--------------------------------------------------------------------------------

 
Exhibit 10.2

 
MEMORANDUM OF AGREEMENT
 
Dated: 3 June 2010
 
SEVENSEAS INTERNATIONAL INC.
hereinafter called the Sellers, have agreed to sell, and
Baltic Trading Limited, 299 Park Avenue NY NY 20th Floor,
hereinafter called the Buyers, have agreed to buy
 
Name: Hull No H-4011 being a 35,000 dwt Handysize Bulkcarrier
 
Classification Society/Class: American Bureau of Shipping
 
Built: Under Construction By: SPP Shipbuilding Co., Ltd the ‘Builder’
 
Flag: To be nominated Place of Registration: To be nominated
 
Call Sign: N/A                                    Grt/Nrt:
 
Register Number: N/A
 
hereinafter called the Vessel, on the following terms and conditions:
 
Definitions
 
“Banking days” are days on which banks are open both in the country of the
currency stipulated for the Purchase Price in Clause 1 and in the place of
closing stipulated in Clause 8.
 
“In writing” or “written” means a letter handed over from the Sellers to the
Buyers or vice versa, a registered letter, telex, telefax or other modern form
of written communication.
 
“Classification Society” or “Class” means the Society referred to in line 4.
 
‘Shipbuilding Contract’ means the Shipbuilding Contract dated 9th May 2007 in
respect of the Vessel, being attached hereto as Appendix I.
 
‘Specifications’ means the Specifications as described in the Shipbuilding
Contract.
 
1.           Purchase Price US$ 33,250,000 (Thirty-three million two hundred and
fifty thousand United States Dollars)
 
2.           Deposit
 
As security for the correct fulfilment of this Agreement the Buyers shall pay a
deposit of 10 % (ten per cent) of the Purchase Price into an interest bearing
joint account within three (3) New York banking days from the date of this
Agreement signed by both parties via fax/email and all subjects are
lifted.  This deposit shall be placed with the Sellers nominated bank in London
or Monaco or Switzerland and held by them in a joint account for the Sellers and
the Buyers, to be released in accordance with joint written instructions of the
Sellers and the Buyers.  Interest, if
 
 
 
 
 

--------------------------------------------------------------------------------

 
 
 
any, to be credited to the Buyers.  Any fee charged for holding the said deposit
shall be borne equally by the Sellers and the Buyers.
 
3.           Payment
 
The balance of the Purchase Price shall be positioned by the Buyers or their
Bankers in a suspense account with a Bank nominated by the Sellers in London or
Monaco or Switzerland (non Eurozone) no later than three (3) New York banking
days prior to the “Delivery Date” as defined in the Shipbuilding Contract.  At
the time of remittance of the said funds to the said suspense account the Buyers
or their bankers shall advise the Sellers bankers (via an MT199 message or
otherwise) of the names of the persons authorised to release the relevant funds
to the Sellers at the time of delivery.  Any excess amount remaining in the said
suspense account after payment of the Purchase Price for the Vessel and any
additional amounts shall be remitted back to the Buyers.
 
On delivery of the Vessel from the Sellers to the Buyers and execution by the
Sellers and the Buyers of a Protocol of Delivery and Acceptance, the Buyers
shall pay to the Sellers the Deposit less all interest accrued thereon, together
with the balance of the purchase price plus any additional amounts payable for
bunkers and lubricating oils on board the Vessel at the time of delivery.
 
4.           Inspections
 
5.           Notices, time and place of delivery
 
a)
The Sellers shall keep the Buyers regularly posted with regards to the actual
delivery date of the Vessel and and shall give the Buyers 30, 20, 10, and 5 days
approximate notice of delivery and 1 days definite notice of delivery.

 
 
When the Vessel is in every respect physically ready for delivery in accordance
with this Agreement, the Sellers shall give the Buyers a written Notice of
Readiness for delivery of the Vessel.  Sellers to keep Buyers informed about the
Vessel’s building schedule and progress of all major construction stages, such
as Steel Cutting, Keel Laying, Launching and delivery date, until the Vessel is
complete.

