AGREEMENT AND PLAN OF MERGER

Dated as of September 25, 2006

Among

OVERSEAS SHIPHOLDING GROUP, INC.,

MARLIN ACQUISITION CORPORATION,

And

MARITRANS INC.

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

Page

                                                        ARTICLE I

The Merger

SECTION 1.01. The Merger *

SECTION 1.02. Closing *

SECTION 1.03. Effective Time *

SECTION 1.04. Effects of the Merger *

SECTION 1.05. Certificate of Incorporation and By-laws *

SECTION 1.06. Directors *

SECTION 1.07. Officers *

ARTICLE II

Effect of the Merger on the Capital Stock of the Constituent Corporations;
Exchange of Certificates

SECTION 2.01. Effect on Capital Stock *

SECTION 2.02. Exchange of Certificates *

ARTICLE III

Representations and Warranties

SECTION 3.01. Representations and Warranties of the Company *

SECTION 3.02. Representations and Warranties of Parent and Sub *

ARTICLE IV

Covenants Relating to Conduct of Business

SECTION 4.01. Conduct of Business *

SECTION 4.02. No Solicitation *

ARTICLE V

Additional Agreements

SECTION 5.01. Preparation of the Proxy Statement; Stockholders' Meeting *

SECTION 5.02. Access to Information; Confidentiality *

SECTION 5.03. Reasonable Best Efforts *

SECTION 5.04. Equity-Based Awards *

SECTION 5.05. Indemnification; Advancement of Expenses; Exculpation and
                            Insurance *

SECTION 5.06. Fees and Expenses *

SECTION 5.07. Public Announcements *

SECTION 5.08. Stockholder Litigation *

SECTION 5.09. Employee Matters *

SECTION 5.10. Rights Agreement *

ARTICLE VI

Conditions Precedent

SECTION 6.01. Conditions to Each Party's Obligation to Effect the Merger *

SECTION 6.02. Conditions to Obligations of Parent and Sub *

SECTION 6.03. Conditions to Obligation of the Company *

SECTION 6.04. Frustration of Closing Conditions *

ARTICLE VII

Termination, Amendment and Waiver

SECTION 7.01. Termination *

SECTION 7.02. Effect of Termination *

SECTION 7.03. Amendment *

SECTION 7.04. Extension; Waiver *

SECTION 7.05. Procedure for Termination or Amendment *

ARTICLE VIII

General Provisions

SECTION 8.01. Nonsurvival of Representations and Warranties *

SECTION 8.02. Notices *

SECTION 8.03. Definitions *

SECTION 8.04. Interpretation *

SECTION 8.05. Consents and Approvals *

SECTION 8.06. Counterparts *

SECTION 8.07. Entire Agreement; No Third-Party Beneficiaries *

SECTION 8.08. GOVERNING LAW *

SECTION 8.09. Assignment *

SECTION 8.10. Specific Enforcement; Consent to Jurisdiction *

SECTION 8.11. Severability *

SECTION 8.12. Waiver of Jury Trial *

Annex I      Index of Defined Terms
Exhibit A   Restated Certificate of Incorporation of the Surviving Corporation
Exhibit B   Officer's Certificate of Parent

 

 

 

 

 

 

 

 

 

 

 

 

AGREEMENT AND PLAN OF MERGER (this "Agreement") dated as of September 25, 2006,
among OVERSEAS SHIPHOLDING GROUP, INC., a Delaware corporation ("Parent"),
MARLIN ACQUISITION CORPORATION, a Delaware corporation and a wholly owned
Subsidiary of Parent ("Sub"), and MARITRANS INC., a Delaware corporation (the
"Company").

                       WHEREAS the Board of Directors of each of the Company and
Sub has approved and declared advisable, and the Board of Directors of Parent
has approved, this Agreement and the merger of Sub with and into the Company
(the "Merger"), upon the terms and subject to the conditions set forth in this
Agreement, whereby each issued and outstanding share of common stock, par value
$.01 per share, of the Company ("Company Common Stock"), other than the
Appraisal Shares and shares of Company Common Stock directly owned by Parent,
Sub or the Company, together with the associated Rights, will be converted into
the right to receive $37.50 in cash; and

                      WHEREAS Parent, Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger.

                     NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement, and subject to
the conditions set forth herein, the parties hereto agree as follows:

ARTICLE I

The Merger

                      SECTION 1.01.  The Merger. Upon the terms and subject to
the conditions set forth in this Agreement, and in accordance with the General
Corporation Law of the State of Delaware (the "DGCL"), Sub shall be merged with
and into the Company at the Effective Time. Following the Effective Time, the
separate corporate existence of Sub shall cease and the Company shall continue
as the surviving corporation in the Merger (the "Surviving Corporation") and
shall succeed to and assume all the rights and obligations of Sub in accordance
with the DGCL.

                      SECTION 1.02.  Closing. The closing of the Merger (the
"Closing") will take place at 10:00 a.m. on a date to be specified by the
parties, which shall be no later than the second business day after satisfaction
or (to the extent permitted by law) waiver of the conditions set forth in
Article VI (other than those conditions that by their terms are to be satisfied
at the Closing, but subject to the satisfaction or (to the extent permitted by
law) waiver of those conditions), at the offices of Cravath, Swaine & Moore LLP,
Worldwide Plaza, 825 Eighth Avenue, New York, New York 10019, unless another
time, date or place is agreed to in writing by Parent and the Company; provided,
however, that if all the conditions set forth in Article VI shall not have been
satisfied or (to the extent permitted by law) waived on such second business
day, then the Closing shall take place on the first business day on which all
such conditions shall have been satisfied or (to the extent permitted by law)
waived. The date on which the Closing occurs is referred to in this Agreement as
the "Closing Date".

                        SECTION 1.03.  Effective Time. Subject to the provisions
of this Agreement, as soon as practicable on the Closing Date, the parties shall
file with the Secretary of State of the State of Delaware a certificate of
merger (the "Certificate of Merger") executed and acknowledged by the parties in
accordance with the relevant provisions of the DGCL and, as soon as practicable
on or after the Closing Date, shall make all other filings or recordings
required under the DGCL. The Merger shall become effective upon the filing of
the Certificate of Merger with the Secretary of State of the State of Delaware,
or at such later time as Parent and the Company shall agree and shall specify in
the Certificate of Merger (the time the Merger becomes effective being the
"Effective Time").

                        SECTION 1.04.  Effects of the Merger. The Merger shall
have the effects set forth in Section 259 of the DGCL.

                        SECTION 1.05.  Certificate of Incorporation and By-laws.
(a) The Certificate of Incorporation (as amended) of the Company (the "Company
Certificate") shall be amended at the Effective Time to be in the form of
Exhibit A and, as so amended, such Company Certificate shall be the Restated
Certificate of Incorporation of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.

                       (b)   The By-laws of Sub, as in effect immediately prior
to the Effective Time, shall be the By-laws of the Surviving Corporation until
thereafter changed or amended as provided therein or by applicable law.

                        SECTION 1.06.  Directors. The directors of Sub
immediately prior to the Effective Time shall be the directors of the Surviving
Corporation until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.

                         SECTION 1.07.  Officers. The officers of the Company
immediately prior to the Effective Time shall be the officers of the Surviving
Corporation until the earlier of their resignation or removal or until their
respective successors are duly elected and qualified, as the case may be.

ARTICLE II

Effect of the Merger on the Capital Stock of the
Constituent Corporations; Exchange of Certificates

                       SECTION 2.01.  Effect on Capital Stock. At the Effective
Time, by virtue of the Merger and without any action on the part of the holder
of any shares of Company Common Stock or any shares of capital stock of Parent
or Sub:

                        (a)  Capital Stock of Sub. Each issued and outstanding
share of capital stock of Sub shall be converted into and become one validly
issued, fully paid and nonassessable share of common stock, par value $0.01 per
share, of the Surviving Corporation.

                        (b)  Cancelation of Treasury Stock and Parent-Owned
Stock. Each share of Company Common Stock that is directly owned by the Company,
Parent or Sub immediately prior to the Effective Time shall automatically be
canceled and shall cease to exist, and no consideration shall be delivered in
exchange therefor.

                        (c)  Conversion of Company Common Stock. Each share of
Company Common Stock issued and outstanding immediately prior to the Effective
Time (other than shares to be canceled in accordance with Section 2.01(b) and
the Appraisal Shares), together with the Rights associated therewith, shall be
converted into the right to receive $37.50 in cash, without interest (the
"Merger Consideration"). At the Effective Time, all such shares of Company
Common Stock and associated Rights shall no longer be outstanding and shall
automatically be canceled and shall cease to exist, and each holder of a
certificate which immediately prior to the Effective Time represented any such
shares of Company Common Stock (each, a "Certificate") shall cease to have any
rights with respect thereto, except the right to receive the Merger
Consideration. The right of any holder of a Certificate to receive the Merger
Consideration shall be subject to and reduced by the amount of any withholding
that is required under applicable tax law.

                      (d)  Appraisal Rights. Notwithstanding anything in this
Agreement to the contrary, shares (the "Appraisal Shares") of Company Common
Stock issued and outstanding immediately prior to the Effective Time that are
held by any holder who is entitled to demand and properly demands appraisal of
such Appraisal Shares pursuant to, and who complies in all respects with, the
provisions of Section 262 of the DGCL ("Section 262") shall not be converted
into the right to receive the Merger Consideration as provided in
Section 2.01(c), but instead such holder shall be entitled to payment of the
fair value of such Appraisal Shares in accordance with the provisions of
Section 262. At the Effective Time, all Appraisal Shares shall no longer be
outstanding, shall automatically be canceled and shall cease to exist, and each
holder of Appraisal Shares shall cease to have any rights with respect thereto,
except the right to receive the fair value of such Appraisal Shares in
accordance with the provisions of Section 262. Notwithstanding the foregoing, if
any such holder shall fail to perfect or otherwise shall waive, withdraw or lose
the right to appraisal under Section 262, or a court of competent jurisdiction
shall determine that such holder is not entitled to the relief provided by
Section 262, then the right of such holder to be paid the fair value of such
holder's Appraisal Shares under Section 262 shall cease and such Appraisal
Shares shall be deemed to have been converted at the Effective Time into, and
shall have become, the right to receive the Merger Consideration as provided in
Section 2.01(c). The Company shall serve prompt notice to Parent of any demands
for appraisal of any shares of Company Common Stock, and Parent shall have the
right to participate in and direct all negotiations and proceedings with respect
to such demands. Prior to the Effective Time, the Company shall not, without the
prior written consent of Parent, voluntarily make any payment with respect to,
or settle or offer to settle, any such demands, or agree to do any of the
foregoing.

                      SECTION 2.02.  Exchange of Certificates. (a) Paying Agent.
Prior to the Effective Time, Parent shall appoint an agent, which shall be a
nationally recognized financial institution or other person that routinely acts
in such capacity, to act as paying agent (the "Paying Agent") for the payment of
the Merger Consideration. At the Effective Time, Parent shall deposit, or cause
the Surviving Corporation to deposit, with the Paying Agent, for the benefit of
the holders of Certificates, cash in an amount sufficient to pay the aggregate
Merger Consideration required to be paid pursuant to Section 2.01(c) (such cash
being hereinafter referred to as the "Exchange Fund").

                      (b)   Exchange Procedures. As soon as reasonably
practicable after the Effective Time, Parent shall cause the Paying Agent to
mail to each holder of record of a Certificate (i) a form of letter of
transmittal (which shall specify that delivery shall be effected, and risk of
loss and title to the Certificates shall pass, only upon proper delivery of the
Certificates to the Paying Agent and which shall be in customary form and have
such other provisions as Parent may reasonably specify) and (ii) instructions
for use in effecting the surrender of the Certificates in exchange for the
Merger Consideration. Each holder of record of a Certificate shall, upon
surrender to the Paying Agent of such Certificate, together with such letter of
transmittal, duly executed, and such other documents as may reasonably be
required by the Paying Agent, be entitled to receive in exchange therefor the
amount of cash which the number of shares of Company Common Stock (together with
the associated Rights) previously represented by such Certificate shall have
been converted into the right to receive pursuant to Section 2.01(c), and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Company Common Stock which is not registered in the
transfer records of the Company, payment of the Merger Consideration may be made
to a person other than the person in whose name the Certificate so surrendered
is registered if such Certificate shall be properly endorsed or otherwise be in
proper form for transfer and the person requesting such payment shall pay any
transfer or other taxes required by reason of the payment of the Merger
Consideration to a person other than the registered holder of such Certificate
or establish to the reasonable satisfaction of Parent that such taxes have been
paid or are not applicable. Until surrendered as contemplated by this
Section 2.02(b), each Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender the
Merger Consideration which the holder thereof has the right to receive in
respect of such Certificate pursuant to this Article II. No interest shall be
paid or will accrue on any cash payable to holders of Certificates pursuant to
the provisions of this Article II.

                      (c)  No Further Ownership Rights in Company Common Stock.
All cash paid upon the surrender of Certificates in accordance with the terms of
this Article II shall be deemed to have been paid in full satisfaction of all
rights pertaining to the shares of Company Common Stock (together with the
associated Rights) formerly represented by such Certificates. At the close of
business on the day on which the Effective Time occurs, the stock transfer books
of the Company shall be closed, and there shall be no further registration of
transfers on the stock transfer books of the Surviving Corporation of the shares
of Company Common Stock that were outstanding immediately prior to the Effective
Time. If, after the Effective Time, any Certificate is presented to the
Surviving Corporation for transfer, it shall be canceled against delivery of
cash to the holder thereof as provided in this Article II.

                       (d)  Termination of the Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the holders of the Certificates for
six months after the Effective Time shall be delivered to Parent, upon demand,
and any holders of the Certificates who have not theretofore complied with this
Article II shall thereafter look only to Parent for, and Parent shall remain
liable for, payment of their claim for the Merger Consideration.

                       (e)  No Liability. None of Parent, Sub, the Company, the
Surviving Corporation or the Paying Agent shall be liable to any person in
respect of any cash from the Exchange Fund properly delivered to a public
official pursuant to any applicable abandoned property, escheat or similar law.
If any Certificate shall not have been surrendered prior to two years after the
Effective Time (or immediately prior to such earlier date on which any Merger
Consideration would otherwise escheat to or become the property of any
Governmental Entity), any such Merger Consideration shall, to the extent
permitted by applicable law, become the property of Parent, free and clear of
all claims or interest of any person previously entitled thereto.

                       (f)  Investment of Exchange Fund. The Paying Agent shall
invest the cash in the Exchange Fund as directed by Parent. Any interest and
other income resulting from such investments shall be paid from time to time to
Parent, upon request.

                       (g)  Lost Certificates. If any Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Certificate to be lost, stolen or destroyed and, if
required by Parent, the posting by such person of a bond in such reasonable
amount as Parent may direct as indemnity against any claim that may be made
against it with respect to such Certificate, the Paying Agent shall deliver in
exchange for such lost, stolen or destroyed Certificate the applicable Merger
Consideration with respect thereto.

                       (h)  Withholding Rights. Parent, the Surviving
Corporation or the Paying Agent shall be entitled to deduct and withhold from
the consideration otherwise payable pursuant to this Agreement to any holder of
shares of Company Common Stock such amounts as Parent, the Surviving Corporation
or the Paying Agent is required to deduct and withhold with respect to the
making of such payment under the Internal Revenue Code of 1986, as amended (the
"Code"), or any provision of state, local or foreign tax law. To the extent that
amounts are so withheld and paid over to the appropriate taxing authority by
Parent, the Surviving Corporation or the Paying Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid to the
holder of the shares of Company Common Stock in respect of which such deduction
and withholding was made by Parent, the Surviving Corporation or the Paying
Agent.

ARTICLE III

Representations and Warranties

                       SECTION 3.01.  Representations and Warranties of the
Company. Except as set forth in the disclosure schedule (with specific reference
to the particular Section or subsection of this Agreement to which the
information set forth in such disclosure schedule relates; provided, however,
that any information set forth in one section of such disclosure schedule shall
be deemed to apply to each other Section or subsection thereof to which its
relevance is readily apparent on its face) delivered by the Company to Parent
prior to the execution of this Agreement (the "Company Disclosure Schedule"),
the Company represents and warrants to Parent and Sub as follows:

                     (a)   Organization, Standing and Corporate Power. Each of
the Company and its Subsidiaries has been duly organized and is validly existing
and in good standing under the laws of the jurisdiction of its incorporation or
formation, as the case may be. Each of the Company and its Subsidiaries has all
requisite power and authority and possesses all governmental licenses, permits,
authorizations and approvals necessary to enable it to use its corporate or
other name and to own, lease or otherwise hold and operate its properties and
other assets and to carry on its business as currently conducted, except where
the failure to have such government licenses, permits, authorizations or
approvals individually or in the aggregate has not had and would not reasonably
be expected to have a Material Adverse Effect. Each of the Company and its
Subsidiaries is duly qualified or licensed to do business and is in good
standing in each jurisdiction in which the nature of its business or the
ownership, leasing or operation of its properties makes such qualification or
licensing necessary, other than in such jurisdictions where the failure to be so
qualified or licensed individually or in the aggregate has not had and would not
reasonably be expected to have a Material Adverse Effect. The Company has made
available to Parent, prior to the execution of this Agreement, complete and
accurate copies of the Company Certificate and its By-laws (the "Company
By-laws"), and the comparable organizational documents of each of its
Subsidiaries, in each case as amended to the date hereof. The Company has made
available to Parent complete and accurate copies of the minutes (or, in the case
of minutes that have not yet been finalized, drafts thereof) of all meetings of
the stockholders of the Company and each of its Subsidiaries, the Boards of
Directors of the Company and each of its Subsidiaries and the committees of each
of such Boards of Directors, in each case held since January 1, 2004 and prior
to the date hereof.

