Exhibit 10.3

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT is dated as of March 15, 2010 and is by and
between BALTIC TRADING LIMITED, a Marshall Islands corporation (the “Company”),
and GENCO INVESTMENTS LLC, a Marshall Islands limited liability company (the
“Stockholder”).

 

In consideration of the mutual covenants and agreements herein contained and
other good and valid consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement hereby agree as follows:

 

1.             Certain Definitions.

 

(a)           In addition to the terms defined elsewhere in this Agreement, the
following terms shall have the following meanings:

 

(b)           “Affiliate” of any Person means any other Person which directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, such Person.

 

(c)           “Agreement” means this Registration Rights Agreement, including
all amendments, modifications and supplements and any exhibits or schedules to
any of the foregoing, and shall refer to this Registration Rights Agreement as
the same may be in effect at the time such reference becomes operative.

 

(d)           “Class B Stock” means shares of the Class B Stock, par value $0.01
per share, of the Company.

 

(e)           “Common Stock” means shares of Common Stock, par value $0.01 per
share, of the Company, including Common Stock issuable upon conversion of
Class B Stock and any other shares into which such shares are converted pursuant
to a recapitalization or reorganization.

 

(f)            “Company” has the meaning set forth in the introductory
paragraph.

 

(g)           “Control,” including the terms “controlling,” “controlled by” and
“under common control with,” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a
person, whether through the ownership of voting shares, by contract or
otherwise. A person who is the owner of 20% or more of the outstanding voting
shares of any corporation, partnership, unincorporated association or other
entity shall be presumed to have control of such entity, in the absence of proof
by a preponderance of the evidence to the contrary. Notwithstanding the
foregoing, a presumption of control shall not apply where such person holds
voting shares, in good faith and not for the purpose of circumventing this
provision, as an agent, bank, broker, nominee, custodian or trustee for one or
more owners who do not individually or as a group have control of such entity.

 

(h)           “Demand Registration” has the meaning set forth in
Section 2(a) hereof.

 

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(i)            “Dissolution” has the meaning set forth in Section 9 hereof.

 

(j)            “Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 

(k)           “Governmental Entity” means any national, federal, state,
municipal, local, territorial, foreign or other government or any department,
commission, board, bureau, agency, regulatory authority or instrumentality
thereof, or any court, judicial, administrative or arbitral body or public or
private tribunal.

 

(l)            “Holder” means any person that owns Registrable Shares, including
such successors and assigns as acquire Registrable Shares, directly or
indirectly, from such Person.  For purposes of this Agreement, the Company may
deem and treat the registered holder of Registrable Shares as the Holder and
absolute owner thereof, and the Company shall not be affected by any notice to
the contrary.

 

(m)          “Initiating Holders” has the meaning set forth in
Section 2(a) hereof.

 

(n)           “Person” means any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, incorporated or unincorporated
organization, association, corporation, institution, public benefit corporation,
Governmental Entity or any other entity.

 

(o)           “Piggyback Registration” has the meaning set forth in
Section 4(a) hereof.

 

(p)           “Prospectus” means the prospectus or prospectuses included in any
Registration Statement, as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Shares covered by such Registration Statement and by all other amendments and
supplements to the prospectus, including post-effective amendments and all
material incorporated by reference in such prospectus or prospectuses.

 

(q)           “Qualifying IPO” means the sale in an underwritten initial public
offering registered under the Securities Act of shares of Common Stock of the
Company.

 

(r)            “Registrable Shares” means shares of Common Stock held by the
Stockholder or Affiliates of the Stockholder (excluding natural persons) or
shares of Common Stock receivable upon the conversion of Class B Stock held by
the Stockholder or Affiliates of the Stockholder (excluding natural persons) or
any shares of any successor or acquiror of the Company issued in exchange or
substitution for any of the foregoing in connection with any acquisition,
merger, combination, or similar transaction involving the Company; provided,
however, Registrable Shares shall not include any securities sold by a Person to
the public either pursuant to a Registration Statement or Rule 144 or any
securities that may be sold pursuant to Rule 144 without restriction.

 

(s)           “Registration Expenses” has the meaning set forth in
Section 7(a) hereof.

 

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(t)            “Registration Statement” means any registration statement of the
Company which covers any of the Registrable Shares pursuant to the provisions of
this Agreement, including the Prospectus, amendments and supplements to such
Registration Statement, including post-effective amendments, all exhibits and
all materials incorporated by reference in such Registration Statement.

 

(u)           “SEC” means the Securities and Exchange Commission.

 

(v)           “Securities Act” means the Securities Act of 1933, as amended.

 

(w)          “Senior Management” means the Chief Executive Officer, President
and/or Chief Financial Officer of the Company.

 

(x)            “Shelf Registration” has the meaning set forth in
Section 3(a) hereof.

 

(y)           “Stockholder” has the meaning set forth in the introductory
paragraph.

 

(z)            “Suspension Notice” has the meaning set forth in
Section 6(f) hereof.