 
The Buyers hereby confirm that the delivery of the Vessel by Sellers under this
agreement will take place simultaneously with delivery of the Vessel to the
Sellers by the Builder.  Sellers will deliver the Vessel unregistered.
 
b)
The Vessel shall be delivered and taken over safely afloat at a safe and
accessible berth or anchorage alongside the pier or at anchorage of SPP
Shipbuilding Co.,Ltd. in the Sellers’ option.

 
Expected time of delivery: 20th September 2010
 
Date of cancelling (see   Clauses   5   c), 6   b)   (iii)   and   14):   15th
December 2010
 
 
 
2

--------------------------------------------------------------------------------

 
 
 
d)
Should the Vessel become an actual, constructive or compromised total loss
before delivery the deposit together with interest earned shall be released
immediately to the Buyers whereafter this Agreement shall be null and void.

 
6.           Drydocking/Divers Inspection
 
7.           Spares/bunkers, etc.
 
The Sellers shall deliver the Vessel to the Buyers with everything belonging to
her on board and on shore and on order and with all those parties mentioned in
the Shipbuilding Specifications except Grab Accessories which is an Owners
Supply Item.  All spare parts and spare equipment including spare tail-end
shaft(s) and/or spare propeller(s)/propeller blade(s), if any, belonging to the
Vessel, whether on board or not shall become the Buyers’ property.  Forwarding
charges, if any, shall be for the Buyers’ account.  The Sellers are not required
to replace spare parts which are taken out of spare and used as replacement
prior to delivery, but the replaced items shall be the property of the Buyers if
same supplied by the Builder under the Shipbuilding Contract.  The radio
installation and navigational equipment shall be included in the sale without
extra payment.  Unused stores and provisions shall be included in the sale and
be taken over by the Buyers without extra payment if same supplied by the
Builder under the Shipbuilding Contract and Specifications.
 
Upon contract signing or as soon as possible thereafter Sellers to provide
copies of all plans/drawings of this Vessel such as capacity plan/midship
section plan/general arrangement pla/stability booklet/loading manual, mooring
plan, accommodation plan and others essential to the Buyers for Chartering and
operation purposes provided same available from the Builder at present or, if
otherwise, whenever available by the Builder.
 
Buyers to take over and pay extra for all luboils (in storage tanks & sealed
drums) and pay at Sellers’ net paid prices as evidenced by invoices.  Bunkers
which are onboard the vessel at the time of delivery to be taken over by Buyers’
at Sellers’ net paid prices as evidenced by invoices from the Shipyard to the
Sellers.  Luboils necessary for filling up the Vessel’s systems including the
main engine and sump tank, are for Sellers’ account.
 
Any changes to Rules and Regulations governing the construction of the vessel
which come into effect following the execution of this Agreement shall not be
applied subject to Buyers request and at their expense
 
8.           Documentation (See Addendum No 1)
 
The place of closing: London or Piraeus (in Sellers option)
 
In exchange for payment of the full purchase price along with any other payments
called for in accordance with the Memorandum of Agreement, the Sellers shall
furnish the Buyers delivery documents as reasonably required by the Buyers for
the registration of the Vessel which to be advised by the Buyers and to be
incorporated in an Addnedum to the Memorandum of Agreement.
 
 
 
 
3

--------------------------------------------------------------------------------

 
 
 
At the time of delivery the Buyers and Sellers shall sign and deliver to each
other a Protocol of Delivery and Acceptance confirming the date and time of
delivery of the Vessel from the Sellers to the Buyers.
 
At the time of delivery the Sellers shall hand to the Buyers the classification
certificate(s) as well as all plans etc., which are on board the Vessel.  Other
certificates which are on board the Vessel shall also be handed over to the
Buyers unless the Sellers are required to retain same, in which case the Buyers
to have the right to take copies.  Other technical documentation which may be in
the Sellers’ possession shall be promptly forwarded to the Buyers at their
expense, if they so request.  The Sellers may keep the Vessel’s log books but
the Buyers to have the right to take copies of same.
 