                      (b)  Subsidiaries. Section 3.01(b) of the Company
Disclosure Schedule lists each of the Subsidiaries of the Company and, for each
such Subsidiary, the jurisdiction of its incorporation or formation, and the
executive officers and directors thereof. All the issued and outstanding shares
of capital stock of, or other equity interests in, each such Subsidiary have
been validly issued and are fully paid and nonassessable and are owned directly
or indirectly by the Company free and clear of all pledges, liens, charges,
claims, options, mortgages, restrictions, encumbrances or security interests of
any kind or nature whatsoever (collectively, "Liens"), and free of any
restriction on the right to vote, sell or otherwise dispose of such capital
stock or other equity interests. Except for the capital stock of, or voting
securities or equity interests in, its Subsidiaries, the Company does not own,
directly or indirectly, any capital stock of, or other voting securities or
equity interests in, any corporation, partnership, joint venture, association or
other entity.

                     (c)  Capital Structure. The authorized capital stock of the
Company consists of 30,000,000 shares of Company Common Stock and
5,000,000 shares of preferred stock, par value $.01 per share (the "Company
Preferred Stock"). At the close of business on September 22, 2006,
(i) 12,029,048 shares of Company Common Stock were issued and outstanding
(including 132,736 shares of Company Common Stock subject to vesting or other
forfeiture restrictions or repurchase conditions (shares so subject, "Company
Restricted Stock"), but excluding shares of Company Common Stock held by the
Company in its treasury), (ii) 5,541,713 shares of Company Common Stock were
held by the Company in its treasury, (iii) 480,676 shares of Company Common
Stock were reserved and available for issuance pursuant to the Maritrans Inc.
Equity Compensation Plan, the Company's 1999 Directors' and Key Employees'
Equity Compensation Plan and the 2005 Omnibus Equity Compensation Plan (such
plans, together, the "Company Stock Plans"), of which 200,533 shares of Company
Common Stock were subject to outstanding Company Stock Options, and (iv) no
shares of Company Preferred Stock were issued or outstanding or were held by the
Company as treasury shares. At the close of business on September 22, 2006,
500,000 shares of Company Preferred Stock designated as Series A Junior
Participating Preferred Shares were reserved for issuance in connection with the
rights (the "Rights") to be issued pursuant to the Rights Agreement, dated as of
August 1, 2002, between the Company and American Stock Transfer & Trust Company
(the "Rights Agreement"). Except as set forth above in this Section 3.01(c), at
the close of business on September 22, 2006, no shares of capital stock or other
voting securities or equity interests of the Company were issued, reserved for
issuance or outstanding. There are no outstanding stock appreciation rights,
"phantom" stock rights, performance units, rights to receive shares of Company
Common Stock on a deferred basis or other rights (other than Company Restricted
Stock and Company Stock Options) that are linked to the value of Company Common
Stock or the value of the Company or any part thereof granted under the Company
Stock Plans or otherwise. Section 3.01(c) of the Company Disclosure Schedule
sets forth a complete and accurate list, as of September 22, 2006, of all
(a) outstanding options to purchase shares of Company Common Stock from the
Company pursuant to the Company Stock Plans or otherwise (together with any
other stock options granted after September 22, 2006, in accordance with the
terms of this Agreement, the "Company Stock Options"), the number of shares of
Company Common Stock (or other stock) subject thereto, the grant dates,
expiration dates, exercise or base prices (if applicable) and vesting schedules
thereof and the names of the holders thereof and (b) all outstanding shares of
Company Restricted Stock, the grant dates, vesting schedules, repurchase prices
(if any) and names of the holders thereof. The terms and conditions of each
outstanding Company Stock Option and share of Company Restricted Stock permit
such option or share to be treated at the Effective Time as set forth in
Section 5.04. All outstanding shares of capital stock of the Company are, and
all shares which may be issued pursuant to the Company Stock Options will be,
when issued in accordance with the terms thereof, duly authorized, validly
issued, fully paid and nonassessable and not subject to preemptive rights. From
September 22, 2006, until the date of this Agreement, there have been no
issuances by the Company of shares of capital stock of, or other equity or
voting interests in, the Company, other than the issuance of shares of Company
Common Stock pursuant to the exercise of Company Stock Options outstanding as of
September 22, 2006, in accordance with their terms as in effect on September 22,
2006. There are no bonds, debentures, notes or other indebtedness of the Company
having the right to vote (or convertible into, or exchangeable for, securities
having the right to vote) on any matters on which stockholders of the Company
may vote. Except as set forth above in this Section 3.01(c), as of the date of
this Agreement, (x) there are not issued, reserved for issuance or outstanding
(A) any shares of capital stock or other voting securities or equity interests
of the Company, (B) any securities of the Company convertible into or
exchangeable or exercisable for shares of capital stock or other voting
securities or equity interests of the Company or (C) any warrants, calls,
options or other rights to acquire from the Company or any of its Subsidiaries,
and no obligation of the Company or any of its Subsidiaries to issue, any
capital stock, voting securities, equity interests or securities convertible
into or exchangeable or exercisable for capital stock or voting securities of
the Company and (y) there are not any outstanding obligations of the Company or
any of its Subsidiaries to repurchase, redeem or otherwise acquire any such
securities or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities.  Neither the Company nor any of its Subsidiaries is a
party to any voting agreement with respect to the voting of any such securities.
Except as set forth above in this Section 3.01(c), there are no outstanding
(1) securities of the Company or any of its Subsidiaries convertible into or
exchangeable or exercisable for shares of capital stock or voting securities or
equity interests of any Subsidiary of the Company, (2) warrants, calls, options
or other rights to acquire from the Company or any of its Subsidiaries, and no
obligation of the Company or any of its Subsidiaries to issue, any capital
stock, voting securities, equity interests or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of any
Subsidiary of the Company or (3) obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any such outstanding
securities or to issue, deliver or sell, or cause to be issued, delivered or
sold, any such securities.

                        (d)  Authority; Noncontravention. The Company has all
requisite corporate power and authority to execute and deliver this Agreement
and, subject to receipt of the Stockholder Approval, to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated by this Agreement have been duly authorized by all necessary
corporate action on the part of the Company and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby, subject, in the case of the
consummation of the Merger, to the obtaining of the Stockholder Approval. This
Agreement has been duly executed and delivered by the Company and, assuming the
due authorization, execution and delivery by each of the other parties hereto,
constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, subject to bankruptcy,
insolvency, moratorium, reorganization or similar laws affecting the rights of
creditors generally and the availability of equitable remedies. The Board of
Directors of the Company, at a meeting duly called and held at which all
directors of the Company were present, duly and unanimously adopted resolutions
(i) approving and declaring advisable this Agreement, the Merger and the other
transactions contemplated by this Agreement, (ii) declaring that it is in the
best interests of the stockholders of the Company that the Company enter into
this Agreement and consummate the Merger and the other transactions contemplated
by this Agreement on the terms and subject to the conditions set forth in this
Agreement, (iii) directing that the adoption of this Agreement be submitted as
promptly as practicable to a vote at a meeting of the stockholders of the
Company and (iv) recommending that the stockholders of the Company adopt this
Agreement, which resolutions, as of the date of this Agreement, have not been
subsequently rescinded, modified or withdrawn in any way. Except as otherwise
contemplated in Section 5.04, the execution and delivery of this Agreement do
not, and the consummation of the Merger and the other transactions contemplated
by this Agreement and compliance by the Company and its Subsidiaries with the
provisions of this Agreement will not, conflict with, or result in any violation
or breach of, or default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, cancelation or acceleration of
any obligation or to the loss of a benefit under, or result in the creation of
any Lien in or upon any of the properties or other assets of the Company or any
of its Subsidiaries under, (x) the Company Certificate or the Company By-laws or
the comparable organizational documents of any of its Subsidiaries, (y) any loan
or credit agreement, bond, debenture, note, mortgage, indenture, lease,
sublease, supply agreement, license agreement, development agreement or other
contract, agreement, obligation, commitment, arrangement, understanding,
instrument, permit, franchise or license, whether oral or written (each,
including all amendments thereto, a "Contract"), to which the Company or any of
its Subsidiaries is a party or any of their respective properties or other
assets is subject or (z) subject to the obtaining of the Stockholder Approval
and the governmental filings and other matters referred to in the following
sentence, any (A) statute, law, ordinance, rule or regulation applicable to the
Company or any of its Subsidiaries or their respective properties or other
assets or (B) order, writ, injunction, decree, judgment or stipulation, in each
case applicable to the Company or any of its Subsidiaries or their respective
properties or other assets, other than, in the case of clauses (y) and (z), any
such conflicts, violations, breaches, defaults, rights, losses or Liens that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect. No consent, approval, order or
authorization of, action by or in respect of, or registration, declaration or
filing with, any Federal, state, local or foreign government, any court,
administrative, regulatory or other governmental agency, commission or authority
or any non-governmental self-regulatory agency, commission or authority (each, a
"Governmental Entity") is required by or with respect to the Company or any of
its Subsidiaries in connection with the execution and delivery of this Agreement
by the Company or the consummation of the Merger or the other transactions
contemplated by this Agreement, except for (1) the filing of a premerger
notification and report form by the Company under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (including the rules and
regulations promulgated thereunder, the "HSR Act"), and the receipt, termination
or expiration, as applicable, of approvals or waiting periods required under the
HSR Act or any other applicable foreign competition, merger control, antitrust
or similar law or regulation, (2) the filing with the Securities and Exchange
Commission (the "SEC") of (A) a proxy statement relating to the adoption by the
stockholders of the Company of this Agreement (as amended or supplemented from
time to time, the "Proxy Statement") and (B) such reports under the Securities
Exchange Act of 1934, as amended (including the rules and regulations
promulgated thereunder, the "Exchange Act"), as may be required in connection
with this Agreement and the transactions contemplated by this Agreement, (3) the
filing of the Certificate of Merger with the Secretary of State of the State of
Delaware and appropriate documents with the relevant authorities of other states
in which the Company or any of its Subsidiaries is qualified to do business,
(4) any filings required under the rules and regulations of the New York Stock
Exchange and (5) such other consents, approvals, orders, authorizations,
actions, registrations, declarations and filings the failure of which to be
obtained or made individually or in the aggregate has not had and would not
reasonably be expected to have a Material Adverse Effect.

                        (e)  Company SEC Documents. (i) The Company has filed or
furnished all reports, schedules, forms, statements and other documents
(including exhibits and other information incorporated therein) with the SEC
required to be filed or furnished by the Company since January 1, 2004 (the
"Company SEC Documents"). As of their respective filing dates, the Company SEC
Documents complied in all material respects with the requirements of the
Securities Act of 1933, as amended (including the rules and regulations
promulgated thereunder, the "Securities Act"), the Exchange Act and the Sarbanes
Oxley Act of 2002 (including the rules and regulations promulgated thereunder,
"SOX") applicable to such Company SEC Documents, and none of the Company SEC
Documents contained, when filed or furnished, any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Except to the extent that
information contained in any Company SEC Document has been revised, amended,
supplemented or superseded by a later-filed Company SEC Document, none of the
Company SEC Documents contains any untrue statement of a material fact or omits
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
were made, not misleading. Each of the financial statements (including the
related notes) of the Company included in the Company SEC Documents was prepared
in accordance with, in all material respects, the applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, was prepared in accordance with generally accepted accounting
principles in the United States ("GAAP") (except, in the case of unaudited
statements, as permitted by the rules and regulations of the SEC) applied on a
consistent basis during the periods involved (except as may be indicated in the
notes thereto) and fairly presented in all material respects the consolidated
financial position of the Company and its consolidated Subsidiaries as of the
dates thereof and the consolidated results of their operations and cash flows
for the periods then ended (subject, in the case of unaudited statements, to
normal year-end audit adjustments). Except as disclosed in the Company SEC
Documents filed or furnished by the Company and publicly available prior to the
date of this Agreement (the "Filed Company SEC Documents"), neither the Company
nor any of its Subsidiaries has any liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) which individually or in
the aggregate have had or would reasonably be expected to have a Material
Adverse Effect. None of the Subsidiaries of the Company are, or have at any time
since January 1, 2004 been, subject to the reporting requirements of
Sections 13(a) and 15(d) of the Exchange Act.

                                 (ii)  Neither the Company nor any of its
Subsidiaries has any outstanding, or has arranged any outstanding, "extensions
of credit" to directors or executive officers within the meaning of Section 402
of SOX.

                                 (iii)  The Company maintains a system of
"internal control over financial reporting" (as defined in Rules 13a-15(f) and
15d-15(f) under the Exchange Act) sufficient to provide reasonable assurance (A)
that records are maintained that in reasonable detail accurately and fairly
reflect the transactions and dispositions of the assets of the Company, (B) that
transactions are recorded as necessary to permit preparation of financial
statements in accordance with GAAP, (C) that receipts and expenditures of the
Company are being made only in accordance with the authorization of management
and (D) regarding prevention or timely detection of the unauthorized
acquisition, use or disposition of the Company's assets that could have a
material effect on the Company's financial statements.

                                 (iv)  The Company's "disclosure controls and
procedures" (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)
are reasonably designed to ensure that all information (both financial and
non-financial) required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC,
and that all such information is accumulated and communicated to the Company's
management as appropriate to allow timely decisions regarding required
disclosure and to make the certifications of the chief executive officer and
chief financial officer of the Company required under the Exchange Act with
respect to such reports.

                                 (v)  Neither the Company nor any of its
Subsidiaries is a party to, or has any commitment to become a party to, any
joint venture, off-balance sheet partnership or any similar Contract (including
any Contract or arrangement relating to any transaction or relationship between
or among the Company or any of its Subsidiaries, on the one hand, and any
unconsolidated Affiliate, including any structured finance, special purpose or
limited purpose entity or person, on the other hand, or any "off-balance sheet
arrangements" (as defined in Item 303(a) of Regulation S-K of the SEC)), where
the result, purpose or intended effect of such Contract is to avoid disclosure
of any material transaction involving, or material liabilities of, the Company
or any of its Subsidiaries in the Company's or such Subsidiary's published
financial statements or other Company SEC Documents.

                                  (vi)  Since January 1, 2004, the Company has
not received any oral or written notification of any (x) "significant
deficiency" or (y) "material weakness" in the Company's internal controls over
financial reporting. There is no outstanding "significant deficiency" or
"material weakness" which the Company's independent accountants certify has not
been appropriately and adequately remedied by the Company. For purposes of this
Agreement, the terms "significant deficiency" and "material weakness" shall have
the meanings assigned to them in the Public Company Accounting Oversight Board's
Auditing Standard No. 2, as in effect on the date hereof.

                       (f)  Information Supplied. None of the information
supplied or to be supplied by or on behalf of the Company specifically for
inclusion or incorporation by reference in the Proxy Statement will, at the date
it is first mailed to the stockholders of the Company and at the time of the
Stockholders' Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading, except that no representation or warranty is made by
the Company with respect to statements made or incorporated by reference therein
based on information supplied by or on behalf of Parent or Sub in writing
specifically for inclusion or incorporation by reference in the Proxy Statement.
The Proxy Statement will comply as to form in all material respects with the
requirements of the Exchange Act.

                       (g)  Absence of Certain Changes or Events. Since
December 31, 2005, there has not been any Material Adverse Change. During the
period since June 30, 2006, through the date of this Agreement, (i) the Company
and its Subsidiaries have conducted their businesses only in the ordinary course
consistent with past practice and (ii) neither the Company nor any of its
Subsidiaries has taken any action that, if taken after the date of this
Agreement, would constitute a breach of any of the covenants set forth in
Section 4.01(a).

                      (h)  Litigation. Except as disclosed in the Filed Company
SEC Documents, there is no suit, action or proceeding pending or, to the
Knowledge of the Company, threatened against the Company or any of its
Subsidiaries or any of their respective assets that individually or in the
aggregate has had or would reasonably be expected to have a Material Adverse
Effect, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator outstanding against, or, to the Knowledge of
the Company, investigation by any Governmental Entity involving, the Company or
any of its Subsidiaries or any of their respective assets that individually or
in the aggregate has had or would reasonably be expected to have a Material
Adverse Effect.

                      (i)  Contracts. (i) Section 3.01(i) of the Company
Disclosure Schedule lists each of the following types of Contracts to which the
Company or any of its Subsidiaries is a party (such Contracts, the "Material
Contracts"):

                                      (A)  any material operating agreement,
management agreement, crewing agreement, contract of affreightment or financial
lease (including any sale/leaseback agreement or similar arrangement) with
respect to any Vessel;

                                       (B)  any Contract for or relating to the
purchase or sale of any Vessel or other vessel;

                                       (C)  any Contract including an option
with respect to the purchase or sale of any Vessel or other vessel;

                                       (D)  any Contract with a third party for
the charter of any Vessel;

                                       (E)  any Contract relating to
indebtedness for borrowed money (including any obligation to guarantee the
indebtedness for borrowed money of any person other than any Subsidiary of the
Company) having an outstanding principal amount in excess of $2,500,000, and,
for each such Contract, the aggregate principal amount outstanding as of the
date of this Agreement;

                                       (F)  any Contract relating to a security
interest imposed on any asset or property of the Company or any of its
Subsidiaries, other than Permitted Liens;

                                       (G)  any Contract with any supplier or
for the furnishing of services to the Company or any of its Subsidiaries
involving consideration of more than $2,500,000 over its remaining term
(including any automatic extensions thereto);

                                       (H)  any partnership, joint venture or
similar agreement or arrangement with a third party;

                                       (I)  any Contract that limits or purports
to limit the ability of the Company or any of its Subsidiaries to compete with
any person or in any geographic area or during any period of time;

                                       (J)  any Contract between or among the
Company or any of its Subsidiaries, on the one hand, and any director, officer
or Affiliate of the Company (other than any of its Subsidiaries) or any person
that beneficially owns 5% or more of the outstanding shares of Company Common
Stock (including, in each case, any "associates" or members of the "immediate
family" (as such terms are defined in Rule 12b-2 and Rule 16a-1 of the Exchange
Act, respectively) of any such person), on the other hand;

                                       (K)  any arrangement for receipt or
repayment of any grant, subsidy or financial assistance from any Governmental
Entity; and

                                       (L)  any effective power of attorney
granted by the Company or any of its Subsidiaries.

