Document:

Unassociated Document

    
      

    

     

    FOURTH
      AMENDMENT TO CREDIT AGREEMENT

     

    Parties:

     

    
      	
               

            	
              “CoBank”:

            	
              CoBank,
                ACB

            

    

    
      	
               

            	
              5500
                South Quebec Street

            

    

    
      	
               

            	
              Greenwood
                Village, Colorado 80111

            

    

    

    
      	
               

            	
              “Borrower”:

            	
              Pilgrim’s
                Pride Corporation

            

    

    
      	
               

            	
              4845
                US Highway 271 N.

            

    

    
      	
               

            	
              Pittsburg,
                Texas 75686

            

    

     

    
      
        	
                 

              	
                
                  “Syndication
                    Parties”:

                

              	
                
                  Whose
                    signatures appear
                    below

                

              

      

       

    

    
      	
              Execution
                Date:

            	
              July
                3, 2007

            

    

     

     

    Recitals:

     

    A.           
      CoBank (in its capacity as the Administrative Agent (“Agent”),
      the Syndication Parties signatory thereto, and Borrower have entered into that
      certain 2006 Amended and Restated Credit Agreement (Convertible Revolving Loan
      and Term Loan) dated as of September 21, 2006, that certain First Amendment
      to
      Credit Agreement dated as of December 13, 2006, that certain Second Amendment
      to
      Credit Agreement dated as of January 4, 2007, and that certain Third Amendment
      to Credit Agreement dated as of February 7, 2007 (as so amended and as amended,
      modified, or supplemented from time to time in the future, the “Credit
      Agreement”) pursuant to which the Syndication Parties, and any entity
      which becomes a Syndication Party on or after September 21, 2006, have extended
      certain credit facilities to Borrower under the terms and conditions set forth
      in the Credit Agreement.

     

    B.           
      Borrower has requested that the Agent and the Syndication Parties modify certain
      provisions of the Credit Agreement, which the Agent and the Syndication Parties
      are willing to do under the terms and conditions as set forth in this Fourth
      Amendment to Credit Agreement (“Fourth
      Amendment”).

     

     

    Agreement:

     

    Now,
      therefore, in consideration of the mutual covenants and agreements herein
      contained and other good and valuable consideration, the receipt and adequacy
      of
      which are hereby acknowledged, the parties hereto hereby agree as
      follows:

     

    1.            
      Amendments to Credit Agreement.  The Credit Agreement
      is amended as of the Effective Date as follows:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    1.1           Sections
      1.56 and 1.57 are amended to read as follows and the definitional references
      set
      forth below are added to the end of Article 1:

     

    1.56          GK
      Fixed Assets:  (a) until the date, subsequent to the Control
      Acquisition Date, that Borrower provides to the Administrative Agent the
      schedule of consolidated fixed assets of Gold Kist pursuant to Section 10.20
      hereof, means the consolidated fixed assets of Gold Kist as reflected on the
      quarter-end financials of Gold Kist that are publicly available for its fiscal
      quarter ending immediately preceding the Closing Date; and (b) on and after
      the
      GK Lien Date, means the consolidated fixed assets of Gold Kist as reflected
      on
      the schedule thereof which Borrower provides to the Administrative Agent
      pursuant to Section 10.20 hereof.  The term “GK Fixed Assets” may, at
      Borrower’s election, and upon satisfaction of the applicable conditions and
      requirements set forth herein, include leasehold interests in one or more of
      the
      facilities described on Exhibit 1.56 hereto, including the real property
      on which such facility is located and the equipment located on and/or used
      in
      connection with such facility (each a “GK Leasehold Facility”)
      owned by Pilgrim’s Pride Corporation of Georgia, Inc., a Delaware corporation
      (“PPC Georgia”), which PPC Georgia acquired as the successor in
      interest, by merger, to Gold Kist, where Borrower is the lessee under a recorded
      lease from PPC Georgia in a form and on terms approved in writing by the
      Administrative Agent (“Approved GK Lease”) and (1) calling for
      a rental payment equal to or in excess of $100,000.00 per annum, or (2) which
      has an Appraised Value, as demonstrated in the Appraisal required pursuant
      to
      clause (vi) below, of no less than $2,000,000.00; provided that, in each case,
      Borrower provides to the Administrative Agent, (i) a leasehold mortgage or
      deed
      of trust substantially in form and substance satisfactory to the Administrative
      Agent, granting a lien and mortgage on such leasehold interest to secure
      Borrower’s obligations hereunder, (ii) a Title Policy and survey satisfying the
      requirements set forth in clause (a) of Subsection 10.21.2 (modified as
      necessary to reflect a leasehold, rather than fee, interest), (iii) a copy
      of
      the executed Approved GK Lease pursuant to which Borrower derives its leasehold
      interest, (iv) a lessor consent in form and content satisfactory to the
      Administrative Agent and containing such estoppels of the lessor of the
      leasehold estate as the Administrative Agent shall require; (v) with respect
      to
      the parcel of property that is the subject of the leasehold interest, (A) a
      Phase I environmental report, satisfactory in form and content to the
      Administrative Agent, and (B) such Phase II environmental report, or proof
      satisfactory to the Administrative Agent that Borrower has taken, or has caused
      PPC Georgia to take, such remedial or other action as the Administrative Agent
      may reasonably require, in either case, based on the contents of such
      environmental reports; and (vi) an Appraisal based on the leasehold interest
      only.

     

    1.57          GK
      Lien Date:  means August 8, 2007.

     

    
      	
              Approved
                GK Lease

            	
              Section
                1.56

            
	
              GK
                Leasehold Facility

            	
              Section
                1.56

            
	
              PPC
                Georgia

            	
              Section
                1.56

            
	
              Truck
                Maintenance Facilities

            	
              Section
                11.4

            

    

    

    1.2           Subsection
      10.21.2 is amended to read as follows:

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    10.21.2    
      Requirements Regarding Real Property Collateral.  With respect
      to all GK Collateral that constitutes an interest in real property (including
      a
      leasehold interest represented by an Approved GK Lease and where the
      requirements of Section 1.56 hereof have been satisfied), (a) a mortgagees’
title insurance policy (Standard Texas Mortgagees Policy Form with respect
      to GK
      Fixed Assets located in the State of Texas, and Standard ALTA form with respect
      to GK Fixed Assets located in states other than Texas) from an insurer
      acceptable to the Administrative Agent insuring the lien in favor of the
      Administrative Agent, on behalf of the Syndication Parties, as a first priority
      lien on each such parcel or leasehold interest, as applicable, subject only
      to
      Permitted Encumbrances, and (i) in such amount as the Administrative Agent
      shall
      require, (ii) deleting the standard printed exceptions (including exceptions
      for
      mechanics liens and exceptions based on lack of adequate survey) and the gap
      exception, (iii) containing only such exceptions to title as are reasonably
      acceptable to the Administrative Agent, (iv) providing access coverage, and
      (v)
      containing such other endorsements as the Administrative Agent may reasonably
      require (but in any event including a revolving credit endorsement); (b) a
      survey, which survey, the certifications thereon, and all information contained
      therein, shall be acceptable to the Administrative Agent, and shall contain
      a
      legal description and shall, at a minimum, show the location of all structures,
      visible utilities, fences, hedges, or walls on the parcel and within 5 feet
      of
      all boundaries thereof, any conflicting boundary evidence or visible
      encroachments, and all easements, underground utilities, and tunnels for which
      properly recorded evidence is available; (c) an Appraisal; and (d) (i) Phase
      I
      environmental reports, satisfactory in form and content to the Administrative
      Agent, on all parcels of real property which are included within the GK
      Collateral, and (ii) such Phase II environmental reports, or proof satisfactory
      to the Administrative Agent that Borrower has taken such remedial or other
      action as the Administrative Agent may reasonably require, in either case,
      based
      on the contents of such environmental reports.

    

    1.3           A
      new clause (d) is added to Section 11.4 so that said Section reads as
      follows:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    11.4          Sale
      of Collateral.  Borrower shall not (nor shall it permit any of its
      Subsidiaries to) sell, convey, assign, lease or otherwise transfer or
      dispose of, voluntarily, by operation of law or otherwise (collectively
“Disposition”), any of the Collateral except: (a) the
      Disposition of Collateral in the ordinary course of business, and which are
      either replaced or are no longer necessary or useful for the business conducted
      at the facilities which are included within the Collateral; (b) without
      duplication of clause (a) or clause (c), the Disposition in any calendar year,
      in one or more events or transactions, of Collateral with a book value in the
      aggregate of up to $10,000,000.00; (c) the Disposition of Collateral utilized
      at
      a facility with respect to which there has been a Shut Down and as to which
      Borrower has elected to proceed under the provisions of Section 10.15(b); (d)
      the lease by Borrower or PPC Georgia to PPC Transportation Company, wholly
      owned
      Subsidiary of Borrower, or such other wholly-owned Subsidiary of Borrower whose
      primary business is the ownership and operation of over-the-road vehicles and
      trailers, truck shop and vehicle facilities and other assets incident thereto
      (each such Person a “Transportation Subsidiary”) of one or more
      of the truck shop and vehicle maintenance facilities described on Exhibit
      11.4 hereto or other such facilities identified by Borrower from time to
      time and approved by Administrative Agent, which approval shall not be
      unreasonably withheld (“Truck Maintenance Facilities”) and the
      equipment located on and/or used in connection with such facilities and as
      such
      equipment is described in the lease agreement entered into with respect to
      each
      such Truck Maintenance Facility; and (e) the lease by PPC Georgia to Borrower
      of
      one or more GK Leasehold Facilities; provided that the following
      conditions are met, as applicable: (v) in the case of clause (c), either (i)
      (A)
      the book value of such Collateral is $20,000,000.00 or less and the
      Administrative Agent has agreed on behalf of the Syndication Parties, in advance
      of such sale, to release its lien thereon, and (B) the aggregate book
      value of all Collateral as to which the Administrative Agent has released,
      or is
      being asked to release, its lien in any calendar year pursuant to clause (c)
      of
      this Section (excluding liens released upon the written authorization of the
      Required Lenders, as provided in clause (v)(ii) of this Section) shall not
      exceed $30,000,000.00, or (ii) (A) the book value of such Collateral is greater
      than $20,000,000.00 and/or (B) the aggregate book value of such Collateral
      as to
      which the Administrative Agent has released, or is being asked to release,
      its
      lien in any calendar year pursuant to clause (c) of this Section is in excess
      of
      $30,000,000.00 and, (C) in either case (v)(ii)(A) or (v)(ii)(B), the Required
      Lenders have provided written authorization to the Administrative Agent, in
      advance of such sale, to release its lien thereon on behalf of the Syndication
      Parties; (w) in the case of either clause (b) or clause (c), (i) such
      Disposition of Collateral shall not cause or give rise to a Potential Default
      or
      an Event of Default, and (ii) at the time of any such Disposition of Collateral
      no Event of Default shall have occurred and be continuing; (x) with respect
      to
      clauses (a), (b), and (c), the full Appraised Value of such Collateral shall
      be
      removed at the closing of the Disposition from the calculation of the Available
      Amount and no later than ten (10) days after closing such Disposition, Borrower
      shall furnish the Administrative Agent with a revised Available Amount Report
      with the entire Appraised Value of the Collateral subject to such Disposition
      removed from such Available Amount Report; (y) with respect to clause (d),
      such
      leases are on terms and for a rental amount acceptable to the Administrative
      Agent and Borrower takes such action as the Administrative Agent may require
      in
      order to create and/or perfect a security interest in Borrower’s rights under
      such lease; and (z) with respect to clause (e), each of the requirements of
      Section 1.56 hereof, including, by incorporation, the requirements of Subsection
      10.21.2 hereof, are satisfied.  At the time of furnishing the
      Administrative Agent with a revised Available Amount Report, Borrower shall
      make
      the payment, if any, that would be required under Section 5.6(d) hereof if
      the
      aggregate outstanding principal balance owing under the Revolving Loan
      (including the Converted Loans) exceeds the Available Amount as calculated
      without such Collateral being included.

     

    1.4           A
      new clause (f) is added to Section 11.6 so that said Section reads as
      follows:

     

    11.6          Loans.  Borrower
      shall not (nor shall it permit any of its Subsidiaries to) lend or advance
      money, credit, or property to any Person, except for:

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (a)           loans
      between Subsidiaries or between Borrower and Subsidiaries, in each case in
      the
      ordinary course and pursuant to the reasonable requirements of Borrower’s
      business and consistent with demonstratable past practices;

     

    (b)           trade
      credit extended in the ordinary course of business;

     

    (c)           loans
      and advances to employees and contract growers (other than executive officers
      and directors of the Borrower or its Subsidiaries) for reasonable expenses
      incurred in the ordinary course of business and made on an arms length
      basis;

     

    (d)           loans
      and advances to officers and employees of Borrower and its Subsidiaries made
      in
      connection with such officer’s or employee’s housing related expenses or loans
      associated with the procurement or sale of personal residences or necessary
      for
      the moving of key personnel, in an aggregate amount outstanding at any time
      not
      to exceed $6,000,000.00;

     

    (e)           loans
      and advances to contract growers in an aggregate amount at any time not to
      exceed $50,000,000.00; and

     

    (f)           loans
      to a Person in which Borrower has an equity interest and with which Borrower
      is
      doing, or intends to do, business; provided that the unpaid balance of such
      loans in the aggregate, when aggregated with all Investments made pursuant
      to
      clause (s) of Section 11.8 hereof, including Investments in such Person, does
      not at any time exceed $75,000,000.00.

     

    1.5           Clause
      (s) of Section 11.8 is amended to read as follows:

     

    (s)  Investments
      not covered by clauses (a) through (r) above, in an amount which, at any time,
      when aggregated with the outstanding balance of all loans made pursuant to
      clause (f) of Section 11.6 hereof, do not to exceed an aggregate of
      $75,000,000.00.

     

    1.6           A
      new Exhibit 1.56 is added in the form of Exhibit 1.56 hereto, and a new
      Exhibit 11.4 is added in the form of Exhibit 11.4 hereto.

     

    2.           Conditions
      to Effectiveness of this Fourth Amendment.  The effectiveness
      of this Fourth Amendment is subject to satisfaction, in the Administrative
      Agent’s sole discretion, of each of the following conditions precedent (the date
      on which all such conditions precedent are so satisfied shall be the
“Effective Date”):

     

    2.1           Delivery
      of Executed Loan Documents.  Borrower shall have delivered to
      the Administrative Agent, for the benefit of, and for delivery to, the
      Administrative Agent and the Syndication Parties, the following document, duly
      executed by Borrower:

     

    A.           This
      Fourth Amendment

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    2.2           Syndication
      Parties Execution; Voting Participant Approval.  The
      Administrative Agent shall have received (a) written approval of this Fourth
      Amendment by at least the Required Lenders (including Voting Participants);
      and
      (b) a copy of this Fourth Amendment executed by the Syndication Parties as
      required.

     

    2.3           Representations
      and Warranties.  The representations and warranties of
      Borrower in the Credit Agreement shall be true and correct in all material
      respects on and as of the Effective Date as though made on and as of such
      date.

     

    2.4           No
      Event of Default.  No Event of Default shall have occurred
      and be continuing under the Credit Agreement as of the Effective Date of this
      Fourth Amendment.

     

    2.5           Payment
      of Fees and Expenses.  Borrower shall have paid the
      Administrative Agent, by wire transfer of immediately available federal funds
      (a) all fees presently due under the Credit Agreement (as amended by this Fourth
      Amendment); and (b) all expenses owing as of the Effective Date pursuant to
      Section 15.1 of the Credit Agreement.

     

    3.           Amendment
      to Security Documents.

     

    3.1           Real
      Estate Mortgage.  To the extent that any real estate mortgage
      or other Security Document executed by Borrower in connection with the Credit
      Agreement contains a provision prohibiting Borrower from leasing any part of
      the
      Mortgaged Property as defined therein, or making such leasing an event of
      default, such real estate mortgage or other Security Document shall be deemed
      to
      be amended to allow the lease by Borrower or PPC Georgia to the Transportation
      Subsidiary (as defined herein) of one or more of the Truck Maintenance
      Facilities (as defined herein) and the equipment located on and/or used in
      connection with such facilities and as such equipment is described in the lease
      agreement entered into with respect to each such facilities

     

    4.           General
      Provisions.

     

    4.1           No
      Other Modifications.  The Credit Agreement, as expressly
      modified herein, shall continue in full force and effect and be binding upon
      the
      parties thereto.

     

    4.2           Successors
      and Assigns.  This Fourth Amendment shall be binding upon and
      inure to the benefit of Borrower, Agent, and the Syndication Parties, and their
      respective successors and assigns, except that Borrower may not assign or
      transfer its rights or obligations hereunder without the prior written consent
      of all the Syndication Parties.

     

    4.3           Definitions.  Capitalized
      terms used, but not defined, in this Fourth Amendment shall have the meaning
      set
      forth in the Credit Agreement.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    4.4           Severability.  Should
      any provision of this Fourth Amendment be deemed unlawful or unenforceable,
      said
      provision shall be deemed several and apart from all other provisions of this
      Fourth Amendment and all remaining provision of this Fourth Amendment shall
      be
      fully enforceable.

     

    4.5           Governing
      Law.  To the extent not governed by federal law, this Fourth
      Amendment and the rights and obligations of the parties hereto shall be governed
      by, interpreted and enforced in accordance with the laws of the State of
      Colorado.

     

    4.6           Headings.  The
      captions or headings in this Fourth Amendment are for convenience only and
      in no
      way define, limit or describe the scope or intent of any provision of this
      Fourth Amendment.

     

    4.7           Counterparts.  This
      Fourth Amendment may be executed by the parties hereto in separate counterparts,
      each of which, when so executed and delivered, shall be an original, but all
      such counterparts shall together constitute one and the same
      instrument.  Each counterpart may consist of a number of copies
      hereof, each signed by less than all, but together signed by all, of the parties
      hereto.  Copies of documents or signature pages bearing original
      signatures, and executed documents or signature pages delivered by a party
      by
      telefax, facsimile, or e-mail transmission of an Adobe® file format document
      (also known as a PDF file) shall, in each such instance, be deemed to be, and
      shall constitute and be treated as, an original signed document or counterpart,
      as applicable.  Any party delivering an executed counterpart of this
      Fourth Amendment by telefax, facsimile, or e-mail transmission of an Adobe® file
      format document also shall deliver an original executed counterpart of this
      Fourth Amendment, but the failure to deliver an original executed counterpart
      shall not affect the validity, enforceability, and binding effect of this Fourth
      Amendment.

     

    [Signatures
      to follow on next page.]

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Fourth Amendment to be
      executed as of the Effective Date.

     

    
      	
              ADMINISTRATIVE
                AGENT:

            	 	
              CoBank,
                ACB 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Jim
                Stutzman

            	 
	 	 	
              Title:

            	
              Vice
                President

            	 
	 	 	 	 	 
	 	 	 	 	 
	
              BORROWER:

            	 	
              Pilgrim’s
                Pride Corporation 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Richard
                A. Cogdill

            	 
	 	 	
              Title:

            	
              Exe.
                VP, CFO, Sec & Treas.

            	 
	 	 	 	 	 
	 	 	 	 	 
	
              SYNDICATION
                PARTIES:

            	 	
              CoBank,
                ACB 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Jim
                Stutzman

            	 
	 	 	
              Title:

            	
              Vice
                President

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              Agriland,
                FCS 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Roger
                Brist

            	 
	 	 	
              Title:

            	
              Chief
                Executive Officer

            	 
	 	 	 	 	 
	 	 	
              Deere
                Credit, Inc. 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Raymond
                L. Murphey

            	 
	 	 	
              Title:

            	
              Senior
                Account Credit Manager

            	 

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              Bank
                of the West 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Lee
                Rosin

            	 
	 	 	
              Title:

            	
              Regional
                Vice President

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              John
                Hancock Life Insurance Company 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Kenneth
                L. Warlick

            	 
	 	 	
              Title:

            	
              Managing
                Director

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              The
                Variable Annuity Life Insurance Company 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Lochlan
                O. McNew

            	 
	 	 	
              Title:

            	
              Managing
                Director

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              The
                United States Life Insurance Company in the City of New
                York 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Lochlan
                O. McNew

            	 
	 	 	
              Title:

            	
              Managing
                Director

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              Merit
                Life Insurance Co. 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Lochlan
                O. McNew

            	 
	 	 	
              Title:

            	
              Managing
                Director

            	 

    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              American
                General Assurance Company 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Lochlan
                O. McNew

            	 
	 	 	
              Title:

            	
              Managing
                Director

            	 
	 	 	 	 	 
	 	 	
              AIG
                International Group, Inc. 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Lochlan
                O. McNew

            	 
	 	 	
              Title:

            	
              Managing
                Director

            	 
	 	 	 	 	 
	 	 	
              AIG
                Annuity Insurance Company 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Lochlan
                O. McNew

            	 
	 	 	
              Title:

            	
              Managing
                Director

            	 
	 	 	 	 	 
	 	 	
              Transamerica
                Life Insurance Company 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	
              Name:

            	
              Thomas
                L. Nordstrom

            	 
	 	 	
              Title:

            	
              Vice
                President

            	 
	 	 	 	 	 
	 	 	
              The
                CIT Group/Business Credit, Inc. 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	   
              	 
	 	 	
              Name:

            	
              Mike
                Ryno

            	 
	 	 	
              Title:

            	
              Vice
                President

            	 
	 	 	 	 	 
	 	 	
              Metropolitan
                Life Insurance Company 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	   
              	 
	 	 	
              Name:

            	
              Steven
                D. Craig

            	 
	 	 	
              Title:

            	
              Director

            	 

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              Cooperatieve
                Centrale Raiffeisen-Boerenleenbank B.A., “Rabobank-Nederland” New York
                Branch 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	   
              	 
	 	 	
              Name:

            	  
              	 
	 	 	
              Title:

            	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              Farm
                Credit Services of America, PCA 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	   
              	 
	 	 	
              Name:

            	  
              	 
	 	 	
              Title:

            	  
              	 

    

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    CREDIT
      AGREEMENT

    EXHIBIT
      1.56

    

    (GK
      Leasehold Facilities)

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    CREDIT
      AGREEMENT

    EXHIBIT
      11.4

    

    (Truck
      Maintenance Facilities)

     

     

     13ex10_1.htm

    
      
        

      

    

    Exhibit
      10.1

     

    EXECUTION
      COPY

     

    
      

       

      

       
        
          

        

      

      

    

    
      AGREEMENT
        AND PLAN OF MERGER

       

      Dated
        as of July 30, 2007

       

      among

       

      MAST
        ACQUISITION LTD.,

       

      MAST
        MERGER SUB CORP.

