Document:

Exhibit 10.9

Exhibit 10.9

 

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

 

 

WARRANT TO PURCHASE COMMON STOCK

Corporation: Hudson Technologies, Inc.

Number of Shares: 33,333

Class of Stock:Common Stock

Initial Exercise Price: $1.88 per share

Issue Date: April 17, 2008

Expiration Date:April 17, 2013

THIS WARRANT CERTIFIES THAT, in consideration of the payment of $1.00 and for other good and valuable consideration, the receipt of which is hereby acknowledged, Bridge Healthcare Finance, LLC or registered assignee ("Holder") is entitled to purchase the number (subject to adjustment hereunder, the "Warrant Number") of fully paid and non-assessable shares of the Common Stock (the "Shares") of Hudson Technologies, Inc. (the "Company") at the Initial Exercise Price per Share of $1.88 (the "Warrant Price") all as set forth above and as adjusted pursuant to Article 2 of this Warrant, subject to the provisions and upon the terms and conditions set forth on this Warrant. For purposes of this Warrant, except as the context may otherwise require and in addition to other capitalized terms defined elsewhere herein, capitalized terms used herein shall have the meanings set forth in Appendix I.

ARTICLE 1. EXERCISE
1.1 Method of Exercise. From and after each date set forth in the Vesting Table ("Vesting Table") below, Holder may exercise this Warrant in respect of the number of Shares equal to the product of the Warrant Number multiplied by the percentage listed opposite each such date (the "Exercise Percentage"), in whole or in part, at any time and from time to time prior to the expiration date referred to above (the "Expiration Date") by delivering this Warrant and a duly executed Notice of Exercise in substantially the form attached as Appendix II to the principal office of the Company located at P.O. Box 1541, One Blue Hill Plaza, 14th Floor, Pearl River, NY, 10965, or such other office as the Company shall advise Holder, as herein provided. Unless Holder is exercising the conversion right set forth in Section 1.2, Holder shall also deliver to the Company a check for the aggregate Warrant Price for the Shares being purchased. In the event the Warrant is not exercised in full, the Company, at its expense, shall forthwith issue and deliver to or upon the order of Holder a new Warrant which shall in all respects be identical to this Warrant in the name of Holder or as Holder may request, calling in the aggregate on the face thereof for the number of Shares equal to (i) the Warrant Number minus (ii) the number of Shares for which this Warrant shall have been exercised. From and after the occurrence of an Acceleration Event, the Exercise Percentage shall be deemed to equal 100% for each date listed in the Vesting Table.

Vesting Table

	
Date
	
Exercise Percentage

	
30-Jun-08
	
8.33% 

	
30-Sep-08
	
16.67%

	
31-Dec-08
	
25.00%

	
31-Mar-09
	
33.34%

	
30-Jun-09
	
41.67%

	
30-Sep-09
	
50.00%

	
31-Dec-09
	
58.34%

	
31-Mar-10
	
66.67%

	
30-Jun-10
	
75.01%

	
30-Sep-10
	
83.34%

	
31-Dec-10
	
91.67%

	
31-Mar-11
	
100%

 
1.2 Conversion Right. (a) In lieu of exercising this Warrant as specified in Section 1.1, Holder may from time to time convert this Warrant (the "Conversion Right"), in whole or in part, into a number of Shares determined by dividing (a) the aggregate Fair Market Value of the Shares or other securities otherwise issuable upon exercise of this Warrant in full or such part of this Warrant minus the aggregate Warrant Price of such Shares by (b) the Fair Market Value of one Share. The Fair Market Value of the Shares shall be determined pursuant to Section 1.5. The Conversion Right may be exercised by Holder at any time, or from time to time, prior to the Expiration Date, on any Business Day by delivering a written notice (the "Conversion Notice") in the form attached as Appendix III to the Company at its principal office exercising the Conversion Right and specifying the total number of Shares Holder will purchase pursuant to such conversion.

