent Guarantor is duly qualified and is authorized to do business and is in good standing in each jurisdiction where the conduct of its business as currently conducted requires such qualifications, except for failures to be so qualified which, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
18.3
Corporate Power and Authority; Legal Validity and Enforceability
(a)
Each Obligor and the Ultimate Parent Guarantor has the corporate or other applicable power and authority to execute, deliver and perform the terms and provisions of each of the Transaction Documents to which it is party and has taken all necessary corporate or other applicable action to authorize the execution, delivery and performance by it of each of such Transaction Documents.
(b)
Each Obligor and the Ultimate Parent Guarantor has duly executed and delivered each of the Transaction Documents to which it is party, and each of such Transaction Documents constitutes the legal, valid and binding obligation of such Obligor or the Ultimate Parent Guarantor enforceable against such Obligor or the Ultimate Parent Guarantor in accordance with its terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws generally affecting creditors' rights and by equitable principles (regardless of whether enforcement is sought in equity or at law).
(c)
Each of the Security Documents creates in favor of the Security Agent for the benefit of the Secured Parties a legal, valid and enforceable fully perfected first priority security interest in and Security on all right, title and interest of the Obligors or the Ultimate Parent Guarantor party thereto in the Security Assets described therein, subject only to Other Permitted Security. No filings or recordings are required in order to perfect the security interests created under any Security Document or to ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document in each case, except for filings or recordings which shall have been made or will be made, in accordance with Schedule 2 ( Conditions Precedent ).
(d)
None of the Obligors or the Ultimate Parent Guarantor has a place of business in any jurisdiction which requires any of the Security Documents to be filed or registered in that jurisdiction to ensure the validity of the Security Documents to which it is a party unless all such filings and registrations have been made or will be made, in accordance with Schedule 2 ( Conditions Precedent ).
18.4
Pari passu ranking
Its payment obligations 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.
18.5
No Violation
Neither the execution, delivery or performance by any Obligor or the Ultimate Parent Guarantor of the Transaction Documents to which it is a party, nor compliance by it with the terms and provisions thereof, will:
(a)
contravene any material provision of any applicable law, statute, rule or regulation or any applicable order, judgment, writ, injunction or decree of any court or governmental instrumentality;
(b)
conflict with or result in any breach of any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Security (except Other Permitted Security) upon any of the material properties or assets of such Obligor or the Ultimate Parent Guarantor pursuant to the terms of any indenture, mortgage, deed of trust, credit agreement or loan agreement, or any other material agreement, contract or instrument, to which such Obligor or the Ultimate Parent Guarantor is a party or by which it or any of its material property or assets is bound or to which it may be subject; or
(c)
violate any provision of the Constitutional Documents of such Obligor or the Ultimate Parent Guarantor.
18.6
Governmental Approvals
No Authorization or validation of, or filing, recording or registration with (except as have been obtained or made or, in the case of any filings or recordings in respect of the Security Documents, will be made within 10 days of the date such Security Document is required to be executed pursuant hereto), or exemption by, any governmental or public body or authority, or any subdivision thereof, is required to authorize, or is required in connection with:
(a)
the execution, delivery and performance by any Obligor or the Ultimate Parent Guarantor of any Finance Document to which it is a party; or
(b)
the legality, validity, binding effect or enforceability of any Finance Document to which it is a party.
18.7
Financial Statements; Financial Condition; Undisclosed Liabilities
(a)
The audited consolidated balance sheets of the Parent Guarantor as at December 31, 2014 and the related consolidated statements of income and cash flows for the fiscal year ended on such date and (ii) the unaudited consolidated balance sheets of the Parent Guarantor as at June 30, 2015 and the related consolidated statements of income and cash flows, in each case for such quarterly accounting period, reported on by and accompanied by, in the case of the audited annual financial statements, an unqualified report from an Acceptable Accounting Firm, presenting fairly the consolidated financial condition of the Parent Guarantor as at such date, and the consolidated results of its operations and its consolidated cash flows for the respective fiscal years then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP applied consistently throughout the periods involved (except as approved by the aforementioned firm of accountants and disclosed therein). Neither the Parent Guarantor nor any of its Subsidiaries has any material guarantee obligations, contingent liabilities and liabilities for taxes, or any long-term leases or unusual forward or long-term commitments, including any interest rate or foreign currency swap or exchange transaction or other obligation in respect of derivatives, that are not reflected in the financial statements referred to in the preceding sentence (it being understood that with respect to guarantee obligations, the underlying debt is so reflected).
(b)
Except as fully disclosed in the financial statements and the notes related thereto delivered pursuant to Clause 19.2 ( Financial statements ), there were as of the date of this Agreement no liabilities or obligations with respect to the Parent Guarantor or any of its Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or otherwise and whether or not due) which, either individually or in the aggregate, would be materially adverse to the Parent Guarantor and its Subsidiaries taken as a whole. As of the date of this Agreement, none of the Obligors knows of any basis for the assertion against it of any liability or obligation of any nature that is not fairly disclosed (including, without limitation, as to the amount thereof) in the financial statements and the notes related thereto delivered pursuant to Clause 19.2 ( Financial statements ) which, either individually or in the aggregate, could reasonably be expected to be materially adverse to the Parent Guarantor and its Subsidiaries taken as a whole.
(c)
The Projections delivered by the Parent Guarantor to the Facility Agent and the Lenders prior to the date of this Agreement have been prepared in good faith and are based on GAAP and reasonable assumptions, and there are no statements or conclusions in such Projections which are based upon or include information known to the Parent Guarantor on the date of this Agreement to be misleading in any material respect or which fail to take into account material information known to the Parent Guarantor on the date of this Agreement regarding the matters reported therein. On the date of this Agreement, the Parent Guarantor believes that such Projections are reasonable and attainable, it being recognized by the Lenders, however, that projections as to future events are not to be viewed as facts and that the actual results during the period or periods covered by the Projections may differ from the projected results included in such Projections.
(d)
Since December 31, 2014 (or as the case may be, the date of the latest audited consolidated balance sheets of the Parent Guarantor provided to the Facility Agent pursuant to this Agreement), nothing has occurred that has had or could reasonably be expected to have a Material Adverse Effect.
(e)
The audited accounts delivered under Clause 19.2(b) ( Financial statements ) will:
(i)
be prepared in accordance with all applicable laws and IFRS consistently applied;
(ii)
give a true and fair view of the state of affairs of the Group (or the Ultimate Parent Guarantor, as the case may be) at the date of those accounts and of profit for the period to which those accounts relate; and
(iii)
fully disclose or provide for all significant liabilities of the Group (or the Ultimate Parent Guarantor, as the case may be).
18.8
Litigation
There are no actions, suits, investigations (conducted by any governmental or other regulatory body of competent jurisdiction) or proceedings pending or, to the knowledge of the Ultimate Parent Guarantor, the Parent Guarantor or the Borrower, threatened against the Ultimate Parent Guarantor, the Parent Guarantor or any of its Subsidiaries (i) with respect to the Finance Documents; or (ii) that could reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect.
18.9
True and Complete Disclosure
(a)
All factual information (taken individually or as a whole) furnished by or on behalf of the Ultimate Parent Guarantor, the Parent Guarantor or the Borrower in writing to the Facility Agent or any Lender (including, without limitation, all information contained in the Transaction Documents and the Previous Merger Agreement and any financial statement referred to in Clause 19.2 ( Financial statements )) for purposes of or in connection with this Agreement, the other Finance Documents or any transaction contemplated herein or therein is, and all other such factual information (taken individually or as a whole) hereafter furnished by or on behalf of the Ultimate Parent Guarantor, the Parent Guarantor or the Borrower in writing to the Facility Agent or any Lender will be, true and accurate in all material respects and did not fail to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time as such information was provided and copies of the Shipbuilding Contracts and the Previous Merger Agreement are the full, complete and true copies of such documents and do not omit any addenda, amendments or supplements thereto.
(b)
All factual information (taken individually or as a whole) furnished by or on behalf of the Ultimate Parent Guarantor, the Parent Guarantor or the Borrower in writing to the Facility Agent or any Lender (including, without limitation, all information contained in the Transaction Documents and the Merger Agreement and any financial statement referred to in Clause 19.2 ( Financial statements )) for purposes of or in connection with this Agreement, the other Finance Documents or any transaction contemplated herein or therein is, and all other such factual information (taken individually or as a whole) hereafter furnished by or on behalf of the Ultimate Parent Guarantor, the Parent Guarantor or the Borrower in writing to the Facility Agent or any Lender will be, true and accurate in all material respects and did not fail to state any fact necessary to make such information (taken as a whole) not misleading in any material respect at such time as such information was provided and copies of the Shipbuilding Contracts and the Merger Agreement are the full, complete and true copies of such documents and do not omit any addenda, amendments or supplements thereto.
18.10
Use of Proceeds
(a)
All proceeds of the Loan shall be used in accordance with Clause 3.1 ( Purpose ).
(b)
No proceeds of the Loan shall be made available directly or indirectly to or for the benefit of a Restricted Party in a manner that would result in a violation of Sanctions Laws, nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions Laws.
(c)
No payment in connection with a Finance Document shall be funded out of proceeds derived from any action which is in breach of Sanctions Laws.
18.11
Tax Returns and Payments
(a)
All payments which an Obligor is liable to make under the Finance Documents to which it is a party can properly be made without deduction or withholding for or on account of any Tax payable under any law of any relevant jurisdiction applicable as of the date of this Agreement.
(b)
The Ultimate Parent Guarantor and each of its Subsidiaries has timely filed with the appropriate taxing authorities, and, as applicable, all material U.S. federal income tax returns, statements, forms and reports for taxes and all other material U.S. and non-U.S. tax returns, statements, forms and reports for taxes required to be filed by or with respect to the income, properties or operations of the Ultimate Parent Guarantor and/or any of its Subsidiaries (the " Returns "). All such Returns accurately reflect in all material respects all liability for taxes of the Ultimate Parent Guarantor and its Subsidiaries as a whole for the periods covered thereby. The Ultimate Parent Guarantor and each of its Subsidiaries have paid, or have provided adequate reserves (in accordance with IFRS) for the payment of, all Taxes shown as due on all such Returns and all other material U.S. federal, state and non-U.S. Taxes that have become due and payable.
(c)
There is no action, suit, proceeding, investigation, audit, or claim now pending or, to the best knowledge of the Ultimate Parent Guarantor or any of its Subsidiaries, threatened by any authority regarding any Taxes relating to the Ultimate Parent Guarantor or any of its Subsidiaries.
(d)
As of the date of this Agreement, neither the Ultimate Parent Guarantor nor any of its Subsidiaries has entered into an agreement or waiver or been requested to enter into an agreement or waiver extending any statute of limitations relating to the payment or collection of Taxes of the Ultimate Parent Guarantor or any of its Subsidiaries, or is aware of any circumstances that would cause the taxable years or other taxable periods of the Ultimate Parent Guarantor or any of its Subsidiaries not to be subject to the normally applicable statute of limitations.
(e)
Neither the Ultimate Parent Guarantor nor any of its Subsidiaries (i) has engaged in any "listed transaction" within the meaning of Section 6011 of the Code or (ii) has any actual or potential liability for the taxes of any person (other than the Ultimate Parent Guarantor or any of its present or former Subsidiaries) under the United States Treasury regulation Section 1.1502-6 (or any similar provision of state, local, foreign or provincial law).
18.12
[Intentionally Deleted]
18.13
Subsidiaries
(a)
On the first Utilization Date, the Parent Guarantor has no Subsidiaries other than those Subsidiaries listed on Schedule 10 ( Subsidiaries) (which Schedule identifies the correct legal name, direct owner, percentage ownership and jurisdiction of organization of each such Subsidiary on the date hereof). On the first Utilization Date, all outstanding capital stock, membership interests, partnership interests, units or other form of equity, of each class outstanding, of each of the Subsidiaries listed on Schedule 10 ( Subsidiaries) has been validly issued, is fully paid and non-assessable (to the extent applicable) and, except in the case of the Parent Guarantor, is owned beneficially and of record by a Obligor free and clear of all Security other than Other Permitted Security.
(b)
The Original Borrower is a wholly-owned Subsidiary of the Shareholder.
(c)
Each of the Owner Guarantors is a wholly-owned Subsidiary of the Original Borrower.
18.14
Compliance with Statutes, etc.
The Ultimate Parent Guarantor and each of its Subsidiaries are in compliance with all applicable statutes, regulations and orders of, and all applicable restrictions imposed by, all governmental bodies, domestic or foreign, in respect of the conduct of its business and the ownership of its property, except such non-compliances that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
18.15
[Intentionally Deleted]
18.16
Anti-Money Laundering; Anti-Bribery and Corruption
(a)
Each Obligor and the Ultimate Parent Guarantor has conducted its business in compliance with all applicable Anti-Bribery and Corruption Laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
(b)
Each Obligor and the Ultimate Parent Guarantor as well as their respective directors and officers, complies with any applicable law or regulation implemented to combat "money laundering", including without limitation the PATRIOT Act and the Bank Secrecy Act.
18.17
Sanctions
Each Relevant Person has been and is in compliance with all Sanctions Laws and no Relevant Person:
(a)
is a Restricted Party, or is involved in any transaction through which it is likely to become a Restricted Party; or
(b)
has received formal notice in writing of any inquiry, claim, action, suit, proceeding or investigation against it with respect to Sanctions Laws.
18.18
Pollution and Other Regulations
(a)
Each of the Borrower, the Parent Guarantor and its Subsidiaries is in compliance with all applicable Environmental Laws governing its business, except for such failures to comply as are not reasonably likely to have a Material Adverse Effect, and neither the Borrower, the Parent Guarantor nor any of its Subsidiaries is, to the knowledge of the Parent Guarantor or the Borrower, liable for any penalties, fines or forfeitures for failure to comply with any of the foregoing except for such penalties, fines or forfeitures as are not reasonably likely to have a Material Adverse Effect.
(b)
All licenses, permits, registrations or approvals required for the business of the Borrower, the Parent Guarantor and each of its Subsidiaries, as conducted as of the date of this Agreement, under any Environmental Law have been secured and each of the Borrower, the Parent Guarantor and each of its Subsidiaries is in substantial compliance therewith, except for such failures to secure or comply as are not reasonably likely to have a Material Adverse Effect.
(c)
Neither the Borrower, the Parent Guarantor nor any of its Subsidiaries is in noncompliance with, breach of or default under any applicable writ, order, judgment, injunction, or decree pursuant to any Environmental Law, to which the Borrower, the Parent Guarantor or such Subsidiary is a party or which would affect the ability of the Borrower, the Parent Guarantor or such Subsidiary to operate any Ship, Real Property or other facility and no event has occurred and is continuing which, with the passage of time or the giving of notice or both, would constitute noncompliance, breach of or default thereunder, except in each such case, as such noncompliance, breaches or defaults as are not likely to, individually or in the aggregate, have a Material Adverse Effect.
(d)
There are, as of the date of this Agreement, no Environmental Claims pending or, to the knowledge of the Borrower, the Parent Guarantor or the Borrower, threatened, against the Borrower, the Parent Guarantor or any of its Subsidiaries in respect of which an unfavorable decision, ruling or finding would be reasonably likely to have a Material Adverse Effect.
(e)
There are no facts, circumstances, conditions or occurrences on any Ship, Real Property or other facility owned or operated by the Borrower, the Parent Guarantor or any of its Subsidiaries that are reasonably likely (i) to form the basis of an Environmental Claim against the Borrower, the Parent Guarantor, any of its Subsidiaries or any Ship, Real Property or other facility owned by the Borrower, the Parent Guarantor or any of its Subsidiaries, or (ii) to cause such Ship, Real Property or other facility to be subject to any restrictions on its ownership, occupancy, use or transferability under any Environmental Law, except in each such case for clauses (i) and (ii) above, such Environmental Claims or restrictions that individually or in the aggregate are not reasonably likely to have a Material Adverse Effect.
(f)
Hazardous Materials have not at any time prior to the date of this Agreement, been (i) generated, used, treated or stored on, or transported to or from, any Ship, Real Property or other facility at any time owned or operated by the Borrower, the Parent Guarantor or any of its Subsidiaries or (ii) released on or from any such Ship, Real Property or other facility, except in each case for clauses (i) and (ii) above where such occurrence or event, either individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.
This Clause 18.18 ( Pollution and Other Regulations ) contains the sole and exclusive representations and warranties of the Obligors with respect to environmental, health and safety matters, including any relating to or arising under Environmental Laws, Environmental Claims or Hazardous Materials.
18.19
[Intentionally Deleted]
18.20
Patents, Licenses, Franchises and Formulas
The Ultimate Parent Guarantor and each of its Subsidiaries owns, or has the right to use, and has the right to enforce and prevent any third party from using, all material patents, trademarks, permits, service marks, trade names, copyrights, licenses, franchises and formulas, and has obtained assignments of all leases and other rights of whatever nature, necessary for the present conduct of its business, without any known conflict with the rights of others, except for such failures and conflicts which could not, either individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
18.21
Financial Indebtedness
Schedule 11 ( Financial Indebtedness) sets forth a true and complete list of all Financial Indebtedness of the Parent Guarantor and its Subsidiaries as of the first Utilization Date (other than Financial Indebtedness under the Re-financing Facility and which is to remain outstanding after giving effect to the date of this Agreement (the " Existing Indebtedness ")), in each case showing the aggregate principal amount thereof and the name of the borrower and any other entity which directly or indirectly guarantees such debt.
18.22
[Intentionally Deleted]
18.23
Ownership and operation of the Ships
The registered owner and jurisdiction of registration and flag (which shall be in an Approved Flag) of each Ship is set forth in Schedule 8 ( Details of the Ships ). Each Ship is and will be operated in compliance with all applicable law, rules and regulations, except such noncompliance as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect or result in a material diminution in the value of such Ship.
18.24
Citizenship
The Parent Guarantor and each other Obligor which owns or operates, or will own or operate, one or more Ships is, or will be, qualified to own and operate such Ships under the relevant Approved Flag, or will be permitted, to be flagged in accordance with the terms of the respective Ship's Mortgage.
18.25
Ship Classification Flag
Each Ship:
(a)
is or will be, classified in the highest class available for ships of its age and type with an Approved Classification Society, free of any conditions or recommendations, other than as permitted, or will be permitted, under the Ship's Mortgages, and
(b)
flagged in an Approved Flag jurisdiction.
18.26
No Immunity
The Ultimate Parent Guarantor does not, nor does any other Obligor or any of their respective properties, have any right of immunity on the grounds of sovereignty or otherwise from the jurisdiction of any court or from setoff or any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of any jurisdiction. The execution and delivery of the Finance Documents by the Obligors and the performance by them of their respective obligations thereunder constitute commercial transactions.
18.27
Flags and Enforcement
No fees or taxes, including, without limitation, stamp, transaction, registration or similar taxes, are required to be paid to ensure the legality, validity, or enforceability of this Agreement or any of the other Finance Documents other than recording taxes which have been, or will be, paid by the Ultimate Parent Guarantor or any of its Subsidiaries as and to the extent due. Under the laws of any Approved Flag jurisdiction, the choice of the laws of England and Wales as set forth in the Finance Documents which are stated to be governed by the laws of England and Wales is a valid choice of law, and the irrevocable submission by each Obligor to jurisdiction and consent to service of process and, where necessary, appointment by such Obligor of an agent for service of process, in each case as set forth in such Finance Documents, is legal, valid, binding and effective.
18.28
Form of Documentation
Each of the Finance Documents is, or when executed will be, in proper legal form under the laws of the jurisdiction of the applicable Approved Flag for the enforcement thereof under such laws. To ensure the legality, validity, enforceability or admissibility in evidence of each such Finance Document in applicable Approved Flag jurisdiction, it is not necessary that any Finance Document or any other document be filed or recorded with any court or other authority in such applicable Approved Flag jurisdiction, or notarized or executed under seal, or physically executed in any such jurisdiction, except as have been made, or will be made, in accordance with Clause 46 ( Counterparts ).
18.29
Solvency
After giving effect to:
(a)
the Loan,
(b)
the consummation of the transactions contemplated hereunder; and
(c)
the payment and accrual of all transaction costs in connection with the foregoing,
the Parent Guarantor and its Subsidiaries, taken as a whole, the Borrower and its Subsidiaries, taken as a whole, and the Ultimate Parent Guarantor are Solvent.
19
INFORMATION UNDERTAKINGS
19.1
General
The undertakings in this Clause 19 ( Information Undertakings ) remain in force throughout the Security Period unless the Facility Agent, acting with the authorization of the Majority Lenders (or, where specified, all the Lenders), may otherwise permit.
19.2
Financial statements
The Ultimate Parent Guarantor will send to the Facility Agent:
(a)
as soon as possible, but in no event later than 120 days after the end of each financial year of the Ultimate Parent Guarantor from and including the financial year ending 31 December 2017, the audited consolidated accounts of the Group and audited individual accounts of the Ultimate Parent Guarantor;
(b)
as soon as possible, but in no event later than 75 days after the end of each financial half-year of the Ultimate Parent Guarantor (which half-year end shall, for the avoidance of doubt, occur annually), the audited consolidated balance sheet of the Group certified as to its correctness by the chief financial officer of the Ultimate Parent Guarantor and the audited individual balance sheet of the Ultimate Parent Guarantor certified as to its correctness by an officer or director of the Ultimate Parent Guarantor;
(c)
as soon as possible, but in no event later than 60 days after the end of each financial quarter of the Ultimate Parent Guarantor and provided that these documents have not been published on the Ultimate Parent Guarantor website or sent to the Lenders in the form of a press release, unaudited consolidated income statements of the Group certified as to their correctness by the chief financial officer of the Ultimate Parent Guarantor and unaudited individual income statements of the Ultimate Parent Guarantor certified as to their correctness by an officer or director of the Ultimate Parent Guarantor;
(d)
as soon as possible, but not later than 120 days after the end of each financial year of the Ultimate Parent Guarantor, a financial projection for the Ultimate Parent Guarantor and the Group for the next 3 years in a format which is acceptable to the Facility Agent; and
(e)
together with delivery of the compliance certificates described in Clause 19.3(a) ( Compliance certificate ) required in connection with Clauses 19.2(a) and 19.2(b) (Financial Statements) and, after the occurrence of an Event of Default which is continuing, at the written request of the Facility Agent, valuations of each of the Ships dated no more than 30 days prior to the delivery thereof, in form and substance reasonably satisfactory to the Facility Agent and from two Approved Appraisers stating the then current Fair Market Value of each of the Ships. All such valuations shall be conducted by, and made at the expense of, the Borrower.
19.3
Compliance Certificate
(a)
At the time of the delivery of the financial statements provided for in Clauses 19.2(a) and 19.2(b) ( Financial Statements ), a compliance certificate (together with supporting schedules, if any) signed by the chief financial officer of the Ultimate Parent Guarantor in the form attached as Schedule 7 ( Compliance Certificate) (or in any other format which the Facility Agent may approve and with such other information as the Facility Agent may require).
(b)
At the time of a disposal of any Ship, a certificate of the chief financial officer of the Ultimate Parent Guarantor which certificate shall:
(i)
certify on behalf of the Ultimate Parent Guarantor the last valuation received pursuant to Clause 19.2(e) ( Financial Statements ) determining the Aggregate Collateral Vessel Value, after giving effect to such disposition(s) and/or showing the individual Fair Market Value of all Ships owned by the Owner Guarantors or Additional Borrower (as the case may be) which have not been sold, transferred, lost or otherwise disposed of at such time; and
(ii)
set forth the calculations required to establish whether the Ultimate Parent Guarantor is in compliance with the provisions of Clause 25.1 ( Minimum required security cover )after giving effect to such disposition.
19.4
Information: miscellaneous
Each Obligor shall and shall procure that each other Obligor shall supply to the Facility Agent (in sufficient copies for all the Lenders and to the ECAs, if the Facility Agent so requests):
(a)
promptly, copies of all financial information, proxy materials and other information and reports, if any, which the Ultimate Parent Guarantor or any of its Subsidiaries shall file with the SEC (or any successor thereto) or deliver to holders of its Financial Indebtedness pursuant to the terms of the documentation governing such Financial Indebtedness (or any trustee, agent or other representative therefor) provided that these documents have not been published on the Additional Borrower's website or on the SEC's EDGAR system (or any successor system) and such documents are publicly available or sent to the Lenders in the form of a press release.
(b)
promptly upon, and in any event within five Business Days after, without duplication of any other reporting requirements herein, receipt of any notices of default, financial reporting and collateral reporting under the Re-financing Facility, and copies of all effectuated additions, amendments, restatements, supplements or other modifications in respect of the Re-financing Facility documents.
(c)
promptly, such further information and/or documents as any Finance Party (through the Facility Agent) may reasonably request so as to enable such Finance Party to comply with any laws applicable to it (including without limitation compliance with FATCA) or as may be required by any regulatory authority.
(d)
promptly upon, and in any event within fifteen Business Days after, the Ultimate Parent Guarantor obtains knowledge thereof, written notice of any of the following environmental matters occurring after the date of this Agreement, except to the extent that such environmental matters could not, individually or in the aggregate, be reasonably expected to have a Material Adverse Effect:
(i)
any Environmental Claim pending or threatened in writing against the Ultimate Parent Guarantor or any of its Subsidiaries or any Ship or property owned or operated or occupied by the Ultimate Parent Guarantor or any of its Subsidiaries;
(ii)
any condition or occurrence on or arising from any Ship or property owned or operated or occupied by the Ultimate Parent Guarantor or any of its Subsidiaries that (a) results in material noncompliance by the Ultimate Parent Guarantor or such Subsidiary with any applicable Environmental Law or (b) could reasonably be expected to form the basis of an Environmental Claim against the Ultimate Parent Guarantor or any of its Subsidiaries or any such Ship or property;
(iii)
any condition or occurrence on any Ship or property owned or operated or occupied by the Ultimate Parent Guarantor or any of its Subsidiaries that could reasonably be expected to cause such Ship or property to be subject to any restrictions on the ownership, occupancy, use or transferability by the Ultimate Parent Guarantor or such Subsidiary of such Ship or property under any Environmental Law;
(iv)
the taking of any removal or remedial action in response to the actual or alleged presence of any Hazardous Material on any Ship or property owned or operated or occupied by the Ultimate Parent Guarantor or any of its Subsidiaries as required by any Environmental Law or any governmental or other administrative agency; provided that in any event the Ultimate Parent Guarantor shall deliver to the Facility Agent all material notices received by the Ultimate Parent Guarantor or any of its Subsidiaries from any government or governmental agency under, or pursuant to the OPA; and
(v)
all such notices shall describe in reasonable detail the nature of the claim, investigation, condition, occurrence or removal or remedial action and the Ultimate Parent Guarantor's or such Subsidiary's response thereto. In addition, the Ultimate Parent Guarantor will provide the Facility Agent with copies of all material communications with any government or governmental agency and all material communications with any person relating to any Environmental Claim of which notice is required to be given pursuant to this Clause 21.4 ( Ownership of Subsidiaries ), and such detailed reports of any such Environmental Claim as may reasonably be requested by the Facility Agent or the Majority Lenders;
(e)
promptly after Ultimate Parent Guarantor's or any of its Subsidiaries' receipt thereof, a copy of any "management letter" received from its certified public accountants and management's response thereto;
(f)
promptly and in any event within five Business Days after any Obligor obtains actual knowledge thereof, the relevant party shall supply to the Facility Agent (i) the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanctions Laws by any Sanctions Authority against it, any of its Subsidiaries, any of its direct or indirect owners, or any of their respective directors, officers, employees, agents or representatives as well as information on what steps are being taken to answer or oppose such inquiry, claim, action, suit, proceeding or investigation and (ii) notice that any Obligor, any of its Subsidiaries or any of its direct or indirect owners, or any of their respective directors, officers, employees agents or representatives has become or is likely to become a Restricted Party or becomes involved in any transaction involving a Restricted Party; and
(g)
from time to time, such other information or documents (financial or otherwise) with respect to the Ultimate Parent Guarantor or its Subsidiaries as the Facility Agent or the Lenders (through the Facility Agent) may reasonably request in writing.
19.5
"Know your customer" checks
If:
(i)
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 (including, without limitation, a change of ownership of an Obligor) after the date of this Agreement;
(iii)
any change in the information provided in the Beneficial Ownership Certification would result in a change to the list of beneficial owners identified in parts (c) or (d) of such certification; or
(iv)
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 a Finance Party (or, in the case of sub-paragraph (iv) 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 any Finance Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by a Servicing Party (for itself or on behalf of any other Finance Party) or any Lender (for itself or, in the case of the event described in sub-paragraph (iv) above, on behalf of any prospective new Lender) (such documentation and evidence to include without limitation, constitutional documents and certificates of good standing of a company, officer's certificates setting out the names of a company's directors and/or officers, copies of passports and address proofs of such directors and/or officers) in order for such Finance Party or, in the case of the event described in sub-paragraph (iv) 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.
(b)
Each Lender shall promptly upon the request of a Servicing Party supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Servicing Party (for itself) in order for that Servicing Party 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.
19.6
Notification of Event of Default
Promptly, and in any event within three Business Days after the Ultimate Parent Guarantor obtains knowledge thereof, notice of (i) the occurrence of any event which constitutes a Default or Event of Default which notice shall specify the nature thereof, the period of existence thereof and what action the Ultimate Parent Guarantor proposes to take with respect thereto, (ii) any litigation or governmental investigation or proceeding pending or threatened in writing against the Ultimate Parent Guarantor or any of its Subsidiaries which, if adversely determined, could reasonably be expected to have a Material Adverse Effect on any Finance Document and (iii) any Total Loss in respect of any Ship.
20
FINANCIAL COVENANTS
20.1
General
The undertakings in this Clause 20 ( Financial Covenants ) remain in force throughout the Security Period except as the Facility Agent, acting with the authorization of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.
20.2
Financial Covenants
The Additional Borrower will ensure that the consolidated financial position of the Group shall at all times during the Security Period be such that:
(a)
Consolidated Working Capital shall not be less than $0;
(b)
Free Liquid Assets are not less than the higher of:
(i)
$50,000,000;
(ii)
5 per cent. of Total Indebtedness;
(c)
the amount of Cash shall equal or exceed US$30,000,000; and
(d)
the ratio of Stockholders' Equity to Total Assets is not less than 30 per cent.
In this Clause 20 ( Financial Covenants ):
" Cash " means, at any date of determination under this Agreement, the aggregate value of the Group's credit balances on any deposit, savings or current account and cash in hand with recognised and reputable banks or financial institutions but excluding any such credit balances and cash subject to a Security at any time;
" Consolidated Current Assets " means, at any date of determination under this Agreement, the amount of the current assets of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet and including any amounts available under committed credit lines having remaining maturities of more than 12 months;
" Consolidated Current Liabilities " means, at any date of determination under this Agreement, the amount of the current liabilities of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet;
" Consolidated Working Capital " means Consolidated Current Assets less Consolidated Current Liabilities;
" Free Liquid Assets " means, at any date of determination under this Agreement, the aggregate amount of cash and cash equivalents of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet but excluding any of those assets subject to a Security (other than a Security in favour of the Security Agent pursuant to this Agreement) at any time and, for the avoidance of doubt, "cash and cash equivalents" include any amounts available under committed credit lines having remaining maturities of more than 6 months;
" Latest Balance Sheet " means, at any date, the consolidated balance sheet of the Group most recently delivered to the Agent pursuant to Clause 19.2 ( Financial Statements ) and/or most recently made publicly available;
" Stockholders' Equity " means, at any date of determination under this Agreement, the amount of the capital and reserves of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet;
" Total Assets " means, at any date of determination under this Agreement, the amount of the total assets of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet; and
" Total Indebtedness " means, at any date of determination under this Agreement, the amount of long-term loans (including finance leases, bank loans and other long-term loans) and short-term loans of the Group determined on a consolidated basis in accordance with IFRS and as shown in the Latest Balance Sheet.
21
GENERAL UNDERTAKINGS
21.1
General
The undertakings in this Clause 21 ( General Undertakings ) remain in force throughout the Security Period except as the Facility Agent, acting with the authorization of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit provided that any undertaking made by an Obligor to a Qualified Sanctions Lender pursuant to this Clause 21 shall be made to such Qualified Sanctions Lender only the extent that the making of and the compliance with this undertaking do not and will not result in a violation of or conflict with the EU Blocking Regulation, Section 7 of the German Foreign Trade Ordinance (§ 7 Aussenwirtschaftsverordnung) or a similar applicable anti-boycott statute.
21.2
Corporate Franchises
The Ultimate Parent Guarantor will, and will cause each of its Subsidiaries, to do or cause to be done, all things necessary to preserve and keep in full force and effect its existence and its material rights, franchises, licenses and patents (if any) used in its business, except, in the case of any Subsidiary of the Ultimate Parent Guarantor that is not an Owner Guarantor, which could not be reasonably expected to have a Material Adverse Effect; provided, however, that nothing in this Clause 21.2 ( Corporate Franchises ) shall prevent:
(a)
sales or other dispositions of assets, consolidations or mergers by or involving the Ultimate Parent Guarantor or any of its Subsidiaries which are permitted in accordance with Clause 21.23 ( Merger ) or Clause 21.22 ( Disposals );
(b)
any Owner Guarantor from changing the jurisdiction of its organization to the extent permitted by Clause 21.31(c)(vi) ( Limitation on Certain Requirements on Subsidiaries ); or
(c)
the abandonment by the Ultimate Parent Guarantor or any of its Subsidiaries of any rights, franchises, licenses and patents that could not be reasonably expected to have a Material Adverse Effect.
21.3
Compliance with laws
Each Obligor will:
(a)
comply with all applicable statutes, regulations and orders of, and all applicable restrictions (including all laws and regulations relating to money laundering) imposed by, all governmental bodies, domestic or foreign, (i) in respect of the conduct of its business and the ownership of its property except such non-compliances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, and (ii) applicable to each Ship, its ownership, employment, operation, management and registration, including the ISM Code, ISPS Code, all material Environmental Laws, all Sanctions Laws and the laws of the relevant Approved Flag;
(b)
obtain, comply with, and do all that is necessary to maintain in full force and effect any approvals required by any Environmental Law except such non-compliances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect; and
(c)
without limiting paragraph (a) above, not employ any Ship, nor allow its employment, operation or management in any manner contrary to any applicable law or regulation, including, but not limited to the ISM Code, the ISPS Code, all applicable Environmental Laws except such non-compliances as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and all Sanctions Laws.
(d)
conduct its business in a proper and efficient manner in compliance with:
(i)
its constitutional documents;
(ii)
all Anti-Corruption Laws; and
(iii)
all other laws and regulations applicable to its business,
and shall notify the Facility Agent immediately upon becoming aware of any breach of any such document, law or regulation.
21.4
Ownership of Subsidiaries
(a)
Other than "director qualifying shares", the Parent Guarantor shall at all times directly or indirectly own 100% of the Equity Interests of the Original Borrower and each of the Owner Guarantors.
(b)
The Parent Guarantor shall cause each Owner Guarantor to at all times be directly owned by one or more of Obligors.
(c)
Until the sale of a Ship to the Additional Borrower as contemplated by Clause 24.13 ( Transfer of Ships ), the Parent Guarantor will cause each Ship to be owned at all times by a single Owner Guarantor that owns no other Ships.
21.5
Environmental claims
The Ultimate Parent Guarantor will, and will cause each of its Subsidiaries to, comply with all Environmental Laws applicable to the ownership or use of any Ship or any other ship or property now or hereafter owned or operated by the Ultimate Parent Guarantor or any of its Subsidiaries, will within a reasonable time period pay or cause to be paid all costs and expenses incurred in connection with such compliance (except to the extent being contested in good faith), and will keep or cause to be kept all such Ships or other ships or property free and clear of any Securities imposed pursuant to such Environmental Laws, in each of the foregoing cases, except to the extent any failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. None of the Ultimate Parent Guarantor, any of Subsidiaries of the Ultimate Parent Guarantor will generate, use, treat, store, release or dispose of, or permit the generation, use, treatment, storage, release or disposal of, Hazardous Materials on any Ship or other ship or property now or hereafter owned or operated or occupied by the Ultimate Parent Guarantor, any of its Subsidiaries, or transport or permit the transportation of Hazardous Materials to or from any ports or property except in material compliance with all applicable Environmental Laws and as reasonably required by the trade in connection with the operation, use and maintenance of any such property or otherwise in connection with their businesses except to the extent any failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Ultimate Parent Guarantor will, and will cause each of its Subsidiaries to, maintain insurance on the Ships and any other Ship in at least such amounts as are in accordance with normal industry practice for similarly situated insureds, against losses from oil spills and other environmental pollution.
21.6
[Intentionally Deleted]
21.7
Taxation
The Ultimate Parent Guarantor will, and will cause each of its Subsidiaries to, pay and discharge, all material taxes, assessments and governmental charges or levies that become due and payable which are imposed upon it or upon its income or profits, or upon any properties belonging to it, prior to the date on which penalties attach thereto, and all lawful claims for sums that have become due and payable which, if unpaid, might become a Security not otherwise permitted under Clause 21.21 ( Negative pledge ), provided that neither the Ultimate Parent Guarantor nor any of its Subsidiaries shall be required to pay any such tax, assessment, charge, levy or claim which is being contested in good faith and by proper proceedings if it has maintained adequate reserves with respect thereto in accordance with IFRS.
21.8
Performance of obligations
The Ultimate Parent Guarantor will, and will cause each of its Subsidiaries to, perform all of its obligations under the terms of each mortgage, indenture, security agreement and other debt instrument (including, without limitation, the Finance Documents) by which it is bound except to the extent waived by the parties thereto and where such non-compliance could reasonably be expected to have a Material Adverse Effect.
21.9
Use of Proceeds
(a)
The Ultimate Parent Guarantor will procure that:
(i)
all proceeds of the Loan shall be used in accordance with Clause 3.1 ( Purpose );
(ii)
no proceeds of the Loan shall be made available directly or indirectly to or for the benefit of a Restricted Party nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions Laws; and
(iii)
no payment in connection with a Finance Document shall be funded out of proceeds derived from any action which is in breach of Sanctions Laws.
21.10
[Intentionally Deleted]
21.11
Books, Records and Inspections
The Ultimate Parent Guarantor will, and will cause each of its Subsidiaries to, keep proper books of record and account in which full, true and correct entries, in conformity in all material respects with IFRS and all requirements of law, shall be made of all dealings and transactions in relation to its business. The Ultimate Parent Guarantor will, and will cause each of its Subsidiaries to, permit officers and designated representatives of the Facility Agent and the Lenders as a group to visit and inspect, during regular business hours and under guidance of officers of the Ultimate Parent Guarantor or any of its Subsidiaries, any of the properties of the Ultimate Parent Guarantor or its Subsidiaries, and to examine the books of account of the Ultimate Parent Guarantor or such Subsidiaries and discuss the affairs, finances and accounts of the Ultimate Parent Guarantor or such Subsidiaries with, and be advised as to the same by, its and their officers and, in the presence of the Ultimate Parent Guarantor, independent accountants, all upon reasonable advance notice and at such reasonable times and intervals and to such reasonable extent as the Facility Agent or the Majority Lenders may request; provided that, unless an Event of Default exists and is continuing at such time, the Facility Agent and the Lenders shall not be entitled to request more than two such visitations and/or examinations in any fiscal year of the Ultimate Parent Guarantor.
21.12
Conduct of business
Until the Final Ship Transfer Date (and, in relation to an Owner Guarantor for so long as it shall own a Ship) the Parent Guarantor will, and will procure that each Owner Guarantor will:
(a)
maintain its books, financial records and accounts, including checking and other bank accounts, and custodian and other securities safekeeping accounts, separate and distinct from those of the other Owner Guarantors;
(b)
maintain its books, financial records and accounts (including inter-entity transaction accounts) in a manner so that it will not be difficult or costly to segregate, ascertain or otherwise identify their assets and liabilities separate and distinct from the assets and liabilities of the other Owner Guarantors;
(c)
not commingle any of its assets, funds or liabilities with the assets, funds or liabilities of the other Owner Guarantors;
(d)
observe all requisite organizational procedures and formalities, including the holding of meetings of the boards of directors as required by its Constitutional Documents, the recordation and maintenance of minutes of such meetings, and the recordation of and maintenance of resolutions adopted at such meetings;
(e)
except as permitted by Clause 21.23 ( Merger) , not be consensually merged or consolidated with the other Owner Guarantors (other than for financial reporting purposes);
(f)
procure that all transactions, agreements and dealings between the Parent Guarantor and the Owner Guarantors (including, in each case, transactions, agreements and dealings pursuant to which the assets or property of one is used or to be used by the other), will reflect the separate identity and legal existence of each such Person;
(g)
ensure that transactions between any of the Borrower and the Owner Guarantors, on the one hand, and any third parties, on the other hand, will be conducted in the name of the Borrower or such Owner Guarantor, as applicable, as an entity separate and distinct from the Borrower or such Owner Guarantor, as applicable; and
(h)
in respect of each Owner Guarantor, refer to the Parent Guarantor as a department or division of such Owner Guarantor and will not otherwise refer to the Parent Guarantor in a manner inconsistent with its status as a separate and distinct legal entity.
21.13
[Intentionally left blank]
21.14
Loan proceeds
The Borrower will use the proceeds of the Loan only as provided in Clause 3.1 ( Purpose ).
21.15
Charters
In connection with any Charter in respect of a Ship having an indicated duration of at least 24 months (including any optional extensions or renewals) entered or to be entered into by the relevant Owner Guarantor or Additional Borrower (as the case may be) owning that Ship with a charterer (other than a member of Group) or any Charter of any duration entered into or to be entered into by the relevant Owner Guarantor or Additional Borrower (as the case may be) owning that Ship with a charterer who is a member of the Group, the relevant Owner Guarantor or Additional Borrower (as the case may be) shall, at its own cost and expense, promptly and duly execute and deliver to the Security Agent a notice of the assignment in respect of such charter contained in the Assignment of Charter Agreement, and will procure that such charterer executes and deliver to the Security Agent a consent and acknowledgement to such assignment in form and substance reasonably satisfactory to the Facility Agent (in the case where such charterer is a member of the Group) and in all other cases, use all commercially reasonable efforts to procure that such charterer executes and delivers to the Security Agent such consent and acknowledgment to such assignment.
21.16
Sanctions
(a)
The Borrower shall:
(i)
ensure that neither it nor any Subsidiary of the Borrower is or will become a Restricted Party;
(ii)
use reasonable endeavours to procure that no director, officer, employee, agent or representative of the Borrower or any Subsidiary of the Borrower is or will become a Restricted Party; and
(iii)
procure that no proceeds of any Advance shall be made available, directly or indirectly, to or for the benefit of a Restricted Party nor shall they otherwise be applied in a manner or for a purpose prohibited by Sanctions Laws.
(b)
Each Obligor shall ensure that it shall not employ a Ship nor allow its employment, operation or management in any manner contrary to any law or regulation including but not limited to the ISM Code, the ISPS Code, all Environmental Laws and all Sanctions Laws.
21.17
[Intentionally left blank]
21.18
[Intentionally left blank]
21.19
[Intentionally Deleted]
21.20
[Intentionally left blank]
21.21
Negative pledge
(a)
The Ultimate Parent Guarantor shall not, and shall not permit any of its Subsidiaries to, create, incur, assume or suffer to exist any Security upon or with respect to any Security Assets, whether now owned or hereafter acquired, or sell any such Security Assets subject to an understanding or agreement, contingent or otherwise, to repurchase such Security Assets (including sales of accounts receivable with recourse to the Ultimate Parent Guarantor or any of its Subsidiaries), or assign any right to receive income or permit the filing of any financing statement under the UCC describing such Security or any other similar notice of Security under any similar recording or notice statute; provided that the provisions of this Clause 21.21 ( Negative Pledge ) shall not prevent the creation, incurrence, assumption or existence of the following (any Security referred to in paragraphs (i) to (vii) (" Other Permitted Security ")):
(i)
any inchoate Security for taxes, assessments or governmental charges or levies not yet due and payable or Securities for taxes, assessments or governmental charges or levies being contested in good faith and by appropriate proceedings for which adequate reserves have been established in accordance with IFRS;
(ii)
any Permitted Encumbrance, and in the case where such Permitted Encumbrance is a Security imposed by law, such Security was incurred in the ordinary course of business and does not secure any Financial Indebtedness (such as carriers', warehousemen's, materialmen's and mechanics' liens and other similar Security arising in the ordinary course of business) and:
(A)
does not in the aggregate materially detract from the value of the Security Assets and does not materially impair the use thereof in the operation of the business of the Ultimate Parent Guarantor, the Parent Guarantor or such Subsidiary; or
(B)
which is being contested in good faith by appropriate proceedings, which proceedings (or orders entered in connection with such proceedings) have the effect of preventing the forfeiture or sale of the Security Assets subject to any such Security;
(iii)
any Security incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security to secure the performance of tenders, statutory obligations (other than excise taxes), surety, stay, customs and appeal bonds, statutory bonds, bids, leases, government contracts, trade contracts, performance and return of money bonds and other similar obligations in each case incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money) and any Security arising by virtue of deposits made in the ordinary course of business to secure liability for premiums to insurance carriers; provided that the aggregate value of all cash and property at any time encumbered pursuant to this paragraph (iii) shall not exceed $5,000,000;
(iv)
any Security in respect of seamen's wages which are not past due and other maritime Security for amounts arising in the ordinary course of business and not yet required to be removed or discharged under the terms of the respective Mortgages; and
(v)
any bankers' Security, rights of setoff and other similar Security existing solely with respect to cash and Cash Equivalents on deposit in one or more accounts maintained by any Obligor or any of its Subsidiaries, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank or banks with respect to cash management and operating account arrangements;
(vi)
any Permitted Security; and
(vii)
any Security arising out of any judgments, awards, decrees or attachments in respect of which the Ultimate Parent Guarantor, the Parent Guarantor or its Subsidiaries shall in good faith be prosecuting an appeal or proceedings for review, provided that the aggregate amount of all such judgments, awards, decrees or attachments shall not exceed $10,000,000.
(b)
Each Obligor or any of its Subsidiaries, the Facility Agent and the Security Agent shall be authorized to take any actions deemed appropriate by it in connection with the granting of any Other Permitted Security (including, without limitation, by executing appropriate lien subordination agreements in favor of the holder or holders of such Security, in respect of the item or items of equipment or other assets subject to such Security) and for the avoidance of doubt an Owner Guarantor may transfer any Ship owned by it to the Additional Borrower subject to the provisions of Clause 24.13 ( Transfer of Ships ).
21.22
Disposals
(a)
The Ultimate Parent Guarantor shall not, and shall not permit any of its Subsidiaries to convey, sell, lease or otherwise dispose of any of the Security Assets, or enter into any sale-leaseback transactions involving any of the Security Assets, except that:
(i)
the Borrower and each Owner Guarantor may sell, lease or otherwise dispose of any Ship or 100% of the Equity Interest (but not part) of the Owner Guarantor owning that Ship, provided that:
(A)
such sale is made on market terms at no less than Fair Market Value (as determined in accordance with the Appraisals most recently delivered to the Facility Agent (or obtained by the Facility Agent) pursuant to Clause 19.2(d) ( Financial Statements ) or delivered at the time of such sale to the Facility Agent by the Ultimate Parent Guarantor);
(B)
at least 75% of the consideration in respect of such sale shall consist of cash or Cash Equivalents received by the Borrower, or to the respective Owner Guarantor which owned such Ship, on the date of consummation of such sale; and
(C)
the Borrower shall prepay the relevant Vessel Loans as required by Clause 7.6 ( Mandatory prepayment on sale or Total Loss ) with the proceeds of such sale, and provided that no Default or Event of Default pursuant to Clause 27.3 ( Specific obligations) exists, such prepayment may be made with the proceeds of such sale together with such other cash of the Borrower;
(ii)
the Ultimate Parent Guarantor and its Subsidiaries may sell or discount, in each case without recourse and in the ordinary course of business, overdue accounts receivable arising in the ordinary course of business, but only in connection with the compromise or collection thereof consistent with customary industry practice (and not as part of any bulk sale); and
(iii)
the Borrower and any Owner Guarantor may transfer any Security Assets (other than a ship) to any other Owner Guarantor, so long as:
(A)
no Default or Event of Default then exists; and
(B)
the Security Requirement are satisfied after giving effect to such transfer to the satisfaction of the Facility Agent (acting on instructions of the Majority Lenders).
For the avoidance of doubt, the provisions of this Clause 21.22 ( Disposals ) shall not apply to the sale of a Ship in accordance with Clause 24.13 ( Transfer of Ships ).
(b)
To the extent the Majority Lenders (or to the extent required pursuant to Clause 45 ( Amendments and Waivers ) all Lenders) waive the provisions of this Clause 21.22 with respect to the sale of any Security Assets, or any Security Assets is sold as permitted by this Clause 21.22 ( Disposals ), such Security Assets (unless sold to the Ultimate Parent Guarantor or a Subsidiary of the Ultimate Parent Guarantor) shall be sold free and clear of the Securities created by the Security Documents, and the Facility Agent and Security Agent shall be authorized to take any actions deemed appropriate in order to effect the foregoing.
(c)
Save to the extent permitted under this Agreement or otherwise permitted by the Facility Agent (acting on instructions of the Majority Lenders), nothing in this Clause shall be deemed to permit an Obligor from disposing all or substantially all of its assets.
21.23
Merger
The Ultimate Parent Guarantor will not, and will not permit any of its Subsidiaries to wind up, liquidate or dissolve its affairs or enter into any transaction of merger, consolidation or amalgamation or convey, sell, lease or otherwise dispose of all or substantially all of its assets, except that:
(a)
any Owner Guarantor may be merged, consolidated or amalgamated with, or convey or sell all or substantially all of its assets to any other Owner Guarantor, so long as (x) no Default or Event of Default then exists and (y) the Security Requirements are satisfied after giving effect to such transfer to the satisfaction of the Facility Agent and (ii) any Subsidiary of the Ultimate Parent Guarantor (other than the Borrower, any Owner Guarantor and any subsidiary thereof) may be merged, consolidated or amalgamated with, or convey or sell all or substantially all of its assets to any other Subsidiary (other than the Borrower, any Owner Guarantor and any subsidiary thereof) of the Ultimate Parent Guarantor or the Ultimate Parent Guarantor;
(b)
following a Security Assets Disposition permitted by this Agreement, the Owner Guarantor which owned the Ship that is the subject of such Security Assets Disposition may dissolve, provided that (i) the Borrower shall prepay the relevant Vessel Loan as required by Clause 7.6 ( Mandatory prepayment on sale or Total Loss ), (ii) all of the proceeds of such dissolution shall be paid only to an Obligor and (iii) no Default or Event of Default is continuing unremedied at the time of such dissolution; and
(c)
any Subsidiary which is not an Obligor may wind up, liquidate or dissolve.
21.24
Change of business
(a)
The Ultimate Parent Guarantor and its Subsidiaries will not engage in any business other than the businesses permitted pursuant to that Ultimate Parent Guarantor or Subsidiaries' constitutional documents (or, in the case of any Subsidiary that is formed or incorporated after the date of this Agreement, any business in which the Ultimate Parent Guarantor or any other Subsidiary is permitted to carry out pursuant to that Ultimate Parent Guarantor or Subsidiaries' constitutional documents) and activities directly related thereto, and similar or related maritime businesses.
(b)
The Borrower and Owner Guarantors will not engage in any operating or business activities other than (i) ownership, management or operation of the Ships, (ii) maintenance of legal existence (including the ability to incur fees, costs, expenses and taxes relating to such management), (iii) the entering into and performance of its obligations under this Agreement and the other Finance Documents and its Constitutional Documents, (iv) if applicable, participating in tax, accounting and other administrative matters as a member of the consolidated group of the Ultimate Parent Guarantor and its Subsidiaries, (v) holding any cash, Cash Equivalents and other property necessary or desirable in connection with or incidental to, the ownership, management and operation of the Ships, (vi) payment of Dividends, incurring Indebtedness and any other activities to the extent permitted hereunder and under the other Finance Documents, (vii) providing indemnification to officers and directors and (viii) any activities incidental or reasonably related to the foregoing.
21.25
Financial Indebtedness
(a)
The Parent Guarantor will not, and will not permit any of its Subsidiaries to, contract, create, incur, assume or suffer to exist any Indebtedness other than:
(i)
Financial Indebtedness incurred pursuant to this Agreement and the other Finance Documents;
(ii)
Financial Indebtedness of the Obligors incurred pursuant to the Re-financing Facility in an aggregate principal amount not to exceed $581,000,000 at any time outstanding, less any repayments thereof made after the date hereof, including, for the avoidance of doubt, any swap or hedge agreement permitted thereunder in accordance with the terms thereof (including, without limitation, any swap or hedge agreement entered into by the relevant Obligor(s) for the purposes of hedging interest rate exposure thereunder);
(iii)
any Hedging Agreement and Other Hedging Agreement entered into in the ordinary course of business and consistent with past practices; provided that (x) in the case of any Hedging Agreement, the term thereof does not extend beyond the relevant Termination Date and (y) in the case of any Other Hedging Agreement, the term thereof does not exceed six months and additionally, where such Hedging Agreement is an agreement to hedge interest rate fluctuations, such agreement is entered into in accordance with Clauses 8.5 ( Hedging ) to 8.6 ( Hedging – First Right to Bid and Non-Lender Hedging Agreements ) of this Agreement;
(iv)
intercompany loans and advances (i) among the Obligors and (ii) made by Subsidiaries of the Parent Guarantor (other than the Obligors) to the Parent Guarantor or any other Subsidiary of the Parent; provided that any such loans or advances to an Obligor pursuant to this Clause 21.25(a)(iv) ( Financial Indebtedness ) shall be unsecured and subordinated to the obligations incurred hereunder of the respective Obligor pursuant to written subordination provisions on terms reasonably acceptable to the Facility Agent (acting on instructions of the Majority Lenders);
(v)
additional Financial Indebtedness incurred by the Parent Guarantor or any Subsidiary (other than the Borrower or any Owner Guarantor) in an aggregate principal amount not to exceed $25,000,000 at any one time outstanding; and
(vi)
the Parent Guarantor or any Subsidiary (other than the Borrower or any Owner Guarantor) may incur and remain liable for Financial Indebtedness not otherwise permitted under this Clause 21.25 ( Financial Indebtedness ) so long as (i) no Default or Event of Default exists at the time of such incurrence and after giving effect thereto and (ii) the Parent Guarantor and its Subsidiaries shall be in pro forma compliance with the financial covenants under this Agreement both before and after giving effect to the incurrence of such Financial Indebtedness.
(b)
The Ultimate Parent Guarantor shall not, without the prior consent of the Majority Lenders, incur any Financial Indebtedness or grant any guarantee in respect of Financial Indebtedness if, as a result of incurring that Financial Indebtedness or incurring the contingent liability under that guarantee (as assessed in accordance with IFRS), an Event of Default would occur, or one or more of the financial covenants in respect of the Ultimate Parent Guarantor set out in Clause 20 ( Financial Covenants ) would be breached, on the date of such incurrence.
21.26
Share capital
(a)
The Parent Guarantor will not issue, and will not permit any Subsidiary to issue, any preferred stock (or equivalent equity interests) other than Qualified Preferred Stock.
(b)
The Parent Guarantor will not permit the Original Borrower or any Owner Guarantor to issue any capital stock (including by way of sales of treasury stock) or any options or warrants to purchase, or securities convertible into, capital stock, except
(i)
for transfers and replacements of then outstanding shares of capital stock,
(ii)
for stock splits, stock dividends and additional issuances which do not decrease the percentage ownership of the Parent Guarantor or any of its Subsidiaries in any class of the capital stock of such Subsidiary,
(iii)
to qualifying directors to the extent required by applicable law,
(iv)
to such Person's shareholders or in connection with any investment permitted under this Agreement, and
(v)
to the Original Borrower or another Owner Guarantor, in the case of an Owner Guarantor, or to the Parent Guarantor, in the case of the Original Borrower.
(vi)
All capital stock of the Original Borrower or any Owner Guarantor issued in accordance with this Clause 21.26 ( Share Capital ) shall be delivered to the Security Agent pursuant to the Shares Security.
21.27
Jurisdiction of Employment
The Additional Borrower will not, the Parent Guarantor will not, and will not permit the Owner Guarantors or any third party charterer of a Ship to, employ or cause to be employed any Ship in any country or jurisdiction in which (i) the Borrower, the Owner Guarantors or such third party charterer of a Ship is prohibited by law from doing business, or (ii) the Security created by the applicable Mortgage will be rendered unenforceable.
21.28
Dividends
The Ultimate Parent Guarantor may only pay a Dividend or make a distribution and/or buy-back, redeem or cancel its own common stock or otherwise return any income or capital to shareholders if the following conditions are satisfied:
(i)
no Event of Default has occurred and is continuing or would result upon payment of the proposed dividend, distribution or buy-back or other relevant sum; and
(ii)
the payment of such dividend or distribution or other relevant sum would not cause any breach of any of the financial covenants set out in Clause 20 ( Financial Covenants ).
21.29
Chartering Arrangements
(a)
The Additional Borrower will, the Parent Guarantor will, and will procure that each Owner Guarantor shall, subject to paragraph (d) below, only charter out the Ship owned or to be owned by it under the relevant Pool Agreement, provided that any Ship may exit such Pool Agreement and be employed under a Charter either directly with a charterer (such direct Charter, an " Other Charter ") or through entering into another Pool Agreement without the prior written consent of the Facility Agent, if, such Other Charter complies with the requirements of Clause 24.11 ( Restrictions on chartering etc. ).
(b)
The Additional Borrower will, the Parent Guarantor will and will procure that each Owner Guarantor shall (i) provide the Facility Agent upon its request with a true, and complete copy of any Pool Agreement entered into by such Owner Guarantor or the Additional Borrower (as the case may be) in relation to the Ship owned by it; (ii) ensure that each Pool Agreement entered into by the relevant Owner Guarantor or the Additional Borrower (as the case may be) shall constitute legal and valid and binding obligations of the Owner Guarantor or the Additional Borrower (as the case may be) party thereto and shall use commercially reasonable endeavours to ensure that such Pool Agreement shall constitute the legal and valid and binding obligations of the relevant Pool Manager which is party thereto, (iii) and ensure that each Pool Agreement is assignable, and shall be assigned, to the Security Agent pursuant to an Assignment of Pool Agreement, (iv) use commercially reasonable endeavours to procure that the relevant Pool Manager to such Pool Agreement shall provide an acknowledgement in such form and substance as set out in the Assignment of Pool Agreement (or such other form as the Security Agent may approve).
(c)
Notwithstanding anything to the contrary set forth in this Agreement and any other Finance Documents, with respect to any charter of a Ship through a Pool Manager, such charter may only be entered into between the Owner Guarantor or Additional Borrower which owns such Ship and such Pool Manager and in no event shall the Parent Guarantor or any Subsidiary thereof (other than the Owner Guarantor or Additional Borrower owning such Ship) have any obligations thereunder.
(d)
After withdrawal of the relevant Ship from the VL8 Pool, no Owner Guarantor or Additional Borrower will (in the case of any Ships owned by that Owner Guarantor or Additional Borrower) enter into any agreement or arrangement for the sharing of any Earnings other than pursuant to a pooling agreement relating to the Tankers International Pool.
21.30
Other transactions
The Ultimate Parent Guarantor will not, and will not permit any of the Owner Guarantors to, enter into any transaction or series of related transactions, whether or not in the ordinary course of business, with any of its Affiliates, other than on terms and conditions no less favourable to such Person as would be obtained by such Person at that time in a comparable arm's-length transaction with a Person other than an Affiliate, except:
(a)
Restricted Payments may be paid to the extent provided in Clause 21.28 ( Dividends );
(b)
loans and investments may be made and other transactions may be entered into between the Ultimate Parent Guarantor and the Owner Guarantors to the extent permitted by Clause 21.28 ( Dividends ); and Clause 21.25 (Financial Indebtedness);
(c)
as long as the Ultimate Parent Guarantor has an independent compensation committee, directors' fees as determined by such independent compensation committee and, at any time the Ultimate Parent Guarantor does not have an independent compensation committee, the Ultimate Parent Guarantor may pay reasonable directors' fees;
(d)
the Ultimate Parent Guarantor and the Owner Guarantors may enter into employment agreements or arrangements with their respective officers and employees in the ordinary course of business;
(e)
the Ultimate Parent Guarantor and the Owner Guarantors may pay management fees which have been pre-approved by the Facility Agent (acting on instructions of the Majority Lenders) to Wholly‑Owned Subsidiaries of the Ultimate Parent Guarantor in the ordinary course of business;
(f)
the Ultimate Parent Guarantor and the Owner Guarantors may enter into a Intercompany Ship Delivery Agreement;
(g)
the transactions in existence on the date of this Agreement which are listed on Schedule 13 ( Existing Transactions) shall be permitted; and
(h)
the Ship Management Agreements and the Pool Agreement.
21.31
Limitation on Certain Restrictions on Subsidiaries
The Ultimate Parent Guarantor will not, and will not permit any of the Owner Guarantors to, directly or indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any such Owner Guarantor to:
(a)
pay dividends or make any other distributions on its capital stock or any other interest or participation in its profits owned by the Ultimate Parent Guarantor or the Owner Guarantors, or pay any Financial Indebtedness owed to the Ultimate Parent Guarantor or the Owner Guarantors,
(b)
make loans or advances to the Ultimate Parent Guarantor or any of the Owner Guarantors; or
(c)
transfer any of its properties or assets to the Ultimate Parent Guarantor or any of the Owner Guarantors, except for such encumbrances or restrictions existing under or by reason of:
(i)
applicable law;
(ii)
this Agreement and the other Finance Documents;
(iii)
the Re-financing Facility to the extent applicable, or any refinancing thereof or amendments thereto, and the other documents related thereto;
(iv)
customary provisions restricting subletting or assignment of any lease governing a leasehold interest of the Ultimate Parent Guarantor or an Owner Guarantor;
(v)
customary provisions restricting assignment of any agreement entered into by the Ultimate Parent Guarantor or an Owner Guarantor in the ordinary course of business; and
(vi)
restrictions which are not more restrictive than those contained in this Agreement for any documents governing any Indebtedness incurred after the date of this Agreement in accordance with the terms of this Agreement.
21.32
Jurisdiction of incorporation or formation; Amendment of constitutional documents
(a)
The Parent Guarantor will not, and will not permit the Borrower or any Owner Guarantor to, amend, modify or change its (i) Constitutional Documents from that provided to the Facility Agent as at the date of this Agreement or (ii) any agreement entered into by it with respect to its Equity Interests (including any shareholders' agreement), or enter into any new agreement with respect to its Equity Interests, other than any amendments, modifications or changes or any such new agreements which are not in any way materially adverse to the interests of the Lenders.
(b)
Notwithstanding the foregoing, upon not less than 30 days prior written notice to the Facility Agent and so long as no Default or Event of Default exists and is continuing, any Owner Guarantor may change its jurisdiction of organization to another jurisdiction reasonably satisfactory to the Facility Agent (acting on the instructions of the Majority Lenders), provided that any Owner Guarantor that has entered into the Security Documents hereunder shall promptly take all actions reasonably deemed necessary by the Security Agent to preserve, protect and maintain, without interruption, the security interest and Security of the Security Agent in any Security Assets owned by such Owner Guarantor to the satisfaction of the Security Agent, and such Owner Guarantor shall have provided to the Facility Agent and the Lenders such opinions of counsel as may be reasonably requested by the Facility Agent to assure itself that the conditions of this proviso have been satisfied.
21.33
End of Fiscal Year; Fiscal Quarter
The Ultimate Parent Guarantor shall cause:
(a)
each of its, and each of its Subsidiaries' fiscal years to end on December 31; and
(b)
each of its and its Subsidiaries' fiscal quarters to end on March 31, June 30, September 30 and December 31 of each year.
21.34
Further assurance
(a)
The Ultimate Parent Guarantor will, and will cause each of the Subsidiaries to, cause the Security Requirement to be satisfied at all times.
(b)
The Ultimate Parent Guarantor, on behalf of itself and each other Obligor, will at any time and from time to time, at the expense of the Ultimate Parent Guarantor or such other Obligor, it will promptly execute and deliver all further instruments and documents, and take all further action that may be reasonably necessary, or that the Facility Agent may reasonably require, to perfect and protect any Security granted or purported to be granted hereby or by the other Finance Documents, or to enable the Security Agent to exercise and enforce its rights and remedies with respect to any Security Assets. Without limiting the generality of the foregoing, the Ultimate Parent Guarantor will, and will cause each Obligor, execute (to the extent applicable) and file, or cause to be filed, such financing or continuation statements under the UCC (or any non-U.S. equivalent thereto), or amendments thereto, such amendments or supplements to the Mortgages (including any amendments required to maintain Securities granted by such Mortgages pursuant to the effectiveness of this Agreement), and such other instruments or notices, as may be reasonably necessary, or that the Facility Agent may reasonably require, to protect and preserve the Securities granted or purported to be granted hereby and by the other Finance Documents.
(c)
The Ultimate Parent Guarantor, Borrower and Owner Guarantors hereby authorize the Security Agent to file one or more financing or continuation statements under the UCC (or any non-U.S. equivalent thereto), and amendments thereto, relative to all or any part of the Collateral, without the signature of the Parent Guarantor, Borrower or any Owner Guarantor, where permitted by law. The Security Agent will promptly send the Parent Guarantor a copy of any financing or continuation statements which it may file without the signature of the Parent Guarantor, Borrower or any Owner Guarantor and the filing or recordation information with respect thereto.
(d)
At the reasonable written request of any counterparty to Hedging Agreement entered into after the date of this Agreement (to the extent permitted under this Agreement to be entered into and secured but would not result in or create any Excluded Hedging Obligation) with one or more Lenders or any Affiliate thereof (even if, after the entry into such Hedging Agreement, the respective Lender subsequently ceases to be a Lender for any reason), the applicable Obligor and, at the written direction of the Security Agent, the mortgagee, shall promptly execute an amendment to each Mortgage adding obligations under such Hedging Agreement as an additional secured obligation under each Mortgage (and allowing such obligations to be secured on such basis as set forth in this Agreement or in the Share Agreement), and cause the same to be promptly and duly recorded, and such amendment shall be in form and substance reasonably satisfactory to the Security Agent.
21.35
Notification of Sanctions
The Borrower shall:
(a)
supply to the Facility Agent, promptly upon becoming aware of them, the details of any inquiry, claim, action, suit, proceeding or investigation pursuant to Sanction Laws against (i) the Borrower, (ii) any other Relevant Person or (iii) any owners of any Relevant Person (other than any owner of the Borrower), as well as information on what steps are being taken with regards to answering or opposing the same;
(b)
inform the Facility Agent promptly upon becoming aware that any of (i) the Borrower, (ii) any other Relevant Person or (iii) any owners of any Relevant Person (other than any owner of the Borrower), has become or is likely to become a Restricted Party.
22
INSURANCE UNDERTAKINGS
22.1
General
The undertakings in this Clause 22 ( Insurance Undertakings ) remain in force from the date of this Agreement throughout the rest of the Security Period except as the Facility Agent, acting with the authorization of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.
22.2
Maintenance of obligatory insurances
(a)
The Borrower and each Owner Guarantor shall keep each Ship insured with insurers and protection and indemnity clubs or associations of internationally recognized reputation, and placed in such markets, on such terms and conditions, and through an Approved Insurance Broker and under forms of policies approved by the Security Agent against the risks indicated below and such other risks as the Security Agent may reasonably specify from time to time; however, in no case shall the Security Agent specify insurance in excess of the customary insurances purchased by first-class owners of comparable vessels:
(i)
marine and war risk, including terrorism, confiscation, London Blocking and Trapping Addendum and Missing Collateral Vessel Clause, hull and machinery insurance, hull interest insurance and freight interest insurance (in each case, on an agreed value basis), together in an amount in Dollars at all times equal to or greater than the greater of (x) the then Fair Market Value of such Ship and (y) an amount which when aggregated with such insured value of the insurances for other Ships which are then subject to a Mortgage, is equal to one-hundred ten per cent (110%) of the aggregate principal amount of the Loan outstanding under this Agreement and any Swap Exposure outstanding at such time. The insured value for hull and machinery insurances required under this clause (i) for a Ship shall at all times be in an amount equal to the greater of (x) seventy per cent (70%) of the Fair Market Value of such Ship and (y) an amount which, when aggregated with the insured value of the hull and machinery insurances of the other Ships which are then subject to a Mortgage is equal to the aggregate principal amount of the Loan outstanding under this Agreement at such time, and the remaining marine and war risk insurance required by this paragraph (i) may be taken out as hull and freight interest insurance;
(ii)
marine and war risk protection and indemnity insurance or equivalent insurance (including coverage against liability for crew, fines and penalties arising out of the operation of such Ship, insurance against liability arising out of pollution, spillage or leakage, and workmen's compensation or longshoremen's and harbor workers' insurance as shall be required by applicable law) and freight, demurrage & defense insurance in such amounts approved by the Security Agent; provided, however, that insurance against liability under law or international convention arising out of pollution, spillage or leakage shall be in an amount not less than the greater of:
(A)
$1,000,000,000;
(B)
the maximum amount reasonably available from the International Group of Protection and Indemnity Associations (the "International Group") or alternatively such sources of pollution, spillage or leakage coverage as are commercially available in any absence of such coverage by the International Group as shall be carried by prudent shipowners engaged in similar trades; and
(C)
the amounts required by the laws or regulations of the United States of America or any applicable jurisdiction in which such Ship may be trading from time to time.
(iii)
mortgagee's interest insurance and mortgagee's additional perils insurance on such conditions as the Security Agent may reasonably require and mortgagee's interest insurance for pollution risks as from time to time agreed, satisfactory to the Security Agent and for an amount in U.S. dollars approved by the Security Agent but not being less than 110% of the sum of the aggregate principal amount of the Loan outstanding pursuant to this Agreement and any Swap Exposure outstanding at such time, the Borrower and such Owner Guarantor having no interest or entitlement in respect of such policies; all such mortgagee's interest insurance cover shall be obtained directly by the Security Agent and the Security Agent undertakes to use its best endeavors to match the premium level that the Borrower or such Owner Guarantor would have paid if they had arranged such cover on such conditions (as demonstrated by the reasonable satisfaction of the Security Agent), provided that in no event shall the Borrower or such Owner Guarantor be required to reimburse the Security Agent for any such costs in excess of the premium level then available to the Security Agent in the market; and
(iv)
while such Ship is idle or laid up, at the option of the Borrower and in lieu of the above-mentioned marine and war risk hull insurance, port risk insurance insuring such Ship against the usual risks encountered by like vessels under similar circumstances.
(b)
The marine and commercial war-risk insurance required in this Clause 22.2 ( Maintenance of Obligatory Insurances ) for such Ship shall have deductibles and franchises in amounts reasonably satisfactory to the Security Agent. All insurance maintained hereunder shall be primary insurance without right of contribution against any other insurance mainta ined by the Security Agent. The policy of marine and war risk hull and machinery insurance with respect to each Ship shall, if so requested by the Security Agent, provide that the Security Agent shall be a named insured in its capacity as mortgagee and as loss payee. The entry in a marine and war risk protection indemnity club with respect to each Ship shall note the interest of the Security Agent. The Facility Agent, the Security Agent and each of their respective successors and assigns shall not be responsible for any premiums, club calls, assessments or any other obligations or for the representations and warranties made therein by the Borrower, any of the Borrower's Subsidiaries, the Owner Guarantor or any other Person. In addition, the Borrower shall reimburse the Facility Agent for the commercially reasonable cost of mortgagee's interest insurance and mortgagee's additional perils insurance, which the Facility Agent will take out on each Ship upon such terms and in such amounts as the Facility Agent shall deem appropriate.
(c)
The Security Agent shall from time to time obtain a detailed report signed by an Approved Broker with respect to P & I entry, the hull and machinery and war risk insurance carried and maintained on each Ship, together with their opinion as to the adequacy thereof and its compliance with the provisions of this Clause 22.2 ( Maintenance of Obligatory Insurances ). At the Borrower's expense, the Borrower will instruct its insurance broker (which, for the avoidance of doubt shall be a different insurance broker from the Approved Insurance Broker referred to in the immediately preceding sentence) and the P & I club or association providing P & I insurance referred to in part (a)(ii) of this Clause 22.2 ( Maintenance of Obligatory Insurances ), to agree to advise the Facility Agent by electronic mail of any expiration, termination, alteration or cancellation of any policy, any default in the payment of any premium and of any other act or omission on the part of the Borrower or Owner Guarantor of which the Borrower or such Owner Guarantor has knowledge and which might invalidate or render unenforceable, in whole or in part, any insurance on each Ship, and to provide an opportunity of paying any such unpaid premium or call, such right being exercisable by the Security Agent on each Ship on an individual and not on a fleet basis. In addition, the Borrower and each Owner Guarantor shall promptly provide the Security Agent with any information which the Security Agent reasonably requests for the purpose of obtaining or preparing any report from the Security Agent's independent marine insurance consultant as to the adequacy of the insurances effected or proposed to be effected in accordance with this Clause 22.2 ( Maintenance of Obligatory Insurances ) as of the date hereof or in connection with any renewal thereof, and the Borrower and each Owner Guarantor shall upon demand indemnify the Security Agent in respect of all reasonable fees and other expenses incurred by or for the account of the Security Agent in connection with any such report, provided that the Security Agent shall be entitled to such indemnity only for one such report during a period of twelve months.
(d)
The underwriters or brokers shall furnish the Security Agent with a letter or letters of undertaking to the effect that:
(i)
they will hold the instruments of insurance, and the benefit of the insurances thereunder, to the order of the Security Agent in accordance with the terms of the loss payable clause referred to in the Assignment of Insurances;
(ii)
they will have endorsed on each and every policy as and when the same is issued the loss payable clause, to be in the excess of an amount equivalent to the Major Casualty, and the notice of assignment referred to in the relevant Assignment of Insurances for such Ship; and
(iii)
they will not set off against any sum recoverable in respect of a claim against any Ship under the said underwriters or brokers or any other Person in respect of any other vessel nor cancel the said insurances by reason of non-payment of such premiums or other amounts.
(e)
All policies of insurance required hereby shall provide for not less than fourteen (14) days prior written notice (seven (7) days in respect of war risks) to be received by the Security Agent of the termination or cancellation of the insurance evidenced thereby. All policies of insurance maintained pursuant to this Clause 22.2 ( Maintenance of Obligatory Insurances ) for risks covered by insurance other than that provided by a P & I Club shall contain provisions waiving underwriters' rights of subrogation thereunder against any assured named in such policy and any assignee of said assured, only to the extent such underwriters agree to so waive rights of subrogation (provided that it is understood and agreed that the Borrower and each Owner Guarantor shall use commercially reasonable efforts to obtain such waivers). The Borrower and each Owner Guarantor shall assign to the Security Agent its full rights under any policies of insurance in respect of each Ship in accordance with the terms contained herein (and, for the avoidance of doubt, such assignments shall include any additional value of any insurance that exceeds the values expressly required herein in respect of such Ship). Each of the Borrower and each Owner Guarantor agrees that it shall deliver unless the insurances by their terms provide that they cannot cease (by reason of nonrenewal or otherwise) without the Facility Agent being informed and having the right to continue the insurance by paying any premiums not paid by the Borrower or such Owner Guarantor, receipts showing payment of premiums for Required Insurance and also of demands from each Ships P & I underwriters to the Security Agent at least two (2) days before the risk in question commences.
(f)
Unless the Security Agent shall otherwise agree, all amounts of whatsoever nature payable under any insurance must be payable to the Security Agent for distribution first to itself and thereafter to the Borrower, relevant Owner Guarantor or others as their interests may appear, provided that, notwithstanding anything to the contrary herein, until otherwise required by the Security Agent by notice to the underwriters upon the occurrence and continuance of an Event of Default hereunder, (i) amounts payable under any insurance on a Ship with respect to protection and indemnity risks may be paid directly to (x) the Borrower or relevant Owner Guarantor reimburse it for any loss, damage or expense incurred by it and covered by such insurance or (y) the Person to whom any liability covered by such insurance has been incurred, and (ii) amounts payable under any insurance with respect to such Ship involving any damage to such Ship not constituting an Total Loss, may be paid by underwriters directly for the repair, salvage or other charges involved or, if the Borrower or such Owner Guarantor shall have first fully repaired the damage or paid all of the salvage or other charges, may be paid to the Borrower or such Owner Guarantor as reimbursement therefor; provided, however, that if such amounts (including any franchise or deductible) are in excess of an amount equivalent to the Major Casualty, the underwriters shall not make such payment without first obtaining the written consent thereto of the Security Agent and the loss payable clauses pertaining to such insurances shall be endorsed to that effect.
(g)
All amounts paid to the Security Agent in respect of any insurance on each Ship shall be disposed of as follows (after deduction of the expenses of the Security Agent in collecting such amounts):
(i)
any amount which might have been paid at the time, in accordance with the provisions of paragraph (d) above, directly to the Borrower, Owner Guarantor or others shall be paid by the Security Agent to, or as directed by, the Borrower;
(ii)
all amounts paid to the Security Agent in respect of a Total Loss of such Ship shall be applied by the Security Agent to the payment of the Financial Indebtedness hereby secured pursuant to Clause 7.6(b) ( Mandatory Prepayment on Sale or Total Loss ) of this Agreement; and
(iii)
all other amounts paid to the Security Agent in respect of any insurance on such Ship may, in the Security Agent's sole discretion, be held and applied to the prepayment of the Obligations or to making of needed repairs or other work on such Ship, or to the payment of other claims incurred by the Borrower or Owner Guarantor relating to such Ship, or may be paid to the Borrower, Owner Guarantor or whosoever may be entitled thereto.
(h)
In the event that any claim or lien is asserted against a Ship for loss, damage or expense which is covered by insurance required hereunder and it is necessary for the Borrower or Owner Guarantor to obtain a bond or supply other security to prevent arrest of such Ship or to release such Ship from arrest on account of such claim or lien, the Security Agent, on request of the Borrower, may, in the sole discretion of the Security Agent, assign to any Person, firm or corporation executing a surety or guarantee bond or other agreement to save or release such Ship from such arrest, all right, title and interest of the Security Agent in and to said insurance covering said loss, damage or expense, as collateral security to indemnify against liability under said bond or other agreement.
(i)
The Borrower shall deliver to the Security Agent certified copies and, whenever so reasonably requested by the Security Agent, if available to the Borrower, the originals of all certificates of entry, cover notes, binders, evidences of insurance and policies and all endorsements and riders amendatory thereof in respect of insurance maintained pursuant to Clause 22 ( Insurance Undertakings) for the purpose of inspection or safekeeping, or, alternatively, satisfactory letters of undertaking from the broker holding the same. The Security Agent shall be under no duty or obligation to verify the adequacy or existence of any such insurance or any such policies, endorsement or riders.
(j)
Neither the Borrower nor any Owner Guarantor will execute or permit or willingly allow to be done any act by which any insurance may be suspended, impaired or cancelled, and that it will not permit or allow any Ship to undertake any voyage or run any risk or transport any cargo which may not be permitted by the policies in force, without having previously notified the Security Agent in writing and insured such Ship by additional coverage to extend to such voyages, risks, passengers or cargoes.
(k)
In case any underwriter proposes to pay less on any claim than the amount thereof, the Borrower shall forthwith inform the Security Agent, and if a Default, Event of Default or a Total Loss has occurred and is continuing, the Security Agent shall have the exclusive right to negotiate and agree to any compromise.
(l)
The Borrower and each Owner Guarantor will comply with and satisfy all of the provisions of any applicable law, convention, regulation, proclamation or order concerning financial responsibility for liabilities imposed on the Borrower, Owner Guarantor or each Ship with respect to pollution by any state or nation or political subdivision thereof and will maintain all certificates or other evidence of financial responsibility as may be required by any such law, convention, regulation, proclamation or order with respect to the trade in which such Ship is from time to time engaged and the cargo carried by it.
23
SHIPBUILDING CONTRACT UNDERTAKINGS
23.1
General
The undertakings in this Clause 23 ( Shipbuilding Contract Undertakings ) remain in force throughout the Security Period except as the Facility Agent, acting with the authorization of the Majority Lenders (or, where specified, all the Lenders) may otherwise permit.
23.2
Performance of Shipbuilding Contracts
The Borrower and the Parent Guarantor shall procure that the relevant Owner Guarantor, the Shareholder or Subsidiary Inc., as applicable, shall:
(a)
observe and perform all its obligations and meet all its liabilities under or in connection with each Shipbuilding Contract to which it is a party to which non-compliance of would lead to a breach or default under such Shipbuilding Contract; and
(b)
take any action, or refrain from taking any action, which the Facility Agent may reasonably request in connection with any breach of the Shipbuilding Contract to which it is a party to, by it.
23.3
No variation, release etc. of Shipbuilding Contracts
The Borrower and the Parent Guarantor shall procure that no relevant Owner Guarantor, the Shareholder or Subsidiary Inc., as applicable, shall whether by a document, by conduct, by acquiescence or in any other way:
(a)
vary, amend or waive the Shipbuilding Contract which it is a party to in a manner materially adverse to the Lenders;
(b)
terminate the Shipbuilding Contract to which it is a party to or treat itself as discharged or relieved from further performance of any of its obligations or liabilities under the Shipbuilding Contract to which it is a party to without the consent of the Facility Agent,
only if it is hereby agreed that an Owner Guarantor, the Shareholder or Subsidiary Inc., may assign, novate or transfer all of (but not part of) its rights, title, interest and benefit under a Shipbuilding Contract to which it is a party to, only if, prior to any such assignment, novation or transfer, the Facility Agent has been provided by the Borrower, in advance, with satisfactory documentary evidence that the Vessel Loan relating to such Shipbuilding Contract has been or will be fully prepaid and/or the relevant portion of the Commitments relating to such Vessel Loan has been or will be fully cancelled in compliance with Clause 7.6 ( Mandatory prepayment on Sale or Total Loss ).
23.4
Action to protect validity of Shipbuilding Contracts
The Borrower and the Parent Guarantor shall procure that the relevant Owner Guarantor, the Shareholder or Subsidiary Inc., as applicable, shall use its best endeavors to ensure that all interests and rights conferred by the Shipbuilding Contract to which it is a party to remain valid and enforceable in all respects and retain the priority which they were intended to have.
23.5
No assignment etc. of Shipbuilding Contracts
Save as permitted by the Finance Documents, no Owner Guarantor shall, and the Borrower and the Parent Guarantor shall procure that no Owner Guarantor shall assign, novate, transfer or dispose of any of its rights or obligations under the Shipbuilding Contract to which it is a party to.
23.6
Provision of information relating to Shipbuilding Contracts
Without prejudice to Clause 19.4 ( Information: miscellaneous), the Borrower and the Parent Guarantor shall procure that the relevant Transaction Obligor shall:
(a)
promptly inform the Borrower and Parent Guarantor if any breach of the Shipbuilding Contract to which it is a party occurs or a serious risk of such a breach arises and of any other event or matter affecting that Shipbuilding Contract, Master Agreement to which it is a party, which has or is reasonably likely to have a Material Adverse Effect and the Borrower and Parent Guarantor shall promptly inform the Facility Agent of any incurrence of Clause (a);
(b)
provide the Borrower and Parent Guarantor, promptly after service, with copies of all material notices served on or by it or any other Obligor under or in connection with the Shipbuilding Contract to which it is a party to and the Borrower and the Parent Guarantor shall promptly provide the Facility Agent with all notices received pursuant to this paragraph (b); and
(c)
provide the Borrower and Parent Guarantor with any information which the Facility Agent reasonably requests about any interest or right of any kind which any Owner Guarantor, the Shareholder or Subsidiary Inc. has at any time to, in or in connection with, the Shipbuilding Contract to which it is a party to or in relation to any matter arising out of or in connection with that Shipbuilding Contract including the progress of the construction of the Ship relating to such Shipbuilding Contract, and the Borrower and Parent Guarantor shall provide the Facility Agent with all information received pursuant to this paragraph (c).
24
GENERAL SHIP UNDERTAKINGS
24.1
General
The undertakings in this Clause 24 ( General Ship Undertakings ) remain in force on and from the date of the relevant Delivery Date of a Ship and throughout the rest of the Security Period except as the Facility Agent, acting with the authorization of the Lenders (or, where specified, and the ECAs) may otherwise permit. The provisions of this Clause 24 ( General Ship Undertakings ) shall be met by the relevant Obligor which owns a Ship.
24.2
Flag of Ships; Citizenship; Ship Classification
(a)
Subject to Clause 24.13 (Transfer of Ships), the Additional Borrower shall, the Parent Guarantor shall, and shall cause each Owner Guarantor that owns a Ship to, cause each Ship to be registered under the laws and flag of (i) the Bahamas, (ii) the Republic of Malta; (iii) the Republic of Liberia, (iv) the Republic of the Marshall Islands, (v) the Republic of Panama; (vi) Bermuda; (vii) the United Kingdom; (viii) the Republic of Singapore, (ix) Belgium, (x) Greece, (xi) France, or (xii) such other jurisdiction acceptable to the Lenders (each jurisdiction in clauses (i) through and including (v), an " Approved Flag "). Notwithstanding the foregoing, any Obligor may transfer a Ship to another Approved Flag in accordance with Clause 24.3 ( Flag Jurisdiction Transfer) .
(b)
Subject to Clause 24.13 (Transfer of Ships), the Additional Borrower will, the Parent Guarantor will, and will cause each Owner Guarantor which owns or operates a Ship to, be qualified to own and operate such Ship under the laws of the applicable Approved Flag in accordance with the terms of the related Mortgage.
(c)
Subject to Clause 24.13 (Transfer of Ships), the Additional Borrower will, the Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to keep such Ship in a good and sufficient state of repair consistent with the ship-ownership and management practice employed by first class owners of vessels of similar size and type and so as to ensure that each Ship is classified in the highest class available for vessels of its age and type with an Approved Classification Society, free of any overdue conditions or recommendations affecting the seaworthiness of such Ship, provided that if the classification of any of the Ships shall be subject to any such recommendations, the Borrower will and will cause each Owner Guarantor which operates such Ship to provide a written report to the Facility Agent describing the recommendations and assessing the steps required to be taken to prevent such recommendations from becoming overdue recommendations and it is hereby further agreed that there shall be no change in the classification of any of the Ships, save with the prior written consent of the Majority Lenders.
(d)
Subject to Clause 24.13 (Transfer of Ships), the Additional Borrower will, the Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to:
(i)
comply with and satisfy in all material respects all applicable legal requirements of the jurisdiction of such Ship's home port, now or hereafter from time to time in effect, in order that such Ship shall continue to be documented pursuant to the laws of the jurisdiction of its home port with such endorsements as shall qualify such Ship for participation in the trades and services to which it may be dedicated from time to time; or
(ii)
not do or allow to be done anything whereby such documentation is or could reasonably be expected to be forfeited.
(e)
Subject to Clause 24.13 (Transfer of Ships), the Additional Borrower will, the Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to:
(i)
make or cause to be made all repairs to or replacement of any damaged, worn or lost parts or equipment such that the value of such Ship will not be materially impaired; and
(ii)
except as otherwise contemplated by this Agreement, not remove any material part of, or item of, equipment owned by the Obligors installed on such Ship except in the ordinary course of the operation and maintenance of such Ship unless:
(A)
the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed, is free from any Security (other than any Other Permitted Security) in favor of any Person other than the Security Agent and becomes, upon installation on such Ship, the property of the Obligors and subject to the security constituted by the Mortgage or the Share Agreement; or
(B)
the removal will not materially diminish the value of such Ship.
(f)
Subject to Clause 24.13 (Transfer of Ships), the Additional Borrower will, the Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to submit such Ship to such periodical or other surveys as may be required for classification purposes and, upon the written request of the Security Agent, supply to the Security Agent copies of all survey reports and classification certificates issued in respect thereof.
(g)
Subject to Clause 24.13 (Transfer of Ships), the Additional Borrower will, the Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to promptly pay and discharge all tolls, dues, taxes, assessments, governmental charges, fines, penalties, debts, damages and liabilities whatsoever which have given or may give rise to maritime or possessory Security (other than any Other Permitted Security) on, or claims enforceable against, such Ship other than any of the foregoing being contested in good faith and diligently by appropriate proceedings, and, in the event of arrest of any Ship pursuant to legal process, or in the event of its detention in exercise or purported exercise of any such Security or claim as aforesaid, procure, if possible, the release of such Ship from such arrest or detention forthwith upon receiving notice thereof by providing bail or otherwise as the circumstances may require.
(h)
Subject to Clause 24.13 (Transfer of Ships), the Additional Borrower will, the Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to maintain, or cause to be maintained by the charterer or lessee of any Ship, a valid Certificate of Financial Responsibility (Oil Pollution) issued by the United States Coast Guard pursuant to the Federal Water Pollution Control Act to the extent that such certificate may be required by applicable legal requirements for any Ship and such other similar certificates as may be required in the course of the operations of any Ship pursuant to the International Convention on Civil Liability for Oil Pollution Damage of 1969, or other applicable legal requirements.
(i)
Subject to Clause 24.13 (Transfer of Ships), the Additional Borrower will, the Parent Guarantor will and will cause each Owner Guarantor which operates a Ship to cause such Ships to be managed by Approved Managers, provided that nothing herein shall be construed so as to prohibit such Approved Manager from sub-contracting its management duties. The Additional Borrower, the Parent Guarantor and such Owner Guarantor will use all commercially reasonable endeavours to procure that such Approved Manager shall enter into a Manager's Undertaking.
24.3
Flag Jurisdiction Transfer
Each Owner Guarantor of a Ship shall, and each other Obligor shall procure that such Owner Guarantor or Additional Borrower (as the case may be) shall only change the flag of the Ship which is owned by it from its initial Approved Flag to a new Approved Flag (the " Transferred Ship ") and further upon fulfillment of the following conditions:
(a)
on or prior to each Flag Jurisdiction Transfer Date, the Facility Agent shall have received a certificate, dated the Flag Jurisdiction Transfer Date, signed by the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or an authorized manager, member or general partner of the Owner Guarantor owning that Transferred Ship, certifying that:
(i)
all necessary governmental (domestic and foreign) and third party approvals and/or consents in connection with the Flag Jurisdiction Transfer being consummated on the Jurisdiction Transfer Date and otherwise referred to herein shall have been obtained and remain in effect;
(ii)
there exists no judgment, order, injunction or other restraint prohibiting or imposing materially adverse conditions upon such Flag Jurisdiction Transfer or the other transactions contemplated by this Agreement; and
(iii)
copies of resolutions approving the Flag Jurisdiction Transfer of such Owner Guarantor or Additional Borrower (as the case may be) owning that Ship and any other matters the Facility Agent may reasonably request;
(b)
on a date no later than by the Flag Jurisdiction Transfer Date:
(i)
the Owner Guarantor or Additional Borrower (as the case may be) owning the Transferred Ship shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate vessel registry of the new Approved Flag, a new Mortgage (which shall to the extent possible, be registered as a "continuation mortgage" to the original Mortgage recorded in the initial Approved Flag) with respect to such Transferred Ship and such Mortgage shall be effective to create in favor of the Security Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Transferred Ship, subject only to any Other Permitted Security; and
(ii)
all filings, deliveries of instruments and other actions necessary or desirable in the reasonable opinion of the Security Agent to perfect and preserve such security interests shall have been duly effected and the Security Agent shall have received evidence thereof in form and substance reasonably satisfactory to the Security Agent;
(iii)
the Facility Agent shall have received from counsel to the Owner Guarantor or Additional Borrower (as the case may be) owning that Transferred Ship reasonably satisfactory to the Facility Agent practicing in those jurisdictions in which the Transferred Ship is to be registered and/or the Owner Guarantor or Additional Borrower (as the case may be) owning such Transferred Ship is organized, opinions which shall be addressed to the Facility Agent and each of the Lenders, and dated on such Flag Jurisdiction Transfer Date, which shall (x) be in form and substance reasonably acceptable to the Facility Agent and (y) cover the perfection of the security interests granted pursuant to the new Mortgage registered over the Transferred Ship and such other matters incident thereto as the Facility Agent may reasonably request;
(iv)
the Facility Agent shall have received:
(A)
a certificate of ownership issued by the registry of the new Approved Flag showing the registered ownership of the Transferred Ship in the name of the relevant Owner Guarantor or Additional Borrower (as the case may be) owning that Transferred Ship; and
(B)
a certificate of ownership and encumbrance or, as applicable a transcript of registry issued by the registry of the new Approved Flag with respect to the Transferred Ship, indicating no recorded mortgages, encumbrances or liens over the Transferred Ship other than any Security in favor of the Security Agent and/or the Lenders and any Other Permitted Security, and
(C)
a certificate satisfactory to the Facility Agent, from an Approved Insurance Broker with respect to the insurance maintained in respect of the Transferred Ship certifying that such insurances (x) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Security Agent as mortgagee and (y) conform with the insurance requirements of the Mortgage and this Agreement;
(v)
the Security Requirements, as applicable, for the Transferred Ship shall have been satisfied; and
(vi)
that:
(A)
no Event of Default has occurred and is continuing; and
(B)
all representations and warranties contained in this Agreement or in any other Finance Document shall be true and correct in all material respects (it being understood and agreed that any representation or warranty which by its terms is made as of a specified date shall be required to be true and correct in all material respects only as of such specified date).
24.4
Security Requirements
The Additional Borrower and each Owner Guarantor of a Ship which is to be subject to a Flag Jurisdiction Transfer shall, and each other Obligor shall procure that such Additional Borrower or Owner Guarantor shall comply with the following conditions in relation to such Ship for the purposes of such Flag Jurisdiction Transfer:
(a)
the Additional Borrower or Owner Guarantor owning the Transferred Ship shall have duly authorized, executed and delivered, and caused to be recorded in the appropriate ship registry, a Mortgage with respect to such Ship and such Mortgage shall be effective to create in favor of the Security Agent and/or the Lenders a legal, valid and enforceable first priority security interest, in and lien upon such Ship;
(b)
the Facility Agent shall have received each of the following:
(i)
class certificates from an Approved Classification Society indicating that such Ship meets the criteria specified in Clause 24.2 ( Flag of Ships; Citizenship; Ship Classification);
(ii)
certified copies of all agreements related to the Ship Management Agreements and, if applicable, the Pool Agreement or other applicable Charter, for such Ship;
(iii)
certified copies of all ISM Code and ISPS Code documentation for each Ship; and
(c)
a report, in form and scope reasonably satisfactory to the Facility Agent, from an Approved Insurance Broker with respect to the insurance maintained by the Parent Guarantor, the Borrower or the Owner Guarantors in respect of such Ship, together with a certificate from such broker certifying that such insurances (i) are placed with such insurance companies and/or underwriters and/or clubs, in such amounts, against such risks, and in such form, as are customarily insured against by similarly situated insureds for the protection of the Facility Agent, the Security Agent and/or the Lenders as mortgagee, (ii) otherwise conform with the insurance requirements of each respective Mortgage (it being understood that, except as required by applicable law, the insurance requirements of such Mortgage shall not exceed the Required Insurance) and (iii) include copies of the Required Insurance;
(d)
the Facility Agent shall have received in the relevant jurisdictions of incorporation of the applicable Obligors and in the jurisdiction of the flag of the Ship, an opinion addressed to the Facility Agent and each of the Lenders and dated on or about the date of this Agreement covering such matters as shall be reasonably required by the Facility Agent, in each case which shall (x) be in form and substance reasonably acceptable to the Facility Agent and (y) cover matters such as the perfection of the security interests granted pursuant to the Security Documents, and such other matters incidental to the transactions contemplated herein as the Facility Agent may reasonably request;
(e)
the Facility Agent shall have received a certificate, dated on or about the date of this Agreement and reasonably acceptable to the Facility Agent, signed by the Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Treasurer or an authorized manager, member or general partner of the Parent Guarantor, the Borrower and Owner Guarantors, and attested to by the Secretary or any Assistant Secretary (or, to the extent such entity does not have a Secretary or Assistant Secretary, the analogous Person within such entity) of such entity, as the case may be, with appropriate insertions, together with copies of the Constitutional Documents of such entity and the resolutions of such entity referred to in such certificate authorizing the consummation of the transactions contemplated by the Finance Documents; and
(f)
the Facility Agent shall have received copies of governmental approvals, good standing certificates and bring-down telegrams or facsimiles, if any, which the Facility Agent may have reasonably requested in connection with any matters set out in this Clause, such documents and papers, where appropriate, to be certified by proper corporate or governmental authorities.
24.5
Classification society undertaking
Each Owner Guarantor shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, in respect of the Ship owned by it, instruct the relevant Approved Classification Society (and use all commercially reasonable efforts to procure that the Approved Classification Society undertakes with the Security Agent):
(a)
to send to the Security Agent, following receipt of a written request from the Security Agent, certified true copies of all original class records held by the Approved Classification Society in relation to that Ship;
(b)
to allow the Security Agent (or its agents), at any time and from time to time, to inspect the original class and related records of that Owner Guarantor or the Additional Borrower (as the case may be) and that Ship at the offices of the Approved Classification Society and to take copies of them;
(c)
to notify the Security Agent immediately in writing if the Approved Classification Society:
(i)
receives notification from that Owner Guarantor or the Additional Borrower (as the case may be) or any person that that Ship's Approved Classification Society is to be changed; or
(ii)
becomes aware of any facts or matters which may result in or have resulted in a change, suspension, discontinuance, withdrawal or expiry of that Ship's class under the rules or terms and conditions of that Owner Guarantor or the Additional Borrower (as the case may be) or that Ship's membership of the Approved Classification Society;
(d)
following receipt of a written request from the Security Agent:
(i)
to confirm that that Owner Guarantor or the Additional Borrower (as the case may be) is not in default of any of its contractual obligations or liabilities to the Approved Classification Society, including confirmation that it has paid in full all fees or other charges due and payable to the Approved Classification Society; or
(ii)
to confirm that that Owner Guarantor or the Additional Borrower (as the case may be) is in default of any of its contractual obligations or liabilities to the Approved Classification Society, to specify to the Security Agent in reasonable detail the facts and circumstances of such default, the consequences of such default, and any remedy period agreed or allowed by the Approved Classification Society.
24.6
Modifications
No Owner Guarantor shall, neither shall the Additional Borrower, and the Parent Guarantor and the Original Borrower shall procure that no Owner Guarantor shall, make any modification or repairs to, or replacement of, the Ship owned by it, or equipment installed on it which would or might materially alter the structure, type or performance characteristics of that Ship or materially reduce its value.
24.7
Removal and installation of parts
(a)
Subject to paragraph (b) below, no Owner Guarantor shall, neither shall the Additional Borrower, and the Parent Guarantor and the Borrower shall procure that no Owner Guarantor shall, remove any material part of any Ship, or any item of equipment installed on any Ship unless:
(i)
the part or item so removed is forthwith replaced by a suitable part or item which is in the same condition as or better condition than the part or item removed;
(ii)
the replacement part or item is free from any Security in favor of any person other than the Security Agent; and
(iii)
the replacement part or item becomes, on installation on that Ship, the property of that Owner Guarantor or the Additional Borrower (as the case may be) and subject to the security constituted by the Mortgage on that Ship.
(b)
An Owner Guarantor or the Additional Borrower (as the case may be) may install equipment owned by a third party if the equipment can be removed without any risk of damage to the Ship owned by that Owner Guarantor or the Additional Borrower (as the case may be).
24.8
Surveys
Each Owner Guarantor shall, the Additional Borrower shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, submit the Ship owned by it regularly to all periodic or other surveys which may be required for classification purposes and, if so required by the Facility Agent acting with the authorization of the Majority Lenders or an ECA, provide the Facility Agent, with copies of all survey reports.
24.9
Ship inspections
(a)
Each Owner Guarantor shall, the Additional Borrower shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, permit the Security Agent (acting through surveyors or other persons appointed by it for that purpose) to board the Ship owned by it at all reasonable times, to inspect its condition or to satisfy themselves about proposed or executed repairs and shall afford all proper facilities for such inspections.
(b)
Any inspection of a Ship to be conducted by the Security Agent (or its agents) shall be:
(i)
without undue interference with the operations of that Ship;
(ii)
made upon the giving of at least 15 Business Days' prior written notice by the Facility Agent;
(iii)
at the cost of the Owner Guarantor or the Additional Borrower (as the case may be) owning that Ship provided, that the Owner Guarantor or the Additional Borrower (as the case may be) shall not be required to bear the cost of more than one inspection in each calendar year unless an Event of Default has occurred and is continuing.
24.10
Prevention of and release from arrest
(a)
Each Owner Guarantor shall, the Additional Borrower shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, in respect of the Ship owned by it, promptly discharge:
(i)
all liabilities which give or may give rise to maritime or possessory liens on or claims enforceable against that Ship, its Earnings or its Insurances;
(ii)
all Taxes, dues and other amounts charged in respect of that Ship, its Earnings or its Insurances; and
(iii)
all other outgoings whatsoever in respect of that Ship, its Earnings or its Insurances.
(b)
Each Owner Guarantor shall, the Additional Borrower shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, upon receiving notice of the arrest or seizure of the Ship owned by it or of its detention in exercise or purported exercise of any lien or claim:
(i)
no later than within seven days of receiving such notice, notify the Facility Agent (who shall promptly notify the Lenders) and provide a report to the Facility Agent (for its forwarding to the Lenders) containing such information as the Lenders may require on such arrest, seizure or detention; and
(ii)
promptly procure its release by providing bail or otherwise as the circumstances may require.
24.11
Restrictions on chartering etc.
No Owner Guarantor or Additional Borrower (as the case may be) shall:
(a)
let that Ship on demise charter for any period;
(b)
enter into any charter in relation to a Ship under which more than 2 months' hire (or the equivalent) is payable in advance;
(c)
charter a Ship otherwise than on bona fide arm's length terms at the time when that Ship is fixed;
(d)
appoint a manager of a Ship other than the Approved Managers or agree to any material alteration to the terms of an Approved Manager's appointment; or
(e)
put a Ship into the possession of any person for the purpose of work being done upon it in an amount exceeding or likely to exceed $5,000,000 (or the equivalent in any other currency) unless either:
(i)
that person has first given to the Security Agent and in terms satisfactory to it a written undertaking not to exercise any lien on that Ship or its Earnings for the cost of such work or for any other reason; or
(ii)
the cost of such work is covered by insurances; or
(iii)
the Owner Guarantor or Additional Borrower (as the case may be) establishes to the reasonable satisfaction of the Security Agent that it has sufficient funds to pay for the cost of such work.
24.12
Notice of Mortgage
Each Owner Guarantor shall, the Additional Borrower shall, and the Parent Guarantor and the Borrower shall procure that such Owner Guarantor shall, keep the relevant Mortgage registered against the Ship owned by it as a valid first priority or as the case may be, first preferred mortgage, carry on board that Ship a certified copy of the relevant Mortgage and place and maintain in a conspicuous place in the navigation room and the master's cabin of that Ship a framed printed notice stating that that Ship is mortgaged by that Borrower to the Security Agent.
24.13
Transfer of Ships
Notwithstanding Clause 24.3 ( Flag Jurisdiction Transfer ), an Owner Guarantor may transfer the ownership of a Ship owned by it to the Additional Borrower provided that on or before the date of such transfer the Security Agent has received the following documents in form and substance satisfactory to the Security Agent and its lawyers:
(a)
a duly executed original of the Replacement Finance Documents in relation to the relevant Ship (and of each document required to be delivered by their respective terms);
(b)
in each case if required for the provisions of the legal opinions referred to in paragraph (f), copies of the resolutions of the directors of the Additional Borrower authorising the execution of each of the Replacement Finance Documents in relation to the relevant Ship;
(c)
the original of any power of attorney under which any of the Replacement Finance Documents in relation to the relevant Ship are to be executed on behalf of the Additional Borrower;
(d)
documentary evidence that the relevant Ship:
(i)
is definitively and permanently registered in the name of the Additional Borrower as new owner under the relevant Approved Flag;
(ii)
is in the absolute and unencumbered ownership of the Additional Borrower as new owner save as contemplated by the Finance Documents;
(iii)
the Mortgage granted by the Additional Borrower as new owner in relation to it has been duly registered against that Ship as valid first priority or preferred (as the case may be) ship mortgage in accordance with the laws of the relevant Approved Flag; and
(iv)
notwithstanding the transfer of ownership to the Additional Borrower as new owner, it is insured in accordance with the provisions of this Agreement and all requirements therein in respect of insurances have been complied with.
(e)
documents establishing that the Ship will, as from the date of such transfer, be managed by the Approved Manager on terms acceptable to the Lenders, together with:
(i)
a Manager's Undertaking in respect of the Ship; and
(ii)
copies of the relevant Approved Manager's Document of Compliance and of that Ship's Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires) and ISSC;
(f)
favourable legal opinions from lawyers appointed by the Facility Agent on such matters concerning the laws of England, Belgium, the country where the Ship is registered following such transfer and such other relevant jurisdictions as the Facility Agent may require;
(g)
a favourable opinion from an independent insurance consultant acceptable to the Facility Agent on such matters relating to the insurances for the relevant Ship as the Facility Agent may require;
(h)
if required by the Facility Agent, a duly executed original of a supplemental agreement to this Agreement specifying such consequential amendments to this Agreement and other Finance Documents as may be required as a consequence of:
(i)
the transfer of ownership of the relevant Ship;
(ii)
the execution of the Replacement Finance Documents in relation to the relevant Ship; and
(iii)
the transfer of the relevant Advance by the Owner Guarantor transferring ownership of the relevant Ship to the Additional Borrower;
(i)
if the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent.
24.14
Transfer of Loan
Subject to the satisfaction of Clause 24.13 ( Transfer of Ships ), if the ownership of a Ship is transferred from an Owner Guarantor to the Additional Borrower:
(a)
the Additional Borrower shall assume the Vessel Loan in relation to that Ship and shall become indebted in an amount equal to the then outstanding amount of such Vessel Loan and the provisions of Clause 29.2 ( Additional Borrower ) shall apply; and
(b)
the Owner Guarantor shall be released and the provisions of Clause 29.3 ( Release of Obligors ) shall apply.
25
SECURITY COVER
25.1
Minimum required security cover
(a)
The Ultimate Parent Guarantor will not permit:
(i)
in relation to the Ships then owned by an Owner Guarantor, the Aggregate Collateral Vessel Value for such Ships, as determined by the most recent Appraisals delivered by the Borrower to the Facility Agent or obtained by the Facility Agent, at any time to equal less than:
(A)
from the date of this Agreement to and including the date falling one day prior to the second anniversary of the date of this Agreement, 135% of an amount equal to the aggregate principal amount of the Loan outstanding at such time;
(B)
thereafter 140% of an amount equal to the aggregate principal amount of the Vessel Loans in relation to the Ships owned by an Owner Guarantor outstanding at such time;
(ii)
in relation to the Ships then owned by the Additional Borrower, the Aggregate Collateral Vessel Value for such Ships, as determined by the most recent Appraisals delivered by the Borrower to the Facility Agent or obtained by the Facility Agent, at any time equal to less than 145% of an amount equal to the aggregate principal amount of the Vessel Loans assumed by the Additional Borrower in relation to the Ships owned by it outstanding at such time;
(iii)
in relation to the ECA Ships then owned by an Owner Guarantor, the Aggregate Collateral Vessel Value of such ECA Ships, as determined by the most recent Appraisals delivered by the Borrower to the Facility Agent or obtained by the Facility Agent, at any time to equal less than:
(A)
from the date of this Agreement to and including the date falling one day prior to the second anniversary of the date of this Agreement, 135% of an amount equal to the aggregate principal amount of the ECA Vessel Loans outstanding at such time;
(B)
thereafter 140% of an amount equal to the aggregate principal amount of the ECA Vessel Loans in relation to the Ships owned by an Owner Guarantor outstanding at such time;
(iv)
in relation to the ECA Ships then owned by the Additional Borrower, the Aggregate Collateral Vessel Value for such ECA Ships, as determined by the most recent Appraisals delivered by the Borrower to the Facility Agent or obtained by the Facility Agent, at any time equal to less than 145% of an amount equal to the aggregate principal amount of the ECA Vessel Loans assumed by the Additional Borrower in relation to the ECA Ships owned by it outstanding at such time;
provided that any non-compliance with this Clause 25.1 ( Minimum required security cover ) shall not constitute an Event of Default (but shall constitute a Default), so long as within thirty (30) days of such non-compliance, the Borrower has either (x) provided Additional Collateral (and shall during such period, and prior to satisfactory completion thereof, be diligently carrying out such actions) or (y) prepaid such portion of the Loan outstanding (in the case of paragraph (a)(i) of this Clause 25.1 ( Minimum required security cover )) or the aggregate ECA Vessel Loans outstanding (in the case of paragraph (a)(ii) of this Clause 25.1 ( Minimum required security cover )) to cure such non-compliance.
Any prepayment pursuant to this Clause 25.1 ( Minimum required security cover ) shall be applied to reduce in inverse chronological order the amount of each Repayment Instalment falling after that prepayment by the amount prepaid, pro rata in respect of each Vessel Loan outstanding (in the case of paragraph (a)(i) of this Clause 25.1 ( Minimum required security cover )) and pro rata in respect of each ECA Vessel Loan outstanding (in the case of paragraph (a)(ii) of this Clause 25.1 ( Minimum required security cover )).
26
APPLICATION OF EARNINGS
26.1
Payment of Earnings and Minimum Consolidated Liquidity
(a)
Each Obligor shall cause the Earnings and any other income derived from each of the respective Ships, to the extent constituting Requisition Compensation, Earnings and Insurances, to be deposited by the respective account debtor in respect of such earnings into one or more of the Earnings Accounts maintained for such Obligor from time to time. Without limiting any Obligor's obligations in respect of this Clause 26.1 ( Payment of Earnings and Minimum Consolidated Liquidity ), each of the Obligors agrees that, in the event it receives any earnings and other income constituting Requisition Compensation, Earnings, and Insurances in relation to a Ship, and such other proceeds are deposited into any account other than the Earnings Account relating to that Ship, it shall promptly notify the Facility Agent and immediately deposit all such proceeds into the Earnings Account relating to that Ship.
(b)
The Parent Guarantor and the Original Borrower shall ensure that commencing from the first Utilisation Date and thereafter throughout the Security Period, there shall be maintained in the Minimum Liquidity Account (which shall be subject to an Accounts Security executed by the Parent Guarantor in favour of the Security Agent) an amount which when aggregated with 50% of the amount standing in the credit balance of the Debt Service Reserve Account, shall be no less than the Minimum Liquidity Amount.
(c)
Until the date on which the Amending and Restating Agreement is entered into, all payments by a Hedge Counterparty to the Borrower or the Parent Guarantor under a Hedging Agreement shall be paid to the Minimum Liquidity Account and thereafter the Hedge Counterparty shall be notified to pay into the Earnings Account opened in the name of the Additional Borrower, and the Borrower and the Parent Guarantor (as the case may be) hereby irrevocably authorises such Hedge Counterparty to direct such payments into the Minimum Liquidity Account or the Earnings Account opened in the name of the Additional Borrower as the case may be.
26.2
Debt Service Reserve Account
Each Obligor shall ensure that, at any time after the first Utilization Date and until the Final Ship Transfer Date there shall be maintained in the Debt Service Reserve Account a credit balance of no less than the aggregate of:
(a)
the full amount of the Repayment Instalment(s) falling due under Clause 6.1 ( Repayment of Loan ) in relation to the Vessel Loans relating to the Ships then owned by an Owner Guarantor on the next Repayment Date (excluding the Balloon Payment for the Commercial Tranche); and
(b)
the aggregate amount of interest on the Loan which is payable on the next due date for payment of interest on the Loan under this Agreement in relation to the Vessel Loans relating to the Ships then owned by an Owner Guarantor.
26.3
Shortfall in Earnings
(a)
If the aggregate of the credit balance on the Debt Service Reserve Account falls below the amounts required under Clause 26.2 ( Debt Service Reserve Account ), the Parent Guarantor shall promptly make up the amount of the insufficiency and in any event, immediately on demand from the Facility Agent.
(b)
Without prejudicing the Facility Agent's right to make such demand at any time, the Facility Agent may, if so authorized by the Majority Lenders, permit the Borrower to make up all or part of the insufficiency from the Earnings received in the Earnings Account.
26.4
Interest accrued on Debt Service Reserve Account
Any credit balance on the Debt Service Reserve Account shall bear interest at the rate from time to time offered by the Account Bank to its customers for dollar deposits of similar amounts and for periods similar to those for which such balances appear to the Account Bank likely to remain on the Debt Service Reserve Account.
26.5
Release of accrued interest
Interest accruing under Clause 26.4 ( Interest accrued on Debt Service Reserve Account ) shall be credited to the Debt Service Reserve Account, shall be released to the Parent Guarantor at the end of the Security Period. For the avoidance of doubt, such interest shall count towards the amounts in the Debt Service Reserve Account required to be maintained under Clause 26.2 ( Debt Service Reserve Account ).
26.6
Withdrawals from Accounts.
No withdrawals may be made from any Account without the prior written consent of the Facility Agent unless:
(a)
Clause 26.1(b) ( Payment of Earnings and Minimum Consolidated Liquidity ) and Clause 26.2 ( Debt Service Reserve Account ) are fully complied with; and
(b)
no Event of Default has occurred and is continuing.
26.7
Location of Accounts
Each Obligor shall promptly execute any documents which the Facility Agent specifies is necessary to create or maintain in favour of the Security Agent Security over (and/or rights of set-off, consolidation or other rights in relation to) the Earnings Accounts and the Debt Service Reserve Account.
27
EVENTS OF DEFAULT
27.1
General
Each of the events or circumstances set out in this Clause 27 ( Events of Default) is an Event of Default except for Clause 27.20 ( Acceleration) .
27.2
Non-payment
Any Obligor shall default in the payment when due of any amounts due under any Finance Document (including without limitation, any KEXIM Premium and any K-Sure Premium) unless its failure to pay is caused by:
(a)
administrative or technical error; or
(b)
a Disruption Event,
(c)
and payment is made within three (3) Business Days of the payment due date.
27.3
Specific obligations
Any Obligor shall default in the due performance or observance by it of any term, covenant or agreement contained in Clauses 19.2 ( Financial statements) , 19.3 ( Compliance certificate), 21.2 ( Corporate Franchises ), 21.4 ( Ownership of subsidiaries), 21.21 ( Negative pledge), 21.22 ( Disposals), 21.23 (Merger), 21.24 (Change of business), 21.25 (Financial Indebtedness) 21.26 (Share capital), 21.27 (Jurisdiction of employment), 21.28 ( Dividends) , 21.30 ( Other transactions), 21.31 ( Limitation on certain restrictions on Subsidiaries) , 21.32 ( Jurisdiction of incorporation or formation; Amendment of constitutional documents) , 21.33 ( End of fiscal year; Fiscal quarter), 21.34 (Further assurance) and 25.1 ( Minimum required security cover ).
27.4
Other obligations
(a)
An Obligor does not comply with clause 3.3 ( Condition Subsequent ) of the Amending and Restating Agreement or any provision of the Finance Documents (other than those referred to in Clause 20 ( Financial Covenants ), Clause 27.2 ( Non-payment) and Clause 27.3 ( Specific obligations )).
(b)
No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within thirty (30) days of the Facility Agent giving notice to the Borrower or (if earlier) any Obligor becoming aware of the failure to comply.
27.5
Misrepresentation
Any representation, warranty or statement made by any Obligor herein or in any other Finance Document or in any certificate delivered pursuant hereto or thereto shall prove to be untrue in any material respect on the date as of which made or deemed made.
27.6
Cross default
(a)
The Ultimate Parent Guarantor or any of its Subsidiaries shall default in any payment of any Financial Indebtedness beyond the period of grace, if any, provided in the instrument or agreement under which such Financial Indebtedness was created; or
(b)
The Ultimate Parent Guarantor or any of its Subsidiaries shall default in the observance or performance of any agreement or condition relating to any Financial Indebtedness (other than the obligations created hereunder) or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Financial Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause (determined without regard to whether any notice is required), any such Financial Indebtedness to become due prior to its stated maturity provided that the event giving rise to that event of default is not waived or remedied to the satisfaction of the relevant creditor within 30 days of its occurrence; or
(c)
Any Financial Indebtedness (other than the obligations created hereunder) of the Ultimate Parent Guarantor or any of its Subsidiaries shall be declared to be due and payable, or required to be prepaid, redeemed, defeased or repurchased, other than by a regularly scheduled required prepayment or in connection with an asset sale, casualty or condemnation or other similar mandatory prepayment prior to the stated maturity thereof;
provided that it shall not be a Default or Event of Default under this Clause 27.6 ( Cross Default ) unless the aggregate principal amount of all Financial Indebtedness as described in preceding clauses (a) through (c), inclusive, exceeds $10,000,000.
27.7
Insolvency Event
Neither the Ultimate Parent Guarantor nor any of its Subsidiaries (other than any Immaterial Subsidiary) shall:
(a)
commence a voluntary case concerning itself under Title 11 of the United States Code entitled "Bankruptcy," as now or hereafter in effect, or any successor thereto (the " U.S. Bankruptcy Code ") or any other Debtor Relief Law;
(b)
be the subject of an involuntary proceeding under any Debtor Relief Law, which is not dismissed within thirty (30) days, after commencement of such proceeding;
(c)
an administrator is appointed (whether by the court or otherwise) in respect of a Relevant Person or any administrative or other receiver is appointed over any asset of a Relevant Person;
(d)
a Relevant Person makes any formal declaration of bankruptcy or any formal statement to the effect that it is insolvent or likely to become insolvent, or an administration notice is given or filed in relation to a Relevant Person, or a winding up or administration order is made in relation to a Relevant Person, or the members or directors of a Relevant Person pass a resolution to the effect that it should be wound up, placed in administration or cease to carry on business, save that this paragraph does not apply to a fully solvent winding up of a Relevant Person other than any Borrower which is, or is to be, effected for the purposes of an amalgamation or reconstruction previously approved by the Majority Lenders and effected not later than 3 months after the commencement of the winding up;
(e)
a petition is presented in any Pertinent Jurisdiction for the winding up or administration, or the appointment of a provisional liquidator, of a Relevant Person unless the petition is being contested in good faith and on substantial grounds and is dismissed or withdrawn within 30 days of the presentation of the petition;
(f)
a Relevant Person petitions a court, or presents any proposal for, any form of judicial or non‑judicial suspension or deferral of payments, reorganisation of its debt (or certain of its debt) or arrangement with all or a substantial proportion (by number or value) of its creditors or of any class of them or any such suspension or deferral of payments, reorganisation or arrangement is effected by court order, contract or otherwise;
(g)
have an order for relief entered with respect to it under any Debtor Relief Laws or similar laws as now or hereafter in effect;
(h)
fail to pay, or admit in writing its inability to pay, its debts generally as they become due;
(i)
be adjudicated insolvent or bankrupt; or
(j)
take any corporate action for the purpose of effecting any of the foregoing.
27.8
Judgments
One or more judgments or decrees shall be entered against the Ultimate Parent Guarantor or any of its Subsidiaries involving in the aggregate for the Ultimate Parent Guarantor and its Subsidiaries a liability (not paid or fully covered by a reputable and solvent insurance company) and such judgments and decrees either shall be final and non-appealable or shall not be vacated, discharged or stayed or bonded pending appeal for any period of 60 consecutive days, and the aggregate amount of all such judgments, to the extent not covered by insurance, exceeds $10,000,000.
27.9
[Intentionally Deleted]
27.10
Guarantees
After the execution and delivery thereof, any guarantee pursuant to Clause 17 ( Guarantee and Indemnity ) of this Agreement, or any provision thereof, shall cease to be in full force or effect as to any Guarantor (unless such Guarantor is no longer a Subsidiary of the Parent Guarantor by virtue of a liquidation, sale, merger or consolidation permitted by Clauses 21.23 ( Merger ) and/or 21.24 ( Change of Business )) or any Guarantor (or person acting by or on behalf of such Guarantor) shall deny or disaffirm such Guarantor's obligations under the guarantee to which it is a party or any Guarantor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to the guarantee to which it is a party beyond any grace period (if any) provided therefor.
27.11
Security imperilled
At any time after the execution and delivery thereof, any of the Security Documents shall cease to be in full force and effect, or shall cease in any material respect to give the Security Agent for the benefit of the Secured Parties the Security, rights, powers and privileges purported to be created thereby (including, without limitation, a perfected security interest in, and Security on, all of the Security Assets), in favour of the Security Agent, superior to and prior to the rights of all third Persons (except in connection with any Other Permitted Security), and subject to no other Security (except any Other Permitted Security), or any Obligor shall default in the due performance or observance of any term, covenant or agreement on its part to be performed or observed pursuant to any of the Security Documents and such default shall continue beyond any grace period (if any) specifically applicable thereto pursuant to the terms of such Security Document, or any "event of default" (as defined in any Mortgage) shall occur in respect of any Mortgage.
27.12
Cessation or change of business
Except in connection with the sale of a Ship by the Owner Guarantor that owns it or save to the extent permitted under this Agreement, any Obligor:
(a)
suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business;
(b)
changes the nature of its business from that conducted as at the date of this Agreement.
27.13
Repudiation and rescission of agreements
Save to the extent permitted under this Agreement, an Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Transaction Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Transaction Document or any Transaction Security.
27.14
Restricted Party and non-compliance with Sanctions Laws and/or Anti-Bribery and Corruption Laws
A Transaction Obligor, the Ultimate Parent Guarantor or any Subsidiary becomes a Restricted Party or any Obligor, or the Ultimate Parent Guarantor or its Subsidiary fails to comply with any Sanctions Laws and/or any Anti-Bribery and Anti- Corruption Laws applicable to it.
27.15
Arrest etc.
Any Ship which is subject to a Mortgage is arrested, confiscated, seized, taken in execution, impounded, forfeited, detained in exercise or purported exercise of any possessory lien or other claim and the Owner Guarantor or the Additional Borrower (as the case may be) owning such Ship fails to procure the release of such Ship within a period of 30 Business Days thereafter (the " 30 Days Period ") unless the Borrower has prepaid the Vessel Loan in full (together with all interest, fees and other related amounts payable in relation thereto) on or before the last day of the 30 Days Period.
27.16
Expropriation
If a Relevant Person fails to comply with or pay any sum due from it under any final judgment or any final order made or given by any court of competent jurisdiction or any assets of a Relevant Person are subject to any form of execution, attachment, arrest, sequestration or distress in respect of a sum of, or sums aggregating, $10,000,000 or more or the equivalent in another currency
27.17
Transaction Documents.
(a)
It is or becomes unlawful for a Transaction Obligor to perform any of its obligations under the Transaction Documents.
(b)
Any obligation of a Transaction Obligor under the Transaction Documents is not or ceases to be legal, valid, binding or enforceable.
(c)
Any Transaction Document ceases to be in full force and effect or to be continuing or is or purports to be determined or any Transaction Document is alleged by a party to it (other than a Finance Party) to be ineffective.
27.18
Stock Exchange Listing
The shares of the Additional Borrower cease to remain listed, or are suspended from trading on First Market of Euronext Brussels and the New York Stock Exchange or such other reputable international stock exchange approved by the Facility Agent (acting on the instructions of the Majority Lenders) in writing, such approval not to be unreasonably withheld or delayed, for a consecutive period of more than fourteen (14) days.
27.19
K-Sure Insurance Policies and KEXIM Guarantee
(a)
Any default (howsoever described) occurs under the terms of the KEXIM Guarantee and/or any K-Sure Insurance Policy.
(b)
Any of the KEXIM Guarantee and/or any K-Sure Insurance Policy is terminated, repudiated or ceases to be in full force and effect.
27.20
Acceleration
Upon the occurrence and during the continuance of an Event of Default, the Facility Agent may and, upon the written request of the Majority Lenders, shall by written notice to the Borrower, take any or all of the following actions, without prejudice to the rights of the Facility Agent or any Lender to enforce its claims against any Obligor (provided that, if an Event of Default specified in Clause 27.7 ( Insolvency Event ) shall occur in respect of any Obligor, the result which would occur upon the giving of written notice by the Facility Agent to the Borrower as specified in paragraphs (a) and (b) below shall occur automatically without the giving of any such notice):
(a)
cancel the Total Commitments, whereupon they shall immediately be cancelled and/or declare the principal of and any accrued interest in respect of the Loan and all Secured Liabilities owing hereunder to be, whereupon the same shall become, forthwith due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by each Obligor; and
(b)
enforce, as Security Agent, all of the Security and security interests created pursuant to the Security Documents.
27.21
No impairment of rights.
Nothing in this Clause 27 ( Events of Default ) shall be taken to impair or restrict the exercise of any right given to individual Finance Parties under a Finance Document.
Section 9     