       

      and

       

      MC
        SHIPPING INC.

       
        
          

        

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    TABLE
      OF CONTENTS

     

    
      	 	 	
              Page

            
	 	 	 
	
              ARTICLE
                I THE MERGER 

            	
              1

            
	 	 
	
              SECTION
                1.1

            	
              The
                Merger

            	
              1

            
	
              SECTION
                1.2

            	
              Closing

            	
              2

            
	
              SECTION
                1.3

            	
              Effective
                Time

            	
              2

            
	
              SECTION
                1.4

            	
              Effects
                of the Merger

            	
              2

            
	
              SECTION
                1.5

            	
              Articles
                of Incorporation and Bylaws of the Surviving Corporation

            	
              2

            
	
              SECTION
                1.6

            	
              Directors
                and Officers of the Surviving Corporation

            	
              2

            
	
              SECTION
                1.7

            	
              Conversion
                of Securities

            	
              3

            
	
              SECTION
                1.8

            	
              Exchange
                of Certificates

            	
              3

            
	
              SECTION
                1.9

            	
              Appraisal
                Rights

            	
              5

            
	
               

            	 	
               

            
	
              ARTICLE
                II REPRESENTATIONS AND WARRANTIES OF THE COMPANY 

            	
              6

            
	 	 	
               

            
	
              SECTION
                2.1

            	
              Organization
                and Standing

            	
              6

            
	
              SECTION
                2.2

            	
              Capitalization

            	
              7

            
	
              SECTION
                2.3

            	
              Authority;
                Noncontravention; Voting Requirements

            	
              8

            
	
              SECTION
                2.4

            	
              Governmental
                Approvals

            	
              9

            
	
              SECTION
                2.5

            	
              Company
                SEC Documents; Financial Statements; Undisclosed
                Liabilities

            	
              9

            
	
              SECTION
                2.6

            	
              Absence
                of Certain Changes

            	
              11

            
	
              SECTION
                2.7

            	
              Legal
                Proceedings

            	
              11

            
	
              SECTION
                2.8

            	
              Compliance
                With Laws; Permits

            	
              11

            
	
              SECTION
                2.9

            	
              Proxy
                Statement

            	
              12

            
	
              SECTION
                2.10

            	
              Tax
                Matters

            	
              12

            
	
              SECTION
                2.11

            	
              Employee
                Benefits and Labor Matters

            	
              13

            
	
              SECTION
                2.12

            	
              Contracts

            	
              15

            
	
              SECTION
                2.13

            	
              Real
                Estate; Environmental Matters

            	
              16

            
	
              SECTION
                2.14

            	
              Intellectual
                Property

            	
              17

            
	
              SECTION
                2.15

            	
              Insurance

            	
              18

            
	
              SECTION
                2.16

            	
              Vessels

            	
              18

            
	
              SECTION
                2.17

            	
              Leases
                of Ships and Ship Charters

            	
              19

            
	
              SECTION
                2.18

            	
              Certain
                Business Relationships with Affiliates

            	
              19

            
	
              SECTION
                2.19

            	
              Opinion
                of Financial Advisor

            	
              19

            
	
              SECTION
                2.20

            	
              Brokers
                and Other Advisors

            	
              20

            
	
              SECTION
                2.21

            	
              Management
                Consideration

            	
              20

            
	
              SECTION
                2.22

            	
              No
                Other Representations or Warranties

            	
              20

            

    

     

    
      
        
        

      

      
        i

        
          

        

      

      
        
        

      

    

     

    
      	
              ARTICLE
                III REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB 

            	
              20

            
	
               

            	 	
               

            
	
              SECTION
                3.1

            	
              Organization
                and Standing

            	
              20

            
	
              SECTION
                3.2

            	
              Authority;
                Noncontravention

            	
              20

            
	
              SECTION
                3.3

            	
              Governmental
                Approvals

            	
              21

            
	
              SECTION
                3.4

            	
              Information
                Supplied

            	
              21

            
	
              SECTION
                3.5

            	
              Ownership
                and Operations of Merger Sub

            	
              22

            
	
              SECTION
                3.6

            	
              Capital
                Resources

            	
              22

            
	
              SECTION
                3.7

            	
              Legal
                Proceedings

            	
              22

            
	
              SECTION
                3.8

            	
              Brokers
                and Other Advisors

            	
              22

            
	
              SECTION
                3.9

            	
              Ownership
                of Company Common Stock

            	
              22

            
	
              SECTION
                3.10

            	
              No
                Reliance

            	
              22

            
	 	 	
               

            
	
              ARTICLE
                IV ADDITIONAL COVENANTS AND AGREEMENTS 

            	
              23

            
	 	 	
               

            
	
              SECTION
                4.1

            	
              Conduct
                of Business

            	
              23

            
	
              SECTION
                4.2

            	
              Other
                Offers; Etc

            	
              26

            
	
              SECTION
                4.3

            	
              Reasonable
                Best Efforts

            	
              30

            
	
              SECTION
                4.4

            	
              Proxy
                Statement

            	
              31

            
	
              SECTION
                4.5

            	
              Company
                Shareholders Meeting

            	
              32

            
	
              SECTION
                4.6

            	
              Public
                Announcements

            	
              33

            
	
              SECTION
                4.7

            	
              Access
                to Information; Confidentiality

            	
              33

            
	
              SECTION
                4.8

            	
              Notification
                of Certain Matters

            	
              33

            
	
              SECTION
                4.9

            	
              Indemnification
                and Insurance

            	
              34

            
	
              SECTION
                4.10

            	
              Fees
                and Expenses

            	
              36

            
	
              SECTION
                4.11

            	
              Delisting

            	
              36

            
	
              SECTION
                4.12

            	
              Parent
                Representation on the Company Board

            	
              36

            
	
              SECTION
                4.13

            	
              Securityholder
                Litigation

            	
              39

            
	
              SECTION
                4.14

            	
              Tax
                Elections

            	
              39

            
	
              SECTION
                4.15

            	
              U.S.
                Federal Income Tax Returns

            	
              39

            
	
              SECTION
                4.16

            	
              Vessel
                Charters

            	
              39

            
	 	 	
               

            
	
              ARTICLE
                V CONDITIONS TO THE MERGER

            	
              39

            
	 	 	
               

            
	
              SECTION
                5.1

            	
              Conditions
                to Each Party's Obligation to Effect the Merger

            	
              39

            
	
              SECTION
                5.2

            	
              Conditions
                to the Obligations of Parent and Merger Sub

            	
              40

            
	
              SECTION
                5.3

            	
              Conditions
                to the Obligations of the Company

            	
              40

            
	
              SECTION
                5.4

            	
              Frustration
                of Closing Conditions

            	
              40

            
	 	 	
               

            
	
              ARTICLE
                VI TERMINATION 

            	
              41

            

    

     

    
      
        
        

      

      
        ii

        
          

        

      

      
        
        

      

    

     

    
      	
              SECTION
                6.1

            	
              Termination

            	
              41

            
	
              SECTION
                6.2

            	
              Effect
                of Termination

            	
              42

            
	
              SECTION
                6.3

            	
              Termination
                Fee

            	
              42

            
	
              SECTION
                6.4

            	
              Acknowledgment

            	
              43

            
	
               

            	 	
               

            
	
              ARTICLE
                VII MISCELLANEOUS 

            	
              43

            
	 	 	
               

            
	
              SECTION
                7.1

            	
              Survival
                of Representations, Warranties and Agreements

            	
              43

            
	
              SECTION
                7.2

            	
              Amendment
                or Supplement

            	
              43

            
	
              SECTION
                7.3

            	
              Extension
                of Time, Waiver, Etc

            	
              43

            
	
              SECTION
                7.4

            	
              Assignment

            	
              44

            
	
              SECTION
                7.5

            	
              Counterparts

            	
              44

            
	
              SECTION
                7.6

            	
              Entire
                Agreement; No Third-Party Beneficiaries

            	
              44

            
	
              SECTION
                7.7

            	
              Governing
                Law; Submission to Jurisdiction; Waiver of Jury Trial

            	
              44

            
	
              SECTION
                7.8

            	
              Specific
                Enforcement

            	
              45

            
	
              SECTION
                7.9

            	
              Notices

            	
              45

            
	
              SECTION
                7.10

            	
              Severability

            	
              46

            
	
              SECTION
                7.11

            	
              Definitions

            	
              47

            
	
              SECTION
                7.12

            	
              Interpretation

            	
              49

            

    

     

    
      
        
        

      

      
        iii

        
          

        

      

      
        
        

      

    

    AGREEMENT
      AND PLAN OF MERGER

     

    This
      AGREEMENT AND PLAN OF MERGER, dated as of July 30, 2007 (this
      "Agreement"), is among MAST ACQUISITION LTD., a Bermuda exempted limited
      company organized under the laws of Bermuda ("Parent"), MAST MERGER SUB
      CORP., a corporation organized under the laws of the Republic of Liberia and
      a
      wholly owned Subsidiary of Parent ("Merger Sub"), and MC SHIPPING INC., a
      corporation organized under the laws of the Republic of Liberia (the
      "Company").  Certain terms used in this Agreement without
      definition shall have their meanings as defined in
Section 7.11.

     

    WHEREAS,
      the respective Boards of Directors of Parent, Merger Sub and the Company each
      deems it advisable that Parent acquire the Company on the terms and subject
      to
      the conditions provided for in this Agreement;

     

    WHEREAS,
      in furtherance thereof it is proposed that such acquisition be accomplished
      by
      the merger of Merger Sub with and into the Company, with the Company as the
      surviving corporation, in accordance with the Business Corporation Act of the
      Republic of Liberia (the "BCAL"), pursuant to which all of the shares of
      voting common stock, $0.01 par value, of the Company ("Company Common
      Stock") issued and outstanding (each, a "Share" and, collectively,
      the "Shares"), other than certain Shares as provided in
Section 1.7(b) and Dissenting Shares, will be converted into the
      right to receive the Merger Consideration on the terms and subject to the
      conditions provided for in this Agreement (the "Merger");

     

    WHEREAS,
      the respective Boards of Directors of Parent (on its own behalf and as the
      sole
      shareholder of Merger Sub), Merger Sub and the Company have each approved this
      Agreement and the Merger; and

     

    WHEREAS,
      the Company has been advised by Navalmar Transportes Maritimos
      LDA and Weco-Rederi
      Holding A/S (the "Principal Shareholders"), whose representatives
      on the Company Board resigned their positions as directors of the Company prior
      to the meeting of the Company Board held to approve this Agreement, that,
      concurrent with the execution and delivery of this Agreement, they and their
      respective Affiliates are entering into binding commitments to sell the
      4,226,448 Shares and 849,270 Shares owned by them, respectively, representing
      in
      the aggregate approximately 53% of the outstanding Shares, to Parent at a cash
      purchase price equal to $14.25 per Share;

     

    NOW,
      THEREFORE, in consideration of the representations, warranties, covenants and
      agreements contained in this Agreement, and intending to be legally bound
      hereby, Parent, Merger Sub and the Company hereby agree as follows:

     

    ARTICLE
      I

     

    The
      Merger

     

    SECTION
      1.1    The
      Merger.  Upon the terms and subject to the conditions set
      forth in this Agreement, and in accordance with the BCAL, at the Effective
      Time
      Merger Sub shall be merged with and into the Company, and the separate corporate
      existence of Merger Sub shall thereupon cease, and the Company shall be the
      surviving corporation in the Merger (the "Surviving
      Corporation").

    
      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    

    SECTION
      1.2    Closing.  The
      closing of the Merger (the "Closing") shall take place at 10:00 a.m. (New
      York time) on a date to be specified by the parties (the "Closing Date"),
      which date shall be no later than the fifth (5th) business day after
      satisfaction or waiver of the conditions set forth in Article V
      (other than those conditions that by their nature are to be satisfied at the
      Closing, but subject to the satisfaction or waiver of those conditions at such
      time), at the offices of Milbank, Tweed, Hadley & McCloy LLP, 1 Chase
      Manhattan Plaza, New York, New York 10005, unless another time, date or place
      is
      agreed to in writing by the parties hereto.

     

    SECTION
      1.3    Effective
      Time.  Subject to the provisions of this Agreement, as soon
      as practicable on the Closing Date, the parties shall file with the Minister
      of
      Foreign Affairs (as defined in the BCAL, the "Minister of Foreign
      Affairs") articles of merger pursuant to Section 10.2.5 of the BCAL executed
      in accordance with the relevant provisions of the BCAL (the "Articles of
      Merger").  The Merger shall become effective upon the filing of
      the Articles of Merger or at such later time as is agreed to by the parties
      hereto and specified in the Articles of Merger (the time at which the Merger
      becomes effective is herein referred to as the "Effective
      Time").

     

    SECTION
      1.4    Effects of the
      Merger.  The Merger shall have the effects set forth in the
      BCAL.  Without limiting the generality of the foregoing, and subject
      thereto, at the Effective Time, all the properties, rights, privileges, powers
      and franchises of the Company and Merger Sub shall vest in the Surviving
      Corporation, and all debts, liabilities and duties of the Company and Merger
      Sub
      shall become the debts, liabilities and duties of the Surviving
      Corporation.

     

    SECTION
      1.5    Articles of
      Incorporation and Bylaws of the Surviving Corporation.At the
      Effective Time, the articles of incorporation and bylaws of the Surviving
      Corporation shall be amended in their entirety to read as the articles of
      incorporation and bylaws of Merger Sub until thereafter amended as provided
      therein or by applicable Law (and subject to Section 4.9);
provided, however, that Article I of the articles of incorporation
      of the Surviving Corporation shall be amended to provide that the Surviving
      Corporation shall be named "MC Shipping Inc."

     

    SECTION
      1.6    Directors and
      Officers of the Surviving Corporation

     

    (a)           The
      directors of Merger Sub immediately prior to the Effective Time shall be the
      directors of the Surviving Corporation immediately following the Effective
      Time,
      until their respective successors are duly elected or appointed and qualified
      or
      their earlier death, resignation or removal in accordance with the articles
      of
      incorporation and bylaws of the Surviving Corporation.

     

    (b)           The
      officers of Merger Sub immediately prior to the Effective Time shall be the
      officers of the Surviving Corporation until their respective successors are
      duly
      appointed and qualified or their earlier death, resignation or removal in
      accordance with the articles of incorporation and bylaws of the Surviving
      Corporation.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    SECTION
      1.7    Conversion of
      Securities.  At the Effective Time, by virtue of the Merger and
      without any action on the part of the holders of any securities of Merger Sub
      or
      the Company:

     

    (a)           Each
      issued and outstanding share of capital stock of Merger Sub shall be converted
      into and become one (1) validly issued, fully paid and nonassessable share
      of
      common stock, par value $0.01 per share, of the Surviving
      Corporation.

     

    (b)           Any
      shares of Company Common Stock that are owned by the Company as treasury stock
      and any Shares owned by Parent, Merger Sub or any other Subsidiary of Parent
      shall be automatically canceled and shall cease to exist and no consideration
      shall be delivered in exchange therefor.

     

    (c)           Each
      Share (other than (i) Shares to be canceled in accordance with
Section 1.7(b) and (ii) any Dissenting Shares) shall be
      converted into the right to receive $14.25 in cash, without interest (the
      "Merger Consideration").  All such Shares, when so converted,
      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 shall cease to have any rights with
      respect thereto, except the right to receive the Merger Consideration therefor
      upon the surrender of such certificate in accordance with this Agreement,
      without interest.

     

    SECTION
      1.8    Exchange of
      Certificates.

     

    (a)           Paying
      Agent.  Prior to the Effective Time, Parent shall designate a bank
      or trust company reasonably acceptable to the Company to act as agent for the
      holders of Shares in connection with the Merger (the "Paying Agent") to
      receive, on terms reasonably acceptable to the Company, for the benefit of
      holders of Shares, the aggregate Merger Consideration to which holders of Shares
      shall become entitled pursuant to Section 1.7(c).  Parent
      shall deposit such aggregate Merger Consideration with the Paying Agent at
      or
      prior to the Effective Time.  Such aggregate Merger Consideration
      deposited with the Paying Agent shall, pending its disbursement to such holders,
      be invested by the Paying Agent in (i) direct obligations of the United
      States of America, (ii) obligations for which the full faith and credit of
      the United States of America is pledged to provide for the payment of principal
      and interest, (iii) commercial paper rated the highest quality by either
      Moody's Investors Service, Inc. or Standard & Poor's Ratings Services or
      (iv) non-U.S. money market funds investing solely in a combination of
      the foregoing.  Any interest and other income resulting from such
      investments shall be the property of, and shall be paid to,
      Parent.  Parent shall promptly replace any funds deposited with the
      Paying Agent lost through any investment made pursuant to this
      paragraph.

     

    (b)           Exchange
      Procedures.  Promptly after the Effective Time (but in no event
      more than three (3) business days thereafter), the Surviving Corporation shall
      cause the Paying Agent to mail to each holder of record of a certificate or
      certificates (or evidence of shares in book-entry form), which immediately
      prior
      to the Effective Time represented outstanding Shares (the
      "Certificates"), whose shares were converted pursuant to
Section 1.7(c) into the right to receive the Merger Consideration,
      (i) a letter of transmittal (which shall specify that delivery shall be
      effected, and risk of loss and title to the Certificates shall pass, only upon
      delivery of the Certificates to the Paying Agent, and which shall be in such
      form and shall have such other customary provisions (including customary
      provisions with respect to delivery of an "agent's message" with respect to
      shares held in book-entry form) as Parent may reasonably specify) and
      (ii) instructions for use in effecting the surrender of the Certificates in
      exchange for payment of the Merger Consideration.  Upon surrender of a
      Certificate for cancellation to the Paying Agent, together with such letter
      of
      transmittal, duly completed and validly executed in accordance with the
      instructions (and such other customary documents as may reasonably be required
      by the Paying Agent), the holder of such Certificate shall be entitled to
      receive in exchange therefor the Merger Consideration (less any applicable
      excise and withholding Taxes in accordance with Section 1.8(g)),
      without interest, for each Share formerly represented by such Certificate,
      and
      the Certificate so surrendered shall forthwith be canceled.  If
      payment of the Merger Consideration is to be made to a Person other than the
      Person in whose name the surrendered Certificate is registered, it shall be
      a
      condition of payment that (x) the Certificate so surrendered shall be
      properly endorsed or shall otherwise be in proper form for transfer and
      (y) the Person requesting such payment shall have paid any transfer and
      other Taxes required by reason of the payment of the Merger Consideration to
      a
      Person other than the registered holder of such Certificate surrendered or
      shall
      have established to the reasonable satisfaction of the Surviving Corporation
      that such Tax either has been paid or is not applicable.  Until
      surrendered as contemplated by this Section 1.8, each Certificate
      shall be deemed at any time after the Effective Time to represent only the
      right
      to receive the Merger Consideration as contemplated by this
Article I, without interest.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    (c)           Transfer
      Books; No Further Ownership Rights in Company Stock.  The Merger
      Consideration paid in respect of Shares upon the surrender for exchange of
      Certificates in accordance with the terms of this Article I shall be
      deemed to have been paid in full satisfaction of all rights pertaining to the
      Shares previously represented by such Certificates, and 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 thereafter there shall be no further registration
      of
      transfers on the stock transfer books of the Surviving Corporation of the Shares
      that were outstanding immediately prior to the Effective Time.  From
      and after the Effective Time, the holders of Certificates that evidenced
      ownership of Shares outstanding immediately prior to the Effective Time shall
      cease to have any rights with respect to such shares, except as otherwise
      provided for herein or by applicable Law.  Subject to the last
      sentence of Section 1.8(e), if, at any time after the Effective
      Time, Certificates are presented to the Surviving Corporation for any reason,
      they shall be canceled and exchanged as provided in this
Article I.

     

    (d)           Lost,
      Stolen or Destroyed 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 the Surviving Corporation, 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 will
      pay, in exchange for such lost, stolen or destroyed Certificate, the applicable
      Merger Consideration to be paid in respect of the Shares formerly represented
      by
      such Certificate, as contemplated by this Article I.

     

    (e)           Termination
      of Fund.  At any time following the six-month anniversary of the
      Closing Date, the Surviving Corporation shall be entitled to require the Paying
      Agent to deliver to it any funds (including any interest received with respect
      thereto) that had been made available to the Paying Agent and which have not
      been disbursed to holders of Certificates, and thereafter such holders shall
      be
      entitled to look only to the Surviving Corporation (subject to abandoned
      property, escheat, Tax or other similar Laws) as general creditors thereof
      with
      respect to the payment of any Merger Consideration that may be payable upon
      surrender of any Certificates held by such holders, as determined pursuant
      to
      this Agreement, without any interest thereon.  Any amounts remaining
      unclaimed by such holders at such time at which such amounts would otherwise
      escheat to or become property of any Governmental Authority shall become, to
      the
      extent permitted by applicable Law, the property of Parent free and clear of
      all
      claims or interests of any Person previously entitled thereto.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    (f)           No
      Liability.  Notwithstanding any provision of this Agreement to the
      contrary, none of the parties hereto, the Surviving Corporation or the Paying
      Agent shall be liable to any Person for Merger Consideration delivered to a
      public official pursuant to any applicable abandoned property, escheat, Tax
      or
      similar Law.

     

    (g)           Withholding
      Taxes.  Parent, Merger Sub, the Surviving Corporation and the
      Paying Agent shall be entitled to deduct and withhold from the consideration
      otherwise payable to a holder of Shares pursuant to the Merger such amounts
      as
      may be required to be deducted and withheld with respect to the making of such
      payment under any applicable Tax Law.  To the extent amounts are so
      withheld and paid over to the appropriate taxing authority, the withheld amounts
      shall be treated for all purposes of this Agreement as having been paid to
      the
      holder of the Shares in respect of which such deduction and withholding was
      made.

