Document:

Exhibit 10.18

 

NEWBUILDING SERVICES AGREEMENT

 

This NEWBUILDING SERVICES AGREEMENT, dated as of July 26, 2013 (this “Agreement”), is entered into by and between Dorian LPG Ltd., a Marshall Islands corporation with offices located at c/o Dorian LPG (USA) LLC, 27 Signal Road, Stamford, CT 06902 USA, , on behalf of itself and the Owners, as defined below (the “Company”), and Dorian (Hellas) S.A., a Panama corporation with offices located at 102/-104 Kolokotroni Street, Piraeus 185 35, Greece (the “Manager”).

 

W I T N E S S E T H

 

WHEREAS, the Company has been formed for, among other things, the purpose of owning, exercising all voting rights and powers associated with, and ultimately disposing of the ownership interests in subsidiaries (the Company and its subsidiaries, collectively referred to hereinafter as the “Company Group”) that purchase or otherwise invest in, own, operate, charter and sell or otherwise dispose of LPG vessels.

 

WHEREAS, the certain members Company Group have entered into shipbuilding contracts for the construction of LPG vessels (each, a “Newbuilding” and collectively the “Newbuildings” and each Newbuilding-owning subsidiary, an “Owner” and collectively, the “Owners”).  The names of the initial Owners and their respective Newbuildings are listed in Schedule I hereto, which schedule shall be amended from time to time to add or remove Owners and the Newbuildings that are owned, directly or indirectly, by the Company;

 

WHEREAS, the Manager is in the business of providing vessel management services, including provision of newbuilding management services; and

 

WHEREAS, the Company desires that the Manager perform and/or procure and arrange for the newbuilding management services of the Newbuildings and the Manager is willing to render such services, on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other valuable consideration, the parties hereto hereby agree as follows:

 

1.                                      Engagement of Manager.  The Company, on behalf of itself and each Owner, hereby engages the Manager to provide and/or procure and arrange for the newbuilding management services of the Newbuildings as described more fully herein, and the Manager hereby accepts such engagement.

 

2.              Term.  The term of this Agreement shall commence on the date hereof and shall continue until terminated earlier in accordance with Section 6 hereof.

 

3.              Services.  Subject to the terms and conditions set forth herein, the Manager shall act as the supervisors of the Company Group Newbuildings’ construction and shall provide and/or procure and arrange for the provision of all newbuilding management services, including without limitation, the following services (collectively, the “Services”):

 

 

(a)                                 overseeing and supervising, in all material respects, the construction of the Newbuildings;

 

(b)                                 assisting in the negotiation of the shipbuilding contract and specifications and related documentation;

 

(c)                                  arranging for and supervise alterations and changes to the Newbuildings’ design;

 

(d)                                 liaising with the ship builder, supervising the ship builder’s progress and overseeing construction to ensure the ship builder is constructing the Newbuildings in accordance with the shipbuilding contract, design and specifications; and

 

(e)                                  subject to the Company’s prior approval, entering into, making and performing all contracts, agreements and other undertakings as may be, in the opinion of the Manager, necessary, advisable or incidental to the performance of the Services contemplated by this Section 3.

 

4.                                      Engagement of Sub-Managers. The Manager shall be entitled to procure the performance of its obligations hereunder by its affiliates and/or third-party managers (hereinafter collectively called the “Sub-Managers”), provided that any performance of the Manager’s obligations by the Sub-Managers shall be without prejudice to the rights of the Company hereunder for any failure by the Manager in performance of the Manager’s duties and obligations hereunder and notwithstanding performance by the Sub-Managers, the Manager shall remain solely responsible to the Company for performance of its obligations hereunder.

 

5.                                      Fees.  In consideration for the Manager’s provision of the Services pursuant to this Agreement, the Company shall pay or cause to be paid to the Manager a monthly fee equal to US$15,000 (fifteen thousand United States dollars) per Newbuilding (the “Fee”) during the term of this Agreement.  The Fee shall be payable monthly in advance based on the number of Newbuildings owned by the Owners on the first day of such month and shall be pro rated for periods less than a month.

 

6.                                      Termination.

 

(a)                                 Delivery of Newbuilding.  With respect to each Newbuilding, this Agreement shall terminate automatically at the time of delivery of the Newbuilding from the shipyard to the relevant Owner.

 

(b)                                 Expiration of the Transition Period.  This Agreement shall terminate automatically upon the completion of the transfer of the certain assets and properties of the Manager used or held for use in or otherwise relating to, and certain Manager’s personnel employed in vessel management services for LPG vessels engaged in international commerce to Dorian LPG Management Corp., an indirect subsidiary of the Company.