1.3 Payment of Taxes. The Company shall pay all documentary stamp taxes, if any, attributable to the issuance of the Warrant and the Shares; provided, however, that the Company shall not be required to pay any tax or taxes which may be payable in respect of any transfer involved in (a) the issuance of any Warrant in the name other than Holder or (b) the issue of any certificates for Shares in a name other than that of Holder upon exercise of the Warrant, or any portion thereof, and the Company shall not be required to issue or deliver such certificates unless and until the persons requesting the issuance thereof have paid to the Company the amount of such tax or shall have established to the reasonable satisfaction of the Company that such tax has been paid. 

1.4 Fractional Shares. The Company shall not be required upon any exercise of this Warrant to issue a certificate representing any fraction of a Share. If any fraction of a Share would, but for this Section, be issuable upon final exercise of this Warrant (and after aggregating all Warrants presented for exercise by the Holder), in lieu of such fractional share, the Company shall purchase from the Holder any fractional Shares created as a result of such final exercise by cash payment to the Holder in an amount equal to the same fraction of its Fair Market Value per Share as of the date of exercise.

1.5 Fair Market Value. "Fair Market Value" shall have the meaning as set forth in this Section 1.5. If the Shares are traded regularly in a public market, the Fair Market Value of the Shares shall be the average closing sale price of the Shares (or the closing sale price of the Company's stock into which the Shares are convertible) reported on the principal stock exchange or other trading system on which the Shares are traded for the five (5) Business Days ending one Business Day before Holder delivers its Notice of Exercise to the Company. If the Shares are not regularly traded in a public market, the Board of Directors of the Company shall determine Fair Market Value in its reasonable good faith judgment. The foregoing notwithstanding, if Holder advises the Board of Directors in writing that Holder disagrees with such determination, then the Company and Holder shall promptly agree upon a reputable investment banking firm to undertake such valuation. All such fees and expenses shall be paid by Holder. With respect to this Section 1.5, the Fair Market Value of the Shares shall be determined without regard to (v) any discount on the basis of minority interest, (w) any restrictions on transfer of the Common Stock under applicable securities laws or otherwise, (x) any agreement or document prohibiting or restricting the payment of dividends or stock or option repurchases, and (y) any lack of marketability or liquidity of the Common Stock (as opposed to the marketability or liquidity of the entire Company). 

1.6 Delivery of Certificate. Promptly after Holder exercises or converts this Warrant, the Company shall deliver to Holder certificates for the number of fully paid and non-assessable Shares acquired in the name of Holder or its designee(s). Notwithstanding any provision herein to the contrary, the delivery to the Company of this Warrant and the Notice of Exercise provided in Section 1.1 shall confer upon the Holder immediate voting rights in respect of the Warrant Shares acquired in connection therewith.

1.7 Replacement of Warrants. On receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant and, in the case of loss, theft or destruction, on delivery of an indemnity agreement reasonably satisfactory in form and amount to the Company or, in the case of mutilation, or surrender and cancellation of this Warrant, the Company at its expense shall execute and deliver, in lieu of this Warrant a new warrant which shall in all respects be identical to this Warrant.

1.8 Valid Issuance. All Shares issuable upon the exercise of this Warrant pursuant to the terms hereof shall be validly issued, fully paid and nonassessable, shall be issued without violation of any preemptive or similar rights of any third parties, and shall be free and clear of any and all liens, encumbrances, claims and restrictions whatsoever, other than restrictions on transfer pursuant to applicable federal and state securities laws.

ARTICLE 2. ADJUSTMENTS TO THE SHARES 
2.1 Dividends, Subdivisions and Combinations. If the Company, at any time and from time to time, (i) declares or distributes to all the holders of its Common Stock, a dividend payable in, or other distribution of, additional shares of Common Stock or Common Stock Equivalents (other than Common Stock or Common Stock Equivalents issued under and pursuant to any current or future Stock Option of Stock Incentive Plan of the Company) , (ii) splits or subdivides its outstanding shares of Common Stock into a greater number of shares of Common Stock or Common Stock Equivalents, or (iii) combines its outstanding shares of Common Stock into a smaller number of shares of Common Stock or Common Stock Equivalents, then, in each such case, the Warrant Number shall be adjusted to equal the product of the Warrant Number in effect immediately prior to the adjustment multiplied by a fraction the numerator of which is equal to the number of shares of Common Stock outstanding immediately after such adjustment and the denominator of which is equal to the number of shares of Common Stock outstanding immediately prior to the adjustment, and the Warrant Price shall be adjusted pursuant to Section 2.5.