     

    SECTION
      1.9    Appraisal
      Rights.  Notwithstanding anything in this Agreement to the
      contrary, Shares that are issued and outstanding immediately prior to the
      Effective Time and which are held by a shareholder who did not vote in favor
      of
      the Merger (or consent thereto in writing) and who is entitled to demand and
      properly demands appraisal of such shares pursuant to, and who complies in
      all
      respects with, the provisions of Section 10.8 of the BCAL (each, a
      "Dissenting Shareholder"), shall not be converted into or be exchangeable
      for the right to receive the Merger Consideration (the "Dissenting
      Shares"), but instead such Dissenting Shareholder shall be entitled to
      payment of the fair value of such Dissenting Shares in accordance with the
      provisions of Section 10.8 of the BCAL (and at the Effective Time, such
      Dissenting Shares shall no longer be outstanding and shall automatically be
      canceled and shall cease to exist, and such Dissenting Shareholder shall cease
      to have any rights with respect thereto, except the right to receive the fair
      value of such Dissenting Shares in accordance with the provisions of
      Section 10.8 of the BCAL), unless and until such Dissenting Shareholder
      shall have failed to perfect or shall have effectively withdrawn or lost rights
      to appraisal under the BCAL.  If any Dissenting Shareholder shall have
      failed to perfect or shall have effectively withdrawn or lost such right, such
      Dissenting Shareholder's Shares shall thereupon be treated as if they had been
      converted into and become exchangeable for the right to receive, as of the
      Effective Time, the Merger Consideration for each such Share, in accordance
      with
Section 1.7(c), without any interest thereon.  The Company
      shall give Parent (i) prompt notice of any written demands for appraisal of
      any Shares, attempted withdrawals of such demands and any other instruments
      served pursuant to the BCAL and received by the Company relating to
      shareholders' rights of appraisal, and (ii) the opportunity to participate
      in all negotiations and proceedings with respect to demands for appraisal under
      the BCAL.  The Company shall not make any payment or settlement offer
      prior to the Effective Time with respect to any such demand, notice or
      instrument, or waive any failure by a shareholder to timely comply with the
      requirements of the BCAL, unless Parent shall have given its written consent
      to
      such payment or settlement offer or unless otherwise required by an order,
      decree, ruling or injunction of a court of competent
      jurisdiction.  Any portion of the Merger Consideration made available
      to the Paying Agent pursuant to Section 1.8 to pay for Shares for
      which appraisal rights have been perfected shall be returned to Parent upon
      demand.

     

    
      
        
        

      

      
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    ARTICLE
      II

     

    Representations
      and Warranties of the Company

     

    The
      Company represents and warrants to Parent and Merger Sub that except as set
      forth in the letter delivered by the Company to Parent simultaneously with
      the
      execution of this Agreement (the "Company Disclosure Letter") or in the
      Company SEC Documents publicly filed prior to the date of this Agreement,
      excluding any disclosures set forth in any risk factor section thereof, in
      any
      section relating to forward-looking statements and any other disclosures
      included therein that are cautionary, predictive or forward-looking in
      nature (the "Filed Company SEC Documents") (it being understood that
      any matter set forth in the Company Disclosure Letter or in such Filed Company
      SEC Documents shall be deemed disclosed with respect to any section of this
      Article II to which the matter relates, to the extent the relevance
      of such matter to such section is readily apparent):

     

    SECTION
      2.1    Organization and
      Standing.

     

    (a)           The
      Company is a corporation validly existing and in good standing under the Laws
      of
      the Republic of Liberia and has all requisite corporate power and authority
      necessary to own or lease all of its properties and assets and to carry on
      its
      business as it is now being conducted.  The Company is duly licensed
      or qualified to do business and is in good standing in each jurisdiction in
      which the nature of the business conducted by it or the character or location
      of
      the properties and assets owned or leased or held under license by it makes
      such
      licensing or qualification necessary, except where the failure to be so
      licensed, qualified or in good standing would not, individually or in the
      aggregate, reasonably be expected to have a Company Material Adverse Effect
      or
      to impair in any material respect the ability of the Company to perform its
      obligations hereunder or prevent or materially delay consummation of the
      Merger.  For purposes of this Agreement, the term "Company Material
      Adverse Effect" shall mean any change, event or occurrence which has a
      material adverse effect on the results of operations, assets,
      liabilities or financial condition of the Company and its Subsidiaries
      taken as a whole, other than changes, events, occurrences or effects arising
      out
      of, resulting from or attributable to (i) changes in conditions in any
      geographic region in which the Company does business or in the global economy
      or
      in capital or financial markets generally, including changes in interest or
      exchange rates, provided that such changes do not affect the Company and
      its Subsidiaries in a disproportionate manner, (ii) changes in general
      legal, regulatory, political, economic or business conditions or changes in
      generally accepted accounting principles that, in each case, generally affect
      industries in which the Company and its Subsidiaries conduct business,
provided that such changes do not affect the Company and its Subsidiaries
      in a disproportionate manner, (iii) the negotiation, execution,
      announcement or performance of this Agreement or the consummation of the Merger,
      including the impact thereof on relationships, contractual or otherwise, with
      customers, suppliers, distributors, partners, collaborators or employees,
      (iv) acts of war, sabotage or terrorism, or any escalation or worsening of
      any such acts of war, sabotage or terrorism threatened or underway as of the
      date of this Agreement, provided that such changes do not affect the
      Company and its Subsidiaries in a disproportionate manner, (v) storms,
      earthquakes or other natural disasters, provided that such changes do not
      affect the Company and its Subsidiaries in a disproportionate manner,
      (vi) any action required to be taken by the Company or any of its
      Subsidiaries pursuant to this Agreement, or (vii) any decline in the market
      price, or change in trading volume, of the capital stock of the Company or
      any
      failure of the Company to meet publicly announced revenue or earnings
      projections, provided that the underlying cause of any such decline,
      change or failure may otherwise be taken into consideration in determining
      whether a Company Material Adverse Effect has occurred.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    (b)           Each
      of the Company's Subsidiaries is a corporation or
      other organization duly organized, validly existing and in
      good standing under the Laws of the jurisdiction of its
      organization.  Each of the Company's Subsidiaries is duly licensed or
      qualified to do business and is in good standing in each jurisdiction in which
      the nature of the business conducted by it or the character or location of
      the
      properties and assets owned or leased or held under license by it makes such
      licensing or qualification necessary, except where the failure to be so
      licensed, qualified or in good standing would not, individually or in the
      aggregate, reasonably be expected to have a Company Material Adverse
      Effect.  The Filed Company SEC Documents contain a true and complete
      list of each such Subsidiary and the jurisdiction of incorporation or
      organization of such Subsidiary.  All the outstanding shares of
      capital stock of, or other equity interests in, each such Subsidiary (except
      for
      directors' qualifying shares or the like) are duly authorized, have been validly
      issued, are fully paid, nonassessable and free of preemptive rights, and are
      owned directly or indirectly by the Company free and clear of all liens,
      pledges, security interests and transfer restrictions, except for such transfer
      restrictions of general applicability as may be provided under the Securities
      Act of 1933, as amended (together with the rules and regulations promulgated
      thereunder, the "Securities Act"), and other applicable securities Laws
      and rules and regulations promulgated thereunder.

     

    (c)           The
      Company has previously made available to Parent complete and correct copies
      of
      the articles of incorporation and bylaws (or other comparable organizational
      documents) of the Company and each of its Subsidiaries, in each case as amended
      through the date of this Agreement (the "Company Charter
      Documents").  None of the Company or its Subsidiaries,
      respectively, is in material violation of the Company Charter
      Documents.

     

    SECTION
      2.2    Capitalization.

     

    (a)           The
      authorized capital stock of the Company consists of
      20,000,000 shares of Company Common Stock, par value $0.01
      per share. At the close of business on July 11, 2007, (i) 9,515,471 shares
      of Company Common Stock were issued and outstanding (none of which were held
      by
      the Company in its treasury) and (ii) 47,000 shares of Company Common Stock
      were reserved for issuance under the Company Stock Plan (none of which were
      subject to outstanding options to purchase shares of Company Common Stock
      granted under the Company Stock Plan).  All shares of Company Common
      Stock have been duly authorized and are validly issued, fully paid,
      nonassessable and free of preemptive rights.  Since July 11, 2007, the
      Company has not issued, or reserved for issuance, any shares of its capital
      stock or any securities convertible into or exchangeable or exercisable for
      any
      shares of its capital stock.

     

    
      
        
        

      

      
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    (b)           There
      are no outstanding contractual obligations of the Company or any of its
      Subsidiaries (i) restricting the transfer of, (ii) affecting the
      voting rights of, (iii) requiring the repurchase, redemption or disposition
      of, or containing any right of first refusal with respect to,
      (iv) requiring the registration for sale of, or (v) granting any
      preemptive or anti-dilutive right with respect to, any shares of Company Common
      Stock or any capital stock of the Company or any of its
      Subsidiaries.  There are no bonds, debentures, notes or other
      indebtedness of the Company or any of its Subsidiaries having the right to
      vote
      (or convertible into or exchangeable for securities having the right to vote)
      on
      any matters on which holders of Company Common Stock or any such Subsidiary
      may
      vote.

     

    SECTION
      2.3    Authority;
      Noncontravention; Voting Requirements.

     

    (a)           The
      Company has all necessary corporate power and authority to execute and deliver
      this Agreement and, subject to obtaining the Company Shareholder Approval,
      to
      perform its obligations hereunder and to consummate the transactions
      contemplated hereby.  The execution, delivery and performance by the
      Company of this Agreement, and the consummation by it of the transactions
      contemplated hereby, have been duly authorized and approved by the Company
      Board, and except for obtaining the Company Shareholder Approval, no other
      corporate action on the part of the Company is necessary to authorize the
      execution, delivery and performance by the Company of this Agreement and the
      consummation by it of the transactions contemplated hereby.  This
      Agreement has been duly executed and delivered by the Company and, assuming
      due
      authorization, execution and delivery hereof by the other parties hereto,
      constitutes a legal, valid and binding obligation of the Company, enforceable
      against the Company in accordance with its terms, except that such
      enforceability (i) may be limited by bankruptcy, insolvency, fraudulent
      transfer, reorganization, moratorium and other similar Laws of general
      application affecting or relating to the enforcement of creditors' rights
      generally and (ii) is subject to general principles of equity, whether
      considered in a proceeding at Law or in equity (the "Bankruptcy and Equity
      Exception").

     

    (b)           The
      Company Board, at a meeting duly called and held and based on the recommendation
      of the Transaction Committee of the Company Board (the "Transaction
      Committee"), has (i) approved and declared advisable this Agreement and
      the Merger and directed that this Agreement and the Merger be submitted to
      the
      holders of Company Common Stock for their adoption and (ii) resolved,
      subject to Section 4.2, to recommend that the holders of Company
      Common Stock adopt this Agreement (the "Company
      Recommendation").

     

    (c)           Neither
      the execution and delivery of this Agreement by the Company nor the consummation
      by the Company of the transactions contemplated hereby, nor compliance by the
      Company with any of the terms or provisions hereof, will (i) conflict with
      or violate any provision of the Company Charter Documents or (ii) assuming
      that the authorizations, consents and approvals referred to in
Section 2.4 and the Company Shareholder Approval are obtained and
      the filings referred to in Section 2.4 are made, (x) violate
      any Law, judgment, writ or injunction of any Governmental Authority applicable
      to the Company or any of its Subsidiaries or (y) except as set forth in
Section 2.3(c) of the Company Disclosure Letter, violate or constitute a
      default under any of the terms, conditions or provisions of any loan or credit
      agreement, debenture, note, bond, mortgage, indenture, deed of trust, lease,
      contract or other agreement (each, a "Contract") to which the Company or
      any of its Subsidiaries is a party, or by which any of their respective
      properties or assets is bound, except, in the case of clause (ii), for
      such violations or defaults as would not, individually or in the aggregate,
      reasonably be expected to have a Company Material Adverse Effect or to impair
      in
      any material respect the ability of the Company to perform its obligations
      hereunder or prevent or materially delay consummation of the
      Merger.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    (d)           The
      affirmative vote (in person or by proxy) of the holders of two-thirds of the
      shares of Company Common Stock present in person or represented by proxy at
      the
      Company Shareholders Meeting, but in no event less than a majority of the
      outstanding shares of Company Common Stock, in favor of the adoption of this
      Agreement is the only vote or approval of the holders of any class or series
      of
      capital stock of the Company which is necessary to adopt this Agreement and
      approve the Merger (the "Company Shareholder Approval").

     

    SECTION
      2.4    Governmental
      Approvals.  Except for (i) the filing of the Articles of
      Merger with the Minister of Foreign Affairs pursuant to the BCAL and
      (ii) filings required under, and compliance with other applicable
      requirements of, non-U.S. Laws intended to prohibit, restrict or regulate
      actions or transactions having the purpose or effect of monopolization,
      restraint of trade, harm to competition or effectuating foreign investment
      (collectively, "Foreign Antitrust Laws"), no consents or approvals of, or
      filings, declarations or registrations with, any Governmental Authority are
      necessary for the execution and delivery of this Agreement by the Company and
      the consummation by the Company of the transactions contemplated hereby, other
      than such consents, approvals, filings, declarations or registrations that,
      if
      not obtained, made or given, would not, individually or in the aggregate,
      reasonably be expected (A) to have a Company Material Adverse Effect,
      (B) impair in any material respect the ability of the Company to perform
      its obligations hereunder, (C) prevent or materially
      delay consummation of the Merger or (D) impair in any material respect
      the ability of the Company and its Subsidiaries to conduct their business and
      operations immediately following consummation of the Merger in the manner in
      which they were conducted immediately prior to consummation of the
      Merger.

     

    SECTION
      2.5    Company SEC
      Documents; Financial Statements; Undisclosed Liabilities.

     

    (a)           The
      Company is a "foreign private issuer" (as that term is defined in Rule 3b-4
      promulgated under the Securities Exchange Act of 1934, as amended (together
      with
      the rules and regulations promulgated thereunder, the "Exchange Act"))
      and voluntarily files annual reports on Form 10-K and quarterly reports on
      Form
      10-Q with the Securities and Exchange Commission.  The Company has
      filed all required registration statements, prospectuses, forms, reports and
      proxy statements with the SEC, together with all certifications required
      pursuant to the Sarbanes-Oxley Act of 2002 (the "Sarbanes-Oxley Act"),
      from and after January 1, 2004 (collectively, and in each case including
      all exhibits and schedules thereto and documents incorporated by reference
      therein, the "Company SEC Documents").  None of the Company's
      Subsidiaries is required to file periodic reports with the U.S. Securities
      and
      Exchange Commission (the "SEC") pursuant to the Exchange Act. As of
      their respective effective dates (in the case of Company SEC Documents that
      are
      registration statements filed pursuant to the requirements of the Securities
      Act) and as of their respective SEC filing dates (in the case of all other
      Company SEC Documents), the Company SEC Documents complied in all material
      respects with the requirements of the Exchange Act, the Securities Act and
      Sarbanes-Oxley Act, as the case may be, applicable to such Company SEC
      Documents, and none of the Company SEC Documents as of such respective dates
      contained 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.  As of the date of this Agreement, there are no
      outstanding or unresolved comments received from the SEC staff with respect
      to
      the Company SEC Documents and, to the Company's Knowledge, none of the Company
      SEC Documents is the subject of ongoing SEC review or
      investigation.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    (b)           The
      consolidated financial statements of the Company included in the Company SEC
      Documents (the "Company Financial Statements") have been prepared in
      accordance with GAAP (except, in the case of unaudited interim statements,
      as
      indicated in the notes thereto) applied on a consistent basis during the periods
      involved (except as may be indicated in the notes thereto) and fairly present
      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 interim statements, to normal year-end audit adjustments
      which
      were not and would not, individually or in the aggregate, reasonably be expected
      to be material).  The books and records of the Company and each of its
      Subsidiaries have been, and are being, maintained in all material respects
      in
      accordance with applicable legal and accounting requirements, and the Company
      Financial Statements are consistent in all material respects with such books
      and
      records.

     

    (c)           Neither
      the Company nor any of its Subsidiaries has any liabilities which would be
      required to be reflected or reserved against on a consolidated balance sheet
      of
      the Company prepared in accordance with GAAP or the notes thereto, except
      liabilities (i) reflected or reserved against on the audited balance sheet
      of the Company and its Subsidiaries as of December 31, 2006 (the
      "Balance Sheet Date") included in the Filed Company SEC Documents
      (including the notes thereto), (ii) incurred after the Balance Sheet Date
      in the ordinary course of business, (iii) as contemplated by this Agreement
      or
      otherwise in connection with the transactions contemplated hereby, or
      (iv) as would not, individually or in the aggregate, reasonably be expected
      to have a Company Material Adverse Effect.

     

    (d)           The
      Company and its Subsidiaries have designed and maintain a system of internal
      controls over financial reporting (as defined in Rules 13a-15(f) and
      15d-15(f) of the Exchange Act) sufficient to provide reasonable assurances
      regarding the reliability of financial reporting and the preparation of
      financial statements for external purposes in accordance with
      GAAP.  The Company (i) has designed and maintains "disclosure
      controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of
      the Exchange Act) to ensure that material information 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 SEC's rules and forms and is accumulated and communicated to the
      Company's management as appropriate to allow timely decisions regarding required
      disclosure, and (ii) has disclosed, based on its most recent evaluation of
      such disclosure controls and procedures prior to the date hereof, to the
      Company's auditors and the audit committee of the Company Board (A) any
      "significant deficiencies" and "material weaknesses" in the design or operation
      of internal controls over financial reporting that are reasonably likely to
      adversely affect in any material respect the Company's ability to record,
      process, summarize and report financial information and (B) any fraud,
      whether or not material, that involves management or other employees who have
      a
      significant role in the Company's internal controls over financial
      reporting.  For purposes of this Agreement, the terms "significant
      deficiency" and "material weakness" shall have the meanings assigned to them
      by
      the Public Company Accounting Oversight Board in Auditing Standard No. 2, as
      in
      effect on the date hereof.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    (e)           The
      Company's financial projections and the Company's business plan, for the period
      from 2007 through 2011, prepared for the Company Board and thereafter provided
      by the Company to Parent and Merger Sub prior to the date hereof, were
      reasonably prepared on a basis reflecting management's best estimates,
      assumptions and judgments, at the time provided to Parent and Merger Sub, as
      to
      the future financial performance of the Company and the
      Subsidiaries.  Except as set forth in Section 2.5(e) of the Company
      Disclosure Letter, to the Knowledge of the Company, there have been no
      events or circumstances which would reasonably be expected to materially
      adversely affect the accuracy of such projections on the date
      hereof.

     

    SECTION
      2.6    Absence of Certain
      Changes.  Since the Balance Sheet Date, (a) each of the
      Company and its Subsidiaries has carried on and operated its businesses in
      all
      material respects in the ordinary course of business, (b) there have not been
      any events, changes or occurrences that have had a Company Material Adverse
      Effect and (c) no fact, event, circumstance or condition exists or has
      occurred and continues to exist that would reasonably be expected to have a
      Company Material Adverse Effect.

     

    SECTION
      2.7    Legal
      Proceedings.  As of the date hereof, except as set forth in
Section 2.7 of the Company Disclosure Letter, there is no pending or, to
      the Knowledge of the Company, threatened Action or Proceeding against or
      relating to the Company or any of its Subsidiaries (including any Action or
      Proceeding relating to any alleged or actual breach of the ISM Code or ISPS
      Code
      or any Environmental Law) for an amount that could reasonably be expected to
      be
      greater than $100,000 for any individual Action or Proceeding and $400,000
      for
      all Actions or Proceedings in the aggregate (in either case excluding legal
      fees
      and expenses), nor is there any injunction, order, judgment, ruling or decree
      imposed upon the Company or any of its Subsidiaries, in each case, by or before
      any Governmental Authority.

     

    SECTION
      2.8    Compliance With
      Laws; Permits.  The Company and its Subsidiaries have been for the
      past five (5) years and are currently in compliance with all laws, statutes,
      ordinances, codes, rules, regulations, decrees, treaties, orders and other
      legal
      requirements of Governmental Authorities (collectively, "Laws")
      applicable to the Company or any of its Subsidiaries, except for such
      non-compliance as would not reasonably be expected to be adverse to the Company
      or any of its Subsidiaries in any material respect.  The Company and
      each of its Subsidiaries have held for the past five (5) years and are currently
      holding all licenses, franchises, permits, certificates, approvals, clearances
      and authorizations from Governmental Authorities necessary for the lawful
      conduct of their respective businesses (collectively, "Permits"), and all such
      Permits are valid and in full force and effect, except where the failure to
      hold
      the same or of the same to be valid and in full force and effect would not,
      individually or in the aggregate, reasonably be expected to (A) have a
      Company Material Adverse Effect, (B) impair in any material respect the
      ability of the Company to perform its obligations hereunder, (C) prevent or
      materially delay consummation of the Merger, or (D) impair in any material
      respect the ability of the Company and its Subsidiaries to conduct their
      business and operations immediately following consummation of the Merger in
      the
      manner in which they were conducted immediately prior to consummation of the
      Merger. 

     

    
      
        
        

      

      
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    SECTION
      2.9    Proxy
      Statement.  Subject to the accuracy of the representations and
      warranties of Parent and Merger Sub set forth in Section 3.4, the
      Proxy Statement, and any amendments or supplements thereto, will not, on the
      date it is first mailed to the holders of Company Common Stock, 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, and will
      not, at the time of the Company Shareholders Meeting, omit to state any material
      fact necessary to correct any statement in any earlier communication from the
      Company with respect to the Company Shareholders Meeting which shall have become
      false or misleading in any material respect.  Notwithstanding the
      foregoing, the Company makes no representation or warranty with respect to
      information supplied by or on behalf of Parent or Merger Sub for inclusion
      or
      incorporation by reference in the Proxy Statement.

     

    SECTION
      2.10   Tax
      Matters.