CHANGES TO PARTIES
28
CHANGES TO THE LENDERS
28.1
Assignments and transfers by the Lenders
Subject to this Clause 28 ( Changes to the Lenders ), a Lender (the " Existing Lender ") may:
(a)
assign all of its rights (or if less than all, a portion equal to at least $20,000,000 in principal amount in the aggregate for the Existing Lender); or
(b)
transfer by novation all of its rights and obligations (or if less than all, a portion equal to at least $20,000,000 in principal amount in the aggregate for the Existing Lender),
under the Finance Documents to another bank or financial institution, an ECA 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 "); provided that if all of any Existing Lender's rights are less than $20,000,000 in principal amount and any Affiliates of such Existing Lender hold any rights under this Agreement, then such Existing Lender and its Affiliates must assign or transfer all of their rights and obligations (or if less than all, a portion equal to at least $20,000,000 in principal amount in the aggregate for the Existing Lender and such Affiliates) to the New Lender.
28.2
Conditions of assignment or transfer
(a)
The consent of the Borrower or any Owner Guarantor is not required for an assignment or transfer by an Existing Lender. The consent of the Parent Guarantor is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is:
(i)
to another Lender or an Affiliate of a Lender;
(ii)
if the Existing Lender is a fund, to a fund which is a Related Fund; or
(iii)
made at a time when any Event of Default is continuing.
(b)
The consent of the Parent Guarantor to an assignment or transfer must not be unreasonably withheld or delayed. The Parent Guarantor will be deemed to have given its consent ten (10) days after the Existing Lender has requested it unless consent is expressly refused by the Parent Guarantor within that time.
(c)
The consent of the Parent Guarantor to an assignment or transfer must not be withheld solely because the assignment or transfer may result in an increase to any amount payable under Clause 14.3 ( Mandatory Cost) if the Existing Lender agrees to indemnify the Borrower against any such additional amount payable by the Borrower under such Clause.
(d)
Any assignment or transfer by an Existing Lender which is a K-Sure Lender must be made in accordance with the terms of the relevant K-Sure Insurance Policy.
(e)
An assignment will only be effective on:
(i)
receipt by the Facility Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Facility Agent) that the New Lender will assume the same obligations to the other Secured Parties as it would have been under if it were an Original Lender; and
(ii)
performance by the Facility 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 Facility Agent shall promptly notify to the Existing Lender and the New Lender.
(f)
Each Obligor agrees that all rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender's title and of any rights or equities which the Borrower or any other Obligor had against the Existing Lender.
(g)
A transfer will only be effective if the procedure set out in Clause 28.5 ( Procedure for transfer ) is complied with.
(h)
If:
(i)
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 under that clause as incorporated by reference or in full in any other Finance Document or Clause 13 ( Increased Costs ),
then the New Lender or Lender acting through its new Facility Office is entitled to receive payment under those Clauses only 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 paragraph (h) shall not apply in respect of an assignment or transfer made in the ordinary course of the primary syndication of the Facility.
(i)
Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Facility 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.
(j)
Any New Lender in respect of a KEXIM Guaranteed Tranche may only be a Lead Arranger, a Mandated Lead Arranger or such other bank or financial institution acceptable to KEXIM.
28.3
Assignment or transfer fee
The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent (for its own account) a fee of $5,000.
28.4
Limitation of responsibility of Existing Lenders
(a)
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
(i)
the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents, the Transaction Security or any other documents;
(ii)
the financial condition of any Obligor;
(iii)
the performance and observance by any Obligor 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.
(b)
Each New Lender confirms to the Existing Lender and the other Finance Parties and the Secured Parties that it:
(i)
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor 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 or any other Finance Party in connection with any Finance Document or the Transaction Security; and
(ii)
will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities throughout the Security Period.
(c)
Nothing in any Finance Document obliges an Existing Lender to:
(i)
accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 28 ( 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 Transaction Obligor of its obligations under the Finance Documents or otherwise.
28.5
Procedure for transfer
(a)
Subject to the conditions set out in Clause 28.2 ( Conditions of assignment or transfer ), a transfer is effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, subject to paragraph (b) below as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with this Agreement and delivered in accordance with this Agreement, execute that Transfer Certificate.
(b)
The Facility 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.
(c)
Subject to Clause 28.9 ( Pro rata interest settlement ), on the Transfer Date:
(i)
to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents and in respect of the Transaction Security, each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and in respect of the Transaction Security and their respective rights against one another under the Finance Documents and in respect of the Transaction Security shall be cancelled (being the " Discharged Rights and Obligations ");
(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 Facility Agent, the Security Agent, the Mandated Lead Arrangers, the Lead Arrangers, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves and in respect of the Transaction Security 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 Facility Agent, the Security Agent, the Mandated Lead Arrangers, the Lead Arrangers and the Existing Lenders shall each be released from further obligations to each other under the Finance Documents; and
(iv)
the New Lender shall become a Party as a "Lender".
28.6
Procedure for assignment
(a)
Subject to the conditions set out in Clause 28.2 ( Conditions of assignment or transfer ) an assignment may be effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, subject to paragraph (b) 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.
(b)
The Facility 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.
(c)
Subject to Clause 28.9 ( Pro rata interest settlement ), on the Transfer Date:
(i)
the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of the Transaction Security expressed to be the subject of the assignment in the Assignment Agreement;
(ii)
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 the Transaction Security); and
(iii)
the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.
(d)
Lenders may utilize procedures other than those set out in this Clause 28.6 ( Procedure for assignment ) to assign their rights under the Finance Documents (but not, without the consent of the relevant Transaction Obligor or unless in accordance with Clause 28.5 ( Procedure for transfer ), to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 28.2 ( Conditions of assignment or transfer ).
28.7
Copy of Transfer Certificate or Assignment Agreement to Borrower
The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate or an Assignment Agreement, send to the Borrower a copy of that Transfer Certificate or Assignment Agreement.
28.8
Security over Lenders' rights
In addition to the other rights provided to Lenders under this Clause 28 ( Changes to the Lenders ), each Lender may without consulting with or obtaining consent from any Transaction Obligor, at any time charge, assign or otherwise create Security 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:
(a)
any charge, assignment, pledge or other Security to secure obligations to a federal reserve or central bank; and
(b)
in the case of any Lender which is a fund, any charge, assignment, pledge or other Security 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, pledge or Security shall:
(i)
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment, pledge or Security for the Lender as a party to any of the Finance Documents; or
(ii)
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.
28.9
Pro rata interest settlement
If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a " pro rata basis" to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 28.5 ( Procedure for transfer ) or any assignment pursuant to Clause 28.6 ( Procedure for assignment ) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):
(a)
any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favor of the Existing Lender up to but excluding the Transfer Date (" Accrued Amounts ") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and
(b)
the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:
(i)
when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and
(ii)
the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 28.9 ( Pro rata interest settlement ), have been payable to it on that date, but after deduction of the Accrued Amounts.
(c)
In this Clause 28.9 ( Pro rata interest settlement ) references to "Interest Period" shall be construed to include a reference to any other period for accrual of fees.
29
CHANGES TO THE OBLIGORS
29.1
Assignment or transfer by Obligors
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
29.2
Additional Borrower
(a)
On the First Ship Transfer Date, the Additional Borrower:
(i)
agrees to become a Borrower and to be bound by the terms of this Agreement and the other Finance Documents as Borrower; and
(ii)
shall assume the Vessel Loan in relation to the Ship transferred to it in accordance with Clause 24.13 ( Transfer of Ships ).
(b)
On each Subsequent Ship Transfer Date, the Additional Borrower shall assume the Vessel Loan in relation to the Ship then transferred to it in accordance with Clause 24.13 ( Transfer of Ships ).
(c)
On the Final Ship Transfer Date, the Additional Borrower shall:
(i)
assume the Vessel Loan in relation to the Ship then transferred to it in accordance with Clause 24.13 ( Transfer of Ships ); and
(ii)
become the sole Borrower under this Agreement and the provisions of Clause 29.3 ( Release of Obligors ) shall apply in relation to the Original Borrower.
29.3
Release of Obligors
(a)
On the First Ship Transfer Date, the Owner Guarantor which has transferred the Ship to the Additional Borrower shall, provided the conditions set out in Clause 24.13 ( Transfer of Ships ) have been satisfied in full, be released from the Security Documents relating to such Ship and from its obligations under the Finance Documents.
(b)
On each Subsequent Ship Transfer Date, the relevant Owner Guarantor which has transferred a Ship to the Additional Borrower shall, provided the conditions set out in Clause 24.13 ( Transfer of Ships ) have been satisfied in full, be released from the Security Documents relating to such Ship and from its obligations under the Finance Documents.
(c)
On the Final Ship Transfer Date:
(i)
the relevant Owner Guarantor which has transferred a Ship to the Additional Borrower shall, provided the conditions set out in Clause 24.13 ( Transfer of Ships ) have been satisfied in full, be released from the Security Documents relating to such Ship and from its obligations under the Finance Documents;
(ii)
the Ultimate Parent Guarantor shall be released from its obligations as a Guarantor and all references to the Ultimate Parent Guarantor shall be construed as references to the Borrower;
(iii)
the Parent Guarantor shall be released from its obligations as a Guarantor under this Agreement;
(iv)
the Shares Pledges granted by the Shareholder shall be released; and
(v)
the Ultimate Parent Guarantor shall be entitled to proceed with the solvent winding up of each Owner Guarantor, the Parent Guarantor and the Shareholder.
29.4
Release of security
(a)
If a disposal of any asset subject to security created by a Security Document is made in the following circumstances:
(i)
the disposal is permitted by the terms of any Finance Document;
(ii)
all Lenders agree to the disposal;
(iii)
the disposal is being made at the request of the Security Agent in circumstances where any security created by the Security Documents has become enforceable; or
(iv)
the disposal is being effected by enforcement of a Security Document,
the Security Agent may release the asset(s) being disposed of from any security over those assets created by a Security Document. However, the proceeds of any disposal (or an amount corresponding to them) must be applied in accordance with the requirements of the Finance Documents (if any).
(b)
If the Security Agent is satisfied that a release is allowed under this Clause 29.2 (Release of security) (at the request and expense of the Borrower) each Finance Party must enter into any document and do all such other things which are reasonably required to achieve that release. Each other Finance Party irrevocably authorizes the Security Agent to enter into any such document. Any release will not affect the obligations of any other Obligor under the Finance Documents.
Section 10     

