AGREEMENT AND PLAN OF MERGER by and among GENCO SHIPPING & TRADING LIMITED, POSEIDON MERGER SUB LIMITED and BALTIC TRADING LIMITED, Dated as of April 7, 2015

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ARTICLE I DEFINITIONS		2
Section 1.1	Definitions	2
ARTICLE II THE MERGER		12
Section 2.1	Merger	12
Section 2.2	Effect of the Merger	12
Section 2.3	Closing; Effective Time	12
Section 2.4	Organizational Documents; Directors and Officers	13
ARTICLE III EFFECT OF THE MERGER		13
Section 3.1	Conversion of Shares	13
Section 3.2	Closing of the Company's Transfer Books	14
Section 3.3	Exchange of Certificates	15
Section 3.4	Equity Awards	17
Section 3.5	Further Action	17
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY		17
Section 4.1	Organization and Good Standing; Subsidiaries	18
Section 4.2	Authority	18
Section 4.3	Capital Structure	19
Section 4.4	No Conflict; Required Filings and Consents	20
Section 4.5	Permits; Compliance With Law	21
Section 4.6	SEC Filings	22
Section 4.7	Financial Statements; No Undisclosed Liabilities	23
Section 4.8	Disclosure Documents	24
Section 4.9	Absence of Certain Changes or Events	24
Section 4.10	Employee Benefit Plans	25
Section 4.11	Absence of Labor Dispute	25
Section 4.12	Material Contracts	25
Section 4.13	Litigation	28
Section 4.14	Environmental Matters	28
Section 4.15	Intellectual Property	29
Section 4.16	Property	29
Section 4.17	Vessels; Maritime Matters	30
Section 4.18	Taxes	31
Section 4.19	Insurance	32
Section 4.20	Opinion of Financial Advisor	33
Section 4.21	Takeover Statutes	33
Section 4.23	Brokers	33
Section 4.24	No Other Representations or Warranties	33

ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB		34
Section 5.1	Organization and Good Standing; Subsidiaries	34
Section 5.2	Authority	35
Section 5.3	Capital Structure	35
Section 5.4	No Conflict; Required Filings and Consents	37
Section 5.5	Permits; Compliance With Law	38
Section 5.6	SEC Filings	38
Section 5.7	Financial Statements; No Undisclosed Liabilities	40
Section 5.8	Disclosure Documents	40
Section 5.9	Absence of Certain Changes or Events	41
Section 5.10	Employee Benefit Plans	41
Section 5.11	Absence of Labor Dispute	41
Section 5.12	Material Contracts	42
Section 5.13	Litigation	44
Section 5.14	Environmental Matters	44
Section 5.15	Intellectual Property	45
Section 5.16	Property	45
Section 5.17	Vessels; Maritime Matters	46
Section 5.18	Taxes	47
Section 5.19	Insurance	48
Section 5.20	Required Shareholder Vote	48
Section 5.21	Brokers	49
Section 5.22	Ownership of Merger Sub; No Prior Activities	49
Section 5.23	No Other Representations or Warranties	49
ARTICLE VI COVENANTS AND AGREEMENTS		49
Section 6.1	Conduct of Business by the Company	49
Section 6.2	Conduct of Business by Parent	53
Section 6.3	Access to Information	54
Section 6.4	Notification of Certain Matters; Transaction Litigation	54
Section 6.5	Registration Statement; Joint Proxy Statement; Shareholder Meetings	55
Section 6.6	No Solicitation; Change in Recommendation	58
Section 6.7	Appropriate Action; Consents; Filings	61
Section 6.8	Public Announcements	63
Section 6.9	Directors' and Officers' Indemnification and Insurance	63
Section 6.10	Merger Sub	65
Section 6.11	Section 16 Matters	65
Section 6.12	Stock Exchange Listing	65
Section 6.13	Voting of Shares	66
Section 6.15	Resignation of Directors	66
Section 6.16	Parent Board of Directors	66
Section 6.17	Compliance with Management Agreement	66
Section 6.18	Gain Recognition Agreement	67

