Exhibit 10.4


 


EXECUTION
VERSION


 


DIRECTOR
Designation agreement


 


This Director Designation Agreement (this
“Agreement”), dated March 27, 2019, is by and between First Reserve Fund XII, L.P., a Cayman Islands limited
partnership (“FRXII”), First Reserve XII-A Parallel Vehicle, L.P., a Cayman Islands limited partnership (together
with FRXII and its and their respective successors and permitted assigns, “Investor”), and Diamond S Shipping
Inc., a corporation organized under the laws of the Republic of the Marshall Islands (together with its successors and permitted
assigns, the “Company”) (Investor, together with the Company, the “Parties” and each, a “Party”).


 


RECITALS


 


1.          The
Company is a newly formed corporation with shares of common stock, par value $0.001 per share (“Common Stock”),
listed or to be listed on a U.S. stock exchange pursuant to a Transaction Agreement, dated November 27, 2018, among DSS Holdings
L.P., Capital Product Partners L.P. and the other parties named therein (as amended, the “Transaction Agreement”).


 


2.          At
Closing (as defined in the Transaction Agreement), Investor will hold approximately 30.09% of the issued and outstanding shares
of Common Stock.


 


3.          Investor
and the Company desire to enter into this Agreement to set forth their agreements regarding the designation of nominees on the
Board of Directors of the Company (the “Board”).


 


I.           Board
representation


 


1.01       Designation.
Until the annual meeting of the Company’s shareholders (the “Shareholders”) held in 2024 (the “2024
Annual Meeting”):


 


(a)          Subject
to the terms and conditions of this Agreement, Investor is entitled to designate up to three individuals (collectively, the “Nominees”
and each, a “Nominee”) for inclusion by the Company and the Board, acting through the Nominating Committee of
the Board (the “Nominating Committee”), in the slate of nominees recommended to the Shareholders for election
as directors at any annual or special meeting of the Shareholders at which directors of the Company are to be elected. Notwithstanding
the foregoing, if Former DSS Holders (as defined below) reduce their combined beneficial ownership (as defined in SEC Rule 13d-3)
and, as a result thereof:


 


(i)          their
combined beneficial ownership is reduced by 50% or more, but less than 75%, from that owned at Closing, Investor will, without
further action, only be entitled to designate up to two Nominees;


 


(ii)         their
combined beneficial ownership is reduced by 75% or more of that owned at Closing, but Investor still beneficially owns 5% or more
of the then outstanding shares of Common Stock, Investor will, without further action, only be entitled to designate up to one
Nominee; and


 




     


     


    

 


(iii)        Investor
owns less than 5% of the then outstanding shares of Common Stock, it will, without further action, no longer have any nomination
rights hereunder.


 


(b)          In
the event that the size of the Board is increased or decreased following the date hereof, then the number of individuals that Investor
will have the right to designate under this Section 1.01 will be proportionally adjusted (rounded up or down to the nearest
whole number) such that, following such change in the size of the Board, the number of Nominees as a percentage of the total number
of directors on the Board is equal to the number of individuals that Investor was entitled to designate as a percentage of the
total number of directors on the Board immediately prior to such change.


 


(c)          Board
vacancies arising through the death, resignation or removal of a then-serving Nominee may be filled by the Board only with another
Nominee and the director so chosen will hold office until the next election at an annual meeting of the Shareholders and until
his or her successor is duly elected and qualified, or until his or her earlier death, resignation or removal.


 


(d)          Notwithstanding
the provisions of this Section 1.01, Investor will not be entitled to designate a person as a nominee to the Board upon
a determination in good faith by (i) the Nominating Committee that such person would not be qualified under applicable law, rule
or regulation to serve as a director of the Company or (ii) the Board, the Nominating Committee or another duly authorized committee
of the Board, after consultation with outside counsel, that so doing would be inconsistent with its fiduciary duties under applicable
law or violate applicable law. Other than with respect to the considerations set forth in the preceding sentence, the Company will
not have the right to object to any Nominee.


 


(e)          The
Company will notify Investor in writing of the date on which proxy materials are expected to be mailed by the Company in connection
with an election of directors at an annual or special meeting of the Shareholders (and such notice will be delivered to Investor
at least 30 days prior to such expected mailing date). The Company will provide Investor with a reasonable opportunity to review
and provide comments on any portion of the proxy materials relating to the Nominees or the rights and obligations provided under
this Agreement and to discuss any such comments with the Company. The Company will use its reasonable best efforts to notify Investor
of any opposition to the Nominee in accordance with Section 1.01(d) or of any proposed selection of Nominees by the Board
under Section 1.01(f), in either case sufficiently in advance of the date on which such proxy materials are to be mailed
by the Company in connection with such election of directors so as to enable Investor to propose a replacement Nominee, if necessary,
in accordance with the terms of this Agreement, and Investor will have ten Business Days to designate another nominee.