THE FINANCE PARTIES
30
THE FACILITY AGENT, THE LEAD ARRANGERS AND THE MANDATED LEAD ARRANGERS
30.1
Appointment of the Facility Agent
(a)
Each other Finance Party appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.
(b)
Each other Finance Party authorizes the Facility Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions.
(c)
Notwithstanding anything in Clause 1.1 ( Definitions) , references to the Finance Documents or a Finance Document in this Clause do not include any Hedging Agreement entered into by any Obligor with any Hedge Counterparty in connection with the Facility, and references to a Finance Parties or a Finance Party in this Clause do not include a Hedge Counterparty.
30.2
Instructions
(a)
The Facility Agent shall:
(i)
unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by:
(A)
all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and
(B)
in all other cases, the Majority Lenders; and
(ii)
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or, if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties).
(b)
The Facility 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 Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Facility Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.
(c)
Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Facility Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
(d)
The Facility Agent may refrain from acting in accordance with any instructions of any Finance Party or group of Finance Parties 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 (together with any applicable VAT) which it may incur in complying with those instructions.
(e)
Without prejudice to the remainder of this Clause 30.2 (Instructions) , in the absence of instructions, the Facility Agent shall not be obliged to take any action (or refrain from taking action) even if it considers acting or not acting to be in the best interests of the Finance Parties. The Facility Agent may act (or refrain from acting) as it considers to be in the best interest of the Finance Parties.
(f)
The Facility Agent is not authorized to act on behalf of a Finance Party (without first obtaining that Finance Party'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 Transaction Security or Security Documents.
30.3
Duties of the Facility Agent
(a)
The Facility Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
(b)
Subject to paragraph (c) below, the Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.
(c)
Without prejudice to Clause 28.7 ( Copy of Transfer Certificate or Assignment Agreement to Borrower ), paragraph (b) above shall not apply to any Transfer Certificate or any Assignment Agreement.
(d)
Except where a Finance Document specifically provides otherwise, the Facility Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
(e)
If the Facility Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.
(f)
If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent, the Mandated Lead Arrangers or the Security Agent) under this Agreement, it shall promptly notify the other Finance Parties.
(g)
The Facility 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).
30.4
Role of the Lead Arrangers or Mandated Lead Arrangers
Except as specifically provided in the Finance Documents, the Lead Arrangers and the Mandated Lead Arrangers have no obligations of any kind to any other Party under or in connection with any Finance Document.
30.5
No fiduciary duties
(a)
Nothing in any Finance Document constitutes the Facility Agent or the Lead Arrangers or the Mandated Lead Arrangers as a trustee or fiduciary of any other person.
(b)
Neither the Facility Agent nor the Lead Arrangers or the Mandated Lead Arrangers shall be bound to account to other Finance Party for any sum or the profit element of any sum received by it for its own account.
30.6
Application of receipts
Except as expressly stated to the contrary in any Finance Document, any moneys which the Facility Agent receives or recovers in its capacity as Facility Agent shall be applied by the Facility Agent in accordance with Clause 36.5 ( Application of receipts; partial payments ).
30.7
Business with the Group
The Facility Agent, the Lead Arrangers and the Mandated Lead Arrangers may accept deposits from, lend money to, and generally engage in any kind of banking or other business with, any member of the Group.
30.8
Rights and discretions
(a)
The Facility Agent may:
(i)
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorized;
(ii)
assume that:
(A)
any instructions received by it from the Majority Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents; and
(B)
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,
(C)
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.
(b)
The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Finance Parties) that:
(i)
no Default has occurred (unless it has actual knowledge of a Default arising under Clause 27 ( Events of Default ));
(ii)
any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and
(iii)
any notice or request made by the Borrower (other than a Utilization Request) is made on behalf of and with the consent and knowledge of all the Transaction Obligors.
(c)
The Facility Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.
(d)
Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Facility Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Facility Agent (and so separate from any lawyers instructed by the Lenders) if the Facility Agent in its reasonable opinion deems this to be desirable.
(e)
The Facility 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 Facility 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.
(f)
The Facility Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:
(i)
be liable for any error of judgment made by any such person; or
(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,
(iii)
unless such error or such loss was caused by the Facility Agent's gross negligence or willful misconduct.
(g)
Unless a Finance Document expressly provides otherwise the Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under the Finance Documents.
(h)
Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor the Mandated Lead Arrangers 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.
(i)
Notwithstanding any provision of any Finance Document to the contrary, the Facility 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.
30.9
Responsibility for documentation
Neither the Facility Agent nor the Mandated Lead Arrangers or the Lead Arrangers is responsible or liable for:
(a)
the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Mandated Lead Arrangers, the Lead Arrangers, an Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; or
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or
(c)
any determination as to whether any information provided or to be provided to any Finance Party or Secured 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.
30.10
No duty to monitor
The Facility Agent shall not be bound to inquire:
(a)
whether or not any Default has occurred;
(b)
as to the performance, default or any breach by any Obligor of its obligations under any Transaction Document; or
(c)
whether any other event specified in any Transaction Document has occurred.
30.11
Exclusion of liability
(a)
Without limiting paragraph (b) below (and without prejudice to paragraph (e) of Clause 36.11 ( Disruption to Payment Systems etc. ) or any other provision of any Finance Document excluding or limiting the liability of the Facility Agent), the Facility Agent will not be liable for:
(i)
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 Transaction Document or the Security Property, 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 Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or
(iii)
any shortfall which arises on the enforcement or realization of the Security Property; or
(iv)
without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:
(A)
any act, event or circumstance not reasonably within its control; or
(B)
the general risks of investment in, or the holding of assets in, any jurisdiction,
(C)
including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalization, 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.
(b)
No Party other than the Facility Agent may take any proceedings against any officer, employee or agent of the Facility Agent in respect of any claim it might have against the Facility Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Transaction Document or any Security Property (other than any claim based on, or any act or omission resulting from gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision)) and any officer, employee or agent of the Facility Agent may rely on this Clause subject to Clause 1.5 ( Third party rights ).
(c)
The Facility 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 Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognized clearing or settlement system used by the Facility Agent for that purpose.
(d)
Nothing in this Agreement shall oblige the Facility Agent or the Mandated Lead Arrangers or the Lead Arrangers to carry out:
(i)
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,
(iii)
on behalf of any Finance Party and each Finance Party confirms to the Facility Agent, the Lead Arrangers and the Mandated Lead Arrangers 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 Facility Agent or the Mandated Lead Arrangers or the Lead Arrangers.
(e)
Without prejudice to any provision of any Finance Document excluding or limiting the Facility Agent's liability, any liability of the Facility Agent arising under or in connection with any Transaction Document or the Security Property 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 Facility 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 Facility Agent at any time which increase the amount of that loss. In no event shall the Facility 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 Facility Agent has been advised of the possibility of such loss or damages.
30.12
Lenders' indemnity to the Facility Agent
(a)
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 Facility Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Facility Agent (otherwise than by reason of the Facility Agent's gross negligence or willful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 36.11 ( Disruption to Payment Systems etc. ) notwithstanding the Facility Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the gross negligence or willful misconduct (as determined by a court of competent jurisdiction in a final and non-appealable decision)) in acting as Facility Agent under the Finance Documents (unless the Facility 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 Facility Agent pursuant to paragraph (a) above.
(c)
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 Facility Agent to an Obligor.
30.13
Resignation of the Facility Agent
(a)
The Facility Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrower.
(b)
Alternatively, the Facility Agent may resign by giving 15 days' notice to the other Finance Parties and the Borrower, in which case the Majority Lenders may appoint a successor Facility Agent with the consent of the Borrower (not to be unreasonably withheld or delayed).
(c)
If the Majority Lenders have not appointed a successor Facility Agent in accordance with paragraph (b) above within 15 days after notice of resignation was given, the retiring Facility Agent may appoint a successor Facility Agent (with effect from its written acceptance) with the consent of the Borrower (not to be unreasonably withheld or delayed).
(d)
If the Facility Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Facility Agent is entitled to appoint a successor Facility Agent under paragraph (c) above, the Facility Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Facility Agent to become a party to this Agreement as Facility Agent) agree with the proposed successor Facility Agent amendments to this Clause 30 ( The Facility Agent, the Lead Arrangers and the Mandated Lead Arrangers ) and any other term of this Agreement dealing with the rights or obligations of the Facility 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 Facility Agent's normal fee rates and those amendments will bind the Parties.
(e)
The retiring Facility Agent shall make available to the successor Facility Agent such documents and records and provide such assistance as the successor Facility Agent may reasonably request for the purposes of performing its functions as Facility Agent under the Finance Documents. The Borrower shall, within three Business Days of demand, reimburse the retiring Facility Agent for the amount of all costs and expenses (including legal fees) incurred by it in making available such documents and records and providing such assistance.
(f)
The Facility Agent's resignation notice shall only take effect upon the appointment of a successor.
(g)
Upon the appointment of a successor, the retiring Facility 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 14.4 ( Indemnity to the Facility Agent ) and this Clause 30 ( The Facility Agent, the Lead Arrangers and the Mandated Lead Arrangers ) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Facility Agent. Any fees for the account of the retiring Facility 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.
(h)
The Majority Lenders may, by notice to the Facility Agent, require it to resign in accordance with paragraph (b) above. In this event, the Facility Agent shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (e) above shall be for the account of the Borrower.
(i)
The consent of the Borrower, the Ultimate Parent Guarantor, the Parent Guarantor or any other Obligor, is not required for an assignment or transfer of rights and/or obligations by the Facility Agent.
30.14
Confidentiality
(a)
In acting as Facility Agent for the Finance Parties, the Facility 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.
(b)
If information is received by a division or department of the Facility Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Facility Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.
30.15
Relationship with the other Finance Parties
(a)
Subject to Clause 28.9 ( Pro rata interest settlement ), the Facility Agent may treat the person shown in its records as Lender or Hedge Counterparty at the opening of business (in the place of the Facility Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office or, as the case may be, the Hedge Counterparty:
(i)
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 or Hedge Counterparty to the contrary in accordance with the terms of this Agreement.
(b)
Each Finance Party shall supply the Facility Agent with any information that the Security Agent may reasonably specify (through the Facility Agent) as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent.
(c)
Any Lender may by notice to the Facility 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 39.5 ( 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, fax number, electronic mail address (or such other information), department and officer by that Lender for the purposes of Clause 39.2 ( Addresses ) and sub-paragraph (ii) of paragraph (a) of Clause 39.5 ( Electronic communication ) and the Facility 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.
30.16
Credit appraisal by the Finance Parties
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance Party confirms to the Facility Agent and the Mandated Lead Arrangers 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 Transaction Document including but not limited to:
(a)
the financial condition, status and nature of each member of the Group;
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(c)
whether that Finance 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 Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(d)
the adequacy, accuracy or completeness of any information provided by the Facility Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and
(e)
the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.
30.17
Facility Agent's management time
Any amount payable to the Facility Agent under Clause 14.4 ( Indemnity to the Facility Agent ) and Clause 16 ( Costs and Expenses ) shall include the cost of utilizing the Facility Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Facility Agent may notify to the Borrower and the other Finance Parties, and is in addition to any fee paid or payable to the Facility Agent under Clause 11 ( Fees; KEXIM Premium and K-Sure Premium ).
30.18
Deduction from amounts payable by the Facility Agent
If any Party owes an amount to the Facility Agent under the Finance Documents, the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility 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.
30.19
Reliance and engagement letters
Each Secured Party confirms that each of the Mandated Lead Arrangers and the Facility Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Mandated Lead Arrangers or the Facility Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports 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.
30.20
Full freedom to enter into transactions
Without prejudice to Clause 30.7 ( Business with the Group ) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Facility Agent shall be absolutely entitled:
(a)
to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Obligor or any person who is party to, or referred to in, a Finance Document);
(b)
to deal in and enter into and arrange transactions relating to:
(i)
any securities issued or to be issued by any Obligor or any other person; or
(ii)
any options or other derivatives in connection with such securities; and
(c)
to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,
and, in particular, the Facility Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.
31
THE SECURITY AGENT
31.1
Appointment and trust
(a)
Each other Finance Party appoints the Security Agent to act as its agent and (to the extent permitted or required under any applicable law) trustee in connection with the Security Property and confirms that the Security Agent shall have a lien on the Security Property and the proceeds of the enforcement of the Security Documents for all moneys payable to the beneficiaries of the Security Documents.
(b)
The Security Agent accepts its appointment under paragraph (a) above as trustee of the Security Property with effect from the date of this Agreement and declares that it holds the Security Property in trust for the Secured Parties on the terms contained in this Agreement and shall deal with the Security Property in accordance with this Clause 31 ( The Security Agent ) and the other provisions of the Finance Documents.
(c)
Each other Finance Party authorizes the Security Agent to (i) perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Security Agent under, or in connection with, the Finance Documents together with any other incidental rights, powers, authorities and discretions, and (ii) execute each of the Security Documents and all other documents that may be approved by the Facility Agent and/or the Majority Lenders for execution by it.
(d)
Notwithstanding anything in Clause 1.1 ( Definitions) , references to the Finance Documents or a Finance Document in this Clause do not include any Hedging Agreement entered into by any Obligor with any Hedge Counterparty in connection with the Facility, and references to a Finance Parties or a Finance Party in this Clause do not include a Hedge Counterparty.
31.2
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.
31.3
Instructions
(a)
The Security Agent shall:
(i)
unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Security Agent in accordance with any instructions given to it by the Facility Agent acting on the instructions of:
(A)
all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and
(B)
in all other cases, the Majority Lenders; and
(ii)
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with sub-paragraph (i) above (or if this Agreement stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties).
(b)
The Security Agent shall be entitled to request instructions, or clarification of any instruction, from the Facility Agent acting on the instructions of the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Finance Party or group of Finance Parties, from that Finance Party or group of Finance Parties) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Security Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.
(c)
Save in the case of decisions stipulated to be a matter for any other Finance Party or group of Finance Parties under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Security Agent by the Facility Agent acting on the instructions of the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
(d)
The Security Agent may refrain from acting in accordance with any instructions of the Facility Agent acting on the instructions of any Finance Party or group of Finance Parties 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 (together with any applicable VAT) which it may incur in complying with those instructions.
(e)
Without prejudice to the remainder of this Clause 31.3 ( Instructions ), in the absence of instructions, the Security Agent may (but shall not be obliged to) take such action in the exercise of its powers and duties under the Finance Documents as it considers in its discretion to be appropriate.
(f)
The Security Agent is not authorized to act on behalf of a Finance Party (without first obtaining that Finance Party'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 Transaction Security or Security Documents.
31.4
Duties of the Security Agent
(a)
The Security Agent's duties under the Finance Documents are solely mechanical and administrative in nature.
(b)
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.
(c)
Except where a Finance Document specifically 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.
(d)
If the Security Agent receives notice from a Party referring to any Finance Document, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.
(e)
The Security 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).
31.5
No fiduciary duties
(a)
Nothing in any Finance Document constitutes the Security Agent as an agent, trustee or fiduciary of any Obligor.
(b)
The Security Agent shall not 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.
31.6
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 member of the Group.
31.7
Rights and discretions
(a)
The Security Agent may:
(i)
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorized;
(ii)
assume that:
(A)
any instructions received by it from the Facility Agent acting on the instructions of the Majority Lenders, any Finance Parties or any group of Finance Parties are duly given in accordance with the terms of the Finance Documents; and
(B)
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,
(C)
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.
(b)
The Security Agent may assume (unless it has received notice to the contrary in its capacity as security agent for the Secured Parties) that:
(i)
no Default has occurred;
(ii)
any right, power, authority or discretion vested in any Party or any group of Finance Parties has not been exercised; and
(iii)
any notice or request made by the Borrower (other than a Utilization Request) is made on behalf of and with the consent and knowledge of all the Obligors.
(c)
The Security Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.
(d)
Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Security Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Security Agent (and so separate from any lawyers instructed by the Facility Agent or the Lenders) if the Security Agent in its reasonable opinion deems this to be desirable.
(e)
The Security 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 Security 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.
(f)
The Security Agent may act in relation to the Finance Documents and the Security Property through its officers, employees and agents and shall not:
(i)
be liable for any error of judgment made by any such person; or
(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,
(iii)
unless such error or such loss was caused by the Security Agent's gross negligence or willful misconduct.
(g)
Unless a Finance Document expressly provides otherwise the Security Agent may disclose to any other Party any information it reasonably believes it has received as security agent under the Finance Documents.
(h)
Notwithstanding any other provision of any Finance Document to the contrary, the Security 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.
(i)
Notwithstanding any provision of any Finance Document to the contrary, the Security 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.
31.8
Responsibility for documentation
The Security Agent is not responsible or liable for:
(a)
the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Security Agent, the Mandated Lead Arrangers, the Lead Arrangers, an Obligor or any other person in, or in connection with, any Transaction Document or the transactions contemplated in the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; or
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document or the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or
(c)
any determination as to whether any information provided or to be provided to any Secured 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.
31.9
No duty to monitor
The Security Agent shall not be bound to inquire:
(a)
whether or not any Default has occurred;
(b)
as to the performance, default or any breach by any Obligor of its obligations under any Transaction Document; or
(c)
whether any other event specified in any Transaction Document has occurred.
31.10
Exclusion of liability
(a)
Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Security Agent or any Receiver or Delegate), none of the Security Agent nor any Receiver or Delegate will be liable for:
(i)
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 Transaction Document or the Security Property, unless caused by its gross negligence or willful misconduct;
(ii)
exercising, or not exercising , any right, power, authority or discretion given to it by, or in connection with, any Transaction Document, the Security Property or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Transaction Document or the Security Property; or
(iii)
any shortfall which arises on the enforcement or realization of the Security Property; or
(iv)
without prejudice to the generality of paragraphs (i) to (iii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:
(A)
any act, event or circumstance not reasonably within its control; or
(B)
the general risks of investment in, or the holding of assets in, any jurisdiction,
(C)
including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of nationalization, 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.
(b)
No Party other than the Security Agent, that Receiver or that Delegate (as applicable) 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 Transaction Document or any Security Property and any officer, employee or agent of the Security Agent, a Receiver or a Delegate may rely on this Clause subject to Clause 1.5 ( Third party rights ).
(c)
The Security 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 Security Agent if the Security Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognized clearing or settlement system used by the Security Agent for that purpose.
(d)
Nothing in this Agreement shall oblige the Security Agent to carry out:
(i)
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,
(iii)
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.
(e)
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 Transaction Document or the Security Property 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 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, any Receiver or Delegate 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, the Receiver or Delegate has been advised of the possibility of such loss or damages.
31.11
Lenders' indemnity to the Security Agent
(a)
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 Security Agent and every Receiver and every Delegate, within three Business Days of demand, against any cost, loss or liability incurred by any of them (otherwise than by reason of the Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct) duly justified in acting as Security Agent, Receiver or Delegate under the Finance Documents (unless the Security Agent, Receiver or Delegate 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 Security Agent pursuant to paragraph (a) above.
(c)
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 Security Agent to an Obligor.
31.12
Resignation of the Security Agent
(a)
The Security Agent may resign and appoint one of its Affiliates as successor by giving notice to the other Finance Parties and the Borrower.
(b)
Alternatively, the Security Agent may resign by giving 15 days' notice to the other Finance Parties and the Borrower, in which case the Majority Lenders may appoint a successor Security Agent with the consent of the Borrower (not to be unreasonably withheld or delayed).
(c)
If the Majority Lenders have not appointed a successor Security Agent in accordance with paragraph (b) above within 15 days after notice of resignation was given, the retiring Security Agent may appoint a successor Security Agent with the consent of the Borrower (not to be unreasonably withheld or delayed).
(d)
The retiring Security Agent shall 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 Borrower shall, within three Business Days of demand, reimburse the retiring Security Agent for the amount of all costs and expenses (including legal fees) incurred by it in making available such documents and records and providing such assistance.
(e)
The Security Agent's resignation notice shall only take effect upon:
(i)
the appointment of a successor; and
(ii)
the transfer of all the Security Property to that successor.
(f)
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 31.23 ( Winding up of trust ) and paragraph (d) above) but shall remain entitled to the benefit of Clause 14.5 ( Indemnity to the Security Agent ) and this Clause 31 ( The Security Agent ) and any other provisions of a Finance Document which are expressed to limit or exclude its liability (or to indemnify it) in acting as Security Agent. Any fees for the account of the retiring Security 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.
(g)
The Majority Lenders may, by notice to the Security Agent, require it to resign in accordance with paragraph (b) above. In this event, the Security Agent shall resign in accordance with paragraph (b) above but the cost referred to in paragraph (d) above shall be for the account of the Borrower.
(h)
The consent of the Borrower (or any other Obligor) is not required for an assignment or transfer of rights and/or obligations by the Security Agent.
31.13
Confidentiality
(a)
In acting as Security Agent for the Finance Parties, the Security Agent shall be regarded as acting through its trustee division which shall be treated as a separate entity from any other of its divisions or departments.
(b)
If information is received by a division or department of the Security Agent other than the division or department responsible for complying with the obligations assumed by it under the Finance Documents, that information may be treated as confidential to that division or department, and the Security Agent shall not be deemed to have notice of it nor shall it be obliged to disclose such information to any Party.
31.14
Credit appraisal by the Finance Parties
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Transaction Document, each Finance 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 Transaction Document including but not limited to:
(a)
the financial condition, status and nature of each member of the Group;
(b)
the legality, validity, effectiveness, adequacy or enforceability of any Transaction Document, the Security Property and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(c)
whether that Finance 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 Transaction Document, the Security Property, the transactions contemplated by the Transaction Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document or the Security Property;
(d)
the adequacy, accuracy or completeness of any information provided by the Security Agent, any Party or by any other person under, or in connection with, any Transaction Document, the transactions contemplated by any Transaction Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Transaction Document; and
(e)
the right or title of any person in or to or the value or sufficiency of any part of the Security Assets, the priority of any of the Transaction Security or the existence of any Security affecting the Security Assets.
31.15
Security Agent's management time
(a)
Any amount payable to the Security Agent under Clause 14.5 ( Indemnity to the Security Agent ) and Clause 16 ( Costs and Expenses ) shall include the cost of utilizing the Security Agent's management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Security Agent may notify to the Borrower and the other Finance Parties, and is in addition to any fee paid or payable to the Security Agent under Clause 11 ( Fees, KEXIM Premium and K-Sure Premium ).
(b)
Without prejudice to paragraph (a) above, in the event of:
(i)
a Default;
(ii)
the Security Agent being requested by an Obligor or the Facility Agent acting on the instructions of 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
(iii)
the Security Agent and the Borrower agreeing that it is otherwise appropriate in the circumstances,
(iv)
the Borrower shall pay to the Security Agent any additional remuneration (together with any applicable VAT) that may be agreed between them or determined pursuant to paragraph (c) below.
(c)
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 (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.
31.16
Reliance and engagement letters
Each Secured Party confirms that the Security Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Security Agent) the terms of any reliance letter or engagement letters or any reports or letters provided by accountants, auditors or providers of due diligence reports 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.
31.17
No responsibility to perfect Transaction Security
The Security Agent shall not be liable for any failure to:
(a)
require the deposit with it of any deed or document certifying, representing or constituting the title of any Obligor to any of the Security Assets; or
(b)
obtain any license, consent or other authority for the execution, delivery, legality, validity, enforceability or admissibility in evidence of any Finance Document or the Transaction Security; or
(c)
require any further assurance in relation to any Security Document.
31.18
Insurance by Security Agent
(a)
The Security Agent shall not be obliged:
(i)
to insure any of the Security Assets;
(ii)
to require any other person to maintain any insurance; or
(iii)
to verify any obligation to arrange or maintain insurance contained in any Finance Document,
(iv)
and the Security Agent shall not be liable for any damages, costs or losses to any person as a result of the lack of, or inadequacy of, any such insurance.
(b)
Where the Security Agent is named on any insurance policy as an insured party, it shall not be liable for any damages, costs or losses to any person as a result of 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 the Facility Agent acting on the instructions of the Majority Lenders request it to do so in writing and the Security Agent fails to do so within 14 days after receipt of that request.
31.19
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 asset 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 with reasonable care under this Agreement or be bound to supervise the proceedings or acts of any person.
31.20
Delegation by the Security Agent
(a)
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 right, power, authority or discretion vested in it in its capacity as such.
(b)
That delegation may be made upon any terms and conditions (including 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 and commercially reasonable in the interests of the Secured Parties.
(c)
No Security Agent, Receiver or Delegate shall be bound to supervise, or be in any way responsible for any damages, costs or losses incurred by reason of any misconduct, omission or default on the part of any such delegate or sub delegate selected by it with reasonable care.
31.21
Additional Security Agents
(a)
The Security Agent may at any time 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 best interests of the Secured Parties; or
(ii)
for the purposes of conforming to any legal requirement, restriction or condition 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 Borrower and the Finance Parties of that appointment.
(b)
Any person so appointed shall have the rights, powers, authorities and discretions (not exceeding those given to the Security Agent under or in connection with the Finance Documents) and the duties, obligations and responsibilities that are given or imposed by the instrument of appointment.
(c)
The commercially reasonable 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.
31.22
Acceptance of title
The Security Agent shall be entitled to accept without inquiry, and shall not be obliged to investigate, any right and title that any Obligor may have to any of the Security Assets and shall not be liable for or bound to require any Obligor to remedy any defect in its right or title.
31.23
Winding up of trust
If the Security Agent, with the approval of the Facility Agent determines that:
(a)
all of the Secured Liabilities and all other obligations secured by the Security Documents have been fully and finally discharged; and
(b)
no Secured Party is under any commitment, obligation or liability (actual or contingent) to make advances or provide other financial accommodation to any Obligor pursuant to the Finance Documents,
(c)
then
(i)
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
(ii)
any Security Agent which has resigned pursuant to Clause 31.12 ( Resignation of the Security Agent ) shall release, without recourse or warranty, all of its rights under each Security Document.
31.24
Application of receipts
(a)
Except as expressly stated to the contrary in any Finance Document, any moneys which the Security Agent receives or recovers and which are, or are attributable to, Security Property (for the purposes of this Clause 31 ( The Security Agent ), the " Recoveries ") shall be transferred to the Facility Agent for application in accordance with Clause 36.5 ( Application of receipts; partial payments ).
(b)
Paragraph (a) above is without prejudice to the rights of the Security Agent, each Receiver and each Delegate:
(i)
under Clause 14.5 ( Indemnity to the Security Agent ) or any other indemnity in favor of the Security Agent under the Finance Documents to be indemnified out of the Security Assets; and
(ii)
under any Finance Document to credit any moneys received or recovered by it to any suspense account.
(c)
Any transfer by the Security Agent to the Facility Agent in accordance with paragraph (a) above shall be a good discharge, to the extent of that payment, by the Security Agent.
(d)
The Security Agent is under no obligation to make the payments to the Facility Agent under paragraph (a) of this Clause 31.24 ( Application of receipts ) in the same currency as that in which the obligations and liabilities owing to the relevant Finance Party are denominated.
31.25
Deductions from receipts
(a)
Before transferring any moneys to the Facility Agent under Clause 31.24 ( Application of receipts ), the Security Agent may, in its discretion:
(i)
deduct any sum then due and payable under this Agreement or any other Finance Documents to the Security Agent or any Receiver or Delegate and retain that sum for itself or, as the case may require, pay it to another person to whom it is then due and payable;
(ii)
set aside by way of reserve amounts required to meet, and 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
(iii)
pay all Taxes which may be assessed against it in respect of any of the Security Property, or as a consequence of performing its duties, or by virtue of its capacity as Security Agent under any of the Finance Documents or otherwise (other than in connection with its remuneration for performing its duties under this Agreement).
(b)
For the purposes of sub-paragraph (i) of paragraph (a) above, if the Security Agent has become entitled to require a sum to be paid to it on demand, that sum shall be treated as due and payable, even if no demand has yet been served.
31.26
Prospective liabilities
Following enforcement of any of the Transaction Security, the Security Agent may, in its discretion, or at the request of the Facility Agent, hold any Recoveries 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) for later payment to the Facility Agent for application in accordance with Clause 36.5 ( Application of receipts; partial payments ) in respect of:
(a)
any sum to the Security Agent, any Receiver or any Delegate; and
(b)
any part of the Secured Liabilities,
that the Security Agent or, in the case of paragraph (b) only, the Facility Agent, reasonably considers, in each case, might become due or owing at any time in the future.
31.27
Investment of proceeds
Prior to the payment of the proceeds of the Recoveries to the Facility Agent for application in accordance with Clause 36.5 ( Application of receipts; partial payments ) the Security Agent may, in its discretion, 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 payment from time to time of those moneys in the Security Agent's discretion in accordance with the provisions of this Clause 31.27 ( Investment of proceeds ).
31.28
Currency conversion
(a)
For the purpose of, or pending the discharge of, any of the Secured Liabilities the Security Agent may convert any moneys received or recovered by the Security Agent from one currency to another, at a market rate of exchange.
(b)
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.
31.29
Good discharge
Any payment to be made in respect of the Secured Liabilities by the Security Agent may be made to the Facility Agent on behalf of the Secured Parties and any payment made in that way shall be a good discharge, to the extent of that payment, by the Security Agent.
31.30
Full freedom to enter into transactions
Without prejudice to Clause 31.6 ( Business with the Group ) or any other provision of a Finance Document and notwithstanding any rule of law or equity to the contrary, the Security Agent shall be absolutely entitled:
(a)
to enter into and arrange banking, derivative, investment and/or other transactions of every kind with or affecting any Transaction Obligor or any person who is party to, or referred to in, a Finance Document (including, but not limited to, any interest or currency swap or other transaction, whether related to this Agreement or not, and acting as syndicate agent and/or security agent for, and/or participating in, other facilities to such Obligor or any person who is party to, or referred to in, a Finance Document);
(b)
to deal in and enter into and arrange transactions relating to:
(i)
any securities issued or to be issued by any Obligor or any other person; or
(ii)
any options or other derivatives in connection with such securities; and
(c)
to provide advice or other services to the Borrower or any person who is a party to, or referred to in, a Finance Document,
and, in particular, the Security Agent shall be absolutely entitled, in proposing, evaluating, negotiating, entering into and arranging all such transactions and in connection with all other matters covered by paragraphs (a), (b) and (c) above, to use (subject only to insider dealing legislation) any information or opportunity, howsoever acquired by it, to pursue its own interests exclusively, to refrain from disclosing such dealings, transactions or other matters or any information acquired in connection with them and to retain for its sole benefit all profits and benefits derived from the dealings transactions or other matters.
32
ECA AGENT
32.1
The ECA Agent
(a)
Each K-Sure Lender and each KEXIM Guaranteed Lender appoints and authorizes the ECA Agent to act as its agent under and in connection with this Agreement and the other Finance Documents, in relation to each K-Sure Insurance Policy and all K-Sure Matters or the KEXIM Guarantee and all KEXIM Matters (as the case may be) with power to take such actions as:
(i)
are specified under any Finance Document as being for the ECA Agent to take on behalf of the K-Sure Lenders insured under the K-Sure Insurance Policy or on behalf of the KEXIM Guaranteed Lenders under the KEXIM Guarantee (as the case may be);
(ii)
are specifically delegated to the ECA Agent by the terms of the K-Sure Insurance Policy or the KEXIM Guarantee; or
(iii)
are reasonably incidental thereto,
and if expressly authorized in writing by each K-Sure Lender or each KEXIM Guaranteed Lender (as the case may be), the ECA Agent may execute and deliver on its behalf the K-Sure Insurance Policy or the KEXIM Guarantee (as the case may be) and all documents that are necessary or desirable in connection with such agreement, and where the ECA Agent has acted in accordance with the express written instructions of the K-Sure Lenders or the KEXIM Guaranteed Lenders (as the case may be), each K-Sure Lender or each KEXIM Guaranteed Lender agrees severally to be bound by the terms and conditions of each K-Sure Insurance Policy or the KEXIM Guarantee (as the case may be) as if it had executed and delivered such agreement for and in its own name.
(b)
Without limiting the foregoing:
(i)
each K-Sure Lender and each KEXIM Guaranteed Lender authorizes the ECA Agent to exercise those rights, powers and discretions which are expressly given to the ECA Agent by this Agreement and the other Finance Documents, together with any other reasonably incidental rights, powers and discretions; and
(ii)
each K-Sure Lender appoints the ECA Agent solely for the purpose of:
(A)
providing, revealing and disclosing, such information and details relating to any Obligor, the Finance Documents and the facilities granted pursuant thereto, to K-Sure as K-Sure may require from time to time for the purpose of issuing and administering the K-Sure Insurance Policies; and
(B)
making a claim on behalf of the K-Sure Lenders under the K-Sure Insurance Policies and directing payment of the insurance proceeds under the K-Sure Insurance Policies which shall be held by the Security Agent in trust for the K-Sure Lenders and for application by the Facility Agent in accordance with Clause 36 (Payment Mechanics) of this Agreement.
(iii)
each KEXIM Guaranteed Lender appoints the ECA Agent solely for the purpose of:
(A)
providing, revealing and disclosing, such information and details relating to any Obligor, the Finance Documents and the facilities granted pursuant thereto, to KEXIM as KEXIM may require from time to time for the purpose of issuing and administering the KEXIM Guarantee; and
(B)
making a claim on behalf of the KEXIM Guaranteed Lenders under the KEXIM Guarantee and directing payment of any moneys pursuant to the KEXIM Guarantee which shall be held by the Security Agent in trust for the KEXIM Guaranteed Lenders and for application by the Facility Agent in accordance with Clause 36 (Payment Mechanics) of this Agreement.
33
ECA SPECIFIC PROVISIONS
33.1
No actions without K-Sure Lender consent
(a)
Except where the ECA Agent reasonably believes that this is inconsistent with the terms of any K-Sure Insurance Policy, the ECA Agent agrees:
(i)
not to take any action under the relevant K-Sure Insurance Policy without the consent of all the K-Sure Lenders (which consent shall not be unreasonably withheld or delayed), unless the ECA Agent has reasonably determined that such action would not be detrimental to the insurance coverage provided to the K-Sure Lenders thereunder; and
(ii)
to take such actions under the relevant K-Sure Insurance Policy (including with respect to any amendment, modification or supplement to that K-Sure Insurance Policy) as may be directed by all the K-Sure Lenders from time to time;
(b)
provided that, notwithstanding anything herein or in the relevant K-Sure Insurance Policy to the contrary, the ECA Agent shall not be obliged to take any such action or to expend or risk its own funds or otherwise incur any liability in the performance of any of its duties or the exercise of any of its rights or powers under this Agreement or the relevant K-Sure Insurance Policy if:
(i)
it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; or
(ii)
such action would be contrary to applicable law.
(c)
If, in respect of any K-Sure Matters in relation to or arising out of any of the Finance Documents, where the approval, consent, authorization or instruction of K-Sure is required under the terms of the Finance Documents or the relevant K-Sure Insurance Policy, the ECA Agent wishes to take any step or action under or in relation to which conflicts with, or in contrary to, the provisions of the relevant K-Sure Insurance Policy and/or the approval, consent, authorization or instruction of K-Sure, such step or action may only be taken with consent of all the K-Sure Lenders.
33.2
No actions without KEXIM Guaranteed Lender consent
(a)
Except where the ECA Agent reasonably believes that this is inconsistent with the terms of the KEXIM Guarantee, the ECA Agent agrees:
(b)
not to take any action under the KEXIM Guarantee without the consent of all the KEXIM Guaranteed Lenders (which consent shall not be unreasonably withheld or delayed); and
(c)
to take such actions under the KEXIM Guarantee (including with respect to any amendment, modification or supplement to the KEXIM Guarantee) as may be directed by all the KEXIM Guaranteed Lenders from time to time; provided that, notwithstanding anything herein or in the KEXIM Guarantee to the contrary, the ECA Agent shall not be obliged to take any such action or to expend or risk its own funds or otherwise incur any liability in the performance of any of its duties or the exercise of any of its rights or powers under this Agreement or the KEXIM Guarantee if:
(i)
it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; or
(ii)
such action would be contrary to applicable law.
33.3
Limitation on obligation of ECA Agent to request instructions
The ECA Agent shall not have any obligation to request the Facility Agent or the Majority Lenders or any other Finance Party to give it any instructions or to make any determination.
33.4
Ratification of unauthorized action of ECA Agent
Any action which the ECA Agent takes or purports to take at a time when it had not been authorized to do so shall, if subsequently ratified, be as valid as regards every Finance Party as if the ECA Agent had been expressly authorized in advance.
33.5
Cooperation with the ECA Agent
(a)
Each Lender and each Obligor undertakes to cooperate with the ECA Agent to comply with any legal requirements imposed on the ECA Agent in connection with the performance of its duties under this Agreement or any other Finance Document and shall supply any information reasonably requested by the ECA Agent in connection with the proper performance of those duties.
(b)
The ECA Agent undertakes to provide timely notice to KEXIM and K-Sure with respect to any matters that require consent from the Majority Lenders.
33.6
Nature of the ECA Agent's duties
The ECA Agent's duties under the Finance Documents are limited to coordinating and communicating with the ECAs. Unless otherwise specifically required under this Agreement, the ECA Agent is not tasked with responsibilities relating to payment, collection or receipt of funds.
33.7
K-Sure Lenders' representations
(a)
Each K-Sure Lender represents and warrants to the ECA Agent, with effect from the date of the relevant K-Sure Insurance Policy, that:
(b)
no information provided by such K-Sure Lender in writing to the ECA Agent or to K-Sure prior to the date of this Agreement was untrue or incorrect in any material respect except to the extent that such K-Sure Lender, in the exercise of reasonable care and due diligence prior to giving such information, could not have discovered the error or omission;
(c)
it has not taken (or failed to take), and agrees that it shall not take (or fail to take), any action that would result in the ECA Agent being in breach of any of its obligations in its capacity as ECA Agent under the relevant K-Sure Insurance Policy or the other Finance Documents, or result in the relevant K-Sure Lenders being in breach of any of their respective obligations as insured parties under the relevant K-Sure Insurance Policy, or which would otherwise prejudice the ECA Agent's ability to make a claim on behalf of the K-Sure Lenders under the relevant K-Sure Insurance Policy;
(d)
it has reviewed the relevant K-Sure Insurance Policy and is aware of the provisions thereof; and
(e)
the representations and warranties made by the ECA Agent on behalf of each K-Sure Lender under the relevant K-Sure Insurance Policy are true and correct with respect to such K-Sure Lender in all respects.
33.8
KEXIM Guaranteed Lenders' representations
(a)
Each KEXIM Guaranteed Lender represents and warrants to the ECA Agent, with effect from the date of the KEXIM Guarantee, that:
(b)
no information provided by such KEXIM Guaranteed Lender in writing to the ECA Agent or to KEXIM prior to the date of this Agreement was untrue or incorrect in any material respect except to the extent that such KEXIM Guaranteed Lender, in the exercise of reasonable care and due diligence prior to giving such information, could not have discovered the error or omission;
(c)
it has not taken (or failed to take), and agrees that it shall not take (or fail to take), any action that would result in the ECA Agent being in breach of any of its obligations in its capacity as ECA Agent under the KEXIM Guarantee or the other Finance Documents, or result in the relevant KEXIM Guaranteed Lenders being in breach of any of their respective obligations as insured parties under the KEXIM Guarantee, or which would otherwise prejudice the ECA Agent's ability to make a claim on behalf of the KEXIM Guaranteed Lenders under the relevant KEXIM Guarantee;
(d)
it has reviewed the KEXIM Guarantee and is aware of the provisions thereof; and
(e)
the representations and warranties made by the ECA Agent on behalf of each KEXIM Guaranteed Lender under the KEXIM Guarantee are true and correct with respect to such KEXIM Guaranteed Lender in all respects.
33.9
Provision of information
(a)
The ECA Agent shall provide to K-Sure any information which it receives from any Obligor or the Facility Agent pursuant to the Finance Documents and which it is obliged to provide to K-Sure under the terms of the relevant K-Sure Insurance Policy.
(b)
The ECA Agent shall provide to KEXIM any information which it receives from any Obligor or the Facility Agent pursuant to the Finance Documents and which it is obliged to provide to KEXIM under the terms of the KEXIM Guarantee.
33.10
Lender communications
(a)
Each K-Sure Lender shall promptly forward to the ECA Agent a copy of any communication relating to K-Sure Matters which that K-Sure Lender sends to, or receives from, any Obligor or K-Sure directly.
(b)
Each KEXIM Guaranteed Lender shall promptly forward to the ECA Agent a copy of any communication relating to KEXIM Matters which that KEXIM Guaranteed Lender sends to, or receives from, any Obligor or KEXIM directly.
33.11
Claims under K-Sure Insurance Policies and KEXIM Guarantee
(a)
Each K-Sure Lender acknowledges and agrees that, unless otherwise provided for in the relevant K-Sure Insurance Policy, it shall have no entitlement to make any claim or to take any action whatsoever under or in connection with any of the K-Sure Insurance Policies except through the ECA Agent and that all of the rights of the K-Sure Lenders under any of the K-Sure Insurance Policies shall only be exercised by the ECA Agent.
(b)
Each KEXIM Guaranteed Lender acknowledges and agrees that, unless otherwise provided for in the KEXIM Guarantee, it shall have no entitlement to make any claim or to take any action whatsoever under or in connection with the KEXIM Guarantee except through the ECA Agent and that all of the rights of the KEXIM Guaranteed Lenders under the KEXIM Guarantee shall only be exercised by the ECA Agent.
33.12
Application of receipts
(a)
Except as expressly stated to the contrary in any Finance Document, any moneys which the ECA Agent receives or recovers shall be transferred to the Facility Agent as soon as practicable upon receipt by the ECA Agent, for application in accordance with Clause 36 ( Payment Mechanics ) of this Agreement.
(b)
The parties agree that any unpaid K-Sure Premium and any unpaid fees, costs and expenses of K-Sure shall constitute amounts then due and payable in respect of the Loan under the Finance Documents for the purposes of the amounts then due and payable in respect of Clause 36 ( Payment Mechanics ) of this Agreement.
(c)
The parties agree that any unpaid KEXIM Premium and any unpaid fees, costs and expenses of KEXIM shall constitute amounts then due and payable in respect of the Loan under the Finance Documents for the purposes of the amounts then due and payable in respect of Clause 36 ( Payment Mechanics ) of this Agreement.
33.13
Assignment to K-Sure
(a)
Each of the Parties agrees that, upon payment in full or in part by K-Sure of all moneys due under a K-Sure Insurance Policy in accordance with the terms of any K-Sure Insurance Policy, provided that, to the extent required under the relevant K-Sure Insurance Policy, this payment has satisfied all obligations under the Finance Documents in full or in part in respect of the relevant Advance under the K-Sure Tranche to which such K-Sure Insurance Policy relates:
(b)
the obligations of the Borrower, any other Obligor or any other party to the Finance Documents shall not be reduced or affected in any manner;
(c)
each of the K-Sure Lenders shall assign to K-Sure:
(i)
such part of their respective contributions in respect of that K-Sure Tranche and (to the extent that there remain any) of their respective contributions in respect of that K-Sure Tranche as is equal to the amount simultaneously paid to it by K-Sure under the relevant K-Sure Insurance Policy; and
(ii)
the rights of the K-Sure Lenders to recover against the Borrower, any other Obligors or any other party to the Finance Documents pursuant to the Finance Documents or any relevant laws;
(iii)
in each case, by means of a substitution certificate or such other evidence of assignment as may be reasonably required by K-Sure, provided that this shall not be construed as depriving any K-Sure Lender of its rights to recover any part of the Total Commitments, the Loan or otherwise of the Unpaid Sum still owing to it after receipt of the relevant K-Sure Insurance Policy insurance proceeds;
(d)
K-Sure shall, upon being validly assigned rights under the Finance Documents pursuant to Clause 28.1 ( Assignment and transfers by the Lenders ), and to the extent of such assignment, be an assignee and as such shall be entitled to the rights and benefits of the K-Sure Lenders under this Agreement and the other Finance Documents in respect of such payment to the extent of its interest;
(e)
until such assignment, each of the K-Sure Lenders shall hold in trust for K-Sure any payments under this Agreement and each of the other Finance Documents and pay or transfer such payment to K-Sure in accordance with the relevant K-Sure Insurance Policy;
(f)
without prejudice to the indemnity provisions in Clause 14 ( Other Indemnities ), the Borrower and/or any other Obligor shall indemnify K-Sure in respect of any actual, reasonable costs or expenses (including reasonable legal fees) suffered or incurred by K-Sure in connection with the assignment referred to in this Clause 33.13 or in connection with any review by K-Sure of any Event of Default or dispute between the Borrower and/or any other Obligor and the Finance Parties occurring prior to the assignment referred to in this Clause 33.13;
(g)
with respect to the obligations of the Borrower and the other Obligors owed to the Facility Agent and/or the K-Sure Lenders under the Finance Documents, such obligations shall additionally be owed to K-Sure by way of subrogation of the rights of the K-Sure Lenders;
(h)
the Borrower agrees to cooperate with the Facility Agent, the ECA Agent and the Lenders, as the case may be, in giving effect to any subrogation or assignment referred to in this Clause 33.13 and to take all actions requested by the Facility Agent, any K-Sure Lender, the ECA Agent or K-Sure, in each case to the extent capable of being done by it, to implement or give effect to such subrogation or assignment;
(i)
the Borrower hereby acknowledges, for the benefit of the K-Sure Lenders and K-Sure, that any payments made by K-Sure to an K-Sure Lender (or to the Facility Agent or the ECA Agent on their respective behalfs) pursuant to a K-Sure Insurance Policy, will not satisfy, reduce, release or prejudice any of the Borrower's obligations under the Finance Documents in whole or in part, which obligations shall remain due and payable notwithstanding the receipt or application of those payments;
(j)
on the date of any subrogation to, or (as applicable) assignment of any rights referred to in this Clause 33.13:
(i)
all further rights and benefits (including the right to receive commission in respect thereof but not any duty or other obligations) whatsoever of the relevant K-Sure Lender in relation to the portion of the Loan or the rights and benefits to which such assignment or rights of subrogation relate under or arising out of this Agreement shall, to the extent of such assignment or rights of subrogation, be vested in and be for the benefit of K-Sure; and
(ii)
references in this Agreement to the K-Sure Lenders shall, where relevant in the context thereafter be construed so as to include K-Sure in relation to such rights and benefits as are assigned to, or to which K-Sure has rights of subrogation; and
(k)
the representations and warranties made in this Agreement in favor of the relevant K-Sure Lender shall survive any assignment or transfer pursuant to this Clause 33.13 and shall also inure to the benefit of K-Sure;
(l)
provided that nothing in this Clause 33.13 shall be construed as depriving the K-Sure Lenders of any rights they may have against the Borrower or any other Obligor in respect of the Lenders' rights under Clauses 14 ( Other indemnities ) and 13 ( Increased costs ).
33.14
Subrogation to KEXIM
(a)
Notwithstanding any other provision of this Agreement and, in addition to, and without prejudice to, any right of indemnification or subrogation KEXIM (in its capacity as guarantor under the KEXIM Guarantee) may have at law, in equity or otherwise, each of the Parties agrees that KEXIM (in such capacity) will be subrogated to the rights of the KEXIM Guaranteed Lenders under the KEXIM Guaranteed Tranche to the extent of any payment made by KEXIM (in such capacity) under the KEXIM Guarantee (each such payment being a KEXIM Guarantee Payment) and the KEXIM Guaranteed Lenders shall provide all assistance required by KEXIM (in such capacity) to enforce its rights under the Finance Documents following such subrogation.
(b)
Furthermore, the Borrower consents to any assignment by the KEXIM Guaranteed Lenders of any or all of its rights under the Finance Documents in respect of the KEXIM Guaranteed Tranche to KEXIM (in its capacity as guarantor under the KEXIM Guarantee) as may be required by the provisions of the KEXIM Guarantee.
(c)
The Borrower agrees to cooperate with KEXIM (in its capacity as guarantor under the KEXIM Guarantee) and the KEXIM Guaranteed Lenders, as the case may be, in giving effect to any subrogation or assignment referred to in this Clause 33.14 ( Subrogation to KEXIM ), and to take all actions reasonably requested by KEXIM (in such capacity) or any such Lender, in each case, to implement or give effect to such subrogation or assignment.
33.15
Reimbursement to KEXIM
(a)
Without prejudice to Clause 33.14 ( Subrogation to KEXIM ), the Obligors shall, within five (5) Business Days of demand by KEXIM, reimburse KEXIM for any KEXIM Guarantee Payment made by KEXIM from time to time and pay to KEXIM in accordance with the terms of this Agreement in an amount equal to any KEXIM Guarantee Payment plus interest calculated in accordance with clause 8.3 ( Default Interest ) (from and including the date of demand until and including the date of actual payment) upon demand by KEXIM from time to time.
(b)
For the avoidance of doubt, Clause 13 ( Increased costs ) will apply in respect of any reimbursement made pursuant to this Clause 33.15 ( Reimbursement to KEXIM ).
33.16
Obligations to KEXIM Unconditional
The obligations of the Borrower to reimburse KEXIM and to pay the amount of interest required pursuant to Clause 33.15 ( Reimbursement to KEXIM ) are irrevocable and unconditional without regard to any circumstance whatsoever and shall not require any notice to the Borrower or any other party.
33.17
Satisfaction of Obligations to KEXIM
The Parties acknowledge and agree that the KEXIM Guarantee Payments that are reimbursed by the Borrower to KEXIM pursuant to Clause 33.15 ( Reimbursement to KEXIM ) shall satisfy the obligation of the Borrower to make payments to the KEXIM Guaranteed Lenders under this Agreement of the corresponding amounts of principal and interest in respect of which the KEXIM Guarantee Payments were paid to the KEXIM Guaranteed Lenders by KEXIM.
33.18
Voting Rights of KEXIM
As between KEXIM, the Facility Agent, the ECA Agent and the KEXIM Guaranteed Lenders, KEXIM shall be entitled to exercise all of the voting rights held by the KEXIM Guaranteed Lenders under the Finance Documents with effect from any relevant Demand Date proportionately with respect to the principal amount claimed under the relevant demand for payment under the KEXIM Guarantee or, if greater, the principal amount actually paid by KEXIM under the KEXIM Guarantee.
33.19
Cooperation with K-Sure; Events of Default
(a)
Each of the ECA Agent, the Facility Agent and the Security Agent shall provide to K-Sure any information which it receives from the Borrower and any other Obligor pursuant to the Finance Documents.
(b)
Each of the ECA Agent, the Facility Agent and the Security Agent agrees that it shall consult with K-Sure wherever reasonably practical prior to issuing a notice pursuant to Clause 27 ( Events of Default ), provided that K-Sure's consent shall not be required in order for any such notice of default to be issued (other than by K-Sure to the extent required under any K-Sure Insurance Policy).
(c)
Notwithstanding anything to the contrary in any Finance Document, if an Event of Default has occurred and is continuing, the Facility Agent shall put to the vote of the Majority Lenders the question of whether the provisions of the Finance Documents as to the consequences of the occurrence of such Event of Default should apply and/or whether the remedies afforded under Clause 27 ( Events of Default ) of this Agreement should be invoked. Should the Majority Lenders' vote be in favor of any of actions described in the preceding sentence, the Facility Agent and the Security Agent shall be entitled to take the necessary steps to enforce the Finance Documents and the Lenders shall agree and execute and otherwise perfect and do all such acts and things necessary for such purpose; and in the event the Majority Lenders' and K-Sure's respective positions are inconsistent with respect to the K-Sure Tranche, the Facility Agent shall discuss with the ECA Agent with a view to reaching a mutually agreeable position.
(d)
Failing agreement between the Facility Agent (acting on behalf of the Majority Lenders) and the ECA Agent (acting on behalf of K-Sure), the Facility Agent and the Security Agent shall be entitled to act in accordance with the instructions of the Majority Lenders, including in relation to any waiver of an Event of Default and enforcement of remedies related thereto, provided that this does not result in any K-Sure Insurance Policy being lost, cancelled, unenforceable or invalid.
33.20
Cooperation with KEXIM; Events of Default
(a)
Each of the ECA Agent, the Facility Agent and the Security Agent shall provide to KEXIM any information which it receives from the Borrower and any other Obligor pursuant to the Finance Documents with respect to the KEXIM Guaranteed Tranche.
(b)
Each of the ECA Agent, the Facility Agent and the Security Agent agrees that it shall consult with KEXIM wherever reasonably practical prior to issuing a notice pursuant to Clause 27 ( Events of Default ), provided that KEXIM's consent shall not be required in order for any such notice of default to be issued.
(c)
Notwithstanding anything to the contrary in any Finance Document, if an Event of Default has occurred and is continuing, the Facility Agent shall put to the vote of the Majority Lenders the question of whether the provisions of the Finance Documents as to the consequences of the occurrence of such Event of Default should apply and/or whether the remedies afforded under Clause 27 ( Events of Default ) of this Agreement should be invoked. Should the Majority Lenders' vote be in favor of any of actions described in the preceding sentence, the Facility Agent and the Security Agent shall be entitled to take the necessary steps to enforce the Finance Documents and the Lenders shall agree and execute and otherwise perfect and do all such acts and things necessary for such purpose; and in the event the Majority Lenders' and KEXIM's respective positions are inconsistent with respect to the KEXIM Guaranteed Tranche, the Facility Agent shall discuss with the ECA Agent with a view to reaching a mutually agreeable position.
(d)
Failing agreement between the Facility Agent (acting on behalf of the Majority Lenders) and the ECA Agent (acting on behalf KEXIM), the Facility Agent and the Security Agent shall be entitled to act in accordance with the instructions of the Majority Lenders, including in relation to any waiver of an Event of Default and enforcement of remedies related thereto, provided that this does not result in the KEXIM Guarantee being lost, cancelled, unenforceable or invalid.
33.21
K-Sure Override
(a)
Notwithstanding anything to the contrary in this Agreement or any other Finance Document, nothing in this Agreement shall permit or oblige any K-Sure Lender to act (or omit to act) in a manner that is inconsistent with any requirement of K-Sure under or in connection with any K-Sure Insurance Policy and, in particular:
(b)
each of the K-Sure Lenders and if applicable, the ECA Agent shall be authorized to take all such actions as they may deem necessary to ensure that all requirements of K-Sure under or in connection with each of the K-Sure Insurance Policies are complied with;
(c)
no K-Sure Lender shall be obliged to do anything if, in its opinion (upon consultation with the ECA Agent), to do so could result in a breach of any requirements of K-Sure under or in connection with a K-Sure Insurance Policy or affect the validity of a K-Sure Insurance Policy;
(d)
each of the K-Sure Lenders will agree to accept the instructions as advised to them by the ECA Agent or K-Sure and to act in conformity therewith in connection with their obligations under this Agreement; and
(e)
in the event of any conflict or inconsistency between the terms of this Agreement and any K-sure Insurance Policy, the terms of the relevant K-sure Insurance Policy shall prevail.
33.22
KEXIM Override
(a)
Notwithstanding anything to the contrary in this Agreement, nothing in this Agreement shall oblige any Finance Party to act (or omit to act) in a manner that is inconsistent with any requirement of KEXIM under or in connection with the KEXIM Guarantee and, in particular:
(i)
the Parties agree that the ECA Agent shall be authorised to take all such actions as it may deem necessary to ensure that all requirements of KEXIM under or in connection with the KEXIM Guarantee are complied with; and
(ii)
the ECA Agent shall not be obliged to do anything that, in its opinion, could result in a breach of any requirements of KEXIM under or in connection with the KEXIM Guarantee or affect the validity of the KEXIM Guarantee.
(b)
Nothing in this Clause 33.22 ( KEXIM Override ) shall affect the obligations of the Borrower under this Agreement.
33.23
KEXIM Premium and KEXIM
(a)
The Borrower acknowledges that the KEXIM Guaranteed Lenders benefit from the KEXIM Guarantee once issued and in effect.
(b)
The Borrower and each KEXIM Guaranteed Lender acknowledge and agree that:
(i)
the amounts of the KEXIM Premium will be as set forth in the relevant Fee Letter and will be payable on the dates as specified in that Fee Letter (but, for the avoidance of doubt, no KEXIM Premium or any part thereof is payable on the date of this Agreement); and
(ii)
no KEXIM Guaranteed Lender is in any way involved in the calculation or payment (otherwise than as financed in whole or in part pursuant to this Agreement) of any part of the KEXIM Premium.
33.24
K-Sure Premium and K-Sure
Without prejudice to Clause 7.12 ( Refund of K-Sure Premium on voluntary prepayment ), the Borrower:
(a)
agrees, and each K-Sure Lender acknowledges and agrees, that:
(i)
the amount of any K-Sure Premium will be calculated in accordance with the percentage included in the relevant defined term as of the date of this Agreement, but otherwise subject to the terms of the relevant K-Sure Insurance Policy and K-Sure's internal regulations; and
(ii)
no K-Sure Lender is in any way involved in the calculation or payment (otherwise than as financed in whole or in part pursuant to this Agreement) of any part of any K-Sure Premium;
(b)
agrees that their obligation to pay any K-Sure Premium or any part of any K-Sure Premium in accordance with the relevant K-Sure Insurance Policy shall be an absolute and unconditional obligation and, once paid, shall not be affected by any failure by the Borrower to draw down funds under this Agreement or the prepayment or acceleration of the whole or any part of the Loan;
(c)
acknowledges that it shall pay an amount equivalent to each K-Sure Premium (including default interest under the relevant K-Sure Insurance Policy) to K-Sure on the relevant due date, and no K-Sure Premium will be refundable in whole or in part in any circumstances, unless otherwise provided in the relevant K-sure Insurance Policy and Clause 7.12 ( Refund of K-Sure Premium on voluntary prepayment );
(d)
agrees that if, for any reason whatsoever, any additional premium is or becomes payable to K-Sure in respect of any K-Sure Insurance Policy, the Borrower shall promptly pay such additional premium in full and the Borrower shall fully cooperate with the Facility Agent and the ECA Agent on their reasonable request to take all steps necessary on the part of the Borrower to ensure that each K-Sure Insurance Policy remains in full force and effect throughout the Facility Period; and
(e)
shall indemnify K-Sure in relation to any costs or expenses (including reasonable legal fees) suffered or incurred by K-Sure (other than as a result of K-Sure's gross negligence or wilful misconduct) in connection with any transfer to K-Sure undertaken pursuant to Clause 33.13 ( Assignment to K-Sure ) or in connection with any review by K-Sure of or in relation to any Event of Default and/or amendment or supplement to any of the Finance Documents and/or a request for a consent or approval from K-Sure.
33.25
Liability for K-Sure Premiums and KEXIM Premium
(a)
The Borrower shall be responsible and shall bear the cost of the K-Sure Premium of each K-Sure Insurance Policy and shall pay the relevant K-Sure Premium for each Advance on the Utilization Date relating to that Advance.
(b)
The Borrower shall be responsible and shall bear the cost of the KEXIM Premium of the KEXIM Guarantee and shall pay the KEXIM Premium for each Advance on the Utilization Date relating to that Advance.
33.26
K-Sure Insurance Policies and KEXIM Guarantee
(a)
The Borrower will not, without the ECA Agent's prior written consent, do or omit to do anything which may to its knowledge adversely prejudice the K-Sure Lenders' rights under any K-Sure Insurance Policy.
(b)
The ECA Agent and the K-Sure Lenders are responsible for complying with the terms of each K-Sure Insurance Policy from which each K-Sure Lender benefits.
(c)
The Borrower will not, without the ECA Agent's prior written consent, do or omit to do anything which may to its knowledge adversely prejudice the KEXIM Guaranteed Lenders' rights under the KEXIM Guarantee.
(d)
The ECA Agent and the KEXIM Guaranteed Lenders are responsible for complying with the terms of the KEXIM Guarantee from which each KEXIM Guaranteed Lender benefits.
33.27
K-Sure Requirements
(a)
Each Obligor must execute all such other documents and instruments and do all such other acts and things as the ECA Agent, acting on the instructions of K-Sure and/or any Finance Party may reasonably require:
(b)
in order to comply with, and carry out the transactions contemplated by, the Finance Documents and any documents required to be delivered under the Finance Documents; and
(c)
in order for the beneficiaries under each K-Sure Insurance Policy to comply with and continue to benefit from that K-Sure Insurance Policy or to maintain the effectiveness of that K-Sure Insurance Policy.
33.28
KEXIM Requirements
(a)
Each Obligor must execute all such other documents and instruments and do all such other acts and things as the ECA Agent, acting on the instructions of KEXIM and/or any Finance Party may reasonably require:
(b)
in order to comply with, and carry out the transactions contemplated by, the Finance Documents and any documents required to be delivered under the Finance Documents; and
(c)
in order for the beneficiaries under the KEXIM Guarantee to comply with and continue to benefit from the KEXIM Guarantee or to maintain the effectiveness of the KEXIM Guarantee.
33.29
Protection of each of the K-Sure Insurance Policies
(a)
If at any time in the reasonable opinion of the ECA Agent, any provision of a Finance Document contradicts or conflicts (as such conflict relates to the K-Sure Tranche) with any provision of a K-Sure Insurance Policy or K-Sure requires any further action to be taken or documents to be entered into for such K-Sure Insurance Policy to remain in full force and effect, the Borrower shall use commercially reasonable efforts to take such action as the ECA Agent or K-Sure shall reasonably require to remove any contradiction or conflict and to ensure such K-Sure Insurance Policy remains in full force and effect.
(b)
In addition, the Borrower shall comply with any instructions given by K-Sure to the ECA Agent in relation to such K-Sure Insurance Policy and the transactions contemplated in such K-Sure Insurance Policy provided that such instructions are in compliance with that K-Sure Insurance Policy.
33.30
Protection of the KEXIM Guarantee
(a)
If at any time in the reasonable opinion of the ECA Agent, any provision of a Finance Document contradicts or conflicts (as such conflict relates to the KEXIM Guaranteed Tranche) with any provision of the KEXIM Guarantee or KEXIM requires any further action to be taken or documents to be entered into for the KEXIM Guarantee to remain in full force and effect, the Borrower shall use commercially reasonable efforts to take such action as the ECA Agent or KEXIM shall reasonably require to remove any contradiction or conflict and to ensure the KEXIM Guarantee remains in full force and effect.
(b)
In addition, the Borrower shall comply with any instructions given by KEXIM to the ECA Agent in relation to the KEXIM Guarantee and the transactions contemplated in the KEXIM Guarantee provided that such instructions are in compliance with the KEXIM Guarantee.
33.31
Notification to K-Sure
(a)
The Borrower will deliver a notice to each of the Facility Agent and the ECA Agent promptly after it becomes aware of the occurrence of any political or commercial risk covered by a K-Sure Insurance Policy and will:
(i)
pay any additional premium payable to K-Sure in relation to the relevant K-Sure Insurance Policy; and
(ii)
cooperate with the ECA Agent on its reasonable request to take all steps necessary on the part of the Borrower to ensure that the relevant K-Sure Insurance Policy remains in full force and effect throughout the Facility Period which shall include providing the ECA Agent with any information, reasonably requested by the ECA Agent, relating to any material commercial facts which could result in a Material Adverse Effect.
(b)
In addition, the Borrower shall promptly supply to the ECA Agent copies of all financial or other information reasonably required by the ECA Agent to satisfy any request for information made by K-Sure pursuant to a K-Sure Insurance Policy.
(c)
The Borrower agrees that it shall be reasonable for the ECA Agent to make a request under this Clause 33.31 ( Notification to K-Sure ) if it is required to do so as a condition of maintaining a K-Sure Insurance Policy in full force and effect.
33.32
Prior consultation with K-Sure
(a)
The Borrower acknowledges that the ECA Agent may, under the terms of each K-Sure Insurance Policy be required:
(i)
to consult with K-Sure, prior to the exercise of certain decisions under the Finance Documents to which that Borrower is a party (including the exercise of such voting rights in relation to any substantial amendment to any Finance Document); and
(ii)
to follow certain instructions given by K-Sure.
(b)
Each K-Sure Lender will be deemed to have acted reasonably if it has acted on the instructions of the ECA Agent (given by K-Sure to the ECA Agent in accordance with the terms of a K-Sure Insurance Policy) in the making of any such decision or the taking or refraining to take any action under any Finance Document to which it is a party.
33.33
Prior consultation with KEXIM
(a)
The Borrower acknowledges that the ECA Agent may, under the terms of the KEXIM Guarantee, be required:
(i)
to consult with KEXIM, prior to the exercise of certain decisions under the Finance Documents to which that Borrower is a party (including the exercise of such voting rights in relation to any substantial amendment to any Finance Document); and
(ii)
to follow certain instructions given by KEXIM.
(b)
Each KEXIM Guaranteed Lender will be deemed to have acted reasonably if it has acted on the instructions of the ECA Agent (given by KEXIM to the ECA Agent in accordance with the terms of the KEXIM Guarantee) in the making of any such decision or the taking or refraining to take any action under any Finance Document to which it is a party.
33.34
Demand under K-Sure Insurance Policies
Notwithstanding any other terms as set forth herein and the other Finance Documents, the ECA Agent shall make a written demand to K-Sure under a K-Sure Insurance Policy only after the Facility Agent has first made a written demand for payment of the relevant amount of the Unpaid Sum to the Guarantors under the relevant Guaranties.
33.35
Replacement of the ECA Agent
(a)
After consultation with the Borrower, any of the KEXIM Guaranteed Lenders or K-Sure Lenders may, with the prior consent of the KEXIM Guaranteed Lenders and K-Sure Lenders (other than any KEXIM Guaranteed Lender or K-Sure Lender which is also the ECA Agent) constituting the Majority Lenders for the ECA Vessel Loans, KEXIM and K-Sure and by giving 30 days' notice to the ECA Agent, replace the ECA Agent by appointing a successor ECA Agent.
(b)
The retiring ECA Agent shall make available to the successor ECA Agent such documents and records and provide such assistance as the successor ECA Agent may reasonably request for the purposes of performing its functions as ECA Agent under the Finance Documents.
(c)
The appointment of the successor ECA Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring ECA Agent. As from this date, the retiring ECA Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) above) and any agency fees for the account of the retiring ECA Agent shall cease to accrue from (and shall be payable on) that date.
(d)
Any successor ECA Agent and each of the other Parties shall have the same rights and obligations among themselves as they would have had if such successor had been an original Party.
34
CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:
(a)
interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
(b)
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
(c)
oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
35
SHARING AMONG THE FINANCE PARTIES
35.1
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 36 ( Payment Mechanics ) (a " Recovered Amount ") and applies that amount to a payment due to it under the Finance Documents then:
(a)
the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Facility Agent;
(b)
the Facility 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 Facility Agent and distributed in accordance with Clause 36 ( Payment Mechanics ), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and
(c)
the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the " Sharing Payment ") equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 36.5 ( Application of receipts; partial payments ).
35.2
Redistribution of payments
The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Transaction Obligor and distribute it among the Finance Parties (other than the Recovering Finance Party) (the " Sharing Finance Parties ") in accordance with Clause 36.5 ( Application of receipts; partial payments ) towards the obligations of that Transaction Obligor to the Sharing Finance Parties.
35.3
Recovering Finance Party's rights
On a distribution by the Facility Agent under Clause 35.2 ( 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.
35.4
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:
(a)
each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility 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
(b)
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.
35.5
Exceptions
(a)
This Clause 35 ( Sharing among the Finance Parties ) 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 Transaction Obligor.
(b)
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:
(i)
it notified that other Finance Party of the legal or arbitration proceedings; and
(ii)
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.
Section 11     