ARTICLE VII CONDITIONS		67
Section 7.1	Conditions to the Obligations of Each Party	67
Section 7.2	Conditions to the Obligations of Parent and Merger Sub	68
Section 7.3	Conditions to the Obligations of the Company	69
ARTICLE VIII TERMINATION, AMENDMENT AND WAIVER		69
Section 8.1	Termination	70
Section 8.2	Effect of Termination	71
Section 8.3	Expenses	72
Section 8.4	Amendment	72
Section 8.5	Waiver	73
ARTICLE IX GENERAL PROVISIONS		73
Section 9.1	Non-Survival of Representations and Warranties	73
Section 9.2	Notices	73
Section 9.3	Interpretation; Certain Definitions	74
Section 9.4	Severability	75
Section 9.5	Assignment; Delegation	75
Section 9.6	Entire Agreement	75
Section 9.7	No Third-Party Beneficiaries	75
Section 9.8	Specific Performance	76
Section 9.9	Counterparts	76
Section 9.10	Governing Law	76
Section 9.11	Consent to Jurisdiction	76
Section 9.12	WAIVER OF JURY TRIAL	77
Exhibit A	Voting and Support Agreement
Exhibit B	Amended and Restated Articles of Incorporation of the Company

 

 

 

 

 

 

 

 

 

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to require investigation or remedial action by Parent or any of its Subsidiaries under any Environmental Law.

 

 

 

 

 

 

 

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business since the date thereof), free and clear of all Liens except for Permitted Liens and Liens that have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.  Parent and its Subsidiaries are collectively the lessee of all property material to the business of Parent and its Subsidiaries which is purported to be leased by Parent and its Subsidiaries and are in possession of such properties, and each lease for such property is valid and in full force and effect without default thereunder by the lessee or the lessor, except in each case as has not had, and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.  Except as, individually or in the aggregate, has not had and would not reasonably be expected to have a Parent Material Adverse Effect, all items of equipment and other tangible assets owned by or leased to Parent and its Subsidiaries are sufficient for the uses to which they are being put, are in good and safe condition and repair (ordinary wear and tear excepted), and are sufficient for the conduct of the business of Parent and its Subsidiaries in the manner in which such business is currently being conducted and is proposed to be conducted.  Section 5.16 of the Parent Disclosure Letter lists all material real property and any material interest in real property owned by Parent or any of its Subsidiaries.

 

 

 

 

 

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Permitted Liens and Liens that would not, individually or in the aggregate, have a Parent Material Adverse Effect.

 

 

 

 

 

 

 

 

 

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Subsidiaries shall be bound by any such Tax allocation or sharing Contracts or similar arrangements or have any liability thereunder for amounts due in respect of periods prior to the Closing Date.

 

 

 

 

 

 

 

 

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the Parent Shareholder Meeting, voting together as a single class (the “Charter Amendment Approval”), as required to approve the Charter Amendment and (ii) the holders of a majority of the voting power of the Parent Common Stock represented at the Parent Shareholder Meeting (this clause (ii), the “Parent Shareholder Approval”), as required pursuant to the terms of this Agreement, are the only votes of holders of any class or series of capital stock of Parent that are necessary to approve the transactions contemplated by this Agreement.

 

 

 

 

 

 

ARTICLE VI

 

 

 

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permitted) or as set forth in Section 6.1(a) of the Company Disclosure Letter, the Company shall, and shall cause each of its Subsidiaries to (i) conduct its business in the ordinary course and in a manner consistent with past practice and (ii) use commercially reasonable efforts to ensure that the Company and each of its Subsidiaries preserve intact their current business organizations, keep available the services of their current officers and employees, and maintain their relations and goodwill with all suppliers, customers, landlords, creditors, licensors, licensees, employees, and other Persons having business relationships with the Company and each of its Subsidiaries, respectively.

 

 

 

 

 

 

 

 

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Agreement to cause to be exercisable any otherwise unexercisable option under any existing stock plan of the Company or any of its Subsidiaries (except as explicitly required by the terms of any Company Restricted Stock outstanding on the date of this Agreement);

 

 

 

 

 

 

