Exhibit 10.4


 


	
   

  

  	
  Norwegian Shipbrokers’ Association’s Memorandum

  of
  Agreement for sale and purchase of ships.

  Adopted
  by The Baltic and International

  Maritime
  Council (BIMCO) in 1956.

  Code-name

  SALEFORM 1993

  Revised 1966, 1983 and
  1986/87.

  



 


Dated: 19th of February 2010


 


Spice
Shipping Ltd., Malta
hereinafter called the Sellers, have agreed to sell, and  Baltic Trading Limited
or nominee, who’s performance always to be guaranteed by Baltic Trading Limited
hereinafter called the Buyers, have agreed to buy


 


Name: M/V
Spice


 


Classification Society/Class:  BV


 


	
  Built: 2009

  	
  By: Dayang Shipbuilding

  
	
   

  	
   

  
	
  Flag: Malta

  	
  Place of Registration:  Valletta,
  Malta

  
	
   

  	
   

  
	
  Call Sign:

  	
  Grt/Nrt:

  



 


Register Number:
IMO 9387358


 


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.


 


1.                                      Purchase Price  US$ 35,000,000 (United States Dollars Thirty Five million
only)


 


2.                                      Deposit


 


As security for the correct fulfillment of this
Agreement the Buyers shall pay a deposit of 10% (ten per cent) of the Purchase
Price within 3 banking days from
the date of this Agreement being signed/exchanged by both parties by fax or
e-mail and/or joint account established whichever the later. This deposit shall
be placed with and held by them in this joint interest bearing 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. If the Buyers subjects are not lifted, Buyers
deposit to be returned with interest, if any.


 


3.                                      Payment


 


The said Purchase Price shall be paid in full free of
bank charges to Sellers nominated bank on delivery of the Vessel, but not later
than 3 banking days after the Vessel is in every respect physically ready for
delivery in accordance with the terms and conditions of this Agreement and
Notice of Readiness has been given in accordance with Clause 5.


 


4.                                      Inspections


 


a)*                               The Buyers have inspected and accepted
the Vessel’s classification records. The Buyers have waived their right to
physically inspect the Vessel. The sale is outright and definite, subject only
to the terms and conditions of this Agreement.


 

















 


5.                                      Notices, time and place
of delivery


 


a)                                      The Sellers shall keep the Buyers well
informed of the Vessel’s itinerary and shall provide the Buyers with 30, 21 and  14 days approximate notice of the intended port and delivery
date of and 7 and 3 days definite notice of the delivery of the Vessel and her
delivery port. When the Vessel is at the place of delivery and 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.


 


b)                                 The Vessel shall be delivered and taken
over safely afloat at a safe and accessible berth or anchorage in the range of Singapore-Japan, UK-Cont, Med not east of Greece, USEC,
USG in the Sellers’
option. The vessel is not to be delivered at any port in which an entity
subject to U.S. laws is not permitted to accept delivery including Cuba, Iran,
North Korea, Sudan, Syria and Burma/Myanmar.


 


Expected time of delivery: 15th of March 2010 – 31st of April 2010, exact time in sellers
option


 


Date of cancelling (see Clauses 5 c), 6
b) (iii) and 14): 31st of April, 2010 in Buyer’s option, however if
the T/C period for the CP under which the vessel is performing, exceeds the
cancelling date, then the Buyers will take delivery of the Vessel with the
Charter attached, details of which the Buyers have sighted and accepted, or
extend the cancelling date till June 30th 2010 and take delivery of the vessel
Charterfree, in their option.


 


c)                                  If the Sellers anticipate that,
notwithstanding the exercise of due diligence by them, the Vessel will not be
ready for delivery by the cancelling date they may notify the Buyers in writing
stating the date when they anticipate that the Vessel will be ready for
delivery and propose a new cancelling date. Upon receipt of such notification
the Buyers shall have the option of either cancelling this Agreement in
accordance with Clause 14 within 7 running days of receipt of the notice
or of accepting the new date as the new cancelling date. If the Buyers have not
declared their option within 7 running days of receipt of the Sellers’
notification or if the Buyers accept the new date, the date proposed in the
Sellers’ notification shall be deemed to be the new cancelling date and shall
be substituted for the cancelling date stipulated in line 61


 


If this Agreement is maintained with the new
cancelling date all other terms and conditions hereof including those contained
in Clauses 5 a) and 5 c) shall remain unaltered and in full force
and effect. Cancellation or failure to cancel shall be entirely without
prejudice to any claim for damages the Buyers may have under Clause 14
for the Vessel not being ready by the original cancelling date.