ADMINISTRATION
36
PAYMENT MECHANICS
36.1
Payments to the Facility Agent
(a)
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 an amount in dollars equal to such payment available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time specified by the Facility Agent as being customary for settlement of transactions in dollars in the place of payment.
(b)
Payment shall be made to such account and with such bank as the Facility Agent, in each case, specifies.
36.2
Distributions by the Facility Agent
Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to Clause 36.3 ( Distributions to an Obligor ) and Clause 36.4 ( Clawback and pre-funding ), be made available by the Facility Agent as soon as practicable after receipt by 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 Facility Agent by not less than five Business Days' notice with a bank specified by that Party or, in the case of an Advance, to such account of such person as may be specified by the Borrower in a Utilization Request.
36.3
Distributions to an Obligor
The Facility Agent may (with the consent of the Obligor or in accordance with Clause 37 ( 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.
36.4
Clawback and pre-funding
(a)
Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility 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.
(b)
Unless paragraph (c) below applies, if the Facility Agent pays an amount to another Party and it proves to be the case that the Facility 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 Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.
(c)
If the Facility Agent is willing to make available amounts for the account of the Borrower before receiving funds from the Lenders then if and to the extent that the Facility 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 the Borrower:
(i)
the Borrower shall on demand refund it to the Facility Agent; and
(ii)
the Lender by whom those funds should have been made available or, if the Lender fails to do so, the Borrower, shall on demand pay to the Facility Agent the amount (as certified by the Facility Agent) which will indemnify the Facility Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.
36.5
Application of receipts; partial payments
(a)
Subject to the paragraphs below and except as any Finance Document may otherwise provide, any payment (in an amount sufficient to fully repay or prepay the Loan and all amounts owing under the Finance Documents (other than the Hedging Agreements)) that is received or recovered by any Finance Party (other than any Hedge Counterparty) under, in connection with, or pursuant to any Finance Document shall be paid to the Facility Agent which shall apply the same in the following order:
(i)
to the extent such payment is received or recovered in respect of a Finance Document (other than the Hedging Agreements) relating to a Ship in respect of  an ECA Vessel Loan or in respect of a Ship which is financed under an ECA Vessel Loan:
(A)
first, in or towards payment of any amounts then due and payable under any of the Finance Documents (other than the Hedging Agreements) to the Lenders in respect of the ECA Vessel Loans;
(B)
secondly , in retention by the Security Agent of an amount equal to any amount not then payable under any Finance Document (other than the Hedging Agreements) to the Lenders in respect of the ECA Vessel Loans but which the Facility Agent, by notice to the Borrower and the other Finance Parties, states in its opinion will or may become payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them; and
(C)
thirdly , be applied to repay each Non-ECA Vessel Loan and any amounts payable under the Finance Documents (other than the Hedging Agreements) in respect of such Non-ECA Vessel Loans in accordance with paragraph (ii) below; and
(D)
fourthly , in or towards payment of:
(1)
any periodical payments (not being payments as a result of termination or closing out) due but unpaid to the Hedge Counterparties under the Hedging Agreements; and
(2)
thereafter, any payments as a result of termination or closing out due but unpaid to the Hedge Counterparties under the Hedging Agreements;
(E)
fifthly , any surplus shall paid to the Borrower or to any other person who appears to be entitled to it;
(ii)
to the extent such payment is received or recovered in respect of a Finance Document (other than the Hedging Agreements) relating to a Ship in respect of  a Non-ECA Vessel Loan or in respect of a Ship which is financed under a Non-ECA Vessel Loan:
(A)
first , in or towards payment of any amounts then due and payable under any of the Finance Documents (other than the Hedging Agreements) to the Commercial Lenders in respect of the Non-ECA Vessel Loans;
(B)
secondly , in retention by the Security Agent of an amount equal to any amount not then payable under any Finance Document (other than the Hedging Agreements) to the Commercial Lenders in respect of the Non-ECA Vessel Loans but which the Facility Agent, by notice to the Borrower and the other Finance Parties, states in its opinion will or may become payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them; and
(C)
thirdly , be applied to repay the ECA Vessel Loans and any amounts payable under the Finance Documents (other than the Hedging Agreements) in respect of such ECA Vessel Loans in accordance with paragraph (i) above; and
(D)
fourthly , in or towards payment of:
(1)
any periodical payments (not being payments as a result of termination or closing out) due but unpaid to the Hedge Counterparties under the Hedging Agreements; and
(2)
thereafter, any payments as a result of termination or closing out due but unpaid to the Hedge Counterparties under the Hedging Agreements;
(E)
fifthly , any surplus shall paid to the Borrower or to any other person who appears to be entitled to it;
(iii)
to the extent such payment is received or recovered in respect of the Account Security relating to the Debt Service Reserve Account and the Account Security relation to the Minimum Liquidity Account:
(A)
first , in or towards payment of any amounts then due and payable under any of the Finance Documents (other than the Hedging Agreements);
(B)
secondly , in retention by the Security Agent of an amount equal to any amount not then payable under any Finance Document (other than the Hedging Agreements); but which the Facility Agent, by notice to the Borrower and the other Finance Parties, states in its opinion will or may become payable in the future and, upon those amounts becoming due and payable, in or towards satisfaction of them; and
(C)
thirdly , in or towards payment of:
(1)
any periodical payments (not being payments as a result of termination or closing out) due but unpaid to the Hedge Counterparties under the Hedging Agreements; and
(2)
thereafter, any payments as a result of termination or closing out due but unpaid to the Hedge Counterparties under the Hedging Agreements;
(D)
fourthly , any surplus shall be paid to the Borrower or to any other person who appears to be entitled to it.
(b)
If the Facility Agent receives a payment that is insufficient to discharge all the amounts then due and payable by the Obligors under the Finance Documents (other than the Hedging Agreements), the Facility Agent shall apply that payment towards the obligations of the Borrower  and the other Obligors under the Finance Documents (other than the Hedging Agreements) in the following order:
(i)
in relation to any payment which is received or recovered in respect of a Finance Document (other than the Hedging Agreements) relating to a Ship in respect of  an ECA Vessel Loan or in respect of a Ship which is financed under an ECA Vessel Loan or prepaid pursuant to Clause 7.6 ( Mandatory prepayment on sale or Total Loss) :
(A)
first , in or towards payment pro rata of any unpaid fees, costs and expenses of, and any other amounts owing to, the Facility Agent, the Security Agent, any Receiver and any Delegate under the Finance Documents (other than the Hedging Agreements);
(B)
secondly , in or towards payment pro rata of any accrued interest and fees due but unpaid to the Lenders under  the relevant ECA Vessel Loan under this Agreement;
(C)
thirdly , in or towards payment pro rata of any principal due but unpaid to the Lenders under this Agreement in respect of the  relevant ECA Vessel Loan;
(D)
fourthly , in or towards payment pro rata of any other sum due to any Finance Party (other than the Hedge Counterparties) in respect of the relevant ECA Vessel Loan, but unpaid under the Finance Documents (other than the Hedging Agreements);
(E)
fifthly , in or towards payment pro rata of any accrued interest and fees due but unpaid to the Lenders under each of the remaining ECA Vessel Loans under this Agreement;
(F)
sixthly , in or towards payment pro rata of any principal due but unpaid to the Lenders under this Agreement in respect of each of the remaining ECA Vessel Loans;
(G)
seventhly , in or towards payment pro rata of any other sum due to any Finance Party (other than the Hedge Counterparties) in respect of each of the remaining ECA Vessel Loans, but unpaid under the Finance Documents (other than the Hedging Agreements);
(H)
eighthly , in or towards payment pro rata of any accrued interest and fees due but unpaid to the Commercial Lenders under the Non-ECA Vessel Loans under this Agreement;
(I)
ninthly , in or towards payment pro rata of any principal due but unpaid to the Commercial Lenders under this Agreement in respect of the Non-ECA Vessel Loans;
(J)
tenthly , in or towards payment pro rata of any other sum due to any Finance Party (other than the Hedge Counterparties) in respect of the Non-ECA Vessel Loans, but unpaid under the Finance Documents (other than the Hedging Agreements);
(K)
finally , in or towards payment of:
(1)
any periodical payments (not being payments as a result of termination or closing out) due but unpaid to the Hedge Counterparties under the Hedging Agreements; and
(2)
thereafter, any payments as a result of termination or closing out due but unpaid to the Hedge Counterparties under the Hedging Agreements;
(ii)
in relation to any payment which is received or recovered in respect of a Finance Document (other than the Hedging Agreements) relating to a Ship in respect of  a Non-ECA Vessel Loan or in respect of a Ship which is financed under a Non-ECA Vessel Loan  or prepaid pursuant to Clause 7.6 ( Mandatory prepayment or cancellation on sale or Total Loss) :
(A)
first , in or towards payment pro rata of any unpaid fees, costs and expenses of, and any other amounts owing to, the Facility Agent, the Security Agent, any Receiver and any Delegate under the Finance Documents;
(B)
secondly , in or towards payment pro rata of any accrued interest and fees due but unpaid to the Commercial Lenders under the relevant Non-ECA Vessel Loan under  this Agreement;
(C)
thirdly , in or towards payment pro rata of any principal due but unpaid to the Commercial Lenders under this Agreement in respect of the relevant Non-ECA Vessel Loan;
(D)
fourthly , in or towards payment pro rata of any other sum due to any Finance Party (other than the Hedge Counterparties) in respect of the relevant Non-ECA Vessel Loan, but unpaid under the Finance Documents (other than the Hedging Agreements);
(E)
fifthly , in or towards payment pro rata of any accrued interest and fees due but unpaid to the Commercial Lenders under the other Non-ECA Vessel Loan;
(F)
sixthly , in or towards payment pro rata of any principal due but unpaid to the Commercial Lenders under this Agreement in respect of the other Non-ECA Vessel Loan;
(G)
seventhly , in or towards payment pro rata of any other sum due to any Finance Party (other than the Hedge Counterparties) in respect of the other Non-ECA Vessel Loan, but unpaid under the Finance Documents (other than the Hedging Agreements);
(H)
eighthly , in or towards payment pro rata of any accrued interest and fees due but unpaid to the Lenders under the ECA Vessel Loans under this Agreement;
(I)
ninthly , in or towards payment pro rata of any principal due but unpaid to the Lenders under this Agreement in respect of each of the  ECA Vessel Loans;
(J)
tenthly , in or towards payment pro rata of any other sum due to any Finance Party (other than the Hedge Counterparties) in respect of each of the ECA Vessel Loans, but unpaid under the Finance Documents (other than the Hedging Agreements);
(K)
finally , in or towards payment of:
(1)
any periodical payments (not being payments as a result of termination or closing out) due but unpaid to the Hedge Counterparties under the Hedging Agreements; and
(2)
thereafter, any payments as a result of termination or closing out due but unpaid to the Hedge Counterparties under the Hedging Agreements.
(iii)
to the extent such payment is received or recovered in respect of the Account Security relating to the Debt Service Reserve Account and the Account Security relation to the Minimum Liquidity Account:
(A)
first , in or towards payment pro rata of any unpaid fees, costs and expenses of, and any other amounts owing to, the Facility Agent, the Security Agent, any Receiver and any Delegate under the Finance Documents (other than the Hedging Agreements);
(B)
secondly , in or towards payment pro rata of:
(1)
any accrued interest and fees due but unpaid to the Lenders under this Agreement; and
(2)
any principal due but unpaid to the Lenders under this Agreement; and
(C)
thirdly , in or towards payment pro rata of any other sum due to any Finance Party (other than the Hedge Counterparties) but unpaid under the Finance Documents (other than the Hedging Agreements);
(D)
fourthly , in or towards payment pro rata of:
(1)
any periodical payments (not being payments as a result of termination or closing out) due but unpaid to the Hedge Counterparties under the Hedging Agreements;
(2)
any payments as a result of termination or closing out due but unpaid to the Hedge Counterparties under the Hedging Agreements; and
(3)
in or towards payment pro rata of any other sum due to the Hedge Counterparties but unpaid under the Hedging Agreements.
(c)
The Facility Agent shall, if so directed by all the Lenders and the Hedge Counterparties, vary the order set out in sub-paragraphs (i)(B) to (K), (ii)(B) to (K) and (iii)(B) to (D) of paragraph (b) above.
(d)
Paragraphs (a) and (c) above will override any appropriation made by an Obligor.
(e)
Notwithstanding the foregoing, no amount received from a Guarantor in respect of its obligations under Clause 17 ( Guarantee and Indemnity ) shall be applied to any Excluded Hedging Obligations.
36.6
No set-off by Obligors
(a)
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.
(b)
Paragraph (a) above shall not affect the operation of any payment or close-out netting in respect of any amounts owing under any Hedging Agreement.
36.7
Business Days
(a)
Any payment under the Finance Documents 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).
(b)
During any extension of the due date for payment of any principal or an Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
36.8
Currency of account
(a)
Subject to paragraphs (b) and (c) below, dollars are the currency of account and payment for any sum due from an Obligor under any Finance Document.
(b)
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
(c)
Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
36.9
Change of currency
(a)
Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognized by the central bank of any country as the lawful currency of that country, then:
(i)
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 Facility Agent (after consultation with the Borrower); and
(ii)
any translation from one currency or currency unit to another shall be at the official rate of exchange recognized by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting reasonably).
(b)
If a change in any currency of a country occurs, this Agreement will, to the extent the Facility 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 Relevant Interbank Market and otherwise to reflect the change in currency.
36.10
Currency Conversion
(a)
For the purpose of, or pending any payment to be made by any Servicing Party under any Finance Document, such Servicing Party may convert any moneys received or recovered by it from one currency to another, at a market rate of exchange.
(b)
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.
36.11
Disruption to Payment Systems etc.
If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Borrower that a Disruption Event has occurred:
(a)
the Facility Agent may, and shall if requested to do so by the Borrower, consult with the Borrower with a view to agreeing with the Borrower such changes to the operation or administration of the Facility as the Facility Agent may deem necessary in the circumstances;
(b)
the Facility Agent shall not be obliged to consult with the Borrower in relation to any changes mentioned in paragraph (a) 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;
(c)
the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) above but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
(d)
any such changes agreed upon by the Facility Agent and the Borrower shall (whether or not it is finally determined that a 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 45 ( Amendments and Waivers );
(e)
the Facility 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, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 36.11 ( Disruption to Payment Systems etc. ); and
(f)
the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.
37
SET-OFF
A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents other than a Hedging Agreement (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 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.
38
BAIL-IN
Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the parties to a Finance Document, each Party acknowledges and accepts that any liability of any party to a Finance Document 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.
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 fax or letter.
39.2
Addresses
The address and fax number (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 are:
(a)
in the case of the Borrower, the Owner Guarantors, the Ultimate Parent Guarantor and the Parent Guarantor, that specified in Schedule 1 ( The Parties );
(b)
in the case of each Lender, each Obligor, that specified in Schedule 1 ( The Parties ) or, if it becomes a Party after the date of this Agreement, that notified in writing to the Facility Agent on or before the date on which it becomes a Party;
(c)
in the case of the Facility Agent, that specified in Schedule 1 ( The Parties );
(d)
in the case of the Security Agent, that specified in Schedule 1 ( The Parties ); and
(e)
in the case of the ECA Agent, that specified in Schedule 1 ( The Parties ),
or any substitute address, fax number or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days' notice.
39.3
Delivery
(a)
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:
(i)
if by way of fax, when received in legible form; or
(ii)
if by way of letter, 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.
(b)
Any communication or document to be made or delivered to a Servicing Party will be effective only when actually received by that Servicing Party and then only if it is expressly marked for the attention of the department or officer of that Servicing Party specified in Schedule 1 ( The Parties ) (or any substitute department or officer as that Servicing Party shall specify for this purpose).
(c)
All notices from or to an Obligor shall be sent through the Facility Agent unless otherwise specified in any Finance Document.
(d)
Any communication or document made or delivered to the Borrower in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors.
(e)
Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5.00 p.m. in the place of receipt shall be deemed only to become effective on the following day.
39.4
Notification of address and fax number
Promptly upon receipt of notification of an address and fax number or change of address or fax number pursuant to Clause 39.2 ( Addresses ) or changing its own address or fax number, the Facility Agent shall notify the other Parties.
39.5
Electronic communication
(a)
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 (including, without limitation, by way of posting to a secure website) if those two Parties:
(i)
notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and
(ii)
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.
(b)
Any such electronic communication as specified in paragraph (a) above to be made between an Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted from of communication.
(c)
Any such electronic communication as specified in paragraph (a) above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Facility Agent or the Security Agent only if it is addressed in such a manner as the Facility Agent or the Security Agent shall specify for this purpose.
(d)
Any electronic communication which becomes effective, in accordance with paragraph (c) above, after 5.00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
(e)
Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause 39.5 ( Electronic communication ).
(f)
Each Obligor may satisfy its obligation under the Finance Documents to which it is a party to deliver any information via telecopier, email or other electronic means (including by way of the Facility Agent's Debtdomain system). All Lenders confirm that they have consented to the use of the Facility Agent's Debtdomain system as an accepted method of communication under or in connection with the Finance Documents and agree that Debtdomain system will be the primary method of communication between the Facility Agent, the ECA Agents and the Lenders. The Lenders acknowledge that a communication made via Debtdomain will be effective once the communication is posted to Debtdomain by the Facility Agent or ECA Agent.
39.6
English language
(a)
Any notice given under or in connection with any Finance Document must be in English.
(b)
All other documents provided under or in connection with any Finance Document must be:
(i)
in English; or
(ii)
if not in English, and if so required by the Facility Agent, accompanied by a certified English translation prepared by a translator approved by the Facility Agent and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
39.7
Hedging Agreement
Notwithstanding anything in Clause 1.1 ( Definitions) , references to the Finance Documents or a Finance Document in this Clause do not include any Hedging Agreement entered into by any Obligor with any Hedge Counterparty in connection with the Facility.
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
Any certification or determination by a Finance Party 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 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.
41
PARTIAL INVALIDITY
If, at any time, any provision of a Finance Document 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 under the law of that jurisdiction nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
42
REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any 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 a 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 each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.
43
SETTLEMENT OR DISCHARGE CONDITIONAL
Any settlement or discharge under any Finance Document between any Finance Party and any Obligor shall be conditional upon no security or payment to any Finance Party by any Obligor or any other person being set aside, adjusted or ordered to be repaid, whether under any bankruptcy or insolvency law or otherwise.
44
IRREVOCABLE PAYMENT
If the Facility Agent considers that an amount paid or discharged by, or on behalf of, an Obligor or by any other person in purported payment or discharge of an obligation of that Obligor to a Finance Party under the Finance Documents is capable of being avoided or otherwise set aside on the bankruptcy, liquidation or administration of that Obligor or otherwise, then that amount shall not be considered to have been unconditionally and irrevocably paid or discharged for the purposes of the Finance Documents.
45
AMENDMENTS AND WAIVERS
45.1
Required consents
Neither this Agreement nor any other Finance Documents nor any terms hereof or thereof may be changed, waived, discharged or terminated unless such change, waiver, discharge or termination is in writing signed by the respective Obligors party thereto and the Majority Lenders, provided that no such change, waiver, discharge or termination shall, without the consent of each Lender (other than a Defaulting Lender) (with obligations incurred hereunder being directly affected in the case of following paragraphs (a) to (b)) and provided further that, in the case of the following paragraph (g), to the extent that any such Lender would be required to make an Advance in excess of its pro rata portion provided for in this Agreement or would receive a payment or prepayment of the Loan that (in any case) is less than its pro rata portion provided for in this Agreement, in each case, as a result of any such amendment, modification or waiver referred to in the following clause (g):
(a)
extend the final scheduled maturity of the Loan, extend the timing for or reduce the principal amount of any Repayment Date, or reduce the rate or extend the time of payment of fees or interest on the Loan, or reduce the principal amount thereof (except to the extent repaid in cash);
(b)
release any of the Security Assets (except as expressly provided otherwise in the Finance Documents) under the Security Documents;
(c)
amend, modify or waive any provision of this Clause 45 ( Amendments and Waivers ) or amend Clauses 2.2 ( Finance Parties' rights and obligations ), 3 ( Purpose ), 7.2 ( Change of control ), 7.7 ( Termination etc. of KEXIM Guarantee and K-Sure Insurance Policies ) or 18.10 ( Use of proceeds; Margin regulations) or 18.17 ( Sanctions) or 21.9 ( Use of proceeds; Margin regulations) or 21.16 ( Sanctions ) or 28 ( Changes to the Lenders );
(d)
an increase in any Commitment or the Total Commitments, an extension of any Availability Period or any requirement that a cancellation of Commitments reduces the Commitments ratably under the Facility;
(e)
reduce the percentage specified in the definition of Majority Lenders or otherwise amend or modify the definition of Majority Lenders (it being understood that, with the consent of the Majority Lenders, additional extensions of credit pursuant to this Agreement may be included in the determination of the Majority Lenders on substantially the same basis as the extensions of Loan are included on the date of this Agreement),
(f)
consent to the assignment or transfer by any Obligor of any of its respective rights and obligations under this Agreement,
(g)
amend, modify or waive any provision in this Agreement to the extent providing for payments or prepayments of Loan to be applied pro rata among the Lenders entitled to such payments or prepayments of the Loan, or
(h)
release any Guarantor from any guarantee to the extent same owns a Ship (other than as provided in this Agreement), provided, further, that no such change, waiver, discharge or termination shall (A) without the consent of the Facility Agent, amend, modify or waive any provision of Clause 30 ( The Facility Agent, the Lead Arrangers and the Mandated Lead Arrangers ) as same applies to the Facility Agent or any other provision as same relates to the rights or obligations of the Facility Agent, or (B) without the consent of the Security Agent, amend, modify or waive any provision relating to the rights or obligations of the Security Agent.
45.2
Non-Consenting Lender
If, in connection with any proposed change, waiver, discharge or termination to any of the provisions of this Agreement as contemplated by paragraphs (a) through (h), inclusive, of Clause 45.1 ( Required Consents ), the consent of the Majority Lenders is obtained but the consent of one or more of such other Lenders whose consent is required (any such Lender, a " Non-Consenting Lender ") is not obtained, then the Borrower shall have the right, so long as all Non-Consenting Lenders whose individual consent is required are treated as described in either paragraphs (a) or (b) below, to:
(a)
replace each such Non-Consenting Lender with one or more replacement lenders pursuant to Clause 7.9 ( Right of replacement and repayment and cancellation in relation to a single Lender ) so long as at the time of such replacement, each such replacement lender consents to the proposed change, waiver, discharge or termination; or
(b)
repay the outstanding Loan of such Non-Consenting Lender which gave rise to the need to obtain such Non-Consenting Lender's consent, in accordance with Clause 45.1 ( Required consents )
(c)
provided that, unless the Vessel Loans that are repaid pursuant to preceding paragraph (b) are immediately replaced in full at such time through the addition of new Lenders or the increase of the outstanding Vessel Loans of existing Lenders (who in each case must specifically consent thereto), then in the case of any action pursuant to preceding paragraph (b), the Majority Lenders (determined before giving effect to the proposed action) shall specifically consent thereto, provided, further, that in any event the Borrower shall not have the right to replace a Lender or repay such Lender's Vessel Loan solely as a result of the exercise of such Lender's rights (and the withholding of any required consent by such Lender) pursuant to the second proviso in the opening paragraph of Clause 45.1 ( Required consents ).
45.3
Other exceptions
(a)
An amendment or waiver which relates to the rights or obligations of a Servicing Party or the a Mandated Lead Arranger or the Lead Arranger (each in their capacity as such) may not be effected without the consent of that Servicing Party or that Mandated Lead Arranger or that Lead Arranger, as the case may be.
(b)
The Borrower and the Facility Agent, the Mandated Lead Arrangers, the ECA Agent, KEXIM or the Security Agent, as applicable, may amend or waive a term of a Fee Letter to which they are party.
(c)
An amendment or waiver which relates to the rights or obligations of a Hedge Counterparty (in its capacity as such) may not be effected without the consent of that Hedge Counterparty.
45.4
Rights of a Defaulting Lender
Notwithstanding anything to the contrary herein, any Lender that is a Defaulting Lender shall not have any right to approve or disapprove of any amendment, waiver or consent hereunder; provided that, except as otherwise provided in Clause 15.3 ( Defaulting Lender ), (i) the Commitments of such Defaulting Lender may not be increased or extended without the consent of such Defaulting Lender, and (ii) no payment to such Defaulting Lender shall be decreased or postponed without the consent of such Defaulting Lender.
46
CONFIDENTIAL INFORMATION
46.1
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 46.2 ( Disclosure of Confidential Information ) and Clause 46.3 ( 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.
46.2
Disclosure of Confidential Information
Any Finance Party may disclose:
(a)
to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives 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 paragraph (a) 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;
(b)
to any person:
(i)
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 Facility Agent or Security Agent and, in each case, to any of that person's Affiliates, Related Funds, 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, Related Funds, Representatives and professional advisers;
(iii)
appointed by any Finance Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) 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 paragraph (c) of Clause 30.15 ( Relationship with the other Finance Parties ));
(iv)
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (i) or (ii) of paragraph (b) above;
(v)
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, arbitrations, administrative or other investigations, proceedings or disputes;
(vii)
to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 28.8 ( Security over Lenders' rights );
(viii)
who is a Party, a member of the Group or any related entity of a Transaction Obligor;
(ix)
as a result of the registration of any Finance Document as contemplated by any Finance Document or any legal opinion obtained in connection with any Finance Document; or
(x)
with the consent of the Ultimate Parent Guarantor;
in each case, such Confidential Information as that Finance Party shall consider appropriate if:
(A)
in relation to sub-paragraphs (i), (ii) and (iii) of paragraph (b) 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;
(B)
in relation to sub-paragraph (iv) of paragraph (b) 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;
(C)
in relation to sub-paragraphs (v), (vi) and (vii) of paragraph (b) 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 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;
(c)
to any person appointed by that Finance Party or by a person to whom sub-paragraph (i) or (ii) of paragraph (b) 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 paragraph (c) if the service provider to whom the Confidential Information is to be given has entered in to a confidentiality agreement in such form as may be agreed between the Borrower and the relevant Finance Party;
(d)
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 Transaction Obligors 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; and
(e)
to K-Sure.
46.3
Disclosure to numbering service providers
(a)
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:
(i)
names of Obligors;
(ii)
country of domicile of Obligors;
(iii)
place of incorporation/formation of Obligors;
(iv)
date of this Agreement;
(v)
Clause 48 ( Governing Law );
(vi)
the names of the Facility Agent, the Security Agent, the Lead Arrangers and the Mandated Lead Arrangers;
(vii)
date of each amendment and restatement of this Agreement;
(viii)
amount of Total Commitments;
(ix)
currency of the Facility;
(x)
type of Facility;
(xi)
ranking of Facility;
(xii)
a Termination Date;
(xiii)
changes to any of the information previously supplied pursuant to sub-paragraphs (i) to (xii) above; and
(xiv)
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.
(b)
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.
(c)
Each Obligor represents that none of the information set out in sub-paragraphs (i) to (xiv) of paragraph (a) above is, nor will at any time be, unpublished price-sensitive information.
46.4
Entire agreement
This Clause 46 ( Confidential Information ) 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.
46.5
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.
46.6
Notification of disclosure
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Borrower:
(a)
of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (v) of paragraph (b) of Clause 46.2 ( Disclosure of Confidential Information ) 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
(b)
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 46 ( Confidential Information ).
46.7
[Intentionally left blank]
47
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.
Section 12     

