Exhibit 10.5


 


	
  MEMORANDUM
  OF AGREEMENT

  	
   

  	
  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

  
	
  Dated: 22nd
  February 2010

  	
   

  	
  SALEFORM 1993

  Revised 1966, 1983 and
  1986/87.

  



 


Shipping Trust
Ltd., 80 Broad Street, Monrovia, Liberia

hereinafter
called the Sellers, have agreed to sell, and Baltic Trading
Limited a Marshall Islands Corporation


 


hereinafter called the Buyers, have agreed to buy


 


Name: =SWS JNCX Hull H1150=


 


Classification Society/Class: ABS


 


Built:  scheduled delivery April 2010 By:  Shanghai Waigaoqiao Shipbuilding Co Ltd / Shanghai Jiangnan
Changxing Shipbuilding Co. Ltd., China


 


	
  Flag: Liberia

  	
  Place of Registration: Monrovia

  



 


	
  Call Sign:

  	
  Grt/Nrt:

  



 


Register Number:


 


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, London, Oslo, New York, Greece, or China  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 30 March 2006 between
Shipping Trust Ltd. (as BUYER) and China Shipbuilding Trading Company Limited (CSTC)
and Shanghai Waigaoqiao Shipbuilding Co., Ltd. (BUILDER), including any
additions, amendments, addenda and novations thereof.


 

















 


“Specifications”
means the Specifications of 177,000 DWT bulk carrier with Forecastle SWS-DWG
NO. SY406-01-001 (PC-DWG NO. 1173-024-01.01-G00-01-01-00) Version 3, updated 24
February 2005, including any additions and amendments / addenda thereof.


 


“Builder”
means Shanghai Waigaoqiao Shipbuilding Co., Ltd. and/or Shanghai Jiangnan
Changxing Shipbuilding Co. Ltd.


 


1.                                       Purchase
Price U.S.$ 73,000,000.00 (United States Dollars Seventy Three Million) in
cash


 


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 within 3 (three)             banking days from the date this Agreement
has been signed by both the Buyers and the Sellers on
fax provided the account is open and functional .
 This deposit shall be placed with the London branch of DnB NOR Bank ASA and held by them in a 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 to be credited to
the Buyers.  Any fee charged for holding
the said deposit shall be borne equally by the Sellers and the Buyers.   In case the IPO mentioned in clause 21 herein
is not completed by the Buyers within 16th March 2010, then the deposit
shall be returned to the Buyers with interest, if any.


 


3.                                       Payment


 


The
90% (ninety per cent) of the said Purchase Price (hereinafter “the Balance”)
and any other charges / money whatsoever payable by the Buyers to the Sellers
under this Agreement (hereinafter “the Charges”) shall be remitted by the
Buyers by Swift Interbank Transfer and received by the Sellers’ nominated bank
not later than 2 (two) banking days prior to the date when the Vessel is
expected to be in every respect physically ready for delivery with 10 (ten)
days notice under Clause 5.


 


The
Balance and the Charges shall be released to the Sellers on delivery of the
Vessel, but not later than 3 (three) 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.


 


The
Charges include the compensation for bunkers, lubricating / hydraulic / grease
oils in accordance with Clause 7 and anything for which the Buyers agree to pay
to the Sellers in accordance with this Agreement.


 


The
Balance and the Charges shall be paid out to the Sellers unconditionally by
Swift Interbank Transfer in accordance with an irrevocable written instruction
from the Buyers in full without any deduction, off-set or diminution in
accordance with this Agreement.


 


The
Bank Charges covering the joint account, the Buyers’ account and Closing
meeting concerning this Agreement shall be borne equally by the Sellers and the
Buyers.


 

















 


4.                                       Inspections


 


5.                                       Notices, time and place of
delivery


 


a)                                      The Sellers shall keep the Buyers well
informed of the Vessel’s itinerary in accordance
with schedule from the shipyard  and shall provide the Buyers with 30/21/14, 10/7, and 5
days approximate  notice of the delivery and 3/1 days definite notice of the delivery.  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 safe and accessible  anchorage ex-yard in accordance with the Shipbuilding Contract
(intention SWS-JNCX Shipyard, Shanghai / Changxing Island area).  The Buyers shall have the obligation to remove
the Vessel from the Builder’s yard within maximum five running days after
delivery.


 


Expected time of
delivery:  between 1st April 2010 and 31st May 2010 in the
Sellers’ option.


 


Date of cancelling
(see Clauses 5 c), 6 b) (iii) and 14):  31st May 2010
in the Buyers’ 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 3 banking
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 3 banking  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 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.


 

















 


7.                                       Spares/bunkers, etc.


 


The Sellers shall deliver the Vessel to the Buyers with everything
belonging to her on board and on shore including all
Owners’ supply items as per the Shipbuilding Contract.
 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 delivery used or unused, whether on board or not
shall become the Buyers’ property, but spares on order are to be excluded.
Forwarding charges, if any, shall be for the Buyers’ account.  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.  Unused stores and provisions shall be included
in the sale and be taken over by the Buyers without extra payment.


 


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. Captain’s,
Officers’ and Crew’s personal belongings including the slop chest are to be
excluded from the sale, as well as the following additional items (including
items on hire):


 


The Buyers shall take over the remaining bunkers and unused lubricating
oils/greases on board at the time of delivery and pay
the Sellers’ net price (excluding barging expenses) from the time of supply.


 


Lubricating oils to be those in sealed drums and/or designated storage
tanks not having been used or circulated in the vessel’s machinery.