     

    (a)           Except
      for those matters that would not, individually or in the aggregate, reasonably
      be expected to have a Company Material Adverse Effect: (i) each of the Company
      and its Subsidiaries has timely filed, or has caused to be timely filed on
      its
      behalf (taking into account any extension of time within which to file), all
      Tax
      Returns required to be filed by it, and all such filed Tax Returns are correct
      and complete in all material respects; (ii) all material Taxes of the Company
      and each of its Subsidiaries that are duehave been timely paid; (iii) no
      deficiency with respect to Taxes has been proposed, asserted or assessed against
      the Company or any of its Subsidiaries which have not been fully paid; and
      (iv)
      no audit or other Action or Proceeding is pending with any Governmental
      Authority with respect to Taxes of the Company or any of its Subsidiaries,
      and
      no written notice thereof has been received.

     

    (b)           Since
      the Balance Sheet Date, neither the Company nor any of its Subsidiaries has
      incurred any liability for Taxes outside the ordinary course of business or
      otherwise inconsistent with past custom and practice.

     

    (c)           Neither
      the Company nor any of its Subsidiaries is a party to or bound by any Tax
      allocation or sharing agreement (other than any such agreement solely between
      or
      among the Company and any of its Subsidiaries).

     

    (d)           There
      are no liens for Taxes upon any material property or other material assets
      of
      the Company or any of its Subsidiaries, except liens for Taxes not yet due
      and
      payable and liens for Taxes that are being contested in good faith by
      appropriate proceedings and for which adequate reserves have been established
      on
      the Company Financial Statements in accordance with GAAP.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    (e)           All
      Taxes required to be withheld, collected or deposited by or with respect to
      the
      Company and each of its Subsidiaries have been timely withheld, collected or
      deposited, as the case may be, and to the extent required, have been paid to
      the
      relevant Tax authority or other Governmental Authority, except for such failure
      to do any of the foregoing as would not, individually or in the aggregate,
      reasonably be expected to have a Company Material Adverse Effect.

     

    (f)           For
      purposes of this Agreement: (i) "Taxes" shall mean (x) all
      applicable taxes, charges, fees, imposts, levies or other assessments, including
      all net income, gross receipts, tonnage tax, capital, sales, use, ad valorem,
      value added, transfer, franchise, profits, inventory, capital stock, license,
      withholding, payroll, employment, social security, unemployment, excise,
      severance, stamp, occupation, property and estimated taxes, customs duties,
      fees, assessments and charges of any kind whatsoever, (y) all interest,
      penalties, fines, additions to tax or additional amounts imposed by any
      Governmental Authority in connection with any item described in clause (x),
      and (z) any liability in respect of any items described in clauses (x)
      and/or (y) payable by reason of contract, assumption, transferee liability,
      operation of Law or otherwise, and (ii) "Tax Returns" shall mean any
      return, report, claim for refund, estimate, information return or statement
      or
      other similar document relating to or required to be filed with any Governmental
      Authority with respect to Taxes, including any schedule or attachment thereto,
      and including any amendment thereof.

     

    (g)           No
      waivers or extensions of any statute of limitations have been granted or
      requested with respect to any material Taxes of the Company or any of its
      Subsidiaries, other than pursuant to extensions of time to file Tax Returns
      obtained in the ordinary course.  Neither the Company nor any of its
      Subsidiaries (i) has any material liability for the Taxes of any Person
      (other than the Company and its Subsidiaries) under Law or as a transferee
      or
      successor, (ii) has engaged in any "listed transaction" within the meaning
      of U.S. Treasury Regulation Section 1.6011-4(b)(2), or (iii) has, since its
      inception, been required to file a U.S. federal income tax
      return.  None of the Company, any of its Subsidiaries or Waterloo
      Shipping Company Ltd. has ever been a passive foreign investment company within
      the meaning of Section 1297 of the U.S. Internal Revenue Code of 1986, as
      amended (the "Code").  The Company and each of its Subsidiaries
      that owns or operates a ship qualifies, and since its inception has qualified,
      for the exemption provided by Section 883 of the Code.

     

    (h)           Each
      Subsidiary of the Company and Waterloo Shipping Company Ltd. is properly treated
      as a pass-through entity for U.S. federal income Tax purposes.

     

    (i)           This
      Section 2.10 contains the sole and exclusive representations and
      warranties of the Company with respect to Tax matters.

     

    SECTION
      2.11          Employee Benefits
      and Labor Matters.

     

    (a)           The
      Company has previously made available to Parent:

     

    
      
        
        

      

      
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    (i)           details
      of the total number of employees as of the date of this Agreement;

     

    (ii)          the
      full name, age, date of start of employment, period of continuous employment,
      notice period, job title, salary, bonus and commission of all directors,
      officers or employees of the Company;

     

    (iii)         details
      of any period of absence and any payments received or due to those employees
      who
      have been absent for more than a month as of the date of this Agreement or
      who
      are on long-term sickness leave, parental leave or other long-term leave of
      absence as of the date of this Agreement and have a contractual or statutory
      right to return to work; and

     

    (iv)         correct
      and complete copies of each material employee benefit plan or agreement
      maintained by the Company or any of its Subsidiaries (each, a "Company
      Plan"), including, but not limited to, each (w) severance or
      employment agreement with directors, officers or employees of or consultants
      to
      the Company or any of its Subsidiaries, (x) severance program or policy of
      the Company or any of its Subsidiaries with or relating to its employees,
      (y) plan, program, agreement or other arrangement of the Company or any of
      its Subsidiaries with or relating to its directors, officers, employees or
      consultants that contains change-in-control (or comparable) provisions, and
      (z)
      arrangement providing pension, lump sum or other payments given or in connection
      with (whether on or following) termination of employment as a result of
      retirement, death or disability, under which any current or former directors,
      officers, employees or consultants of the Company or its Subsidiaries and their
      dependants have any present or future rights to benefits or which the Company
      or
      any of its Subsidiaries has ever operated, contributed to or participated
      in.  Each Company Plan maintained by the Company or any of its
      Subsidiaries has been administered in accordance with its terms other than
      instances of non-compliance as would not, individually or in the aggregate,
      reasonably be expected to have a Company Material Adverse Effect.  The
      Company Plans are all in compliance with all applicable Laws, except for any
      instances of non-compliance that would not, individually or in the aggregate,
      reasonably be expected to have a Company Material Adverse Effect.

     

    (b)           Except
      as set forth in Section 2.11(b) of the Company Disclosure Letter, (i) no
      change has been made to the terms of employment of any person earning more
      than
£50,000 per annum since December 31, 2006, and (ii) no new director, officer
      or
      employee earning more than £50,000 has been appointed or received an offer of
      employment from the Company which still remains outstanding (except that the
      Company is in the process of hiring a new employee in Singapore who will earn
      more than £50,000 and intends to hire a new chief financial officer who will
      earn more than £50,000).  The Company has not received or been given
      written notice of any resignation of any director, officer or employee earning
      more than £50,000, and there is no agreement with any director, officer or
      employee that entitles any of them to give notice of termination of employment,
      as a result of this Agreement.

     

    (c)           The
      Company has separately provided Parent true and complete copies of the terms
      of
      employment of all current employees and those with offers
      outstanding.

     

    
      
        
        

      

      
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    (d)           The
      Company and each of its Subsidiaries is in compliance with all applicable Laws
      respecting labor, employment, fair employment practices, terms and conditions
      of
      employment, workers' compensation, occupational safety, plant closings, and
      wages and hours, and the terms of the Company Plans providing benefits described
      in Section 2.11(a)(iv) above, except for such failures to be in
      compliance as would not, individually or in the aggregate, reasonably be
      expected to have a Company Material Adverse Effect.  Neither the
      Company nor any of its Subsidiaries is a party to a collective bargaining
      agreement and no labor union has been certified to represent any employee of
      the
      Company or any of its Subsidiaries or, to the Knowledge of the Company, has
      applied to represent or is attempting to organize so as to represent such
      employees.  None of the Company or its Subsidiaries has been issued
      with a contribution notice or financial support direction by the Pensions
      Regulator in accordance with its powers under sections 38 to 51 (inclusive)
      of
      the UK Pensions Act 2004 ("PA04")  and no circumstances exist
      which would reasonably be expected to result in the Company or its Subsidiaries
      being issued with a contribution notice or a financial support direction under
      sections 38 to 51 (inclusive) of PA04.  There are no pending claims
      for severance or early retirement pensions.  None of the directors,
      officers, employees or consultants of the Company or its Subsidiaries who
      transferred to the Company or its Subsidiaries under the UK Transfer of
      Undertakings (Protection of Employment) Regulations 2006 ("TUPE") has
      retired early on less favorable terms than he would have had under his pre-TUPE
      pension arrangement.  No director, officer, employee or consultant of
      the Company or its Subsidiaries is entitled to early retirement terms which
      are
      different from those in the Company Plans as a result of a previous TUPE
      transfer.

     

    Section
      2.12              Contracts.

     

    (a)           The
      Company has previously made available to Parent (including through the provision
      of Filed Company SEC Documents) correct and complete copies of all of the
      following Contracts (including all material amendments, modifications,
      extensions or renewals with respect thereto) to which the Company or any of
      its
      Subsidiaries is a party as of the date of this Agreement (collectively, the
      "Company Contracts"):

     

    (i)           that
      contain a covenant restricting the ability of the Company or any of its
      Subsidiaries to compete in any business or with any Person or in any geographic
      area;

     

    (ii)          with
      any Affiliate of the Company (other than any of its Subsidiaries and other
      than
      employment or compensation-related Contracts);

     

    (iii)         relating
      to any material joint venture, partnership or other similar arrangement
      involving co-investment with a third party;

     

    (iv)        with
      a Governmental Authority (other than ordinary course Contracts with Governmental
      Authorities as a customer) which imposes any material obligation or restriction
      on the Company or any of its Subsidiaries;

     

    (v)         pursuant
      to which any indebtedness for borrowed money of the Company or any of its
      Subsidiaries is outstanding or may be incurred or pursuant to which the Company
      or any of its Subsidiaries has guaranteed any indebtedness for borrowed money
      of
      any other Person (other than the Company or any of its Subsidiaries and
      excluding trade payables arising in the ordinary course of
      business);

     

    
      
        
        

      

      
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    (vi)        that
      are ship charters (including capital leases) to which the Company or any
      Subsidiary is a party (as owner, operator, charterer, lessee or lessor, as
      the
      case may be) and related management agreements, as of the date
      hereof;

     

    (vii)       that
      is required by the rules and regulations of the SEC to be filed as an exhibit
      to
      the Company SEC Documents; and

     

    (viii)      relating
      to (A) the future disposition or acquisition of any material assets or
      properties, other than dispositions or acquisitions in the ordinary course
      of
      business, and (B) any merger or other business combination transaction
      consummated after December 31, 2004.

     

    (b)           Each
      Company Contract is valid and binding on the Company and each of its
      Subsidiaries which is party thereto and, to the Knowledge of the Company, each
      other party thereto, and is in full force and effect, and the Company and each
      of its Subsidiaries has performed all obligations required to be performed
      by it
      prior to the date hereof under each Company Contract and, to the Knowledge
      of
      the Company, each other party to each Company Contract has performed all
      obligations required to be performed by it prior to the date hereof under such
      Company Contract, except for such failures to be in compliance as would not,
      individually or in the aggregate, reasonably be expected to have a Company
      Material Adverse Effect.

     

    SECTION
      2.13   Real
      Estate; Environmental Matters.

     

    (a)           Neither
      the Company nor any of its Subsidiaries owns, or in the past has owned, any
      real
      estate.

     

    (b)           Except
      as set forth in Section 2.13(b) of the Company Disclosure
      Letter:

     

    (i)           The
      Company and each of its Subsidiaries is and has been in compliance with (x)
      all
      applicable federal, state, local, foreign and international Laws concerning
      pollution or protection of the environment or natural resources, including
      without limitation all those relating to the presence, use, production,
      generation, handling, transportation, treatment, storage, disposal,
      distribution, labeling, testing, processing, discharge, release, threatened
      release, control or cleanup of any hazardous or toxic materials, substances
      or
      wastes or pollutants or contaminants (collectively "Hazardous
      Materials"), as such requirements are enacted and in effect on the Closing
      Date ("Environmental Laws"), and (y) any Permits required under
      applicable Environmental Laws for the current operations of the Company and
      each
      of its Subsidiaries, except for any such instances of non-compliance that would
      not, individually or in the aggregate, reasonably be expected to have a Company
      Material Adverse Effect.

     

    (ii)           Neither
      the Company nor any of its Subsidiaries has received any written notice or
      report regarding any actual or alleged violation of any applicable Environmental
      Law or any liabilities arising under applicable Environmental Laws, in each
      case
      concerning the Company or its Subsidiaries, except for any such violation or
      liability that would not, individually or in the aggregate, reasonably be
      expected to have a Company Material Adverse Effect.

     

    
      
        
        

      

      
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    (iii)         To
      the Knowledge of the Company, there is no Action or Proceeding relating to
      or
      arising under Environmental Laws that is pending or threatened against or
      affecting the Company or any of its Subsidiaries.

     

    (iv)        Neither
      the Company nor any of its Subsidiaries has received any written notice of
      or
      entered into any obligation, liability, order, settlement, judgment, injunction
      or decree relating to or arising under Environmental Laws, except for any such
      instances of notices or obligations that would not, individually or in the
      aggregate, reasonably be expected to have a Company Material Adverse
      Effect.

     

    (v)         To
      the Knowledge of the Company, no facts, circumstances or conditions exist with
      respect to the Company or any of its Subsidiaries or any real property or assets
      owned or leased by or for the Company or any of its Subsidiaries that would
      reasonably be expected to result in the Company and its Subsidiaries incurring
      liabilities or losses under Environmental Laws, including, but not limited
      to,
      any releases of Hazardous Materials at or from any of the vessels or any
      containers under the control of the Company or any Subsidiary except for any
      such facts, circumstances or conditions that would not, individually or in
      the
      aggregate, reasonably be expected to have a Company Material Adverse
      Effect.

     

    (c)           This
      Section 2.13 contains the sole and exclusive representations and
      warranties of the Company with respect to any environmental matters, including
      without limitation any arising under any Environmental Laws.

     

    SECTION
      2.14   Intellectual
      Property.

     

    (a)           As
      used herein: (i) "Intellectual Property" means all U.S. and foreign
      (A) trademarks, service marks, trade names, Internet domain names, designs,
      logos and slogans, together with goodwill, registrations and applications
      relating to the foregoing ("Trademarks"), (B) patents and pending
      patent applications, invention disclosure statements, and any and all divisions,
      continuations, continuations-in-part, reissues, reexaminations and extensions
      thereof, any counterparts claiming priority therefrom and like statutory rights
      ("Patents"), (C) registered and unregistered copyrights (including
      those in Software) and registrations and applications to register the same
      ("Copyrights"), (D) confidential technology, know-how, inventions,
      processes, formulae, algorithms, models and methodologies ("Trade
      Secrets") and (E) databases and compilations, including any and all
      electronic data and electronic collections of data; (ii) "IP
      Licenses" means any license or sublicense rights in or to any Intellectual
      Property; (iii) "Software" means all computer programs, including
      any and all software implementations of algorithms, models
      and methodologies whether in source code or object code form, and
      all documentation, including user manuals and training materials, related to
      any
      of the foregoing; and (iv) "Company Intellectual Property" means the
      Intellectual Property, IP Licenses and Software held for use or used in the
      business of the Company or any of its Subsidiaries as presently
      conducted.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

    (b)           Except
      as would not, individually or in the aggregate, reasonably be expected to result
      in a Company Material Adverse Effect, the Company or one of its Subsidiaries
      owns or possesses appropriate licenses or other legal rights to use, sell or
      license all Company Intellectual Property.

     

    (c)           Except
      as would not, individually or in the aggregate, reasonably be expected to result
      in a Company Material Adverse Effect:

     

    (i)           to
      the Knowledge of the Company, the conduct of the businesses of the Company
      and
      its Subsidiaries does not infringe, misappropriate, or otherwise violate any
      Intellectual Property rights of any third party;

     

    (ii)           to
      the Knowledge of the Company, no third party is infringing, misappropriating,
      diluting or violating any Company Intellectual Property that is owned by the
      Company or any of its Subsidiaries;

     

    (iii)           no
      settlement agreements, consents, orders, forbearances to sue or similar
      obligations to which the Company or any of its Subsidiaries is a party limit
      or
      restrict any rights of the Company or any of its Subsidiaries in and to any
      Company Intellectual Property that is owned by the Company or any of its
      Subsidiaries; and

     

    (iv)           the
      consummation of the Merger will not result in the loss or impairment of any
      rights of the Company or any of its Subsidiaries to own or use any of the
      Company Intellectual Property or obligate the Company or any of its Subsidiaries
      to pay any royalties or other amounts to any third party in excess of the
      amounts that would have been payable by them absent the consummation of the
      Merger.

     

    SECTION
      2.15          Insurance.Section
      2.15 of the Company Disclosure Letter lists and briefly describes each
      insurance policy maintained by the Company and any of its
      Subsidiaries.  The Company previously furnished Parent with a claims
      history as of June 12, 2007 for the past five (5) years plus any insurance
      year
      that has not been closed in accordance with the terms of the relevant insurance
      policy.  All premiums due and payable to date under all such policies
      and Contracts have been paid and the Company and its Subsidiaries are otherwise
      in compliance in all respects with the terms of such policies and Contracts,
      except for such failures to be in compliance which could not, individually
      or in
      the aggregate, reasonably be expected to have a Company Material Adverse
      Effect.  Neither the Company nor any of its Subsidiaries has received
      notice of cancellation or non-renewal of any marine insurance
      policy.

     

    SECTION
      2.16          Vessels.

     

    (a)           Section
      2.16(a) of the Company Disclosure Letter lists all vessels owned, chartered
      or operated by the Company or any of its Subsidiaries (the "Vessels"),
      setting forth, for each Vessel, its (i) name, (ii) owner, (iii) flag state
      of
      registration (including any bareboat registration), (iv) charterer, (v) IMO
      number and call sign, (vi) classification society, (vii) year of construction,
      (viii) date of last special survey, and (ix) date of last
      drydocking.  Except as set forth in Section 2.16(a) of the Company
      Disclosure Letter, no Vessel is subject to any demise charter or contract of
      affreightment.

     

    
      
        
        

      

      
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    (b)           Except
      as set forth on Section 2.16(b) of the Company Disclosure Letter, each of
      the Vessels: (i) is free and clear of all secured liens except as described
      in
      the Filed Company SEC Documents; (ii) is insured in accordance with the policies
      listed on Section 2.15 of the Company Disclosure Letter; (iii) is in
      material compliance, and each Person providing management services for such
      Vessel is in material compliance, with the requirements of the ISM Code, the
      ISPS Code and the MTSA, including (but not limited to) the maintenance and
      renewal of valid certificates pursuant thereto; (iv) is in material compliance
      with all laws as are applicable to vessels (A) registered under the law of
      the
      flag state in which such Vessel is registered and (B) trading to any
      jurisdiction to which such Vessel may trade from time to time; (v) is in the
      sole and absolute ownership of the relevant owner described in Section
      2.16(a) of the Company Disclosure Letter, and duly documented in the name of
      such owner under the laws of the flag state in which such Vessel is registered;
      (vi) except with respect to Kew Bridge, maintains the highest classification
      and
      rating for vessels of the same age and type with her classification society;
      (vii) is in a good and safe condition and state of repair; and (viii) is
      seaworthy for hull and machinery insurance warranty purposes in all material
      respects for its intended service.  Except with respect to Kew Bridge,
      class certificates and national and international certificates respecting the
      Vessels are valid and their class is maintained.

     

    SECTION
      2.17          Leases of
      Ships and Ship Charters.  The Filed Company SEC Documents contain
      a correct and complete list of all ship charters (including capital leases)
      to
      which the Company or any Subsidiary is a party (as owner, operator, charterer,
      lessee or lessor, as the case may be) as of the date hereof (collectively,
      the
      "Charters").  Each such Charter is, with respect to the Company
      and its Subsidiaries, in full force and effect; all rents, payments or charter
      hire due to date on each such Charter have been paid in the ordinary course
      consistent with past practice (except where disputed in good faith); in each
      case, the charterer has been in possession since the commencement of the
      original term of such Charter and is not in default thereunder and no waiver,
      indulgence or postponement of the charterer's obligations thereunder has been
      granted by the lessor, owner or operator.  Neither the Company nor any
      Subsidiary has breached any material terms or conditions under any such Charter
      in any material respect, and, to the Knowledge of the Company, all material
      covenants to be performed by any other party under any such Charter have been
      performed in all material respects.  None of the Charters will be
      violated, breached or terminated by reason of the consummation of the
      Merger.

     

    SECTION
      2.18         Certain Business
      Relationships with Affiliates.  Except as disclosed in the Filed
      Company SEC Documents, from and after January 1, 2006 and prior to the date
      hereof, no event has occurred, and there has been no transaction, or series
      of
      similar transactions, agreements, arrangements or understandings to which the
      Company or any of its Subsidiaries is to be a party, that would be required
      to
      be reported pursuant to Item 404 of Regulation S-K promulgated by the
      SEC.

     

    SECTION
      2.19          Opinion of
      Financial Advisor.  The Transaction Committee has received the
      opinion of DnB NOR Markets, Inc. ("DnB"), dated the date of this Agreement,
      to
      the effect that, as of such date, and subject to the various assumptions and
      qualifications set forth therein, the Merger Consideration is fair to the
      holders of Company Common Stock from a financial point of view.

     

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

    

    SECTION
      2.20          Brokers and
      Other Advisors.  Except for DnB, the fees and expenses of which
      will be paid by the Company, no broker, investment banker, financial advisor,
      agent or other Person is entitled to any broker's, finder's, financial
      advisor's, agent's or other similar fee or commission, or the reimbursement
      of
      expenses, in connection with this Agreement and the transactions contemplated
      hereby based upon arrangements made by or on behalf of the Company or any of
      its
      Subsidiaries.  The Company has provided a true and correct copy of the
      engagement letter, dated July 12, 2007, with DnB providing for the
      payment of fees or commissions and such agreement has not been amended or
      superseded (the "Engagement Letter").