9.           Encumbrances
 
The Sellers warrant that the Vessel, at the time of delivery, is free from
encumbrances, mortgages and maritime liens or any other debts whatsoever.  The
Sellers hereby undertake to indemnify the Buyers against all consequences of
claims made against the Vessel which have been incurred prior to the time of
delivery.
 
10.           Taxes, etc.
 
Any taxes, fees and expenses in connection with the purchase and registration
under the Buyers’ flag shall be for the Buyers’ account, whereas similar charges
in connection with the closing of the Sellers’ register shall be for the
Sellers’ account.
 
11.           Condition on delivery
 
The Vessel with everything belonging to her shall be at the Sellers’ risk and
expense until she is delivered to the Buyers, but subject to the terms and
conditions of this Agreement she shall be delivered and taken over in brand new
condition as is at the time of delivery of the Vessel to the Sellers by the
Builders and always in accordance with the terms of this Agreement and the
Shipbuilding Contract and Specification reviewed.
 
Furthermore, the Vessel shall be delivered with her class maintained without
any condition/recommendation*, save in respect of classification society
requirements which customarily apply to newly built vessels and which can only
be satisfied post delivery, free of damage affecting the Vessel’s class, and
with all her classification certificates and national and international
trading certificates issued, and valid for a minimum period customarily issued
by class or the relevant authorities at the time of delivery provided that the
Buyers shall accept the interim/shor term/provisional certificates as issued by
the class and or other applicable authorities at the time of delivery from the
Builder.  Buyers shall deal directly with class for full term certificates after
delivery of the Vessel.
 
12.           Name/markings

 
Upon delivery the Buyers undertake to change the name of the Vessel and alter
funnel markings.
 
13.           Buyers’ default
 
 
 
 
4

--------------------------------------------------------------------------------

 
 
 
Should the deposit not be paid in accordance with Clause 2, the Sellers have the
right to cancel this Agreement, and they shall be entitled to claim compensation
for their losses and for all expenses incurred together with interest.

 
Should the Purchase Price not be paid in accordance with Clause 3, the Sellers
have the right to cancel the Agreement, in which case the deposit together with
interest earned shall be released to the Sellers.  If the deposit does not cover
their loss, the Sellers shall be entitled to claim further compensation for
their losses and for all expenses incurred together with interest.
 
14.           Sellers’ default
 
Should the Sellers fail to give Notice of Readiness in accordance with Clause 5
a) or fail to be ready to validly complete a legal transfer by the date
stipulated in line 61 the Buyers shall have the option of cancelling this
Agreement provided always that the Sellers shall be granted a maximum of 3
banking days after Notice of Readiness has been given to make arrangements for
the documentation set out in Clause 8.  If after Notice of Readiness has been
given but before the Buyers have taken delivery, the Vessel ceases to be
physically ready for delivery and is not made physically ready again in every
respect by the date stipulated in line 61 and new Notice of Readiness given, the
Buyers shall retain their option to cancel.  In the event that the Buyers elect
to cancel this Agreement the deposit together with interest earned shall be
released to them immediately.
 
Should the Sellers fail to give Notice of Readiness by the date stipulated in
line 61 or fail to be ready to validly complete a legal transfer as aforesaid
they shall make due compensation to the Buyers for their loss and for all
expenses together with interest if their failure is due to proven negligence and
whether or not the Buyers cancel this Agreement.
 
15.           Buyers’ representatives
 
Buyers have the right to have at their risk and expense one (1)
representatives/member of the crew for familiarization purposes only during
normal working hours of the Shipyard, twenty one (21) days prior to the
estimated date of delivery or from the time of sea trials whichever is the
earlier.  The Buyer’ representatives/crew shall not interfere whatsoever with
the Vessel’s operation/sea trial or building schedule and shall sign all
necessary letters of indemnity prior to their embarkation.
 