                                  (ii)  Each Material Contract is a valid and
binding obligation of the Company or its Subsidiary, as the case may be, and, to
the Knowledge of the Company, a valid and binding obligation of each other party
thereto. None of the Company, any Subsidiary of the Company or, to the Knowledge
of the Company, any other party is in breach of, or in default under, or has
repudiated, and no event has occurred which, with notice or lapse of time or
both, would constitute a breach of, or a default under, any such Material
Contract, except for such breach, default or repudiation that has not had and
would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. The Company has made available to Parent a true and
correct copy of each Material Contract (as amended to date). Neither the Company
nor any of its Subsidiaries is a party to any material oral Contract.

                                  (iii)  Except as disclosed in the Filed
Company SEC Documents, as of the date hereof, neither the Company nor any of its
Subsidiaries is a party to, and none of their respective properties or other
assets is subject to, any Contract that is of a nature required to be filed as
an exhibit to a report or filing under the Securities Act or the Exchange Act.

                          (j)  Compliance with Laws; Environmental Matters.
(i)  Except with respect to Environmental Laws, the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") and taxes, which are the subjects of
Sections 3.01(j)(ii), 3.01(l) and 3.01(n), respectively, each of the Company and
its Subsidiaries is in compliance with all statutes, laws, ordinances, rules,
regulations, judgments, orders and decrees of all Governmental Entities
(collectively, "Legal Provisions") and all Maritime Guidelines applicable to it,
its properties, facilities or other assets (including its Vessels), its business
or operations or any product or service that is developed, performed,
distributed and/or marketed by it, except for failures to be in compliance that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect. The Company and each of its
Subsidiaries are citizens of the United States within the meaning of
Section 2(c) of the Shipping Act of 1916, as amended. Each of the Company and
its Subsidiaries has in effect all approvals, authorizations, certificates,
filings, franchises, licenses, notices and permits of or with all Governmental
Entities or pursuant to any Maritime Guideline (collectively, "Permits")
necessary for it to own, lease or operate its properties (including its Vessels)
and other assets and to carry on its business and operations as currently
conducted, except where the failure to have such Permits individually or in the
aggregate has not had and would not reasonably be expected to have a Material
Adverse Effect. There has occurred no default under, or violation of, any such
Permit, except for any such default or violation that individually or in the
aggregate has not had and would not reasonably be expected to have a Material
Adverse Effect. The consummation of the Merger by the Company, in and of itself,
would not cause the revocation or cancelation of any such Permit that
individually or in the aggregate would reasonably be expected to have a Material
Adverse Effect. To the Knowledge of the Company, no action, demand, requirement
or investigation by any Governmental Entity, including any written notice or
warning from any Governmental Entity regarding deficiencies in compliance with
any Legal Provision or Maritime Guideline, and no suit, action or proceeding by
any other person, in each case with respect to the Company or any of its
Subsidiaries or any of their respective properties, facilities or other assets
(including their Vessels) or products or services, under any Legal Provision or
Maritime Guideline is pending or threatened, other than, in each case, those the
outcome of which individually or in the aggregate have not had and would not
reasonably be expected to have a Material Adverse Effect.

                                  (ii)  Except for those matters that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect: (A) each of the Company and its
Subsidiaries, and each currently owned, operated or leased Vessel of the Company
or any of its Subsidiaries, is, and has been, in compliance with all
Environmental Laws, and each of the Company and its Subsidiaries has obtained
and complied with all Permits required under any Environmental Laws to own,
lease or operate its properties or other assets (including its Vessels) and to
carry on its business and operations as currently conducted; (B) to the
Knowledge of the Company, during the period of the Company's or its
Subsidiaries' ownership, operation or use thereof, no formerly owned, operated
or used Vessel violated any Environmental Law; (C) there have been no Releases
or threatened Releases of Hazardous Materials in, on, from, under or affecting
any properties or Vessels currently or formerly owned, leased or operated by the
Company, any of its Subsidiaries or any of its former Subsidiaries; (D) there is
no investigation, suit, claim, action or proceeding pending, or to the Knowledge
of the Company, threatened against or affecting the Company or any of its
Subsidiaries relating to or arising under Environmental Laws, and neither the
Company nor any of its Subsidiaries has received any notice of any such
investigation, suit, claim, action or proceeding; (E) neither the Company nor
any of its Subsidiaries has entered into or assumed by Contract or operation of
law or otherwise any obligation, liability, order, settlement, judgment,
injunction or decree relating to or arising under Environmental Laws; (F) to the
Knowledge of the Company, there are no facts, circumstances or conditions that
would reasonably be expected to form the basis for any investigation, suit,
claim, action, proceeding, compliance obligation or liability against or
affecting the Company or any of its Subsidiaries relating to or arising under
Environmental Laws; and (G) neither the Company nor any of its Subsidiaries is
subject to any claim, action, obligation or liability arising under any
Environmental Law as such relates to human exposure to asbestos, with respect to
the presence or alleged presence of asbestos or asbestos-containing materials in
any product or at or upon any current property or Vessels, and, to the Knowledge
of the Company, neither the Company nor any of its Subsidiaries has
manufactured, sold, marketed, installed, removed, imported or distributed any
asbestos-containing products in such a manner that would reasonably be expected
to form the basis of any such claim, action, obligation or liability. The
Company has made available to Parent all material environmental audits, reports
and other material environmental documents prepared in the last five years,
which are in its possession or under its reasonable control, relating to the
Company's or any of its Subsidiary's past or current properties, including
Vessels, or operations. The term "Environmental Laws" means all applicable
Federal, state, local and foreign laws (including common law), statutes, rules,
regulations, codes, ordinances, orders, decrees, judgments, injunctions,
notices, Permits, treaties or binding Contracts issued, promulgated or entered
into by any Governmental Entity relating in any way to the environment,
preservation or reclamation of natural resources, the presence, management,
Release or threat of Release of, or exposure to, Hazardous Materials, or to
human health and safety, including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and the Oil Pollution Act of
1990, as amended. The term "Hazardous Materials" means (1) petroleum products
and by-products, asbestos and asbestos-containing materials, urea formaldehyde
foam insulation, medical or infectious wastes, polychlorinated biphenyls, radon
gas, radioactive substances, chlorofluorocarbons and all other ozone-depleting
substances or (2) any chemical, material, substance, waste, pollutant or
contaminant that is prohibited, limited or regulated by or pursuant to any
Environmental Law. The term "Release" means any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing or migrating into or through the environment or any natural
or man-made structure.

                        (k)  Absence of Changes in Company Benefit Plans; Labor
Relations.
(i)  From the date of the most recent audited financial statements included in
the Filed Company SEC Documents to the date of this Agreement, there has not
been any adoption, amendment or termination by the Company or any of its
Subsidiaries of any collective bargaining agreement or any employment, bonus,
pension, profit sharing, deferred compensation, incentive compensation, stock
ownership, stock purchase, stock appreciation, restricted stock, stock option,
"phantom" stock, performance, retirement, thrift, savings, stock bonus, paid
time off, perquisite, fringe benefit, vacation, severance, disability, death
benefit, hospitalization, medical, welfare benefit or other plan, program,
policy, arrangement, agreement or understanding (whether or not legally binding)
maintained, contributed to or required to be maintained or contributed to by the
Company or any of its Subsidiaries or any other person or entity that, together
with the Company, is treated as a single employer under Section 414(b), (c), (m)
or (o) of the Code (each, a "Commonly Controlled Entity"), in each case
providing benefits to any current or former director, officer, employee,
independent contractor or consultant of the Company or any of its Subsidiaries
(each, a "Participant"), but not including the Company Benefit Agreements (all
such plans, programs, policies, arrangements, agreements and understandings,
including any such plan, program, policy, arrangement, agreement or
understanding entered into or adopted on or after the date of this Agreement,
collectively, the "Company Benefit Plans"), or any change in any actuarial or
other assumption used to calculate funding obligations with respect to any
Company Pension Plan, or any change in the manner in which contributions to any
Company Pension Plan are made or the basis on which such contributions are
determined, other than amendments or other changes as required to ensure that
such Company Pension Plan is not then out of compliance with applicable law, or
reasonably determined by the Company to be necessary or appropriate to preserve
the qualified status of a Company Pension Plan under Section 401(a) of the Code.
Except as disclosed in the Filed Company SEC Documents, as of the date of this
Agreement, there are not any other material Company Benefit Agreements.

                                  (ii)  There are no collective bargaining or
other labor union agreements to which the Company or any of its Subsidiaries is
a party or by which the Company or any of its Subsidiaries is bound. No
employees of the Company or any of its Subsidiaries are or since January 1,
2004, have been, represented by any union with respect to their employment by
the Company or such Subsidiary. There is not pending, and, since January 1,
2004, there has not been, any labor dispute, labor strike, union organization
attempt or work stoppage, slowdown or lockout involving the Company or any of
its Subsidiaries. Neither the Company nor any of its Subsidiaries is, or since
January 1, 2004, has been, the subject of any suit, action or proceeding which
is pending or, to the Knowledge of the Company, threatened, asserting that the
Company or any of its Subsidiaries has committed an unfair labor practice
(within the meaning of the National Labor Relations Act or applicable state
statutes) or seeking to compel it to bargain with any labor union or labor
organization. Each of the Company and its Subsidiaries is, and since January 1,
2004, has been, in compliance with all applicable laws relating to employment
and employment practices, occupational safety and health standards, terms and
conditions of employment and wages and hours, except where such non-compliance
has not had and would not reasonably be expected to result in a material
liability to the Company, and since January 1, 2004, has not, engaged in any
material unfair labor practice.

                       (l)  ERISA Compliance. (i)  Section 3.01(l)(i) of the
Company Disclosure Schedule contains a complete and accurate list of each
material Company Benefit Plan that is an "employee pension benefit plan" (as
defined in Section 3(2) of ERISA) (sometimes referred to herein as a "Company
Pension Plan"), each material Company Benefit Plan that is an "employee welfare
benefit plan" (as defined in Section 3(1) of ERISA) and all other material
Company Benefit Plans and material Company Benefit Agreements in effect as of
the date of this Agreement. The Company has made available to Parent complete
and accurate copies of (A) each such Company Benefit Plan and Company Benefit
Agreement, (B) the two most recent annual reports on Form 5500 required to be
filed with the Internal Revenue Service (the "IRS") with respect to each Company
Benefit Plan (if any such report was required under applicable law), (C) the
most recent summary plan description for each Company Benefit Plan for which a
summary plan description is required under applicable law and (D) each trust
agreement and insurance or group annuity contract relating to any Company
Benefit Plan. Each Company Benefit Plan has been administered in accordance with
its terms and with the applicable provisions of ERISA, the Code and all other
applicable laws and the terms of all applicable collective bargaining
agreements, except where such non-compliance has not had and would not
reasonably be expected to result in a material liability to the Company.

                                  (ii)  All Company Pension Plans intended to be
tax qualified have received favorable determination letters from the IRS with
respect to all tax law changes with respect to which the IRS is currently
willing to provide a determination letter, to the effect that such Company
Pension Plans are qualified and exempt from Federal income taxes under
Sections 401(a) and 501(a), respectively, of the Code, no such determination
letter has been revoked (nor, to the Knowledge of the Company, has revocation
been threatened) and, to the Knowledge of the Company, no event has occurred
since the date of the most recent determination letter or application therefor
relating to any such Company Pension Plan that has had or would reasonably be
expected to result in a material liability to the Company. The Company has
delivered or made available to Parent a complete and accurate copy of the most
recent determination letter received prior to the date hereof with respect to
each Company Pension Plan.

                                  (iii)  Neither the Company nor, within the
last six years, any Commonly Controlled Entity, (A) has maintained, contributed
to or been required to contribute to, or has any actual or contingent liability
under, any Company Benefit Plan that is subject to Title IV of ERISA or Section
412 of the Code or that is otherwise a defined benefit pension plan or (B) has
any unsatisfied liability under Title IV of ERISA or Section 412 of the Code
which would reasonably be expected to result in a material liability to the
Company.

                                 (iv)  All reports, returns and similar
documents with respect to all Company Benefit Plans required to be filed with
any Governmental Entity or distributed to any Company Benefit Plan participant
have been duly and timely filed or distributed, except where such failure has
not had and would not reasonably be expected to result in a material liability
to the Company. None of the Company or any of its Subsidiaries has received
notice of, and to the Knowledge of the Company, there are no investigations by
any Governmental Entity with respect to, termination proceedings or other claims
(except claims for benefits payable in the normal operation of the Company
Benefit Plans), suits or proceedings against or involving any Company Benefit
Plan or Company Benefit Agreement or asserting any rights or claims to benefits
under any Company Benefit Plan or Company Benefit Agreement that would
reasonably be expected to give rise to any material liability, and, to the
Knowledge of the Company, there are not any facts that would reasonably be
expected to give rise to any material liability in the event of any such
investigation, claim, suit or proceeding.

                                 (v)  Except where such failure has not had and
would not reasonably be expected to result in a material liability to the
Company, all contributions, premiums and benefit payments under or in connection
with the Company Benefit Plans that are required to have been made as of the
date hereof in accordance with the terms of the Company Benefit Plans have been
timely made or have been reflected on the most recent consolidated balance sheet
filed or incorporated by reference into the Filed Company SEC Documents. No
Company Pension Plan has an "accumulated funding deficiency" (as such term is
defined in Section 302 of ERISA or Section 412 of the Code), whether or not
waived.

                                   (vi)  With respect to each Company Benefit
Plan, (A) to the Knowledge of the Company, there has not occurred any prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975 of the
Code) that would reasonably be expected to result in a material liability to the
Company and (B) to the Knowledge of the Company, none of the Company, any of its
Subsidiaries or any of their respective officers, directors or employees has
engaged in any transaction or acted in a manner, or failed to act in a manner,
that would reasonably be expected to subject the Company to any liability for
breach of fiduciary duty under ERISA that would reasonably be expected to result
in a material liability to the Company. There has not been any "reportable
event" (as that term is defined in Section 4043 of ERISA) for which the 30-day
reporting requirement has not been waived with respect to any Company Benefit
Plan during the last five years.

                                (vii)  To the Knowledge of the Company, each of
the Company and its Subsidiaries complies in all material respects with the
applicable requirements of Section 4980B(f) of the Code or any similar state or
local law with respect to each Company Benefit Plan that is a group health plan,
as such term is defined in Section 5000(b)(1) of the Code or such state or local
law. Except as required by Section 4980B(f) of the Code, no Company Benefit Plan
or Company Benefit Agreement that is an employee welfare benefit plan provides
benefits after termination of employment.

                                 (viii)  Except as contemplated by this
Agreement, no Participant will be entitled to any additional compensation,
severance or other benefits or any acceleration of the time of payment or
vesting of any compensation, severance or other benefits as a result of the
Merger or any other transaction contemplated by this Agreement (alone or in
combination with any other event) or any benefits the value of which will be
calculated on the basis of the Merger or any other transaction contemplated by
this Agreement (alone or in combination with any other event). None of the
execution and delivery of this Agreement, the obtaining of the Stockholder
Approval or the consummation of the Merger or any other transaction expressly
contemplated by this Agreement will (including as a result of any termination of
employment on or following the Effective Time) (A) entitle any Participant to
severance, termination, change in control or similar pay or benefits,
(B) accelerate the time of payment or vesting, or trigger any payment or funding
(through a grantor trust or otherwise) of, compensation or benefits under,
increase the amount payable or trigger any other material obligation pursuant
to, or increase the cost of, any Company Benefit Plan or Company Benefit
Agreement or (C) result in any breach or violation of, or a default under, any
Company Benefit Plan or Company Benefit Agreement.

                                 (ix)  No deduction by the Company or any of its
Subsidiaries in respect of any "applicable employee remuneration" (within the
meaning of Section 162(m) of the Code) has been disallowed or is subject to
disallowance by reason of Section 162(m) of the Code, except where such
disallowance has not had and would not reasonably be expected to result in a
material liability to the Company.

                       (m)  No Excess Parachute Payments. Other than payments
that may be made to persons set forth on Section 3.01(m) of the Company
Disclosure Schedule (the "Primary Company Executives"), (i) no amount or other
entitlement or economic benefit that would be received (whether in cash or
property or the vesting of property) as a result of the execution and delivery
of this Agreement, the obtaining of the Stockholder Approval, the consummation
of the Merger or any other transaction contemplated by this Agreement (including
as a result of termination of employment on or following the Effective Time) by
or for the benefit of any Participant who is a "disqualified individual" (as
such term is defined in Treasury Regulation Section 1.280G-1) under any Company
Benefit Plan, Company Benefit Agreement or other compensation arrangement would
be characterized as an "excess parachute payment" (as such term is defined in
Section 280G(b)(1) of the Code), and (ii) no such disqualified individual is
entitled to receive any additional payment (e.g., any tax gross up or other
payment) from the Company, Parent, the Surviving Corporation or any other person
in the event that the excise tax required by Section 4999(a) of the Code is
imposed on such disqualified individual.

                       (n)  Taxes. (i)  Each of the Company and its Subsidiaries
has filed or has caused to be filed in a timely manner (within any applicable
extension period) all material tax returns required to be filed. All such tax
returns are complete and accurate in all material respects and have been
prepared in compliance in all material respects with all applicable laws and
regulations. Each of the Company and its Subsidiaries has timely paid or caused
to be paid (or the Company has paid on its behalf) all material taxes due and
owing, and the most recent financial statements contained in the Filed Company
SEC Documents reflect an adequate reserve, determined in accordance with GAAP,
for all material taxes payable by the Company and its Subsidiaries for all
taxable periods and portions thereof accrued through the date of such financial
statements.