GOVERNING LAW AND ENFORCEMENT
48
GOVERNING LAW
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
49
ENFORCEMENT
49.1
Jurisdiction
(a)
Unless specifically provided in another Finance Document in relation to that Finance Document, the courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with any Finance Document (including a dispute regarding the existence, validity or termination of any Finance Document or any non-contractual obligation arising out of or in connection with any Finance Document) (a " Dispute ").
(b)
The Obligors accept that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Obligor will argue to the contrary.
(c)
This Clause 49.1 ( Jurisdiction ) is for the benefit of the Secured Parties only. As a result, no Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Secured Parties may take concurrent proceedings in any number of jurisdictions.
49.2
Service of process
(a)
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):
(i)
irrevocably appoints Euronav (UK) Agencies Limited at its registered office for the time being, presently at 99 King's Road, London, SW3 4PA, England as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
(ii)
agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.
(b)
If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Borrowers (on behalf of all the Obligors) must immediately (and in any event within five days of such event taking place) appoint another agent on terms acceptable to the Facility Agent. Failing this, the Facility Agent may appoint another agent for this purpose.
50
PATRIOT ACT NOTICE
50.1
PATRIOT Act notice
Each of the Secured Parties hereby notifies the Obligors that pursuant to the requirements of the PATRIOT Act and the policies and practices of the Secured Parties, each of the Secured Parties is required to obtain, verify and record certain information and documentation that identifies each Obligor, which information includes the name and address of each Obligor and such other information that will allow each of the Secured Parties to identify each Obligor in accordance with the PATRIOT Act.
This Agreement has been entered into on the date stated at the beginning of this Agreement.

EXECUTION PAGES

 
 
 
 
 
 
 
 
 
 

Schedule 5     

THE PARTIES
Part A

THE OBLIGORS
Name of Original Borrower
Place of Incorporation or Formation
Registration number (or equivalent, if any)
Address for Communication
GENER8 MARITIME SUBSIDIARY VIII INC.
REPUBLIC OF MARSHALL
ISLANDS
78647
299 PARK AVENUE,
2 nd  Floor
NEW YORK, NY 10017 - 0002
Attn: Chief Financial Officer  
Telephone: (212) 763-5600  
Facsimile: (212) 763-5608
E-mail: finance@gener8maritime.com
With a copy to:
Euronav NV
de Gerlachekaai 20
B-2000 Antwerp
Belgium
Tel No: 32 3 247 4411
Fax No: 32 3 247 4409
Attn: Chief Financial Officer

Name of Additional Borrower
Place of Incorporation or Formation
Registration number (or equivalent, if any)
Address for Communication
EURONAV NV
BELGIUM
0860.402.767
de Gerlachekaai 20
B-2000 Antwerp
Belgium
Tel No: 32 3 247 4411
Fax No: 32 3 247 4409
Attn: Chief Financial Officer

Name of Parent Guarantor
Place of Incorporation or Formation
Registration number (or equivalent, if any)
Address for Communication
GENER8 MARITIME INC.
REPUBLIC OF MARSHALL
ISLANDS
31343
299 PARK AVENUE,
2 nd  Floor
NEW YORK, NY 10017 - 0002
Attn: Chief Financial Officer  
Telephone: (212) 763-5600  
Facsimile: (212) 763-5608
E-mail: finance@gener8maritime.com
 
 
 
With a copy to:
Euronav NV
de Gerlachekaai 20
B-2000 Antwerp
Belgium
Tel No: 32 3 247 4411
Fax No: 32 3 247 4409
Attn: Chief Financial Officer
 
 
 
 
Name of Ultimate Parent Guarantor
Place of Incorporation or Formation
Registration number (or equivalent, if any)
Address for Communication
EURONAV NV
BELGIUM
0860.402.767
de Gerlachekaai 20
B-2000 Antwerp
Belgium
Fax No: 32 3 247 4409
Attn: Chief Financial Officer

Name of Shareholder
Place of Incorporation or Formation
Registration number (or equivalent, if any)
Address for Communication
GENER8 MARITIME SUBSIDIARY V INC.
REPUBLIC OF MARSHALL
ISLANDS
67634
299 PARK AVENUE,
2 nd  Floor
NEW YORK, NY 10017 - 0002
Attn: Chief Financial Officer  
Telephone: (212) 763-5600  
Facsimile: (212) 763-5608
E-mail: finance@gener8maritime.com
With a copy to:
Euronav NV
de Gerlachekaai 20
B-2000 Antwerp
Belgium
Tel No: 32 3 247 4411
Fax No: 32 3 247 4409
Attn: Chief Financial Officer


Name of Owner Guarantor / Hedge
Guarantor
Place of Incorporation or Formation
Registration number (or equivalent, if any)
Address for Communication
GENER8 NEPTUNE LLC
GENER8 ATHENA LLC
GENER8 APOLLO LLC
GENER8 ARES LLC
GENER8 HERA LLC
GENER8 CONSTANTINE LLC
GENER8 OCEANUS LLC
GENER8 NAUTILUS LLC
GENER8 MACEDON LLC
GENER8 NOBLE LLC
GENER8 ETHOS LLC
GENER8 PERSEUS LLC
GENER8 THESEUS LLC
GENER8 HECTOR LLC
GENER8 NESTOR LLC
REPUBLIC OF MARSHALL
ISLANDS
963422
963429
963436
963437
963441
963438
963446
963443
963442
963445
963439
963447
963448
963440
963444
299 PARK AVENUE,
2 nd  Floor
NEW YORK, NY 10017 - 0002
Attn: Chief Financial Officer  
Telephone: (212) 763-5600
Facsimile: (212) 763-5608
E-mail: finance@gener8maritime.com
With a copy to:
Euronav NV
de Gerlachekaai 20
B-2000 Antwerp
Belgium
Tel No: 32 3 247 4411
Fax No: 32 3 247 4409
Attn: Chief Financial Officer

Part B     

THE ORIGINAL LENDERS
 
 
Name of Commercial Lender
Address for Communication
ABN AMRO CAPITAL USA LLC

100 Park Avenue,
New York, New York 10017 - 0002
Attention: Rajbir Talwar,
Director of Transportation Clients
Telephone: 917 284 6850
Facsimile: N/A
E-mail: rajbir.talwar@abnamro.com
With a copy to:
Attention: Eden Rahman,
Vice President
Telephone: +1 212 931 9714
Facsimile: N/A
E-mail: Eden.Rahman@abnamro.com
And to:
Attention: Lilla Engelsbel-Sporysheva,
Director Trade Finance Operations
Telephone: 917 284 6962
Facsimile: 917 284 6697
E-mail: tradefinance@abnamro.com
And to:
Attention: Maria Pina,
Vice President  
Telephone: 917 284 6917
Facsimile: 917 284 6683  
E-mail: middleoffice@abnamro.com  
CITIBANK, N.A., LONDON BRANCH
Citibank N.A., London Branch,
Citigroup Centre, Canada Square,
London, E14 5LB
c/o Citibank International Limited,
Poland Branch  
7/9 Traugutta str., 1 st  Floor  
00-985 Warsaw, Poland
Attention: Loan Operations Department
(Kara Catt / Romina Coates – EAF Middle Office)
Telephone: +44 207986 4881
Facsimile: +44 207 655 2380
E-mail: cibuk.loans@citi.com
With a copy to:
388 Greenwich Street,
New York, NY, 10013
Attention: Meghan O'Connor
Telephone: +1 212 816 8557
Facsimile: N/A
E-mail: meghan.oconnor@citi.com
DNB CAPITAL LLC
200 Park Avenue,
31st Floor New York,
NY 10166
Attention: Cathleen Buckley
Telephone: 212 681 3861
Facsimile: 212 681 3900
E-mail: Cathleen.buckley@dnb.no
With a copy to:
Attention: Sybille Andaur
Telephone: 212 681 3878
Facsimile: 212 681 3900
E-mail: Sybille.Andaur@dnb.no
DVB BANK SE
DVB Bank SE
Platz der Republik 6
60325  Frankfurt
Germany
For admin matters:
TLS - Transaction Management
DVB Bank SE | WTC Schiphol Tower F 6th Floor, Schiphol Boulevard 255 | 1118 BH Schiphol | The Netherlands  
tls.tm.amsterdam@dvbbank.com  
For commercial matters:
Wijnand Botman
Shipping Finance Europe
DVB Bank SE | WTC Schiphol Tower F 6th Floor, Schiphol Boulevard 255 | 1118 BH Schiphol | The Netherlands  
Wijnand.Botman@dvbbank.com

With a copy to:
609 Fifth Avenue; 5th Floor;
New York, NY 10017 - 0002
Attention: DVB Transport (US) LLC
(Jurek Bochner)
Telephone: +1 212 858 2609
Facsimile: +1 212 858 2673
E-mail: Jurek.Bochner@dvbbank.com
Attention: Christiane Lombardi
Telephone: +1 212 858 2608
Facsimile: +1 212 858 2693
E-mail: Christiane.Lombardi@dvbbank.com
NORDEA BANK AB (PUBL), NEW YORK BRANCH
1211 Avenue of the Americas
23 rd   Floor
New York, NY  10036
Attention: Shipping Offshore and Oil Services
Telephone:  +1 212 318 9636
Facsimile:   +1 212 421 4420
E-mail: dlny-ny-cadloan@nordea.com
With a copy to:  
 
Essendropsgate 7
0368 Oslo
Norway
Facsimile: +47 22 48 66 78  
E-mail: agency.soosid@nordea.com
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)
Skandinaviska Enskilda Banken AB (publ)  
Filipstad Brygge 1, Pb 18473 Vika, 0123 Oslo  
Attention: Egil Aarrestad (Client Executive) / Cecilie Landberg (Account Manager)
Telephone: +22827021 / +22827105
Facsimile: N/A
E-mail: egil.aarrestad@seb.no   / cecilie.landberg@seb.no  
 

With a copy to:
Attention: Structured Credit Operations
Telephone: +370 521 90485
Facsimile: N/A
E-mail: sco@seb.se  

Name of KEXIM Guaranteed Lender
Address for Communication
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.,
HONG KONG BRANCH
Unit 9507, Level 95, International Commerce Centre,
One Austin Road West,
Kowloon, Hong Kong
Attention: Grace Li / Weilei Song / Winnie Chung
Telephone: +852 2582 3278 / +852 2582 3110 / +852 2582 3145 /+8210 4665 1079
Facsimile: +852 2587 3199
E-mail: gracel@bbva.com.hk  / weilei.song@bbva.com .hk / winniec@bbva.com.hk
With a copy to:
Attention: Shirin Arabsolghar / Lucie Court / Maggie Siu
 
Telephone: +34 91 537 0006 / +852 2582 3216
 
Facsimile: + 34 91 537 0040 / +852 2582 3199
 
E-mail:

 
 
CITIBANK, N.A., LONDON BRANCH
Citibank N.A., London Branch,
Citigroup Centre, Canada Square,
London, E14 5LB
c/o Citibank International Limited,
Poland Branch  
7/9 Traugutta str., 1 st  Floor  
00-985 Warsaw, Poland
Attention: Loan Operations Department
(Kara Catt / Romina Coates – EAF Middle Office)
Telephone: +44 207986 4881
Facsimile: +44 207 655 2380
E-mail: cibuk.loans@citi.com
With a copy to:
388 Greenwich Street,
New York, NY, 10013
Attention: Meghan O'Connor
Telephone: +1 212 816 8557
Facsimile: N/A
E-mail: meghan.oconnor@citi.com
INDUSTRIAL AND COMMERCIAL BANK OF CHINA, BUSAN BRANCH
1205-10, Choryang 1-dong,
Dong-gu, Busan, Korea, 601-839  
Attention: Byung-joo, Seo  
Telephone: 82-51-463-8707  
Facsimile: 82-51-463-6880
E-mail: seobj@kr.icbc.com.cn
With a copy to:
18th Floor, Taepyeongno Bldg., #73 Sejongdaero, Jung-gu,
Seoul, Korea 100-767  
Attention: Hyun-il, Sohn  
Telephone: 82-2-3788-6692  
Facsimile: 82-2-3783-6735
E-mail: sohnhi@kr.icbc.com.cn
KOMMUNAL LANDSPENSJONSKASSE GJENSIDIG FORSIKRINGSSELSKAP
Dronning Eufemias gate 10,
Pb.400 Sentrum, 0103 OSLO
Attention: Anne Kristine Skappel
Telephone: +47 900 65 243
Facsimile: +47 22 03 36 00
E-mail: anne.kristine.skappel@klp.no
 
With a copy to:
Attention: Christian Dahl
Telephone:+47 411 022 86
Facsimile:+47 22 03 36 00
E-mail: Christian.dahl@klp.no
 
And to:
Trondheim
Attention: Linda Bruneel / Birgitte Elvrum
Telephone: +4798623977 / +4790774226
Facsimile: +4773533839
E-mail: okontrd@klp.no
 
And to:
Trondheim
Attention: Oddvar Engelsastro / Anette Christensen
Telephone: +4748186935
Facsimile: +4773533839
E-mail: Oddvar.Engelsaastro@klp.no / Anette.Christensen@klp.no
MITSUBISHI UFJ TRUST AND BANKING CORPORATION
4-5, Marunouchi 1-Chome,
Chiyoda-ku, Tokyo 100-8212, Japan
Attention: Corporate Business Planning Division
(Takashi Tomioka / Yoshitake Tanaka)
Telephone: +81-3-6256-1460
Facsimile: +81-3-6214-8199
E-mail:  takashi_tomioka@tr.mufg.jp  /  
yoshitake_tanaka@tr.mufg.jp  
 
With a copy to:
Attention: Takeshi Sugiyama
Telephone: +81-3-6250-3967
Facsimile: +81-3-6214-8199
E-mail: mutbsf2_post@tr.mufg.jp
NONGHYUP BANK
120 Tongil-Ro, Jung-Gu,
Seoul, Korea 04517
Attention: Young Jin Choi
Telephone: +822 2080-8116
Facsimile : +822 2080-8130
 
With a copy to:
 
Attention : Young Ho Jung
Telephone : +822 2080-8119
Facsimile : +822 2080-8130

SAMBA FINANCIAL GROUP, LONDON BRANCH
Nightingale House, 65 Curzon Street,
London, W1 8PF, UK  
Attention: Sherif Atef  
Telephone: +44 207 659 8235  
Facsimile: +44 207 355 4416  
E-mail: sherif.atef@samba.com
With a copy to:
Attention: Keith Clay  
Telephone: +44 207 659 8237  
Facsimile: +44 207 355 4416  
E-mail: keith.clay@samba.com
Name of K-Sure Lender
Address for Communication
ABN AMRO CAPITAL USA LLC
100 Park Avenue,
New York, New York 10017 - 0002
Attention: Rajbir Talwar,
Director of Transportation Clients
Telephone: 917 284 6850
Facsimile: N/A
E-mail: rajbir.talwar@abnamro.com
 
With a copy to:
Attention: Eden Rahman,
Vice President
Telephone: +1 212 931 9714
Facsimile: N/A
E-mail: Eden.Rahman@abnamro.com
 
And to:
Attention: Lilla Engelsbel-Sporysheva,
Director Trade Finance Operations
Telephone: 917 284 6962
Facsimile: 917 284 6697
E-mail: tradefinance@abnamro.com  
 
And to:
Attention: Maria Pina,
Vice President  
Telephone: 917 284 6917
Facsimile: 917 284 6683
E-mail: middleoffice@abnamro.com
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.,
HONG KONG BRANCH
Unit 9507, Level 95, International Commerce Centre,
One Austin Road West,
Kowloon, Hong Kong
Attention: Grace Li / Weilei Song / Winnie Chung
Telephone: +852 2582 3278 / +852 2582 3110 / +852 2582 3145 /+8210 4665 1079
Facsimile: +852 2587 3199
E-mail: gracel@bbva.com.hk  / weilei.song@bbva.com .hk / winniec@bbva.com.hk
With a copy to:
Attention: Shirin Arabsolghar / Lucie Court / Maggie Siu
 
Telephone: +34 91 537 0006 / +852 2582 3216
 
Facsimile: + 34 91 537 0040 / +852 2582 3199
 
E-mail:

CAIXABANK, S.A.
Av. Diagonal 615, planta 5, 08028 Barcelona; Spain  
Attention: Isabel Marquez Buey
Telephone: +34 628 22 43 46  
Facsimile: +34 93 404 67 94  
E-mail: imarquez@caixabank.com
 
With a copy to:
Attention: Eduard Sin / Susanna Farnós
Telephone: + 34 93 404 41 39 / +34 93 297 46 63
Facsimile: +34 93 404 64 66
E-mail:  creditos.sindicados@lacaixa.es
 
And to:
Attention: Maria Carmen Utrilla
Telephone: +34 93 404 44 32  
Facsimile: N/A
E-mail: Carmen.utrilla@caixabank.com
CITIBANK, N.A., LONDON BRANCH
Citibank N.A., London Branch,
Citigroup Centre, Canada Square,
London, E14 5LB
c/o Citibank International Limited,
Poland Branch  
7/9 Traugutta str., 1 st  Floor  
00-985 Warsaw, Poland
Attention: Loan Operations Department
(Kara Catt / Romina Coates – EAF Middle Office)
Telephone: +44 207986 4881
Facsimile: +44 207 655 2380
 
With a copy to:
388 Greenwich Street,
New York, NY, 10013
Attention: Meghan O'Connor
Telephone: +1 212 816 8557
Facsimile: N/A
E-mail: meghan.oconnor@citi.com
LANDESBANK HESSEN-THUERINGEN GIROZENTRALE
Landesbank Hessen-Thueringen Girozentrale,
MT-259300, Neue Mainzer Strasse
52-58, 60311 Frankfurt am Main
Attention: Navina Lucke
Telephone: +49 69 9132-4830
Facsimile: +49 69 9132- 84830
E-mail: Navina.Lucke@helaba.de
 
With a copy to:
Attention: Stefan Kroth
Telephone: +49 69 9132-2165
Facsimile: +49 69 9132-82165
E-mail: Stefan.Kroth@helaba.de
MITSUBISHI UFJ TRUST AND BANKING CORPORATION
4-5, Marunouchi 1-Chome,
Chiyoda-ku, Tokyo 100-8212, Japan
Attention: Corporate Business Planning Division
(Takashi Tomioka / Yoshitake Tanaka)
Telephone: +81-3-6256-1460
Facsimile: +81-3-6214-8199
E-mail: :takashi_tomioka@tr.mufg.jp  /  
yoshitake_tanaka@tr.mufg.jp  
 
With a copy to:
Attention: Takeshi Sugiyama
Telephone: +81-3-6250-3967
Facsimile : +81-3-6214-8199
E-mail: mutbsf2_post@tr.mufg.jp
 
 
THE EXPORT-IMPORT BANK OF KOREA
BIFC 20th floor,
Munhyeongeumyung-ro 40, Namgu,
Busan 608-828, Korea  
Attention: Hanie(Okju) Jang  
Telephone: +82 51 922 8830  
Facsimile: +82 51 922 8849  
E-mail: okju@koreaexim.go.kr
 
With a copy to:
Attention: Eva(Hae Jeong) Cho
Telephone: +82 51 922 8828  
Facsimile: +82 51 922 8849  
E-mail: hj.cho@koreaexim.go.kr

Part C     

THE HEDGE COUNTERPARTIES
ABN AMRO BANK N.V.
100 Park Avenue 17th Floor
New York, NY
10017 - 0002
United States of America
Attention: MacGregor Stockdale,
Derivative Sales
Telephone: +917 284 6738
Facsimile: N/A
E-mail: MacGregor.Stockdale@abnamro.com
BANCO BILBAO VIZCAYA ARGENTARIA, S.A.,
HONG KONG BRANCH
Unit 9507, Level 95, International Commerce Centre,
One Austin Road West,
Kowloon, Hong Kong
Attention: Grace Li / Weilei Song / Winnie Chung
Telephone: +852 2582 3278 / +852 2582 3110 / +852 2582 3145 /+8210 4665 1079
Facsimile: +852 2587 3199
E-mail: gracel@bbva.com.hk  / weilei.song@bbva.com .hk / winniec@bbva.com.hk
With a copy to:
Attention: Shirin Arabsolghar / Lucie Court / Maggie Siu
 
Telephone: +34 91 537 0006 / +852 2582 3216
 
Facsimile: + 34 91 537 0040 / +852 2582 3199
 
E-mail:

CITIBANK, N.A.
390 Greenwich Street
New York NY – New York USA 10013
Attention: Sarver, Kevin
Vice President
Telephone: +1 212 723 6566
E-mail: kevin.sarver@citi.com
 