 


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


 


b)**                       (i) The Vessel is to be delivered
without drydocking. However, the Buyers shall have the right at their expense
to arrange for an underwater inspection by a diver approved by the Classification
Society prior to the delivery of the Vessel. The Sellers shall at their cost
make the Vessel available for such inspection. The extent of the inspection and
the conditions under which it is performed shall be to the satisfaction of the
Classification Society. If the conditions at the port of delivery are
unsuitable for such inspection, the Sellers shall make the Vessel available at
a suitable alternative place near to the delivery port.


 


(ii) If the rudder, propeller, bottom or other
underwater parts below the deepest load line are found broken, damaged or
defective so as to affect the Vessel’s class, then unless repairs can be
carried out afloat to the satisfaction of the Classification Society, the
Sellers shall arrange for the Vessel to be drydocked at their expense for
inspection by the Classification Society of the Vessel’s underwater parts below
the deepest load line, the extent of the inspection being in accordance with
the Classification Society’s rules. If the rudder, propeller, bottom or other
underwater parts below the deepest load line are found broken, damaged or
defective so as to affect the Vessel’s class, such defects shall be made good
by the Sellers at their expense to the satisfaction of the Classification
Society without condition/recommendation*. In such event the Sellers are to pay
also for the cost of the underwater inspection and the Classification Society’s
attendance.


 


(iii) If the Vessel is to be drydocked pursuant
to Clause 6 b) (ii) and no suitable dry- docking facilities are
available at the port of delivery, the Sellers shall take the Vessel to a port
where suitable drydocking facilities are available, whether within or outside
the delivery range as per Clause 5 b). Once drydocking has taken place
the Sellers shall deliver the Vessel at a port within the delivery range as per
Clause 5 b) which shall, for the purpose of this Clause, become the new
port of delivery. In such event the cancelling date provided for in Clause 5
b) shall be extended by the additional time required for the drydocking and
extra steaming, but limited to a maximum of 14 running days.


 


c)                                      If the Vessel is drydocked pursuant to Clause
6 a) or 6 b) above


 


(i) the Classification Society may require survey
of the tailshaft system, the extent of the survey being to the satisfaction of
the Classification surveyor. If such survey is not required by the
Classification Society, the Buyers shall have the right to require the
tailshaft to be drawn and surveyed by the Classification Society, the extent of
the survey being in accordance with the Classification Society’s rules for
tailshaft survey and consistent with the current stage of the Vessel’s survey
cycle. The Buyers shall declare whether they require the tailshaft to be drawn
and surveyed not later than by the completion of the inspection by the
Classification Society. The drawing and refitting of the tailshaft shall be
arranged by the Sellers. Should any parts of the tailshaft system be condemned
or found defective so as to affect the Vessel’s class, those parts shall be
renewed or made good at the Sellers’ expense to the satisfaction of the
Classification Society without condition/recommendation*.


 


(ii) the expenses relating to the survey of the
tailshaft system shall be borne by the Buyers unless the Classification Society
requires such survey to be carried out, in which case the Sellers shall pay
these expenses. The Sellers shall also pay the expenses if the Buyers require
the survey and parts of the system are condemned or found defective or broken
so as to affect the Vessel’s class*.


 


(iii) the expenses in connection with putting the
Vessel in and taking her out of drydock, including the drydock dues and the
Classification Society’s fees shall be paid by the Sellers if the
Classification Society issues any condition/recommendation* as a result of the
survey or if it requires survey of the tailshaft system. In all other cases the
Buyers shall pay the aforesaid expenses, dues and fees.


 


(iv) the Buyers’ representative shall have the
right to be present in the drydock, but without interfering with the work or
decisions of the Classification surveyor.


 

















 


(v) the Buyers shall have the right to have the
underwater parts of the Vessel cleaned and painted at their risk and expense
without interfering with the Sellers’ or the Classification surveyor’s work, if
any, and without affecting the Vessel’s timely delivery. If, however, the
Buyers’ work in drydock is still in progress when the Sellers have completed
the work which the Sellers are required to do, the additional docking time
needed to complete the Buyers’ work shall be for the Buyers’ risk and expense.
In the event that the Buyers’ work requires such additional time, the Sellers
may upon completion of the Sellers’ work tender Notice of Readiness for
delivery whilst the Vessel is still in drydock and the Buyers shall be obliged
to take delivery in accordance with Clause 3, whether the Vessel is in
drydock or not and irrespective of Clause 5 b).


 


*                                         Notes, if any, in the surveyor’s report
which are accepted by the Classification Society without
condition/recommendation are not to be taken into account.


**                                  6 a) and 6 b) are alternatives;
delete whichever is not applicable. In the absence of deletions, alternative 6
a) to apply.