 




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(f)          Notwithstanding
the provisions of Section 1.01(a), the maximum aggregate number of nominees that the Company is obligated to include on
any slate of nominees recommended to the Shareholders is equal to the greater of (i) the number of Nominees that Investor has the
right to nominate under such Section or (ii) the number of Nominees that the other Former DSS Holder has the right to nominate
under its corresponding Director Designation Agreement. In the event that the aggregate number of nominees submitted by Former
DSS Holders is greater than such maximum aggregate number, then the maximum number of Nominees shall be selected from among the
aggregate Nominees submitted by the Former DSS Holders, as determined in good faith by the Board or a duly authorized committee
thereof; provided that at least one Nominee submitted by each Former DSS Holder that has a nomination right is included
in such selection.


 


(g)          Subject
to applicable legal requirements, the Company will procure that its Articles of Incorporation and Bylaws accommodate the rights
and obligations set forth herein.


 


(h)          The
Investor may waive its rights to nomination rights under this Section 1.01 or the Company’s Articles of Incorporation or
Bylaws at any time by delivering written notice thereof to the Company.


 


(i)          For
purposes hereof: “Former DSS Holders” means Investor, WL Ross & Co. LLC (“WLR”) and their
respective controlled Affiliates or their successors by operation of law.


 


1.02       Subsequent
Nomination of Persons Designated by Investor; Voting. (a) Subject to applicable law, the Company will use its commercially
reasonable efforts to cause the election of each Nominee, including by including each such Nominee in the proxy statement prepared
by management of the Company in connection with soliciting proxies for every meeting of Shareholders called for the election of
such Nominee, and at every postponement or adjournment thereof, and on every action of the Board or the Shareholders with respect
to the election of such Nominee.


 


(b)          Until
the 2024 Annual Meeting, Investor will vote its shares of Common Stock received at the Closing to confirm any nominee nominated
and recommended by the Board (whether or not it has nomination rights hereunder) as long as it owns any such shares.


 


1.03       Chairman.
The Company and the Investor agree that, until the 2022 annual meeting of Shareholders, the Chairman of the Board will be designated
by WLR; provided that if WLR, its controlled Affiliates and its successors by operation of law reduce their beneficial ownership
(as defined in SEC Rule 13d-3) in the Company by 50% or more from that owned as at the Closing, WLR will cease to have the right
to designate the Chairman, and the Board will select the Chairman.


 


1.04       Termination.
This Agreement may be terminated at any time with the affirmative written consent of both Former DSS Holders.


 




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II.          MISCELLANEOUS


 


2.01       Expenses.
Except as otherwise provided herein, all expenses incurred in connection with this Agreement and the transactions contemplated
hereby will be paid by the Party incurring such expenses; provided, for the avoidance of doubt, that the Company will pay
the reasonable out-of-pocket expenses incurred by each Nominee in connection with his or her election and/or attending the meetings
of the Board and any committee thereof submitted in accordance with its expense reimbursement policies.


 


2.02       Notice.
All notices, requests, demands and other communications made under or by reason of the provisions of this Agreement must be in
writing and be given by hand delivery, email, facsimile or next Business Day courier to the affected Party at the addresses and
facsimile numbers set forth below. Such notices will be deemed given at the time personally delivered (if delivered by hand with
receipt acknowledged), upon issuance by the transmitting machine of confirmation that the number of pages constituting the notice
has been transmitted without error and confirmed telephonically (if sent by email or facsimile), and the first Business Day after
timely delivery to the courier (if sent by next-Business Day courier specifying next-Business Day delivery).


 


(iv)         If
to the Company, to:


 


Diamond S Shipping Inc.


33 Benedict Place


Greenwich, CT 06830


USA


Attention:   Craig Stevenson


Email:   cstevenson@diamondsshipping.com


 


With a copy (which will not constitute notice) to:


 


Jones Day


250 Vesey Street


New York, New York 10281


Attention:   Robert Profusek, Esq.