 

(aa)         “underwritten registration” or “underwritten offering” means a
registration in which securities of the Company are sold to underwriters for
reoffering to the public.

 

(bb)         “Withdrawn Demand Registration” has the meaning set forth in
Section 2(f) hereof.

 

2.             Demand Registrations.

 

(a)           Right to Request Registration.  At any time commencing 180 days
following the closing of a Qualifying IPO, any Holder or Holders of either (i) a
number Registrable Shares equal to at least 50% of the number of Registrable
Shares as of the date hereof or (ii) Registrable Shares having an aggregate
market value of at least $25 million at the time of request may request
registration under the Securities Act (“Initiating Holders”) of all or part of
the Registrable Shares (“Demand Registration”); provided, however, that each
Demand Registration be for Registrable Shares.

 

Within ten (10) days after receipt of any such request for Demand Registration,
the Company shall give written notice of such request to all other Holders of
Registrable Shares and shall, subject to the provisions of Section 2(d) hereof,
include in such registration all such Registrable Shares with respect to which
the Company has received written requests for inclusion therein within fifteen
(15) days after the receipt of the Company’s notice.

 

(b)           Number of Demand Registrations.  Subject to the provisions of
Section 2(a), the Initiating Holders of Registrable Shares shall collectively be
entitled to request an aggregate of three (3) Demand Registrations.  A
registration shall not count as one of the permitted Demand Registrations
(i) until it has become effective, (ii) if the Initiating Holders requesting
such registration are not able to have registered and sold at least 50% of the
Registrable Shares

 

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requested by such Initiating Holders to be included in such registration or
(iii) in the case of a Demand Registration that would be the last permitted
Demand Registration requested hereunder, if the Initiating Holders requesting
such registration are not able to have registered and sold all of the
Registrable Shares requested to be included by such Initiating Holders in such
registration.

 

(c)           Priority on Demand Registrations.  The Company shall not include
in any Demand Registration any securities which are not Registrable Shares
without the written consent of the Holders of a majority of the Registrable
Shares to be included in such registration, or, if such Demand Registration is
an underwritten offering, without the written consent of the managing
underwriters.  If the managing underwriters of the requested Demand Registration
advise the Company in writing that in their opinion the number of shares of
Registrable Shares proposed to be included in any such registration exceeds the
number of securities which can be sold in such offering without having an
adverse affect on such offering, including the price at which such Registrable
Shares can be sold, the Company shall include in such registration only the
number of shares of Registrable Shares which in the opinion of such managing
underwriters can be sold without having the adverse effect referred to above. 
If the number of shares which can be sold without having the adverse effect
referred to above is less than the number of shares of Registrable Shares
proposed to be registered, the amount of Registrable Shares to be so sold shall
be allocated pro rata among the Holders of Registrable Shares desiring to
participate in such registration on the basis of the amount of such Registrable
Shares initially proposed to be registered by such Holders.  If the number of
shares which can be sold exceeds the number of shares of Registrable Shares
proposed to be sold, such excess shall be allocated pro rata among the other
holders of securities, if any, desiring to participate in such registration
based on the amount of such securities initially requested to be registered by
such holders or as such holders may otherwise agree.

 

(d)           Restrictions on Demand Registrations.  The Company shall not be
obligated to effect any Demand Registration within three (3) months after the
termination of an offering under a previous Demand Registration or a previous
registration under which the Initiating Holder had piggyback rights pursuant to
Section 4 hereof where the Initiating Holder was permitted to register and sell
50% of the Registrable Shares requested to be included therein.  The Company may
postpone for up to ninety (90) days the filing or the effectiveness of a
Registration Statement for a Demand Registration if, based on the good faith
judgment of the Company’s board of directors, such filing or effectiveness would
be materially detrimental to the Company and its stock holders, such
postponement or withdrawal is necessary in order to avoid premature disclosure
of a matter the board has determined would not be in the best interest of the
Company to be disclosed at such time; and provided, further, that in the event
described above, the Initiating Holders requesting such Demand Registration
shall be entitled to withdraw such request prior to its effective date and, if
such request is withdrawn, such Demand Registration shall not count as one of
the permitted Demand Registrations.  The Company shall provide written notice to
the Initiating Holders requesting such Demand Registration of (i) any
postponement or withdrawal of the filing or effectiveness of a Registration
Statement pursuant to this Section 2(d), (ii) the Company’s decision to file or
seek effectiveness of such Registration Statement following such withdrawal or
postponement and (iii) the effectiveness of such Registration Statement.  The
Company may defer the filing of a particular Registration Statement pursuant to
this Section 2(d) only once during any twelve (12) month period.

 

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(e)           Selection of Underwriters.  If any of the Registrable Shares
covered by a Demand Registration are to be sold in an underwritten offering, the
Initiating Holders shall have the right to select the managing underwriter(s) to
administer the offering subject to the approval of the Company, which will not
be unreasonably withheld.