2.2 Redemptions or Other Acquisitions of Common Stock. If the Company makes any redemptions, purchases or other acquisitions of Common Stock or Common Stock equivalents from all holders thereof, the Holder shall promptly receive the cash, stock, securities or property to which the Holder would have been entitled by way of redemption, purchase or other acquisition if the Holder had exercised this Warrant for the full amount of Shares then issuable upon such exercise immediately prior to such redemption, purchase or other acquisition and such redemption, purchase or other acquisition had been consummated on a pro rata basis among all holders of Common Stock (after giving effect to such exercise of the Warrant).

2.3 Reorganization, Reclassification, Merger, Consolidation, or Disposition of Assets. If the Company reorganizes its capital, reclassifies its capital stock, merges or consolidates with or into another person or entity (where the Company is not the surviving person or entity or where there is any change whatsoever in, or distribution with respect to, the Outstanding Common Stock of the Company, other than a change in par value), or sells, transfers or otherwise disposes of all or substantially all of the assets of the Company and its subsidiaries, on a consolidated basis, to another person or entity and, pursuant to the terms of such reorganization, reclassification, merger, consolidation, or disposition of assets, cash, securities or property are to be received by or distributed to the holders of Common Stock of the Company who are holders immediately prior to such transaction, then the Holder shall have the right thereafter to receive, provided Holder exercises this Warrant within thirty (30) days of completion of such transaction, the cash, securities or property receivable by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately prior to such event. In the case of any such reorganization, reclassification, merger, consolidation or disposition of assets, any successor or acquiring person or entity (other than the Company) shall expressly assume the due and punctual observance and performance of each and every covenant and condition of this Warrant to be performed and observed by the Company and all the obligations and liabilities of the Company hereunder and, upon the Holder tendering this Warrant for cancellation, shall issue a replacement Warrant containing substantially the same provisions as this Warrant, but containing appropriate changes due to such event (such as changes to the name of the issuing company and equitable changes to the Warrant Number due to the occurrence of such event). The foregoing provisions of this Section 2.3 shall similarly apply to successive reorganizations, reclassifications, mergers, consolidations or dispositions of assets.

2.4 Dissolution, Liquidation and Winding Up. In case the Company, at any time prior to the exercise in full of this Warrant, dissolves, liquidates or winds up its affairs, the Holder shall have the right to receive upon exercise of this Warrant, in lieu of the shares of Common Stock that such Holder would have been entitled to receive, the same kind and amount of assets as would have been issued, distributed or paid to such Holder upon any such dissolution, liquidation or winding up with respect to such shares of Common Stock had such Holder been the holder of record of such shares of Common Stock receivable upon the exercise of this Warrant on the record date for the determination of those persons entitled to receive any such liquidating distribution, provided, however, that the Holder shall not in any case be required to assume or be obligated in respect of any liabilities of the Company.

2.5 Adjustment of Warrant Price. Upon any adjustment of the Warrant Number as provided in Section 2.1, the Warrant Price shall be adjusted to be equal to the product of (i) the Warrant Price in effect immediately prior to such adjustment multiplied by (ii) the quotient of the Warrant Number in effect immediately prior to such adjustment divided by the Warrant Number in effect immediately after such adjustment.