Email:   raprofusek@jonesday.com


 


(v)          If
to Investor:


 


First Reserve


290 Harbor Drive


Stamford, CT 06902


Attention:   General Counsel


Email:   aschwartz@firstreserve.com


 


With a copy (which will not constitute notice) to:


 


Gibson, Dunn & Crutcher LLP


1801 California St.


 




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Suite 4200


Denver, CO 80202


Attention:   Beau Stark


Email:   bstark@gibsondunn.com


 


2.03       Interpretation.
This Agreement has been freely and fairly negotiated among the Parties. If an ambiguity or question of intent or interpretation
arises, this Agreement will be construed as if drafted jointly by the Parties and no presumption or burden of proof will arise
favoring or disfavoring any Party because of the authorship of any provision of this Agreement. When a reference is made in this
Agreement to an Article or Section, such reference will be to an Article or Section of this Agreement unless otherwise indicated.
The headings contained in this Agreement are for reference purposes only and will not affect in any way the meaning or interpretation
of this Agreement. Whenever the words “include,” “includes” or “including” are used in this
Agreement, they will be deemed to be followed by the words “without limitation.” “$” refers to U.S. dollars.
Words used in the singular form in this Agreement will be deemed to include the plural, and vice versa, as the context may require.
If the date upon or by which any Party is required to perform any covenant or obligation hereunder falls on a day that is not a
Business Day, then such date of performance will be automatically extended to the next Business Day thereafter. The words “hereof,”
“herein” and “hereunder” and words of similar import when used in this Agreement will refer to this Agreement
as a whole and not to any particular provision of this Agreement. Unless the context otherwise requires, (i) ”or”
is disjunctive but not necessarily exclusive, (ii) the use in this Agreement of a pronoun in reference to a Party includes
the masculine, feminine or neuter, as the context may require, and (iii) unless otherwise defined herein, terms used herein
which are defined in GAAP have the meanings ascribed to them therein. Any agreement, instrument or Law defined or referred to herein
means such agreement, instrument or Law as from time to time amended, modified or supplemented (and, in the case of any Law, the
rules and regulations promulgated thereunder), including (in the case of agreements or instruments) by waiver or consent and (in
the case of Laws) by succession of comparable successor Laws. The term “Business Day” means any day that is
not a Saturday, a Sunday or other day that is a statutory holiday and on which banks are open in New York and London to the general
public for business.


 




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2.04       Governing
Law. This Agreement, any claims, causes of actions or disputes (whether in contract or tort) based upon, arising out of
or relating to this Agreement or the negotiation, execution or performance of this Agreement will be governed by and construed
in accordance with the Laws applicable to contracts made and to be performed entirely in the State of New York, United States of
America, without regard to any applicable conflict of Laws principles. The Parties agree that any action seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this Agreement will only be brought in any United States
District Court located in New York County, New York so long as such court has subject matter jurisdiction over such action, or
alternatively in any New York State Court located in New York County, New York if the aforesaid United States District Courts do
not have subject matter jurisdiction, and that any cause of action arising out of this Agreement will be deemed to have arisen
from a transaction of business in the State of New York, and each of the Parties hereby irrevocably consents to the jurisdiction
of such court (and of the appropriate appellate courts therefrom) in any such action and irrevocably waives any objection that
it may now or hereafter have to the laying of the venue of any such action in any such court or that any such action which is brought
in such court has been brought in an inconvenient forum. Process in any such action may be served on any Party anywhere in the
world, whether within or without the jurisdiction of such court. Without limiting the foregoing, each Party agrees that service
of process on such Party as provided in Section 2.02 will be deemed effective service of process on such Party. In
the event of litigation relating to this Agreement, the non-prevailing Party will be liable and pay to the prevailing Party the
reasonable costs and expenses (including attorney’s fees) incurred by the prevailing Party in connection with such litigation,
including any appeal therefrom.


 


2.05       Specific
Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise breached, that monetary damages may be inadequate
and that a Party may have no adequate remedy at Law. Notwithstanding Section 2.04, the Parties accordingly agree that
the Parties will be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in action instituted in a United States District Court located in New York County, New
York, or alternatively in any New York State Court located in New York County, New York if the aforesaid United States District
Courts do not have subject matter jurisdiction, this being in addition to any other remedy to which such Party is entitled at law
or in equity. In the event that a Party seeks in equity to enforce the provisions of this Agreement, no Party will allege, and
each Party hereby waives the defense or counterclaim that, there is an adequate remedy at law.


 


2.06       WAIVER
OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS
AGREEMENT OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT
OR ANY OF THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT,
EQUITY OR OTHERWISE. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION WILL BE DECIDED BY COURT TRIAL WITHOUT A JURY.