 

(f)            Effective Period of Demand Registrations.  After any Demand
Registration filed pursuant to this Agreement has become effective, the Company
shall use its reasonable best efforts to keep such Demand Registration effective
for a period equal to 180 days from the date on which the SEC declares such
Demand Registration effective (or if such Demand Registration is not effective
during any period within such 180 days, such 180-day period shall be extended by
the number of days during such period when such Demand Registration is not
effective), or such shorter period which shall terminate when all of the
Registrable Shares covered by such Demand Registration have been sold pursuant
to such Demand Registration.  If the Company shall withdraw any Demand
Registration pursuant to Section 2(d) (a “Withdrawn Demand Registration”), the
Initiating Holders of the Registrable Shares remaining unsold and originally
covered by such Withdrawn Demand Registration shall be entitled to a replacement
Demand Registration which (subject to the provisions of this Section 2) the
Company shall use its reasonable best efforts to keep effective for a period
commencing on the effective date of such Demand Registration and ending on the
earlier to occur of the date (i) which is 180 days from the effective date of
such Demand Registration and (ii) on which all of the Registrable Shares covered
by such Demand Registration have been sold.  Such additional Demand Registration
otherwise shall be subject to all of the provisions of this Agreement.

 

3.             Shelf Registration.

 

(a)           (i) At such time as the Company is able to use Form S-3 under the
Securities Act (or any successor form) for sales of Registrable Shares by a
Holder, at the request of one or more Holders of the lesser of (A) a number
Registered Shares equal to at least 50% of the number of Registrable Shares as
of the date hereof or (B) Registrable Shares having an aggregate market value of
at least $25 million at the time of request, the Company shall use its
reasonable best efforts to effect, as expeditiously as possible, the
registration under the Securities Act of any number of Registrable Shares for
which it receives requests in accordance with Section 2(a) (the “Shelf
Registration”).  The Company shall use its reasonable best efforts to cause such
Registration Statement to become effective as promptly as practicable and
maintain the effectiveness of such Registration Statement (subject to the terms
and conditions herein) for a period ending on the earlier of (i) two (2) years
following the date on which such Registration Statement first becomes effective
(but one (1) year if the Company is not able to use Form S-3 under the
Securities Act (or any successor form)), and (ii) the date on which all
Registrable Shares covered by such Registration Statement have been sold and the
distribution contemplated thereby has been completed or have become freely
tradeable pursuant to Rule 144 without regard to volume.

 

(b)           The Shelf Registration Statement pursuant to this Section 3 shall
to the extent possible under applicable law, be effected to permit sales on a
continuous basis pursuant to Rule 415 under the Securities Act.  Any takedown
under the Shelf Registration pursuant to this

 

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Section 3 may or may not be underwritten; provided, however, that (i) Holders
may request any underwritten takedown only to be effected as a Demand
Registration (in which event, unless such Demand Registration would not require
representatives of the Company to meet with prospective purchasers of the
Company’s securities, a Demand Registration must be available thereunder and the
number of Demand Registrations available shall be reduced by one subject to
Section 2(b)) or (ii) Holders may request an unlimited number of underwritten
takedowns to be effected in accordance with the terms of Section 4.  The Company
shall be entitled to effect the Shelf Registration on any available form under
the Securities Act.

 

(c)           In the event of a request for a Shelf Registration pursuant to
Section 3(a), the Company shall give written notice of the proposed filing of
the Registration Statement in connection therewith to all Holders of Registrable
Shares offering to each such Holder the opportunity to have any or all of the
Registrable Shares held by such Holder included in such registration statement. 
Each Holder of Registrable Shares desiring to have its Registrable Shares
registered under this Section 3(c) shall so advise the Company in writing within
fifteen (15) days after the date of such notice from the Company (which request
shall set forth the amount of Registrable Shares for which registration is
requested), and the Company shall include in such Registration Statement all
such Registrable Shares so requested to be included therein.

 

(d)           The number, percentage, fraction or kind of shares referred to in
this Section 3 shall be appropriately adjusted for any stock dividend, stock
split, reverse stock split, combination, recapitalization, reclassification,
merger or consolidation, exchange or distribution in respect of the shares of
Common Stock.

 

(e)           The Company, and any other holder of the Company’s securities who
has registration rights, may include its securities in any Shelf Registration
effected pursuant to this Section 3.

 

4.             Piggyback Registrations.

 

(a)           Right to Piggyback.  If at any time commencing 180 days following
the closing of a Qualifying IPO the Company proposes to register any of its
common equity securities under the Securities Act (other than a registration
statement on Form S-8 or on Form S-4 or any similar successor forms thereto or a
registration statement covering an offering of convertible securities), whether
for its own account or for the account of one or more stockholders of the
Company, and the registration form to be used may be used for any registration
of Registrable Shares (a “Piggyback Registration”), the Company shall give
prompt written notice (in any event within twenty (20) days after its receipt of
notice of any exercise of other demand registration rights) to each Holders of
Registrable Shares having a market value at such time of at least $1 million of
its intention to effect such a registration and, subject to Sections 4(b) and
4(c), shall include in such registration all Registrable Shares with respect to
which the Company has received written requests for inclusion therein within
fifteen (15) days after the effectiveness of the Company’s notice.  The Company
may postpone or withdraw the filing or the effectiveness of a Piggyback
Registration at any time in its sole discretion.