 

7.                                      Force Majeure.  Neither the Company nor the Manager shall be under any liability to the other for any failure to perform any of their obligations hereunder by reason of Force Majeure.  The parties shall make reasonable efforts to minimize, avoid or prevent the effect of 

 

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the Force Majeure event.  “Force Majeure” shall mean any cause whatsoever of any nature or kind beyond the reasonable control of the Company or the Manager, including acts of God, acts of civil or military authorities, acts of war or public enemy, acts of any court, regulatory agency or administrative body having jurisdiction, insurrections, riots, strikes or other labor disturbances, embargoes or other causes of a similar nature.

 

8.                                      Notices.  All notices, statements or requests provided for hereunder shall be in writing and shall be deemed to have been duly given when received by the party receiving the notice by hand, or when delivered by the U.S. Postal Service as certified or registered mail, postage prepaid, or when transmitted by fax with confirmed answerback received.  Delivery “by hand” includes commercial express or courier service or overnight delivery service.  All notices shall be sent to the addresses of the parties as set forth in the preamble of this Agreement.

 

9.                                      Miscellaneous Provisions.

 

(a)                                 Entire Agreement.  This Agreement constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes any prior agreement or undertaking among them with respect to such subject matter.

 

(b)                                 Headings.  The Section headings in this Agreement are for convenience of reference only, and shall not be deemed to alter or affect the meaning or interpretation of any provisions hereof.

 

(c)                                  Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

 

(d)                                 Modification.  No change or modification of this Agreement shall be of any force unless such change or modification is in writing and has been signed by each party.

 

(e)                                  Waivers.  No waiver of any breach of any of the terms of this Agreement shall be effective unless such waiver is in writing and signed by the party against whom such waiver is claimed.  No waiver of any breach shall be deemed to be a waiver of any other or subsequent breach.

 

(f)                                   Severability.  If any provision of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

(g)                                  Independent Contractor.  The parties agree that the Manager is and shall act as an independent contractor in the performance of its duties hereunder.  The Manager is not, and in the performance of its duties hereunder will not hold itself out as, an employee, agent or partner of the Company, but shall advise persons with whom it deals on behalf of the Company that it is conducting such business as an independent contractor for the Company.

 

(h)                                 Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York without giving effect to any choice or conflict of law provision or rule.

 

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All disputes between or among the parties arising out of or in any way connected with the execution, interpretation and performance of this Agreement shall be solely and finally exclusively settled by arbitration in New York, New York, in accordance with the International Arbitration Rules of the International Centre for Dispute Resolution.

 

The parties irrevocably consent and agree that (i) any action brought to compel arbitration or in aid of arbitration in accordance with the terms of this Agreement, (ii) any action confirming and entering judgment upon any arbitration award, and (iii) any action for temporary injunctive relief to maintain the status quo or prevent irreparable harm prior to the appointment of the arbitral tribunal, may be brought exclusively in the courts of the State of New York sitting in New York City or (if it has jurisdiction) the United States District Court for the Southern District of New York (each, a “New York Court”), and, by execution and delivery of this Agreement, each party hereby submits to and accepts for itself and in respect of its property, generally and unconditionally, the exclusive jurisdiction of the aforesaid courts and appellate courts thereof except that any final arbitral award may be entered and enforced in any court having jurisdiction over any party or any of its assets.  Each party hereby appoints Seward & Kissel LLP, One Battery Park Plaza, New York, NY 10004 as its attorney-in-fact to receive any process on its behalf hereunder.

 

(i)                                     Third Parties.  This Agreement is not intended to, nor shall it create, any rights, claims or benefits enforceable by any person not a party to it.

 

[Remainder of Page Intentionally Left Blank]

 

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

 

	
 
    	
THE   MANAGER:
    
	
 
    	
 
    
	
 
    	
DORIAN   (HELLAS) S.A.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Constantine J. Markakis
    
	
 
    	
Name:   Constantine J. Markakis
    
	
 
    	
Title:   President/Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
THE   COMPANY:
    
	
 
    	
 
    
	
 
    	
FOR   AND ON BEHALF OF EACH OWNER AS FROM TIME TO TIME LISTED AND IDENTIFIED ON   SCHEDULE I:
    
	
 
    	
 
    
	
 
    	
DORIAN   LPG LTD.
    
	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Alexander Jan Ciaputa
    
	
 
    	
Name:   Alexander Jan Ciaputa
    
	
 
    	
Title:   Secretary
    

 

[Signature Page to Newbuilding Agreement]

 

 

SCHEDULE I

TO THE NEWBUILDING SERVICES AGREEMENT, DATED AS OF JULY 26, 2013, BY AND BETWEEN DORIAN LPG LTD. AND DORIAN (HELLAS) S.A.