 


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:  London, Oslo or New York in Sellers’ option


 


The
Buyers and the Sellers are to mutually agree a list of delivery documents as
reasonably and customarily required to facilitate the legal transfer and
registration of the Vessel by the Buyers that will be delivered by the Sellers
to the Buyers at the time Buyers pay for the Vessel and all extras.  The delivery documentation is to be
incorporated as an Addendum to the MOA.”


 


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  See Clause 17


 


The Vessel with everything belonging to her shall be at the Sellers’
risk and expense until she is delivered to the Buyers.  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 certificates valid and unextended without condition/recommendation* by
Class or the relevant authorities at the time of delivery.  Validity of all
above Certificates to be minimum 5 months after the date of delivery of the
Vessel with the exception of those which are interim or provisional due the
Vessel being a newbuilding (e.g. where final approval of certain documentation
may be pending), in which case the validity of said certificates may be less.


 


*                                         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.


 


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 only if  the Buyers cancel this Agreement.


 


15.                                 Buyers’ representatives  See Clause 18


 


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.


 


Clauses
17 to 22 are to form an integral part of this Agreement.


 


Clause
17


 


The
Vessel is to be delivered to Buyers in accordance with this Agreement, the
Shipbuilding Contract and the Specifications as defined herein, a copy of which
is to be appended to the MOA.  To the
extent there are any conflicts between this Agreement and the Shipbuilding
Contract and Specifications, the
provisions of the Shipbuilding Contract and Specifications shall prevail.  Exempted from this is the specifically agreed
Laycan per lines 60-61 of the MOA, where the MOA will prevail.  All the rights of the Sellers under the
Shipbuilding Contract and warranties are to be assigned to the Buyers.  The Buyers, Sellers and Builder shall upon
delivery sign a tripartite agreement to cover the assignment of all guarantees
and 3rd party warranties in full.  In the
event that the Builder is unwilling to enter into such an agreement for
whatsoever reason, the Sellers shall work constructively as an intermediary in


 

















 


processing the warranty items on behalf of the
Buyers, however will under no circumstances remain responsible for any defects,
latent or not, or any remedy of defects.


 


Clause
18


 


The
supervision will be undertaken by the Sellers in accordance with the
Shipbuilding Contract and to the Sellers’ normal professional standards.  The Sellers shall apply their best endeavours
with the Builder to arrange that a maximum of three representatives of the
Buyers (including Master and Chief Engineer) are permitted to attend the
shipyard 30 days prior to delivery and to attend vessel’s sea trials, always at
Buyers’ risk and expense.  All the
representatives are to sign Sellers’ usual indemnity forms.


 


Clause
19


 


All
negotiations and the terms of this Memorandum of Agreement are to remain
strictly private and confidential, except that the Buyers may disclose such
information as may be required by the securities laws in the United States of
America in respect of Sellers Initial Public Offering.


 


Clause
20  Performance Guarantee


 


The
Buyers have the right to assign this Memorandum of Agreement to a subsidiary
wholly owned by the Buyers.  Notwithstanding the assignment of this
Memorandum of Agreement by the Buyers, the Buyers will remain responsible for
all of the Buyers’ obligations and liabilities to the Sellers hereunder.  The Buyers will execute and deliver a copy of
the Assignment to the Sellers within 14 days after this Memorandum of Agreement
is signed by the Sellers and the Buyers.


 


Clause
21  Buyer’s subjects


 


Buyer’s
obligations in accordance with this Agreement 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,
Buyer may terminate this agreement without any liability or payment.


 


Clause
22


 


Notwithstanding
line 6 of the MOA, it is noted that the Vessel is a Newbuilding and accordingly
it is agreed that Sellers may elect:


 


(a) to
take delivery from the Builder but not to register the Vessel in Liberia prior
to her on-sale and delivery to Buyers.  In
such case Sellers may transfer the ownership of the Vessel, and deliver the
Vessel unregistered, to Buyers; or


 


(b) to
take delivery of the Vessel from the Builder and to register the Vessel in
Liberia prior to her on-sale and delivery to Buyers.


 

















 


The
Sellers shall advise the Buyers in writing of their election not later than 4
weeks prior to the Vessel’s expected delivery date to the Sellers from the
Builder.  The Buyers shall advise the
Sellers in writing not later than 5 weeks prior to Vessel’s expected delivery
of their chosen port of Registry and the exact documentary requirements for the
registration of the Vessel (as a Newbuilding or as a transfer from the Liberia
flag, as the case may be) in Buyers’ chosen port of Registry in the event that
such requirements differ from Sellers’ requirements.


 


This agreement is drawn up in two originals of even
tenor and date one to be retained by each party.


 


 


	
  For the
  Sellers

  	
   

  	
  For the
  Buyers

  
	
  /s/Antonios
  Lampros

  	
   

  	
  /s/
  R.G. Buchanan

  
	
  Antonios
  Lampros

  	
   

  	
  R.G.
  Buchanan

  
	
  Attorney-in-Fact

  	
   

  	
  Attorney-in-Fact

  



 


For and on behalf of
Shipping Trust Ltd.


 


 


This document is a computer generated copy of “SALEFORM 1993”,
printed by authority of the Norwegian Shipbrokers’ Association, using software
which is the copyright of Strategic Software Ltd. Any insertion or deletion to
the form must be clearly visible.  In the
event of any modification made to the preprinted text of this document, the
original document shall apply.  The
Norwegian Shipbrokers’ Association and Strategic Software Ltd. assume no
responsibility for any loss or damage caused as a result of discrepancies
between the original approved document and this document.