2.6 Determination of Adjustments.

(a)Upon any event that shall require an adjustment pursuant to this Article 2, the Company shall promptly calculate such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth, in reasonable detail, such adjustment, the method of calculation thereof and the facts upon which such adjustment is based, including a statement of (i) the number of shares of Outstanding Common Stock and (ii) the Warrant Number, both as in effect immediately prior to such adjustment and as adjusted on account thereof. The Company shall promptly mail a copy of each such certificate to the Holder. In the event that the Holder objects to the computation of such adjustment prepared by the Company within 20 Business Days after receipt thereof, Fair Market Value per Share shall be determined pursuant to the procedures set forth in Section 1.5. The Company shall keep at its principal office copies of all such certificates and cause the same to be available for inspection at such office during normal business hours by the Holder or any prospective transferee hereof designated by the Holder.

(b)The following additional provisions shall be applicable to the adjustments provided for pursuant to this Article 2:
(1) When Adjustments to be Made. The adjustments required by this Article 2 shall be made whenever and as often as any specified event requiring such an adjustment shall occur and shall be effective (A) in the case of any dividend or distribution of Common Stock to the holders of Common Stock, immediately after the close of business on the date such dividend or distribution is actually made by the Company, and (B) in the case of any other specified event, at the close of business on the date of such specified event.

(2) Certain Limitations. Notwithstanding anything herein to the contrary, the Company agrees not to adjust upward the par value per share of its Common Stock and not to enter into any transaction that, by reason of any adjustment hereunder, would cause the Warrant Price per Share to be less than the par value per share of its Common Stock.

2.7 Treasury Shares. For the purposes of this Article 2, the number of Shares at any time outstanding shall not include the Shares held in the treasury of the Company.

2.8 No Impairment. The Company shall at all times in good faith assist in carrying out all the provisions of this Article 2 and in taking all such action as may be necessary or appropriate to protect Holder's rights under this Warrant.

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY
3.1 Representations and Warranties. The Company hereby represents and warrants to Holder as follows:
(a) Reservation of Shares. The Company shall, at all times, reserve and keep available out of its authorized and unissued Common Stock or out of shares of its treasury stock, solely for the purpose of issue upon exercise of the purchase rights evidenced by this Warrant, free from preemptive rights, the number of Shares for which this Warrant can be exercised.

(b) All Shares which may be issued upon the exercise of the purchase right represented by this Warrant, shall, upon issuance and payment therefor pursuant to the terms hereof, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances except for restrictions on transfer provided for herein or under applicable federal and state securities laws or any liens or encumbrances imposed by the Holder on the Shares. If any shares of Common Stock required to be reserved for the purposes of exercise of this Warrant require registration with or approval of any governmental authority applicable to the Company under any federal or state law (other than federal and state securities laws) before such Shares may be issued upon exercise of this Warrant, the Company shall, at its expense and as expeditiously as possible, take commercially reasonable actions to cause any such shares to be duly registered or approved, as the case may be.

(c) The Company shall, at all times, act in good faith to assist in the carrying out of all of the provisions of this Warrant and in taking all other commercially reasonable action that may be necessary in order to protect the rights of Holder as set forth in this Warrant.

(d) Maintenance of Office. The Company shall maintain an office where presentation of this Warrant may be made. The Company shall give notice, in writing, to Holder of each change in the location of such office.

3.2 Notice of Certain Events. If the Company proposes at any time (a) to offer for subscription pro rata to the holders of any class or series of its stock any additional shares of stock of other rights; (b) to effect any reclassification or recapitalization of Common Stock; (c) to merge or consolidate with or into any other corporation, or sell, lease, license, or convey all or substantially all of its assets, or to liquidate, dissolve or wind up; (d) offer holders of registration rights the opportunity to participate in an underwritten public offering of the Company's securities for cash; (e) to amend its Charter or Bylaws; of (f) to issue any Common Stock or Common Stock Equivalents other than an Exempt Issuance; then, in connection with each such event, the Company shall give Holder (1) at least 20 days prior written notice of the date on which a record will be taken for such dividend, distribution, or subscription rights (and specifying the date on which the holders of Common Stock will be entitled thereto) or for determining rights to vote, if any, the matters referred to in (c) and (d) above; (2) in the case of the matters referred to in (c) and (d) above at least 20 days prior written notice of the date when the same will take place (and specifying the date on which the holders of Common Stock will be entitled to exchange their Common Stock for securities or other property deliverable upon the occurrence of such event); and (3) in the case of the matter referred to in (e) above, the same notice as is given to the holders of such registration rights.

