Exhibit 10.3


 


	
  

  	
  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


 


Sinova
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 Sinova


 


Classification
Society/Class: BV


 


Built: 2009                                                                                                                                                                                                                                     By: Dayang Shipbuilding


 


Flag: Malta                                                                                                                                                                                                                                    Place of Registration: Valletta, Malta


 


Call Sign:                                                                                                                                                                                                                                              Grt/Nrt:


 


Register Number: IMO 9347889


 


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.


 


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 the 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:  /s/ Robert Gerald Buchanan 

  	
  NAME:  Tugrul Tokgoz

  
	
   

  	
  TITLE:  Attorney in Fact

  	
  TITLE:  Director