                               (ii)  To the Knowledge of the Company, no tax
return of the Company or any of its Subsidiaries is or has been within the last
five years under audit or examination by any taxing authority, and no written
notice has been received by the Company or any of its Subsidiaries that any
audit, examination or similar proceeding is pending, proposed or asserted with
regard to any taxes or tax returns of the Company or any of its Subsidiaries.
There is no deficiency, refund litigation, proposed adjustment or matter in
controversy with respect to any material amount of taxes due and owing by the
Company or any of its Subsidiaries. Each deficiency resulting from any completed
audit or examination relating to taxes by any taxing authority has been timely
paid or is being contested in good faith and has been reserved for on the books
of the Company. The general statute of limitations with respect to federal
income taxes as set forth in Section 6501 of the Code is closed with respect to
the tax returns of the Company and each of its Subsidiaries for all years
through 2002. There is no currently effective agreement or other document
extending, or having the effect of extending, the period of assessment or
collection of any taxes of the Company or any of its Subsidiaries, nor has any
written request been made for any such extension, and no currently effective
power of attorney (other than powers of attorney authorizing employees of the
Company or any of its Subsidiaries to act on behalf of the Company or any of its
Subsidiaries) with respect to any taxes has been executed or filed with any
taxing authority.

                                (iii)  None of the Company or any of its
Subsidiaries will be required to include in a taxable period ending after the
Effective Time a material amount of taxable income attributable to income that
accrued (for purposes of the financial statements of the Company included in the
Filed Company SEC Documents) in a prior taxable period (or portion of a taxable
period) but was not recognized for tax purposes in any prior taxable period as a
result of (A) an open transaction disposition made on or before the Effective
Time, (B) a prepaid amount received on or prior to the Effective Time, (C) the
installment method of accounting, (D) the completed contract method of
accounting, (E) the long-term contract method of accounting, (F) the cash method
of accounting or Section 481 of the Code or (G) any comparable provisions of
state or local tax law, domestic or foreign, or for any other reason, other than
any amounts that are specifically reflected in a reserve for taxes on the
financial statements of the Company included in the Filed Company SEC Documents.

                               (iv)  The Company and each of its Subsidiaries
have complied in all material respects with all applicable statutes, laws,
ordinances, rules and regulations relating to the payment and withholding of any
material amount of taxes (including Section 482 of the Code and withholding of
taxes pursuant to Sections 1441, 1442, 3121 and 3402 of the Code and similar
provisions under any Federal, state, local or foreign tax laws) and have, within
the time and the manner prescribed by law, withheld from and paid over to the
proper governmental authorities all material amounts required to be so withheld
and paid over under applicable laws.

                                 (v)  None of the Company or any of its
Subsidiaries has within the last two years constituted either a "distributing
corporation" or a "controlled corporation" as such terms are defined in Section
355 of the Code in a distribution of stock qualifying or intended to qualify for
tax-free treatment (in whole or in part) under Section 355(a) or 361 of the
Code.

                                 (vi)  Neither the Company nor any of its
Subsidiaries joins or has joined, for any taxable period in the filing of any
affiliated, aggregate, consolidated, combined or unitary tax return other than
consolidated tax returns for the consolidated group of which the Company is the
common parent.

                                (vii)  Neither the Company nor any of its
Subsidiaries has ever entered into a "listed transaction" within the meaning of
Treasury Regulation Section 1.6011-4(b)(2).

                                (viii)  No written claim has ever been made by
any authority in a jurisdiction where any of the Company or its Subsidiaries
does not file a tax return that the Company or any of its Subsidiaries is, or
may be, subject to a material amount of tax by that jurisdiction.

                                (ix)  Other than with respect to the
consolidated group of corporations of which the Company is the common parent,
neither the Company nor any of its Subsidiaries is a party to or bound by any
tax sharing agreement, tax indemnity obligation or similar agreement,
arrangement or practice with respect to taxes (including any advance pricing
agreement, closing agreement or other agreement relating to taxes with any
taxing authority).

                                  (x)  No taxing authority has asserted in
writing any material liens for taxes with respect to any assets or properties of
the Company or any of its Subsidiaries, except for statutory liens for taxes not
yet due and payable.

                                 (xi)  Neither the Company nor any of its
Subsidiaries has been a United States real property holding corporation within
the meaning of Section 897(c)(2) of the Code during the applicable period
specified in Section 897(c)(1)(A)(ii) of the Code.

                                 (xii)  Neither the Company nor any of its
Subsidiaries (A) is, to the Knowledge of the Company, a "passive foreign
investment company" within the meaning of Section 1297(a) of the Code and the
Treasury Regulations promulgated thereunder or (B) has ever made an election
under Section 1362 of the Code to be treated as an S corporation for Federal
income tax purposes or made a similar election under any comparable provision of
any tax law.

                                (xiii)  As used in this Agreement (A) "tax" or
"taxes" shall include (whether disputed or not) all (x) Federal, state, local
and foreign income, property, sales, use, excise, withholding, payroll,
employment, social security, value-added, ad valorem, capital gain, alternative
minimum, transfer and other taxes, including taxes based on or measured by gross
receipts, profits, sales, use or occupation, tariffs, levies, impositions,
assessments, duties and similar governmental charges or fees of any kind
whatsoever, including any interest, penalties and additions with respect
thereto, (y) liability for the payment of any amounts of the type described in
clause (x) as a result of being or having been a member of an affiliated,
consolidated, combined, unitary or aggregate group and (z) liability for the
payment of any amounts as a result of being or having been party to any tax
sharing agreement or as a result of any express or implied obligation to
indemnify any other person with respect to the payment of any amounts of the
type described in clause (x) or (y); (B) "taxing authority" means any Federal,
state, local or foreign government, any subdivision, agency, commission or
authority thereof, or any quasi-governmental body exercising tax regulatory
authority; and (C) "tax return" or "tax returns" means all returns, declarations
of estimated tax payments, claims for refund, disclosure statements (including
any statement pursuant to Treasury Regulation Section 1.6011-4(a)), forms,
reports, estimates, information returns and statements, including any related or
supporting information with respect to any of foregoing, filed or to be filed
with any taxing authority in connection with the determination, assessment,
collection or administration of any taxes.

                          (o)  Real Property. (i)  None of the Company or any of
its Subsidiaries owns any real property or any interest therein.

                                    (ii)  Section 3.01(o) of the Company
Disclosure Schedule sets forth a complete and accurate list of all material real
property leased by the Company and its Subsidiaries (the "Leased Real
Property"). Except as has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, (A) all leases
(including subleases) of real property under which the Company or any of its
Subsidiaries is a lessee or sublessee (the "Leases") are in full force and
effect and (B) neither the Company nor any of its Subsidiaries, nor, to the
Knowledge of the Company, any other party to any such Lease, is in default under
any of the Leases, and no event has occurred which, with notice or lapse of
time, would constitute a default by the Company or any of its Subsidiaries under
any of the Leases. The transactions contemplated by this Agreement do not
require the consent of any other party to a Lease. Neither the Company nor any
of its Subsidiaries has subleased, licensed or otherwise granted anyone the
right to use or occupy any Leased Real Property or any portion thereof,
and neither the Company nor any of its Subsidiaries has collaterally assigned or
granted any other security interest in any such leasehold estate or any interest
therein.

                                 (iii)  The Leased Real Property comprises all
of the material real property used in the business of the Company and its
Subsidiaries as currently conducted.

                     (p)  Intellectual Property. (i) The Company and its
Subsidiaries own all right, title and interest to, or are validly licensed or
otherwise have the right to use, all Intellectual Property Rights used in the
business of the Company and its Subsidiaries, except for such Intellectual
Property Rights the failure of which to own, license or otherwise have the right
to use, individually or in the aggregate, has not had and would not reasonably
be expected to have a Material Adverse Effect. Section 3.01(p) of the Company
Disclosure Schedule sets forth, as of the date hereof, a complete and accurate
list of: (A) all patents and applications therefor, registered trademarks and
applications therefor, domain name registrations (if any) and copyright
registrations (if any) owned by the Company or any of its Subsidiaries and (B)
all options, rights, licenses or interests of any kind relating to Intellectual
Property Rights that are material to the Company and its Subsidiaries, taken as
a whole, granted (1) to the Company or any of its Subsidiaries (other than
software licenses for generally available software), and (2) by the Company or
any of its Subsidiaries to any other person.

                               (ii)  To the Knowledge of the Company, neither
the Company nor any of its Subsidiaries has infringed upon any Intellectual
Property Rights of any other person, except for any such infringement that,
individually or in the aggregate, has not had and would not reasonably be
expected to have a Material Adverse Effect. No claims are pending or, to the
Knowledge of the Company, threatened, nor are there any outstanding judgments,
injunctions, orders or decrees as of the date of this Agreement, against the
Company or any of its Subsidiaries by any person with respect to the ownership,
validity, enforceability, effectiveness, sale, manufacture or use in the
business of the Company and its Subsidiaries of any Intellectual Property Right,
except for such claims, judgments, injunctions, orders or decrees that,
individually or in the aggregate, have not had and would not reasonably be
expected to have a Material Adverse Effect. To the Knowledge of the Company, no
other person has interfered with, infringed upon, misappropriated, diluted or
otherwise come into conflict with any Intellectual Property Rights of the
Company or any of its Subsidiaries, except for any such interference,
infringement, misappropriation or other conflict that, individually or in the
aggregate, has not had and would not reasonably be expected to have a Material
Adverse Effect.

                                (iii)  The Company and its Subsidiaries have
used commercially reasonable efforts to maintain their trade secrets in
confidence, including the requirement of certain employees of the Company and
its Subsidiaries to execute confidentiality agreements with respect to
intellectual property developed for or obtained from the Company or any of its
Subsidiaries.

                                 (iv)  As used in this Agreement, "Intellectual
Property Rights" means, collectively, whether arising under the laws of the
United States or any other state, country or jurisdiction: (A) ideas, formulas,
patterns, designs, utility models, compositions, programs, methods, inventions,
know-how, manufacturing and production and all other processes, procedures and
techniques, research and development information and technical data (whether
patentable or unpatentable and whether or not reduced to practice) and other
trade secrets and confidential information, patents, patent applications and
patent disclosures; (B) trademarks, service marks, trade dress, trade names,
logos and corporate names (in each case, whether registered or unregistered) and
registrations and applications for registration thereof; (C) copyrights
(registered or unregistered) and copyrightable works and registrations and
applications for registration thereof; (D) computer software, data, data bases
and documentation thereof; and (E) domain name registrations.

                       (q)  Voting Requirements. The affirmative vote of holders
of a majority of the outstanding shares of Company Common Stock at the
Stockholders' Meeting or any adjournment or postponement thereof to adopt this
Agreement (the "Stockholder Approval") is the only vote of the holders of any
class or series of capital stock of the Company necessary to adopt this
Agreement and approve the transactions contemplated hereby.

                        (r)  State Takeover Statutes. The Board of Directors of
the Company has unanimously approved the terms of this Agreement and the
consummation of the Merger and the other transactions contemplated by this
Agreement, and such approval represents all the actions necessary to render
inapplicable to this Agreement, the Merger and the other transactions
contemplated by this Agreement, the restrictions on "business combinations" (as
defined in Section 203 of the DGCL ("Section 203")) set forth in Section 203 to
the extent, if any, such restrictions would otherwise be applicable to this
Agreement, the Merger and the other transactions contemplated by this Agreement.
No other state takeover statute or similar statute or regulation applies or
purports to apply to this Agreement, the Merger or the other transactions
contemplated by this Agreement.

                      (s)  Brokers and Other Advisors. No broker, investment
banker, financial advisor or other person, other than Merrill Lynch & Co., the
fees and expenses of which will be paid by the Company, is entitled to any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company. The Company has made available
to Parent complete and accurate copies of all agreements under which any such
fees or expenses are payable and all indemnification and other agreements
related to the engagement of the persons to whom such fees are payable.

                       (t)  Opinion of Financial Advisor. The Company has
received the opinion of Merrill Lynch & Co., dated the date hereof, to the
effect that, as of such date, the Merger Consideration is fair, from a financial
point of view, to the holders of shares of Company Common Stock. A signed copy
of such opinion will be delivered to Parent promptly after the execution of this
Agreement.

                       (u)  Insurance. Section 3.01(u) of the Company Disclosure
Schedule contains a complete and accurate list of all policies of fire,
liability, workers' compensation, hull and machinery, protection and indemnity,
title and other forms of insurance owned, held by or applicable to the Company
(or its assets (including its and its Subsidiaries' Vessels) or business) as of
the date hereof. All such policies (or substitute policies with substantially
similar terms and underwritten by insurance carriers with substantially similar
or higher ratings) are in full force and effect, all premiums with respect
thereto covering all periods up to and including the Closing Date have been paid
or will be paid in accordance with the applicable terms, and no notice of
cancelation or termination has been received with respect to any such policy
except for such policies, premiums, cancelations or terminations that
individually or in the aggregate have not had and would not reasonably be
expected to have a Material Adverse Effect. Such policies are sufficient for
compliance by the Company with (i) all requirements of applicable laws and
Maritime Guidelines and (ii) all Contracts to which the Company is a party, and
each of the Company and its Subsidiaries has complied in all material respects
with the provisions of each such policy under which it is an insured party. The
Company has not been refused any insurance in writing with respect to its assets
or operations by any insurance carrier to which it has applied for any such
insurance or with which it has carried insurance, during the last five years.
There are no pending or, to the Knowledge of the Company, threatened claims
under any insurance policy that individually or in the aggregate have had or
would reasonably be expected to have a Material Adverse Effect, for which the
Company or any of its Subsidiaries has received written notification of any
defense to coverage or reservation of rights in connection with such claim.

                          (v)  Rights Agreement. The Company has taken all
actions necessary to (i) render the Rights Agreement inapplicable to this
Agreement, the Merger and the other transactions contemplated by this Agreement,
(ii) ensure that (x) none of Parent, Sub or any other Subsidiary or Affiliate of
Parent is an "Acquiring Person" or a "Principal Party" (in each case as defined
in the Rights Agreement) and (y) none of a "Distribution Date", a "Triggering
Event" or a "Stock Acquisition Date" (in each case as defined in the Rights
Agreement) occurs, in the case of clauses (x) and (y), by reason of the
execution of this Agreement or the consummation of the Merger or the other
transactions contemplated by this Agreement and (iii) ensure that neither
Section 11 nor Section 13 of the Rights Agreement will apply to the Merger or
the other transactions contemplated by this Agreement.

                        (w)  Vessels. Section 3.01(w) of the Company Disclosure
Schedule sets forth (categorized by type of Vessel) a description of each
Vessel, including its name, owner, capacity (gt or dwt, as specified therein),
year built, hull type, the country of its registration, its classification
society, details of any warranty claims made on such Vessel and whether such
Vessel is currently leased on the spot or time charter market. Except as set
forth in Section 3.01(w) of the Company Disclosure Schedule or as would not
reasonably be expected to have a Material Adverse Effect, each such Vessel (i)
is duly registered under the flag of the United States, (ii) is seaworthy and in
good operating condition, (iii) has all national and international operating and
trading certificates and endorsements, each valid and unextended, which are
required for the operation of such Vessel in the trades and geographic areas in
which it is operated, (iv) has been classed by a classification society which is
a member of the International Association of Classification Societies, and is
fully in class with no outstanding material recommendations or notations, and,
to the Knowledge of the Company, (A) no event has occurred and no condition
exists that would cause such Vessel's class to be suspended or withdrawn, and
(B) all events and conditions which are required to be reported as to class have
been disclosed and reported to such Vessel's classification society.

                           SECTION 3.02.  Representations and Warranties of
Parent and Sub. Except as set forth in the disclosure schedule (with specific
reference to the particular Section or subsection of this Agreement to which the
information set forth in such disclosure schedule relates; provided, however,
that any information set forth in one section of such disclosure schedule shall
be deemed to apply to each other Section or subsection thereof to which its
relevance is readily apparent on its face) delivered by Parent to the Company
prior to the execution of this Agreement (the "Parent Disclosure Schedule"),
Parent and Sub represent and warrant to the Company as follows:

                            (a)  Organization, Standing and Corporate Power.
Each of Parent and Sub is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation. Each of
Parent and Sub has all requisite corporate power and authority to carry on its
business as now being conducted. Each of Parent and Sub is duly qualified or
licensed to do business and is in good standing in each material jurisdiction in
which the nature of its business or the ownership, leasing or operation of its
properties makes such qualification or licensing necessary. Parent is a citizen
of the United States within the meaning of Section 2(c) of the Shipping Act of
1916, as amended.

                       (b)  Authority; Noncontravention. Each of Parent and Sub
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement have been duly authorized by all
necessary corporate action on the part of Parent and Sub and no other corporate
proceedings on the part of Parent or Sub are necessary to authorize this
Agreement or to consummate the transactions contemplated hereby. This Agreement
and the transactions contemplated hereby do not require approval of the holders
of any shares of capital stock of Parent. This Agreement has been duly executed
and delivered by each of Parent and Sub and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of Parent and Sub, as applicable, enforceable against Parent and Sub,
as applicable, in accordance with its terms, subject to bankruptcy, insolvency,
moratorium, reorganization or similar laws affecting the rights of creditors
generally and the availability of equitable remedies. The execution and delivery
of this Agreement do not, and the consummation of the Merger and the other
transactions contemplated by this Agreement and compliance by Parent and Sub
with the provisions of this Agreement will not, conflict with, or result in any
violation or breach of, or default (with or without notice or lapse of time, or
both) under, or give rise to a right of, or result in, termination, cancelation
or acceleration of any obligation or to the loss of a benefit under, or result
in the creation of any Lien in or upon any of the properties or other assets of
Parent or Sub under (x) the Certificate of Incorporation or By-laws of Parent or
the Certificate of Incorporation or By-laws of Sub, (y) any Contract to which
Parent or Sub is a party or any of their respective properties or other assets
is subject, in any way that would prevent, materially impede or materially delay
the consummation by Parent of the Merger (including the payments required to be
made pursuant to Article II) or the other transactions contemplated hereby or
(z) subject to the governmental filings and other matters referred to in the
following sentence, any (A) statute, law, ordinance, rule or regulation
applicable to Parent or Sub or their respective properties or other assets or
(B) order, writ, injunction, decree, judgment or stipulation, in each case
applicable to Parent or Sub or their respective properties or other assets, and
in each case, in any way that would prevent, materially impede or materially
delay the consummation by Parent of the Merger (including the payments required
to be made pursuant to Article II) or the other transactions contemplated
hereby. No material consent, approval, order or authorization of, action by or
in respect of, or registration, declaration or filing with, any Governmental
Entity is required by or with respect to Parent or Sub in connection with the
execution and delivery of this Agreement by Parent and Sub or the consummation
by Parent and Sub of the Merger or the other transactions contemplated by this
Agreement, except for (1) the filing of a premerger notification and report form
by Parent under the HSR Act and the receipt, termination or expiration, as
applicable, of approvals or waiting periods required under the HSR Act or any
other applicable foreign competition, merger control, antitrust or similar law
or regulation and (2) the filing of the Certificate of Merger with the Secretary
of State of the State of Delaware.