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included therein.  Each of the Company and Parent shall promptly notify the other upon the receipt of any comments from the SEC or any request from the SEC for amendments or supplements to the Form S-4 or Joint Proxy Statement, and shall provide the other with copies of all correspondence between it and its Representatives, on the one hand, and the SEC, on the other hand.  Each of the Company and Parent shall use its reasonable best efforts to respond as promptly as practicable to any comments from the SEC with respect to the Joint Proxy Statement, and Parent shall use its reasonable best efforts to respond as promptly as practicable to any comment from the SEC with respect to the Form S-4.  Notwithstanding the foregoing, prior to filing the Form S-4 (or any amendment or supplement thereto) or mailing the Joint Proxy Statement (or any amendment or supplement thereto) or responding to any comments of the SEC with respect thereto, each of the Company and Parent (i) shall provide the other an opportunity to review and comment on such document or response (including the proposed final version of such document or response) and (ii) shall include in such document or response all comments reasonably proposed by the other.   Parent shall advise the Company, promptly after it receives notice thereof, of the time of effectiveness of the Form S-4, the issuance of any stop order relating thereto or the suspension of the qualification of the Parent Common Stock issuable in connection with the Merger for offering or sale in any jurisdiction, and Parent shall use its reasonable best efforts to have any such stop order or suspension lifted, reversed or otherwise terminated.  Each of the Company and Parent will cause the Joint Proxy Statement to be mailed to its respective shareholders as promptly as practicable after the Form S-4 is declared effective under the Securities Act.  Parent shall also take any other action (other than qualifying to do business in any jurisdiction in which it is not now so qualified) reasonably required to be taken under the Securities Act, the Exchange Act, any applicable foreign securities Laws and the rules and regulations thereunder in connection with the issuance of Parent Common Stock in the Merger and the Charter Amendment, and the Company shall furnish all information concerning the Company and the holders of its capital stock as may be reasonably requested in connection with any such actions.

 

 

 

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adoption and approval of this Agreement and approval of the Merger and (ii) the Joint Proxy Statement shall include the Company Board Recommendation.  Notwithstanding the foregoing provisions of this Section 6.5(c), if, on a date for which the Company Shareholder Meeting is scheduled, the Company has not received proxies representing a sufficient number of shares of Company Common Stock and Company Class B Stock to obtain the Company Shareholder Approval and the Company Unaffiliated Shareholder Approval, whether or not a quorum is present, the Company shall have the right to make one or more successive postponements or adjournments of the Company Shareholder Meeting; provided, that the Company Shareholder Meeting is not postponed or adjourned to a date that is more than 30 days after the date for which the Company Shareholder Meeting was originally scheduled (excluding any adjournments or postponements required by applicable Law) without Parent’s prior written consent.  Nothing contained in this Agreement shall be deemed to relieve the Company of its obligation to submit the Merger to the Company Shareholders for a vote on the approval thereof.  The Company agrees that, unless this Agreement shall have been terminated in accordance with Section 8.1, its obligations to hold the Company Shareholder Meeting pursuant to this Section 6.5(c) shall not be affected by the commencement, public proposal, public disclosure or communication to the Company of any Acquisition Proposal or by any Change in Company Recommendation.

 

 

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Shareholder Meeting pursuant to this Section 6.5(d) shall not be affected by any Change in Parent Recommendation.

 

 

 

(b)

 

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any written nonpublic information or data provided to a third party pursuant to the prior sentence prior to or simultaneously with furnishing such information to such third party.

 

 

 

 

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of the material terms of any Superior Proposal not made in writing, including with respect to any financing commitments relating thereto (a “Notice of Recommendation Change”) (it being understood that any amendment to any material term of such Superior Proposal shall require a new Notice of Recommendation Change and a new three-Business Day period), (E) during such three-Business Day period, the Company has considered and, at the reasonable request of Parent, engaged in good faith discussions with Parent regarding, any adjustment or modification of the terms of this Agreement proposed by Parent and (F) the Company Board, following such three-Business Day period, again determines in good faith (acting through the Company Special Committee, if then in existence, and after consultation with its outside legal counsel and financial advisors, and taking into account any adjustment or modification of the terms of this Agreement proposed by Parent) that such Acquisition Proposal constitutes a Superior Proposal.

 

 

 

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any other provision of this Agreement, including Section 8.1(c) or Section 8.1(d), as applicable; and provided, further, that any such disclosure that addresses or relates to the approval, recommendation or declaration of advisability by the Company Board or the Parent Board, as applicable, with respect to this Agreement or an Acquisition Proposal received by the Company shall be deemed to be a Change in Company Recommendation or Change in Parent Recommendation, as applicable, unless the Company Board or the Parent Board in connection with such communication publicly states that its respective recommendation with respect to this Agreement and the transactions contemplated hereby has not changed or refers to the prior recommendation of the Company Board or the Parent Board, as applicable, without disclosing any Change in Company Recommendation or Change in Parent Recommendation, as applicable.