 

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(b)           Priority on Primary Registrations.  If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the managing
underwriters advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering without having an adverse effect on such
offering, the Company shall include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, the Registrable Shares
requested to be included therein by the Holders, pro rata among the Holders of
such Registrable Shares on the basis of the number of shares requested to be
registered by such Holders, and (iii) third, other securities requested to be
included in such registration pro rata among the holders of such securities on
the basis of the number of shares requested to be registered by such holders or
as such holders may otherwise agree.

 

(c)           Priority on Secondary Registrations.  If a Piggyback Registration
is an underwritten secondary registration on behalf of a holder of the Company’s
securities other than Registrable Shares, and the managing underwriters advise
the Company in writing that in their opinion the number of securities requested
to be included in such registration exceeds the number which can be sold in such
offering without having an adverse effect on such offering, the Company shall
include in such registration (i) first the securities requested to be included
therein by the holders requesting such registration and the Registrable Shares
requested to be included in such registration, pro rata among the holders of
such securities on the basis of the number of shares requested to be registered
by such holders, and (ii) second, other securities requested to be included in
such registration pro rata among the holders of such securities on the basis of
the number of shares requested to be registered by such holders or as such
holders may otherwise agree.

 

(d)           Selection of Underwriters.  If any Piggyback Registration is an
underwritten primary offering, the Company shall have the right to select the
managing underwriter or underwriters to administer any such offering.

 

(e)           Other Registrations.  If the Company has previously filed a
Registration Statement with respect to Registrable Shares, and if such previous
registration has not been withdrawn or abandoned, the Company shall not be
obligated to cause to become effective any other registration of any of its
securities under the Securities Act, whether on its own behalf or at the request
of any holder or holders of such securities, until a period of at least ninety
(90) days has elapsed from the termination of the offering under the previous
registration.

 

5.             Holdback Agreements.

 

The Company agrees not to effect any sale or distribution of any of its common
equity securities during the ten (10) days prior to and during the 180 days
beginning on the pricing date of any underwritten offering pursuant to any
Demand Registration or any Piggyback Registration (except as part of such
underwritten registration or pursuant to registrations on Form S-8 or S-4 or any
successor forms thereto) unless the underwriters managing the offering otherwise
agree to a shorter period.

 

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6.             Registration Procedures.

 

(a)           Whenever the Holders request that any Registrable Shares be
registered pursuant to this Agreement, the Company shall use its reasonable best
efforts to effect the registration and the sale of such Registrable Shares in
accordance with the intended methods of disposition thereof, and pursuant
thereto the Company shall as expeditiously as possible:

 

(i)            prepare and file with the SEC a Registration Statement with
respect to such Registrable Shares and use its reasonable best efforts to cause
such Registration Statement to become effective as soon as practicable
thereafter; and before filing a Registration Statement or Prospectus or any
amendments or supplements thereto, furnish to the Holders of Registrable Shares
covered by such Registration Statement and the underwriter or underwriters, if
any, copies of all such documents proposed to be filed, including documents
incorporated by reference in the Prospectus and, if requested by such Holders,
the exhibits incorporated by reference, and such Holders shall have the
opportunity to object to any information pertaining to such Holders that is
contained therein and the Company will make the corrections reasonably requested
by such Holders with respect to such information prior to filing any
Registration Statement or amendment thereto or any Prospectus or any supplement
thereto;

 

(ii)           prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective for a period of
not less than 180 days, in the case of a Demand Registration or such shorter
period as is necessary to complete the distribution of the securities covered by
such Registration Statement and comply with the provisions of the Securities Act
with respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;

 

(iii)          furnish to each seller of Registrable Shares such number of
copies of such Registration Statement, each amendment and supplement thereto,
the Prospectus included in such Registration Statement (including each
preliminary Prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Shares owned
by such seller;

 

(iv)          use its reasonable best efforts to register or qualify such
Registrable Shares under such other securities or blue sky laws of such
jurisdictions as any seller reasonably requests and do any and all other acts
and things which may be reasonably necessary or advisable to enable such seller
to consummate the disposition in such jurisdictions of the Registrable Shares
owned by such seller (provided, however, that the Company will not be required
to (A) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph 6(a)(iv)(B) subject
itself to taxation in any such jurisdiction, or (C) consent to general service
of process in any such jurisdiction);

 

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(v)           notify each seller of such Registrable Shares, at any time when a
Prospectus relating thereto is required to be delivered under the Securities
Act, of the occurrence of any event as a result of which the Prospectus included
in such Registration Statement contains an untrue statement of a material fact
or omits any fact necessary to make the statements therein not misleading, and,
at the request of any such seller, the Company shall prepare a supplement or
amendment to such Prospectus so that, as thereafter delivered to the purchasers
of such Registrable Shares, such Prospectus shall not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading;

 