                         (c)  Information Supplied. None of the information
supplied or to be supplied by or on behalf of Parent or Sub specifically for
inclusion or incorporation by reference in the Proxy Statement will, at the date
it is first mailed to the stockholders of the Company and at the time of the
Stockholders' Meeting, contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which they
are made, not misleading.

                       (d)  Interim Operations of Sub. Sub was formed solely for
the purpose of engaging in the transactions contemplated hereby, has engaged in
no other business activities and has conducted its operations only as
contemplated hereby.

                       (e)  Capital Resources. Parent has cash on hand and
available borrowings that, together, will at the Effective Time be sufficient to
pay the aggregate Merger Consideration and amounts payable in respect of Company
Stock Options pursuant to Section 5.04.

                       (f)  Brokers. No broker, investment banker, financial
advisor or other person, other than UBS Securities LLC, the fees and expenses of
which will be paid by Parent, is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with the transactions
contemplated by this Agreement based upon arrangements made by or on behalf of
Parent or Sub.

ARTICLE IV

Covenants Relating to Conduct of Business

                          SECTION 4.01.  Conduct of Business. (a) Conduct of
Business by the Company. During the period from the date of this Agreement to
the Effective Time, except as set forth in Section 4.01(a) of the Company
Disclosure Schedule or as consented to in writing in advance by Parent or as
otherwise expressly permitted or required pursuant to this Agreement, the
Company shall, and shall cause each of its Subsidiaries to, carry on its
business in the ordinary course consistent with past practice and in compliance
in all material respects with all applicable laws, rules, regulations, Maritime
Guidelines and treaties and, to the extent consistent therewith, use
commercially reasonable efforts to preserve intact its current business
organizations, keep available the services of its current officers, employees
and consultants and preserve its relationships with customers, suppliers,
licensors, licensees, distributors and others having business dealings with it
with the intention that its goodwill and ongoing business shall be unimpaired at
the Effective Time. In addition to and without limiting the generality of the
foregoing, during the period from the date of this Agreement to the Effective
Time, except as otherwise set forth in Section 4.01(a) of the Company Disclosure
Schedule or as otherwise expressly permitted or required pursuant to this
Agreement, the Company shall not, and shall not permit any of its Subsidiaries
to, without Parent's prior written consent:

                                   (i)  (x) declare, set aside or pay any
dividends on, or make any other distributions (whether in cash, stock or
property) in respect of, any of its capital stock, other than dividends or
distributions by a direct or indirect wholly owned Subsidiary of the Company to
its stockholders, (y) split, combine or reclassify any of its capital stock or
issue or authorize the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock or (z) purchase, redeem or
otherwise acquire any shares of its capital stock or any other securities
thereof or any options, warrants, calls or rights to acquire any such shares or
other securities, other than in connection with (1) the forfeiture of Company
Stock Options and Company Restricted Stock and (2) the withholding of shares of
Company Common Stock to satisfy tax obligations with respect to Company Stock
Options and Company Restricted Stock;

                                   (ii)  issue, deliver, sell, grant, pledge or
otherwise encumber or subject to any Lien any shares of its capital stock, any
other voting securities or any securities convertible into, or any rights,
warrants or options to acquire, any such shares, voting securities or
convertible securities, or any "phantom" stock, "phantom" stock rights, stock
appreciation rights or stock based performance units, including pursuant to
Contracts as in effect on the date hereof (other than (x) the issuance of shares
of Company Common Stock upon the exercise of Company Stock Options (subject to
Section 5.04), in each case outstanding on the date hereof in accordance with
their terms on the date hereof, (y) the issuance of the Rights and capital stock
pursuant to the terms of the Rights Agreement and (z) as required under any
Company Benefit Agreement or Company Benefit Plan in effect on the date hereof);

                                 (iii)  amend the Company Certificate or the
Company By-laws or other comparable charter or organizational documents of any
of the Company's Subsidiaries, in each case except as may be required by law or
the rules and regulations of the SEC or the New York Stock Exchange;

                                  (iv)  directly or indirectly acquire (x) by
merging or consolidating with, or by purchasing assets of, or by any other
manner, any person or division, business or equity interest of any person or
(y) any asset or assets that, individually, has a purchase price in excess of
$1,000,000 or, in the aggregate, have a purchase price in excess of $5,000,000,
except for new capital expenditures, which shall be subject to the limitations
of clause (vii) below, and except for purchases of components, raw materials or
supplies in the ordinary course of business consistent with past practice;

                                  (v)  (x) sell, lease, license, mortgage, sell
and leaseback or otherwise encumber or subject to any Lien (other than Permitted
Liens) or otherwise dispose of any of its properties or other assets (excluding
Intellectual Property Rights) or any interests therein (including
securitizations), except for sales of used equipment in the ordinary course of
business consistent with past practice, (y) enter into, modify or amend any
lease of property, except in the ordinary course of business consistent with
past practice, or (z) modify, amend, terminate or permit the lapse of any
material Lease or other material Contract relating to any real property;

                                   (vi)  (x) incur any indebtedness for borrowed
money in excess of $5,000,000 or guarantee any such indebtedness of another
person, issue or sell any debt securities or calls, options, warrants or other
rights to acquire any debt securities of the Company or any of its Subsidiaries,
guarantee any debt securities of another person, enter into any "keep well" or
other agreement to maintain any financial statement condition of another person
or enter into any arrangement having the economic effect of any of the foregoing
or (y) make any loans, advances or capital contributions to, or investments in,
any other person, other than to employees in respect of travel or other
customary business expenses in the ordinary course of business consistent with
past practice;

                                   (vii)  make any new capital expenditure or
expenditures which, individually, is in excess of $1,000,000 or, in the
aggregate, are in excess of $5,000,000;

                                   (viii) (except as required by law or any
judgment by a court of competent jurisdiction, (v) pay, discharge, settle or
satisfy any material claims, liabilities, obligations or litigation (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge, settlement or satisfaction in the ordinary course of
business consistent with past practice or in accordance with their terms, of
liabilities disclosed, reflected or reserved against in the most recent audited
financial statements (or the notes thereto) of the Company included in the Filed
Company SEC Documents (for amounts not in excess of such reserves) or incurred
since the date of such financial statements in the ordinary course of business
consistent with past practice, (w) cancel any indebtedness, (x) waive or assign
any claims or rights of substantial value, (y) waive any benefits of, or agree
to modify in any respect, or, subject to the terms hereof, fail to enforce, or
consent to any matter with respect to which consent is required under, any
standstill or similar Contract to which the Company or any of its Subsidiaries
is a party or (z) waive any material benefits of, or agree to modify in any
material respect, or, subject to the terms hereof, fail to enforce in any
material respect, or consent to any matter with respect to which consent is
required under, any material confidentiality or similar Contract to which the
Company or any of its Subsidiaries is a party;

                                  (ix)  (A) purchase or construct any vessel or
enter into any Contract for the purchase or construction of any vessel, (B) sell
or otherwise dispose of any Vessel or enter into any Contract for the sale or
disposal of any Vessel, (C) enter into any Contract for the bareboat or time
charter of any Vessel (including any Vessel owned or leased by the Company or
any Subsidiary of the Company) that (x) has a term in excess of six months, (y)
provides for one or more renewal or extension options or (z) provides for any
purchase option, or (C) enter into any Contract for the drydocking or repair of
any Vessel where the estimated cost thereof is in excess of $1,000,000 unless,
in the case of this clause (C), such work cannot prudently be deferred and is
required to preserve the safety and seaworthiness of such Vessel;

                                 (x) enter into, modify, amend or terminate any
Material Contract or waive, release or assign any material rights or claims
thereunder, which if so entered into, modified, amended, terminated, waived,
released or assigned would reasonably be expected to (A) adversely affect in any
material respect the Company, (B) impair in any material respect the ability of
the Company to perform its obligations under this Agreement or (C) prevent or
materially delay the consummation of the transactions contemplated by this
Agreement;

                                  (xi)  enter into any Contract to the extent
consummation of the transactions contemplated by this Agreement or compliance by
the Company with the provisions of this Agreement would reasonably be expected
to conflict with, or result in a violation or breach of, or default (with or
without notice or lapse of time, or both) under, or give rise to a right of, or
result in, termination, cancelation or acceleration of any obligation or to the
loss of a benefit under, or result in the creation of any Lien in or upon any of
the properties or other assets of the Company or any of its Subsidiaries under,
or give rise to any increased, additional, accelerated or guaranteed right or
entitlements of any third party under, or result in any material alteration of,
any provision of such Contract;

                                (xii)  enter into any Contract containing any
restriction on the ability of the Company or any of its Subsidiaries to assign
its rights, interests or obligations thereunder, unless such restriction
expressly excludes any assignment to Parent or any of its Subsidiaries in
connection with or following the consummation of the Merger and the other
transactions contemplated by this Agreement;

                               (xiii)  (A) sell, transfer or license to any
person or otherwise extend, amend or modify any rights to any of the material
Intellectual Property Rights of the Company or any of its Subsidiaries or (B)
license any material Intellectual Property Rights from any person, other than,
in the case of this clause (B), licenses of Intellectual Property Rights granted
to the Company or any of its Subsidiaries entered into in the ordinary course of
business consistent with past practice;

                                (xiv)  except as otherwise contemplated by this
Agreement or as required to ensure that any Company Benefit Plan or Company
Benefit Agreement is not then out of compliance with applicable law or as
required under any Company Benefit Agreement or Company Benefit Plan in effect
on the date hereof, (A) adopt, enter into, terminate or amend any Company
Benefit Plan, Company Benefit Agreement or collective bargaining agreement,
other than amendments that are immaterial or administrative in nature,
(B) increase in any manner the compensation, bonus or fringe or other benefits
of any Participant, or grant or pay any type of compensation or benefits to any
Participant not previously receiving or entitled to receive such type of
compensation or benefits, except for increases in cash compensation (including
cash bonuses) to Participants in the ordinary course of business consistent with
past practice; (C) grant or pay to any Participant (1) any severance,
termination, change in control or similar pay or benefits or increase such pay
or benefits or (2) any right to receive any severance, termination, change in
control or similar pay or benefits, (D) pay any benefit under, or grant any
award under or amend or terminate any bonus, incentive, performance or other
compensation plan or arrangement, Company Benefit Agreement or Company Benefit
Plan (including the grant of Company Stock Options, Company Restricted Stock,
"phantom" stock, stock appreciation rights, "phantom" stock rights, restricted
stock units, deferred stock units, performance stock units or other stock-based
or stock-related awards or the removal or modification of existing restrictions
in any Company Benefit Agreements or Company Benefit Plans or on any awards made
thereunder), other than as expressly permitted pursuant to clause (B), (E) take
any action to fund or in any other way secure the payment of compensation or
benefits under any Company Benefit Plan or Company Benefit Agreement, (F) take
any action to accelerate the vesting or payment of any compensation or benefits
under any Company Benefit Plan or Company Benefit Agreement or (G) materially
change any actuarial or other assumption used to calculate funding obligations
with respect to any Company Pension Plan or change the manner in which
contributions to any Company Pension Plan are made or the basis on which such
contributions are determined;

                                   (xv)  except as required by GAAP, revalue any
material assets of the Company or any of its Subsidiaries or make any change in
accounting methods, principles or practices; or

                                    (xvi)  authorize any of, or commit, resolve,
propose or agree to take any of, the foregoing actions.

                         (b)  Other Actions. The Company, Parent and Sub shall
not, and shall not permit any of their respective Subsidiaries to, take any
action that would reasonably be expected to result in any of the conditions to
the Merger set forth in Article VI not being satisfied.

                         (c)  Advice of Changes; Filings. The Company and Parent
shall promptly advise the other party orally and in writing of (i) any
representation or warranty made by it (and, in the case of Parent, made by Sub)
contained in this Agreement that is qualified as to materiality becoming untrue
or inaccurate in any respect or any such representation or warranty that is not
so qualified becoming untrue or inaccurate in any material respect or (ii) the
failure of it (and, in the case of Parent, of Sub) to comply with or satisfy in
any material respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement; provided, however, that no such
notification shall affect the representations, warranties, covenants or
agreements of the parties (or remedies with respect thereto) or the conditions
to the obligations of the parties under this Agreement. The Company and Parent
shall, to the extent permitted by law, promptly provide the other with copies of
all filings made by such party with any Governmental Entity in connection with
this Agreement and the transactions contemplated hereby, other than the portions
of such filings that include confidential information not directly related to
the transactions contemplated by this Agreement.

                        (d)  Certain Tax Matters. (i) During the period from the
date of this Agreement to the Effective Time, the Company shall, and shall cause
each of its Subsidiaries to, (A) timely file all tax returns ("Post-Signing
Returns") required to be filed by or on behalf of each such entity; (B) timely
pay all taxes due and payable; (C) accrue a reserve in the books and records and
financial statements of any such entity in accordance with past practice for all
taxes payable but not yet due; (D) promptly notify Parent of any suit, claim,
action, investigation, proceeding or audit (collectively, "Actions") pending
against or with respect to the Company or any of its Subsidiaries in respect of
any material amount of tax and not settle or compromise any such Action without
Parent's consent (such consent not to be unreasonably withheld, delayed or
conditioned); (E) not make or change any material tax election or settle or
compromise any material tax liability, other than with Parent's consent (such
consent not to be unreasonably withheld, delayed or conditioned) or other than
in the ordinary course of business; and (F) cause all existing tax sharing
agreements, tax indemnity obligations and similar agreements, arrangements or
practices with respect to taxes to which the Company or any of its Subsidiaries
is or may be a party or by which the Company or any of its Subsidiaries is or
may otherwise be bound to be terminated as of the Closing Date so that after
such date neither the Company nor any of its Subsidiaries shall have any further
rights or liabilities thereunder. Any tax returns described in this
Section 4.01(d) shall be complete and correct in all material respects and shall
be prepared on a basis consistent with the past practice of the Company.

                                  (ii)  The Company shall deliver to Parent at
or prior to the Closing a certificate, in form and substance satisfactory to
Parent, duly executed and acknowledged, certifying that the payment of the
Merger Consideration and any payments made in respect of Appraisal Shares
pursuant to the terms of this Agreement are exempt from withholding pursuant to
the Foreign Investment in Real Property Tax Act.

                      SECTION 4.02.  No Solicitation. (a) The Company shall not,
nor shall it authorize or permit any of its Subsidiaries or any of their
respective directors, officers or employees or any investment banker, financial
advisor, attorney, accountant or other advisor, agent or representative
(collectively, "Representatives") retained by it or any of its Subsidiaries to,
directly or indirectly through another person, (i) solicit, initiate or
knowingly encourage, or take any other action designed to, or which would
reasonably be expected to, facilitate, any Takeover Proposal or (ii) enter into,
continue or otherwise participate in any discussions or negotiations regarding,
or furnish to any person any information, or otherwise cooperate in any way
with, any Takeover Proposal. The Company shall, and shall cause its Subsidiaries
to, immediately cease and cause to be terminated all existing discussions or
negotiations with any person conducted heretofore with respect to any Takeover
Proposal and request the prompt return or destruction of all confidential
information previously furnished. Notwithstanding the foregoing, at any time
prior to obtaining the Stockholder Approval, in response to a bona fide written
Takeover Proposal that the Board of Directors of the Company determines in good
faith (after consultation with outside counsel and a financial advisor of
nationally recognized reputation) constitutes or is reasonably likely to lead to
a Superior Proposal, and which Takeover Proposal was not solicited after the
date hereof and was made after the date hereof and did not otherwise result from
a breach of this Section 4.02(a), the Company may, if its Board of Directors
determines in good faith (after consultation with outside counsel) that the
failure to do so would be reasonably likely to result in a breach of its
fiduciary duties to the stockholders of the Company under applicable law, and
subject to compliance with Section 4.02(c), (x) furnish information with respect
to the Company and its Subsidiaries to the person making such Takeover Proposal
(and its Representatives) pursuant to a customary confidentiality agreement
(which (A) need not restrict such person from making any unsolicited Takeover
Proposal and (B) shall permit the Company to comply with the terms of Section
4.02(c)) not less restrictive of such person than the Confidentiality Agreement;
provided that all such information has previously been provided to Parent or is
provided to Parent prior to or substantially concurrent with the time it is
provided to such person, and (y) participate in discussions or negotiations with
the person making such Takeover Proposal (and its Representatives) regarding
such Takeover Proposal.

                       The term "Takeover Proposal" means any inquiry, proposal
or offer from any person (other than Parent) relating to, or that would
reasonably be expected to lead to, any direct or indirect acquisition or
purchase, in one transaction or a series of transactions, of assets or
businesses that constitute 15% or more of the revenues, net income or the assets
of the Company and its Subsidiaries, taken as a whole, or 15% or more of any
class of equity securities of the Company or any of its Subsidiaries, any tender
offer or exchange offer that if consummated would result in any person (other
than Parent) beneficially owning 15% or more of any class of equity securities
of the Company or any of its Subsidiaries, or any merger, consolidation,
business combination, recapitalization, liquidation, dissolution, joint venture,
binding share exchange or similar transaction involving the Company or any of
its Subsidiaries pursuant to which any person (other than Parent) or the
stockholders of any person (other than Parent) would own 15% or more of any
class of equity securities of the Company or any of its Subsidiaries or of any
resulting parent company of the Company, other than the transactions
contemplated by this Agreement.