16.           Arbitration
 
a)*
This Agreement shall be governed by and construed in accordance with English law
and any dispute arising out of this Agreement shall be referred to arbitration
in London in accordance with the Arbitration Acts 1950 and 1979 or any statutory
modification or re-enactment thereof for the time being in force, one arbitrator
being appointed by each party.  On the receipt by one party of the nomination in
writing of the other party’s arbitrator, that party shall appoint their
arbitrator within fourteen days, failing which the decision of the single
arbitrator appointed shall apply.  If two arbitrators properly appointed shall
not agree they shall appoint an umpire whose decision shall be final.

 
 
 
 
5

--------------------------------------------------------------------------------

 
 
 
17)           The agreement is subject to the Buyers obtaining the necessary
financing within three weeks of both Buyers and Sellers signing the MOA.
 
18)           The Vessel is subject to a Charter Party to Cargill.  The Sellers
agree to exercise their best endeavours to receive Charterers’ (“Cargill”)
approval to transfer by novation or otherwise of the charter for the Vessel to
the Buyers of the existing charter agreement with Cargill which to be attached
to this agreement.  The Vessel is chartered for 46/50 months (plus/minus 15
days) with hire payable 15 days in advance.  The charter rate payable will be a
direct pass through of the BHSI at 115% with the same settlement system per
month of the last ten trading sessions which is the average thereof.
 
The following wording to be used in any novation agreement under the trading
exclusions if same not already in the charterparty: “Any country or area that is
blacklisted by or to which the vessel is prohibited to trade by the U.N. and/or
U.S.A and/or vessel’s flag state”
 
19)           As per the SHIPMAN 98, Shipmangement Agreement, it is agreed that
Crew Management (Box 5), Technical Management (Box 6), Insurance Arrangements
(Box 8) of the Vessel to remain with Metrostar Management Corp. and
Commercial/financial and all corporate responsibilities to be with
Buyers.  Metrostar Management Corp. will document the scope of their
Shipmanagement duties in individual Shipmanagement Agreements in SHIPMAN 98 form
(as amended) for the Vessel.  The parties to attach agreed SHIPMAN 98
Shipmangement Agreement to the MOA.
 
20)           Sellers will seek to obtain the assingment of shipyard warranties
to buyers or failing that agree to act as agents on behalf of buyers in
processing any warranty claims.
 
21)           This Agreement is to be kept strictly private and confidential,
save for any disclosure required by the securities laws of the United States of
America.
 
Clauses 22 - 25 inclusive shall be deemed incorporated and considered an
integral part of this Agreement.
 
 
 
6
 

 
 

--------------------------------------------------------------------------------

 

RIDER CLAUSES TO HULL NO H-4011
MOA DATED 3rd JUNE 2010
 

Clause 22
 
The Sellers are buying the Vessel as a resale from the original Buyer under the
Shipbuilding Contract (the ‘Original Buyer’).
 
Supervision during construction of the vessel to be carried out for Sellers by
the Original Buyer.  Buyers are to have the right to place up to one observer
per two Vessels at SPP Shipbuilding Co.,Ltd shipyard immediately after the Keel
Laying of the Vessel.  This observer is to form part of the Original Buyers
supervision team but all costs connected with their stay at the shipyard are to
be for Buyers’ account.  This observer shall have no authority in the
construction, drawing approval and shall only liaise/communicate with the
Original Buyers supervision team and not the shipyard directly.  Office
facilities with phone, fax, email to be provided the Original Buyers within the
Original Buyers supervision team site office, all direct costs associated with
Buyers observers use of these office to be for Buyers account.
 
The Buyers obvserver shall not have by direct contact with the Shipyard
whatsoever.  Any questions or comments shall be addressed in writing to the
Original Buyers supervision team representatives at the Shipyard who will
receive all written comments/questions from the Buyers.  The original Buyers
supervision team representatives shall forward all of the Buyers
comments/questions to the Shipyard but the Shipyard is not obliged to comply
with all demands.  This paragraph is fundamental for this Contract.
 
If for any reason whatsoever the conduct of the Buyers’ observer is not
satisfactory or such observer act in contravention of the provisions herein the
Sellers may request the substitution of such observer and the Buyers must comply
with such request.
 