     

    SECTION
      2.21          Management
      Consideration.  Except as set forth in Section 2.21 of the
      Company Disclosure Letter, no employee of the Company shall receive any
      amount of  consideration, bonus or other payment in excess of $10,000
      from any Person in connection with the transactions contemplated
      hereby.

     

    SECTION
      2.22          No Other
      Representations or Warranties.  Except for the representations and
      warranties made by the Company in this Article II, neither the
      Company nor any other Person makes any representation or warranty with respect
      to the Company or its Subsidiaries or their respective businesses, operations,
      assets, liabilities, condition (financial or otherwise) or prospects,
      notwithstanding the delivery or disclosure to Parent or any of its Affiliates
      or
      Representatives of any documentation, forecasts or other information with
      respect to any one or more of the foregoing.

     

    ARTICLE
      III

     

    Representations
      and Warranties of Parent and Merger Sub

     

    Parent
      and Merger Sub jointly and severally represent and warrant to the Company
      that:

     

    SECTION
      3.1            Organization
      and Standing.  Parent is an exempted limited company validly
      existing and in good standing under the Laws of Bermuda and Merger Sub is a
      corporation validly existing and in good standing under the Laws of the Republic
      of Liberia.  Parent is duly licensed or qualified to do business and
      is in good standing in each jurisdiction in which the nature of the business
      conducted by it or the character or location of the properties and assets owned
      or leased or held under license by it makes such licensing or qualification
      necessary, except where the failure to be so licensed, qualified or in good
      standing would not, individually or in the aggregate, reasonably be expected
      to
      impair in any material respect the ability of Parent to perform its obligations
      hereunder or prevent or materially delay consummation of the
      Merger.

     

    SECTION
      3.2            Authority;
      Noncontravention.

     

    (a)           Each
      of Parent and Merger Sub has all necessary corporate power and authority to
      execute and deliver this Agreement, to perform their respective obligations
      hereunder and to consummate the transactions contemplated hereby.  The
      execution, delivery and performance by Parent and Merger Sub of this Agreement,
      and the consummation by Parent and Merger Sub of the transactions contemplated
      hereby, have been duly authorized and approved by their respective Boards of
      Directors and adopted by Parent as the sole shareholder of Merger Sub, and
      no
      other corporate action on the part of Parent and Merger Sub is necessary to
      authorize the execution, delivery and performance by Parent and Merger Sub
      of
      this Agreement and the consummation by them of the transactions contemplated
      hereby.  This Agreement has been duly executed and delivered by Parent
      and Merger Sub and, assuming due authorization, execution and delivery hereof
      by
      the Company, constitutes a legal, valid and binding obligation of each of Parent
      and Merger Sub, enforceable against each of them in accordance with its terms,
      subject to the Bankruptcy and Equity Exception.

     

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

    

    (b)           Neither
      the execution and delivery of this Agreement by Parent and Merger Sub, nor
      the
      consummation by Parent or Merger Sub of the transactions contemplated hereby,
      nor compliance by Parent or Merger Sub with any of the terms or provisions
      hereof, will (i) conflict with or violate any provision of the articles of
      incorporation or bylaws (or other comparable organizational documents) of Parent
      or Merger Sub or (ii) assuming that the authorizations, consents and
      approvals referred to in Section 3.3 are obtained and the filings
      referred to in Section 3.3 are made, (x) violate any Law,
      judgment, writ or injunction of any Governmental Authority applicable to Parent
      or any of its Subsidiaries, or (y) violate or constitute a default under
      any of the terms, conditions or provisions of any Contract to which Parent,
      Merger Sub or any of their respective Subsidiaries is a party, or by which
      any
      of their respective properties or assets is bound, except, in the case of
      clause (ii), for such violations or defaults as would not, individually or
      in the aggregate, reasonably be expected to impair the ability of Parent or
      Merger Sub to perform its obligations hereunder or prevent or materially delay
      consummation of the Merger.

     

    (c)           No
      vote of the holders of any class or series of Parent's capital stock or other
      securities is necessary for the consummation by Parent of the
      Merger.

     

    SECTION
      3.3            Governmental
      Approvals.  Except for (i) the filing of the Articles of
      Merger with the Minister of Foreign Affairs pursuant to the BCAL, and
      (ii) filings required under, and compliance with other applicable
      requirements of, Foreign Antitrust Laws, no consents or approvals of, or
      filings, declarations or registrations with, any Governmental Authority are
      necessary for the execution, delivery and performance of this Agreement by
      Parent and Merger Sub or the consummation by Parent and Merger Sub of the
      transactions contemplated hereby, other than such other consents, approvals,
      filings, declarations or registrations that, if not obtained, made or given,
      would not, individually or in the aggregate, reasonably be expected to impair
      in
      any material respect the ability of Parent or Merger Sub to perform its
      obligations hereunder or prevent or materially delay consummation of the
      Merger.

     

    SECTION
      3.4            Information
      Supplied.  The information supplied by Parent for inclusion or
      incorporation by reference in the Proxy Statement will not, on the date it
      is
      first mailed to the holders of Company Common Stock, 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 the
      light of the circumstances under which they are made, not misleading, and will
      not, at the time of the Company Shareholders Meeting, omit to state any material
      fact necessary to correct any statement in any earlier communication with
      respect to the Company Shareholders Meeting which shall have become false or
      misleading in any material respect.

    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

    SECTION
      3.5            Ownership
      and Operations of Merger Sub.  Parent owns beneficially and of
      record all of the outstanding capital stock of Merger Sub.  Merger 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.

     

    SECTION
      3.6            Capital
      Resources.  Parent and Merger Sub collectively have, and will have
      at the Effective Time, sufficient cash resources available to pay the aggregate
      Merger Consideration and all fees and expenses payable by them in connection
      with this Agreement and the transactions contemplated hereby.

     

    SECTION
      3.7            Legal
      Proceedings.  As of the date hereof, there is no pending or, to
      the Knowledge of Parent, threatened Action or Proceeding, against or relating
      to
      Parent or any of its Subsidiaries, nor is there any injunction, order, judgment,
      ruling or decree imposed upon Parent or any of its Subsidiaries, in each case,
      by or before any Governmental Authority, that would, individually or in the
      aggregate, reasonably be expected to impair in any material respect the ability
      of Parent to perform its obligations hereunder or prevent or materially delay
      consummation of the Merger.

     

    SECTION
      3.8            Brokers
      and Other Advisors.  Except for HSBC Securities (USA) Inc. and
      Poten Capital Services, LLC, the fees and expenses of which will be paid by
      Parent, no broker, investment banker, financial advisor, agent or other Person
      is entitled to any broker's, finder's, financial advisor's, agent's or other
      similar fee or commission, or the reimbursement of expenses, in connection
      with
      this Agreement and the transactions contemplated hereby based upon arrangements
      made by or on behalf of Parent or any of its Subsidiaries.

     

    SECTION
      3.9            Ownership
      of Company Common Stock.  Prior to the execution of this
      Agreement, neither Parent nor Merger Sub nor any of their Affiliates owns
      (directly or indirectly, beneficially or of record) any Shares and neither
      Parent nor Merger Sub nor any of their Affiliates holds any rights to acquire
      any Shares except pursuant to this Agreement.

     

    SECTION
      3.10          No
      Reliance.  Notwithstanding anything contained in this Agreement to
      the contrary, each of Parent and Merger Sub acknowledges and agrees that
      (a) neither the Company nor any Person on behalf of the Company is making
      any representations or warranties whatsoever, express or implied, beyond those
      expressly made by the Company in Article II, and (b) none of Parent or
      Merger Sub has been induced by, or relied upon, any representations, warranties
      or statements (written or oral), whether express or implied, made by any Person,
      that are not expressly set forth in Article II of this
      Agreement.  Without limiting the generality of the foregoing, each of
      Parent and Merger Sub acknowledges that no representations or warranties are
      made with respect to any projections, forecasts, estimates, budgets or
      information as to prospects with respect to the Company and its Subsidiaries
      that may have been made available to Parent, Merger Sub or any of their
      respective representatives.

     

    
      
        
        

      

      
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    ARTICLE
      IV

     

    Additional
      Covenants and Agreements

     

    SECTION
      4.1            Conduct
      of Business.

     

    (a)           Except
      as contemplated or permitted by this Agreement or as required by applicable
      Law
      or as contemplated by Section 4.1(a) of the Company Disclosure Letter,
      during the period from the date of this Agreement until the Effective Time,
      unless Parent otherwise consents (which consent shall not be unreasonably
      withheld, conditioned or delayed) in writing, the Company shall, and shall
      cause
      each of its Subsidiaries to, (w) conduct its business in the ordinary
      course and in conformity with past practice, (x) use its commercially reasonable
      efforts to preserve substantially intact its capital structure and business
      organization, its customer and supplier relationships and its goodwill, and
      retain the services of its present officers and key employees, (y) comply
      in all material respects with all applicable Laws and the requirements of all
      Company Contracts, and (z) keep in full force and effect all material
      insurance policies maintained by the Company and its Subsidiaries, other than
      changes to such policies made in the ordinary course of business, and, without
      limiting the generality of the foregoing, the Company shall not, and shall
      not
      permit any of its Subsidiaries to, unless Parent otherwise consents (which
      consent shall not be unreasonably withheld, conditioned or delayed in the case
      of clauses (ii), (iii), (iv), (vi), (vii), (viii), (xiii), (xv) and (xvi) below,
      as well as clause (xviii) below to the extent it relates to any of the foregoing
      clauses):

     

    (i)           (A) issue,
      sell, grant, dispose of, pledge or otherwise encumber any shares of its capital
      stock, or any securities or rights convertible into, exchangeable or exercisable
      for, or evidencing the right to subscribe for any shares of its capital stock,
      or any rights, warrants, options calls, commitments or any other agreements
      of
      any character to purchase any shares of its capital stock, or any securities
      or
      rights convertible into, exchangeable or exercisable for, or evidencing the
      right to subscribe for, any shares of its capital stock; (B) redeem,
      purchase or otherwise acquire any of its outstanding shares of capital stock,
      or
      any rights, warrants, options calls, commitments or any other agreements of
      any
      character to acquire any shares of its capital stock, except pursuant to written
      commitments in effect as of the date hereof; (C) declare, set
      aside for payment or pay any dividend on, or make any other distribution in
      respect of, any shares of its capital stock, other than a quarterly cash
      dividend of no more than $0.0625 per share; (D) split, combine, subdivide
      or reclassify any shares of its capital stock or (E) enter into any
      agreement with respect to the voting of its capital stock;

     

    (ii)          (A) incur
      any new indebtedness for borrowed money or guarantee any such indebtedness
      (other than with respect to mechanics maritime liens which are consistent with
      past practice), or issue or sell any debt securities or options, warrants,
      calls
      or other rights to acquire any debt securities of the Company or any of its
      Subsidiaries other than borrowings in amounts not in excess of $1,000,000 in
      the
      aggregate outstanding at any time, except for borrowings permitted under the
      terms of any existing credit facility as in effect on the date hereof, (B)
      make
      any loans, advances or capital contributions to, or investments in, any Person
      other than the Company or any of its Subsidiaries in excess of $1,000,000 in
      the
      aggregate or (C) repurchase or prepay any indebtedness for borrowed money in
      excess of $1,000,000 in the aggregate, except as required by the terms of such
      indebtedness or for payments of amounts outstanding under the Company's existing
      credit facility in the ordinary course of business;

     

    
      
        
        

      

      
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    (iii)        sell,
      transfer, encumber, lease, mortgage, or otherwise dispose of or subject to
      any
      lien any Vessel owned by the Company or any of its Subsidiaries, or any of
      its properties or assets that are material to the Company and its Subsidiaries
      taken as a whole, except (A) sales, leases, rentals and licenses in the
      ordinary course of business, (B) pursuant to Contracts in force at the date
      of this Agreement or entered into after the date of this Agreement to the extent
      permitted by the terms of this Agreement, (C) dispositions of obsolete or
      worthless assets, or (D) transfers among the Company and its
      Subsidiaries;

     

    (iv)         make
      any non-vessel related capital expenditures in excess of
      $50,000 in the aggregate for the Company and its Subsidiaries taken as a
      whole;

     

    (v)         directly
      or indirectly make any acquisition (including by merger, consolidation or
      acquisition of stock or any other manner) of the capital stock of, or division,
      business or equity interest of, or (except in the ordinary course of business
      consistent with past practice) a material portion of the assets of any other
      Person;

     

    (vi)         increase
      in any material respect the compensation of any of its directors, officers,
      consultants or employees or enter into, amend or terminate any employment,
      consulting, retention, change in control, bonus or incentive compensation
      arrangement with any director, officer, consultant or employee of the Company
      or
      any of its Subsidiaries, it being understood by the parties that the Company
      is
      currently seeking to hire a chief financial officer, other than (A) as
      required pursuant to applicable Law or the terms of Contracts in effect on
      the
      date of this Agreement or entered into after the date of this Agreement to
      the
      extent permitted by the terms of this Agreement and (B) increases in
      salaries, wages and benefits of employees (other than officers) made in the
      ordinary course of business and in a manner consistent with past
      practice;

     

    (vii)       other
      than in the ordinary course of business or pursuant to any Contract or any
      Company Plan in existence on the date hereof or entered into after the date
      of
      this Agreement to the extent permitted by the terms of this Agreement,
      (A) pay to any current or former director, officer, employee or consultant
      of the Company or any of the Company's Subsidiaries any benefit not provided
      for
      under any Contract or Company Plan (other than the payment of cash compensation
      in the ordinary course of business), (B) take any action to fund or in any
      other way secure the payment of compensation or benefits under any Contract
      or
      Company Plan, (C) exercise any discretion to accelerate the vesting or
      payment of any compensation or benefit under any Contract or Company Plan other
      than as required by the terms of this Agreement or (D) adopt any new
      employee benefit plan or arrangement or amend, modify or terminate any existing
      Company Plan to increase the benefits thereunder, in each case for the benefit
      of any current or former director, officer, employee or consultant of the
      Company or any Subsidiary of the Company, other than as required by applicable
      Tax qualification requirements;

     

    
      
        
        

      

      
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    (viii)      make,
      change or rescind any material election concerning Taxes; settle or compromise
      any material Tax liability, claim, audit, Action or Proceeding; file any
      material amended Tax Return; enter into any closing agreement with a
      Governmental Authority relating to material Taxes; other than as required by
      applicable Law, change any of its Tax accounting methods or annual periods;
      surrender any material claim for a refund of Taxes; or waive or extend the
      statute of limitations in respect of any material Tax (other than pursuant
      to
      extensions of time to file Tax Returns in the ordinary course of
      business);

     

    (ix)         make
      any changes in financial accounting methods, principles or practices (or change
      an annual accounting period), except insofar as may be required by a change
      in
      GAAP or applicable Law;

     

    (x)          (A) amend
      the Company Charter Documents, (B) enter into, terminate or amend any
      Contract other than in the ordinary course of business, (C) enter into or
      extend the term or scope of any Contract that purports to restrict the Company,
      or any existing or future Subsidiary or Affiliate of the Company, from engaging
      in any line of business or in any geographic area, (D) amend or modify the
      Engagement Letter, (E) enter into any Contract that would be breached by,
      or require the consent of any third party in order to continue in full force
      following, consummation of the Merger, or (F) except to the extent
      permitted by Section 4.2, release any Person from, or modify or waive any
      provision of, any confidentiality, standstill or similar agreement;

     

    (xi)         except
      to the extent permitted by Section 4.2, adopt a plan or agreement of
      complete or partial liquidation or dissolution, restructuring, recapitalization,
      merger, consolidation or other reorganization (other than transactions
      exclusively between wholly-owned Subsidiaries of the Company);

     

    (xii)        adopt
      or enter into any collective bargaining agreement or other labor union Contract
      applicable to the employees of the Company or any Subsidiary of the
      Company;

     

    (xiii)       fail
      to use commercially reasonable efforts to maintain existing insurance policies
      or comparable replacement policies to the extent available for a reasonable
      cost;

     

    (xiv)      
      enter into any new line of business that is material to the Company and the
      Subsidiaries of the Company, taken as a whole;

     

    
      
        
        

      

      
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    (xv)       
      make any investment (by contribution to capital, property transfers, purchase
      of
      securities or otherwise) in, or loan or advance (other than travel and similar
      advances to its employees in the ordinary course of business consistent with
      past practice) to, any Person;

     

    (xvi)      other
      than in the ordinary course of business, settle or compromise any litigation,
      proceeding or investigation material to the Company and its Subsidiaries taken
      as a whole;

     

    (xvii)     acquire
      any real estate; or

     

    (xviii)    agree
      to take any of the foregoing actions.

     

    (b)           During
      the period from the date of this Agreement until the Effective Time, Parent
      shall not, and shall not permit any of its Subsidiaries to, take, or agree
      or
      commit to take, any action that could reasonably be expected to (i) impose
      any
      material delay in the obtaining of any authorizations, consents, orders,
      declarations or approvals of any Governmental Authority necessary to consummate
      the Merger or the expiration or termination of any applicable waiting period,
      (ii) result in any Governmental Authority entering an order prohibiting the
      consummation of the Merger or (iii) otherwise prevent or materially delay
      the consummation of the Merger.  Without limiting the generality of
      the foregoing, Parent agrees that, during the period from the date of this
      Agreement until the Effective Time, Parent shall not, and shall not permit
      any
      of its Subsidiaries to, acquire or agree to acquire by merging or consolidating
      with, or by purchasing a substantial portion of the assets of or equity in,
      or
      by any other manner, any Person or portion thereof, or otherwise acquire or
      agree to acquire any assets or rights, if the entering into of a definitive
      agreement relating to or the consummation of such acquisition, merger or
      consolidation would reasonably be expected to have any of the effects described
      in clauses (i) through (iii) above.

     

    SECTION
      4.2    Other Offers;
      Etc.

     

    (a)           On
      September 2, 2007, at 11:59 P.M. (the "No-Shop Period Start Date"),
      the Company shall and shall cause each of its Subsidiaries, and shall use its
      reasonable best efforts to cause its and its Subsidiaries' respective directors,
      officers, employees, legal counsel, investment banking and financial advisors,
      independent accountants and any other agents and representatives (collectively,
      "Representatives") to, cease any negotiations that may be ongoing
      immediately prior to the No-Shop Period Start Date with any Person with respect
      to a Takeover Proposal, other than any negotiations with an Excluded Party,
      and
      request, not later than five (5) days following the No-Shop Period Start Date,
      the prompt return or written acknowledgement of destruction of all confidential
      information previously furnished to such parties or their Representatives other
      than an Excluded Party.  During the period from the No-Shop Period
      Start Date until the Effective Time, or such earlier date as this Agreement
      may
      be terminated in accordance with its terms, the Company and its Subsidiaries
      shall not, and the Company shall use its reasonable best efforts to cause its
      and its Subsidiaries' Representatives not to, (i) solicit, initiate or
      knowingly encourage (including by way of providing information or access to
      its
      properties, books, records or personnel) the submission of any inquiries,
      proposals, or offers or any other efforts or attempts that constitute, or could
      reasonably be expected to lead to, any Takeover Proposal, or (ii) except to
      inform Persons of the existence of the provisions contained in this
Section 4.2, participate in or otherwise cooperate with or assist in
      any discussions or negotiations with, or furnish any non-public information
      to,
      any Person regarding any inquiries, proposals, or offers or any other efforts
      or
      attempts that constitute, or may reasonably be expected to lead to a Takeover
      Proposal, or (iii) grant any release or waiver under any standstill or similar
      agreement relating to the Company or any of its Subsidiaries; provided
      that the foregoing restrictions shall not (x) limit in any respect the
      ability of the Company and its Representatives to take any of the actions
      described in clause (i) or (ii) above prior to the commencement of the
      No-Shop Period Start Date (provided that the Company enters into an
      Acceptable Confidentiality Agreement with such Person prior to providing any
      non-public information and promptly provides to Parent any non-public
      information concerning the Company or its Subsidiaries that is provided to
      any
      such Person which was not previously provided to Parent) or (y) be
      applicable to any Excluded Party; and provided, further, that
      (1) prior to the commencement of the No-Shop Period Start Date, if
      requested to do so by any Person, the Company may waive the provisions of any
      "standstill" agreement between the Company and such Person to the extent
      necessary to permit such Person to submit a Takeover Proposal and (2) to
      the extent reasonably required to evaluate a Takeover Proposal that includes
      the
      issuance of securities by the Person making such Takeover Proposal, the Company
      may enter into a customary confidentiality agreement in order to obtain
      non-public information with respect to such Person.  For purposes of
      this Agreement, the term "Excluded Party" means any Person from whom
      the Company receives a Takeover Proposal prior to the No-Shop Period Start
      Date
      who, as determined in good faith by, and in the reasonable judgment of, the
      Company Board as of the No-Shop Period Start Date, satisfies the requirements
      of
      sub-clauses (A) and (B) of clause (z) of Section 4.2(b)
      (disregarding the fact, for this purpose, that such Takeover Proposal may not
      have been an unsolicited Takeover Proposal); provided that any Excluded
      Party shall cease to be an Excluded Party for all purposes under this Agreement
      at such time as the Takeover Proposal made by such Person fails, in the
      reasonable judgment of the Company Board, to satisfy the requirements of
      sub-clauses (A) and (B) of clause (z) of
Section 4.2(b).