(vi)          in the case of an underwritten offering, enter into such customary
agreements (including underwriting agreements in customary form with customary
indemnification provisions) and take all such other actions as the Holders of a
majority of the Registrable Shares being sold or the underwriters reasonably
request in order to expedite or facilitate the disposition of such Registrable
Shares (including, without limitation, making members of Senior Management of
the Company available to participate in, and cause them to cooperate with the
underwriters in connection with, “road-show” and other customary marketing
activities (including one-on-one meetings with prospective purchasers of the
Registrable Shares)) and cause to be delivered to the underwriters and the
sellers, if any, opinions of counsel to the Company in customary form, covering
such matters as are customarily covered by opinions for an underwritten public
offering as the underwriters may request and addressed to the underwriters and
the sellers;

 

(vii)         make available, for inspection by any seller of Registrable
Shares, any underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company’s
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such Registration Statement, subject to
any confidentiality restrictions which the Company reasonably deems necessary;

 

(viii)        use its reasonable best efforts to cause all such Registrable
Shares to be listed on the principal securities exchange on which securities of
the same class issued by the Company are then listed;

 

(ix)           if requested, cause to be delivered, immediately prior to the
effectiveness of the Registration Statement (and, in the case of an underwritten
offering, at the time of delivery of any Registrable Shares sold pursuant
thereto), letters from the Company’s independent certified public accountants
addressed to each selling Holder (unless such selling Holder does not provide to
such accountants the appropriate representation letter required by
rules governing the accounting profession) and each underwriter, if any, stating
that such accountants are independent public accountants within the meaning of
the Securities Act and the applicable rules and regulations adopted by the SEC

 

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thereunder, and otherwise in customary form and covering such financial and
accounting matters as are customarily covered by letters of the independent
certified public accountants delivered in connection with primary or secondary
underwritten public offerings, as the case may be;

 

(x)            make generally available to its stockholders a consolidated
earnings statement (which need not be audited) for the twelve (12) months
beginning after the effective date of a Registration Statement as soon as
reasonably practicable after the end of such period, which earnings statement
shall satisfy the requirements of an earning statement under Section 11(a) of
the Securities Act; and

 

(xi)           promptly notify each seller of Registrable Shares and the
underwriter or underwriters, if any:

 

(A)          when the Registration Statement, any pre-effective amendment, the
Prospectus or any Prospectus supplement or post-effective amendment to the
Registration Statement has been filed and, with respect to the Registration
Statement or any post-effective amendment, when the same has become effective;

 

(B)           of any comments of the SEC or of any written request by the SEC
for amendments or supplements to the Registration Statement or Prospectus;

 

(C)           of the notification to the Company by the SEC of its initiation of
any proceeding with respect to the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement; and

 

(D)          of the receipt by the Company of any notification with respect to
the suspension of the qualification of any Registrable Shares for sale under the
applicable securities or blue sky laws of any jurisdiction.

 

(b)           The Company shall ensure that no Registration Statement (including
any amendments or supplements thereto and Prospectuses contained therein) shall
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein, or necessary to make the statements therein not
misleading (except, with respect to any Holder, for an untrue statement or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact made in reliance on and in conformity with written information
furnished to the Company by or on behalf of such Holder specifically for use
therein).

 

(c)           The Company shall make available to each Holder whose Registrable
Shares are included in a Registration Statement (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company, one copy of each Registration Statement and any amendment thereto, each
preliminary Prospectus and Prospectus and each amendment or supplement thereto,
each letter written by or on behalf of the Company to the SEC or the staff of
the SEC (or other governmental agency or self-regulatory body or other body
having jurisdiction, including any domestic or foreign securities exchange), and
each item of correspondence from the SEC or the staff of the SEC (or other
governmental agency or self-

 

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regulatory body or other body having jurisdiction, including any domestic or
foreign securities exchange), in each case relating to such Registration
Statement (other than any portion thereof which contains information for which
the Company has sought confidential treatment), and (ii) such number of copies
of a Prospectus, including a preliminary Prospectus, and all amendments and
supplements thereto and such other documents as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Shares owned
by such Holder.  The Company will promptly notify each Holder by facsimile of
the effectiveness of each Registration Statement or any post-effective
amendment.  The Company will promptly respond to any and all comments received
from the SEC, with a view towards causing each Registration Statement or any
amendment thereto to be declared effective by the SEC as soon as practicable and
shall file an acceleration request as soon as practicable following the
resolution or clearance of all SEC comments or, if applicable, following
notification by the SEC that any such Registration Statement or any amendment
thereto will not be subject to review.

 

(d)           At all times after the Company has filed a registration statement
with the SEC pursuant to the requirements of either the Securities Act or the
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder, and take such further action as any Holders may
reasonably request, all to the extent required to enable such Holders to be
eligible to sell Registrable Shares pursuant to Rule 144 (or any similar
rule then in effect).

 

(e)           the Company may require each seller of Registrable Shares as to
which any registration is being effected to furnish to the Company any other
information regarding such seller and the distribution of such securities as the
Company may from time to time reasonably request in writing.