                       The term "Superior Proposal" means any bona fide Takeover
Proposal made by a third party that if consummated would result in such person
(or its stockholders) owning, directly or indirectly, more than 80% of the
shares of Company Common Stock then outstanding (or of the surviving entity in a
merger or the direct or indirect parent of the surviving entity in a merger) or
more than 80% of the assets of the Company, which the Board of Directors of the
Company determines in good faith (after consultation with a financial advisor of
nationally recognized reputation) to be (i) more favorable to the stockholders
of the Company from a financial point of view than the Merger (taking into
account all the terms and conditions of such proposal and this Agreement
(including any changes to the financial terms of this Agreement proposed by
Parent in response to such offer or otherwise)) and (ii) reasonably capable of
being completed, taking into account all financial, legal, regulatory and other
aspects of such proposal.

                        (b)  Neither the Board of Directors of the Company nor
any committee thereof shall (i) (A) withdraw (or modify in a manner adverse to
Parent), or publicly propose to withdraw (or modify in a manner adverse to
Parent), the approval, recommendation or declaration of advisability by such
Board of Directors or any such committee thereof of this Agreement, the Merger
or the other transactions contemplated by this Agreement or (B) recommend, adopt
or approve, or propose publicly to recommend, adopt or approve, any Takeover
Proposal (any action described in this clause (i) being referred to as a
"Company Adverse Recommendation Change") or (ii) approve or recommend, or
propose to approve or recommend, or allow the Company or any of its Subsidiaries
to execute or enter into, any letter of intent, memorandum of understanding,
agreement in principle, merger agreement, acquisition agreement, option
agreement, joint venture agreement, partnership agreement or other similar
agreement constituting or related to, or that is intended to or would reasonably
be expected to lead to, any Takeover Proposal (other than a confidentiality
agreement referred to in Section 4.02(a)) (an "Acquisition Agreement").
Notwithstanding the foregoing, at any time prior to obtaining the Stockholder
Approval, the Board of Directors of the Company may, if such Board of Directors
determines in good faith (after consultation with outside counsel) that the
failure to do so would be reasonably likely to result in a breach of its
fiduciary duties to the stockholders of the Company under applicable law, (x)
make a Company Adverse Recommendation Change or (y) in response to a Superior
Proposal that was not solicited after the date hereof and was made after the
date hereof and did not otherwise result from a breach of this Section 4.02,
cause the Company to terminate this Agreement (and concurrently with such
termination enter into an Acquisition Agreement with respect to such Superior
Proposal); provided, however, that (1) no Company Adverse Recommendation Change
may be made and (2) no such termination of this Agreement by the Company may be
made, in each case until after the third business day following Parent's receipt
of written notice from the Company advising Parent that the Board of Directors
of the Company intends to make a Company Adverse Recommendation Change or
terminate this Agreement pursuant to this Section 4.02(b). Such notice from the
Company to Parent shall specify the reasons therefor, including the terms and
conditions of any Superior Proposal that is the basis of the proposed action by
the Board of Directors (it being understood and agreed that any amendment to the
financial terms or any other material term of such Superior Proposal shall
require a new written notice by the Company and a new three business day
period). In determining whether to make a Company Adverse Recommendation Change
or to terminate this Agreement pursuant to this Section 4.02(b), the Board of
Directors of the Company shall take into account any changes to the financial
terms of this Agreement proposed by Parent in response to any such written
notice by the Company or otherwise.

                         (c)  In addition to the obligations of the Company set
forth in paragraphs (a) and (b) of this Section 4.02, the Company shall promptly
advise Parent orally and in writing of any Takeover Proposal, the material terms
and conditions of any such Takeover Proposal (including any changes thereto) and
the identity of the person making any such Takeover Proposal. The Company shall
(i) keep Parent fully informed of the status and details (including any change
to the terms thereof) of any such Takeover Proposal and any discussions and
negotiations concerning the material terms and conditions thereof and
(ii) provide to Parent any written proposals, term sheets, amendments, drafts of
agreements and similar written documents exchanged between the Company or any of
its officers, directors, investment bankers, attorneys, accountants or other
advisors, on the one hand, and the party making a Takeover Proposal or any of
its officers, directors, investment bankers, attorneys, accountants or other
advisors, on the other hand, as promptly as reasonably practicable after receipt
or delivery thereof; provided that, in the case of this clause (ii), (x) such
documents are readily available to the Company or its outside counsel and
(y) the provision of such documents would not in the reasonable good faith
judgment of the Company impose a material administrative burden on the Company.

                      (d)  Nothing contained in this Section 4.02 shall prohibit
the Company from (x) taking and disclosing to its stockholders a position
contemplated by Rule 14e-2(a) promulgated under the Exchange Act or (y) making
any disclosure to the stockholders of the Company if, in the good faith judgment
of the Board of Directors of the Company (after consultation with outside
counsel), failure to so disclose would be inconsistent with its obligations
under applicable law, including the Board of Directors' duty of candor to the
stockholders of the Company; provided, however, that in no event shall the
Company or its Board of Directors or any committee thereof take, or agree or
resolve to take, any action prohibited by Section 4.02(b).

ARTICLE V

Additional Agreements

                            SECTION 5.01.  Preparation of the Proxy Statement;
Stockholders' Meeting. (a)  As promptly as practicable following the date of
this Agreement, the Company shall prepare and file with the SEC the Proxy
Statement and the Company shall use its reasonable best efforts to respond as
promptly as practicable to any comments of the SEC with respect thereto and to
cause the Proxy Statement to be mailed to the stockholders of the Company as
promptly as practicable following the date of this Agreement. Parent shall
promptly furnish all information that may be reasonably requested by the Company
in connection with any such actions. The Company shall promptly notify Parent
upon the receipt of any comments from the SEC or the staff of the SEC or any
request from the SEC or the staff of the SEC for amendments or supplements to
the Proxy Statement and shall provide Parent with copies of all correspondence
between the Company and its Representatives, on the one hand, and the SEC and
the staff of the SEC, on the other hand. Notwithstanding the foregoing, prior to
filing or mailing the Proxy Statement (or any amendment or supplement thereto)
or responding to any comments of the SEC or the staff of the SEC with respect
thereto, the Company (i) shall provide Parent an opportunity to review and
comment on such document or response and (ii) shall include in such document or
response all comments reasonably proposed by Parent.

                       (b)  The Company shall, as soon as practicable following
the date of this Agreement, establish a record date for, duly call, give notice
of, convene and hold a meeting of its stockholders (the "Stockholders' Meeting")
solely for the purpose of obtaining the Stockholder Approval. Subject to
Sections 4.02(b) and 4.02(d), the Company shall, through its Board of Directors,
recommend to its stockholders adoption of this Agreement and shall include such
recommendation in the Proxy Statement. Without limiting the generality of the
foregoing, the Company's obligations pursuant to the first sentence of this
Section 5.01(b) shall not be affected by (i) the commencement, public proposal,
public disclosure or communication to the Company of any Takeover Proposal or
(ii) the withdrawal or modification by the Board of Directors of the Company or
any committee thereof of such Board of Directors' or such committee's approval
or recommendation of this Agreement, the Merger or the other transactions
contemplated by this Agreement.

                      SECTION 5.02.  Access to Information; Confidentiality. The
Company shall afford to Parent, and to Parent's officers, employees,
accountants, counsel, financial advisors and other Representatives, reasonable
access (including for the purpose of integration and transition planning with
the employees of the Company and its Subsidiaries) during normal business hours
and upon reasonable prior notice to the Company during the period prior to the
Effective Time or the termination of this Agreement to all of its and its
Subsidiaries' properties, books, Contracts, commitments, personnel and records
and, during such period, the Company shall furnish promptly to Parent (a) a copy
of each report, schedule, registration statement and other document filed by it
during such period pursuant to the requirements of Federal or state securities
laws, (b) a copy of each correspondence or written communication with any United
States Federal or state Governmental Entity and (c) all other information
concerning its and its Subsidiaries' business, properties and personnel as
Parent may reasonably request, in each case subject to applicable law. Except
for disclosures expressly permitted by the terms of the letter agreement dated
as of September 5, 2006, between Parent and the Company (as it may be amended
from time to time, the "Confidentiality Agreement"), Parent shall hold, and
shall cause its officers, employees, accountants, counsel, financial advisors
and other Representatives to hold, all information received from the Company,
directly or indirectly, in confidence in accordance with the Confidentiality
Agreement. No investigation pursuant to this Section 5.02 or information
provided or received by any party hereto pursuant to this Agreement will affect
any of the representations or warranties of the parties hereto contained in this
Agreement or the conditions hereunder to the obligations of the parties hereto.

                          SECTION 5.03.  Reasonable Best Efforts. Upon the terms
and subject to the conditions set forth in this Agreement, each of the parties
agrees to use its reasonable best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, and to assist and cooperate with the
other parties hereto in doing, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the
Merger and the other transactions contemplated by this Agreement, including
using reasonable best efforts to accomplish the following: (i) the taking of all
acts necessary to cause the conditions to Closing to be satisfied as promptly as
practicable, (ii) the obtaining of all necessary actions or nonactions, waivers,
consents and approvals from Governmental Entities and the making of all
necessary registrations and filings (including filings with Governmental
Entities) and the taking of all steps as may be necessary to obtain an approval
or waiver from, or to avoid an action or proceeding by, any Governmental Entity
and (iii) the obtaining of all necessary consents, approvals or waivers from
third parties; provided that none of the Company, Parent or Sub shall be
required to make any payment to any such third parties or concede anything of
value to obtain such consents from any such third parties. Each of the parties
will, as promptly as practicable, but in no event later than 10 business days
following the execution and delivery of this Agreement, file with (i) the United
States Federal Trade Commission (the "FTC") and the United States Department of
Justice (the "DOJ") the notification and report form required for the
transactions contemplated by this Agreement and any supplemental information
requested in connection therewith pursuant to the HSR Act, which forms will
specifically request early termination of the waiting period prescribed by the
HSR Act, and (ii) any other Governmental Entity, any other filings, reports,
information and documentation required for the transactions contemplated by this
Agreement pursuant to any Other Antitrust Laws. Each party will furnish to each
other's counsel such necessary information and assistance as the other may
reasonably request in connection with its preparation of any filing or
submission that is necessary under the HSR Act and any Other Antitrust Laws.
Parent will be responsible for all filing fees payable in connection with such
filings and for the reasonable fees and expenses of any experts retained by the
parties. Each of Parent and the Company agrees to instruct their respective
counsel to cooperate with each other and use their respective reasonable best
efforts to facilitate and expedite the identification and resolution of any
issues arising under the HSR Act and any Other Antitrust Laws at the earliest
practicable dates. Such reasonable best efforts and cooperation will include
causing its counsel (i) to promptly inform the other of any oral communication
with, and provide copies of written communications with, any Governmental Entity
regarding any such filings or applications or any such transaction, (ii) to
communicate with each other regarding the content of any communication with and
response to personnel of such Governmental Entity, including the content of any
written or oral presentation or submission to any Governmental Entity and (iii)
to comply promptly with any inquiries or requests for additional information
from any such Governmental Entity, unless otherwise agreed to by the other
party, such agreement not to be unreasonably withheld. None of Parent, the
Company nor any of their respective Subsidiaries will independently participate
in any meeting or discussion with any Governmental Entity in respect of any such
filings, applications, investigation or other inquiry without giving, in the
case of Parent and its Subsidiaries, the Company, and in the case of the Company
and its Subsidiaries, Parent, prior notice of the meeting and, to the extent
permitted by the relevant Governmental Entity, the opportunity to attend and
participate (which, at the request of Parent or Company, as applicable, will be
limited to outside antitrust counsel only). Parent agrees to take any and all
reasonable steps within its control and necessary to avoid or eliminate each and
every impediment under any applicable antitrust or competition law that any
Governmental Entity asserts so as to enable the parties to expeditiously close
the transactions contemplated by this Agreement (including the Merger). None of
Parent, Sub or the Company shall take any action that would reasonably be
expected to hinder or delay in any material respect the obtaining of clearance
or the expiration of the required waiting period under the HSR Act and
regulations or any Other Antitrust Laws. Parent and its Subsidiaries will be
obligated to contest, administratively or in court, any ruling, order or other
action of any Governmental Entity respecting the transactions contemplated by
this Agreement pursuant to any applicable antitrust or competition law, except
to the extent that Parent determines, in its reasonable good faith judgment,
that there is no reasonable legal basis for contesting such ruling, order or
other action or no reasonable prospect of a favorable determination thereunder.
Notwithstanding the foregoing, nothing in this Agreement shall be deemed to
require Parent to agree to, or proffer to, (x) divest or hold separate any
assets or any portion of any business of, or modify or accept conditions with
respect to the business operations of, Parent or any of its Subsidiaries (not
including the Company following the Effective Time), or (y) divest or hold
separate any significant assets or any significant portion of any business of,
or modify or accept conditions with respect to any significant portion of the
business operations of, the Company and its Subsidiaries. The Company and its
Board of Directors shall (1) take all action necessary to ensure that no state
takeover statute or similar statute or regulation is or becomes applicable to
this Agreement, the Merger or any of the other transactions contemplated by this
Agreement and (2) if any state takeover statute or similar statute becomes
applicable to this Agreement, the Merger or any of the other transactions
contemplated by this Agreement, take all action necessary to ensure that the
Merger and the other transactions contemplated by this Agreement may be
consummated as promptly as practicable on the terms contemplated by this
Agreement and otherwise to minimize the effect of such statute or regulation on
this Agreement, the Merger and the other transactions contemplated by this
Agreement.

                           SECTION 5.04  Equity-Based Awards. (a)  As soon as
practicable following the date of this Agreement, the Board of Directors of the
Company (or, if appropriate, any committee thereof administering the Company
Stock Plans) shall adopt such resolutions or use commercially reasonable efforts
to take such other actions (including obtaining any required consents) as may be
required to effect the following:

                                     (i)   (A) prior to the Effective Time, each
outstanding unvested Company Stock Option shall automatically accelerate so that
each such Company Stock Option shall become fully exercisable for all shares of
Company Common Stock at the time subject to such Company Stock Option and may be
exercised by the holder thereof for any or all of such shares and (B) upon the
Effective Time, all outstanding Company Stock Options shall be canceled, with
the holder of each Company Stock Option becoming entitled to receive, in full
satisfaction of the rights of such holder with respect thereto, an amount in
cash equal to (x) the excess, if any, of the per share Merger Consideration over
the exercise price per share of Company Common Stock subject to such Company
Stock Option, multiplied by (y) the number of shares of Company Common Stock
subject to such Company Stock Option; provided that all amounts payable pursuant
to this clause (i) shall be subject to any required withholding of taxes or
proof of eligibility for exemption therefrom and shall be paid at or as soon as
practicable following the Effective Time, without interest;

                                  (ii)  each share of Company Restricted Stock
shall be adjusted as necessary to provide that the restrictions on such share
shall lapse at the Effective Time, and at the Effective Time, each share of
Company Restricted Stock shall be converted into the right to receive the Merger
Consideration in accordance with Section 2.01(c), subject to any applicable
withholding pursuant to Section 2.02(h); and

                                  (iii)  make such other changes to the Company
Stock Plans as Parent and the Company may reasonably agree are appropriate to
give effect to the Merger.

                       (b)  Each provision in each Company Benefit Plan and
Company Benefit Agreement providing for the issuance, transfer or grant of any
shares of Company Common Stock or any Company Stock Options, Company Restricted
Stock or any other interests in respect of any capital stock (including any
"phantom" stock, stock appreciation rights or performance units) of the Company
shall be deleted prior to the Effective Time, and the Company shall ensure that,
following the Effective Time, there shall be no rights to acquire shares of
Company Common Stock, Company Stock Options, Company Restricted Stock or any
other interests in respect of any capital stock (including any "phantom" stock,
stock appreciation rights or performance units) of the Company or the Surviving
Corporation.

                         SECTION 5.05.  Indemnification; Advancement of
Expenses; Exculpation and Insurance. (a) Parent shall cause the Surviving
Corporation to assume the obligations with respect to all rights to
indemnification, advancement of expenses and exculpation from liabilities for
acts or omissions occurring at or prior to the Effective Time now existing in
favor of the current or former directors or officers of the Company and its
Subsidiaries as provided in the Company Certificate, the Company By-laws, the
organizational documents of any Subsidiary or any indemnification agreement
between such directors or officers and the Company and/or any Subsidiary (in
each case, as in effect on the date hereof), without further action, as of the
Effective Time and such obligations shall survive the Merger and shall continue
in full force and effect in accordance with their terms.

                                  (b)  In the event that the Surviving
Corporation or any of its successors or assigns (i) consolidates with or merges
into any other person and is not the continuing or surviving corporation or
entity of such consolidation or merger or (ii) transfers or conveys all or
substantially all of its properties and other assets to any person, then, and in
each such case, Parent shall cause proper provision to be made so that the
successors and assigns of the Surviving Corporation shall expressly assume the
obligations set forth in this Section 5.05. In addition, in the event (A) the
Surviving Corporation transfers any material portion of its assets, whether in a
single transaction or in a series of transactions, or (B) Parent takes any
action to materially impair the financial ability of the Surviving Corporation
to satisfy the obligations referred to in Section 5.05(a), Parent will either
guarantee such obligations or take such other action to ensure that the ability
of the Surviving Corporation, legal and financial, to satisfy such obligations
will not be diminished in any material respect.