 

LIST OF NEWBUILDINGS/OWNERS

(effective as of November 26, 2013)

 

	
Newbuilding
    	
 
    	
Owner
    
	
HHI Hull No. 2656
    	
 
    	
COMET   LPG TRANSPORT LLC
    
	
HHI Hull No. 2657
    	
 
    	
SEACOR   LPG II LLC
    
	
HHI Hull No. 2658
    	
 
    	
CORVETTE   LPG TRANSPORT LLC
    
	
HHI Hull No. S749
    	
 
    	
DORIAN   SHANGHAI LPG TRANSPORT LLC
    
	
HHI Hull No. S750
    	
 
    	
DORIAN   HOUSTON LPG TRANSPORT LLC
    
	
HHI Hull No. S751
    	
 
    	
DORIAN   AMSTERDAM LPG TRANSPORT LLC
    
	
HHI Hull No. S752
    	
 
    	
DORIAN   BARCELONA LPG TRANSPORT LLC
    
	
HHI Hull No. S753
    	
 
    	
DORIAN   SAO PAULO LPG TRANSPORT LLC
    
	
HHI Hull No. S754
    	
 
    	
DORIAN   CAPE TOWN LPG TRANSPORT LLC
    
	
HHI Hull No. S755
    	
 
    	
DORIAN   ULSAN LPG TRANSPORT LLC
    
	
HHI Hull No. S756
    	
 
    	
DORIAN   MONACO LPG TRANSPORT LLC
    
	
HHI Hull No. S757
    	
 
    	
DORIAN   EXPLORER LPG TRANSPORT LLC
    
	
HHI Hull No. S758
    	
 
    	
DORIAN   EXPORTER LPG TRANSPORT LLC
    
	
DSME Hull No. 2336
    	
 
    	
DORIAN   DUBAI LPG TRANSPORT LLC
    
	
DSME Hull No. 2337
    	
 
    	
DORIAN   GENEVA LPG TRANSPORT LLC
    
	
DSME Hull No. 2338
    	
 
    	
DORIAN   TOKYO LPG TRANSPORT LLCSUPPLEMENTAL LETTER

 

	
From: 
    	
 
    	
The Royal Bank of Scotland plc 
    
	
 
    	
 
    	
The Shipping Business Centre 
    
	
 
    	
 
    	
4th Floor
    
	
 
    	
 
    	
1 Princes Street
    
	
 
    	
 
    	
London EC2R 8PB
    
	
 
    	
 
    	
England
    
	
 
    	
 
    	
 
    
	
To:
    	
 
    	
CJNP LPG Transport LLC
    
	
 
    	
 
    	
CMNL LPG Transport LLC 
    
	
 
    	
 
    	
CNML LPG Transport LLC 
    
	
 
    	
 
    	
CORSAIR LPG Transport LLC and
    
	
 
    	
 
    	
Dorian LPG Ltd,
    
	
 
    	
 
    	
each of Ajeltake Road, Ajeltake Island
    
	
 
    	
 
    	
Majuro, MH96960
    
	
 
    	
 
    	
Marshall Islands
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
and
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Seacor LPG II LLC
    
	
 
    	
 
    	
of Ajeltake Road, Ajeltake Island 
    
	
 
    	
 
    	
Majuro, MH96960
    
	
 
    	
 
    	
Marshall Islands
    

 

18  October 2013

 

Dear Sirs

 

Facility agreement dated 29 July 2013 and made between (i) CJNP LPG Transport LLC, CMNL LPG Transport LLC, CNML LPG Transport LLC and CORSAIR LPG Transport LLC as joint and several borrowers (together, the “Borrowers”), (ii) the banks and financial institutions listed  in Schedule 1 thereto as lenders, (iii)ourselves as arranger, facility agent and security agent  in respect of a term loan facility of up to $135,224,500 (the “Facility Agreement”)

 

Pre-delivery security assignment dated 29 July 2013 and made between Seacor LPG II LLC and ourselves as security agent (the “Pre-delivery Security Assignment”)

 

Newbuilding cash account security deed dated 29 July 2013 and made between the Borrowers and ourselves (the “Newbuilding Cash Account Security”)

 

We refer to the Facility Agreement and Pre-delivery Security Assignment. Terms defined in the Facility Agreement shall have the same meanings when used in this supplemental letter.

 

 

Following your discussions with Hyundai Heavy industries Co. Ltd. as builder(the “Builder”)under a shipbuilding contract dated 29 April 2013 and made between (i) the Builder and (ii) Seacor LPG II LLC(the “Purchaser”) for the construction of Hull No. 2657 (the “Shipbuilding Contract”), you wish to agree with the Builder a reduction to the Contract Price (as defined in the Shipbuilding Contract) and a consequential amendment to the stage payments payable under Article X of the Shipbuilding Contract.