 

 

 

 

 

 

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any Contract to consummate and make effective, as promptly as practicable, the Merger and the other transactions contemplated by this Agreement, including (i) the taking of all actions necessary to cause the conditions to Closing set forth in Article VII to be satisfied, (ii) the obtaining of all necessary actions or nonactions, waivers, consents and approvals from Governmental Authorities or other Persons necessary in connection with the consummation of the Merger and the other transactions contemplated by this Agreement (including those contemplated by Section 7.2) and the making of all necessary registrations and filings (including filings with Governmental Authorities, if any) and the taking of all reasonable steps as may be necessary to obtain an approval or waiver from, or to avoid an action or proceeding by, any Governmental Authority or other Persons necessary in connection with the consummation of the Merger and the other transactions contemplated by this Agreement, (iii) the defending of any Actions challenging this Agreement or the consummation of the Merger or the other transactions contemplated by this Agreement, including seeking to have any stay or temporary restraining order entered by any Governmental Authority vacated or reversed, the avoidance of each and every impediment under any antitrust, merger control, competition or trade regulation Law that may be asserted by any Governmental Authority with respect to the Merger so as to enable the Closing to occur as soon as reasonably possible and (iv) the execution and delivery of any additional instruments necessary to consummate the Merger and the other transactions contemplated by this Agreement and to fully carry out the purposes of this Agreement.

 

 

 

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and assurances as to financial capability, resources and creditworthiness of the Company and/or any of its Subsidiaries following the Effective Time as may be reasonably requested by any Person from whom a Debt Waiver is required in connection with the Merger and the other transactions contemplated by this Agreement.  Without limitation to the foregoing, except as provided in Section 6.7(c) of the Parent Disclosure Letter, Parent shall execute and deliver such amendments, guarantees, indemnities and other agreements and documents, pledge such collateral, provide such information, participate in such meetings, assist in the preparation of such documents and agreements, make and cooperate in the making of such filings, and take such other action, as promptly as practicable after the date hereof, as shall be reasonably necessary or appropriate in connection with the Debt Waivers (and obtaining the same); provided, however, that neither the Company nor Parent shall be obligated to incur any out of pocket fees, costs and expenses in connection with the Debt Waivers (and obtaining the same). Notwithstanding anything to the contrary set forth in this Agreement, Parent shall promptly reimburse the Company for all reasonable and documented, out-of-pocket fees, costs and expenses incurred by the Company in connection with the Debt Waivers (and obtaining the same).

 

 

 

 

 

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Effective Time an officer or director of the Company or any of its Subsidiaries (each an “Indemnified Person”) as provided under the Company Articles of Incorporation, Company By-Laws or the Company’s indemnification Contracts or undertakings, in each case as in effect on the date of this Agreement, shall be assumed by the Surviving Entity in the Merger, without further action, at the Effective Time and shall survive the Merger and shall remain in full force and effect in accordance with their terms for a period of six years (or, in the event that any Action is pending or asserted during such six-year period, until the final disposition of such Action, if after expiration of such six-year period).

 

 

 

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Company shall be permitted to purchase any such “tail” insurance policy prior to the Effective Time.

 

 

 

 

 

 

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Parent Common Stock reserved for issuance upon the exercise of any Rights to acquire Parent Common Stock outstanding at the Effective Time, to be approved for listing on the NYSE, subject to official notice of issuance, prior to the Closing Date.

 

 

 

 

 

 

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ARTICLE VII

 

 

 

 

 

 

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(vii) the Company Shareholder Meeting shall not have been called and held as required by Section 6.5(c); or

 

 

 

 

 

 

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Section 8.5                  Waiver.  At any time prior to the Effective Time, subject to applicable Law, any Party may (a) extend the time for the performance of any obligation or other act of any other Party, (b) waive any inaccuracy in the representations and warranties of the other Parties contained herein or in any document delivered pursuant hereto and (c) subject to the proviso of Section 8.4, waive compliance with any agreement or condition contained herein.  Any agreement on the part of a Party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the Party or Parties to be bound thereby.  Notwithstanding the foregoing, no failure or delay by the Company, Parent or Merger Sub in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.