3.3 Information Rights. So long as Holder holds this Warrant and/or any of the Shares, but in no event, later than the Expiration Date, the Company shall deliver to Holder promptly after mailing, copies of all communiques, information, reports, and documents sent to the shareholders of the Company which are not filed by the Company with the SEC, and, in the event the Company is no longer a reporting company under the Securities Exchange Act of 1934 and subject to the EDGAR reporting system the Company shall deliver to Holder: (i) within ninety (90) days after the end of each fiscal year of the Company (or such later date as such financial statements become available) the annual audited financial statements of the Company certified by independent public accountants and (c) within forty-five (45) days after the end of each of the first three quarters of each fiscal year(or such later date as such financial statements become available), the Company's quarterly, unaudited financial statements.

3.4 Registration Under Securities Act of 1933, as amended. The Company agrees that the Shares shall be subject to the registration rights set forth on Exhibit A.

ARTICLE 4. MISCELLANEOUS
4.1 Term; Notice of Expiration. This Warrant is exercisable as provided in Section 1.1 above at any time and from time to time on or before the Expiration Date set forth above. 

4.2 Legend. This Warrant and the Shares shall be imprinted with a legend in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION THEREOF UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND REGISTRATION OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED .

4.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares issuable upon exercise of this Warrant may not be transferred or assigned in whole or in part without compliance with applicable federal and state securities laws by the transferor and the transferee (including, without limitation, the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company). The Company shall not require Holder to provide an opinion of counsel if (a) the transfer of the Warrant or Shares is to an affiliate of Holder provided that (i) the Holder provides the Company with such information that it reasonably requests in order to determine that such proposed transfer complies with applicable federal and state securities laws and (ii) counsel for the Company does not advise the Company that such opinion is necessary to determine compliance with applicable federal and state securities laws, or (b) if the Holder provides the Company with information reasonably acceptable to the Company's counsel that demonstrates that Holder has complied with Rule 144 of the Securities Act of 1933 in connection with any such transfer. 

4.4 Investment Representation and Legend. The Registered Holder, by acceptance of this Warrant, represents and warrants to the Company that the holder is acquiring the Warrant for its own account for investment purposes and not with a view toward the distribution thereof. Unless the offering and sale of the Shares to be issued upon the particular exercise of the Warrant shall have been effectively registered under the Securities Act of 1933, the Company shall be under no obligation to issue the Shares covered by such exercise unless and until the Registered Holder who exercises the Warrant shall provide the Company with such information that it may reasonably request to satisfy itself that the issuance of the Shares upon exercise of the Warrant complies with an applicable federal and state securities laws . the person acquiring such Shares shall be bound by the provisions of a legend, substantially as follows, which shall be endorsed upon the certificate(s) evidencing the Shares issued pursuant to such exercise:
"The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended (the "Securities Act"). Such shares may not be sold, transferred or otherwise disposed of unless they have first been registered under the Act or, unless, in the opinion of counsel satisfactory to the Company's counsel, such registration is not required."

4.5 Transfer Procedure. Subject to the provisions of Section 4.3, Holder may transfer all or part of this Warrant by giving the Company notice of the Warrant being transferred setting forth the name, address and taxpayer identification number of the transferee and surrendering this Warrant to the Company for reissuance to the transferee(s). The Company shall have the right to refuse to transfer this Warrant to any person who directly competes with the Company. Any transfer of this Warrant shall be registered on the books of the Company maintained for such purpose. Upon such transfer, the Company shall execute and deliver a new Warrant or Warrants in the name of the transferee and in the denominations specified in such notice, and shall issue to the Holder a new Warrant evidencing the portion of this Warrant not so assigned, if any, and this Warrant shall promptly be cancelled.