With a copy to:
Attention: Shidler, Kenneth B
Managing Director
Telephone: +1 12 723 6468
E-mail: kenneth.b.shidler@citi.com
 
And to:
Attention: Meghan O'Connor
Telephone: +1 (212) 816 8557
E-mail: meghan.oconnor@citi.com
NONGHYUP BANK
120 Tongil-Ro, Jung-Gu,
Seoul, Korea 04517
Attention : Young Jin Choi
Telephone : +822 2080-8116
Facsimile : +822 2080-8130
 
With a copy to:
 
Attention : Young Ho Jung
Telephone : +822 2080-8119
Facsimile : +822 2080-8130

NORDEA BANK AB (PUBL), NEW YORK BRANCH
1211 Avenue of the Americas,
23 rd  Floor
New York, NY  10036
Attention: Shipping Offshore and Oil Services
Telephone:  +1 212 318 9636
Facsimile:   +1 212 421 4420
E-mail: dlny-ny-cadloan@nordea.com
 
With a copy to:  
 
Essendropsgate 7
0368 Oslo
Norway
Facsimile: +47 22 48 66 78  
E-mail: agency.soosid@nordea.com
SKANDINAVISKA ENSKILDA BANKEN AB (PUBL)

Skandinaviska Enskilda Banken AB (publ)  
Filipstad Brygge 1, Pb 18473 Vika, 0123 Oslo  
Attention: Egil Aarrestad (Client Executive) / Cecilie Landberg (Account Manager)
Telephone: +22827021 / +22827105
Facsimile: N/A
E-mail: egil.aarrestad@seb.no   / cecilie.landberg@seb.no  
 

With a copy to:
Attention: Structured Credit Operations
Telephone: +370 521 90485
Facsimile: N/A
E-mail: sco@seb.se  

 
 

Part D     

THE SERVICING PARTIES
Name of Facility Agent
Address for Communication
NORDEA BANK AB (PUBL),
NEW YORK BRANCH
1211 Avenue of the Americas
23 rd   Floor
New York, NY  10036
Attn:  Shipping Offshore and Oil Services  
 
Telephone:  +1 212 318 9636
Facsimile:   +1 212 421 4420
E-mail: dlny-ny-cadloan@nordea.com
 
with a copy to:  
 
Essendropsgate 7
0368 Oslo
Norway
 
Facsimile: +47 22 48 66 78  
E-mail: agency.soosid@nordea.com
Name of Security Agent
Address for Communication
NORDEA BANK AB (PUBL),
NEW YORK BRANCH
1211 Avenue of the Americas
23 rd   Floor
New York, NY  10036
Attn:  Shipping Offshore and Oil Services  
 
Telephone:  +1 212 318 9636
Facsimile:   +1 212 421 4420
E-mail: dlny-ny-cadloan@nordea.com
 
with a copy to:  
 
Essendropsgate 7
0368 Oslo
Norway
 
Facsimile: +47 22 48 66 78  
E-mail: agency.soosid@nordea.com
Name of ECA Agent
Address for Communication
CITIBANK, N.A.,
LONDON BRANCH
Citibank N.A., London Branch
c/o Citibank International Limited,
Poland Branch
7/9 Traugutta str., 1 st  Floor
00-985 Warsaw, Poland
Attention: Loan Operations Department
(Kara Catt/ Romina Coates – EAF Middle Office)
Facsimile: +44 207 655 2380
Telephone: +44 207986 4881
E-mail: cibuk.loans@citi.com

Schedule 6     

CONDITIONS PRECEDENT
Part A     

CONDITIONS PRECEDENT TO INITIAL UTILIZATION REQUEST
1
Obligors
1.1
A copy of the Constitutional Documents of each Obligor.
1.2
A copy of a resolution of the board of directors (or equivalent) of each Obligor:
(a)
approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute the Finance Documents to which it is a party;
(b)
authorizing a specified person or persons to execute the Finance Documents to which it is a party on its behalf; and
(c)
authorizing a specified person or persons, on its behalf, to sign and/or dispatch all documents and notices (including, if relevant, a Utilization Request) to be signed and/or dispatched by it under, or in connection with, the Finance Documents to which it is a party.
1.3
A specimen of the signature of each person authorized by the resolution referred to in paragraph 1.2 above.
1.4
A copy of a resolution signed by the holder of the issued shares in each of the Owner Guarantors, approving the terms of, and the transactions contemplated by, the Finance Documents to which that Owner Guarantor is a party.
1.5
A certificate of an authorized signatory of the relevant Obligor certifying that each copy (but not an original) document relating to it specified in paragraphs 1 and 2 this Part A of Schedule 2 ( Conditions Precedent ) and every other copy document (but not an original) delivered by it under this Schedule, is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.
2
Shipbuilding Contracts and other Documents
2.1
Copies of the Shipbuilding Contracts (which shall for the avoidance of doubt, include the Master Agreement and the Intercompany Ship Delivery Agreements) and the Merger Agreement and of all documents signed or issued by an Obligor or its Affiliate or the Builders (or any of them) under or in connection with it.
3
Finance Documents
3.1
A duly executed copy of any Finance Document not otherwise referred to in this Schedule 2 ( Conditions Precedent ).
3.2
A duly executed copy of any other document required to be delivered by each Finance Document if not otherwise referred to this Schedule 2 ( Conditions Precedent ).
4
Security
4.1
A duly executed copy of the Account Security in relation to each Account and of the Shares Security in respect of the Shareholder, the Borrower and each Owner Guarantor (and of each document to be delivered under each of them).
4.2
If applicable, a duly executed copy of each Assignment of Hedging Agreement in respect of the Borrower or the Parent Guarantor (as the case may be) (and of each document to be delivered under each of them).
4.3
Documentary evidence that the Security intended to be created on or prior to the date of the first Utilization Request by each of the Finance Documents has been duly perfected under applicable law.
5
Legal opinions
5.1
A legal opinion of Kramer Levin Naftalis & Frankel as counsel to the Borrower which shall be addressed to Facility Agent, the Security Agent, the Lenders and K-Sure on such matters concerning the laws of New York.
5.2
A legal opinion of Watson Farley & Williams LLP which shall be addressed to the Facility Agent, the Security Agent, the Lenders and K-Sure on such matters concerning the laws of the Marshall Islands and the Republic of Liberia.
5.3
A legal opinion of Lee&Ko which shall be addressed to the Facility Agent from lawyers (either issued or in a form acceptable to the Facility Agent) on such matters concerning the laws of Republic of South Korea in respect of the K-Sure Notice and/or the K-Sure Insurance Policies.
5.4
A legal opinion of Watson Farley & Williams LLP which shall be addressed to the Facility Agent on such matters concerning the laws of New York in respect of the KEXIM Guarantee.
5.5
A legal opinion of Lee&Ko which shall be addressed to the Facility Agent from lawyers on such matters concerning the laws of Republic of South Korea in respect of KEXIM.
5.6
Favorable legal opinions by lawyers appointed by the Facility Agent on such matters concerning the laws of such relevant jurisdictions as the Facility Agent may require, substantially in the form distributed to the Original Lenders before signing this Agreement.
6
Other documents and evidence
6.1
The Original Financial Statements of the Parent Guarantor.
6.2
Evidence that the fees, costs and expenses then due from the Borrower pursuant to Clause 11 ( Fees, KEXIM Premium and K-Sure Premium ) and Clause 16 ( Costs and Expenses ) have been paid or will be paid by the first Utilization Date.
6.3
Such evidence as the Facility Agent and KEXIM may require for the Finance Parties to be able to satisfy each of their "know your customer" or similar identification procedures in relation to the transactions contemplated by the Finance Documents.
6.4
A copy of K-Sure's written approval notice in respect of the transactions contemplated by the Finance Documents, in form and substance satisfactory to the Lenders and KEXIM.
6.5
The English translation of the K-Sure Notice prepared by a translator approved by the Facility Agent, and a certified English translation in respect of any other the documents referred to above as may be required by the Facility Agent and/or KEXIM.

Part B     

CONDITIONS PRECEDENT TO UTILIZATION – ADVANCE
In this Part:
" Relevant Advance " means the Advance for which a drawing has been requested under the relevant Utilization Request.
" Relevant Ship " means the Ship to which the proposed Advance relates.
" Relevant Owner Guarantor " means the Owner Guarantor owning the Relevant Ship.
7
Borrower and Relevant Owner Guarantor
A certificate of an authorized signatory of the Borrower and the Relevant Owner Guarantor certifying that each copy document which it is required to provide under this Part B of Schedule 2 ( Conditions Precedent ) is correct, complete and in full force and effect as at the Utilization Date for the Relevant Advance (and in particular, that there are no further amendments and/or supplements to the Shipbuilding Contract other than those previously provided to the Facility Agent pursuant to Part A of this Schedule 2 ( Conditions Precedent ) or pursuant to Part B of this Schedule 2 ( Conditions Precedent )).
8
Finance Documents
8.1
A duly executed copy of each Security Document (other than the Mortgage and the relevant Manager's Undertakings) if not previously provided pursuant to Part A of this Schedule 2 ( Conditions Precedent ).
8.2
A duly executed copy of any other document required to be delivered by each Finance Document if not previously provided pursuant to Part A of this Schedule 2 ( Conditions Precedent ).
9
Ship and other security
9.1
Such documentary evidence as the Facility Agent and its legal advisers may require in relation to the due authorization and execution of the relevant Shipbuilding Contracts by each of the parties thereto.
9.2
Such documentary evidence as the Facility Agent and its legal advisers may require in relation to evidencing that the relevant Owner Guarantor is the buyer (and shall be the legal and beneficial owner) of the Relevant Ship.
9.3
A duly executed original of the Mortgage in respect of the relevant Ship and of each document to be delivered under or pursuant thereto together with documentary evidence that the Mortgage in respect of the Relevant Ship has been duly registered as a valid first preferred or first priority ship mortgage in accordance with the laws of the jurisdiction of its Approved Flag.
9.4
Documentary evidence that the Relevant Ship:
(a)
has been unconditionally delivered by the relevant Builder to, and accepted by, the Relevant Owner Guarantor under the Shipbuilding Contract relating to the Relevant Ship and that the full purchase price payable and all other sums due to such Builder under the said Shipbuilding Contract, other than the sums to be financed pursuant to the Utilization of the Delivery Advance, have been, or upon the Utilization of the Delivery Advance, will be, paid to such Builder;
(b)
is definitively and if applicable, permanently registered in the name of the Relevant Owner Guarantor under the Approved Flag;
(c)
is in the absolute and unencumbered ownership of the Relevant Owner Guarantor save as contemplated by the Finance Documents;
(d)
maintains the Approved Classification with the Approved Classification Society free of all overdue recommendations and conditions of the Approved Classification Society; and
(e)
is insured in accordance with the provisions of this Agreement and all requirements in this Agreement in respect of insurances have been complied with.
9.5
Documents establishing that the Relevant Ship will, as from the Utilization Date of the Relevant Advance, be managed commercially by its Approved Commercial Manager and managed technically by its Approved Technical Manager on terms acceptable to the Facility Agent acting with the authorization of all of the Lenders together with:
(a)
to the extent commercially practicable, a Manager's Undertaking for each of the Approved Managers for the Relevant Ship; and
(b)
copies of the relevant Pool Agreement (if applicable and including all relevant novations, amendments, supplements thereto), the relevant Approved Technical Manager's Document of Compliance and of the Relevant Ship's Safety Management Certificate (together with any other details of the applicable Safety Management System which the Facility Agent requires) and of any other documents required under the ISM Code and the ISPS Code in relation to the Relevant Ship including without limitation an ISSC.
9.6
An opinion from an independent insurance consultant acceptable to the Facility Agent on such matters relating to the Insurances as the Facility Agent may reasonably require.
9.7
Two Appraisals of the Relevant Ship stated to be for the purposes of this Agreement and dated not earlier than 14 Business Days before the Utilization Date, evidencing the Fair Market Value of the Relevant Ship.
9.8
Copy of any Charter to which the Relevant Ship is subject (including without limitation, any charter pursuant to the relevant Pool Agreement (if any)).
9.9
The Relevant Ship's INMARSAT number (or equivalent).
10
Legal opinions
Legal opinions of the legal advisers to the Facility Agent in the jurisdiction of the Approved Flag of the Relevant Ship, the Republic of the Marshall Islands, the Republic of South Korea and such other relevant jurisdictions as the Facility Agent may require.
11
Other documents and evidence
11.1
Evidence that the fees, costs and expenses then due from Borrower pursuant to Clause 11 (Fees) and Clause 16 ( Costs and Expenses ) have been paid or will be paid by the Utilization Date for the Delivery Advance.
11.2
Evidence satisfactory to the Facility Agent that the Parent Guarantor and/or one or more of its Subsidiaries has made payment, or has procured the payment:
(a)
to the Builder, of the difference between (i) the Contract Price payable under the Shipbuilding Contract relating to the Relevant Ship and (ii) the sums to be financed pursuant to the Utilization of the relevant Advance, to the Builder; and
(b)
to the Debt Service Reserve Account, of an amount equal to the aggregate of:
(i)
the amount required to repay the first Repayment Instalment of the Relevant Advance and interest thereon, and
(ii)
the next Repayment Instalment of all previous Advances utilised under this Agreement and interest thereon,
(iii)
provided that it is agreed that payment of the amounts referred to under this paragraph (b) may be made from the proceeds of the Relevant Advance in accordance with and upon fulfilment of the conditions set out in Clause 3.1(c) ( Purpose ).
11.3
Evidence satisfactory to the ECA Agent that the relevant KEXIM Premium and the K-Sure Premium payable by the Borrower for the Relevant Advance, have been paid or will be paid by the Utilization Date of the Relevant Advance.
11.4
Evidence satisfactory to the Facility Agent that the Relevant Owner Guarantor is or will be the legal and beneficial owner of the Relevant Ship pursuant to its Shipbuilding Contract by the Utilization Date of the Relevant Advance.
11.5
A copy of the duly executed K-Sure Insurance Policy relating to the Relevant Ship in form and substance acceptable to all the Lenders and the ECA Agent.
11.6
A copy of the duly executed KEXIM Guarantee in form and substance acceptable to all the Lenders and the ECA Agent.
11.7
Confirmation from the ECA Agent that it has not been notified by K-Sure of cancellation of any existing K-SURE Insurance Policy in relation to any Ship.
11.8
In the case of the first Advance:
(a)
a certified English translation of the relevant K-SURE Insurance Policy prepared by a translator approved by the Agent, and
(b)
[Intentionally deleted.]
11.9
A certified English translation in respect of any other documents referred to above as may be required by the Facility Agent.
Schedule 7     

UTILIZATION REQUESTS
From:     GENER8 MARITIME SUBSIDIARY VIII INC.
To:     NORDEA BANK AB (PUBL), NEW YORK BRANCH as Facility Agent
Dated:     [ l ]
Dear Sirs
GENER8 MARITIME SUBSIDIARY VIII INC. – $963,743,455 Facility Agreement originally dated 31 August 2015 as amended and restated on [ l ] 2018 (the "Agreement")
1
We refer to the Agreement. This is a Utilization Request. Terms defined in the Agreement have the same meaning in this Utilization Request unless given a different meaning in this Utilization Request.
2
We wish to borrow the Advance under Vessel Loan relating to Ship [ l ] on the following terms:
Proposed Utilization Date:    [ l ] (or, if that is not a Business Day, the next Business Day)
Amount:
[ l ] or, if less, the Available Commitment of all Lenders in relation to such Vessel Loan
Interest Period:    [ l ]
3
We confirm that each condition specified in Clause 4.1 ( Initial conditions precedent ) and Clause 4.2 ( Further conditions precedent ) of this Agreement as they relate to the Advance to which this Utilization Request refers is satisfied on the date of this Utilization Request.
4
The proceeds of this Advance should be credited to: [account].
5
This Utilization Request is irrevocable.
Yours faithfully
______________________
[ l ]
authorized signatory for
GENER8 MARITIME SUBSIDIARY VIII INC.


Schedule 8     

TRANCHES AND COMMITMENTS
 
COMMERCIAL TRANCHE
KEXIM GUARANTEED TRANCHE
KEXIM FUNDED TRANCHE
K-SURE TRANCHE
ALL TRANCHES
(COMMERCIAL LENDERS)
(KEXIM LENDERS)
(KEXIM- FUNDED LENDERS)
(K-SURE LENDERS)
$
LENDER
$
LENDER
$
LENDER
$
LENDER
$
 
Ship A
Citibank, N.A., London Branch (" Citibank ")
1,752,826
Citibank
112,989
The Export-Import Bank of Korea (" KEXIM ")
15,099,218
Citibank
4,589,148
ABN AMRO Capital USA LLC (" ABN ")
3,175,145
Banco Bilbao Vizcaya Argentaria, S.A., Hong Kong Branch (" BBVA ")
2,156,773
ABN
3,824,290
DVB Bank SE (" DVB ")
1,752,826
Industrial and Commercial Bank of China, Busan Branch (" ICBC ")
1,147,287
BBVA
4,561,509
DNB Capital LLC (" DNB ")
1,752,826
Kommunal Landspensjonskasse Gjensidig Forsikringsselskap (" KLP ")
3,824,290
Landesbank Hessen-Thueringen Girozentrale (" Helaba ")
5,736,435
Nordea Bank AB (publ), New York Branch (" Nordea ")
1,752,826
Mitsubishi UFJ Trust and Banking Corporation (" MUTB ")
1,147,287
Caixabank, S.A.
(" La Caixa ")
5,736,435
Skandinaviska Enskilda Banken AB (publ) (" SEB ")
1,752,826
Nonghyup Bank (" NH Bank ")
1,147,287
 
 
MUTB
1,912,145
 
 
Samba Financial Group, London Branch (" Samba ")
1,147,287
 
 
TOTAL COMMITMENT FOR SHIP A ($)
11,939,273
10,683,200
15,099,218
26,359,963
64,081,655
Ship B
Citibank
1,752,826
Citibank
112,989
KEXIM
15,099,218
Citibank
4,589,148
 
ABN
3,175,145
BBVA
2,156,773
ABN
3,824,290
DVB
1,752,826
ICBC
1,147,287
BBVA
4,561,509
DNB
1,752,826
KLP
3,824,290
Helaba
5,736,435
Nordea
1,752,826
MUTB
1,147,287
La Caixa
5,736,435
SEB
1,752,826
NH Bank
1,147,287
MUTB
1,912,145
 
 
Samba
1,147,287
 
 
TOTAL COMMITMENT FOR SHIP B ($)
11,939,273
10,683,200
15,099,218
26,359,963
64,081,655
Ship C
Citibank
1,752,826
Citibank
112,989
KEXIM
15,099,218
Citibank
4,589,148
 
ABN
3,175,145
BBVA
2,156,773
ABN
3,824,290
DVB
1,752,826
ICBC
1,147,287
BBVA
4,561,509
DNB
1,752,826
KLP
3,824,290
Helaba
5,736,435
Nordea
1,752,826
MUTB
1,147,287
La Caixa
5,736,435
SEB
1,752,826
NH Bank
1,147,287
MUTB
1,912,145
 
 
Samba
1,147,287
 
 
TOTAL COMMITMENT FOR SHIP C ($)
11,939,273
10,683,200
15,099,218
26,359,963
64,081,655
Ship D
Citibank
1,752,826
Citibank
112,989
KEXIM
15,099,218
Citibank
4,589,148
 
ABN
3,175,145
BBVA
2,156,773
ABN
3,824,290
DVB
1,752,826
ICBC
1,147,287
BBVA
4,561,509
DNB
1,752,826
KLP
3,824,290
Helaba
5,736,435
Nordea
1,752,826
MUTB
1,147,287
La Caixa
5,736,435
SEB
1,752,826
NH Bank
1,147,287
MUTB
1,912,145
 
 
Samba
1,147,287
 
 
TOTAL COMMITMENT FOR SHIP D ($)
11,939,273
10,683,200
15,099,218
26,359,963
64,081,655
Ship E
Citibank
1,862,789
Citibank
120,077
KEXIM
16,046,466
Citibank
4,877,048
 
ABN
3,374,337
BBVA
2,292,078
ABN
4,064,207
DVB
1,862,789
ICBC
1,219,262
BBVA
4,847,675
DNB
1,862,789
KLP
4,064,207
Helaba
6,096,310
Nordea
1,862,789
MUTB
1,219,262
La Caixa
6,096,310
SEB
1,862,789
NH Bank
1,219,262
MUTB
2,032,103
 
 
Samba
1,219,262
 
 
TOTAL COMMITMENT FOR SHIP E ($)
12,688,281
11,353,4090
16,046,466
28,013,652
68,101,808
Ship F
Citibank
1,862,789
Citibank
120,077
KEXIM
16,046,466
Citibank
4,877,048
 
ABN
3,374,337
BBVA
2,292,078
ABN
4,064,207
DVB
1,862,789
ICBC
1,219,262
BBVA
4,847,675
DNB
1,862,789
KLP
4,064,207
Helaba
6,096,310
Nordea
1,862,789
MUTB
1,219,262
La Caixa
6,096,310
SEB
1,862,789
NH Bank
1,219,262
MUTB
2,032,103
 
 
Samba
1,219,262
 
 
TOTAL COMMITMENT FOR SHIP F ($)
12,688,281
11,353,409
16,046,466
28,013,652
68,101,808
Ship G
Citibank
9,243,217
Not applicable
Not applicable
Not applicable
 
ABN
16,743,567
DVB
9,243,217
DNB
9,243,217
Nordea
9,243,217
SEB
9,243,217
 
 
TOTAL COMMITMENT FOR SHIP G ($)
62,959,650
0
0
0
62,959,650
Ship H
Citibank
9,243,217
Not applicable
Not applicable
Not applicable
 
ABN
16,743,567
DVB
9,243,217
DNB
9,243,217
Nordea
9,243,217
SEB
9,243,217
 
 
TOTAL COMMITMENT FOR SHIP H ($)
62,959,650
0
0
0
62,959,650
Ship I
Citibank
1,729,955
Citibank
111,514
KEXIM
14,902,203
Citibank
4,529,269
 
ABN
3,133,716
BBVA
2,128,631
ABN
3,774,391
DVB
1,729,955
ICBC
1,132,317
BBVA
4,501,991
DNB
1,729,955
KLP
3,774,391
Helaba
5,661,586
Nordea
1,729,955
MUTB
1,132,317
La Caixa
5,661,586
SEB
1,729,955
NH Bank
1,132,317
MUTB
1,887,195
 
 
Samba
1,132,317
 
 
TOTAL COMMITMENT FOR SHIP I ($)
11,783,489
10,543,806
14,902,203
26,016,018
63,245,516
Ship J
Citibank
1,729,955
Citibank
111,514
KEXIM
14,902,203
Citibank
4,529,269
 
ABN
3,133,716
BBVA
2,128,631
ABN
3,774,391
DVB
1,729,955
ICBC
1,132,317
BBVA
4,501,991
DNB
1,729,955
KLP
3,774,391
Helaba
5,661,586
Nordea
1,729,955
MUTB
1,132,317
La Caixa
5,661,586
SEB
1,729,955
NH Bank
1,132,317
MUTB
1,887,195
 
 
Samba
1,132,317
 
 
TOTAL COMMITMENT FOR SHIP J ($)
11,783,489
10,543,806
14,902,203
26,016,018
63,245,516
Ship K
Citibank
1,729,955
Citibank
111,514
KEXIM
14,902,203
Citibank
4,529,269
 
ABN
3,133,716
BBVA
2,128,631
ABN
3,774,391
DVB
1,729,955
ICBC
1,132,317
BBVA
4,501,991
DNB
1,729,955
KLP
3,774,391
Helaba
5,661,586
Nordea
1,729,955
MUTB
1,132,317
La Caixa
5,661,586
SEB
1,729,955
NH Bank
1,132,317
MUTB
1,887,195
 
 
Samba
1,132,317
 
 
TOTAL COMMITMENT FOR SHIP K ($)
11,783,489
10,543,806
14,902,203
26,016,018
63,245,516
Ship L
Citibank
1,729,955
Citibank
111,514
KEXIM
14,902,203
Citibank
4,529,269
 
ABN
3,133,716
BBVA
2,128,631
ABN
3,774,391
DVB
1,729,955
ICBC
1,132,317
BBVA
4,501,991
DNB
1,729,955
KLP
3,774,391
Helaba
5,661,586
Nordea
1,729,955
MUTB
1,132,317
La Caixa
5,661,586
SEB
1,729,955
NH Bank
1,132,317
MUTB
1,887,195
 
 
Samba
1,132,317
 
 
TOTAL COMMITMENT FOR SHIP L ($)
11,783,489
10,543,806
14,902,203
26,016,018
63,245,516
Ship M
Citibank
1,784,845
Citibank
115,053
KEXIM
15,375,039
Citibank
4,672,979
 
ABN
3,233,146
BBVA
2,196,171
ABN
3,894,149
DVB
1,784,845
ICBC
1,168,245
BBVA
4,644,835
DNB
1,784,845
KLP
3,894,149
Helaba
5,841,224
Nordea
1,784,845
MUTB
1,168,245
La Caixa
5,841,224
SEB
1,784,845
NH Bank
1,168,245
MUTB
1,947,075
 
 
Samba
1,168,245
 
 
TOTAL COMMITMENT FOR SHIP M ($)
12,157,370
10,878,353
15,375,039
26,841,487
65,252,248
Ship N
Citibank
1,737,731
Citibank
112,016
KEXIM
14,969,188
Citibank
4,549,628
 
ABN
3,147,802
BBVA
2,138,200
ABN
3,791,357
DVB
1,737,731
ICBC
1,137,407
BBVA
4,522,227
DNB
1,737,731
KLP
3,791,357
Helaba
5,687,035
Nordea
1,737,731
MUTB
1,137,407
La Caixa
5,687,035
SEB
1,737,731
NH Bank
1,137,407
MUTB
1,895,678
 
 
Samba
1,137,407
 
 
TOTAL COMMITMENT FOR SHIP N ($)
11,836,455
10,591,200
14,969,188
26,132,960
63,529,803
Ship O
Citibank
1,737,731
Citibank
112,016
KEXIM
14,969,188
Citibank
4,549,628
 
ABN
3,147,802
BBVA
2,138,200
ABN
3,791,357
DVB
1,737,731
ICBC
1,137,407
BBVA
4,522,227
DNB
1,737,731
KLP
3,791,357
Helaba
5,687,035
Nordea
1,737,731
MUTB
1,137,407
La Caixa
5,687,035
SEB
1,737,731
NH Bank
1,137,407
MUTB
1,895,678
 
 
Samba
1,137,407
 
 
TOTAL COMMITMENT FOR SHIP O ($)
11,836,455
10,591,200
14,969,188
26,132,960
63,529,803
 
TOTAL COMMITMENTS IN RESPECT OF THE COMMERCIAL TRANCHES
TOTAL COMMITMENTS IN RESPECT OF THE KEXIM GUARANTEED TRANCHES
TOTAL COMMITMENTS IN RESPECT OF THE KEXIM FUNDED TRANCHES
TOTAL COMMITMENTS IN RESPECT OF THE K-SURE TRANCHES
TOTAL COMMITMENTS OF ALL TRANCHES


282,017,190
139,675,594
197,412,033
344,638,638
963,743,455



Schedule 9     

FORM OF TRANSFER CERTIFICATE
To:    [ l ] as Facility Agent
From:    [The Existing Lender] (the " Existing Lender ") and [The New Lender] (the " New Lender ")
Dated:     [ l ]
Dear Sirs
Euronav NV - [ l ] Facility Agreement originally dated 31 August 2015 (as amended and restated on [ l ] 2018) (the "Agreement")
1
We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.
2
We refer to Clause 28.5 ( Procedure for transfer ) of the Agreement:
(a)
The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all of the Existing Lender's rights and obligations under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitment and participation in the Loan under the Agreement as specified in the Schedule in accordance with Clause 28.5 ( Procedure for transfer ) of the Agreement.
(b)
The proposed Transfer Date is [ l ].
(c)
The Facility Office and address, fax number 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.
3
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 28.4 ( Limitation of responsibility of Existing Lenders ) of the Agreement.
4
This Transfer Certificate 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 Transfer Certificate.
5
This Transfer Certificate and any non-contractual obligations arising out of or in connection with it, are governed by New York law.
6
This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.
7
The New Lender confirms that, immediately following the effective date of this Transfer Certificate, it will be a FATCA Exempt Party.
Note: The execution of this Transfer Certificate 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.

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: _________________________________
Name:
Name:
Title:
Title:
This Transfer Certificate is accepted by the Facility Agent and the Transfer Date is confirmed as [ l ].
[Facility Agent]
By: _______________________
Name:
Title:
Schedule 10     

FORM OF ASSIGNMENT AGREEMENT
To:    [ l ] as Facility Agent and [ l ] as Borrower, for and on behalf of each Obligor
From:    [the Existing Lender] (the " Existing Lender ") and [the New Lender] (the " New Lender ")
Dated:    [ l ]
Dear Sirs
Euronav NV - [ l ] Facility Agreement originally dated 31 August 2015 as amended and restated on [ l ] 2018 (the "Agreement")
1
We refer to the Agreement. This is an Assignment Agreement. Terms defined in the Agreement have the same meaning in this Assignment Agreement unless given a different meaning in this Assignment Agreement.
2
We refer to Clause 28.6 ( Procedure for assignment ):
(a)
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 Transaction Security which correspond to that portion of the Existing Lender's Commitment and participations in the Loan under the 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 Commitments and participations in the Loan under the 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) above.
(d)
All rights and interests (present, future or contingent) which the Existing Lender has under or by virtue of the Finance Documents are assigned to the New Lender absolutely, free of any defects in the Existing Lender's title and of any rights or equities which the Borrower or any other [Transaction] Obligor had against the Existing Lender.
3
The proposed Transfer Date is [ l ].
4
On the Transfer Date the New Lender becomes Party to the Finance Documents as a Lender.
5
The Facility Office and address, fax, number and attention details for notices of the New Lender for the purposes of Clause 39.2 ( Addresses ) are set out in the Schedule.
6
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph (c) of Clause 28.4 ( Limitation of responsibility of Existing Lenders ).
7
This Assignment Agreement acts as notice to the Facility Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 28.7 ( Copy of Transfer Certificate or Assignment Agreement to Borrower ), to the Borrower (on behalf of each [Transaction] Obligor) of the assignment referred to in this Assignment Agreement.
8
This Assignment 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 Assignment Agreement.
9
This Assignment Agreement and any non-contractual obligations arising out of or in connection with it are governed by New York law.
10
This Assignment Agreement has been entered into on the date stated at the beginning of this Assignment 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.

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: _________________________________
Name:
Name:
Title:
Title:
This Assignment Agreement is accepted by the Facility Agent and the Transfer Date is confirmed as [ l ].
Signature of this Assignment Agreement by the Facility Agent constitutes confirmation by the Facility Agent of receipt of notice of the assignment referred to herein, which notice the Facility Agent receives on behalf of each Finance Party.
[Facility Agent]
By: _______________________
Name:
Title:
Schedule 11     

FORM OF COMPLIANCE CERTIFICATE
To:     NORDEA BANK AB (PUBL), NEW YORK BRANCH as Facility Agent
From:     EURONAV NV
Dated:     [ l ]
Dear Sirs
EURONAV NV – $963,743,455 Facility Agreement originally dated 31 August 2015 as amended and restated on [ l ] 2018 (the "Facility Agreement")
1
We refer to the Facility Agreement. This is a Compliance Certificate. Terms defined in the Facility Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
I, the Chief Financial Officer of the Ultimate Parent Guarantor, hereby certify that:
2
Attached to this Certificate [are][is] the latest [audited consolidated accounts of the Group and audited individual accounts of the Ultimate Parent Guarantor for the financial year ending on [ l ]] [unaudited consolidated balance sheet of the Group and the unaudited individual balance sheet of the Ultimate Parent Guarantor in relation to the [first] [second] six months of the financial year ending on [ l ]] (the " Accounts ").
3
Set out below are the respective amounts, in US Dollars, of the Cash, Consolidated Current Assets, Consolidated Current Liabilities, Free Liquid Assets, Stockholders' Equity, Total Assets and Total Indebtedness of the Group as at [ l ]:
 
US Dollars
Cash
[ l ]
Consolidated Current Assets
[ l ]
Consolidated Current Liabilities
[ l ]
Free Liquid Assets
[ l ]
Stockholders' Equity
[ l ]
Total Assets
[ l ]
Total Indebtedness
[ l ]
4
Accordingly, as at the date of this Certificate the financial covenants set out in clause 20 ( Financial Covenants ) of the Facility Agreement [are] [are not] complied with, in that as at [ l ]:
(a)
Consolidated Working Capital is US$[ l ];
(b)
Free Liquid Assets are US$[ l ];
(c)
Cash is US$[ l ]; and
(d)
the ratio of Stockholders' Equity to Total Assets is [ l ] per cent.;
[or, as the case may be, specify in what respect any of the financial covenants are not complied with.]
1
As at [ l ] no Event of Default has occurred and is continuing.
[or, specify/identify any Event of Default]
The Ultimate Parent Guarantor is in compliance with clause 25.1 ( Minimum required security cover ) of the Facility Agreement.
The Fair Market Value of the Ships which are subject to a Mortgage is as follows as at [ date ]:
Name of Ship
Name of first shipbroker
providing valuation
Name of second shipbroker
providing valuation
Average market value
[ l ]
[ l ]
[ l ]
[ l ]



…………………………………………
Chief Financial Officer
EURONAV NV
Note: Supporting Schedules to be attached.


Schedule 12     

DETAILS OF SHIPS

Ship
Hull Number
Owner Guarantor
Builder
Shipbuilding Contract
Ship Name
Approved Classification / Approved Flag
Scheduled Delivery Date
Maximum Contract Price (USD)
Ship A
S768
Gener8 Nautilus LLC  
(" Owner Guarantor A ")
HSHI
Shipbuilding Contract dated December 12, 2013 signed by Navig8 Crude Tankers Inc.
Gener8 Nautilus
KS / Liberia
Mar 15, 2016
$95,800,000
Ship B
S769
Gener8 Macedon LLC
(" Owner Guarantor B ")
HSHI
Shipbuilding Contract dated December 12, 2013 signed by Navig8 Crude Tankers Inc.
Gener8 Macedon
KS / Liberia
July 25, 2016
$95,800,000
Ship C
S770
Gener8 Noble LLC
(" Owner Guarantor C ")
HSHI
Shipbuilding Contract dated December 12, 2013 signed by Navig8 Crude Tankers Inc.
Gener8 Noble
KS / Liberia
Oct. 20, 2016
$95,800,000
Ship D
S771
Gener8 Ethos LLC
(" Owner Guarantor D ")
HSHI
Shipbuilding Contract dated December 12, 2013 signed by Navig8 Crude Tankers Inc.
Gener8 Ethos
KS / Liberia
Feb. 20, 2017
$95,800,000
Ship E
H2794
Gener8 Perseus LLC
(" Owner Guarantor E ")
HHIC
Shipbuilding Contract dated March 25, 2014 (Amendment No. 1 dated 24 March 2014) signed by Navig8 Crude Tankers Inc.
Gener8 Perseus
KS / Liberia
Sept. 9, 2016
$101,810,294

Ship F
H2795
Gener8 Theseus LLC
(" Owner Guarantor F ")
HHIC
Shipbuilding Contract dated March 25, 2014 (Amendment No. 1 dated 24 March 2014) signed by Navig8 Crude Tankers Inc.
Gener8 Theseus
KS / Liberia
Nov. 15, 2016
$101,810,294

Ship G
H0137
Gener8 Hector LLC
(" Owner Guarantor G ")
HHIC-PHIL
Shipbuilding Contract dated March 25, 2014 signed by Navig8 Crude Tankers Inc. or its nominees
Gener8 Hector
DNV / Liberia
July 29, 2016
$96,860,500
Ship H
H0138
Gener8 Nestor LLC
(" Owner Guarantor H ")
HHIC-
PHIL
Shipbuilding Contract dated March 25, 2014 signed by Navig8 Crude Tankers Inc. or its nominees
Gener8 Nestor
DNV / Liberia
Dec. 31, 2016
$96,860,500
Ship I
H5404
Gener8 Neptune LLC
(" Owner Guarantor I ")
DAEWOO
Shipbuilding Contract dated
December 13, 2013 (Amendment No.1 dated 10 March 2014) signed by STI Glasgow Shipping Company Limited
Gener8 Neptune
DNV / Marshall Islands
Sept. 11, 2015
$94,550,000
Ship J
H5405
Gener8 Athena LLC
(" Owner Guarantor J ")
DAEWOO
Shipbuilding Contract dated December 13, 2013 (Amendment No.1 dated 10 March 2014) signed by STI Edinburgh Shipping Company Limited
Gener8 Athena
DNV / Marshall Islands
Oct. 28, 2015
$94,550,000
Ship K
H5406
Gener8 Apollo LLC
(" Owner Guarantor K ")
DAEWOO
Shipbuilding Contract dated December 13, 2013 (Amendment No.1 dated 10 March 2014) signed by STI
Perth Shipping Company Limited
Gener8 Apollo
DNV / Marshall Islands
Jan. 5, 2015
$94,550,000
Ship L
H5407
Gener8 Ares LLC
(" Owner Guarantor L ")
DAEWOO
Shipbuilding Contract dated December 13, 2013 (Amendment No.1
dated 10 March 2014) signed by STI Dundee Shipping Company
Limited
Gener8 Ares
DNV / Marshall Islands
Jan. 15, 2016
$94,550,000
Ship M
H5408
Gener8 Hera LLC
(" Owner Guarantor M ")
DAEWOO
Shipbuilding Contract dated December 13, 2013 (Amendment No.1) signed by STI Newcastle Shipping Company Limited
Gener8 Hera
DNV / Marshall Islands
Feb. 12, 2016
$97,550,000
Ship N
HS777
Gener8 Constantine LLC
(" Owner Guarantor N ")
HSHI
Shipbuilding Contract dated December 20, 2013 signed by STI Cavaliere
Shipping Company Limited
Gener8 Constantine
ABS / Liberia
May 30, 2016
$94,975,000
Ship O
HS778
Gener8 Oceanus LLC
(" Owner Guarantor O ")
HSHI
Shipbuilding Contract dated December 20, 2013 signed by STI Esles Shipping Company Limited
Gener8 Oceanus
ABS / Liberia
Aug. 8, 2016
$94,975,000



Schedule 13     
[Intentionally left blank]
Schedule 14     

SUBSIDIARIES
Name of Subsidiary
Direct Owner(s)
Percent (%) Ownership
Jurisdiction of
Organization
GMR Zeus LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Atlas LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Hercules LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Ulysses LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Poseidon LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
Victory Ltd.
Gener8 Maritime Subsidiary II Inc.
100%
Bermuda
Vision Ltd.
Gener8 Maritime Subsidiary II Inc.
100%
Bermuda
GMR Spartiate LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Maniate LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR St Nikolas LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR George T LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Kara G LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of Liberia
GMR Harriet G LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of Liberia
GMR Orion LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Argus LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Spyridon LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Horn LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Phoenix LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Strength LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of Liberia
GMR Daphne LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
GMR Defiance LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of Liberia
GMR Elektra LLC
Gener8 Maritime Subsidiary II Inc.
100%
Republic of the Marshall Islands
Companion Ltd.
Gener8 Maritime Subsidiary II Inc.
100%
Bermuda
Compatriot Ltd.
Gener8 Maritime Subsidiary II Inc.
100%
Bermuda
Consul Ltd.
Gener8 Maritime Subsidiary II Inc.
100%
Bermuda
Gener8 Maritime Subsidiary III Ltd.
Gener8 Maritime, Inc.
100%
Bermuda
Gener8 Maritime Subsidiary NEW IV Inc.
Gener8 Maritime, Inc.
100%
Republic of the Marshall Islands
GMR Minotaur LLC
Gener8 Maritime Subsidiary NEW IV Inc.
100%
Republic of Liberia
GMR Agamemnon LLC
Gener8 Maritime Subsidiary NEW IV Inc.
100%
Republic of Liberia
GMR Hope LLC
Gener8 Maritime Subsidiary NEW IV Inc.
100%
Republic of the Marshall Islands
GMR Chartering LLC
Gener8 Maritime Subsidiary NEW IV Inc.
100%
New York
Gener8 Maritime Management LLC
Gener8 Maritime Subsidiary NEW IV Inc.
100%
Republic of the Marshall Islands
Gener8 Maritime Management (Portugal) LLC
Gener8 Maritime Management LLC
100%
Republic of the Marshall Islands
Unique Tankers LLC
Gener8 Maritime Management LLC
100%
Republic of the Marshall Islands
General Maritime Management (Portugal) Limitada
Gener8 Maritime Management (Portugal) LLC
100%
Portugal
Gener8 Maritime Crewing Pte. Limited
Gener8 Maritime Management (Portugal) LLC
100%
Singapore
General Maritime Crewing Pte. Limited (India Division Office; not a separate entity)
Gener8 Maritime Crewing Pte. Limited
100%
India
Gener8 Maritime Crewing Pte. Limited
Gener8 Maritime Crewing Pte. Limited
100%
Russia
Gener8 Maritime Subsidiary V Inc.
Gener8 Maritime, Inc.
100%
Republic of the Marshall Islands
Gener8 Maritime Subsidiary VIII Inc.
Gener8 Maritime Subsidiary V Inc.
100%
Republic of the Marshall Islands
Gener8 Neptune LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Athena LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Apollo LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Ares LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Hera LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Constantine LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Oceanus LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Nautilus LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Macedon LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Noble LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Ethos LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Perseus LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Theseus LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Hector LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Nestor LLC
Gener8 Maritime Subsidiary VIII Inc.
100%
Republic of the Marshall Islands
Gener8 Maritime Subsidiary VII Inc.
Gener8 Maritime, Inc.
100%
Republic of the Marshall Islands
Gener8 Strength LLC
Gener8 Maritime Subsidiary VII Inc.
100%
Republic of the Marshall Islands
Gener8 Supreme LLC
Gener8 Maritime Subsidiary VII Inc.
100%
Republic of the Marshall Islands
Gener8 Andriotis LLC
Gener8 Maritime Subsidiary VII Inc.
100%
Republic of the Marshall Islands
Gener8 Miltiades LLC
Gener8 Maritime Subsidiary VII Inc.
100%
Republic of the Marshall Islands
Gener8 Success LLC
Gener8 Maritime Subsidiary VII Inc.
100%
Republic of the Marshall Islands
Gener8 Chiotis LLC
Gener8 Maritime Subsidiary VII Inc.
100%
Republic of the Marshall Islands
Gener8 Maritime Subsidiary VI Inc.
Gener8 Maritime, Inc.
100%
Republic of the Marshall Islands
Concord Ltd.
Gener8 Maritime Subsidiary VI Inc.
100%
Bermuda
Contest Ltd.
Gener8 Maritime Subsidiary VI Inc.
100%
Bermuda
Concept Ltd.
Gener8 Maritime Subsidiary VI Inc.
100%
Bermuda
Gener8 Maritime Subsidiary Inc.
Gener8 Maritime, Inc.
100%
Republic of the Marshall Islands
Gener8 Strength Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Supreme Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Andriotis Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Miltiades Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Success Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Chiotis Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Tankers 1 Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Tankers 2 Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Tankers 3 Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Tankers 4 Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Tankers 5 Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Tankers 6 Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Tankers 7 Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
Gener8 Tankers 8 Inc.
Gener8 Maritime Subsidiary Inc.
100%
Republic of the Marshall Islands
STI Cavaliere Shipping Company Limited
Gener8 Maritime Subsidiary V Inc.
100%
Republic of the Marshall Islands
STI Dundee Shipping Company Limited
Gener8 Maritime Subsidiary V Inc.
100%
Republic of the Marshall Islands
STI Edinburgh Shipping Company Limited
Gener8 Maritime Subsidiary V Inc.
100%
Republic of the Marshall Islands
STI Esles Shipping Company Limited
Gener8 Maritime Subsidiary V Inc.
100%
Republic of the Marshall Islands
STI Glasgow Shipping Company Limited
Gener8 Maritime Subsidiary V Inc.
100%
Republic of the Marshall Islands
STI Newcastle Shipping Company Limited
Gener8 Maritime Subsidiary V Inc.
100%
Republic of the Marshall Islands
STI Perth Shipping Company Limited
Gener8 Maritime Subsidiary V Inc.
100%
Republic of the Marshall Islands

Schedule 15     

FINANCIAL INDEBTEDNESS
1
Approximately $1,379,294,532 remaining instalment payments as of August 27, 2015 due under the shipbuilding contracts for 21 VLCCs.
2
Letter of Credit of $658,344 within Article 42 of the Agreement of Lease, dated as of November 30, 2012, by and among Fisher-Park Lane Owner LLC, as Landlord, and General Maritime Corporation, as Tenant.
3
Letter of credit of $1,385,378 dated as of June 30, 2015.
[WFW: Euronav to update.]
Schedule 16     

[Intentionally deleted]

Schedule 17     

EXISTING TRANSACTIONS
NONE.
Schedule 18     

NON-CASH CHARGES
1
noncash interest expense and amortization of debt discount and commissions and other fees and charges, amortization or write off of deferred financing fees, debt issuance costs, commissions, fees and expenses and to the extent not reflected in consolidated interest, any losses on any interest rate hedging agreements (including, without limitation, any Hedging Agreements) and Other Hedging Agreements, associated with Indebtedness for such period (whether amortized or immediately expensed) less any gains on any interest rate hedging agreements (including, without limitation, any Hedging Agreements) and Other Hedging Agreements;
2
all amounts attributable to impairment charges on intangible assets, including, without limitation, amortization of intangible assets (including goodwill) for such period;
3
any non-cash management retention or incentive program payments for such period, including any accelerated charges relating to option plans;
4
non-cash restricted stock compensation, including, without limitation, any restricted stock units; and
5
losses on minority interests owned by any person, all losses from investments recorded using the equity method and the noncash impact of accounting changes or restatements less any gains on such minority interests or investments for such period.
Schedule 19     

TIMETABLES
Delivery of a duly completed Utilization Request (Clause 5.1 ( Delivery of a Utilization Request ))
For the first Utilization, three (3) Business Days before the intended Utilization Date (Clause 5.1 ( Delivery of a Utilization Request )), and in all other cases, five (5) Business Days before the intended Utilization Date (Clause 5.1 ( Delivery of a Utilization Request )) or the expiry of the preceding Interest Period (Clause 9.1 ( Interest Periods ))
Facility Agent notifies the Lenders of the Advance in accordance with Clause 5.4 ( Lenders' participation )
For the first Utilization, two (2) Business Days before the intended Utilization Date, and in all other cases, four (4) Business Days before the intended Utilization Date.
LIBOR is fixed
Quotation Day as of 11:00 am New York time
Schedule 20     

FORM OF MT 199
Swift message to accompany MT103 payment for US$ [●] sent under swift reference number [●].
TO THE ATTENTION OF [Bank Name] ([Swift Address]), ADDRESS: [Street Address], ATTENTION: [Name, Telephone, Email]
Re: The Shipbuilding Contract dated [●] (as AMENDED, NOVATED and/or supplemented from time to time, the "Shipbuilding Contract") made between [Original Buyer Name] WITH ADDRESS AT [●] (THE "ORIGINAL BUYER") AND [Shipyard Name] WITH ADDRESS AT [●] (the "Builder") TO BE NOVATED TO [New Buyer Name] AS NEW BUYER (THE "BUYER") FOR THE CONSTRUCTION OF [Shipyard Name] HULL [●] TO BE NAMED [●] (THE "VESSEL").
We confirm having irrevocably remitted to you for value [DATE] an amount of US$ [●] (United States Dollars [●] only) being PART OF the delivery instalment in respect of the purchase of the Vessel by the Buyer from the Builder pursuant to the Shipbuilding Contract.
This amount is to be held to the sole order of [NORDEA BANK AB (PUBL), NEW YORK BRANCH] under reference – [Shipyard Name] HULL [Hull Number] (to be named [Vessel Name]) delivery instalment.
You are hereby instructed to hold these funds and release them to the Builder only upon presentation to you by the Builder of a fax copy of the protocol of delivery and acceptance for the Vessel duly signed by the authorised representatives of the Builder and the Buyer and countersigned by any one of the following:
[Name, Nationality, Passport Number]
[Name, Nationality, Passport Number]
[Name, Nationality, Passport Number]
EACH OF [Law firm's name], ACTING SINGLY ON BEHALF OF [NORDEA BANK AB (PUBL), NEW YORK BRANCH].
These monies, when released, may only be used for payment to the account of the Builder with [Builder Bank Name, Address] in or towards satisfaction of the balance of the purchase price for the Vessel, payment instructions:
1.    BANK: [●]
2.    ACCOUNT NO.: [●]
3.    CORRESPONDENT BANK: [●]
4.    BENEFICIARY: [●]
5.    reference: [●]
In the event that all or any part of the amount so remitted has not been released in accordance with the foregoing instructions by close of business on [date, to be not later than 5 business days after the scheduled delivery date], then all of the money held by you must be immediately returned by remitting the same to [NORDEA BANK AB (PUBL), NEW YORK BRANCH (swift code NDEAUS3NXXX)], for THE account of [Borrower] Account number [●] under reference: attn CREDIT ADMINISTRATION DEPARTMENT RE: [Borrower Name] – return of purchase price of the vessel [●].
If you have any questions please contact [●] telephone no. [●] AT [NORDEA BANK AB (PUBL), NEW YORK BRANCH.]