 

ARTICLE IX

 

 

 

if to the Company:

 

Baltic Trading Limited

▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇

▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

Phone:  (▇▇▇) ▇▇▇-▇▇▇▇

Fax:  (▇▇▇) ▇▇▇-▇▇▇▇

Attention:  ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

Email: ▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

 

with a copy (which shall not constitute notice) to:

 

▇▇▇▇ ▇▇▇▇▇▇▇ LLP

▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇

▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

Phone:  ▇▇▇-▇▇▇-▇▇▇▇

 

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Email: ▇▇▇▇▇▇▇.▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

 

if to Parent or Merger Sub:

 

Genco Shipping & Trading Limited

▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇

▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

Phone:  (▇▇▇) ▇▇▇-▇▇▇▇

Fax:  (▇▇▇) ▇▇▇-▇▇▇▇

Attention:  ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇

Email: ▇▇▇▇.▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇

with a copy (which shall not constitute notice) to:

 

Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP

▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇

▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇

Phone:  (▇▇▇) ▇▇▇-▇▇▇▇

Fax:  (▇▇▇) ▇▇▇-▇▇▇▇

Attention:  ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.

Email: ▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇.▇▇▇

 

 

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warranties are subject to waiver by the Parties in accordance with Section 8.5 without notice or liability to any other Person.  The representations and warranties in this Agreement may represent an allocation among the Parties of risks associated with particular matters regardless of the knowledge of any of the Parties.  Accordingly, Persons other than the Parties may not rely upon the representations and warranties in this Agreement as characterizations of actual facts or circumstances as of the date of this Agreement or as of any other date.

 

 

 

 

 

 

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[Remainder of page intentionally left blank; signature page follows.]

 

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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

 

	GENCO SHIPPING & TRADING LIMITED
	By:	/s/ Apostolos Zafolias
		Name:  Apostolos Zafolias
		Title:  Chief Financial Officer
	POSEIDON MERGER SUB LIMITED
	By:	/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
		Name:  ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
		Title:  President
	BALTIC TRADING LIMITED
	By:	/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
		Name:  ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
		Title:  President and Chief Financial Officer

[Signature Page to Agreement and Plan of Merger]

 

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EXHIBIT B

SECOND AMENDED AND RESTATED

ARTICLES OF INCORPORATION

OF

BALTIC TRADING LIMITED

PURSUANT TO THE ▇▇▇▇▇▇▇▇ ISLANDS BUSINESS CORPORATIONS ACT

The undersigned, for the purpose of forming a corporation pursuant to the provisions of the ▇▇▇▇▇▇▇▇ Islands Business Corporations Act (the “BCA”), does hereby make, subscribe, acknowledge and file with the Registrar of Corporations this instrument for that purpose, as follows:

A.	The name of the Corporation shall be:

BALTIC TRADING LIMITED (hereinafter, the “Corporation”).

B.	The purpose of the Corporation is to engage in any lawful act or activity for which corporations may now or hereafter be organized under the BCA.

C.	The registered address of the Corporation in the ▇▇▇▇▇▇▇▇ Islands is Trust Company Complex, Ajeltake Road, Ajeltake Island, Majuro, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇. The name of the Corporation’s registered agent at such address is The Trust Company of the ▇▇▇▇▇▇▇▇ Islands, Inc.

D.	The aggregate number of shares of stock that the Corporation is authorized to issue is five hundred (500) registered shares of Common Stock, par value $0.01 per share.  No holder of shares of capital stock of the Corporation shall be entitled to preemptive or subscriptive rights.

E.	The Corporation is to have perpetual existence and shall have every power which a corporation now or hereafter organized under the BCA may have.

F.	The name and address of the incorporator is:

Name	Post Office Address
Majuro Nominees Ltd.	▇.▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇

G.	The Board of Directors of the Corporation as well as the shareholders of the Corporation shall each have the authority to adopt, amend or repeal the bylaws of the Corporation.

H.

A director of the Corporation shall not be personally liable to the Corporation or its shareholders for monetary damages for any breach of duty in such capacity except that the liability of a director shall not be eliminated or limited: (a) for any breach of such director’s duty of loyalty to the Corporation or its shareholders; (b) for acts or omissions

 

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not undertaken in good faith or which involve intentional misconduct or a knowing violation of law; or (c) for any transaction from which such director derived an improper personal benefit.  If the BCA hereafter is amended to authorize the further elimination or limitation of the liability of directors for actions taken or omitted to be taken then the liability of a director of the Corporation, in addition to the limitation on personal liability provided herein, shall be limited to the fullest extent permitted by the amended BCA in respect of actions or omissions to act which occurred during any period to which the BCA’s amended provisions pertain.  Any repeal or modification of this Section H by the shareholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of the director existing at the time of such repeal or modification.

 

 

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