4.6 Notices. All notices and other communications from the Company to Holder, or vice versa, shall be deemed delivered and effective when given personally or mailed by first-class registered or certified mail, postage prepaid, at such address as may have been furnished to the Company or Holder, as the case may be, in writing by the Company or such Holder from time to time.

4.7 Waiver. This Warrant and any term hereof may not be changed, waived, discharged or terminated, except by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought.

4.8 Attorneys' Fees. In the event of any dispute between the parties concerning the terms and provisions of this Warrant, the party prevailing in such dispute shall be entitled to collect from the other party all costs incurred in such dispute, including reasonable attorneys' fees.

4.9 Governing Law. This Warrant shall be governed by and construed in accordance with the laws of New York, without giving effect to its principles of conflicts of law.

 

 

[THIS SPACE INTENTIONALLY LEFT BLANK]
4.10 Limitation of Liability. No provision hereof and no enumeration herein of the rights or privileges of the Holder shall give rise to (i) any liability of such Holder for the purchase price of any Warrant Shares or as a stockholder of the Company, except upon proper exercise of the Warrant by the Holder, or (ii) any other liability of the Holder, whether such liability is asserted by the Company or by creditors of the Company.

 
HUDSON TECHNOLOGIES, INC.

 

By: /s/ Brian F. Coleman

Name:Brian F. Coleman

Title:President

 

APPENDIX I

DEFINITIONS
"Acceleration Event" means the earliest to occur of (i) a material breach of this Warrant by Company, (ii) an Event of Default, and (iii) a Termination Date, where "Event of Default" and "Termination Date" shall be as defined under that certain Amended and Restated Loan Agreement between Keltic Financial Partners, LP and Company dated June 26, 2007, as subsequently amended on or about the date hereof to add Holder.

"Business Day" means any day other than a Saturday or Sunday, a legal holiday or a day on which commercial banks in New York are authorized or required by law to be closed.

"Common Stock" means the capital stock of the Company, however designated, that is not limited as to the amount of dividends, or that is not limited as to the amount of distributions upon liquidation or dissolution of the Company.

"Common Stock Equivalents" means any evidences of indebtedness, shares of stock or other securities (including without limitation the Warrants) that are convertible into or exchangeable for, with or without payment of additional consideration in cash or property, shares of Common Stock, and any options, warrants or other securities or rights to subscribe for, purchase or otherwise acquire shares of Common Stock or any of the foregoing, in each case whether or not immediately exercisable.

"Exempt Issuance" means (i) any issuance of Common Stock for which an adjustment to the Warrant Number has been made under Sections 2.1, 2.2 or 2.3, (ii) the issuance of any Common Stock upon the exercise of Common Stock Equivalents (including without limitation the issuance of Shares upon exercise of any Warrant); and (iii) the issuance of any Common Stock or Common Stock Equivalents under and pursuant to any of the Company's current or future Stock Option Plan or Stock Incentive Plan

"Outstanding Common Stock" means, at any date of determination, the sum of all shares of Common Stock issued and outstanding at such date.

"Subsequent Issuance" means any sale or issuance by the Company of Common Stock or Common Stock Equivalents after the Issue Date.

 

 

 

APPENDIX II

 

NOTICE OF EXERCISE

 
1.The undersigned hereby elects to purchase ___ shares of the Common Stock of issuable pursuant to the terms of the attached Warrant, and tenders herewith payment of the purchase price of such shares in full.

2.The undersigned hereby elects to convert the attached Warrant into _____ number of Shares in the manner specified in the Warrant. This conversion is exercised with respect to _____ Shares covered by the Warrant. The undersigned tenders herewith payment in full of the purchase price of such shares purchased. 

[Strike paragraph that does not apply.]
3.In lieu of exercising the attached Warrant for cash or by check, the undersigned hereby elects to effect the exercise by surrender of the Warrant pursuant to the provisions of Section 1.2 of the Warrant and receive_______(leave blank if you choose alternative no. 1 or no. 2 above) shares of Common Stock pursuant to the terms of this Warrant. (Initial here if the undersigned elects this alternative:_____ 

4.Please issue a certificate or certificates representing said shares in the name of the undersigned or in such other name as is specified below.