EUROPE/61614181v9


Exhibit 4.11
SUPPLEMENTAL LETTER
(Change of flag for MT SONIA from Belgian flag to French flag)
To:
Euronav NV
20 De Gerlachekaai
2000 Antwerp
Belgium

Euronav Shipping NV
20 De Gerlachekaai
2000 Antwerp
Belgium

Euronav Tankers NV
20 De Gerlachekaai
2000 Antwerp
Belgium

as Borrowers
19 January 2018
Dear Sirs
Loan Facility of US$409,500,000 to Euronav NV, Euronav Tankers NV and Euronav Shipping NV
We refer to the loan agreement dated 16 December 2016 (as amended, the " Loan Agreement ") made between (i) Euronav NV, Euronav Tankers NV and Euronav Shipping NV as joint and several borrowers, (ii) the banks and financial institutions listed in Schedule 1 to the Loan Agreement as Lenders, (iii) the Swap Banks (as defined therein), (iv) the Lead Arrangers (as defined therein), (v) the Co-arrangers (as defined therein), (vi) the Bookrunners (as defined therein), (vii) Nordea Bank AB (publ), filial i Norge as agent and (viii) Nordea Bank AB (publ), filial i Norge as security trustee (the " Security Trustee ").
Word and expressions defined in the Loan Agreement shall have the same meanings when used herein
1
Euronav NV has advised the Agent that it intends to reflag the vessel m.t. “SONIA” with IMO Number 9537771 (the “ Vessel ”) currently registered under Belgian flag with the French Ships Registry on or around 19 January 2018 and register a new first priority French mortgage over the Vessel immediately thereafter (the “ New Mortgage ”).
2
In accordance with clause 14.2 ( Ship’s name and registration ) of the Loan Agreement Euronav NV is permitted to change the registry of a Ship owned by it to any Approved Flag without the consent of the Lenders subject to Euronav NV providing the Creditor Parties with replacement security at the time of such transfer (in form and substance satisfactory to the Agent) so that the Creditor Parties have the same security on that Ship and subject to any appropriate consequential amendments to the Finance Documents.
3
With effect from the date of the reflagging of the Vessel the Finance Documents shall be, and shall be deemed by this Agreement to have been, amended as follows:




(a)
by amending the definition of “Mortgage” in clause 1.1 of the Loan Agreement and references thereto throughout the Loan Agreement and other relevant Finance Documents to refer to the New Mortgage in the case of the Vessel; and
(b)
by amending all references to “SONIA” in the Loan Agreement and other relevant Finance Documents to mean the VLCC named “SONIA” and registered in the ownership of Euronav NV under the laws and flag of France with IMO Number 9537771.
4
The Agent shall receive in all respects in form and substance satisfactory to the Agent and its lawyers favourable legal opinions in relation to the New Mortgage from lawyers appointed by the Agent on such matters concerning the laws of Belgium and France as the Agent may require.
5
All other terms and conditions of the Loan Agreement and the other Finance Documents are to remain in full force and effect.
6
This letter may be executed in any number of counterparts.
7
This letter and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English Law. The provisions of clause 38.2 (Exclusive English jurisdiction) to 38.6 (Meaning of "proceedings") (inclusive) of the Loan Agreement shall be incorporated into this letter as if set out in full herein with references to this Agreement construed as references to this letter.
Please confirm your agreement to this letter by signing below.
/s/ James Bull /s/ Kamilla Nordby
____________________________
for and on behalf of
NORDEA BANK AB (PUBL), FILIAL I NORGE
as Agent for the Lenders

We hereby acknowledge receipt of the above letter and confirm our agreement to the terms hereof and confirm that the Finance Documents to which we are a party shall remain in full force and effect and shall continue to stand as security for our obligations under the Loan Agreement.
/s/ Egied Verbeeck                /s/ Alex Staring
______________________________
for and on behalf of
EURONAV NV
as a Borrower

19 January 2018
/s/ Egied Verbeeck                /s/ Alex Staring
______________________________
for and on behalf of
EURONAV SHIPPING NV
as a Borrower

19 January 2018

2     60725311v6


/s/ Egied Verbeeck                /s/ Alex Staring
______________________________
for and on behalf of
EURONAV TANKERS NV
as a Borrower

19 January 2018

3     60725311v6

Exhibit 4.13
SUPPLEMENTAL LETTER No 2
(Change of flag for m.t. NECTAR and m.t. "NAUTIC" (tbr "NAUTICA") from Marshall Islands flag to Liberian flag)
To:
Euronav NV
20 De Gerlachekaai
2000 Antwerp
Belgium

Euronav Shipping NV
20 De Gerlachekaai
2000 Antwerp
Belgium

Euronav Tankers NV
20 De Gerlachekaai
2000 Antwerp
Belgium

as Borrowers
12 November 2018
Dear Sirs
Loan Facility of US$409,500,000 to Euronav NV, Euronav Tankers NV and Euronav Shipping NV
We refer to the loan agreement dated 16 December 2016 (as amended by a supplemental letter dated 19 January 2018, the " Loan Agreement ") made between (i) Euronav NV, Euronav Tankers NV and Euronav Shipping NV as joint and several borrowers, (ii) the banks and financial institutions listed in Schedule 1 to the Loan Agreement as Lenders, (iii) the Swap Banks (as defined therein), (iv) the Lead Arrangers (as defined therein), (v) the Co-arrangers (as defined therein), (vi) the Bookrunners (as defined therein), (vii) Nordea Bank Abp, filial i Norge (previously known as Nordea Bank AB (publ), filial i Norge as agent and (viii) Nordea Bank Abp, filial i Norge (previously known as Nordea Bank AB (publ), filial i Norge) as security trustee (the " Security Trustee ").
Word and expressions defined in the Loan Agreement shall have the same meanings when used herein. In addition, in this letter:
" Nectar Mortgage " means the first preferred Liberian mortgage on the "NECTAR" to be executed by Borrower A in favour of the Security Trustee in the Agreed Form; and
" Nautica Mortgage " means the first preferred Liberian mortgage on the "NAUTICA" to be executed by the Borrower B in favour of the Security Trustee in the Agreed form.
1
The Borrowers have advised the Agent that:
(i)
Borrower A intends to transfer the m.t. "NECTAR" from Marshall Islands flag to Liberian flag; and



(ii)
Borrower B intends to transfer the m.t. "NAUTIC" from Marshall Islands flag to Liberian flag and rename this vessel "NAUTICA" ("NAUTICA").
2
In accordance with clause 14.2 ( Ship's name and registration ) of the Loan Agreement the Borrowers are permitted to change the registry of a Ship owned by it to any Approved Flag without the consent of the Lenders subject to the Borrowers providing the Creditor Parties with replacement security at the time of such transfer (in form and substance satisfactory to the Agent) so that the Creditor Parties have the same security on that Ship and subject to any appropriate consequential amendments to the Finance Documents.
3
Borrower C is hereby released from its obligations as a Borrower under the Loan Agreement and the other Finance Documents and all references to the Borrowers in the Loan Agreement and the other Finance Documents shall be construed as references to Borrower A and Borrower B.
4
With effect from the date of the reflagging of each of the NECTAR and NAUTICA the Finance Documents shall be, and shall be deemed by this Agreement to have been amended as follows:
(a)
by amending the definition of "Mortgage" in clause 1.1 of the Loan Agreement and references thereto throughout the Loan Agreement and other relevant Finance Documents to refer to the Nectar Mortgage and the Nautica Mortgage;
(b)
by amending all references to "NECTAR" in the Loan Agreement and other relevant Finance Documents to mean the VLCC named "NECTAR" and registered in the ownership of Euronav NV under the laws and flag of Liberia with IMO Number 9323936; and
(c)
by amending all references to "NAUTIC" in the Loan Agreement and other relevant Finance Documents to mean the VLCC named "NAUTICA" and registered in the ownership of Euronav Tankers NV under the laws and flag of Liberia with IMO number 9323948.
5
The Agent shall receive in all respects in form and substance satisfactory to the Agent and its lawyers:

2     EUROPE/62908320v3

(a)
for each of the Borrowers, documents of the kind referred to in paragraphs 2, 3 and 4 of Part A to Schedule 4 of the Loan Agreement (or, if applicable, in the case of the constitutional documents for the Borrowers, confirmation that these have not been amended since the date of which copies of such documents were last provided to the Agent);
(b)
favourable legal opinions in relation to the Nectar Mortgage and the Nautica Mortgage from lawyers appointed by the Agent on such matters concerning the laws of Belgium and Liberia as the Agent may require; and
(c)
documentary evidence that:
(i)
the NECTAR is definitively and permanently registered in the name of Borrower A on Liberian flag;
(ii)
the NAUTICA is definitively and permanently registered in the name of Borrower B on Liberian flag;
(iii)
the Nectar Mortgage has been duly registered against the NECTAR and is a valid first preferred ship mortgage in accordance with the laws of the Republic of Liberia; and
(iv)
the Nautica Mortgage has been duly registered against the NAUTICA and is a valid first preferred ship mortgage in accordance with the laws of the Republic of Liberia.
6
All other terms and conditions of the Loan Agreement and the other Finance Documents are to remain in full force and effect.
7
This letter may be executed in any number of counterparts.
8
This letter and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English Law. The provisions of clause 38.2 (Exclusive English jurisdiction) to 38.6 (Meaning of "proceedings") (inclusive) of the Loan Agreement shall be incorporated into this letter as if set out in full herein with references to this Agreement construed as references to this letter.
Please confirm your agreement to this letter by signing below.
/s/ Frederick van Hasselt
Attorney-in-Fact
____________________________
for and on behalf of
NORDEA BANK ABP, FILIAL I NORGE (formerly known as NORDEA BANK AB (PUBL), FILIAL I NORGE)
as Agent for the Lenders
We hereby acknowledge receipt of the above letter and confirm our agreement to the terms hereof and confirm that the Finance Documents to which we are a party shall remain in full force and effect and shall continue to stand as security for our obligations under the Loan Agreement.
/s/ Tamara Ristic
Attorney-in-Fact
___________________________
for and on behalf of
EURONAV NV
as a Borrower

3     EUROPE/62908320v3


12 November 2018
/s/ Tamara Ristic
Attorney-in-Fact

______________________________
for and on behalf of
EURONAV SHIPPING NV
as a Borrower

12 November 2018

/s/ Tamara Ristic
Attorney-in-Fact
______________________________
for and on behalf of
EURONAV TANKERS NV
as a Borrower

12 November 2018

4     EUROPE/62908320v3


Exhibit 4.14
SIDE LETTER TO SUPPLEMENTAL LETTER No 2
(Change of ownership for m.t. "NAUTICA" from Euronav Tankers NV to Euronav NV)
To:
Euronav NV
20 De Gerlachekaai
2000 Antwerp
Belgium

Euronav Tankers NV
20 De Gerlachekaai
2000 Antwerp
Belgium

as Borrowers
4 January 2019
Dear Sirs
Loan Facility of US$409,500,000 to Euronav NV and Euronav Tankers NV
We refer to the loan agreement dated 16 December 2016 (as amended by a supplemental letter dated 19 January 2018 and a supplemental letter no 2 dated 12 November 2018, the " Loan Agreement ") made between (i) Euronav NV and Euronav Tankers NV as joint and several borrowers, (ii) the banks and financial institutions listed in Schedule 1 to the Loan Agreement as Lenders, (iii) the Swap Banks (as defined therein), (iv) the Lead Arrangers (as defined therein), (v) the Co-arrangers (as defined therein), (vi) the Bookrunners (as defined therein), (vii) Nordea Bank Abp, filial i Norge (previously known as Nordea Bank AB (publ), filial i Norge as agent and (viii) Nordea Bank Abp, filial i Norge (previously known as Nordea Bank AB (publ), filial i Norge) as security trustee (the " Security Trustee ").
Word and expressions defined in the Loan Agreement shall have the same meanings when used herein.
1
The Borrowers and the Agent, on behalf of the Creditor Parties, agree that all references in the Supplemental Letter no 2 dated 12 November 2018 (“ Supplemental Letter No 2 ”)to Borrower B owning the vessel "NAUTICA" shall be construed as references to Borrower A owning that vessel.
2
The Borrowers have advised that the “NAUTIC” (tbr “NAUTICA” will be transferred from Marshall Islands flag to Liberian flag and will be registered in the ownership of Borrower A rather than in the ownership of Borrower B as stated in the Supplemental Letter No 2.
3
All other terms and conditions of the Loan Agreement and the other Finance Documents are to remain in full force and effect.
4
This letter may be executed in any number of counterparts.
5
This letter and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English Law. The provisions of clause 38.2 (Exclusive English jurisdiction) to 38.6 (Meaning of "proceedings") (inclusive) of the Loan


EUROPE/63373447v2


Agreement shall be incorporated into this letter as if set out in full herein with references to this Agreement construed as references to this letter.

Please confirm your agreement to this letter by signing below.
/s/ Tamara Ristic
Attorney-in-Fact

____________________________
for and on behalf of
NORDEA BANK ABP, FILIAL I NORGE (formerly known as NORDEA BANK AB (PUBL), FILIAL I NORGE)
as Agent for the Lenders

We hereby acknowledge receipt of the above letter and confirm our agreement to the terms hereof and confirm that the Finance Documents to which we are a party shall remain in full force and effect and shall continue to stand as security for our obligations under the Loan Agreement.
/s/ Cole Tennant-Fry
Attorney-in-Fact
______________________________
for and on behalf of
EURONAV NV
as a Borrower

4 January 2019

/s/ Cole Tennant-Fry
Attorney-in-Fact
______________________________
for and on behalf of
EURONAV TANKERS NV
as a Borrower

4 January 2019


2     EUROPE/63373447v2


Exhibit 4.15
SUPPLEMENTAL LETTER No 3
(Change of Ownership for m.t. "SARA" from Euronav Tankers NV to Euronav NV)
To:
Euronav NV
20 De Gerlachekaai
2000 Antwerp
Belgium


Euronav Tankers NV
20 De Gerlachekaai
2000 Antwerp
Belgium

as Borrowers
7 February 2019
Dear Sirs
Loan Facility of US$409,500,000 to Euronav NV and Euronav Tankers NV
We refer to the loan agreement dated 16 December 2016 (as amended by a supplemental letter dated 19 January 2018 and further amended by a supplemental letter no.2 dated 12 November 2018 (as amended by a side letter dated 4 January 2019), together the " Loan Agreement ") made between (i) Euronav NV and Euronav Tankers NV as joint and several borrowers, (ii) the banks and financial institutions listed in Schedule 1 to the Loan Agreement as Lenders, (iii) the Swap Banks (as defined therein), (iv) the Lead Arrangers (as defined therein), (v) the Co-arrangers (as defined therein), (vi) the Bookrunners (as defined therein), (vii) Nordea Bank Abp, filial i Norge (previously known as Nordea Bank AB (publ), filial i Norge) as agent and (viii) Nordea Bank Abp, filial i Norge (previously known as Nordea Bank AB (publ), filial i Norge) as security trustee (the " Security Trustee ").
Word and expressions defined in the Loan Agreement shall have the same meanings when used herein. In addition, in this letter:
" Sara General Assignment " means the general assignment on the "SARA" to be executed by Borrower A in favour of the Security Trustee in the Agreed Form.
" Sara Manager’s Undertaking " means the manager undertaking for the "SARA" to be executed by an Approved Manager in the Agreed Form.
" Sara Mortgage " means the first preferred French mortgage on the "SARA" to be executed by Borrower A in favour of the Security Trustee in the Agreed Form.
1
The Borrowers have advised the Agent that the vessel "SARA" (" SARA ") will be transferred from Borrower B to Borrower A and remain registered on French flag in the ownership of Borrower A.


EUROPE/63616390v4


2
In accordance with clause 14.15 ( Transfer of Ships ) of the Loan Agreement, a Borrower is permitted to transfer the ownership of a Ship owned by it to any other Borrower without the consent of the Lenders subject to the Borrowers providing the Creditor Parties with certain documents at the time of such transfer (in form and substance satisfactory to the Agent) so that the Creditor Parties have the same security on that Ship and subject to any appropriate consequential amendments to the Loan Agreement and the other Finance Documents.
3
With effect from the date of the transfer of ownership of SARA from Borrower B to Borrower A the Finance Documents shall be, and shall be deemed by this Agreement to have been amended as follows:
(a)
by amending the definition of "General Assignment" in relation to SARA in clause 1.1 of the Loan Agreement, and references thereto throughout the Loan Agreement and other relevant Finance Documents, to refer to the Sara General Assignment;
(b)
by amending the definition of "Manager’s Undertaking" in relation to SARA in clause 1.1 of the Loan Agreement, and references thereto throughout the Loan Agreement and other relevant Finance Documents, to refer to the Sara Manager’s Undertaking;
(c)
by amending the definition of "Mortgage" in relation to SARA in clause 1.1 of the Loan Agreement, and references thereto throughout the Loan Agreement and other relevant Finance Documents, to refer to the Sara Mortgage; and
(d)
by amending all references to "SARA" in the Loan Agreement and other relevant Finance Documents to mean the VLCC named "SARA" and registered in the ownership of Euronav NV under the laws and flag of France with IMO Number 9537745.
4
The Agent shall receive in all respects in form and substance satisfactory to the Agent and its lawyers:
(a)
for each of the Borrowers, documents of the kind referred to in paragraphs 2, 3 and 4 of Part A to Schedule 4 of the Loan Agreement (or, if applicable, in the case of the constitutional documents for the Borrowers, confirmation that these have not been amended since the date of which copies of such documents were last provided to the Agent);
(b)
documentary evidence that:
(i)
the SARA is definitively and permanently registered in the name of Borrower A on French flag;
(ii)
the SARA is in the absolute and unencumbered ownership of Borrower A as new owner save as contemplated by the Finance Documents;
(iii)
the Sara Mortgage has been duly registered against the SARA as valid first preferred ship mortgage in accordance with the laws of France; and
(iv)
notwithstanding the transfer of ownership of the SARA to Borrower A as new owner, it is insured in accordance with the provisions of the Loan Agreement and all requirements therein in respect of insurances have been complied with;
(c)
an executed original of the Sara General Assignment;
(d)
documents establishing that the SARA will, as from the date of the transfer to Borrower A, be managed by an Approved Manager on terms acceptable to the Lenders, together with:

2     EUROPE/63616390v4


(i)
the Sara Manager’s Undertaking; and
(ii)
copies of the relevant Approved Manager’s Document of Compliance and of that Ship’s Safety Management Certificate (together with any other details of the applicable safety management system which the Agent requires) and ISSC;
(e)
favourable legal opinions in relation to the Sara Mortgage and Sara General Assignment from lawyers appointed by the Agent on such matters concerning the laws of Belgium and France as the Agent may require; and
(f)
a favourable opinion from an independent insurance consultant acceptable to the Agent on such matters relating to the insurances for the SARA as the Agent may require or confirmation acceptable to the Agent from the insurance brokers that the insurances remain unaltered save for the change of ownership for the SARA.
5
All other terms and conditions of the Loan Agreement and the other Finance Documents are to remain in full force and effect.
6
This letter may be executed in any number of counterparts.
7
This letter and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English Law. The provisions of clause 38.2 (Exclusive English jurisdiction) to 38.6 (Meaning of "proceedings") (inclusive) of the Loan Agreement shall be incorporated into this letter as if set out in full herein with references to this Agreement construed as references to this letter.
Please confirm your agreement to this letter by signing below.
/s/ Jamie Tiru
Attorney-in-Fact
__________________________________
for and on behalf of
NORDEA BANK ABP, FILIAL I NORGE (formerly known as NORDEA BANK AB (PUBL), FILIAL I NORGE)
as Agent for the Lenders
We hereby acknowledge receipt of the above letter and confirm our agreement to the terms hereof and confirm that the Finance Documents to which we are a party shall remain in full force and effect and shall continue to stand as security for our obligations under the Loan Agreement.
/s/ Kieran Ferguson
Attorney-in-Fact
_________________________________
for and on behalf of
EURONAV NV
as a Borrower
7 February 2019
/s/ Kieran Ferguson
Attorney-in-Fact
_________________________________

for and on behalf of

3     EUROPE/63616390v4


EURONAV TANKERS NV
as a Borrower
7 February 2019

4     EUROPE/63616390v4
Execution Version

Exhibit 4.16
SUPPLEMENTAL LETTER
relating to the entry into Master Agreements
To:
EURONAV NV
de Gerlachekaai 20
B-2000 Antwerp
Belgium
as Borrower
Date: 7 August 2018
Dear Sirs
Loan Agreement dated 22 March 2018 (the "Loan Agreement") and made between (i) Euronav NV as borrower (the "Borrower"), (ii) Crédit Agricole Corporate and Investment Bank, Sea Bridge Finance Limited and BNP Paribas Fortis SA/NV listed in Part A of Schedule 1 of the Loan Agreement as commercial lenders (the "Commercial Lenders"), (iii) The Export Import Bank of Korea listed in Part B of Schedule 1 of the Loan Agreement as ECA lender (the "ECA Lender" and together with the Commercial Lenders the "Lenders"), (iv) BNP Paribas Fortis SA/NV ("Swap Bank A") and Crédit Agricole Corporate and Investment Bank listed in Part C of Schedule 1 of the Loan Agreement as swap banks, (v) Crédit Agricole Corporate and Investment Bank and BNP Paribas Fortis SA/NV as mandated lead arrangers, (vi) Crédit Agricole Corporate and Investment Bank as agent and (vii) Crédit Agricole Corporate and Investment Bank as security trustee in relation to a facility of up to US$173,550,300
1
DEFINITIONS
1.1
We refer to the Loan Agreement. Words and expressions defined in the Loan Agreement shall have the same meanings when used herein.
1.2
In this letter, unless the contrary intention appears:
" Coordination Deed " means the deed entered or to be entered into between the Borrower, the Agent and Swap Bank A regulating the rights of enforcement of Swap Bank A under the Second Mortgages in Agreed Form.
" Effective Date " means the date on which the conditions in paragraph 3.1 are satisfied.
" Second Mortgages " means, in respect of each of Ship A and Ship B, a second preferred Greek ship mortgage on that Ship executed by the Borrower in favour of Swap Bank A, each such mortgage to be in the Agreed Form.
2
BORROWER'S REQUEST
2.1
The Borrower has requested the consent of the Lenders to:
(a)
the entry by the Borrower into a Master Agreement with Swap Bank A; and
(b)
the execution by the Borrower of second preferred Greek ship mortgages in respect of Ship A and Ship B as security for the obligations of the Borrower in respect of the Master Agreement referred to in paragraph (a).


EUROPE/62480427v6


3
CONSENT AND CONDITIONS PRECEDENT
3.1
The Agent and the Lenders confirm the agreement of the Lenders to the Borrower's request in paragraph 2.1 subject to the receipt by the Agent of the following in form and substance satisfactory to the Agent no later than 17 August 2018 or such later date which the Agent may agree with the Borrower:
(a)
for the Borrower, documents of the kind specified in Schedule 3, Part A paragraphs 2, 3, 4 and 5 of the Loan Agreement as amended and supplemented by this letter and updated with appropriate modifications to refer to this letter, the Second Mortgages and the Coordination Deed (or, if applicable, in the case of the said paragraph 2, confirmation that its constitutional documents have not been amended since the date copies were last provided to the Agent pursuant to the Loan Agreement);
(b)
an duly executed original of this letter;
(c)
duly executed copies of the Master Agreement entered into between Swap Bank A and the Borrower and all amendments to it;
(d)
a duly executed original of the Master Agreement Assignment in relation to the Master Agreement, each Second Mortgage and the Coordination Deed (and of each document required to be delivered by their respective terms);
(e)
documentary evidence that each Second Mortgage has been duly registered against the relevant Ship as valid second preferred mortgage in accordance with the laws of Greece;
(f)
if the Agent so requires, in respect of any of the documents referred to above, a certified English translation prepared by a translator approved by the Agent;
(g)
favourable legal opinions from lawyers appointed by the Agent on such matters concerning the laws of England, Greece and Belgium as the Agent may require;
(h)
any further opinions, consents, agreements and documents in connection with this letter and the Finance Documents which the Agent may reasonably request by notice to the Borrower; and
(i)
evidence that the process agent referred to in clause 37.4 ( Process Agent ) of the Loan Agreement has accepted its appointment in respect of this letter and the Coordination Deed.
4
AMENDMENTS TO FINANCE DOCUMENTS
4.1
With effect from the Effective Date, the Loan Agreement and other Finance Documents shall be amended as follows:
(a)
by deleting the definitions of " Finance Documents ", " Mortgage " and " Security Party " in clause 1.1 ( definitions ) of the Loan Agreement and by replacing it with the following new definitions:
"" Finance Documents " means:
(a)
this Agreement;
(b)
any Fee Letter;
(c)
each Drawdown Notice;

2     EUROPE/62480427v6


(d)
the Mortgages;
(e)
the Deeds of Covenant (if any);
(f)
the General Assignments;
(g)
the Charter Assignments;
(h)
the Master Agreement Assignment;
(i)
the Account Charge;
(j)
the Coordination Deed;
(k)
any Manager's Undertaking executed by a wholly owned subsidiary of the Borrower;
(l)
any other document (whether creating a Security Interest or not, other than a Manager’s Undertaking not falling under paragraph (k)) which is executed at any time by the Borrower or any other person as security for, or to establish any form of subordination or priorities arrangement in relation to, any amount payable to the Lenders and/or the Swap Banks under this Agreement or any of the other documents referred to in this definition; or
(m)
any other document designated as such by the Agent and the Borrower."
"" Mortgage " means a First Mortgage or a Second Mortgage."
"" Security Party " means any person other than the Borrower (except a Creditor Party) who, as a surety or mortgagor, as a party to any subordination or priorities arrangement, or in any similar capacity, executes a document falling within paragraph (l) of the definition of "Finance Documents"."
(b)
by inserting the following new definitions of " Coordination Deed ", " First Mortgage " and " Second Mortgage " in clause 1.1 ( definitions ) of the Loan Agreement:
"" Coordination Deed " means the deed entered or to be entered into between the Borrower, the Agent and BNP Paribas Fortis SA/NV as a Swap Bank regulating the rights of enforcement of BNP Paribas Fortis SA/NV as a Swap Bank under the Second Mortgages in Agreed Form."
"" First Mortgage " means, in relation to each Ship, a first priority or preferred (as the case may be) mortgage on that Ship in the form appropriate to the relevant Approved Flag in each case executed by the Borrower in favour of the Security Trustee (and/or such other Creditor Parties as may be appropriate in the opinion of the Agent and in the context of the relevant Approved Flag), each such mortgage to be in the Agreed Form and, where the relevant Approved Flag is Belgian or French flag, the amount secured by such mortgage shall be limited to 125 per cent. of the Fair Market Value of the relevant Ship as at the date of the relevant mortgage."
" Second Mortgage " means, in respect of Ship A or Ship B, a second preferred Greek ship mortgage on that Ship executed by the Borrower in favour of the Security Trustee and BNP Paribas Fortis SA/NV as a Swap Bank, each such mortgage to be in the Agreed Form.
(c)
By construing all references in the Loan Agreement to " this Agreement " and all references in the other Finance Documents to " the Loan Agreement " as references to the Loan Agreement as amended and supplemented by this letter.

3     EUROPE/62480427v6


5
MISCELLANEOUS
5.1
All other terms and conditions of the Loan Agreement and the other Finance Documents are to remain in full force and effect.
5.2
This letter may be executed in any number of counterparts.
5.3
A person who is not a party to this letter has no rights under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this letter.
6
LAW AND JURISDICTION
6.1
This letter and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English Law. The provisions of clause 37.2 to 37.6 (inclusive) of the Loan Agreement shall be incorporated into this letter as if set out in full herein with references to this Agreement construed as references to this letter and references to the Borrower construed so as to include the Guarantor.
Please confirm your agreement to this letter by signing below.
/s/ Laura Caines
Attorney-in-Fact
                                                                     
for and on behalf of
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
as Agent
/s/ Laura Caines
Attorney-in-Fact
                                                                     
for and on behalf of
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
as Security Trustee
/s/ Laura Caines
Attorney-in-Fact
                                                                     
for and on behalf of
BNP PARIBAS FORTIS SA/NV
as Lender
/s/ Laura Caines
Attorney-in-Fact
                                                                     
for and on behalf of
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
as Lender
/s/ Laura Caines
Attorney-in-Fact
                                                                     
for and on behalf of
SEA BRIDGE FINANCE LIMITED
as Lender
/s/ Laura Caines
Attorney-in-Fact
                                                                     
for and on behalf of
THE EXPORT-IMPORT BANK OF KOREA
as Lender


4     EUROPE/62480427v6



We hereby acknowledge receipt of the above letter and confirm our agreement to the terms thereof and confirm that the Finance Documents to which we are a party (and as amended in accordance with the terms of this letter) shall remain in full force and effect (as amended by this letter) and shall continue to stand as security for our obligations under the Loan Agreement and the other Finance Documents to which we are a party and the Master Agreement.
/s/ Amalia Adamidou
                                                                      
for and on behalf of  
EURONAV NV  
as Borrower
___________ 2018


5     EUROPE/62480427v6
Execution Version

Exhibit 4.18
Dated 9 August 2018

EURONAV NV
as Owner
and
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK
as Agent
and
BNP PARIBAS FORTIS SA/NV
as Swap Bank A


COORDINATION DEED
relating to m.v.s "CAP QUEBEC" and "CAP PEMBROKE"






Index
Clause    Page

1 Definitions and Interpretation     2
2 Representations and Warranties     3
3 Consent     3
4 Subordination of Liabilities     3
5 Ranking of Security     3
6 Covenants of the Swap Banks     4
7 Enforcement of Security     4
8 Power of Attorney     5
9 Incorporation of Loan Agreement provisions     5
10 Transfer     6
11 Miscellaneous     6
12 Law and Jurisdiction     6




EUROPE/62482729v7


THIS DEED is made on 9 August 2018
PARTIES
(1)
EURONAV NV , a company incorporated in Belgium whose registered address is at De Gerlachekaai 20, B-2000 Antwerp, Belgium (the " Owner ")
(2)
CRÉDIT AGRICOLE CORPORATE AND INVESTMENT BANK acting through its office at 12, place des Etats-Unis CS 70052, 92547 Montrouge, Cedex, France as trustee for the Creditor Parties (the " Agent " which expression includes its successors and assigns)
(3)
BNP PARIBAS FORTIS SA/NV acting through its office at 3, Montagne du Parc/1KA1E, 1000 Brussels, Belgium as swap bank (" Swap Bank A " which expression includes its successors and assigns)
BACKGROUND
(A)
By a loan agreement (the " Loan Agreement ") dated 22 March 2018 and made between (i) the Owner as borrower, (ii) Crédit Agricole Corporate and Investment Bank, Sea Bridge Finance Limited and BNP Paribas Fortis SA/NV listed in Part A of Schedule 1 of the Loan Agreement as commercial lenders (the " Commercial Lenders "), (iii) The Export Import Bank of Korea listed in Part B of Schedule 1 of the Loan Agreement as ECA lender (the " ECA Lender " and together with the Commercial Lenders the " Lenders "), (iv) Crédit Agricole Corporate and Investment Bank and BNP Paribas Fortis SA/NV listed in Part C of Schedule 1 of the Facility Agreement as swap banks (the " Swap Banks "), (v) Crédit Agricole Corporate and Investment Bank and BNP Paribas Fortis SA/NV as mandated lead arrangers, (vi) Crédit Agricole Corporate and Investment Bank as agent and (vii) Crédit Agricole Corporate and Investment Bank as security trustee, it was agreed amongst other things that the Lenders would make available to the Owner a secured loan facility of up to US$173,550,300.
(B)
Pursuant to the Loan Agreement there have been executed by the Owner and, where applicable, registered in favour of the Lenders and the Swap Banks as security for, among other things, the Owner's obligations and liabilities to the Creditor Parties under the Loan Agreement:
(i)
a first preferred Greek ship mortgage dated 26 March 2018 (the " Ship A First Mortgage ") on the vessel "CAP QUEBEC" registered in the name of the Owner under the laws and flag of Greece under Official Number 12530 (" Ship A "); and
(ii)
a first preferred Greek ship mortgage dated 25 April 2018 (the " Ship B First Mortgage " and, together with the Ship A First Mortgage, the " First Mortgages ") on the vessel "CAP PEMBROKE" registered in the name of the Owner under the laws and flag of Greece under Official Number 12541 (" Ship B " and, together with Ship A, the " Ships ").
(C)
By a master agreement (" Master Agreement A ") dated 1 August 2018 and made between the Borrower and Swap Bank A, Swap Bank A has agreed terms on which it may enter into interest rate swap transactions with the Borrower.
(D)
As a condition to the entry by the Borrower into such interest rate swap transactions with Swap Bank A, the Owner has agreed to the execution and, where applicable, the registration (subject to receiving the consent of the Security Trustee thereto) in favour of Swap Bank A as security for the Owner's obligations to Swap Bank A under the Master Agreements a second preferred ship mortgage on each Ship.


EUROPE/62482729v7


(E)
The Agent and the Lenders have agreed to consent to the execution and, where applicable, registration of the second preferred ship mortgages referred to in Recital (D) upon condition that the Owner and Swap Bank A enter into this Deed.
OPERATIVE PROVISIONS
1
DEFINITIONS AND INTERPRETATION
1.1
Defined expressions
Words and expressions defined in the Loan Agreement shall have the same meanings when used in this Deed (including its Recitals) unless the context otherwise requires.
1.2
Additional definitions
In this Deed unless the contrary intention appears:
" Final Repayment Date " means the date on which the Owner repays all amounts owing under or in connection with the Senior Finance Documents and ceases to have any future or contingent liability under or in connection with the Senior Finance Documents.
" Second Mortgages " means the second preferred ship mortgage to be executed and registered by the Owner in favour of Swap Bank A.
" Senior Finance Documents " means the Loan Agreement and the First Mortgages.
" Senior Liabilities " means all debts and liabilities whatsoever (whether present or future, actual or contingent) which the Owner now or at any later time has to the Security Trustee, the Lenders and Swap Bank A under or in connection with the Senior Finance Documents.
" Subordinated Liabilities " mean all debts and liabilities whatsoever (whether present or future, actual or contingent) which the Owner now or at any later time has to Swap Bank A under or in connection with the Second Mortgages.
1.3
General Interpretation
In this Deed:
(a)
Clause headings are inserted for convenience only and shall not affect the construction of this Deed and, unless otherwise specified, all references to clauses and appendices are to clauses of, and appendices to, this Deed;
(b)
unless the context otherwise requires, words denoting the singular number shall include the plural and vice versa;
(c)
references to persons include bodies corporate and unincorporate;
(d)
references to assets include property, rights and assets of every description;
(e)
references to any document are to be construed as references to such document as amended or supplemented from time to time; and
(f)
references to any enactment include re‑enactments, amendments and extensions thereof.
2
REPRESENTATIONS AND WARRANTIES

2     EUROPE/62482729v7


2.1
General
The Owner represents and warrants to the Agent and Swap Bank A as follows.
2.2
Repetition of the Loan Agreement representations and warranties
The representations and warranties in clause 10 ( Representations and warranties ) of the Loan Agreement remain true and not misleading as if repeated on the date of this Deed with reference to the circumstances now existing.
3
CONSENT
3.1
Security Trustee's consent
Subject to the representations and warranties in Clause 2 ( Representations and Warranties ) being in all respects correct, and in consideration of the Owner and Swap Bank A executing this Deed, the Agent's consent to the execution and, where applicable registration by the Owner in favour of Swap Bank A, of the Second Mortgage Documents.
4
SUBORDINATION OF LIABILITIES
Each of the Owner and Swap Bank A covenants, as separate covenants, with the Agent and, separately, the Owner and Swap Bank A covenant with each other, that, until and including the Final Repayment Date, the payment and performance of the Subordinated Liabilities shall be fully subordinated to the Senior Liabilities as set out below.
5
RANKING OF SECURITY
5.1
Ranking of security
Each of the Owner and Swap Bank A covenants, as separate covenants, with the Agent and, separately, the Owner and Swap Bank A covenant with each other that, until and including the Final Repayment Date, all security created by or in connection with the First Mortgages shall in all respects rank prior to all security created by or in connection with the Second Mortgages, including any such security which may be created after the date of this Deed.
6
COVENANTS OF SWAP BANK A
6.1
General
Swap Bank A covenants with the Agent as follows.
6.2
No enforcement of Second Mortgages
Until and including the Final Repayment Date, Swap Bank A will not, without the prior written consent of the Agent, take any step to exercise or enforce any right or remedy which Swap Bank A now or at any later time has under or in connection with the Second Mortgages.
6.3
Enforcement of Second Mortgages at request of Security Trustee
Swap Bank A will, if requested by the Agent before the Final Repayment Date, promptly take any steps or other action such as is described in Clause 6.2 ( No enforcement of Second Mortgages ).
6.4
Restrictions on transfer of rights and obligations of Swap Bank A

3     EUROPE/62482729v7


Until and including the Final Repayment Date, Swap Bank A shall not transfer any of its rights or obligations under the Second Mortgages unless:
(a)
the Agent has first given its written consent to the transfer; and
(b)
the transferee has undertaken in terms acceptable to the Agent to comply with the obligations of Swap Bank A under this Deed and in all other respects to be bound by this Deed.
6.5
Effect of consents and approvals of Security Trustee
Where any act requires the consent or approval of the Agent under the Senior Finance Documents and the same act requires the consent or approval of Swap Bank A under the Second Mortgages, then the consent or approval of the Agent given under the Senior Finance Documents shall be deemed also to constitute the consent or approval of Swap Bank A under the Second Mortgages; and, for this purpose, " act " includes transaction.
7
ENFORCEMENT OF SECURITY
7.1
General
The Owner and Swap Bank A covenants with the Agent and, separately, the Owner and Swap Bank A covenant with each other that the following provisions of this Clause shall apply if, before the Final Repayment Date, the Agent notifies Swap Bank A:
(a)
that the Creditor Parties that are party to the First Mortgages wish to sell either Ship in the exercise of any of its rights under or in connection with the First Mortgages, whether as mortgagee, as the attorney of the Owner or otherwise; or
(b)
that the Creditor Parties that are party to the First Mortgages or the Owner (with the prior written consent of the Security Trustee) wish to sell either Ship by private treaty free of the First Mortgages and the Second Mortgages.
7.2
Cooperation by Swap Bank A
Following the notification referred to in Clause 7.1 ( General ) Swap Bank A shall co-operate with the Agent and the Owner in doing all things and executing all documents which the Agent may consider necessary or desirable to enable or facilitate the sale of the relevant Ship or any related transaction; without limiting the generality of the foregoing, Swap Bank A shall, forthwith upon the Agent's request, execute any discharges, releases and/or re‑assignments as the Agent may specify.
This Clause 7.2 ( Cooperation by Swap Bank A ) applies irrespective of whether the proceeds of the sale will be sufficient to discharge the Subordinated Liabilities after discharging the Senior Liabilities and any other claims ranking prior to the Subordinated Liabilities and/or the Second Mortgages.
8
POWER OF ATTORNEY
8.1
Appointment
For the purpose of securing the due and punctual performance of its obligations to the Senior Mortgagee under or in connection with this Deed, Swap Bank A irrevocably and by way of security appoints the Agent its attorney, on its behalf and in its name or otherwise, to execute or sign any document and do any act or thing which Swap Bank A is obliged to do under this Deed.

4     EUROPE/62482729v7


8.2
Delegation
The Security Trustee may sub‑delegate to any person or persons all or any of the powers conferred by Clause 8.1 ( Appointment ), and may do so on terms authorising successive sub‑delegations.
8.3
Restrictions of use of power
The above power of attorney shall not be valid after the Final Repayment Date.
9
INCORPORATION OF LOAN AGREEMENT PROVISIONS
9.1
Incorporation of specific provisions
The following provisions of the Loan Agreement apply to this Deed as if they were expressly incorporated therein with any necessary modifications:
clause 22, ( no set-off or tax deduction );
clause 33, ( variations and waivers );
clause 34 ( bail-in );
clause 35, ( notices ); and
clause 36, ( supplemental ).
9.2
Incorporation of general provisions
Clause 9.1 ( Incorporation of specific provisions ) is without prejudice to the application to this Deed of any provision of the Loan Agreement which, by its terms, applies or relates to the Finance Documents to which the Owner is a party generally.
10
TRANSFER
10.1
Transfer by Agent
The Agent may transfer its rights under and in connection with this Deed to the same extent as it may transfer its rights under the Loan Agreement and the other Finance Documents.
11
MISCELLANEOUS
11.1
Rights cumulative, non-exclusive
The rights and powers of the Agent under this Deed are cumulative; and nothing in this Deed shall have the effect of excluding or limiting any right or remedy which the Agent would, apart from this Deed, have under any applicable English or other law.
11.2
Severability
If any provision of this Deed is invalid, that shall not affect the validity of any other provision; and, if this Deed, or any of its provisions, is invalid as regards the Owner, any liquidator or administrator of the Owner or the Ships, Swap Bank A shall nevertheless remain in all respects bound by this Deed.
11.3
Counterparty

5     EUROPE/62482729v7


This Deed may be executed in several counterparts, each of which shall be an original, but which together shall constitute but one and the same document.
11.4
Third party rights
A person who is not a party to this Deed has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any term of this Deed.
12
LAW AND JURISDICTION
12.1
English law
This Deed and any non-contractual obligations arising out of or in connection with it shall be governed by, and construed in accordance with, English law.
12.2
Exclusive English jurisdiction
Subject to Clause 12.3 ( Choice of forum for the exclusive benefit of the Agent ), the courts of England shall have exclusive jurisdiction to settle any Dispute.
12.3
Choice of forum for the exclusive benefit of the Agent
Clause 12.2 ( Exclusive English jurisdiction ) is for the exclusive benefit of the Agent, which reserves the right:
(a)
to commence proceedings in relation to any Dispute in the courts of any country other than England and which have or claim jurisdiction to that Dispute; and
(b)
to commence such proceedings in the courts of any such country or countries concurrently with or in addition to proceedings in England or without commencing proceedings in England.
Neither the Owner nor Swap Bank A shall commence any proceedings in any country other than England in relation to a Dispute.
12.4
Process agent for Owner
The Owner irrevocably appoints Euronav (UK) Agencies Limited at its registered office for the time being, presently at 99 King's Road, London, SW3 4PA, England, to act as its agent to receive and accept on its behalf any process or other document relating to any proceedings in the English courts which are connected with a Dispute.
12.5
Agent's rights unaffected
Nothing in this Clause 12 ( Law and Jurisdiction ) shall exclude or limit any right which the Agent may have (whether under the law of any country, an international convention or otherwise) with regard to the bringing of proceedings, the service of process, the recognition or enforcement of a judgment or any similar or related matter in any jurisdiction.
12.6
Meaning of "proceedings"
In this Clause 12 ( Law and Jurisdiction ), " proceedings " means proceedings of any kind, including an application for a provisional or protective measure and a " Dispute " means any dispute arising out of or in connection with this Deed (including a dispute relating to the existence, validity or

6     EUROPE/62482729v7


termination of this Deed) or any non-contractual obligation arising out of or in connection with this Deed.
This Deed has been duly executed as a deed on the date stated at the beginning of this Deed.

7     EUROPE/62482729v7


EXECUTION PAGE
OWNER
EXECUTED  and DELIVERED as a DEED
)
/s/ Amalia Adamidou
by EURONAV NV
)
Attorney-in-fact
acting by
)
 
expressly authorised
)
 
by virtue of a power of attorney granted
)
/s/ Angeliki Avramoglou
on 30 July 2018
)
Lawyer
such execution being
)
 
witnessed by:
)
 







AGENT
EXECUTED  and DELIVERED as a DEED
)
/s/ Laura Caines
by CRÉDIT AGRICOLE CORPORATE AND
)
Attorney-in-fact
INVESTMENT BANK
)
 
acting by
)
 
expressly authorised
)
 
by virtue of a power of attorney granted
)
/s/ Alice Lightfoot
on 31 July 2018
)
Trainee Solicitor
such execution being
)
 
witnessed by:
)
 





SWAP BANK A
EXECUTED  and DELIVERED as a DEED
)
/s/ Laura Caines
by BNP PARIBAS FORTIS SA/NV
)
Attorney-in-fact
acting by
)
 
expressly authorised
)
 
by virtue of a power of attorney granted
)
/s/ Alice Lightfoot
on 24 July 2018
)
Trainee Solicitor
such execution being
)
 
witnessed by:
)
 




8     EUROPE/62482729v7

Exhibit 4.19
NOTIFICATION LETTER FOR AN INCREASE IN THE PROGRAMME MAXIMUM AMOUNT




To: The Dealer referred to below
cc. BNP Paribas Fortis SA/NV (as Domiciliary Agent)
cc. BNP Paribas Fortis SA/NV (as Arranger)


Dear Sirs

1 October 2018

Euronav NV EUR 150,000,000 Belgian Multi-currency Short-Term Treasury Notes Programme (the
"Programme")

We refer to a dealer agreement dated 6 June 2017 (the “ Dealer Agreement ”) between ourselves as Issuer, BNP Paribas Fortis SA/NV as Dealer and Arranger relating to the Programme. Terms used in the Dealer Agreement shall have the same meaning in this letter.
In accordance with Clause 3.6 ( Increase in Programme Maximum Amount ) of the Dealer Agreement, we hereby notify each of the addressees listed above that the Maximum Amount is to be increased from EUR 50,000,000 to EUR 150,000,000 with effect from the date of this letter, subject to delivery to the Dealers, the Arranger and the Domiciliary Agent of the following documents:

(a) a certificate from a duly authorised officer of the Issuer confirming that no changes have been made to the constitutional documents of the Issuer since the date of the Dealer Agreement or, if there has been a change, a certified copy of the constitutional documents currently in force;

(b) certified copies of all documents evidencing the internal authorisations and approvals required to be granted by the Issuer for such an increase in the Programme Maximum Amount;

(c) written consent (by e-mail) of the Domiciliary Agent in relation to the increase;

(d) a list of names, titles and specimen signatures of the persons authorised to sign on behalf of the Issuer all notices and other documents to be delivered in connection with such an increase in the Programme Maximum Amount;

(e) an updated or supplemental Information Memorandum reflecting the increase in the Programme Maximum
Amount of the Programme. Yours faithfully,

/s/ Hugo De Stoop                      /s/ Egied Verbeeck

Name: Hugo De Stoop                     Egied Verbeeck
Title: CFO                        General Counsel
for and on behalf of Euronav NV


Exhibit 4.20
DEALER ACCESSION LETTER



1 October 2018

To: KBC Bank NV
cc.: BNP Paribas Fortis SA/NV as Dealer and Arranger cc.: BNP Paribas Fortis SA/NV as Domiciliary Agent

Dear Sirs

Euronav NV EUR 150,000,000 Belgian Multi-currency Short-Term Treasury Notes Programme (the
"Programme")

We refer to a dealer agreement dated 6 June 2017 (the “ Dealer Agreement ”) between ourselves Issuer, BNP Paribas Fortis SA/NV as Dealer and BNP Paribas Fortis SA/NV as Arranger, relating to the Programme, as amended, supplemented or updated from time to time. Terms used in the Dealer Agreement shall have the same meaning in this letter.

In accordance with Clause 8.3 ( Appointment of Additional Dealer ) of the Dealer Agreement, we hereby appoint you as an Additional Dealer for the Programme upon the terms of the Dealer Agreement with immediate effect.

Please confirm acceptance of your appointment upon such terms by signing and returning to us the enclosed copy of this letter, whereupon you will, in accordance with Clause 8.3 ( Appointment of Additional Dealer ) of the Dealer Agreement, become a party to the Dealer Agreement vested with all the authority, rights, powers, duties and obligations of a Dealer as set out in the Dealer Agreement.

This letter may be executed in any number of counterparts. This has the same effect as if the signatures on the counterparts were on a single copy of this letter.

Yours faithfully


/s/ Hugo De Stoop              /s/ Egied Verbeeck
CFO                    General Counsel

for and on behalf of
Euronav NV
We hereby confirm acceptance of our appointment as a Dealer upon the terms of the Dealer Agreement referred to above. For the purposes of Clause 12 ( Notices ) of the Dealer Agreement our contact details are as follows:


KBC Bank NV
Havenlaan 2
B-1080 Brussel Belgium                    Dated: 1 October 2018
Tel: +32 2 417 1735
Fax: +32 2 429 1715
Attention: CP Desk

/s/ Danny Swinnen                  /s/ Christophe Heerinckx
Chief Dealer                    Head loan and debt origination
Financial markets



for KBC Bank NV


Exhibit 4.33


1 October 2018



SUPPLEMENTAL DEALER AGREEMENT



Supplementing the dealer agreement signed on 6 June 2017 (the "Dealer Agreement") and relating to the
EUR 150,000,000 Belgian Multi-currency Short-Term Treasury Notes Programme of

Euronav NV


as Issuer


and


BNP Paribas Fortis SA/NV


as Arranger, Domiciliary Agent and Dealer


and


KBC Bank NV


as Dealer



TABLE OF CONTENTS



1. CONSTRUCTION ..................................................................................................................................... 2
2. AMENDMENTS TO CLAUSE 1 ( INTERPRETATION ) OF THE DEALER AGREEMENT......................... 3
3. COUNTERPARTS .................................................................................................................................... 3
4. APPLICABLE LAW AND JURISDICTION................................................................................................. 4



THIS SUPPLEMENTAL AGREEMENT IS DATED

1 October 2018

AND MADE BETWEEN

Euronav NV , a limited liability company (“ naamloze vennootschap ” / “ société anonyme ”) incorporated under the laws of Belgium and having its registered office at De Gerlachekaai 20, 2000 Antwerp , enterprise number
0860.402.767 (RPR/RPM Antwerpen) as issuer (hereinafter referred to as the “ Issuer ”);

AND

BNP PARIBAS FORTIS SA/NV , a credit institution validly existing under the laws of the Kingdom of Belgium, having its registered office at Montagne du Parc 3, B-1000 Brussels, Belgium, enterprise number 0403,199,702 (RPM/RPR Brussels) as arranger and dealer (the “ Arranger ” and a “ Dealer ”);

AND

KBC Bank NV , a credit institution validly existing under the laws of the Kingdom of Belgium, having its registered office at Havenlaan 2, B-1050 Brussels, Belgium, enterprise number 0462.920.226 (RPM/RPR Brussels) as dealer (a “ Dealer ”, together with the Arranger, the “ Dealers ”);

WHEREAS,

(i)
The Issuer has, further to a decision of its board of directors dated 6 June 2017 , established a Multi- currency Short Term Treasury Notes Programme for the issue of Treasury Notes denominated in euro or any other foreign currency, subject to the Terms and Conditions of the Treasury Notes (the “ Conditions ”) set out in the Information Memorandum (as defined below) and in accordance with the law of 22 July 1991 relating to billets de trésorerie et certificats de dépôt / thesauriebewijzen en depositobewijzen , as amended, and the royal decree of 14 October 1991 relating to billets de trésorerie et certificats de dépôt / thesauriebewijzen en depositobewijzen , as amended.