 

(f)            Each seller of Registrable Shares agrees by having its shares
treated as Registrable Shares hereunder that, upon notice that the Prospectus
included in such Registration Statement (or any document incorporated therein)
contains an untrue statement of a material fact or omits any material fact
necessary to make the statements therein not misleading or that such Prospectus
or Registration Statement  (or any document incorporated therein) must be
amended or supplemented for any other reason (a “Suspension Notice”), such
seller will forthwith discontinue disposition of Registrable Shares for a
reasonable length of time not to exceed sixty (60) days until such seller is
advised in writing by the Company that the use of the Prospectus may be resumed
and is furnished with a supplemented or amended Prospectus as contemplated by
Section 6(a)(v) hereof, and, if so directed by the Company, such seller will
deliver to the Company (at the Company’s expense) all copies, other than
permanent file copies then in such seller’s possession, of the Prospectus
covering such Registrable Shares current at the time of receipt of such notice;
provided, however, that such postponement of sales of Registrable Shares by the
Holders shall not exceed ninety (90) days in the aggregate in any one (1) year. 
If the Company shall give any notice to suspend the disposition of Registrable
Shares pursuant to a Prospectus, the Company shall extend the period of time
during which the Company is required to maintain the Registration Statement
effective pursuant to this Agreement by the number of days during the period
from and including the date of the giving of such notice to and including the
date such seller either is advised by the Company that the use of the Prospectus
may be resumed or receives the copies of the supplemented or amended Prospectus
contemplated by

 

11

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Section 6(a)(v).  In any event, the Company shall not be entitled to deliver
more than three (3) Suspension Notices in any one (1) year.

 

7.             Registration Expenses.

 

(a)           All expenses incident to the Company’s performance of or
compliance with this Agreement, including, without limitation, all registration
and filing fees, fees and expenses of compliance with securities or blue sky
laws, listing application fees, printing expenses, transfer agent’s and
registrar’s fees, cost of distributing Prospectuses in preliminary and final
form as well as any supplements thereto, and fees and disbursements of counsel
for the Company and all independent certified public accountants and other
Persons retained by the Company (all such expenses being herein called
“Registration Expenses”) (but not including any underwriting discounts or
commissions attributable to the sale of Registrable Shares or fees and expenses
of more than one counsel representing the Holders of Registrable Shares), shall
be borne by the Company.  In addition, the Company shall pay its internal
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties), the expense of
any annual audit or quarterly review, the expense of any liability insurance
which the Company may elect to obtain and the expenses and fees for listing the
securities to be registered on each securities exchange on which they are to be
listed.

 

(b)           In connection with each registration initiated hereunder (whether
a Demand Registration or a Piggyback Registration), the Company shall reimburse
the Holders covered by such registration or sale for the reasonable fees and
disbursements of one law firm, plus local counsel as necessary, chosen by the
Holders of a majority of the Registrable Shares included in such registration or
sale.

 

(c)           The obligation of the Company to bear the expenses described in
Section 7(a) and to reimburse the Holders for the expenses described in
Section 7(b) shall apply irrespective of whether a registration, once properly
demanded, if applicable, becomes effective, is withdrawn or suspended, is
converted to another form of registration and irrespective of when any of the
foregoing shall occur; provided, however, that Registration Expenses for any
supplements or amendments to a Registration Statement or Prospectus resulting
from a misstatement furnished to the Company by a Holder shall be borne by such
Holder.  If any Registration Statement for a Demand Registration is withdrawn
solely at the request of a Holder of Registrable Shares (unless withdrawn
following postponement of filing by the Company in accordance with
Sections 2(d)(i) or (ii)) and such request is the second or subsequent such
withdrawal request by any Holder complied with by the Company, then at the
election of the requesting Holder, either such Holder shall bear the
Registration Expenses for such Registration Statement, or the number of Demand
Registrations available to such Holder shall be reduced by one.

 

8.             Best Available Rights Terms.

 

The Company shall not grant to any Person the right, to request the Company to
register any common equity securities of the Company except such rights as are
not materially more favorable than or inconsistent with the rights granted to
the Holders herein. In the event the Company grants rights which are materially
more favorable, the Company will make such

 

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provisions available to the Holders and will enter into any amendments necessary
to confer such rights on the Holders.

 

9.                                      Distribution of Rights upon Dissolution
of the Stockholder.

 

At any time after the execution date of this Agreement, the Stockholder shall
cease to exist for any reason as a legal entity (a “Dissolution”), if prior to
such Dissolution the Stockholder distributed its shares in the Company to its
members or if the Stockholder has otherwise distributed such shares to its
members, such members shall have the same rights and obligations under this
Agreement as granted to the Stockholder as if such Dissolution had not occurred.