____________________________

____________________________

____________________________
5.The undersigned Holder, in connection with the exercise of the attached Warrant, represents to Hudson Technologies, Inc. ("Company") that as follows:
A. It is acquiring the Shares issuable upon exercise of the Warrant solely for its own account and not as a nominee for any other party and not with a view toward the resale or distribution thereof except in compliance with applicable securities laws.

B. The Holder understand and agrees that the Shares may not be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the Securities Act of 1933 and in compliance with the applicable securities laws of any state or other jurisdiction, or pursuant to an opinion of counsel satisfactory to the Company that such registration is not required and such compliance has been obtained. 

C. The Holder understands that the Shares are being offered and sold by the Company in reliance on an exemption from the registration requirements of the Securities Act of 1933 and equivalent state securities and "blue sky" laws, and that the Company is relying upon the accuracy of, and the compliance by the Holder with its, his or her representations and warranties set forth herein, in determining the availability of such exemption and the eligibility of the Holder to acquire the Shares.

D. The Holder acknowledges that the Holder or its representative has had access to the reports and other documents filed by the Company with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended, and that has been given an opportunity to ask questions of, and to receive answers from, the Company's management personnel concerning the Company's business and the Shares. The Holder has been provided access to all materials relating to the business, financial position and results of operations of the Company, and all other materials requested by the Holder or its representative to enable him to make an informed investment decision with respect to the acquisition of the Shares. 

E. The Holder or its representative has such knowledge and experience in financial and business matters that Holder or such representative is capable of evaluating the merits and risks of an investment in the Shares. 

F. The Holder understands that an investment in the Shares involves a high degree of risk, and has the financial ability to bear the economic risk of this investment in the Shares, including a complete loss of such investment. The Holder has no need for liquidity with respect to this investment.

G. If the Holder is an entity, the undersigned is duly authorized to execute this notice on behalf of the Holder.
HOLDER:

____________________________

Date:_______________

Signature:____________________

Name:

Title:

Address:______________________

____________________________

____________________________

(Signature)

____________________________

(Date)

 

APPENDIX III

 

CONVERSION NOTICE

 

See Appendix II

 

EXHIBIT A

Registration Rights

 

Holder shall have the following Registration Rights relating to Shares held by Holder pursuant to exercise of this Warrant ("Holder Shares").
(1)Registration. If the Company at any time proposes for any reason to register authorized but unissued shares of Common Stock held by the Company in its treasury (other than on Form S-4 or Form S-8 promulgated under the Securities Act or any successor forms thereto) ("Primary Shares") or shares issued to ___________ ("Registrable Shares") under the Securities Act (defined below) (other than on Form S-4 or Form S-8 promulgated under the Securities Act or any successor forms thereto), it shall promptly give written notice to Holder of its intention to so register the Primary Shares or Registrable Shares and, upon the written request, given within 20 days after delivery of any such notice by the Company, of Holder to include in such registration Holder Shares (which request shall specify the number of Holder Shares proposed to be included in such registration), the Company shall use commercially reasonable efforts to cause all such Holder Shares to be included in such registration on the same terms and conditions as the securities otherwise being sold in such registration; provided, however, that if the managing underwriter advises the Company that the inclusion of all of the Primary Shares, Holder Shares and other unregistered shares ("Other Shares") proposed to be included in such registration would interfere with the successful marketing (including pricing) of Primary Shares or Registrable Shares proposed to be registered by the Company, then the number of Primary Shares, Registrable Shares, Holder Shares and Other Shares proposed to be included in such registration shall be included in the following order:

(i) first, the Primary Shares;

(ii) second, the Registrable Shares; and

(iii) third, the Holder Shares and Other Shares.

