Exhibit
10.5


 


	
  

  	
  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

  
	
  Dated: 19th of February 2010

  	
  Revised 1966, 1983 and 1986/87

  



 


Borak 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 Borak


 


Classification Society/Class: BV


 


	
  Built: 2009

  	
  By: Dayang Shipbuilding

  
	
   

  	
   

  
	
  Flag: Malta

  	
  Place of Registration: Valletta, Malta

  
	
   

  	
   

  
	
  Call Sign:

  	
  Grt/Nrt:

  



 


Register Number:  IMO
9387334


 


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 also inspected the Vessel
at/in Singapore on about 5th of January 2010 and have
accepted the Vessel in all aspects. 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 ofReadiness
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