 

You have requested our consent to the variation of:

 

(a)         the Shipbuilding Contract; and

 

(b)         a RefundGuarantee with number M0902-305-LG-00840 dated 2 May 2013 issued by The Export Import Bank of Korea (the “Refund Guarantor”) in favour of the Purchaser pursuant to the Shipbuilding Contract (the “Refund Guarantee”),

 

(together, the “Pre-delivery Contracts”).

 

This letter confirms our agreement  as Facility Agent to the variation of the Pre-delivery Contracts, pursuant to clauses 23.22 and 26.2 of the Facility Agreement, clause 5.3(a) of the Pre-delivery Security Assignment (and paragraph 7(a) of the Builder’s Acknowledgment and Refund Guarantor’s Acknowledgement thereunder, respectively), subject to the satisfaction of the following conditions:

 

1.              Receipt in form and substance satisfactory to ourselvesof the amendment to the Shipbuilding Contract in the form attached as the Appendix hereto (“Agreement No. 1”), confirming, inter  alia, that:

 

a.         the Contract Price at Article II has been reduced from $73,931,300 to $73,345,000 (the “New Contract Price”);

 

b.         Article VII paragraph 2 is amended so that delivery of Ship D shall be concurrent with the release of the fourth instalment pursuant to the Shipbuilding Contract (as amended pursuant to Agreement No. 1;

 

c.          the instalment profile at Article Xis amended so that the instalment payable pursuant to Article X, paragraph 2(c) is increased to $28,418,740, the instalment payable pursuant to Article X, paragraph 2(d) is increased to $30,540,000 and the instalment which was originally payable pursuantArticle X, paragraph 2(e) is no longer payable;

 

d.         the method of payment set out at Article X, paragraph 4 is amended accordingly; and

 

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e.          that notwithstanding the changes to the Shipbuilding Contract, all provisions of the Shipbuilding Contract and any notices and acknowledgements issued thereunder shall remain in full force and effect.

 

2.              Confirmation from the Borrowers under the Facility Agreement that at no time before the Delivery Date shall the Newbuilding Cash Collateral fall below $29,572,520.

 

3.              Receipt in form and substance satisfactory to the ourselves of the form of amendment to the Refund Guarantee in the form appended to Agreement No. 1, confirming, inter alia, that:

 

a.              the Refund Guarantee Amount as stated in Article 2 of the Refund Guarantee will be increased from$28,772,520 to $42,805,000, being 60% of the NewContract Price; and

 

b.              that notwithstanding the changes to the Shipbuilding Contract and the Refund Guarantee, all provisions of the Refund Guarantee and any notices and acknowledgements issued thereundershall remain in full force and effect.

 

4.              Confirmation by the parties to whom this supplemental letter is addressed of the terms of this supplemental by signing the acknowledgement at the foot of this letter and returning the same to us within 2 days of the execution of this supplemental letter, together with such evidence as we may require in relation to the parties’ rights and authorisation to execute this letter.

 

5.         Receipt of favourable legal opinions from lawyers appointed by ourselves on such mattersconcerning the laws of Korea, including but not limited to an opinion confirming that the amendments to the Pre-delivery Contracts will be binding on the Builder and Refund Guarantor.

 

6.         Reimbursement to us on demand all costs, fees (including legal fees) and expenses and Taxes thereon incurred by us in connection with the preparation and execution of this supplemental letter and the arrangements contemplated hereunder.

 

This letter further confirms our agreement as Facility Agent to the withdrawal of $28,418,740 from the Newbuilding Cash Account, and, that for the purposes of clause 23.22(a) of the FacilityAgreement, the minimum balance from the date of this Supplemental Letter shall be $29,572,520, as set out in clause 23.22(b) of the Facility Agreement.

 

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This letter shall be governed by, and construed in accordance with English law. Clause 48 (Enforcement) of the Facility Agreement shall apply to this letter as if set out in full herein.

 

Save as amended by this supplemental letter, all remaining provisions of the Facility Agreement, the Shipbuilding Contract, the Refund Guarantee Agreement and the Pre-delivery Security Assignment shall remain in full force and effect.

 

Please indicate your acknowledgement of this letter and agreement to its terms by executing the form of acknowledgement set out below.

 

	
Yours faithfully
    
	
 
    
	
 
    
	
/s/ Colin Manchester
    	
 
    
	
For and on behalf of
    
	
The Royal Bank of Scotland plc
    

 

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