     

    
      
        
        

      

      
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    (b)           Notwithstanding
      Section 4.2(a), commencing on the No-Shop Period Start Date and at
      any time prior to obtaining the Company Shareholder Approval, in addition to
      continuing discussions with any Excluded Party regarding such Excluded Party's
      Takeover Proposal, (x) the Company and its Representatives may have
      discussions with any Person that has made an unsolicited Takeover Proposal
      in
      order to clarify and understand the terms and conditions of such proposal,
      (y) if requested to do so by any Person, the Company may waive the
      provisions of any "standstill" agreement between the Company and such Person
      to
      the extent necessary to permit such Person to submit an unsolicited Takeover
      Proposal and (z) if the Company Board (A) receives an unsolicited
      Takeover Proposal that it determines in good faith (after consultation with
      outside legal counsel and a financial advisor of recognized reputation (which
      shall include DnB)) constitutes or would reasonably be expected to lead to
      a
      Superior Proposal and (B) determines in good faith (after consultation with
      outside legal counsel) that the taking of any of the following actions is
      advisable in order for the Company Board to comply with its fiduciary duties
      to
      the holders of Company Common Stock under applicable Law, the Company may
      (I) furnish information with respect to the Company and its Subsidiaries to
      the Person making such Takeover Proposal (provided that the Company first
      enters into an Acceptable Confidentiality Agreement with such Person and
      promptly provides to Parent any non-public information concerning the Company
      or
      its Subsidiaries that is provided to any Person given such access which was
      not
      previously provided to Parent), (II) participate in discussions and
      negotiations with such Person regarding such Takeover Proposal and (III) to
      the
      extent reasonably required to evaluate a Takeover Proposal that includes the
      issuance of securities by the Person making such Takeover Proposal, enter into
      a
      customary confidentiality agreement in order to obtain non-public information
      with respect to such Person.  The Company shall promptly (and in any
      event within one (1) business day) advise Parent of any Takeover Proposal,
      any
      inquiry or indication of interest that could reasonably be expected to lead
      to a
      Takeover Proposal or any request for non-public information relating to the
      Company or any of its Subsidiaries with respect to any Takeover Proposal that
      is
      made or submitted by any Person during the period commencing on the No-Shop
      Period Start Date (including from an Excluded Party the Company remains in
      discussions with regarding a Takeover Proposal after the No-Shop Period Start
      Date), and at any time after the No-Shop Period Start Date and prior to
      obtaining Company Shareholder Approval, the identity of the Person making any
      such Takeover Proposal, inquiry, indication of interest or request and shall
      provide Parent with a copy (if in writing) or summary of the terms and
      conditions (if not in writing) of any such Takeover Proposal, inquiry,
      indication of interest or request (which shall include copies of any written
      materials received from or on behalf of such Person relating to such Takeover
      Proposal, inquiry, indication of interest or request).  The Company
      shall keep Parent fully informed of the status of any Takeover Proposal,
      inquiry, indication of interest or request, including promptly advising Parent
      of any change to the terms of any Takeover Proposal, after the No-Shop Period
      Start Date.

     

    
      
        
        

      

      
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    (c)           Except
      as expressly permitted by this Section 4.2(c), (i) the Company
      Board shall not (A) withdraw or modify, in a manner adverse to Parent, the
      Company Recommendation or (B) publicly approve or recommend to the holders
      of Company Common Stock a Takeover Proposal (any action described in this
      clause (i) being referred to as a "Company Adverse Recommendation
      Change"), and (ii) neither the Company nor any of its Subsidiaries
      shall enter into any letter of intent, merger, acquisition or similar agreement
      with respect to any Takeover Proposal (each, a "Company Acquisition
      Agreement"), other than an Acceptable Confidentiality
      Agreement.  Notwithstanding the foregoing, prior to the Company
      Shareholder Approval, (x) other than in connection with a Takeover
      Proposal, the Company Board may withdraw or modify the Company Recommendation
      if
      it determines in good faith (after consultation with outside legal counsel)
      that
      such action is advisable in order for the Company Board to comply with its
      fiduciary duties to the holders of Company Common Stock under applicable Law,
      and (y) subject to Section 4.2(d), if the Company Board
      (A) determines in good faith (after consultation with outside legal counsel
      and a financial advisor of recognized reputation (which shall include DnB))
      that
      any Takeover Proposal submitted by an Excluded Party prior to the No-Shop Period
      Start Date or any unsolicited Takeover Proposal received on or after the No-Shop
      Period Start Date, in either case, constitutes a Superior Proposal, and
      (B) determines in good faith (after consultation with outside legal
      counsel) that the taking of any of the following actions is advisable in order
      for the Company Board to comply with its fiduciary duties to the holders of
      Company Common Stock under applicable Law, the Company Board may (I) make a
      Company Adverse Recommendation Change and/or (II) cause the Company to
      enter into a Company Acquisition Agreement with respect to such Superior
      Proposal, but only if the Company shall have concurrently with entering into
      such Company Acquisition Agreement terminated this Agreement pursuant to
Section 6.1(c)(i).

     

    
      
        
        

      

      
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    (d)           If
      the Company Board determines to effect a Company Adverse Recommendation Change
      as provided in Section 4.2(c)(y)(I) or to authorize the Company to
      enter into a Company Acquisition Agreement as provided in
Section 4.2(c)(y)(II), such Company Adverse Recommendation Change or
      Company Acquisition Agreement (as applicable) may only become effective after
      the end of the fifth (5th) business
      day (the
      "Notice Period") following Parent's receipt of written notice from the
      Company (an "Adverse Recommendation Notice") advising Parent that the
      Company Board intends to effect such Company Adverse Recommendation Change
      or to
      authorize the Company to enter into such Company Acquisition Agreement, which
      notice shall contain a copy of the Superior Proposal to which such Company
      Adverse Recommendation Change or Company Acquisition Agreement relates;
provided that the Company shall negotiate in good faith with Parent, to
      the extent Parent wishes to negotiate, during the Notice Period to enable Parent
      to make proposed changes to the terms of this Agreement; provided,
further, that any material amendment to the terms of such Superior
      Proposal after the initial Adverse Recommendation Notice shall require a new
      Adverse Recommendation Notice and restart the five (5) business day period
      referred to above.  Notwithstanding the foregoing, the Company Board
      shall not be entitled, in response to a Superior Proposal, to effect a Company
      Adverse Recommendation Change or permit the Company to enter into a Company
      Acquisition Agreement if, within the Notice Period, Parent shall have made
      an
      offer that the Company Board determines in its good faith judgment (having
      considered the advice of its financial advisor and outside legal counsel) is
      at
      least as favorable to the Company's shareholders as such Superior Proposal
      (it
      being agreed in each case that the Company Board shall convene a meeting to
      consider any such offer by Parent reasonably promptly following the receipt
      thereof).

     

    (e)           For
      purposes of this Agreement:

     

    "Acceptable
      Confidentiality Agreement" means a confidentiality agreement that
      contains provisions that are no less restrictive with respect to the Company's
      counterparty than those contained in the Confidentiality
      Agreement.  Following the No-Shop Period Start Date, the Company shall
      provide Parent with a correct and complete copy of any Acceptable
      Confidentiality Agreement within one (1) business day following the execution
      thereof.

     

    "Takeover
      Proposal" means a bona fide written proposal or offer from any Person (other
      than Parent and its Subsidiaries) after the date, and not in breach, of this
      Agreement relating to any (i) direct or indirect acquisition of all or
      substantially all of the assets of the Company and its Subsidiaries, (ii) direct
      or indirect acquisition of all or substantially all of the outstanding Company
      Common Stock, (iii) tender offer or exchange offer that if consummated would
      result in any Person beneficially owning all or substantially all of the
      outstanding Company Common Stock or (iv) merger, consolidation, share exchange,
      business combination, recapitalization, liquidation, dissolution or similar
      transaction involving the Company.

     

    "Superior
      Proposal" means a Takeover Proposal that the Company Board determines in
      good faith, after consultation with its legal and financial advisors, and
      consideration of all terms and conditions of such offer or proposal (including
      the conditionality and the timing and likelihood of consummation), to be more
      favorable to the holders of Company Common Stock than the Merger, after giving
      effect to any modifications proposed to be made to this Agreement or any other
      offer by Parent after Parent's receipt of an Adverse Recommendation
      Notice.

     

    
      
        
        

      

      
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    (f)           Nothing
      in this Section 4.2 shall prohibit the Company Board from
      (i) taking and disclosing to the Company's shareholders a position
      contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of
      Regulation M-A promulgated under the Exchange Act, or other applicable Law,
      if the Company Board determines, after consultation with outside legal counsel,
      that failure to so disclose such position could constitute a violation of
      applicable Law, or (ii) filing a copy of this Agreement and any amendments
      hereto, together with a description of its terms, on a Form 8-K under the
      Exchange Act.  In addition, it is understood and agreed that, for
      purposes of this Section 4.2, a factually accurate public statement
      by the Company that describes the Company's receipt of a Takeover Proposal
      and
      the operation of this Agreement with respect thereto and contains a
      "stop-look-and-listen communication" shall not be deemed a Company Adverse
      Recommendation Change.

     

    (g)           In
      the event that, in accordance with the provisions of this Section 4.2 and
Section 6.1(c)(i), the Company terminates this Agreementand enters into a
      definitive Company Acquisition Agreement relating to a Superior Proposal (or
      any
      subsequent definitive Company Acquisition Agreement relating to a Superior
      Proposal entered into pursuant to procedures contained in any Company
      Acquisition Agreement similar to those contained in this Section 4.2)
      that (x) provides for a purchase price and/or merger consideration per Share
      payable solely in cash of at least $15.00 and (y) is not subject to any
      financing condition or other conditions to consummation of such Superior
      Proposal which are less favorable in the aggregate to the Company's shareholders
      than the conditions to Parent's obligation to effect the Merger contained in
      this Agreement, Parent will, and will cause its Affiliates to, for a period
      of
      ninety (90) days after such termination, (I) in the event that such
      Superior Proposal includes a tender offer for the Shares, tender any Shares
      owned by them into such tender offer prior to the expiration of such tender
      offer, or (II) in the event that such Superior Proposal includes a merger or
      similar transaction that is subject to approval by the Company's shareholders,
      vote (or cause to be voted) any Shares owned by them in favor of such merger
      or
      similar transaction (together with any related proposals) at any meeting of
      the
      Company's shareholders held for such purpose and, at the request of the Company,
      deliver an irrevocable proxy to the Company with respect to any such
      vote.

     

    SECTION
      4.3    Reasonable Best
      Efforts.

     

    (a)           Subject
      to the terms and conditions of this Agreement, each of the parties hereto shall
      cooperate with the other parties and use (and shall cause their respective
      Subsidiaries to use) their respective reasonable best efforts, to the fullest
      extent permitted by applicable Law, to promptly (i) take, or cause to be
      taken, all actions, and do, or cause to be done, all things, necessary, proper
      or advisable to cause the conditions to Closing to be satisfied as promptly
      as
      practicable and to consummate and make effective, in the most expeditious manner
      practicable, the Merger, including preparing and filing promptly and fully
      all
      documentation to effect all necessary filings, notices, petitions, statements,
      registrations, submissions of information, applications and other documents,
      and
      (ii) obtain all approvals, consents, registrations, permits, authorizations
      and other confirmations from any Governmental Authority or third party
      necessary, proper or advisable to consummate the Merger.

     

    
      
        
        

      

      
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    (b)           Each
      of the parties hereto shall use its reasonable best efforts to
      (i) cooperate in all respects with each other in connection with any filing
      or submission with a Governmental Authority in connection with the Merger and
      in
      connection with any investigation or other inquiry by or before a Governmental
      Authority relating to the Merger, including any proceeding initiated by a
      private party, and (ii) keep the other party informed in all material
      respects and on a reasonably timely basis of any material communication received
      by such party from, or given by such party to, any Governmental Authority and
      of
      any material communication received or given in connection with any proceeding
      by a private party, in each case regarding the Merger.  Subject to
      applicable Laws relating to the exchange of information, each of the parties
      hereto shall have the right to review in advance, and to the extent practicable
      each will consult the other on, all the information relating to the other
      parties and their respective Subsidiaries, as the case may be, that appears
      in
      any filing made with, or written materials submitted to, any third party and/or
      any Governmental Authority in connection with the Merger.

     

    (c)           In
      furtherance and not in limitation of the covenants of the parties contained
      in
      this Section 4.3, each of the parties hereto shall use its
      reasonable best efforts to resolve such objections, if any, as may be asserted
      by a Governmental Authority or other Person with respect to the
      Merger.  Without limiting any other provision hereof, Parent and the
      Company shall each use its reasonable best efforts to (i) avoid the entry
      of, or to have vacated or terminated, any decree, order or judgment that would
      restrain, prevent or delay the consummation of the Merger on or before the
      Outside Date, including by defending through litigation on the merits any claim
      asserted in any court by any Person, and (ii) avoid or eliminate each and
      every impediment under any Foreign Antitrust Law that may be asserted by any
      Governmental Authority with respect to the Merger so as to enable the
      consummation of the Merger to occur as soon as reasonably possible (and in
      any
      event no later than the Outside Date) including, in the case of Parent, by
      taking all such actions, including (x) proposing, negotiating, committing to
      and
      effecting, by consent decree, hold separate order, or otherwise, the sale,
      divestiture or disposition of such assets or businesses of Parent or any of
      its
      Subsidiaries (which, for the avoidance of doubt, shall not include the Company
      or its Subsidiaries) and (y) otherwise taking or committing to take actions
      that
      limit Parent's or its Subsidiaries' (which, for the avoidance of doubt, shall
      not include the Company or its Subsidiaries) freedom of action with respect
      to,
      or its ability to retain, one or more of its, or its Subsidiaries', businesses,
      product lines or assets, in each case, as may be required in order to avoid
      the
      entry of, or to effect the dissolution of, any injunction, temporary restraining
      order or other order in any Action or Proceeding, which would otherwise have
      the
      effect of preventing or materially delaying the consummation of the
      Merger.

     

    SECTION
      4.4    Proxy
      Statement.

     

    (a)           The
      Company shall use all reasonable best efforts to prepare and distribute to
      the
      shareholders of the Company a proxy statement relating to the Company
      Shareholders Meeting (together with any amendments thereof or supplements
      thereto, the "Proxy Statement"), it being the parties' intention that
      such distribution will occur within twelve (12) days after the date
      hereof.  The Company shall furnish Parent and its Representatives with
      drafts of the Proxy Statement in advance of its release to the holders of
      Company Common Stock as soon as reasonably practicable and shall consider in
      good faith comments made by Parent and its Representatives.  Parent
      shall cooperate with the Company in connection with the preparation of the
      Proxy
      Statement, and shall furnish all information concerning Parent and Merger Sub
      as
      the Company may reasonably request in connection with the preparation of the
      Proxy Statement.  Subject to Section 4.2(c), the Proxy
      Statement shall include text of this Agreement and the Company
      Recommendation.

     

    
      
        
        

      

      
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    (b)           The
      Company shall ensure that none of the information included or incorporated
      by
      reference in the Proxy Statement (other than information relating to Parent
      included in the Proxy Statement that was provided by Parent) will, at the time
      the Proxy Statement is mailed to the shareholders of the Company or at the
      time
      of the Company Shareholders Meeting (or any adjournment or postponement
      thereof), 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 the light of the circumstances under which they are
      made,
      not misleading. 

     

    (c)           Parent
      shall ensure that none of the information relating to Parent that is provided
      to
      the Company in writing by Parent or any Person authorized to act on its behalf
      for inclusion in the Proxy Statement and that is included in the Proxy Statement
      will, at the time the Proxy Statement is mailed to the Company's shareholders
      or
      at the time of the Company Shareholders Meeting (or any adjournment or
      postponement thereof), contain any untrue statement of a material fact or omit
      to state any material fact required to be included in such information or
      necessary in order to make statements therein, in the light of the circumstances
      under which they are made, not misleading.

     

    SECTION
      4.5    Company
      Shareholders Meeting.  The Company shall (i) duly establish a
      record date for, call, give notice of, convene and hold a special meeting of
      the
      Company's shareholders (the "Company Shareholders Meeting") as promptly
      as reasonably practicable following the date of this Agreement (but in no event
      shall the Company Shareholders Meeting take place prior to the No-Shop Period
      Start Date or later than the later of (x) one (1) business day after the
      No-Shop Period Start Date and (y) the 15-day notice period required under
      the Company's by-laws and the BCAL) for the purpose of voting upon the adoption
      of this Agreement and approval of the Merger (it being the parties' intention
      that the notice of the Company Shareholders Meeting will be distributed to
      the
      holders of Company Common Stock within the time frame described in Section
      4.4(a)), (ii) in connection therewith, mail the Proxy Statement to the
      holders of Company Common Stock in advance of such meeting, and (iii) hold
      the
      Company Shareholders Meeting.  Subject to Section 4.2, the
      Company shall use commercially reasonable efforts to (i) solicit from the
      holders of Company Common Stock proxies in favor of the adoption of this
      Agreement and approval of the Merger and (ii) take all other actions
      necessary or advisable to secure the vote or consent of the holders of Company
      Common Stock required by applicable Law to obtain such approval; provided
      that the Company may extend the date of the Company Shareholders Meeting to
      the
      extent (A) necessary in order to obtain a quorum of its shareholders or
      (B) the Company reasonably determines that such delay is required by
      applicable Law.  The Company shall keep Parent updated with respect to
      proxy solicitation results as reasonably requested by Parent.  At the
      Company Shareholders Meeting, Parent will, and will cause its Affiliates to,
      vote all Shares owned by them in favor of adoption of this Agreement and
      approval of the Merger.  The Company shall not be required to hold the
      Company Shareholders Meeting if this Agreement is terminated before such meeting
      is held.

     

    
      
        
        

      

      
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    SECTION
      4.6    Public
      Announcements.  The initial press release with respect to the
      execution of this Agreement shall be a joint press release to be reasonably
      agreed upon by Parent and the Company; provided that the Company shall be
      entitled to include in such initial press release a description of the
      provisions of Section 4.2 and to describe the Merger and the
      transactions contemplated by this Agreement in, and to file a copy of this
      Agreement as an exhibit to, the Company SEC Documents.  Thereafter,
      except as expressly permitted by Section 4.2, neither the Company
      nor Parent shall issue or cause the publication of any press release or other
      public announcement (to the extent not previously issued or made in accordance
      with this Agreement) with respect to this Agreement or the transactions
      contemplated hereby without the prior consent of the other party (which consent
      shall not be unreasonably withheld, conditioned or delayed), except as may
      be
      required by Law, applicable fiduciary duties or by any applicable listing
      agreement with or other requirement of the American Stock Exchange
      ("AMEX") as determined in the good faith judgment of the party proposing
      to make such release (in which case such party shall not issue or cause the
      publication of such press release or other public announcement without prior
      consultation with the other party to the extent reasonably
      practicable).

     

    SECTION
      4.7    Access to
      Information; Confidentiality.  Subject to applicable Laws relating
      to the exchange of information, the Company shall afford to Parent and Parent's
      Representatives reasonable access during normal business hours to the officers,
      employees, accountants, properties, books, Contracts and records of the Company
      and its Subsidiaries and the Company shall furnish promptly to Parent (i) a
      copy of each report, schedule and other document filed by it pursuant to the
      requirements of federal or state securities Laws and rules and regulations
      promulgated thereunder and (ii) other information concerning the business
      and properties of the Company and its Subsidiaries as Parent may reasonably
      request; provided, however, that the Company shall not be
      obligated to provide such access or information if the Company determines,
      in
      its reasonable judgment, that doing so would violate applicable Law or a
      Contract or obligation of confidentiality owing to a third party or jeopardize
      the protection of an attorney-client privilege.  Until the Effective
      Time, the information provided pursuant to this Agreement will be subject to
      the
      terms of the Confidentiality Agreement, dated as of May 21, 2007, between Parent
      and the Company (as it may be amended from time to time, the "Confidentiality
      Agreement"), which shall survive the termination of this Agreement in
      accordance with its terms.

     

    SECTION
      4.8    Notification of
      Certain Matters.  The Company shall give prompt notice to Parent,
      and Parent shall give prompt notice to the Company, of (i) any notice or
      other communication received by such party from any Governmental Authority
      in
      connection with this Agreement and the transactions contemplated hereby or
      from
      any Person alleging that the consent of such Person is or may be required in
      connection with the Merger, if the subject matter of such communication or
      the
      failure of such party to obtain such consent could reasonably be expected to
      be
      material to the Company, the Surviving Corporation or Parent, (ii) any
      actions, suits, claims, investigations or proceedings commenced or, to such
      party's Knowledge, threatened against, relating to or involving or otherwise
      affecting such party or any of its Subsidiaries which, in the case of either
      clause (i) or (ii), would reasonably be expected to have a Company Material
      Adverse Effect or prevent or materially delay consummation of the Merger, and
      (iii) the discovery of any event, fact or circumstance that, or the occurrence
      or non-occurrence of which, would reasonably be expected to cause the failure
      of
      the closing conditions set forth in Section 5.2(a) or Section 5.3(a),
      respectively, or any material failure of Parent or Merger Sub or the Company,
      as
      the case may be, or of any Representative thereof, to comply with or satisfy
      any
      covenant, condition or agreement to be complied with or satisfied by it
      hereunder; provided, however, that the delivery of any notice pursuant to this
      Section 4.8 shall not limit or otherwise affect the remedies available
      hereunder to the party receiving such notice.

     

    
      
        
        

      

      
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    SECTION
      4.9    Indemnification
      and Insurance.

     

    (a)           From
      and after the Effective Time, Parent shall, and shall cause the Company and
      the
      Surviving Corporation to, (i) indemnify and hold harmless each individual
      who at the Effective Time is, or at any time prior to the Effective Time was,
      a
      director, officer, employee or agent of the Company or of a Subsidiary of the
      Company (each, an "Indemnitee" and, collectively, the
      "Indemnitees") with respect to all claims, liabilities, losses, damages,
      judgments, fines, penalties, costs (including amounts paid in settlement or
      compromise) and expenses (including fees and expenses of legal counsel) in
      connection with any Action or Proceeding (whether civil, criminal,
      administrative or investigative), whenever asserted, based on or arising out
      of,
      in whole or in part, acts or omissions by an Indemnitee in the Indemnitee's
      capacity as a director, officer, employee or agent of the Company or such
      Subsidiary or taken at the request of the Company or such Subsidiary (including
      in connection with serving at the request of the Company or such Subsidiary
      as a
      director, officer, employee or agent of another Person (including any employee
      benefit plan)), at, or at any time prior to, the Effective Time (including
      in
      connection with the Merger), to the fullest extent permitted under applicable
      Law, and (ii) assume all obligations of the Company and such Subsidiaries
      to the Indemnitees in respect of indemnification and exculpation from
      liabilities for acts or omissions occurring at or prior to the Effective Time
      as
      provided in (x) the Company Charter Documents as currently in effect and
      (y) the indemnification agreements with any of the Indemnitees provided to
      Parent prior to the date hereof, which shall survive the Merger and
      continue in full force and effect in accordance with their respective
      terms.  Without limiting the foregoing, Parent, from and after the
      Effective Time, shall cause the articles of incorporation and bylaws of the
      Surviving Corporation to contain provisions no less favorable to the Indemnitees
      with respect to limitation of liabilities of directors and officers and
      indemnification than are set forth as of the date of this Agreement in the
      Company Charter Documents, which provisions shall not be amended, repealed
      or
      otherwise modified in a manner that would adversely affect the rights thereunder
      of the Indemnitees.  In addition, from and after the Effective Time,
      Parent shall, and shall cause the Company and the Surviving Corporation to,
      pay
      any expenses (including fees and expenses of legal counsel) of any Indemnitee
      under this Section 4.9 (including in connection with enforcing the
      indemnity and other obligations provided for in this Section 4.9) as
      incurred to the fullest extent permitted under applicable Law; provided
      that the individual to whom expenses are advanced provides an undertaking to
      repay such advances to the extent required by applicable Law.