                                (c)  For six years after the Effective Time,
Parent shall maintain (directly or indirectly through the Company's existing
insurance programs) in effect the Company's current directors' and officers'
liability insurance in respect of acts or omissions occurring at or prior to the
Effective Time, covering each person currently covered by the Company's
directors' and officers' liability insurance policy (a complete and accurate
copy of which has been heretofore delivered to Parent), on terms with respect to
such coverage and amounts no less favorable than those of such policy in effect
on the date hereof; provided, however, that Parent may (i) substitute therefor
policies of Parent containing terms with respect to coverage (including as
coverage relates to deductibles and exclusions) and amount no less favorable to
such directors and officers or (ii) request that the Company obtain such
extended reporting period coverage under its existing insurance programs (to be
effective as of the Effective Time); provided further, however, that in
satisfying its obligation under this Section 5.05(c), neither the Company nor
Parent shall be obligated to pay more than $882,500 in the aggregate to obtain
such coverage. It is understood and agreed that in the event such coverage
cannot be obtained for $882,500 or less in the aggregate, Parent shall be
obligated to provide such coverage as may be obtained for such $882,500
aggregate amount.

                               (d)  The provisions of this Section 5.05 (i) are
intended to be for the benefit of, and will be enforceable by, each indemnified
party, his or her heirs and his or her representatives and (ii) are in addition
to, and not in substitution for, any other rights to indemnification or
contribution that any such person may have by contract or otherwise.

                       SECTION 5.06.  Fees and Expenses. (a)  Except as provided
in Section 5.03 and paragraph (b) of this Section 5.06, all fees and expenses
incurred in connection with this Agreement, the Merger and the other
transactions contemplated by this Agreement shall be paid by the party incurring
such fees or expenses, whether or not the Merger is consummated.

                                 (b)  In the event that (i) this Agreement is
terminated by Parent pursuant to Section 7.01(e), (ii) this Agreement is
terminated by the Company pursuant to Section 7.01(f) or (iii) (A) prior to the
obtaining of the Stockholder Approval, a Takeover Proposal shall have been made
to the Company or shall have been made directly to the stockholders of the
Company generally or shall have otherwise become publicly known or any person
shall have publicly announced an intention (whether or not conditional) to make
a Takeover Proposal, (B) thereafter this Agreement is terminated by either
Parent or the Company pursuant to Section 7.01(b)(i) (but only if a vote to
obtain the Stockholder Approval or the Stockholders' Meeting has not been held)
or Section 7.01(b)(iii) and (C) within 12 months after such termination, the
Company enters into a definitive agreement to consummate, or consummates, the
transactions contemplated by any Takeover Proposal, then the Company shall pay
Parent a fee equal to $10,000,000 (the "Termination Fee") by wire transfer of
same-day funds (x) in the case of a payment required by clause (i) above, on the
first business day following the date of termination of this Agreement, (y) in
the case of a payment required by clause (ii) above, on the date of termination
of this Agreement and (z) in the case of a payment required by clause (iii)
above, on the first business day following the date of the first to occur of the
events referred to in clause (iii)(C).

                                (c)  The Company and Parent acknowledge and
agree that the agreements contained in Section 5.06(b) are an integral part of
the transactions contemplated by this Agreement, and that, without these
agreements, Parent would not enter into this Agreement; accordingly, if the
Company fails promptly to pay the amount due pursuant to Section 5.06(b), and,
in order to obtain such payment, Parent commences a suit that results in a
judgment against the Company for the Termination Fee, the Company shall pay to
Parent its costs and expenses (including attorneys' fees and expenses) in
connection with such suit, together with interest on the amount of the
Termination Fee from the date such payment was required to be made until the
date of payment at the prime rate of Citibank, N.A. in effect on the date such
payment was required to be made.

                        SECTION 5.07  Public Announcements. Except with respect
to any Company Adverse Recommendation Change made in accordance with the terms
of this Agreement, Parent and the Company shall consult with each other before
issuing, and give each other the opportunity to review and comment upon, any
press release or other public statements with respect to the transactions
contemplated by this Agreement, including the Merger, and shall not issue any
such press release or make any such public statement prior to such consultation,
except as such party may reasonably conclude may be required by applicable law,
court process or by obligations pursuant to any listing agreement with any
national securities exchange or national securities quotation system. The
parties agree that the initial press release to be issued with respect to the
transactions contemplated by this Agreement shall be in the form heretofore
agreed to by the parties.

                       SECTION 5.08  Stockholder Litigation. The Company shall
give Parent the opportunity to participate in the defense or settlement of any
stockholder litigation against the Company and/or its directors relating to the
transactions contemplated by this Agreement, and no such settlement shall be
agreed to without Parent's prior written consent.

                      SECTION 5.09  Employee Matters. (a)  For a period of not
less than twelve months following the Effective Time, the employees of the
Company who remain in the employment of the Surviving Corporation and its
Subsidiaries, or become employed by Parent or a Subsidiary of Parent, following
the Effective Time (the "Continuing Employees") shall receive employee benefits
that in the aggregate are substantially comparable to the employee benefits
provided under the Company's employee benefit plans to such employees, taken as
a whole, immediately prior to the Effective Time; provided that employees of the
Company shall be eligible to receive equity awards for calendar year 2007 under
equity incentive plans of Parent on a substantially comparable basis to
similarly situated employees of Parent, which awards shall be granted in January
2008. Notwithstanding the foregoing, the value of benefits under Company defined
benefit pension plans and any related supplemental defined benefit pension plans
of the Company will not be taken into account for purposes of determining
comparability of employee benefits.

                               (b)  Subject to compliance with Section 5.09(a),
nothing contained herein shall be construed as requiring, and the Company shall
take no action that would have the effect of requiring, Parent or the Surviving
Corporation to continue any specific plans or to continue the employment of any
specific person.

                              (c)  Except as would result in any duplication of
benefits for the same period of service, Parent shall cause the Surviving
Corporation to recognize the service of each Continuing Employee with the
Company and its Subsidiaries as if such service had been performed with Parent
(i) for purposes of eligibility for vacation under Parent's vacation program,
(ii) for purposes of eligibility and participation under any health or welfare
plan maintained by Parent (other than any post-employment health or
post-employment welfare plan), (iii) unless covered under another arrangement
with or of the Company, for benefit accrual purposes under Parent's severance
plan and (iv) for purposes of eligibility to participate in, vesting under and
benefits accrual pursuant to any other benefit plan of Parent (including any
retirement plan) other than for purposes of benefit accrual pursuant to any
defined benefit pension plan of Parent (in the case of each of clauses (i),
(ii), (iii) and (iv), solely to the extent that Parent makes such plan or
program available to Continuing Employees).

                                  (d)  With respect to any welfare plan
maintained by Parent in which Continuing Employees are eligible to participate
after the Effective Time, Parent shall, and shall cause the Surviving
Corporation to, (i) waive all limitations as to preexisting conditions and
exclusions with respect to participation and coverage requirements applicable to
such employees to the extent such conditions and exclusions were satisfied or
did not apply to such employees under the welfare plans of the Company and its
Subsidiaries prior to the Effective Time and (ii) provide each Continuing
Employee with credit for any co-payments and deductibles paid prior to the
Effective Time in satisfying any analogous deductible or out-of-pocket
requirements to the extent applicable under any such plan.

                                (e)  Parent agrees that it shall, or shall cause
the Surviving Corporation to, pay bonuses and long term incentive awards in the
amounts and at the times set forth on Section 5.09(e) of the Company Disclosure
Schedule.

                                (f)  In the event the Effective Time occurs
before the Company makes a profit sharing contribution in respect of calendar
year 2006 in the ordinary course of business under its defined contribution
retirement plan, Parent shall, or shall cause the Surviving Corporation to, make
such contribution; provided that the amount of such contribution shall not
exceed $500,000.

                                 SECTION 5.10  Rights Agreement. The Board of
Directors of the Company shall take all further action (in addition to that
referred to in Section 3.01(v)) reasonably requested by Parent in order to
render the Rights issued pursuant to the Rights Agreement inapplicable to the
Merger and the other transactions contemplated by this Agreement. Except as
provided above with respect to the Merger and the other transactions
contemplated by this Agreement, the Board of Directors of the Company shall not,
without the prior written consent of Parent, (a) amend the Rights Agreement or
(b) take any action with respect to, or make any determination under, the Rights
Agreement, including a redemption of the Rights or any action to facilitate a
Takeover Proposal.

ARTICLE VI

Conditions Precedent

                        SECTION 6.01  Conditions to Each Party's Obligation to
Effect the Merger. The respective obligation of each party to effect the Merger
is subject to the satisfaction or (to the extent permitted by law) waiver on or
prior to the Closing Date of the following conditions:

                       (a)  Stockholder Approval. The Stockholder Approval shall
have been obtained.

                        (b)  HSR Act. The waiting period (and any extension
thereof) applicable to the Merger under the HSR Act shall have been terminated
or shall have expired.

                        (c)  No Injunctions or Restraints. No temporary
restraining order, preliminary or permanent injunction or other judgment or
order issued by any court of competent jurisdiction or other statute, law, rule,
legal restraint or prohibition (collectively, "Restraints") shall be in effect
(i) preventing the consummation of the Merger or (ii) which otherwise has had or
would reasonably be expected to have a Material Adverse Effect (provided that
the enforcement of the condition set forth in this Section 6.01(c) by Parent
with respect to any Restraint shall be subject to Parent's prior satisfaction of
its obligations pursuant to Section 5.03 to the extent applicable to such
Restraint).

                         SECTION 6.02. Conditions to Obligations of Parent and
Sub. The obligations of Parent and Sub to effect the Merger are further subject
to the satisfaction or (to the extent permitted by law) waiver by Parent on or
prior to the Closing Date of the following conditions:

                          (a)  Representations and Warranties. (i) The
representations and warranties of the Company contained in Section 3.01(c), the
first four sentences of Section 3.01(d), Section 3.01(r) and Section 3.01(v) of
this Agreement shall be true and correct as of the date of this Agreement and as
of the Closing Date as though made on the Closing Date (except to the extent
such representations and warranties expressly relate to an earlier date, in
which case as of such earlier date) and (ii) all other representations and
warranties of the Company contained in this Agreement shall be true and correct
(disregarding all qualifications or limitations as to "materiality", "Material
Adverse Effect", "Material Adverse Change" and words of similar import set forth
therein) as of the date of this Agreement and as of the Closing Date as though
made on the Closing Date (except to the extent such representations and
warranties expressly relate to an earlier date, in which case as of such earlier
date), except where the failure of such representations and warranties to be so
true and correct, individually and in the aggregate has not had and would not
reasonably be expected to have a Material Adverse Effect. Parent shall have
received a certificate signed on behalf of the Company by the chief executive
officer and the chief financial officer of the Company to such effect.

                       (b)  Performance of Obligations of the Company. The
Company shall have performed in all material respects all obligations required
to be performed by it under this Agreement at or prior to the Closing Date, and
Parent shall have received a certificate signed on behalf of the Company by the
chief executive officer and the chief financial officer of the Company to such
effect.

                       (c)  No Litigation. There shall not be pending any suit,
action or proceeding by any Governmental Entity in the United States
(i) challenging the acquisition by Parent or Sub of any shares of Company Common
Stock, seeking to restrain or prohibit the consummation of the Merger, or
seeking to place limitations on the ownership of shares of Company Common Stock
(or shares of capital stock of the Surviving Corporation) by Parent or Sub or
seeking to obtain from the Company, Parent or Sub any damages that are material
in relation to the Company, (ii) seeking to prohibit or materially limit (x) the
ownership or operation by Parent or any of its Subsidiaries of any portion of
any business or of any assets of Parent or any of its Subsidiaries, or to compel
Parent or any of its Subsidiaries to divest or hold separate any portion of any
business or of any assets of Parent or any of its Subsidiaries, or (y) the
ownership or operation by the Company, Parent or any of their respective
Subsidiaries of any significant portion of any business or of any significant
assets of the Company or any of its Subsidiaries, or to compel the Company,
Parent or any of their respective Subsidiaries to divest or hold separate any
significant portion of any business or of any significant assets of the Company
or any of its Subsidiaries, in the case of either clause (x) or (y), as a result
of the Merger, (iii) seeking to prohibit Parent or any of its Subsidiaries from
effectively controlling in any material respect any significant portion of the
business or operations of the Company or any of its Subsidiaries or
(iv) otherwise having, or that would reasonably be expected to have, a Material
Adverse Effect (provided that the enforcement of the condition set forth in this
Section 6.02(c) by Parent with respect to any suit, action or proceeding shall
be subject to Parent's prior satisfaction of its obligations pursuant to Section
5.03 to the extent applicable to such suit, action or proceeding).

                        (d)  Restraints. No Restraint that would reasonably be
expected to result, directly or indirectly, in any of the effects referred to in
clauses (i) through (iv) of paragraph (c) of this Section 6.02 shall be in
effect (provided that the enforcement of the condition set forth in this Section
6.02(d) by Parent with respect to any Restraint shall be subject to Parent's
prior satisfaction of its obligations pursuant to Section 5.03 to the extent
applicable to such Restraint).

                         SECTION 6.03.  Conditions to Obligation of the Company.
The obligation of the Company to effect the Merger is further subject to the
satisfaction or (to the extent permitted by law) waiver by the Company on or
prior to the Closing Date of the following conditions:

                         (a)  Representations and Warranties. The
representations and warranties of Parent and Sub contained in this Agreement
shall be true and correct (disregarding all qualifications or limitations as to
"materiality" and words of similar import set forth therein) as of the date of
this Agreement and as of the Closing Date as though made on the Closing Date
(except to the extent such representations and warranties expressly relate to an
earlier date, in which case as of such earlier date), except where the failure
of such representations and warranties to be so true and correct, individually
and in the aggregate, has not had and would not reasonably be expected to have a
material adverse effect on the ability of Parent or Sub to perform its
obligations under this Agreement or to consummate the Merger or the other
transactions contemplated by this Agreement, or materially delay the
consummation of the Merger or the other transactions contemplated by this
Agreement. The Company shall have received a certificate signed on behalf of
Parent by an executive officer of Parent to such effect.

                          (b)  Performance of Obligations of Parent and Sub.
Parent and Sub shall have performed in all material respects all obligations
required to be performed by them under this Agreement at or prior to the Closing
Date, and the Company shall have received a certificate signed on behalf of
Parent by an executive officer of Parent to such effect.

                         (c)  Parent shall have delivered to the Company a
certificate, in the form of Exhibit B hereto, executed by an executive officer
of Parent.

                         SECTION 6.04.  Frustration of Closing Conditions. None
of the Company, Parent or Sub may rely on the failure of any condition set forth
in Section 6.01, 6.02 or 6.03, as the case may be, to be satisfied if such
failure was caused by such party's failure to act in good faith or to use its
reasonable best efforts to consummate the Merger and the other transactions
contemplated by this Agreement, as required by and subject to Section 5.03.

ARTICLE VII

Termination, Amendment and Waiver

                          SECTION 7.01.  Termination. This Agreement may be
terminated at any time prior to the Effective Time, whether before or after
receipt of the Stockholder Approval:

                          (a)  by mutual written consent of Parent, Sub and the
Company;

                          (b)  by either Parent or the Company:

                                    (i)  if the Merger shall not have been
consummated on or before March 31, 2007; provided, however, that if the
condition set forth in Section 6.01(b) shall not have been satisfied as of the
third business day prior to such date, such date may be extended from time to
time by either Parent or the Company one or more times to a date not later than
December 31, 2007, so long as all other conditions shall have been satisfied or
shall be capable of being satisfied at the time of each such extension; provided
further, however, that the right to terminate this Agreement under this Section
7.01(b)(i) shall not be available to any party whose breach of a representation
or warranty in this Agreement or whose action or failure to act has been a
principal cause of or resulted in the failure of the Merger to be consummated on
or before such date;

                                    (ii)  if any Restraint having any of the
effects set forth in Section 6.01(c) shall be in effect and shall have become
final and nonappealable; or

                                     (iii)  if the Stockholder Approval shall
not have been obtained at the Stockholders' Meeting duly convened therefor or at
any adjournment or postponement thereof;

                           (c)  by Parent (i) if the Company shall have breached
or failed to perform any of its representations, warranties, covenants or
agreements set forth in this Agreement, which breach or failure to perform
(A) would give rise to the failure of a condition set forth in Section 6.02(a)
or 6.02(b) and (B) is incapable of being cured by the Company within 30 calendar
days following receipt of written notice of such breach or failure to perform
from Parent or (ii) if any Restraint having the effects referred to in
clauses (i) through (iv) of Section 6.02(c) shall be in effect and shall have
become final and nonappealable;

                           (d)  by the Company, if Parent shall have breached or
failed to perform any of its representations, warranties, covenants or
agreements set forth in this Agreement, which breach or failure to perform
(A) would give rise to the failure of a condition set forth in Section 6.03(a)
or 6.03(b) and (B) is incapable of being cured by Parent within 30 calendar days
following receipt of written notice of such breach or failure to perform from
the Company;

                           (e) by Parent, in the event that prior to the
obtaining of the Stockholder Approval (i) a Company Adverse Recommendation
Change shall have occurred or (ii) the Board of Directors of the Company fails
to publicly reaffirm its recommendation of this Agreement, the Merger or the
other transactions contemplated by this Agreement within ten business days of
receipt of a written request by Parent to provide such reaffirmation following a
Takeover Proposal that is publicly announced or that otherwise becomes publicly
known; or

                            (f)  by the Company in accordance with Section
4.02(b).

                        SECTION 7.02.   Effect of Termination. In the event of
termination of this Agreement by either the Company or Parent as provided in
Section 7.01, this Agreement shall forthwith become void and have no effect,
without any liability or obligation on the part of Parent, Sub or the Company,
other than the provisions of Section 3.01(s), Section 3.02(f), the penultimate
sentence of Section 5.02, Section 5.06, this Section 7.02 and Article VIII,
which provisions shall survive such termination, and except to the extent that
such termination results from the wilful and material breach by a party of any
of its representations, warranties, covenants or agreements set forth in this
Agreement.

                         SECTION 7.03.  Amendment. This Agreement may be amended
by the parties hereto at any time before or after receipt of the Stockholder
Approval; provided, however, that after such approval has been obtained, there
shall be made no amendment that by law requires further approval by the
stockholders of the Company without such approval having been obtained. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties hereto.