 


2.07       Certain
Adjustments. The provisions of this Agreement will apply to the full extent set forth herein with respect to any shares
of Common Stock received at Closing or any shares of voting stock which may be issued in respect of, in exchange for or in substitution
for such shares of Common Stock, by combination, recapitalization, reclassification, merger, consolidation or otherwise and the
term “Common Stock” will include all such other securities.


 




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2.08       Successors
and Assigns; Assignment. Except as otherwise expressly provided herein, the provisions hereof will inure to the benefit
of, and be binding upon, the successors, assigns, heirs, executors and administrators of the Parties hereto Parties; provided,
however, that any of the rights and obligations of Investor hereunder may be transferred or assigned in whole or in part by it
to any Affiliate of Investor, provided, further, that such rights and obligations will terminate and cease to be
so transferred or assigned upon any Affiliate to which such rights and obligations are transferred or assigned no longer being
an Affiliate of Investor.


 


2.09       Amendment
and Waiver. No amendment, waiver or other modification of, or consent under, any provision of this Agreement will be effective
unless it is approved in writing by each Party. No waiver of any breach of any agreement or provision herein contained will be
deemed a waiver of any preceding or succeeding breach thereof or of any other agreement or provision herein contained. The failure
or delay of any Party to assert any of its rights or remedies under this Agreement will not constitute a waiver of such rights
nor will it preclude any other or further exercise of the same or of any other right or remedy.


 


2.10       No
Third-Party Beneficiaries. This Agreement is for the sole benefit of the Parties and their permitted assigns and nothing
herein expressed or implied will give or be construed to give any person, other than the Parties and such permitted assigns, any
legal or equitable rights hereunder.


 


2.11       Entire
Agreement. This Agreement (including the exhibits hereto) constitutes the entire agreement among the Parties with respect
to the subject matter hereof and supersede all prior agreements, understandings, representations and undertakings, both written
and oral, among the Parties with respect to the subject matter hereof and thereof.


 


2.12       Severability.
If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any law or public policy
in any jurisdiction, all other terms and provisions of this Agreement will nevertheless remain in full force and effect so long
as the economic or legal substance of the transactions and the intention of the Parties with respect to the transactions contemplated
hereby is not affected in any manner materially adverse to any of the Parties. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties will negotiate in good faith to modify this Agreement so as to
effect the original intent of the Parties as closely as possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent possible.


 




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2.13       Further
Assurances. Each of the Parties hereto will, from time to time and without further consideration, execute such further
instruments and take such other actions as any other Party hereto will reasonably request in order to fulfill its obligations under
this Agreement to effectuate the purposes of this Agreement.


 


2.14       Counterparts.
This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which will constitute one
and the same agreement. This Agreement may be executed by any Party by means of a facsimile, email or PDF transmission of an originally
executed counterpart, the delivery of which facsimile, email or PDF transmission will have the same force and effect, except as
specified in any document executed and delivered pursuant to the immediately preceding sentence, as the delivery of the originally
executed counterpart.


 


[Signature Pages Follow]


 




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


 


	 	Diamond S Shipping Inc. 
	 	 	 
	 	By: 	/s/ Craig H. Stevenson Jr.
	 	 	Name: Craig H. Stevenson Jr.
	 	 	Title: Authorized Signatory


 


[Signature Page to the Dispatch Director
Designation Agreement]


 




     


     


    

 


	 	First Reserve Fund XII, L.P.
	 	By:
    First Reserve GP XII, L.P., its general partner
	 	 	By: First Reserve GP XII
    Limited, its general partner
	 	 	 
	 	By:	/s/ Edward Bialas
	 	 	Name: Edward Bialas
	 	 	Title: Managing Director
	 	 	 
	 	FR XII-A Parallel Vehicle, L.P.
	 	By:
    First Reserve GP XII, L.P., its general partner
	 	 	By: First Reserve GP XII, Limited, its general
    partner
	 	 	 
	 	By:	/s/ Edward Bialas
	 	 	Name: Edward Bialas
	 	 	Title: Managing Director


 


	 	Addresses for Notices:
	 	 
	 	First Reserve
	 	290 Harbor Drive
	 	Stamford, CT 06902
	 	Attention:   General Counsel
	 	Email:   aschwartz@firstreserve.com
	 	 
	 	With a copy (which will not constitute notice) to:
	 	 
	 	Gibson, Dunn & Crutcher LLP
	 	1801 California St.
	 	Suite 4200
	 	Denver, CO 80202
	 	Attention:   Beau Stark
	 	Email: bstark@gibsondunn.com


 


[Signature Page to the Dispatch Director
Designation Agreement]