(ii) The Issuer has appointed BNP Paribas Fortis SA/NV, which has accepted, to act as Domiciliary Agent in relation to the Treasury Notes to be issued under the Programme pursuant to the Domiciliary Agency Agreement (as defined below).
(iii) The Issuer, the Domiciliary Agent and the NBB (as defined below) have executed the Clearing Agreement (as defined below) in relation to the clearing of the Treasury Notes to be issued by the Issuer.

THE PARTIES HERETO AGREE AS FOLLOWS:

1. CONSTRUCTION

(a) In this Supplemental Agreement, unless the contrary intention appears, a reference to:

(i)
a provision of a law is a reference to that provision as amended, extended, applied or re-enacted and includes any subordinate legislation;

(ii) a Clause or a Schedule is a reference to a clause of or a schedule to this
Supplemental Agreement;

(iii) a person includes any individual, company, corporation, unincorporated association or body (including a partnership, trust, joint venture or consortium), government, state, agency, organisation or any other entity whether or not having separate legal



personality, and references to any person shall include its successors in title, permitted assigns and permitted transferees;

(iv) assets includes present and future properties, revenues and rights of every description;

(v)
an authorisation includes any authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration;

(vi) a regulation includes any regulation, rule, official directive, request or guideline (whether or not having the force of law) of any governmental, inter-governmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation; and

(vii) any Programme Agreement or other document is a reference to that Programme Agreement or other document as amended, novated, restated, superseded or supplemented.

(b)
Each capitalised term used in this Agreement and not expressly defined in this Supplemental Agreement shall, unless the context otherwise requires, have the meaning given to such term in the Information Memorandum.

(c)
The index to and the headings in this Supplemental Agreement are for convenience only and may not be considered in construing this Supplemental Agreement.

2. AMENDMENTS TO CLAUSE 1 ( INTERPRETATION ) OF THE DEALER AGREEMENT

2.1 Definitions


In clause 1.1 (Definitions) of the Dealer Agreement, the definitions of the following terms are deleted:

• “ Business Day ”
• “ Clearing Agreement ”
• " Clearing System "
• “ Domiciliary Agency Agreement ”
• “ Domiciliary Agent ”
• “ Foreign Currency ”
• “ Programme ”
• “ Programme Maximum Amount ”
• “ Trade Date ”
• “ Treasury Note ”
• “ Treasury Notes Decree ”
• “ Treasury Notes Law ”

These terms are defined in the Information Memorandum and deemed to have the same meaning in the Dealer
Agreement as given to them in the Information Memorandum.

3. COUNTERPARTS


This Supplemental Agreement may be executed in any number of counterparts. This has the same effect as if the signatures on the counterparts were on a single copy of this Supplemental Agreement.






4. APPLICABLE LAW AND JURISDICTION


This Supplemental Agreement shall be governed by and construed in accordance with the laws of the Kingdom of Belgium and any dispute in relation therewith will be subject to the exclusive jurisdiction of the courts of Brussels, Belgium. Each of the Issuer, and the Dealer or Additional Dealer, if any, irrevocably submits to the jurisdiction of such courts and waives any objection to proceedings in such courts whether on the ground of venue or on the ground that the proceedings have been brought in an inconvenient forum.




This Supplemental Agreement is executed in 2 original copies, of which each party hereto acknowledges having received one.




for the Issuer,


Euronav NV



/s/ Hugo De Stoop                          /s/ Egied Verbeeck

Name Hugo De Stoop Name    Egied Verbeeck
Title CFO Title    General Counsel




for the Arranger and Dealer

BNP Paribas Fortis SA/NV




/s/ Martin de Patoul                          /s/ Martine Van Sinay

Name Martin De Patoul                     Name Martine Van Sinay
Title Company Lawyer                     Title CP Dealer
for the Dealer

KBC Bank NV




/s/ Christophe Heerinckx                      /s/ Danny Swinnen

Name Christophe Heerinckx Name Danny Swinnen
Title Head loan and debt markets Title Chief Dealer



Exhibit 4.34











EURONAV NV
TRANSACTION BASED INCENTIVE PLAN 2018


1
Definitions
“ Acceptance Notification ”
:
means the written notification substantially in the form as attached in Annex A  to this Plan whereby the Beneficiary notifies the Company of his/her full or partial acceptance of the Transaction Based Incentive Plan (TBIP) Grant, in accordance with the provisions set out in this Plan;
“ Affiliated Entity ”
:
means, in relation to any person or legal entity, any undertaking which relates to that person or legal entity as set out in Article 11 of the Belgian Companies Code;
“ Bad Leaver Event ”
:
;
“ Beneficiary ”
:
means (i) a member of the Executive Committee, (ii) a direct report of a member of the Executive Committee or (iii) any other employee of a Group Company recommended by the Executive Committee and approved by the Board of Directors;
“ Board of Directors ”
:
;
“ Business Day ”
:
means a day, other than Saturday or Sunday, on which banks are open for business both in Belgium and the United States;

1


“ Cause ”
:
means dishonesty, fraud, gross misconduct, unauthorized use or disclosure of confidential information or trade secrets, or conduct prohibited by criminal law (except minor violations), in each case determined by the Company’s chief executive officer or, in the case of directors and executive directors, the Remuneration Committee whose determination shall be conclusive and binding;
“ Company ”
:
;
“ Change of Control ”
:
means the occurrence of any of the following events:
(i)      the consummation of an amalgamation, merger consolidation or similar form of corporate transaction involving the Company and as a result of which at least 25% of the outstanding shares of the combined entity are held by (a) one new shareholder, or (b) a group of shareholders acting in concert; or
(ii)      a sale of all or substantially all of the assets of the Company; or
(iii)      a change of Control takes place;
“ Control ”
:
;
“ Disability”
:
means the permanent disablement of a Participant which prevents that Participant from attending any business or occupation for which he/she is reasonably suited by training, education or experience and which lasts twelve consecutive months and at the end of such twelve-month period is beyond reasonable hope of improvement;
“ Executive Committee ”
:
means the executive committee of the Company;
“ Fair Market Value ”
:
means, on a given date, the volume weighted average price of the Shares on the New York Stock Exchange over the thirty (30) Business Days preceding such date;
“ Good Leaver Event ”
:
means the termination of the Professional Relationship between a Participant and a Group Company due to any of the reasons described in Article 6.1 of this Plan;
“ Group ”
:
means the Company and any of its Affiliated Entities;
“ Group Company ”
:
means any company being part of the Group;
“ Leaver Instance ”
:
means each instance which in respect of a Participant gives rise to the termination of his/her Professional Relationship with a Group Company either in the context of a Good Leaver Event or a Bad Leaver Event;
“ TBIP Award ”
:
means Phantom Stock accepted by a Beneficiary in accordance with this Plan and the terms and conditions of the TBIP Grant;
“TBIP Grant ”
:
means a grant of Phantom Stock Units made to a Beneficiary under this Plan;
“ Offer ”
:
means the written notification pursuant to which the Company offers a TBIP Grant to a Beneficiary in accordance with Article 3.2 of this Plan;
“ Offer Date ”
:
means the date a Beneficiary is notified in writing by the Board of Directors that he or she is offered a TBIP Grant;
“ Participant ”
:
means an individual person or a legal entity who is a Phantom Stock Holder;
“ Phantom Stock Unit ”
:
means an unfunded and unsecured promise to deliver an amount in cash equal to the Fair Market Value of one (1) Share on the Settlement Date in accordance with the terms and conditions of this Plan;

2


“ Phantom Stock Holder ”
:
means the holder of a Phantom Stock Unit granted under this Plan;
“ Plan ”
:
means this Transaction Based Incentive Plan (TBIP) 2018 of the Company, as may be amended from time to time;
“ Professional Relationship ”
:
means the employment contract between a Participant and a Group Company, a Service Agreement between a Participant and a Group Company or the mandate of a Participant at a Group Company;
“ Remuneration Committee ”
:
means the remuneration committee of the Company;
“ Resignation ”
:
means the voluntary termination of the Professional Relationship with the Group Company by the Participant for motives other than a Good Leaver Event;
“ Retirement ”
:
means either (a) attaining the legal retirement age in the relevant jurisdiction, or (b) each of the Group Company and the Participant agreeing to early retirement no earlier than at the age of 60;
“ Secretary ”
:
means Ann Vleugels and any person appointed by the Board of Directors to receive the Acceptance Notifications, or if she is unavailable, the General Counsel of the Company or any other person appointed by him/her;
“ Service Agreement ”
:
means each agreement pursuant to which services, such as among others management or consultancy services, are rendered by a self-employed individual or a legal entity for the benefit of a Group Company;
“ Settlement Date ”
:
has the meaning set out in Article 5.1.2 of this Plan;
“ Shares ”
:
means all issued Shares in the Company from time to time;
“ Term ”
:
has the meaning set out in Article 3.4 of this Plan.
2
Object of the Plan
2.1
The purpose of this Plan is to align Participants and shareholder interests by providing a proportion of variable compensation directly linked to the performance of the Company’s Share price. This variable compensation is structured as a TBIP Grant composed out of Phantom Stock Units and is to recognize services rendered by the Phantom Stock Holder in the framework of the merger with Gener8 Maritime, Inc.
2.2
Each Phantom Stock Unit grants the Phantom Stock Holder a conditional right to receive upon vesting of the Phantom Stock Unit and subject to the terms and conditions of this Plan an amount in cash equal to the Fair Market Value of one (1) Share on the Settlement Date .
3
Offer of TBIP Grants
3.1
Offer
3.1.1
The Board of Directors, upon recommendation of the Remuneration Committee, determines the number of Phantom Stock Units offered to each Beneficiary under this Plan. The aggregate number of Phantom Stock Units that will be offered under this plan amounts to 1,200,000.

3


3.1.2
An Offer does not entail any right for a Beneficiary to additional Offers of TBIP Grants in the future taking into account that this Plan is exceptional as it recognizes services rendered in the framework of the merger with Gener8 Maritime, Inc.
3.1.3
The Offer of TBIP Grants under this Plan does not give rise to an implied guarantee of continuous employment by the Group Companies.
3.1.4
The Offer will be made to the Beneficiaries in the course of December 2018.
3.2
Form of the Offer
The Company notifies the Beneficiary by means of a written notification of the number of Phantom Stock Units offered to such Beneficiary under the TBIP Grant (the “ Offer ”).
3.3
Free Offer
The TBIP Grants are offered to the Beneficiaries for no consideration.
3.4
Term of the Offer
The TBIP Grant will have a term of five (5) years commencing on the Offer Date and terminating on the day preceding the fifth (5 th ) anniversary of the Offer Date, unless otherwise determined by the Board of Directors in the Offer (the “ Term ”).
3.5
Acceptance or refusal of TBIP Grants
3.5.1
Any Beneficiary should accept all or part of the TBIP Grant offered to him/her by returning a duly completed and executed Acceptance Notification to the Secretary within ninety (90) calendar days after the Offer Date, unless indicated otherwise in the Offer. If the Acceptance Notification is not received in due time, the TBIP Grant shall be deemed to have been refused by the Beneficiary and the rights of the concerned Beneficiary with regard to the TBIP Grant are automatically cancelled. The same is true for explicitly refused TBIP Grants. No financial compensation shall be granted to the Beneficiary for any implicit or explicit refusal.
3.5.2
A Beneficiary has the possibility to accept only part of the TBIP Grant granted to him/her. To this effect, the Beneficiary should mention the exact number of accepted Phantom Stock Units in the Acceptance Notification. If the Beneficiary accepts only part of the Phantom Stock Units granted to him/her, he/she shall be deemed to have refused the other Phantom Stock Units offered to him/her. In such case, no financial compensation shall be granted to the Beneficiary for the refused Phantom Stock Units.
3.5.3
Through their acceptance of (part of) the TBIP Grants by means of the Acceptance Notification, the Beneficiaries of TBIP Grants unconditionally accept all the provisions contained in this Plan.
3.5.4
In due course the Company will confirm the Beneficiary’s election to accept or to refuse the TBIP Grant and the number of Phantom Stock Units accepted, if any.
4
General Terms of the TBIP Awards

4


4.1
TBIP Awards granted to Beneficiaries are strictly personal and not eligible for transfer of ownership title or any other form of transfer of (ownership) rights, except in event of decease in which case the TBIP Awards will be transferred to the heirs.
4.2
TBIP Awards cannot be pledged or encumbered directly or indirectly in any way.
4.3
TBIP Awards that have been transferred, pledged or encumbered directly or indirectly in any way in violation of Article 4.1 and/or Article 4.2 of this Plan, shall lapse automatically without any financial compensation for the Beneficiary or its transferee.
5
Specific terms of the Phantom Stock Units
5.1
Vesting and settlement of the Phantom Stock Units
5.1.1
Subject to Article 8 of this Plan, the Phantom Stock Units shall vest as follows:
(i)
a first tranche of 12% of the total number of Phantom Stock Units accepted by a Phantom Stock Holder vests on the date on which the Fair Market Value of the Shares first reaches USD 12.00;
(ii)
a second tranche of 19% of the total number of Phantom Stock Units accepted by a Phantom Stock Holder vests on the date on which the Fair Market Value of the Shares first reaches USD 14.00;
(iii)
a third tranche of 25% of the total number of Phantom Stock Units accepted by a Phantom Stock Holder vests on the date on which the Fair Market Value of the Shares first reaches USD 16.00; and
(iv)
a final tranche of 44% of the total number of Phantom Stock Units accepted by a Phantom Stock Holder vests on the date on which the Fair Market Value of the Shares first reaches USD 18.00;
it being understood, for the avoidance of doubt, that no Phantom Stock Units can vest after the Term of the Phantom Stock Units has lapsed. Fractions of Phantom Stock Units cannot vest. In the event that the percentages as set out above would entail the vesting of fractions of Phantom Stock Units, such number will be rounded upwards or downwards, whereby 0.5 will be rounded upwards (it being understood, that the aggregate number of Phantom Stock Units vested in favour of a Phantom Stock Holder will never be higher than the number of Phantom Stock Units accepted by him/her).
5.1.2
On the first Business Day after a Phantom Stock Unit vesting event as per Article 5.1.1 (the “ Settlement Date ”), the Phantom Stock Holder will receive, an amount in cash equal to: (i) the relevant Fair Market Value of one (1) Share as set forth in Article 5.1.1(i) to 5.1.1(iv) that has first been reached on the date of the Phantom Stock Unit vesting event, multiplied by (ii) the number of Phantom Stock Units that have vested prior to that Settlement Date (i.e. the aggregate of the number of Phantom Stock Units that have vested on the relevant Phantom Stock Unit event date and, as the case may be, the number of all Phantom Stock Units that have previously vested).

5


5.1.3
In the event that the Company has paid dividends since the Offer Date, the amount of any dividends paid in respect of a Share since the Offer Date will be deducted from the Fair Market Value hurdles as set forth in Article 5.1.1(i) to 5.1.1(iv) (i.e. the amounts of USD 12.00, USD 14.00, USD 16.00 and USD 18.00) to determine whether Phantom Stock Units have vested in accordance with Article 5.1.1 above.
6
Lapse of the TBIP Awards in a Leaver Instance
6.1
Good Leaver Events
6.1.1
In case of Retirement, the decease or Disability of a Participant, or if a TBIP participant is terminated by the Company on a “no fault” basis, all Phantom Stock Units held by that Participant shall continue to vest in accordance with the vesting schedule set out in Article 5.1.1 of this Plan and shall be cash settled by the Company upon vesting in accordance with this Plan.
6.1.2
If the Professional Relationship between a Participant and a Group Company is terminated by the Participant or the Group Company, for any reason not included in this Article 6.1 or in Article 6.2 of this Plan, all Phantom Stock Units held by that Participant that will vest subject to reaching the appropriate share price triggers on or prior to 31 December of the year following the calendar year in which the Professional Relationship was terminated, and shall continue to vest in accordance with the vesting schedule set out in Article 5.1.1 of this Plan and shall be cash settled by the Company upon vesting in accordance with Article 5.1.2. All Phantom Stock Units held by that Participant that vest after 31 December of the year following the calendar year in which the Professional Relationship was terminated, shall lapse automatically, without any payment, unless the Board of Directors upon recommendation of the Remuneration Committee, would decide otherwise. No Group Company can be held liable for the potential loss incurred by a Participant as a result of the lapsing of the TBIP Awards.
6.2
Bad Leaver Event
6.2.1
If the Professional Relationship between a Participant and a Group Company is terminated by the Group Company for Cause, all TBIP Awards held by the Participant and not yet settled by the Company shall lapse automatically, without any payment, irrespective of whether the TBIP Awards have vested in accordance with Article 5.1.1 of this Plan, unless the Board of Directors, upon recommendation of the Remuneration Committee, would decide otherwise. No Group Company can be held liable for the potential loss incurred by a Participant as a result of the lapsing of the TBIP Awards.
6.2.2
In case of Resignation by the Participant, all unvested TBIP Awards held by that resigning Participant shall lapse automatically, without any payment, upon first notification to the Group Company of such termination of the Professional Relationship, unless the Board of Directors upon recommendation of the Remuneration Committee, would decide otherwise. No Group Company can be held liable for the potential loss incurred by a Participant as a result of the lapsing of the TBIP Awards.

6


7
Adjustments
7.1
Adjustment of the TBIP Awards
IN THE EVENT OF any extraordinary dividend or other extraordinary distribution or if an adjustment of the Share capital would occur, and save when for Fair Market Value, including but not limited to, a capital decrease as a result of a reimbursement to the shareholders, an incorporation of reserves in the capital with the issuance of new Shares, the issuance of new Shares, profit Shares, convertible bonds, bonds with a subscription right, a change of the statutory provisions with respect to the distribution of reserves and other profits and/or the distribution of liquidation bonuses or the distribution as a result of the dissolution of the Company, or a merger, contribution or the transfer of Shares as a consequence of a Share exchange, THEN the number of the nominal amount of Shares or the Fair Market Value hurdles of the Shares taken into account to establish the cash equivalent of a Phantom Stock Unit will be adjusted accordingly (upwards or downwards) by the Board of Directors, even retroactively, if and to the extent that this is necessary to maintain the terms and conditions of the TBIP Awards granted to the Beneficiaries/Participants and the rights of the Beneficiaries/Participants under this Plan.
7.2
Notification
The Board of Directors will notify the Participants of each adjustment as referred to in Article 7.1 of this Plan.
8
Change of Control
In the event that a Change of Control is followed by a delisting of Euronav, and to the extent the Phantom Stock Units have not vested in accordance with the terms of the Plan before the effectiveness of the Change of Control, (i) the definition of ‘Shares’ shall be amended to refer to the shares issued by the acquiring company and (ii) both (a) the number of Shares as well as (b) the Fair Market Value hurdles of the Shares in Article 5.1.1 , will be adjusted using the valuation ratio in the transaction that resulted in the Change of Control.
If, however, the Change of Control would result in a privatisation of the Company, the Board of Directors shall consider the lost opportunity value and if the value cannot be agreed by all parties shall potentially instruct a third party expert to calculate (using the Black Scholes method or similar) the value of the Phantom Stock Units immediately before the effectiveness of the Change of Control (the “Lost Opportunity Value”). To the extent the Lost Opportunity Value is a positive figure, that amount shall be paid to the Beneficiary within 10 Business Days following the Change of Control.

9
General
9.1
Notifications
Each notification which should be given to the Beneficiary/Participant or each document which should be provided to the Beneficiary/Participant with respect to this Plan, can be delivered at

7


his home address as communicated to the Company, or any other address which the Company reasonably seems appropriate.
9.2
Decision of the Board of Directors
The decisions of the Board of Directors concerning the interpretation of the Plan or concerning any dispute with respect to a TBIP Award or with respect to any affair which relates to this Plan, will be final and decisive.
9.3
Changes to the Plan
9.3.1
The Board of Directors can change the Plan and/or adjust the terms and conditions of the TBIP Awards if they believe that that is necessary or required taking into account, to be in accordance with, or for the moderation of the relevant legal provisions applicable in any relevant jurisdiction, including, but not limited to, tax provisions and securities regulations and currency regulations, provided that it is the intention of the Board of Directors to maintain the terms and conditions of the TBIP Awards granted to such Beneficiaries/Participants in line with the terms and conditions granted to the other Beneficiaries/ Participants.
9.3.2
The Board of Directors will notify the Beneficiaries/Participants as soon as possible of each change as referred to in Article 9.3.1 of this Plan.
9.4
Taxes and Expenses
9.4.1
The possible taxes, duties, para-fiscal levies due by the Participant as a result of the grant and/or acceptance of the TBIP Awards and/or settlement in cash of the Phantom Stock Units, will be exclusively borne by the Participant, without the possibility to claim any compensation therefore from the Company.
9.4.2
The Company and/or any Group Company are entitled to withhold any amount and conclude any agreement they deem necessary or useful in order to comply with any tax and/or social security obligation that results from the grant and/or acceptance of the Phantom Stock Units and/or the settlement in cash of the Phantom Stock Units in accordance with this Plan.
9.4.3
Without prejudice to Articles 9.4.1 and 9.4.2 of this Plan, all costs with respect to the implementation of this Plan will be borne by the Company.
9.5
Nature of the Plan
Notwithstanding any provisions to the contrary included in the Plan:
9.5.1
the granting of the TBIP Awards is not to form part of the rights held by the Participant with respect to remuneration or benefits under his/her Professional Relationship with a Group Company;
9.5.2
nothing contained in the Plan shall prevent the Company or any Group Company from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of Phantom Stock Units, other types of equity-based or equity-

8


linked awards (subject to approval of the shareholders of the Company if such approval is required) and cash incentive awards, and such arrangements may be either generally applicable or applicable only in specific cases.
9.5.3
the Plan does not confer upon the Participant any right to the continuation of his/her Professional Relationship or continued performance under a statutory position for any period and therefore does not prevent any Group Company from terminating the Professional Relationship or statutory position in accordance with applicable regulations;
9.5.4
the granting of the TBIP Awards cannot be considered as a right acquired for the future.
9.6
Severability
If any provision in this document is held to be illegal, invalid or unenforceable, in whole or in part, under any applicable law, that provision will be deemed not to form part of this document, and the legality, validity or enforceability of the remainder of this document will not be affected.
9.7
Governing Law
9.7.1
The Plan, all Phantom Stock Units and their implications are governed by Belgian Law.
9.7.2
The courts of Antwerp (division of Antwerp) have exclusive jurisdiction.

9


9.7.3     
Annex A
Acceptance Notification

PHANTOM STOCK UNITS OFFERED BY EURONAV NV
ACCEPTANCE NOTIFICATION

MANDATORY RETURN
REGISTERED OR HAND DELIVERY
[date no later than [insert date]]
Euronav NV
f.a.o. [ to be inserted ]
De Gerlachekaai 20
2000 Antwerp
Belgium

Dear Madam,
Dear Sir,
Euronav NV Transaction Based Incentive Plan 2018
Further to the offer I received from Euronav NV on [ insert date of offer ], I hereby inform you that I:
◦
accept ________ Phantom Stock Units referred to in the offer; this acceptance shall be construed as my unconditional acceptance of all the provisions contained in the Euronav NV Transaction Based Incentive Plan 2018 ;

◦
refuse ________ Phantom Stock Units referred to in the offer;

Sincerely,

[signature of the beneficiary]
[name]
Confirmation of receipt in the event the notification was not returned by registered mail
Date of receipt: _____________


10


Exhibit 8.1
Euronav NV Subsidiaries
 
 
 
 
Name of Subsidiary
 
Jurisdiction of
Incorporation or
Organization
Euronav (UK) Agencies Limited
 
UK
Euronav Luxembourg SA
 
Luxembourg
Euronav SAS
 
France
Euronav Ship Management SAS
 
France
Euronav Ship Management (Hellas) Ltd.
 
Liberia
Euronav Hong Kong Limited
 
Hong Kong
Euronav Singapore Pte. Ltd.
 
Singapore
E.S.M.C. Euro-Ocean Ship Management (Cyprus) Ltd.
 
Cyprus
Euronav Shipping NV
 
Belgium
Euronav Tankers NV
 
Belgium
Fiorano Shipholding Limited
 
Hong Kong
Larvotto Shipholding Limited
 
Hong Kong
Euronav MI II Inc.
 
Marshall Islands
Gener8 Maritime Subsidiary II Inc.
 
Marshall Islands
Gener8 Maritime Subsidiary New IV Inc.
 
Marshall Islands
Gener8 Maritime Management LLC
 
Marshall Islands
Gener8 Maritime Subsidiary V Inc.
 
Marshall Islands
Gener8 Maritime Subsidiary VIII Inc.
 
Marshall Islands
Gener8 Maritime Subsidiary Inc.
 
Marshall Islands
GMR Zeus LLC
 
Marshall Islands
GMR Atlas LLC
 
Marshall Islands
GMR Hercules LLC
 
Marshall Islands
GMR Ulysses LLC
 
Marshall Islands
GMR Posseidon LLC
 
Marshall Islands
Victory Ltd.
 
Bermuda
Vision Ltd.
 
Marshall Islands
GMR Spartiate LLC
 
Marshall Islands
GMR Maniate LLC
 
Marshall Islands
GMR St Nikolas LLC
 
Marshall Islands
GMR George T LLC
 
Marshall Islands
GMR Kara G LLC
 
Liberia
GMR Harriet G LLC
 
Liberia
GMR Orion LLC
 
Marshall Islands
GMR Argus LLC
 
Marshall Islands
GMR Spyridon LLC
 
Marshall Islands
GMR Horn LLC
 
Marshall Islands
GMR Phoenix LLC
 
Marshall Islands
GMR Strength LLC
 
Liberia
GMR Daphne LLC
 
Marshall Islands
GMR Defiance LLC
 
Liberia
GMR Elektra LLC
 
Marshall Islands
Companion Ltd.
 
Bermuda


Compatriot Ltd.
 
Bermuda
Consul Ltd.
 
Bermuda
GMR Agamemnon LLC
 
Liberia
Gener8 Neptune LLC
 
Marshall Islands
Gener8 Athena LLC
 
Marshall Islands
Gener8 Apollo LLC
 
Marshall Islands
Gener8 Ares LLC
 
Marshall Islands
Gener8 Hera LLC
 
Marshall Islands
Gener8 Constantine LLC
 
Marshall Islands
Gener8 Oceanus LLC
 
Marshall Islands
Gener8 Nestor LLC
 
Marshall Islands
Gener8 Nautilus LLC
 
Marshall Islands
Gener8 Macedon LLC
 
Marshall Islands
Gener8 Noble LLC
 
Marshall Islands
Gener8 Ethos LLC
 
Marshall Islands
Gener8 Perseus LLC
 
Marshall Islands
Gener8 Theseus LLC
 
Marshall Islands
Gener8 Hector LLC
 
Marshall Islands
Gener8 Strength Inc.
 
Marshall Islands
Gener8 Supreme Inc.
 
Marshall Islands
Gener8 Andriotis Inc.
 
Marshall Islands
Gener8 Militiades Inc.
 
Marshall Islands
Gener8 Success Inc.
 
Marshall Islands
Gener8 Chiotis Inc.
 
Marshall Islands
Gener8 Tankers 1 Inc.
 
Marshall Islands
Gener8 Tankers 2 Inc.
 
Marshall Islands
Gener8 Tankers 3 Inc.
 
Marshall Islands
Gener8 Tankers 4 Inc.
 
Marshall Islands
Gener8 Tankers 5 Inc.
 
Marshall Islands
Gener8 Tankers 6 Inc.
 
Marshall Islands
Gener8 Tankers 7 Inc.
 
Marshall Islands
Gener8 Tankers 8 Inc.
 
Marshall Islands
Mar
 
Joint ventures
 
 
Kingswood Co. Ltd.
 
Marshall Islands
TI Africa Limited
 
Hong Kong
TI Asia Limited
 
Hong Kong
Tankers Agencies (UK) Ltd
 
UK
Tankers International LLC
 
Marshall Islands
 
 
 



Exhibit 11.1


EURONAV NV
CODE OF BUSINESS CONDUCT AND ETHICS
Approved by the Board of Directors on 9 December 2014


This Code of Business Conduct and Ethics (the “Code”) has been adopted by the Board of Directors (the “Board”) of Euronav NV (together with its subsidiaries, the “Company”) for all of the Company’s employees, directors and officers (“Relevant Persons”).

The conduct of individuals in these guidelines relate to the relationship with colleagues, customers, suppliers and government agencies with equal importance. As a starting point, Euronav should present itself as a professional and responsible organisation. This Code sets out a set of basic principles to guide Relevant Persons regarding the minimum requirements expected of them. However, this Code does not provide a detailed description of all Company policies and it does not cover every issue that may arise. In general, if a Relevant Person is unsure of what to do in any situation, he or she should seek guidance from the head of department or the Company’s General Counsel.


I. Conflicts of interest

A. In general

Every Relevant Person should avoid any conflict between his/her own interests and the interests of the Company, especially when dealing with suppliers, customers, and other third parties, and in the conduct of his/her personal affairs, including transactions in securities of the Company.

A conflict of interest occurs when a Relevant Person’s private interests interfere with the interests of the Company as a whole. While it is not possible to describe every situation in which a conflict of interest may arise, Relevant Persons must never use or attempt to use their position with the Company to obtain improper personal benefits for themselves or for members of their families.

Any Relevant Person who is aware of a conflict of interest, or the appearance of a conflict of interest, or is concerned that a conflict might develop, should report and discuss the matter with the head of department or the General Counsel. Any of these shall report to and consult the Chairman of the Audit and Risk Committee immediately in the event of any irregularities apparently arising within the Company.

The Audit and Risk Committee shall have the responsibility to determine whether a conflict of interest exists, and it may establish procedures to arrive at its conclusion and to approve or reject, or otherwise resolve, a potential conflict of interest.


1



B. In relation to a Director or member of the Executive Committee

Any conflict of interest question involving one or more of the Company’s directors and/or members of the Executive Committee, shall be resolved according to the applicable provisions of the Belgian Companies Code, with the assistance of the Audit and Risk Committee where required.

C. Business relationships with third parties

Business relationships with third parties shall be governed solely by objective criteria. Suppliers shall be selected only on the basis of price, quality, reliability, technological standard, product suitability, the existence of a continuing business relationship, ISO or ecological audit certification and the existence of a quality management system. In no circumstances shall personal relationships be determining factors in awarding a contract. Advice or recommendations given by any Relevant Person must not be motivated by the prospect of a material or non-material advantage to that or another Relevant Person.

The procurement policy of the Company requires that at least two bids are obtained for each procurement and unless there is risk as to quality or significant additional cost at least two suppliers are to be maintained.


II. Corporate opportunities

A Relevant Person may not:

i.
take for himself or herself opportunities that are discovered through the use of Company property, information or position;
ii.
use Company property, information or position for personal gain; or
iii.
compete with the Company.

Relevant Persons owe a duty to the Company to advance its interests.

A corporate opportunity may be described as any business opportunity for the Company which arises through or outside the activities of a person and which could benefit the Company. In case of dispute, the Audit and Risk Committee has the responsibility to determine whether a corporate opportunity exists. The Audit and Risk Committee may also establish procedures to arrive at its conclusion and to approve or reject, or otherwise resolve, a potential usurpation of a corporate opportunity.


III. Confidentiality and privacy

It is important that Relevant Persons protect the confidentiality of Company information.

Relevant Persons may have access to proprietary and confidential information concerning the Company’s business, clients and suppliers. Confidential information includes any internal information obtained in the course of employment, including but not limited to non-public information concerning the Company’s business, financial results and prospects, the Company’s customers and suppliers, the Company’s contracts, agreements or investments, potential corporate transactions involving the Company and any legal proceedings commenced by or against the Company as well as any non-public information that might, if disclosed, be of use to the Company’s competitors or harmful to the Company or its customers.

Relevant Persons are required to keep such information confidential during employment as well as for at least 5 years thereafter, and not to use, disclose, or communicate such confidential information to third

2


parties other than in the course of employment with and with proper authority of the Company, except when disclosure is authorized by the Company or legally mandated.

The consequences to the Company and the Relevant Person concerned can be severe where there is unauthorized disclosure of any non-public, privileged or proprietary information. Among other things, disclosure of material non-public information relating to the Company could violate applicable insider trading laws and could result in significant civil and criminal penalties for the individual, in addition to penalties that may be imposed upon the Company and its supervisory personnel.

Relevant Persons should immediately notify the Company’s General Counsel of any known or suspected leak of confidential information. Based on the information received, the Chief Executive Officer, Chairman of the Audit and Risk Committee and the General Counsel together with the Company’s investor relations manager shall determine which measures to take.


IV. Honest and fair dealing

Relevant Persons must endeavour to deal honestly, ethically and fairly and with integrity with the Company’s customers, suppliers, competitors and employees.

Honest conduct is considered to be conduct that is free from fraud or deception.

Ethical conduct is considered to be conduct conforming to accepted professional standards of conduct.

Fair conduct is considered to be conduct that is free from unfair advantage through manipulation, concealment or misrepresentation of material facts, abuse of privileged information or any other unfair-dealing practice.

Integrity refers to the quality of being honest and having strong moral principles.

Relevant Persons are expected to report suspected violations of law or of Company policies in the first place to the head of department, who will report to the General Counsel, or the Chief Executive Officer and/or to the Chairman of the Audit and Risk Committee, as appropriate. The Company expects compliance with its standards of integrity throughout the organisation and will not tolerate any Relevant Person who achieves results at the cost of violation of laws or who deals unscrupulously.


V. Health, safety and social behaviour

A. Health and safety

The Company strives to provide each Relevant Person with a safe and healthy work environment. Each Relevant Person has responsibility for maintaining a safe and healthy workplace for all Relevant Persons by following safety and health rules and practices and reporting accidents, injuries and unsafe equipment, practices or conditions.

B. Social behaviour

Threats or acts of violence and physical intimidation are not permitted. The use of illegal drugs in the workplace will not be tolerated.


3


Each Relevant Person must realize that his/her behaviour will be attributed to the Company and can affect its reputation. The Company therefore expects all Relevant Persons to be polite objective and fair in dealing with colleagues.

Hence, Relevant Persons:

•
may not unfairly disadvantage, favour, harass or ostracize others because of race, colour, nationality, descent, religion, gender, sexual orientation, age, physical characteristics or appearance;
•
have the right to be protected against harassment; and the obligation to allow others to feel freedom from harassment, regardless of whether one might consider his or her own behaviour to be normal or acceptable and whether the harassed person has the opportunity to avoid the harassment;
•
are entitled to work together with colleagues in an atmosphere of safety, comfort and trust.

C. Communication

Relevant Persons must endeavour to contribute as much as possible of his or her own expertise and of the expertise drawn on from elsewhere within the Company. Free and open communication between Relevant Persons is key for decision-making within the Company.

In respect of the abovementioned points, employees are also referred to the Employment standards and the Staff Handbook.


VI. Protection and proper use of Company assets

The Company’s assets are only to be used for legitimate business purposes and only by authorized Relevant Persons or their authorized designees. This applies to tangible assets (such as equipment, office equipment, telephone, copy machines, etc.) and intangible assets (such as trade secrets and confidential information). These assets must not be removed from Company premises without the express permission of the head of department other than for work-related purposes. Data, programs or documents must be neither copied nor brought onto or removed from Company premises without permission other than for work-related purposes.

Relevant Persons have a responsibility to protect the Company’s assets from theft and loss and to ensure their efficient and safe use. Theft, carelessness and waste have a direct impact on the Company’s profitability. If a Relevant Person becomes aware of theft, waste or misuse of the Company’s assets, such Relevant Person should report this to his or her manager or the General Counsel.


VII. Security of files and records and archiving
The documents and data storage media used in the workplace must not come into the possession of unauthorized persons. Relevant Persons must therefore keep them secure, must secure computer data through the use and frequent changing of passwords and shall not make copies of business papers or computer files other than for work-related purposes.

Relevant Persons do not have the right to access to information not relating to their own field of work or responsibility and shall not read messages addressed to others, except for work-related reasons.


4


Relevant Persons must keep all records and files (including electronic records) in such a way as to permit delegation to a colleague at any time. All significant information should be properly recorded and archived. Hence, files must be kept in a manner that is complete, orderly and readily understandable.

Reference is also made in this respect to the Company’s Record Retention Policy.


VIII. Compliance with laws, rules and regulations
All Relevant Persons are responsible for complying with various laws, rules and regulations of the countries and regulatory authorities that apply to the Company’s business. Any Relevant Person who is unsure whether a situation violates any applicable law, rule, regulation or Company policy should contact his or her manager or the Company’s General Counsel.


IX. Cooperation with authorities while defending our rights

The Company will endeavour to be cooperative and open in its dealings with all authorities and government agencies. Relevant Persons shall inform the Company’s General Counsel immediately in the event of a request for information or questioning outside the ordinary course of business.


X. Securities trading; prohibition on loans

The Company is subject to a number of laws concerning the purchase of its shares and other publicly traded securities. Company policy prohibits Relevant Persons and their family members from trading securities while in possession of material, non-public information relating to the Company or any other company, including a customer or supplier. Please see the Company’s "Dealing Code" in this respect.

U.S. securities laws also prohibit the Company from, directly or indirectly (including through subsidiaries), (i) extending or arranging for the extension of personal loans to its directors or executive officers and (ii) renewing or materially modifying existing loans to such persons. Directors shall not seek or facilitate personal loans from the Company in contravention of the foregoing.

5



XI. Directors

The business of the Company is managed under the direction of the Board and the various committees thereof. The basic responsibility of the directors is to act honestly and in good faith with a view to the best interests of the Company.

In carrying out their duties and responsibilities and setting the general policies pursuant to which the Company operates, directors should endeavour to promote fair dealing by the Company and its employees, officers and agents with customers, suppliers, competitors and employees.

In carrying out their duties and responsibilities, directors should endeavour to comply, and to cause the Company to comply, with applicable governmental laws, rules and regulations.

Directors should endeavour to cause the Company to proactively promote ethical behaviour and to encourage employees to report evidence of illegal or unethical behaviour to appropriate Company personnel.


XII. Outside directorships and other outside activities

Although activities outside the Company are not necessarily a conflict of interest, a conflict could arise depending upon a Relevant Person’s position within the Company and the Company’s relationship with the entity involved in such outside activity. Outside activities may also be a conflict of interest if they cause a Relevant Person, or are perceived to cause a Relevant Person, to choose between that interest and the interests of the Company. Reference is made in this respect to the Corporate Governance Charter and this policy (see sections “Conflicts of interest” and “Corporate opportunities” above).


XIII. Relationships with government personnel and business partners

All Relevant Persons should be aware that practices that may be acceptable in the commercial business environment (such as providing certain transportation, meals, entertainment and other things of nominal value) may be entirely unacceptable and even illegal when they relate to government employees or others who act on a government’s behalf. Relevant Persons are expected to adhere to the relevant laws and regulations governing relations with government employees or others who may act on a government’s behalf, including customers and suppliers, or with business partners outside any governmental context, in every country where they conduct business. Further reference is made to the Anti-Corruption Policy.


XIV. Political contributions

Laws in many jurisdictions may prohibit or limit political contributions by corporations to candidates or to other political campaigns. In accordance with these laws, the Company does not make contributions where applicable laws make such contributions illegal. Relevant Persons may make personal political contributions in accordance with applicable laws, but contributions to candidates or to other political campaigns by Relevant Persons must not be, or appear to be, made with, or reimbursed by, Company funds or resources. Company funds and resources include (but are not limited to) Company facilities, office supplies, letterhead, telephones and fax machines. In this respect, reference is made to rules imposed by the Anti-Corruption policy.


6


Relevant Persons who hold or seek to hold political office must do so on their own time, whether through vacation, unpaid leave, after work hours or on weekends. Additionally, all Relevant Persons must obtain advance approval from the Company’s General Counsel prior to running for political office to ensure that there are no conflicts of interest with Company business.


XV. Procedures regarding waivers

Because of the importance of the matters involved in this Code, waivers will be granted only in limited circumstances and where such circumstances would support a waiver. Waivers of the Code may only be made by the Audit and Risk Committee and may need to be publicly disclosed by the Company.


XVI. Duty to report

Relevant Persons shall take all appropriate actions to stop any known misconduct by fellow Relevant Persons that violate this Code.

Please see the Company’s “Compliance/Whistleblower Protection Policy” for a description of how to report potential violations. Note that reports may be made anonymously and the Company will not retaliate or allow retaliation for reports made in good faith.


XVII. Enforcement and discipline

Violations of law will not be tolerated. The Company will offer all the necessary sources of information and guidance of the Company’s General Counsel to enable violations of law to be avoided. Relevant Persons will also be afforded guidance in the event of unjustified actions by authorities.

Violations may result in reprimand, claims for damages, termination of employment, or loss of office. In case of uncertainty of whether a violation has occurred within the Company, one must seek guidance from the Company’s General Counsel. Complaints, suggestions for improvements or reports of alleged violations of law should be made to the relevant departments.

It is not sufficient simply to take note of this Code of Conduct. Relevant Persons are requested to review their own behaviour in light of the above standards and to determine where improvements are possible. They must organize their area of responsibility in such a way that violations can always be observed or reports of violations received and take the initiative to regularly monitor subordinates' activities and actively communicate with them. Relevant Persons have a duty both to provide and to obtain information.

These principles must always form an active part of the Company’s corporate culture. Adherence to them must be based on the necessary sensitivity to the legal limits of employees’ own actions and a willingness to allow those actions to be judged against legal standards.


*    *    *

7


Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER


I, Patrick Rodgers, certify that:

1. I have reviewed this annual report on Form 20-F of Euronav NV;

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: April 30 , 2019



/s/ Patrick Rodgers     
Patrick Rodgers
Chief Executive Officer (Principal Executive Officer)





Exhibit 12.2
CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

I, Hugo De Stoop, certify that:

1. I have reviewed this annual report on Form 20-F of Euronav NV;

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: April 30, 2019

/s/ Hugo De Stoop
                      
Hugo De Stoop
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 Euronav NV (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, Patrick Rodgers, Chief Executive 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: April 30 , 2019



/s/ Patrick Rodgers     
Patrick Rodgers
Chief Executive Officer (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 Euronav NV (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, Hugo De Stoop, Chief 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: April 30 , 2019



/s/ Hugo De Stoop                                      
Hugo De Stoop
Chief Financial Officer (Principal Financial Officer)








Exhibit 15.1

DREWRYLOGO1.JPG




April 30 , 2019

Euronav NV
De Gerlachekaai 20
2000 Antwerpen
Belgium

Ladies and Gentlemen:

Reference is made to the annual report on Form 20-F of Euronav NV (the “Company”) for the year ended December 31, 2018 (the “Annual Report”) and the registration statement on Form F-3 (Registration No. Registration No. 333-210849) of the Company, as may be amended, including the prospectus contained therein and any prospectus supplement related thereto (the “Registration Statement”). We hereby consent to the incorporation by reference in the Registration Statement of all references to our name in the Annual Report and to the use of the statistical information supplied by us set forth in the section of the Annual Report entitled “The International Oil Tanker Shipping Industry.” We further advise the Company that our role has been limited to the provision of such statistical data supplied by us. With respect to such statistical data, we advise you that:

(1) we have accurately described the tanker shipping industry, subject to the availability and reliability of the data supporting the statistical and graphical information presented; and

(2) our methodologies for collecting information and data may differ from those of other sources and does not reflect all or even necessarily a comprehensive set of the actual transactions occurring in the tanker shipping industry.

We hereby consent to the filing of this letter as an exhibit to the Annual Report, which is incorporated by reference into the Registration Statement and any related prospectus.


Yours faithfully,

DREWRYSIGN.JPG

Nigel Gardiner
Group Managing Director
Drewry Shipping Consultants Ltd

DREWRYBANNERFOOTER.JPG

LONDON | DELHI | SINGAPORE | SHANGHAI
Drewry Shipping Consultants, 15-17 Christopher Street, London EC2A 2BS, United Kingdom
t : +44 (0) 20 7538 0191 f : +44 (0) 20 7987 9396 e : enquiries@drewry.co.uk
Registered in England No. 3289135 Registered VAT No. 830 3017 77
www.drewry.co.uk




LOGOEMAA03.JPG

Exhibit 15.2
April 30 , 2019

Euronav NV
De Gerlachekaai 20
2000 Antwerpen
Belgium

Ladies and Gentlemen:

Reference is made to the annual report on Form 20-F of Euronav NV (the “Company”) for the year ended December 31, 2018 (the “Annual Report”) and the registration statement on Form F-3 (Registration No. Registration No. 333-210849) of the Company, as may be amended, including the prospectus contained therein and any prospectus supplement related thereto (the “Registration Statement”). We hereby consent to the incorporation by reference in the Registration Statement of all references to our name in the Annual Report and to the use of the statistical information supplied by us set forth in the section of the Annual Report entitled “Overview of the Offshore Oil and Gas Industry.” We further advise the Company that our role has been limited to the provision of such statistical data supplied by us. With respect to such statistical data, we advise you that:
(1) we have accurately described the offshore oil and gas industry, subject to the availability and reliability of the data supporting the statistical and graphical information presented; and
(2) our methodologies for collecting information and data may differ from those of other sources and does not reflect all or even necessarily a comprehensive set of the actual transactions occurring in the offshore oil and gas industry.
We hereby consent to the filing of this letter as an exhibit to the Annual Report, which is incorporated by reference into the Registration Statement and any related prospectus.


Yours faithfully,



/s/ David Boggs
David Boggs, Managing Director
Energy Maritime Associates







LOGOKPMGA01.JPG

Exhibit 15.3
Consent of Independent Registered Public Accounting Firm
The Board of Directors of Euronav NV:
We consent to the incorporation by reference in the registration statement (No. 333-210849) on Form F-3 of Euronav NV of our report dated April 30, 2019, with respect to the consolidated statements of financial position of Euronav NV and subsidiaries as of December 31, 2018 and 2017, and the related consolidated statements of profit or loss, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2018, and the related notes, and the effectiveness of internal control over financial reporting as of December 31, 2018, which report appears in the December 31, 2018 annual report on Form 20-F of Euronav NV.
Our report contains an explanatory paragraph that states the Company acquired Gener8 Maritime Inc. during 2018, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2018, Gener8 Maritime Inc.’s internal control over financial reporting associated with total assets of USD 76.3 million and revenue of USD 16.5 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2018. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Gener8 Maritime Inc.
Our report refers to a change to the method of accounting for revenue from contracts with customers effective January 1, 2018 due to the adoption of International Financial Reporting Standard 15 Revenue from Contracts with Customers.






Patricia Leleu
Bedrijfsrevisor / Réviseur d’Entreprises
KPMG Bedrijfsrevisoren – Réviseurs d'Entreprises CVBA

Zaventem, BELGIUM
April 30, 2019




KPMG Bedrijfsrevisoren - Réviseurs d’Entreprises, a Belgian CVBA/SCRL and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.
Document Classification: KPMG Confidential
Maatschappelijke zetel - Siège Social:
Luchthaven Brussel Nationaal 1K
1930 Zaventem
België - Belgique

KPMG Bedrijfsrevisoren - Réviseurs d'Entreprises CVBA/SCRL
BTW - TVA BE 0419.122.548
RPR Brussel - RPM Bruxelles
IBAN : BE 62 4377 5152 9261
BIC : KREDBEBB

Exhibit 15.4

SEWARD & KISSEL LLP
ONE BATTERY PARK PLAZA
NEW YORK, NEW YORK 10004
 
 
 
 
 
TELEPHONE:  (212)  574-1200
 
901 K STREET, NW
FACSIMILE:  (212) 480-8421
 
WASHINGTON, D.C. 20001
WWW.SEWKIS.COM
 
TELEPHONE:  (202) 737-8833
 
 
FACSIMILE:  (202) 737-5184


    


April 30, 2019

Euronav NV
De Gerlachekaai 20
2000 Antwerpen
Belgium

Re:    Euronav NV
Ladies and Gentlemen:
Reference is made to the annual report on Form 20-F of Euronav NV (the “Company”) for the year ended December 31, 2018 (the “Annual Report”) and the registration statement on Form F-3 (Registration No. 333-210849) of the Company, as may be amended and supplemented, including the prospectus contained therein and any prospectus supplement related thereto (the “Registration Statement”). We hereby consent to (i) the filing of this letter as an exhibit to the Annual Report, which is incorporated by reference into the Registration Statement and (ii) each reference to us and the discussions of advice provided by us in the Annual Report under the section “Item 10. Additional Information—E. Taxation” and to the incorporation by reference of the same in the Registration Statement, in each case, without admitting we are “experts” within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the U.S. Securities and Exchange Commission promulgated thereunder with respect to any part of the Registration Statement.
Very truly yours,
/s/ Seward & Kissel LLP

 

SK 02257 0013 8225764 v1


Exhibit 15.5
 


April 30, 2019


Euronav NV
De Gerlachekaai 20
2000 Antwerpen
Belgium


Re:    Euronav NV
Ladies and Gentlemen:
Reference is made to the annual report on Form 20-F of Euronav NV (the “Company”) for the year ended December 31, 2018 (the “Annual Report”) and the registration statement on Form F-3 (Registration No. Registration No. 333-210849) of the Company, as may be amended, including the prospectus contained therein and any prospectus supplement related thereto (the “Registration Statement”). We hereby consent to (i) the filing of this letter as an exhibit to the Annual Report, which is incorporated by reference into the Registration Statement and (ii) each reference to us and the discussions of advice provided by us in the Annual Report under the section “Item 10. Additional Information—E. Taxation” and to the incorporation by reference of the same in the Registration Statement, in each case, without admitting we are “experts” within the meaning of the Securities Act of 1933, as amended, or the rules and regulations of the U.S. Securities and Exchange Commission promulgated thereunder with respect to any part of the Registration Statement.
Very truly yours,
/s/ Nico Goossens
Nico Goossens
for and on behalf of Argo Law cvba