                         SECTION 7.04.  Extension; Waiver. At any time prior to
the Effective Time, the parties may (a) extend the time for the performance of
any of the obligations or other acts of the other parties, (b) to the extent
permitted by law, waive any inaccuracies in the representations and warranties
contained herein or in any document delivered pursuant hereto or (c) subject to
the proviso to the first sentence of Section 7.03 and to the extent permitted by
law, waive compliance with any of the agreements or conditions 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 on behalf of such
party. The failure of any party to this Agreement to assert any of its rights
under this Agreement or otherwise shall not constitute a waiver of such rights.

                          SECTION 7.05  Procedure for Termination or Amendment.
A termination of this Agreement pursuant to Section 7.01 or an amendment of this
Agreement pursuant to Section 7.03 shall, in order to be effective, require, in
the case of Parent or the Company, action by its Board of Directors or, with
respect to any amendment of this Agreement pursuant to Section 7.03, the duly
authorized committee of its Board of Directors to the extent permitted by law.

ARTICLE VIII

General Provisions

                           SECTION 8.01.  Nonsurvival of Representations and
Warranties. None of the representations and warranties in this Agreement or in
any instrument delivered pursuant to this Agreement shall survive the Effective
Time. This Section 8.01 shall not limit any covenant or agreement of the parties
which by its terms contemplates performance after the Effective Time.

                         SECTION 8.02.  Notices. Except for notices that are
specifically required by the terms of this Agreement to be delivered orally, all
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be deemed given if delivered personally, telecopied (which
is confirmed) or sent by overnight courier (providing proof of delivery) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice):

if to Parent or Sub, to:

Overseas Shipholding Group, Inc.
666 Third Avenue
New York, NY 10017

Telecopy No.: (212) 578-1832

Attention: Myles R. Itken
                  Executive Vice President, Chief Financial Officer and
Treasurer

with a copy to:

Cravath, Swaine & Moore LLP
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019

Telecopy No.: (212) 474-3700

Attention: John T. Gaffney, Esq.

if to the Company, to:

Maritrans Inc.
Two Harbour Place
302 Knights Run Avenue
Suite 1200
Tampa, FL 33602

Telecopy No.: (813) 221-2769

Attention: Jonathan P. Whitworth
                  Chief Executive Officer

with a copy to:

Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103

Telecopy No.: (215) 963-5001

Attention: Brian C. Miner, Esq.

                       SECTION 8.03  Definitions. For purposes of this
Agreement:

                       (a)  an "Affiliate" of any person means another person
that directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with, such first person;

                       (b)  "Company Benefit Agreement" means (i) any
employment, deferred compensation, consulting, severance, change of control,
termination, indemnification, employee benefit, loan, stock repurchase or
similar Contract between the Company or any of its Subsidiaries, on the one
hand, and any Participant, on the other hand, or (ii) any Contract between the
Company or any of its Subsidiaries, on the one hand, and any Participant, on the
other hand, the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction involving the Company
of a nature contemplated by this Agreement.

                       (c)  "Knowledge" of any person that is not an individual
means, with respect to any matter in question, the actual knowledge of such
person's executive officers;

                       (d)  "Maritime Guideline" means any United States or
non-United States rule, code of practice, convention, protocol, guideline or
similar requirement or restriction concerning or relating to a Vessel, and to
which a Vessel is subject, imposed or published by any Governmental Entity, the
International Maritime Organization, such Vessel's classification society or the
insurer(s) of such Vessel;

                       (e)  "Material Adverse Change" or "Material Adverse
Effect" means any change, effect, event, occurrence, state of facts or
development which individually or in the aggregate (i) would reasonably be
expected to result in any change or effect that is materially adverse to the
business, financial condition, properties, assets, liabilities (contingent or
otherwise) or results of operations of the Company and its Subsidiaries, taken
as a whole, or (ii) would reasonably be expected to prevent or materially
impede, interfere with, hinder or delay the consummation by the Company of the
Merger or the other transactions contemplated by this Agreement; provided that
none of the following shall be deemed, either alone or in combination, to
constitute, and none of the following shall be taken into account in determining
whether there has been or will be, a Material Adverse Effect or a Material
Adverse Change: (A) any change, effect, event, occurrence, state of facts or
development attributable to the United States economy or securities markets in
general, (B) any change, effect, event, occurrence, state of facts or
development attributable to conditions affecting the shipping industry
generally, so long as the effects do not disproportionately impact the Company,
or (C) any effect resulting from the pendency or announcement of this Agreement
or the transactions contemplated by this Agreement;

                       (f)  "Other Antitrust Laws" mean the antitrust and
competition laws of all jurisdictions other than those of the United States and
any other similar applicable law.

                        (g)  "Permitted Liens" means (i) mechanics', carriers',
workmen's, repairmen's, maritime or other like Liens arising or incurred in the
ordinary course of business relating to obligations that are not delinquent or
that are being contested in good faith by the Company or any of its Subsidiaries
and for which the relevant party has established adequate reserves in accordance
with GAAP, (ii) Liens for taxes that are not due and payable or that may
thereafter be paid without interest or penalty, (iii) easements, covenants,
rights-of-way and other encumbrances or restrictions of record that,
individually or in the aggregate, do not materially impair, and would not
reasonably be expected to materially impair, the value or the continued use and
operation of the assets to which they relate, (iv) zoning, building and other
similar codes and regulations, and (v) Liens (other than Liens that secure
indebtedness) that, individually or in the aggregate, do not materially
interfere with, and would not reasonably be expected to materially interfere
with, the ability of the Company or any of its Subsidiaries to conduct their
respective businesses as currently conducted.

                      (h)  "person" means an individual, corporation,
partnership, limited liability company, joint venture, association, trust,
unincorporated organization or other entity;

                      (i)  a "Subsidiary" of any person means another person, an
amount of the voting securities, other voting rights or voting partnership
interests of which is sufficient to elect at least a majority of its board of
directors or other governing body (or, if there are no such voting interests,
50% or more of the equity interests of which) is owned directly or indirectly by
such first person; and

                      (j)  "Vessel" means a vessel owned or leased by the
Company or any Subsidiary of the Company, including tugs, barges, tankers and
articulated tug barge units.

                      SECTION 8.04.  Interpretation. When a reference is made in
this Agreement to an Article, a Section, Exhibit or Schedule, such reference
shall be to an Article of, a Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation". The words "hereof",
"herein" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement. References to "this Agreement" shall include the Company
Disclosure Schedule. All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein. The definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms and to the masculine as well as to the feminine and neuter genders of
such term. Any agreement, instrument or statute defined or referred to herein or
in any agreement or instrument that is referred to herein means such agreement,
instrument or statute as from time to time amended, modified or supplemented,
including (in the case of agreements or instruments) by waiver or consent and
(in the case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns.

                       SECTION 8.05.  Consents and Approvals. For any matter
under this Agreement requiring the consent or approval of any party to be valid
and binding on the parties hereto, such consent or approval must be in writing.

                       SECTION 8.06.  Counterparts. This Agreement may be
executed in one or more counterparts (including by facsimile), all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties.

                       SECTION 8.07.  Entire Agreement; No Third-Party
Beneficiaries. This Agreement and the Confidentiality Agreement (a) constitute
the entire agreement, and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter of
this Agreement and the Confidentiality Agreement and (b) except for the
provisions of Article II and Section 5.05, are not intended to and do not confer
upon any person other than the parties any legal or equitable rights or
remedies.

                        SECTION 8.08. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
DELAWARE, REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

                         SECTION 8.09.  Assignment. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned, in
whole or in part, by operation of law or otherwise by any of the parties without
the prior written consent of the other parties, and any assignment without such
consent shall be null and void, except that Sub, upon prior written notice to
the Company, may assign, in its sole discretion, any of or all its rights,
interests and obligations under this Agreement to Parent or to any direct or
indirect wholly owned Subsidiary of Parent, but no such assignment shall relieve
Parent or Sub of any of its obligations hereunder. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and assigns.

                       SECTION 8.10.  Specific Enforcement; Consent to
Jurisdiction. The parties agree that irreparable damage would occur and that the
parties would not have any adequate remedy at law in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. It is accordingly agreed that the
parties shall be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of this
Agreement in any Federal court located in the State of Delaware or in any state
court in the State of Delaware, this being in addition to any other remedy to
which they are entitled at law or in equity. In addition, each of the parties
hereto (a) consents to submit itself to the personal jurisdiction of any Federal
court located in the State of Delaware or of any state court located in the
State of Delaware in the event any dispute arises out of this Agreement or the
transactions contemplated by this Agreement, (b) agrees that it will not attempt
to deny or defeat such personal jurisdiction by motion or other request for
leave from any such court and (c) agrees that it will not bring any action
relating to this Agreement or the transactions contemplated by this Agreement in
any court other than a Federal court located in the State of Delaware or a state
court located in the State of Delaware.

                        SECTION 8.11. Severability. If any term or other
provision of this Agreement is invalid, illegal or incapable of being enforced
by any rule of law or public policy, all other conditions and provisions of this
Agreement shall nevertheless remain in full force and effect. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated hereby are fulfilled to the
extent possible.

                        SECTION 8.12.  Waiver of Jury Trial. Each party hereto
hereby waives, to the fullest extent permitted by applicable law, any right it
may have to a trial by jury in respect of any suit, action or other proceeding
arising out of this Agreement or the transactions contemplated hereby. Each
party hereto (a) certifies that no representative, agent or attorney of any
other party has represented, expressly or otherwise, that such party would not,
in the event of any action, suit or proceeding, seek to enforce the foregoing
waiver and (b) acknowledges that it and the other parties hereto have been
induced to enter into this Agreement by, among other things, the mutual waiver
and certifications in this Section 8.12.

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

Overseas Shipholding Group, Inc.,

By /s/Morten Arntzen

     

Name: Morten Arntzen

 

Title:  CEO & President

 

 

 

MARLIN ACQUISITION CORPORATION,

By /s/Morten Arntzen

     

Name:  Morten Arntzen

 

Title:    President

 

 

MARITRANS INC.,

By /s/Jonathan P. Whitworth

     

Name:  Jonathan P. Whitworth

 

Title:   CEO

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Index of Defined Terms

Term

409A
Authorities............................................................Section
3.01(l)

Acquisition
Agreement....................................................Section 4.02(b)

Actions.......................................................................Section 4.01(d)

Affiliate......................................................................Section 8.03(a)

Agreement...........................................................................Preamble

AJCA..........................................................................Section
3.01(l)

Appraisal
Shares............................................................Section 2.01(d)

Certificate....................................................................Section 2.01(c)

Certificate of
Merger..........................................................Section 1.03

Closing..........................................................................Section 1.02

Closing
Date....................................................................Section 1.02

Code..........................................................................Section 2.02(h)

Commonly Controlled
Entity.............................................Section 3.01(k)

Company............................................................................Preamble

Company Adverse Recommendation Change...........................Section 4.02(b)

Company Benefit
Agreement.............................................Section 8.03(b)

Company Benefit
Plans....................................................Section 3.01(k)

Company
By-laws..........................................................Section 3.01(a)

Company
Certificate.......................................................Section 1.05(a)

Company Common
Stock........................................................Preamble

Company Disclosure
Schedule..............................................Section 3.01

Company Pension
Plan.....................................................Section 3.01(l)

Company Preferred Stock..................................................Section
3.01(c)

Company Restricted Stock................................................Section
3.01(c)

Company SEC
Documents................................................Section 3.01(e)

Company Stock
Options...................................................Section 3.01(c)

Company Stock
Plans......................................................Section 3.01(c)

Confidentiality
Agreement....................................................Section 5.02

Continuing Employees.....................................................Section
5.09(a)

Contract......................................................................Section 3.01(d)

DGCL............................................................................Section 1.01

DOJ..............................................................................Section 5.03

Effective
Time..................................................................Section 1.03

Environmental
Laws........................................................Section 3.01(j)

ERISA........................................................................Section 3.01(j)

Exchange
Act...............................................................Section 3.01(d)

Exchange
Fund..............................................................Section 2.02(a)

Filed Company SEC
Documents..........................................Section 3.01(e)

FTC..............................................................................Section 5.03

GAAP........................................................................Section 3.01(e)

Governmental
Entity.......................................................Section 3.01(d)

Hazardous
Materials........................................................Section 3.01(j)

HSR
Act.....................................................................Section 3.01(d)

Intellectual Property
Rights...............................................Section 3.01(p)

IRS............................................................................Section 3.01(l)

Knowledge...................................................................Section 8.03(c)

Leases........................................................................Section 3.01(o)

Leased Real
Property......................................................Section 3.01(o)

Legal
Provisions.............................................................Section 3.01(j)

Liens..........................................................................Section 3.01(b)

Maritime
Guideline.........................................................Section 8.03(d)

Material Adverse
Change..................................................Section 8.03(e)

Material Adverse
Effect...................................................Section 8.03(e)

Material
Contract............................................................Section 3.01(i)

Merger..............................................................................Preamble

Merger
Consideration......................................................Section 2.01(c)

Nonqualified Deferred Compensation Plan..............................Section
3.01(l)

Parent................................................................................Preamble

Parent Disclosure
Schedule...................................................Section 3.02

Participant...................................................................Section
3.01(k)

Paying
Agent................................................................Section 2.02(a)

Permits........................................................................Section 3.01(j)

Permitted
Liens..............................................................Section 8.03(f)

Person........................................................................Section 8.03(g)

Post-Signing
Returns.......................................................Section 4.01(d)

Primary Company
Executives............................................Section 3.01(m)

Proxy
Statement............................................................Section 3.01(d)

Representatives.............................................................Section 4.02(a)

Release........................................................................Section 3.01(j)

Restraints.....................................................................Section 6.01(c)

Rights.........................................................................Section 3.01(c)

Rights
Agreement...........................................................Section 3.01(c)

SEC...................................................................................................Section 3.01(d)

Section 203........................................................................................Section 3.01(r)

Section 262..................................................................Section 2.01(d)

Securities
Act................................................................Section 3.01(e)

SOX...........................................................................Section
3.01(e)

Stockholder
Approval......................................................Section 3.01(q)

Stockholders'
Meeting.....................................................Section 5.01(b)

Sub..................................................................................Preamble

Subsidiary...................................................................Section 8.03(h)

Superior
Proposal...........................................................Section 4.02(a)

Surviving
Corporation.........................................................Section 1.01

Takeover
Proposal..........................................................Section 4.02(a)

Taxes.........................................................................Section 3.01(n)

taxing
authority.............................................................Section 3.01(n)

tax
returns....................................................................Section 3.01(n)

Termination
Fee............................................................Section 5.06(b)

Vessel........................................................................Section
8.03(i)

 

 

 

 

 

 

EXHIBIT A
TO THE MERGER AGREEMENT

Restated Certificate of Incorporation
of the Surviving Corporation

                          FIRST: The name of the corporation (hereinafter called
the "Corporation") is Maritrans Inc.

                          SECOND: The address, including street, number, city
and county, of the registered office of the Corporation in the State of Delaware
is Corporate Trust Center, 1209 Orange Street, Wilmington, Delaware 19801,
County of New Castle; and the name of the registered agent of the Corporation in
the State of Delaware at such address is The Corporation Trust Company.

                         THIRD: The purpose of the Corporation is to engage in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.

                         FOURTH: The aggregate number of shares which the
Corporation shall have authority to issue is 1,000 shares of Common Stock, par
value $0.01 per share.

                         FIFTH: In furtherance and not in limitation of the
powers conferred upon it by law, the Board of Directors of the Corporation is
expressly authorized to adopt, amend or repeal the By-laws of the Corporation.

                         SIXTH: To the fullest extent permitted by the General
Corporation Law of the State of Delaware as it now exists and as it may
hereafter be amended, no director or officer of the Corporation shall be
personally liable to the Corporation or any of its stockholders for monetary
damages for breach of fiduciary duty as a director or officer; provided,
however, that nothing contained in this Article SIXTH shall eliminate or limit
the liability of a director or officer (i) for any breach of the director's or
officer's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the General
Corporation Law of the State of Delaware or (iv) for any transaction from which
the director or officer derived an improper personal benefit. No amendment to or
repeal of this Article SIXTH shall apply to or have any effect on the liability
or alleged liability of any director or officer of the Corporation for or with
respect to any acts or omissions of such director or officer occurring prior to
such amendment or repeal.

                           SEVENTH: The Corporation shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said Section from and
against any and all of the expenses, liabilities or other matters referred to in
or covered by said Section. Such indemnification shall be mandatory and not
discretionary. The indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any by-law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his or her official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person. Any
repeal or modification of this Article SEVENTH shall not adversely affect any
right to indemnification of any persons existing at the time of such repeal or
modification with respect to any matter occurring prior to such repeal or
modification.

                       The Corporation shall to the fullest extent permitted by
the General Corporation Law of the State of Delaware advance all costs and
expenses (including, without limitation, attorneys' fees and expenses) incurred
by any director or officer within 15 days of the presentation of same to the
Corporation, with respect to any one or more actions, suits or proceedings,
whether civil, criminal, administrative or investigative, so long as the
Corporation receives from the director or officer an unsecured undertaking to
repay such expenses if it shall ultimately be determined that such director or
officer is not entitled to be indemnified by the Corporation under the General
Corporation Law of the State of Delaware. Such obligation to advance costs and
expenses shall be mandatory, and not discretionary, and shall include, without
limitation, costs and expenses incurred in asserting affirmative defenses,
counterclaims and cross claims. Such undertaking to repay may, if first
requested in writing by the applicable director or officer, be on behalf of
(rather than by) such director or officer, provided that in such case the
Corporation shall have the right to approve the party making such undertaking.

                            EIGHTH: Unless and except to the extent that the
By-laws of the Corporation shall so require, the election of directors of the
Corporation need not be by written ballot.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXHIBIT B
TO THE MERGER AGREEMENT

 

Form of Officer's Certificate