     

    (b)           Any
      Indemnitee wishing to claim indemnification under this Section 4.9,
      upon learning of any such Action or Proceeding, shall notify Parent, the Company
      and the Surviving Corporation, but the failure to so notify Parent, the Company
      and the Surviving Corporation shall not relieve such party from any liability
      which it may have under this paragraph except to the extent such failure
      materially prejudices Parent, the Company and/or the Surviving
      Corporation.  Parent shall have the right, but not the
      obligation, to assume and control the defense of any litigation, claim or
      proceeding relating to any acts or omissions covered under this
Section 4.9 (each, a "Claim") with counsel selected by the
      Parent, which counsel shall be reasonably acceptable to the Indemnitee;
provided, however, that Indemnitee shall be permitted to
      participate in the defense of such Claim at its own expense; provided,
further, that such Indemnitee shall be entitled to participate in
      any
      such defense with separate counsel at the expense of Parent if (i) so
      requested by Parent to participate or (ii) in the reasonable opinion of
      counsel to Indemnitee, a conflict or potential conflict exists between Parent
      and Indemnitee that would make such separate representation advisable; and
      provided, further, that Parent shall not be required to pay for
      more than one such counsel for all Indemnitees in connection with any such
      claim.  Each of Parent, the Company, the Surviving Corporation and the
      Indemnitees shall cooperate in the defense of any Claim and shall provide access
      to properties and individuals as reasonably requested and furnish or cause
      to be
      furnished records, information and testimony, and attend such conferences,
      discovery proceedings, hearings, trials or appeals, as may be reasonably
      requested in connection therewith.

     

    
      
        
        

      

      
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    (c)           For
      the six-year period commencing immediately after the Effective Time (and for
      so
      long thereafter as any Claims thereunder are being adjudicated), Parent shall
      maintain in effect the Company's current directors' and officers' liability
      insurance covering acts or omissions occurring at or prior to the Effective
      Time
      with respect to those individuals who are currently (and any additional
      individuals who prior to the Effective Time become) covered by the Company's
      directors' and officers' liability insurance policy on terms with respect to
      such coverage, and in amount, not less favorable in any material respect in
      the
      aggregate to such individuals than those of such policy in effect on the date
      hereof (or Parent may substitute therefor policies, issued by reputable
      insurers, of at least the same coverage with respect to matters occurring at
      or
      prior to the Effective Time); provided, however, that, if the
      aggregate annual premiums for such insurance shall exceed 300% of the current
      aggregate annual premium, then Parent shall provide or cause to be provided
      a
      policy for the applicable individuals with the best coverage as shall then
      be
      available at an annual premium of 300% of the current aggregate annual premium
      (but in no event shall such coverage be less than the directors' and officers'
      liability insurance coverage then provided by Parent to its directors and
      officers); and provided, further, that the Company may elect to
      purchase prior to the Effective Time, and Parent may elect to cause the Company
      to purchase at or after the Effective Time, in lieu of the foregoing insurance,
      a directors' and officers' liability insurance "tail" or "runoff" insurance
      program to be in effect until the end of such six-year period (and for so long
      thereafter as any Claims thereunder are being adjudicated) with respect to
      acts
      or omissions occurring at or prior to the Effective Time (such coverage to
      be on
      terms and conditions no less favorable to the covered directors and officers
      than such coverage existing on the date hereof).

     

    (d)           The
      provisions of this Section 4.9 are (i) intended to be for the
      benefit of, and shall be enforceable by, each Indemnitee, his or her heirs
      and
      his or her representatives and (ii) in addition to, and not in substitution
      for, any other rights to indemnification or contribution that any such
      individual may have by Contract or otherwise.  The obligations of
      Parent and the Surviving Corporation under this Section 4.9 shall
      not be terminated or modified in such a manner as to adversely affect the rights
      of any Indemnitee to whom this Section 4.9 applies unless
      (x) such termination or modification is required by applicable Law or
      (y) the affected Indemnitee shall have consented in writing to such
      termination or modification (it being expressly agreed that the Indemnitees
      to
      whom this Section 4.9 applies shall be third-party beneficiaries of
      this Section 4.9).

     

    
      
        
        

      

      
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    (e)           In
      the event that Parent, the Surviving Corporation or any of their respective
      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 assets to any Person, then, and in each such case,
      proper provision shall be made so that the successors and assigns of Parent
      and
      the Surviving Corporation shall assume all of the obligations thereof set forth
      in this Section 4.9.

     

    SECTION
      4.10          Fees and
      Expenses.  Except as provided in Section 6.3, all fees
      and expenses incurred in connection with this Agreement and the transactions
      contemplated hereby shall be paid by the party incurring such fees or expenses,
      whether or not the Merger is consummated.

     

    SECTION
      4.11         
Delisting.  Parent shall cause the Company's securities to be
      de-listed from the AMEX and de-registered under the Exchange Act as soon as
      practicable following the Effective Time.

     

    SECTION
      4.12          Parent
      Representation on the Company Board.

     

    (a)           Subject
      to Parent's compliance with its obligations under Section 4.2(g), in
      the event that this Agreement is terminated for any reason other than by the
      Company pursuant to Section 6.1(c)(ii), Parent shall thereafter (but
      only (x) following the termination of Parent's obligations under Section
      4.2(g), to the extent applicable, and (y) until such time as Parent and
      its Affiliates own less than fifty percent (50%) of the shares of Company Common
      Stock then outstanding) be entitled to designate for appointment or election
      to
      the Company Board, upon written notice to the Company (any such notice being
      referred to herein as the "Parent Notice"), (i) prior to the earlier to
      occur of (A) the annual meeting of shareholders of the Company to be held in
      2008 (the "2008 Shareholders Meeting") and (B) June 30, 2008, a number of
      directors equal to one-half of the size of the Company Board from time to time,
      and (ii) commencing with the earlier to occur of (A) the 2008 Shareholders
      Meeting and (B) June 30, 2008, such number of directors, rounded to the nearest
      whole number, as is equal to the product obtained by multiplying the total
      number of directors on the Company Board (after giving effect to the directors
      designated by Parent pursuant to this sentence) by the percentage that the
      number of shares of Company Common Stock so owned by Parent and its Affiliates
      bears to the total number of shares of Company Common Stock then
      outstanding.  In furtherance thereof, the Company shall, upon request
      of Parent, use its reasonable best efforts, subject to compliance with
      applicable securities Laws and applicable rules of the AMEX, to promptly
      following receipt of a Parent Notice cause Parent's designees (and any
      replacement designees in the event that any designee shall no longer be on
      the
      Company Board) to be so appointed or elected to the Company Board and, in
      furtherance thereof, to the extent necessary, use its reasonable best efforts
      to
      increase the size of the Company Board or obtain the resignation of such number
      of its directors as is necessary to give effect to the foregoing
      provision.  Parent's right to designate members of the Company Board
      pursuant to Section 4.12(a) shall not be assignable to any transferee of
      shares of Company Common Stock from Parent or any of its
      Affiliates.  If at any time there is a greater number of designees of
      Parent serving on the Company Board than the number of designees to which Parent
      is then entitled pursuant to this Section 4.12(a), Parent shall
      immediately cause one or more of its designees to resign from the Company Board
      in order that there not be more designees of Parent serving on the Company
      Board
      than the number to which it is entitled.

     

    
      
        
        

      

      
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    (b)           During
      such period as designees of Parent constitute one-half of the Company Board
      pursuant to an appointment or election in accordance with Section
      4.12(a)(i), any vote by the Company Board to cause the Company to take any
      action, in order to be effective, must include the affirmative vote of at least
      one (1) director who has not been so designated by Parent.

     

    (c)           Following
      the appointment or election to the Company Board of any designees of Parent
      pursuant to Section 4.12(a)(ii), and until such time as Parent and its
      Affiliates own all of the issued and outstanding shares of Company Common Stock,
      the Company Board shall have at least three (3) directors who are directors
      of
      the Company on the date of this Agreement (other than the designees of the
      Principal Shareholders) and who are not officers of the Company or any of its
      Subsidiaries ("Independent Directors"); provided, however,
      that if the number of Independent Directors shall thereafter be reduced below
      three (3) for any reason whatsoever, then the remaining Independent Director
      or
      Directors shall be entitled to identify a person or persons who is not then
      an
      officer or Affiliate of the Company, Parent or any of their respective
      Affiliates and who otherwise qualifies as "independent" under the applicable
      rules or listing standards of any securities exchange or market on which the
      shares of Company Common Stock are then listed or approved for trading (any
      such
      person being referred to herein as a "Qualified Person"; it being
      understood that, for purposes of this definition, a person who would otherwise
      not be considered an Affiliate of the Company shall not be deemed an Affiliate
      of the Company solely because he or she is a director of the Company), willing
      to serve as an Independent Director, in which case such remaining Independent
      Director or Directors shall be entitled to designate any such Qualified Person
      or Persons to fill such vacancy or vacancies, and any such designated Qualified
      Person or Persons shall be deemed to be an Independent Director for purposes
      of
      this Agreement; and providedfurther, however, that if no
      Independent Directors then remain, the other directors shall be required to
      designate three (3) Qualified Persons to fill such vacancies, and such persons
      shall be deemed to be Independent Directors for purposes of this
      Agreement.

     

    (d)           Following
      the election or appointment of any designees of Parent pursuant to Section
      4.12(a)(ii) and for so long thereafter as the Company Board is required to
      include Independent Directors in accordance with Section 4.12(c), the
      approval by affirmative vote or written consent of either a majority of the
      Independent Directors then in office or the holders of a majority of the
      outstanding Shares not held by the Parent or its Affiliates ("Independent
      Approval") shall be required to authorize (and such authorization shall
      constitute the authorization of the Company Board, as applicable, and no other
      action on the part of the Company, including any action by any other committee
      thereof or any other director of the Company, shall, unless otherwise required
      by applicable Law, be required or permitted to authorize)
      (w) any Related Party Transaction (as defined below), (x) the
      deregistration of the shares of Company Common Stock under the Exchange Act
      or
      the delisting of the shares of Company Common Stock from the AMEX, (y) any
      amendment or modification of, or any waiver of any right of the Company under,
      this Section 4.12 or (z) any amendment of the Company Charter
      Documents adverse to the interests of the shareholders of the Company (other
      than Parent and its Affiliates).  The Independent Directors shall have
      the authority to retain such counsel and other advisors at the expense of the
      Company as are reasonably appropriate to the exercise of their duties in
      connection with this Section 4.12.  In addition, the
      Independent Directors shall have the authority to institute any action, on
      behalf of the Company, to enforce performance of this Section
      4.12.

     

    
      
        
        

      

      
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    (e)           During
      any period commencing on the furnishing of a Parent Notice and ending on the
      date on which Parent's designees are elected to the Company Board in accordance
      with such Parent Notice, the covenants of the Company set forth in Section
      4.1 shall be in full force and effect regardless of any termination of this
      Agreement.

     

    (f)           During
      any period in which Parent is entitled to the election or appointment of any
      designees to the Company Board pursuant to Section 4.12(a), neither
      Parent nor any of its Affiliates will acquire any additional shares of Company
      Common Stock from any shareholder of the Company at a price less than the Merger
      Consideration (as adjusted for stock dividends, stock splits and other similar
      changes in the Company Common Stock), except pursuant to an offer made to all
      shareholders of the Company to purchase all of their shares at the same price
      or
      with prior Independent Approval.

     

    (g)           Parent
      shall, and shall cause its Affiliates to, vote all shares of Company Common
      Stock at any time owned by them so as to give effect to the provisions of this
      Section 4.12.

     

    (h)           All
      holders of Company Common Stock from time to time (other than Parent and its
      Affiliates) may rely on the provisions of this Section 4.12 which relate
      to the appointment and approval rights of the Independent Directors, which
      provisions are intended to be for the benefit of such holders of Company Common
      Stock and shall be enforceable by them.

     

    (i)           For
      purposes of this Agreement, "Related Party Transaction" shall
      mean:

     

    (i)           Any
      sale of the assets or issuance of shares of capital stock of the Company or
      any
      Subsidiary of the Company to (or any acquisition of assets from or share
      subscription in) Parent or any of its Affiliates, other than a subscription
      for
      shares of Company Common Stock by Parent or any of its Affiliates pursuant
      to a
      rights offering made available to all holders of Company Common Stock on a
      pro
      rata basis and for the same amount and form of consideration and otherwise
      on
      substantially the same terms and conditions; or

     

    (ii)          Any
      merger or consolidation between or among the Company or any Subsidiary of the
      Company, on the one hand, and Parent or any of its Affiliates, on the other;
      or

     

    (iii)         Any
      merger, statutory share exchange or consolidation involving the Company or
      any
      Subsidiary of the Company pursuant to which Parent or any of its Affiliates
      is
      entitled to receive consideration in respect of its securities in the Company
      that is different in form or amount from that offered all other holders of
      the
      same class of such securities, other than ancillary arrangements or rights
      entailing no monetary payments and other than reasonable third-party legal
      fees,
      out-of-pocket expense reimbursement and indemnification for the benefit of
      Parent or any of its Affiliates for liabilities in respect of which other
      holders of the same class have no liability; or

     

    
      
        
        

      

      
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    (iv)        Any
      other transaction or series of related transactions between or among the Company
      and/or any Subsidiary of the Company, on the one hand, and Parent or any of
      its
      Affiliates, on the other, other than payments in respect of customary director
      fees in accordance with past practice or other ordinary course transactions
      the
      value of any of which does not exceed $100,000.

     

    SECTION
      4.13   Securityholder
      Litigation.  The Company shall give Parent the opportunity to
      participate in the defense and settlement of any litigation against the Company
      and/or its directors relating to the transactions contemplated hereby, and
      no
      such settlement relating to the Company shall be agreed to without Parent's
      prior written consent which, prior to the Effective Time, shall not be
      unreasonably withheld, conditioned or delayed.

     

    SECTION
      4.14          Tax
      Elections.  Within seventy five (75) days following the date
      hereof, the Company shall cause each of its Subsidiaries that owns one or more
      ships to properly file an election under U.S. Treasury Regulation Section
      301.7701-3(c) to be treated, effective as of the opening of business on the
      date
      hereof, as a pass-through entity for U.S. federal income Tax
      purposes.

     

    SECTION
      4.15          U.S. Federal
      Income Tax Returns.  Prior to the Effective Time, the Company
      shall file, and shall cause each of its Subsidiaries that derives income from
      the international operation of a ship or ships (within the meaning of Section
      883 of the Code) to file, a properly-completed U.S. federal income Tax return
      for the 2005 and 2006 taxable years of such entity (with the appropriate owner
      certifications attached thereto) claiming the exemption provided by Section
      883
      of the Code.

     

    SECTION
      4.16          Vessel
      Charters.  During the period prior to the Effective
      Time:

     

    (a)           The
      Company shall take the actions set forth in Section 4.16(a) of the
      Company Disclosure Letter; and

     

    (b)           The
      Company shall not enter into any arrangement or take any action that would
      reasonably be expected to constitute a violation of U.S. Law by the Company
      or
      Parent solely as a result of ownership or control of the Company by a U.S.
      Person.

     

    ARTICLE
      V

     

    Conditions
      to the Merger

     

    SECTION
      5.1            Conditions
      to Each Party's Obligation to Effect the Merger.  The respective
      obligations of each party hereto to effect the Merger shall be subject to the
      satisfaction (or waiver, if permissible under applicable Law) on or prior to
      the
      Closing Date of the following conditions:

     

    (a)           The
      Company Shareholder Approval shall have been obtained.

     

    
      
        
        

      

      
        39

        
          

        

      

      
        
        

      

    

    (b)           No
      Law, injunction, judgment or ruling enacted, promulgated, issued, entered,
      amended or enforced by any Governmental Authority (collectively, the
      "Restraints") shall be in effect enjoining, restraining, preventing or
      prohibiting consummation of the Merger or making the consummation of the Merger
      illegal, it being understood and agreed that, for purposes of Sections
      5.1(b), 5.2(a) and 5.3(a), the absence of shareholder
      litigation challenging the transactions contemplated by this Agreement does
      not
      constitute a condition to the obligations of any party hereto to effect the
      Merger.

     

    SECTION
      5.2            Conditions
      to the Obligations of Parent and Merger Sub. The obligations of Parent and
      Merger Sub to effect the Merger shall be subject to the satisfaction (or waiver,
      if permissible under applicable Law) on or prior to the Closing Date of the
      following conditions:

     

    (a)           Each
      of the representations and warranties of the Company set forth in this Agreement
      shall be true and correct at and as of the Effective Time as if made on such
      date (other than those representations and warranties that address matters
      only
      as of a particular date, which shall be true and correct as of such date),
      except (x) for changes permitted by this Agreement or (y) where the
      failure of any such representation or warranty to be true and correct (without
      giving effect to any limitation as to "materiality" or "Company Material Adverse
      Effect" set forth therein) would not, individually or in the aggregate,
      reasonably be expected to have a Company Material Adverse Effect; and Parent
      shall have received a certificate of an executive officer of the Company to
      that
      effect.

     

    (b)           The
      Company shall have performed or complied with in all material respects all
      agreements and covenants required by this Agreement to be performed or complied
      with by it on or prior to the Effective Time; and Parent shall have received
      a
      certificate of an executive officer of the Company to that effect.

     

    SECTION
      5.3            Conditions
      to the Obligations of the Company.  The obligations of the Company
      to effect the Merger shall be subject to the satisfaction (or waiver, if
      permissible under applicable Law) on or prior to the Closing Date of the
      following conditions:

     

    (a)           Each
      of the representations and warranties of Parent and Merger Sub set forth in
      this
      Agreement shall be true and correct at and as of the Effective Time as if made
      on such date, except where the failure of any such representation or warranty
      to
      be true and correct would not, individually or in the aggregate, reasonably
      be
      expected to impair the ability of Parent or Merger Sub to perform its
      obligations hereunder or prevent or materially delay consummation of the Merger;
      and the Company shall have received a certificate of an executive officer of
      Parent to that effect.

     

    (b)           Parent
      and Merger Sub shall each have performed or complied with in all material
      respects all agreements and covenants required by this Agreement to be performed
      or complied with by it on or prior to the Effective Time; and the Company shall
      have received a certificate of an executive officer of Parent to that
      effect.

     

    SECTION
      5.4            Frustration
      of Closing Conditions.  Neither the Company nor Parent or
      Merger Sub may rely on the failure of any condition set forth in
      Section 5.1, 5.2 or 5.3, as the case may be, to be satisfied if such
      failure was caused by such party's failure to use reasonable best efforts to
      consummate the Merger, to the extent required by and subject to Section 4.5
      and the other applicable provisions of Article IV.

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    ARTICLE
      VI

     

    Termination

     

    SECTION
      6.1            Termination.  This
      Agreement may be terminated and the Merger abandoned at any time prior to the
      Effective Time, whether before or after receipt of the Company Shareholder
      Approval, except as set forth below:

     

    (a)           by
      the mutual written consent of the Company and Parent duly authorized by the
      Company Board and the Board of Directors of Parent; or

     

    (b)           by
      either the Company or Parent:

     

    (i)           if
      any Restraint enjoining, restraining, preventing or prohibiting consummation
      of
      the Merger or making the consummation of the Merger illegal shall be in effect
      and shall have become final and non-appealable; provided that the right
      to terminate this Agreement under this Section 6.l(b)(i) shall not
      be available to a party if the issuance of such final, non-appealable Restraint
      was primarily due to the failure of such party to perform any of its obligations
      under this Agreement;

     

    (ii)          if
      the Merger shall not have been consummated on or before the Outside Date;
provided that the right to terminate this Agreement under this
Section 6.1(b)(ii) shall not be available to any party whose failure
      to perform any of its obligations under this Agreement resulted in the failure
      of the Merger to be so consummated by the Outside Date; or

     

    (iii)         if
      the Company Shareholder Approval shall not have been obtained at a duly convened
      Company Shareholders Meeting (or at any adjournment or postponement thereof)
      by
      reason of the failure to obtain the required vote upon a vote taken thereon;
      provided, however, that the Company shall not be permitted to
      terminate this Agreement pursuant to this Section 6.1(b)(iii) if the
      Company or any of its Subsidiaries or their respective Representatives has
      failed to comply in any material respect with its obligations under Section
      4.2, 4.4 or 4.5; or

     

    (c)           by
      the Company:

     

    (i)           if,
      at any time prior to the receipt of the Company Shareholder Approval, the
      Company has complied with the terms of this Agreement, including
Section 4.2(c), and concurrently it enters into a definitive Company
      Acquisition Agreement providing for a Superior Proposal; provided,
however, that such termination shall not be effective unless concurrently
      therewith the Company fulfills its obligations under Section 6.3;
      or

     

    (ii)           if
      (A) the representations and warranties of Parent or Merger Sub set forth in
      this Agreement shall not be true and correct on and as of the date of such
      determination as if made on such date (other than those representations and
      warranties that address matters only as of a particular date which shall be
      true
      and correct as of such date), but only to the extent that such failure would
      cause the condition contained in Section 5.3(a) not to be satisfied as of
      such date; or (B) Parent or Merger Sub shall have breached or failed to
      perform or comply with any obligation, agreement or covenant required by this
      Agreement to be performed or complied with by them, but only to the extent
      that
      such failure would cause the condition contained in Section 5.3(b) not to
      be satisfied as of such date and such condition is, as a result of such breach
      or failure (in each case under clauses (A) and (B)), incapable of being
      satisfied by the Outside Date; or

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

    (d)           by
      Parent, if (i) the representations and warranties of the Company set forth
      in this Agreement shall not be true and correct on and as of the date of such
      determination as if made on such date (other than those representations and
      warranties that address matters only as of a particular date, which shall be
      true and correct as of such date), but only to the extent that such failure
      would cause the condition contained in Section 5.2(a) not to be satisfied
      as of such date; or (ii) the Company shall have breached or failed to
      perform or comply with any obligation, agreement or covenant required by this
      Agreement to be performed or complied with by it, but only the extent that
      such
      breach or failure would cause the condition contained in
Section 5.2(b) not to be satisfied as of such date and such
      condition is, as a result of any such breach or failure (in each case under
      clauses (i) and (ii)), incapable of being satisfied by the Outside Date; or
      (iii) a Triggering Event shall have occurred.