Clause 23
 
On or prior to the delivery of the Vessel under this Agreement, the Sellers
undertake to procure that the Original Buyer shall assign to the Buyers all
their rights, interest and title a) under the relevant article of the
Shipbuilding Contract dealing with the Vessel’s so called warranty of quality,
b) in any claims made thereunder outstanding at the time of such assignment and
c) under any other suppliers’ or equipment manufacturers’ warranties that are
available to the Original Buyer, such assignments being subject to the consent
of the Builder and such other suppliers.  The assignment of the rights described
above, shall be effected by a) the Original Buyer executing a deed in a form
acceptable to the Buyers and b) the Builder, or such other relevant supplier or
manufacturer countersigning a notice of assignment again in a form acceptable to
the Buyers, such notice to be duly executed, provided, however, that in the
event that the Builder or any supplier or manufacturer does not consent to the
assignment of the relevant warranty, the Sellers hereby further undertake to
procure that the Original Buyer shall act as the agent of the Buyers in raising,
handling and closing any claims that the Buyers may want to raise under the said
warranty always following instructions of the Buyers.  The Sellers shall arrange
that the Original Buyer shall not refuse any request by the Buyers to raise a
claim under the said warranty of quality on the understanding that neither the
Sellers or the Original Buyer shall be liable to meet a claim if there is a
failure to recover the same from the Builder, or,
 
 

 
 

--------------------------------------------------------------------------------

 

RIDER CLAUSES TO HULL NO H-4011
MOA DATED 3rd JUNE 2010
 

 
 
as the case may be, the relevant supplier or manufacturer, provided, however
that the Sellers shall procure that the Original Buyer, will on the request of
the Buyers, commence legal proceedings against the Builder, or the supplier or
manufacturer in connection with any disputed or non-recoverable claim made under
the relevant warranty.  The Original Buyer will draft the deed of assignment
which is subject to Buyers approval.
 
If the Vessel is not built in accordance to the specifications and the
Shipbuilding Contract then the Sellers will transfer to the Buyers the benefit
of any resultant liquidated damages as per the Shipbuilding Contract Article III
- Adjustment of Contract Price.
 
The Vessel shall be delivered to the Buyers only once she is in all respects
ready in accordance with the Shipbuilding Contract and specification.  However,
the Buyers shall accept the vessel if the Original Buyer is obliged to take
delivery of the Vessel under the Shipbuilding Contract Article III, always with
the provision that any liquidated damages are transferred to the benefit of the
Buyers.
 
Clause 24
 
The Vessel is to be delivered with Buyer’s name/funnel markings/port of
registry.
 
The Sellers undertake that the following date of this Agreement and until
delivery of the Vessel to the Buyers under this Agreement, they will not, and
that they will procure that the Original Buyer will not without the previous
written consent of the Buyers, a) agree any amendments, supplements or changes
whatsoever to the Shipbuilding Contract, the Specifications or any other
document relating to the construction of the Vessel; b) release or, waive any
breach of, the Builder from any of the Builder’s obligations under the
Shipbuilding Contract, and c) terminate the Shipbuilding Contract for any reason
whatsoever.
 
However, in case of questions arise which may result in amendments, supplements
or changes whatsoever to the Shipbuilding Contract the Sellers are to notify the
Buyers in writing thereof.  The Buyers shall within seven (7) days after receipt
of such written notice the Sellers of their approval or comments thereon, if
any, Should the Buyers fail to notify the Sellers of their approval or comments
within seven (7) days then the Sellers to be at their liberty to make their own
decisions thereon.
 
Clause 26
 
The Buyers have received and approved the Vessel’s Specifications, Makers List
and the Shipbuilding Contract and therefore this sale is outright and definite,
subject only to the terms and conditions of this Agreement.
 
 
2
 

 
 

--------------------------------------------------------------------------------

 
RIDER CLAUSES TO HULL NO H-4011
MOA DATED 3rd JUNE 2010
 

 
For the Buyers
For the Sellers
 
 
/s/ John C. Wobensmith                                                     
 
 
/s/ Achilleas Stergiou          
                                                      
John C. Wobensmith
President
Achilleas Stergiou
President

 
 
 
 
 

 

3