 

10.                               Indemnification.

 

(a)           The Company shall indemnify, to the fullest extent permitted by
law, each Holder, each underwriter for such Holder, their respective officers,
directors and Affiliates and each Person who controls such Holder or underwriter
(within the meaning of the Securities Act) against all losses, claims, damages,
liabilities and expenses arising out of or based upon any untrue or alleged
untrue statement of material fact contained in any Registration Statement,
Prospectus or preliminary Prospectus or any amendment thereof or supplement
thereto or any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading or any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act or applicable “blue sky” laws, except insofar as the same are made
in reliance and in conformity with information relating to such Holder furnished
in writing to the Company by such Holder expressly for use therein or caused by
such Holder’s failure to deliver to such Holder’s immediate purchaser a copy of
the Registration Statement or Prospectus or any amendments or supplements
thereto (if the same was required by applicable law to be so delivered).

 

(b)           In connection with any Registration Statement in which a Holder of
Registrable Shares is participating, each such Holder shall furnish to the
Company in writing such information and affidavits as the Company reasonably
requests for use in connection with any such Registration Statement or
Prospectus and, shall indemnify, to the fullest extent permitted by law, the
Company, its officers, directors Affiliates, and each Person who controls the
Company (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses arising out of or based upon any untrue or
alleged untrue statement of material fact contained in the Registration
Statement, Prospectus or preliminary Prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, but only to the extent that the same are made in reliance and in
conformity with information relating to such Holder furnished in writing to the
Company by such Holder expressly for use therein or caused by such Holder’s
failure to deliver to such Holder’s immediate purchaser a copy of the
Registration Statement or Prospectus or any amendments or supplements thereto
(if the same was required by applicable law to be so delivered) after the
Company has furnished such Holder with a sufficient number of copies of the
same; provided, however, that the obligation to indemnify shall be several, not
joint and several, among such Holders and the liability of each

 

13

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such Holder shall be in proportion to and limited to the net amount received by
such Holder from the sale of Registrable Shares pursuant to such Registration
Statement.

 

(c)           Any Person entitled to indemnification hereunder shall (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification; provided, however, that the failure to notify
the indemnifying party shall not relieve the indemnifying party from any
liability that it may have under this Section 10 except to the extent that it
has been materially prejudiced (through the forfeiture of substantive rights or
defenses) by such failure; and provided, further, that the failure to notify the
indemnifying party shall not relieve the indemnifying party from any liability
that it may have to an indemnified party otherwise than under this Section 10
and (ii) unless in such indemnified party’s reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may exist with
respect to such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party.  If
such defense is assumed, the indemnifying party shall not be subject to any
liability for any settlement made by the indemnified party without its consent
(but such consent will not be unreasonably withheld).  An indemnifying party who
is not entitled to, or elects not to, assume the defense of a claim shall not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party there may be one or more legal or
equitable defenses available to such indemnified party which are in addition to
or may conflict with those available to another indemnified party with respect
to such claim.  Failure to give prompt written notice shall not release the
indemnifying party from its obligations hereunder.

 

(d)           The indemnification provided for under this Agreement shall remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and shall survive the transfer of securities.

 

(e)           If the indemnification provided for in or pursuant to this
Section 10 is due in accordance with the terms hereof, but is held by a court to
be unavailable or unenforceable in respect of any losses, claims, damages,
liabilities or expenses referred to herein, then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified Person as a result of such losses,
claims, damages, liabilities or expenses in such proportion as is appropriate to
reflect the relative fault of the indemnifying party on the one hand and of the
indemnified party on the other in connection with the statements or omissions
which result in such losses, claims, damages, liabilities or expenses as well as
any other relevant equitable considerations.  The relative fault of the
indemnifying party on the one hand and of the indemnified Person on the other
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the indemnifying
party or by the indemnified party, and by such party’s relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.  In no event shall the liability of any selling Holder be
greater in amount than the amount of net proceeds received by such Holder upon
such sale or the amount for which such indemnifying party would have been
obligated to pay by way of indemnification if the

 

14

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indemnification provided for under Section 10(a) or 10(b) hereof had been
available under the circumstances.

 

11.                               Participation in Underwritten Registrations.

 

No Person may participate in any registration hereunder which is underwritten
unless such Person (a) agrees to sell such Person’s securities on the basis
provided in any underwriting arrangements approved by the Person or Persons
entitled hereunder to approve such arrangements and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents required under the terms of such underwriting arrangements.

 

12.                               Rule 144.

 

The Company covenants that it will file the reports required to be filed by it
under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder, and it will take such further action as any
Holder may reasonably request to make available adequate current public
information with respect to the Company meeting the current public information
requirements of Rule 144(c) under the Securities Act, to the extent required to
enable such Holder to sell Registrable Shares without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144
under the Securities Act, as such Rule may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC.  Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such information and requirements.

 

13.                               Miscellaneous.

 

(a)           Notices.  All notices, requests, consents and other communications
required or permitted hereunder shall be in writing and shall be hand delivered
or mailed postage prepaid by registered or certified mail or by facsimile
transmission (with immediate telephone confirmation thereafter),

 

If to the Company:

 

 

 

Baltic Trading Limited

 

299 Park Avenue, 20th Floor

 

New York, NY 10171

 

Attention: John C. Wobensmith, President and Chief Financial Officer

Fax: (646) 443-8551

 

 

 

If to the Stockholder:

 

 

 

Genco Investments LLC

 

299 Park Avenue, 20th Floor

 

New York, NY 10171

 

Attention: John C. Wobensmith, Chief Financial Officer

Fax: (646) 443-8551

 

 

15

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or if to another Holder, to the addresses set forth on the counterpart signature
pages of this Agreement signed by such Holders.