     

    SECTION
      6.2            Effect
      of Termination.  In the event of the termination of this Agreement
      as provided in Section 6.1, written notice thereof shall be given to the
      other party or parties, specifying the provision hereof pursuant to which such
      termination is made, and this Agreement shall forthwith become null and void
      (other than Sections 4.2(g), 4.10, 4.12, 6.2 and 6.3, Article VII, the
      last sentence of Section 4.7 and the Confidentiality Agreement, each of
      which shall survive termination of this Agreement at any time in accordance
      with
      their respective terms), and there shall be no liability as a result thereof
      on
      the part of Parent or the Company or their respective directors, officers and
      Affiliates, except (i) the Company may have liability as provided in
      Section 6.3, and (ii) nothing contained in this Section 6.2 shall
      relieve any party from liability for fraud or any willful breach of this
      Agreement occurring prior to termination of this Agreement.

     

    SECTION
      6.3            Termination
      Fee.  In the event that:

     

    (a)           (i) after
      the date of this Agreement a Takeover Proposal has been publicly announced
      (whether or not conditional or withdrawn) or made known to the Company, (ii)
      after the date of such announcement or knowledge by the Company, this Agreement
      is terminated by (A) either Parent or the Company pursuant to Section
      6.1(b)(ii) or (iii) or (B) Parent pursuant to Section
      6.1(d)(i) or (ii) as a result of a breach or failure by or on the part of
      the Company and (iii) within twelve (12) months after such termination the
      Company shall have consummated any Takeover Proposal, or a definitive agreement
      contemplating a Takeover Proposal is executed, or the Company recommends or
      submits to shareholders of the Company for adoption or acceptance a Takeover
      Proposal or a definitive agreement contemplating a Takeover Proposal (the
      Takeover Proposal so consummated, executed, recommended or submitted need not
      be
      the same Takeover Proposal that was publicly disclosed, announced or made known
      to the Company); or

     

    
      
        
        

      

      
        42

        
          

        

      

      
        
        

      

    

    (b)           this
      Agreement is terminated by the Company pursuant to Section 6.1(c)(i)
      or by Parent pursuant to Section 6.1(d)(iii);

     

    then
      the
      Company shall (A) in the case of a termination described in paragraph
      (a) of this Section 6.3, upon the earlier of the
      consummation of the transaction contemplated by such Takeover Proposal, the
      execution of a definitive agreement contemplating a Takeover Proposal or the
      recommendation by the Company or the submission to its shareholders for adoption
      or acceptance a Takeover Proposal or a definitive agreement contemplating a
      Takeover Proposal or (B) in the case of a termination described in
      paragraph (b) of this Section 6.3, on the date of such termination,
      pay Parent a fee equal to $7,750,000 (the "Termination
      Fee") by wire transfer of immediately available funds to an account
      designated by Parent.

     

    SECTION
      6.4            Acknowledgment.  The
      Company acknowledges and agrees that the agreements contained in
      Section 6.3 are an integral part of the Merger and that, without these
      agreements, Parent would not enter into this Agreement.  If the
      Company fails promptly to pay the Termination Fee 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 reasonable costs
      and expenses (including reasonable attorneys' fees and expenses) incurred in
      connection with such suit.

     

    ARTICLE
      VII

     

    Miscellaneous

     

    SECTION
      7.1            Survival
      of Representations, Warranties and Agreements.  The
      representations and warranties contained herein or in any other writing
      delivered pursuant hereto, as well as any covenant or agreement of the parties
      that by its terms contemplates performance exclusively prior to the Effective
      Time, shall survive until (but not beyond) the Effective
      Time.  Nothing in this paragraph shall limit any covenant or agreement
      of the parties that by its terms contemplates performance in whole or in part
      after the Effective Time.

     

    SECTION
      7.2            Amendment
      or Supplement.  At any time prior to the Effective Time, this
      Agreement may be amended or supplemented in any and all respects, whether before
      or after approval of the Merger by the holders of Company Common Stock, by
      written agreement of the parties hereto, by action taken by their respective
      Boards of Directors; provided, however, that following the Company Shareholder
      Approval, there shall be no amendment or change to the provisions hereof which
      by Law or in accordance with the rules of any relevant stock exchange would
      require further approval by the holders of Company Common Stock without such
      approval.

     

    SECTION
      7.3            Extension
      of Time, Waiver, Etc.  At any time prior to the Effective Time,
      any party may, subject to applicable Law, (a) waive any inaccuracies in the
      representations and warranties of any other party hereto, (b) extend the
      time for the performance of any of the obligations or acts of any other party
      hereto or (c) waive compliance by any other party with any of the
      agreements contained herein or, except as otherwise provided herein, waive
      any
      of such party's conditions; provided that after the Company Shareholder Approval
      is obtained, there may not be any extension or waiver of this Agreement or
      any
      portion thereof which, by Law or in accordance with the rules of any relevant
      stock exchange, requires further approval by such
      shareholders.  Notwithstanding the foregoing, no failure or delay by
      the Company, Parent or Merger Sub in exercising any right hereunder shall
      operate as a waiver thereof nor shall any single or partial exercise thereof
      preclude any other or further exercise thereof or the exercise of any other
      right hereunder.  Any agreement on the part of a party hereto to any
      such extension or waiver shall be valid only if set forth in an instrument
      in
      writing signed on behalf of such party.

     

    
      
        
        

      

      
        43

        
          

        

      

      
        
        

      

    

     

    SECTION
      7.4            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; provided
      that Parent and Merger Sub may assign its rights, interests and obligations
      under this Agreement to any of its Affiliates.  Subject to the
      preceding sentence, this Agreement shall be binding upon, inure to the benefit
      of, and be enforceable by, the parties hereto and their respective successors
      and permitted assigns.  Any purported assignment not permitted under
      this section shall be null and void.

     

    SECTION
      7.5            Counterparts.  This
      Agreement may be executed in counterparts (each of which shall be deemed to
      be
      an original but all of which taken together shall constitute 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
      7.6            Entire
      Agreement; No Third-Party Beneficiaries.  This Agreement, together
      with the Company Disclosure Letter and the Confidentiality Agreement,
      (a) constitutes the entire agreement, and supersedes all other prior
      agreements and understandings, both written and oral, among the parties, or
      any
      of them, with respect to the subject matter hereof and thereof and
      (b) except for the provisions of Section 4.9 and Section
      4.12 to the extent provided therein, is not intended to and shall not confer
      upon any Person other than the parties hereto any rights or remedies
      hereunder.

     

    SECTION
      7.7            Governing
      Law; Submission to Jurisdiction; Waiver of Jury Trial.

     

    (a)           This
      Agreement shall be governed by, and construed in accordance with, the Laws
      of
      the State of New York applicable to Contracts executed in and to be performed
      entirely within that State.

     

    (b)           The
      parties hereto hereby agree to bring all Actions or Proceedings arising out
      of
      or relating to this Agreement in the federal or state courts located in the
      Borough of Manhattan of the City of New York, New York and the parties
      irrevocably waive, to the fullest extent permitted by applicable Law, the
      defense of an inconvenient forum to the maintenance of any such Action or
      Proceeding.  The parties hereto agree that a final judgment in any
      such Action or Proceeding shall be conclusive and may be enforced in other
      jurisdictions by suit on the judgment or in any other manner provided by
      applicable Law.

     

    (c)           Each
      of the parties hereto hereby irrevocably waives any and all rights to trial
      by
      jury in any Action or Proceeding arising out of or related to this
      Agreement.

     

    
      
        
        

      

      
        44

        
          

        

      

      
        
        

      

    

    SECTION
      7.8            Specific
      Enforcement.

     

    (a)             The
      parties agree that irreparable damage would occur 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 the federal or state courts located in the Borough of
      Manhattan of the City of New York, New York without bond or other security
      being
      required, this being in addition to any other remedy to which they are entitled
      at Law or in equity.

     

    (b)           In
      circumstances under which the Termination Fee is payable and has been paid,
      Parent and Merger Sub agree that (i) to the extent they have incurred losses
      or
      damages in connection with this Agreement, their sole and exclusive remedy
      against the Company and any of its directors, officers or Affiliates for any
      breach, loss or damage shall be to receive payment of the Termination Fee to
      the
      extent provided in Section 6.3 and (ii) upon payment in full of such
      amounts, (x) neither Parent nor Merger Sub shall have any other rights or claims
      or seek damages against the Company or any of its directors, officers or
      Affiliates under this Agreement or otherwise, whether at law or equity, in
      contract, in tort or otherwise, and (y) neither the Company nor any of its
      directors, officers or Affiliates shall have any further liability or
      obligations relating to or arising out of this Agreement or the transactions
      contemplated hereby.  Nothing herein shall relieve Parent or Merger
      Sub of liability to pay the Merger Consideration in the event the Merger
      occurs.  Parent and Merger Sub agree and acknowledge that none of the
      directors, officers or Affiliates of the Company shall have any personal
      liability hereunder, including, without limitation, for any breach of this
      Agreement or inaccuracy of any representation or warranty.

     

    SECTION
      7.9            Notices.  All
      notices, requests and other communications to any party hereunder shall be
      in
      writing and shall be deemed given if delivered either personally, by facsimile
      transmission (with acknowledgement received) by electronic mail (with receipt
      confirmed) or by overnight courier (providing proof of delivery) to the parties
      at the following addresses:

     

    If
      to
      Parent or Merger Sub, to:

     

    
      	
               

            	
              c/o
                Bear Stearns Merchant Banking, LLC

            

    

    
      	
               

            	
              383
                Madison Avenue

            

    

    
      	
               

            	
              New
                York, New York 10179

            

    

    
      	
               

            	
              Attention:

            	
              Douglas
                R. Korn

            

    

    
      	
            	
               

            	
              Theodore
                B. Young

            

    

    
      	
               

            	
              Facsimile:  212-881-9304

            

    

    
      	
               

            	
              Email:

            	
              dkorn@bear.com

            

    

    
      	
            	
               

            	
              theodore.young@bear.com

            

    

    
      
        
        

      

      
        45

        
          

        

      

      
        
        

      

    

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

    

    
      	
               

            	 	
              Weil,
                Gotshal & Manges LLP

            

    

    
      	
               

            	
              767
                Fifth Avenue

            

    

    
      	
               

            	
              New
                York, New York  10153

            

    

    
      	
               

            	
              Attention:

            	
              David
                Zeltner,

            

    

    
      	
            	
               

            	
              Jane
                McDonald

            

    

    
      	
               

            	
              Facsimile:  (212)
                310-8007

            

    

    
      	
               

            	
              Email:

            	
              david.zeltner@weil.com,

            

    

    
      	
            	
               

            	
               jane.mcdonald@weil.com

            

    

    

    If
      to the
      Company, to:

    

    
      	
               

            	
              Gildo
                Pastor Center

            

    

    
      	
               

            	
              7,
                rue du Gabian

            

    

    
      	
               

            	
              MC
                98000 Monaco

            

    

    
      	
               

            	
              Attention:

            	
              Antony
                S. Crawford

            

    

    
      	
            	
               

            	
              Chief
                Executive Office and President

            

    

    
      	
               

            	
              Facsimile:  377-97-97-49-99

            

    

    
      	
               

            	
              Email:

            	
              tony.crawford@mcshipping.com

            

    

    

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

    

    
      	
               

            	
              Milbank,
                Tweed, Hadley & McCloy LLP

            

    

    
      	
               

            	
              1
                Chase Manhattan Plaza

            

    

    
      	
               

            	
              New
                York, NY 10005

            

    

    
      	
               

            	
              Attention:  Robert
                S. Reder

            

    

    
      	
               

            	
              Facsimile:  (212)
                822-5680

            

    

    
      	
               

            	
              Email:

            	
              rreder@milbank.com

            

    

    

    or
      such
      other address, facsimile number or email address as such party may hereafter
      specify by notice to the other parties hereto.  All such notices,
      requests and other communications shall be deemed received on the date of
      receipt by the recipient thereof if received prior to 5:00 P.M. in the place
      of
      receipt and such day is a business day in the place of
      receipt.  Otherwise, any such notice, request or communication shall
      be deemed not to have been received until the next succeeding business day
      in
      the place of receipt.

     

    SECTION
      7.10        
Severability.  If any term or other provision of this
      Agreement is determined by a court of competent jurisdiction to be invalid,
      illegal or incapable of being enforced by any rule of Law or public policy,
      all
      other terms, provisions and conditions 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
      Merger is fulfilled to the extent possible.

     

    
      
        
        

      

      
        46

        
          

        

      

      
        
        

      

    

    SECTION
      7.11          Definitions.

     

    (a)           As
      used in this Agreement, the following terms have the meanings ascribed thereto
      below:

     

    "Action
      or Proceeding" shall mean any action, suit, proceeding, hearing, charge,
      complaint, grievance, arbitration or Governmental Authority
      investigation.

     

    "Affiliate"
      shall mean, as to any Person, any other Person that directly or indirectly
      controls, or is controlled by, or is under common control with, such
      Person.  For this purpose, "control" (including, with its correlative
      meanings, "controlled by" and "under common control with") shall mean the
      possession, directly or indirectly, of the power to direct or cause the
      direction of management or policies of a Person, whether through the ownership
      of securities or partnership or other ownership interests, by Contract or
      otherwise.

     

    "business
      day" shall mean a day except a Saturday, a Sunday or other day on which the
      SEC or banks in the City of New York are authorized or required by Law to be
      closed.

     

    "Company
      Board" shall mean the Board of Directors of the Company or the Transaction
      Committee or any other duly constituted committee thereof which has been given
      the authority to act in the name, place and stead of the Board of Directors
      of
      the Company with respect to this Agreement and the transactions contemplated
      hereby.

     

    "Company
      Stock Plan" shall mean the Company's 2001 Stock Option Plan.

     

    "GAAP"
      shall mean generally accepted accounting principles in the United
      States.

     

    "Governmental
      Authority" shall mean any government, court, tribunal, regulatory or
      administrative agency, commission or authority or other governmental
      instrumentality, federal, state or local, domestic, foreign or
      multinational.

     

    "Knowledge"
      shall mean, in the case of either the Company or Parent, the actual knowledge,
      as of the date of this Agreement, of any of the executive officers of such
      party
      after due inquiry of their direct reports.

     

    "Outside
      Date" shall mean October 27, 2007.

     

    "Person"
      shall mean an individual, a corporation, a limited liability company, a
      partnership, an association, a trust or any other entity, including a
      Governmental Authority.

     

    "Subsidiary"
      when used with respect to any party, shall mean any corporation, limited
      liability company, partnership, association, trust or other entity of which
      securities or other ownership interests representing more than 50% of the equity
      and more than 50% of the ordinary voting power (or, in the case of a
      partnership, more than 50% of the general partnership interests) are, as of
      such
      date, owned by such party or one or more Subsidiaries of such party or by such
      party and one or more Subsidiaries of such party.

     

    
      
        
        

      

      
        47

        
          

        

      

      
        
        

      

    

    "Triggering
      Event" shall be deemed to have occurred if: (i) the Company Board shall
      have failed to recommend that the Company shareholders vote to adopt this
      Agreement or shall have made a Company Adverse Recommendation Change;
      (ii) the Company shall have failed to include in the Proxy Statement
      distributed to shareholders the Company Recommendation or a statement to the
      effect that the Company Board has determined and believes that the Merger is
      in
      the best interests of the Company's shareholders; (iii) the Company Board
      shall have formally approved or recommended to the Company's shareholders any
      Takeover Proposal (other than the Merger); (iv) the Company Board shall
      have approved, endorsed or recommended any Takeover Proposal (other than the
      Merger); (v) the Company shall have executed any letter of intent,
      memorandum of understanding or similar Contract relating to any Takeover
      Proposal (other than the Merger); or (vi) a tender or exchange offer
      relating to securities of the Company shall have been commenced and the Company
      shall not have sent to its security holders, within ten (10) business days
      after
      the commencement of such tender or exchange offer, a statement disclosing that
      the Company recommends rejection of such tender or exchange offer.

     

    (b)           The
      following terms are defined on the page of this Agreement set forth opposite
      such term below:

    
      	
              2008
                Shareholders Meeting

            	
              36

            
	
              Acceptable
                Confidentiality Agreement

            	
              29

            
	
              Adverse
                Recommendation Notice

            	
              29

            
	
              Agreement

            	
              1

            
	
              AMEX

            	
              33

            
	
              Articles
                of Merger

            	
              2

            
	
              Balance
                Sheet Date

            	
              10

            
	
              Bankruptcy
                and Equity Exception

            	
              8

            
	
              BCAL

            	
              1

            
	
              Certificates

            	
              3

            
	
              Charters

            	
              19

            
	
              Claim

            	
              35

            
	
              Closing

            	
              2

            
	
              Closing
                Date

            	
              2

            
	
              Code

            	
              13

            
	
              Company

            	
              1

            
	
              Company
                Acquisition Agreement

            	
              28

            
	
              Company
                Adverse Recommendation Change

            	
              28

            
	
              Company
                Charter Documents

            	
              7

            
	
              Company
                Common Stock

            	
              1

            
	
              Company
                Contracts

            	
              15

            
	
              Company
                Disclosure Letter

            	
              6

            
	
              Company
                Financial Statements

            	
              10

            
	
              Company
                Intellectual Property

            	
              17

            
	
              Company
                Material Adverse Effect

            	
              6

            
	
              Company
                Plan

            	
              14

            
	
              Company
                Recommendation

            	
              8

            
	
              Company
                SEC Documents

            	
              9

            
	
              Company
                Shareholder Approval

            	
              9

            
	
              Company
                Shareholders Meeting

            	
              32

            
	
              Confidentiality
                Agreement

            	
              33

            
	
              Contract

            	
              9

            
	
              Copyrights

            	
              17

            
	
              Dissenting
                Shareholder

            	
              5

            
	
              Dissenting
                Shares

            	
              5

            
	
              DnB

            	
              19

            
	
              Effective
                Time

            	
              2

            
	
              Engagement
                Letter

            	
              20

            
	
              Environmental
                Laws

            	
              16

            
	
              Exchange
                Act

            	
              9

            
	
              Excluded
                Party

            	
              27

            
	
              Filed
                Company SEC Documents

            	
              6

            
	
              Foreign
                Antitrust Laws

            	
              9

            
	
              Hazardous
                Materials

            	
              16

            
	
              Indemnitee

            	
              34

            
	
              Independent
                Approval

            	
              37

            
	
              Independent
                Directors

            	
              37

            
	
              Intellectual
                Property

            	
              17

            
	
              IP
                Licenses

            	
              17

            
	
              Laws

            	
              11

            
	
              Merger

            	
              1

            
	
              Merger
                Consideration

            	
              3

            
	
              Merger
                Sub

            	
              1

            
	
              Minister
                of Foreign Affairs

            	
              2

            
	
              No-Shop
                Period Start Date

            	
              26

            

    

     

    
      
         

      

      
        48

        
          

        

      

      
         

      

       

    

    
      	
              Notice
                Period

            	
              29

            
	
              PA04

            	
              15

            
	
              Parent

            	
              1

            
	
              Parent
                Notice

            	
              36

            
	
              Patents

            	
              17

            
	
              Paying
                Agent

            	
              3

            
	
              Permits

            	
              12

            
	
              Principal
                Shareholders

            	
              1

            
	
              Proxy
                Statement

            	
              31

            
	
              Qualified
                Person

            	
              37

            
	
              Related
                Party Transaction

            	
              38

            
	
              Representatives

            	
              26

            
	
              Restraints

            	
              40

            
	
              Sarbanes-Oxley
                Act

            	
              9

            
	
              SEC

            	
              9

            
	
              Securities
                Act

            	
              7

            
	
              Shares

            	
              1

            
	
              Software

            	
              17

            
	
              Superior
                Proposal

            	
              29

            
	
              Surviving
                Corporation

            	
              2

            
	
              Takeover
                Proposal

            	
              29

            
	
              Tax
                Returns

            	
              13

            
	
              Taxes

            	
              13

            
	
              Termination
                Fee

            	
              43

            
	
              Trade
                Secrets

            	
              17

            
	
              Trademarks

            	
              17

            
	
              Transaction
                Committee

            	
              8

            
	
              TUPE

            	
              15

            
	
              Vessels

            	
              18

            

    

     

    
      SECTION
        7.12          Interpretation.

       

      (a)           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.  All terms defined in this Agreement shall have the defined
        meanings when used in any 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.

       

      (b)           The
        parties hereto have participated jointly in the negotiation and drafting
        of this
        Agreement and, in the event an ambiguity or question of intent or interpretation
        arises, this Agreement shall be construed as jointly drafted by the parties
        hereto and no presumption or burden of proof shall arise favoring or disfavoring
        any party by virtue of the authorship of any provision of this
        Agreement.

    

    
      
        
        

      

      
        49

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed and delivered as of the date first above written.

     

     

    
      	 	 	
              MAST
                ACQUISITION LTD. 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	 	
              Name:

            	 
	 	 	 	
              Title:

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              MAST
                MERGER SUB CORP. 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	 	
              Name:
                

            	 
	 	 	 	
              Title:

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              MC
                SHIPPING INC. 

            	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	
              By:

            	  
              	 
	 	 	 	
              Name:  Antony
                S. Crawford

            	 
	 	 	 	
              Title:  Chief
                Executive Officer and President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00126-of-00352.parquet"}]]