 


7.                                      Spares/bunkers, etc.


 


The Sellers shall deliver the Vessel to the Buyers with everything
belonging to her on board and on shore. 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 at the time of signing this Agreement
used or unused, whether on board or not shall become the Buyers’ property. The
Sellers are not required to replace spare parts including spare tail-end shaft(s) and
spare propeller(s)/propeller blade(s) which are taken out of spare and used
as replacement prior to delivery, but the replaced items shall be the property
of the Buyers. The radio installation and navigational equipment shall be
included in the sale without extra payment if they are the property of the
Sellers. All stores, manuals, instruction books, charts, plans likewise and
provisions shall be included in the sale and be taken over by the Buyers
without extra payment. The Sellers also to leave onboard:


 


1)              SOPEP


2)              Ballast Management Plan


3)              Compulsory ISM Library


4)              Continuous Synopls Record


 


The Sellers have the right to take ashore crockery, plates, cutlery,
linen and other articles bearing the Sellers’ flag or name, provided they
replace same with similar unmarked items. Library, forms, etc., exclusively for
use in the Sellers’ vessel(s), shall be excluded without compensation.
Victualling which are property of the catering company, Captain’s, Officers’
and Crew’s personal belongings including the slop chest are to be excluded from
the sale, as well. However, sellers shall
provide inventory list of spare parts on board to Buyers soon after this
Agreement has been signed and 10 percent deposit lodged. There are no hired
items at the time of inspection except UNITOR gas bottles.


 


The Buyers shall take over the remaining bunkers, which to be
sufficient to reach nearest main bunkering port with the usual safety margin,
and unused lubricating oils in designated storage tanks and sealed drums and
pay Sellers net invoiced prices (excluding barging expenses) and for luboils in
tanks and unbroached drums as evidenced by invoices and supporting vouchers.
Payment under this Clause shall be made at the same time and place and in the
same currency as the Purchase Price.


 


8.                                      Documentation


 


The place of closing:  to be mutually agreed


 

















 


Delivery procedure to be mutually agreed between the Sellers and
Buyers. The delivery of the Vessel and closing may be at different venues, but
at the same date and time.


 


In order to enable the Buyers to obtain clear title on delivery and to
register the Vessel Buyers and Sellers shall provide a list of delivery
documents which are to be mutually agreed and attached to this Agreement in the
form of an Addendum. Any such documents for purpose of registering the Vessel
should be the documents which can reasonably be obtained by the Sellers.


 


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 all charters, 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 as she
was at the time of inspection, fair wear and tear excepted. However, the Vessel
shall be delivered with her class maintained without condition/recommendation*,
free of average damage affecting the Vessel’s class, and with her
classification certificates and national and international certificates, as
well as all other certificates the Vessel had at the time of signing this
Agreement, valid and unextended for at least 4 months from the date of delivery
without condition/recommendation* by Class or the relevant authorities at
the time of delivery.


 


“Inspection” in this Clause 11, shall mean the
Buyers’ inspections according to Clause 4 a) or 4 b), if
applicable, or the Buyers’ inspection prior to the signing of this Agreement.
If the Vessel is taken over without inspection, the date of this Agreement
shall be the relevant date.


 


*                                         Notes, if any, in the surveyor’s report
which is accepted by the Classification Society without
condition/recommendation are not to be taken into account.


 


12.                               Name/markings


 


Upon delivery the Buyers undertake to change the name of the Vessel and
alter funnel markings.


 


13.                               Buyers’
default


 


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


 


After the lodge of deposit amount in the joint account
the Buyers have the right to place two representatives on board the Vessel at
their sole risk and expense for the purpose of familiarization only, and they
shall not interfere in any respect with the operation of the crew and/or Vessel
until time of the delivery of the Vessel to the Buyers. Buyers have the right
to change their actual representatives from time to time but always to be in
keeping with the above. The Buyers’ representatives shall sign the Sellers’
letter of indemnity in the form of the Sellers P + I club wording 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.


 


*                                         16 a), 16 b) and 16 c)
are alternatives; delete whichever is not applicable. In the absence of
deletions, alternative 16 a) to apply.


 


17                              Subjects


 


Buyer’s
obligations hereunder are subject to an initial public offering being completed
by Baltic Trading Limited on or prior to March 16, 2010. In the event such
an offering is not completed on or prior to such date, either Buyers or Sellers
may terminate this agreement by written notice to the other without any
liability or payment (other than the return of Buyer’s deposit, with interest,
if any, as provided in Clause 2)


 


 


	
   

  	
  SIGNATURES

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/
  Robert Gerald Buchanan

  	
   

  	
  /s/ Tugrul Tokgoz

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ON BEHALF OF BUYERS

  	
   

  	
  ON BEHALF OF SELLERS

  
	
   

  	
  NAME:  Robert Gerald Buchanan

  	
   

  	
  NAME:  Tugrul Tokgoz

  
	
   

  	
  TITLE:   Attorney in Fact

  	
   

  	
  TITLE:   Director