 

If to a transferee Holder, to the address of such Holder set forth in the
transfer documentation provided to the Company or at such other address as such
party each may specify by written notice to the others, and each such notice,
request, consent and other communication shall for all purposes of the Agreement
be treated as being effective or having been given when delivered personally or
upon receipt of facsimile confirmation if transmitted by facsimile, or, if sent
by mail, at the earlier of its receipt or 72 hours after the same has been
deposited in a regularly maintained receptacle for the deposit of United States
mail, addressed and postage prepaid as aforesaid.

 

(b)           No Waivers.  No failure or delay by any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.  The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.

 

(c)           Successors and Assigns.  The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, it being understood that subsequent Holders of the
Registrable Shares are intended third party beneficiaries of this Agreement.

 

(d)           Other Registration Rights.  Other Registration Rights. The Company
shall not grant to any Person the right, to request the Company to register any
securities of the Company except such rights as are not more favorable than or
inconsistent with the rights granted to the Holders herein. In the event the
Company grants rights which are more favorable, the Company will make such
provisions available to the Holders and will enter into any amendments necessary
to confer such rights on the Holders.

 

(e)           Governing Law.  The laws of the State of New York shall govern the
enforceability and validity of this Agreement, the construction of its terms and
the interpretation of the rights and duties of the parties, without regard to
the principles of conflicts of laws thereof.

 

(f)            Jurisdiction.  Any suit, action or proceeding seeking to enforce
any provision of, or based on any matter arising out of or in connection with,
this Agreement or the transactions contemplated hereby may be brought in any
federal or state court located in the County and State of New York, and each of
the parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum.  Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court.  Without

 

16

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limiting the foregoing, each party agrees that service of process on such party
as provided in this Section 13(e) shall be deemed effective service of process
on such party.

 

(g)           Waiver of Jury Trial.  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.

 

(h)           Counterparts; Effectiveness.  This Agreement may be executed in
any number of counterparts (including by facsimile) and by different parties
hereto in separate counterparts, with the same effect as if all parties had
signed the same document.  All such counterparts shall be deemed an original,
shall be construed together and shall constitute one and the same instrument. 
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.

 

(i)            Entire Agreement.  This Agreement contains the entire agreement
among the parties hereto with respect to the subject matter hereof and
supersedes and replaces all other prior agreements, written or oral, among the
parties hereto with respect to the subject matter hereof.

 

(j)            Captions.  The headings and other captions in this Agreement are
for convenience and reference only and shall not be used in interpreting,
construing or enforcing any provision of this Agreement.

 

(k)           Severability.  If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.  Upon such a
determination, the parties shall 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 be consummated as originally contemplated to the fullest extent possible.

 

(l)            Amendments.  The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the prior written consent of the holders of a majority of the
Registrable Shares (as constituted on the date hereof); provided, however, that
without a Holder’s written consent no such amendment, modification, supplement
or waiver shall affect adversely such Holder’s rights hereunder in a
discriminatory manner inconsistent with its adverse effects on rights of other
Holders hereunder (other than as reflected by the different number of shares
held by such Holder); provided, further, that the consent or agreement of the
Company shall be required with regard to any termination, amendment,
modification or supplement of, or waivers or consents to departures from, the
terms hereof, which affect the Company’s obligations hereunder.  This Agreement
cannot be changed, modified, discharged or terminated by oral agreement.

 

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(m)          Aggregation of Shares.  All Registrable Shares held by or acquired
by any Affiliated Persons will be aggregated together for the purpose of
determining the availability of any rights under this Agreement.

 

(n)           Equitable Relief.  Without limiting the remedies available, the
parties hereto acknowledge that any failure by the Company to comply with its
obligations under this Agreement will result in material irreparable injury to
the Holders for which there is no adequate remedy at law, that it will not be
possible to measure damages for such injuries precisely and that, in the event
of any such failure, any Holder shall have the right to obtain such relief as
may be required to specifically enforce the Company’s obligations under this
Agreement.

 

[Remainder of Page Intentionally Left Blank]

 

18

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IN WITNESS WHEREOF, this Agreement has been duly executed by each of the parties
hereto as of the date first written above.

 

 

 

BALTIC TRADING LIMITED

 

 

 

 

 

 

 

By:

/s/ John C. Wobensmith

 

Name:

John C. Wobensmith

 

Title:

President and Chief Financial Officer

 

 

 

 

 

 

 

GENCO INVESTMENTS LLC

 

 

 

 

 

 

 

By:

/s/ John C. Wobensmith

 

Name:

John C. Wobensmith

 

Title:

Chief Financial Officer

 

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