Notwithstanding anything to the contrary, the Holder Shares shall cease to be Registrable Shares and the Company shall have no obligation to register the Holder Shares if (i) the Holder Shares are publicly sold; (ii) the Holder Shares may be publicly sold under Rule 144 of the Securities Act of 1933, as amended ("Securities Act") or any successor rule, without regard to volume limitation or (iii) the Holder Shares cease to be outstanding.
(2)Expenses. With respect to each registration effected, all fees, costs and expenses of and incidental to such registration and the public offering in connection therewith shall be borne by the Company; provided, however, that the Holder participating in any such registration shall bear the underwriting discounts, selling commissions and all costs or expenses of any counsel or other advisor to the Holder, attributable to the Holder Shares sold in such public offering.

(3)Indemnification and Contribution.
(a)To the fullest extent permitted by law, the Company will indemnify and hold harmless Holder and any underwriter (as defined in the Securities Act ) acting for Holder, and any person who controls such Holder or such underwriter within the meaning of the Securities Act, from and against, and will reimburse Holder and each such underwriter and controlling person with respect to, any and all claims, actions, demands, losses, damages, liabilities, costs and expenses to which Holder or any such underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such claims, actions, demands, losses, damages, liabilities, costs or expenses arise out of or. are based upon any untrue statement or alleged untrue statement of any material fact contained in any Registration Statement, any prospectus contained therein or any amendment or supplement thereto in which shares of the Holder are included pursuant to this Agreement, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading or arise out of any violation by the Company of any rule or regulation under the Securities Act applicable to the Company and relating to action or inaction required of the Company in connection with such registration; provided, however, that the Company will not be liable: (i) if corrected information is contained in a supplement to or an amendment to any such prospectus that was delivered to but not used by Holder; (ii) if Holder was required to deliver a prospectus and failed to do so; (iii) if the Holder was advised by the Company that the prospectus should no longer be used or (iv) in any such case to the extent that any such claim, action, demand, loss, damage, liability, cost or expense is caused by an untrue statement or alleged untrue statement or omission or alleged omission so made in reliance upon and in strict conformity with information furnished by Holder, such underwriter or such controlling person in writing specifically for use in the preparation thereof. 

(b)If shares of Holder are included in a registration statement pursuant to this Agreement, Holder will indemnify and hold harmless the Company from and against, and will reimburse the Company with respect to, any and all losses, damages, liabilities, costs or expenses to which the Company may become subject under the Securities Act or otherwise, insofar as such losses, damages, liabilities, costs or expenses are caused by any untrue or alleged untrue statement of any material fact contained therein or any amendment or supplement thereto, or are caused by the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they are made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was so made in reliance upon and in strict conformity with written information furnished by Holder specifically for use in the preparation thereof.

(c)Promptly after receipt by a party to be indemnified pursuant to the provisions of paragraph (a) or (b) (an indemnified party) of notice of the commencement of any action involving the subject matter of the foregoing indemnity provisions, such indemnified party will, if a claim thereof is to be made against the indemnifying party pursuant to the provisions of paragraph (a) or (b), notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to an indemnified party otherwise than under the provisions of this paragraph and shall not relieve the indemnifying party from liability under the provisions of this paragraph unless such indemnifying party is prejudiced by such omission. In case such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party shall have the right to participate in and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party pursuant to the provisions of such paragraphs (a) and (b) for any legal or other expense subsequently incurred by indemnified party in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall be liable to an indemnified patty for any settlement of any action or claim without the consent of the indemnifying party; no indemnifying party may unreasonably withhold its consent to any such settlement. No indemnifying party will consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.

(4)Lock-Up Agreement. In consideration of the assumption by the Company of its obligations hereunder, Holder agrees in connection with any registration of the Company's securities that, upon the request of the Company or the underwriter or any underwritten offering of the Company's securities, not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any Registrable Securities (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed one hundred eighty (180) days) from the effective date of such registration as the Company or the underwriters may reasonably specify.

(5)Duty to Provide Information.In connection with any registration of Holder Shares, Holder shall provide to the Company such information as reasonably required by the Company to complete such registration and. any obligation of the Company under this Agreement to register the Registrable Securities shall be conditioned upon the Company's receipt of such information from the Holder.EXHIBIT 10.1

EMPLOYMENT AGREEMENT

          AGREEMENT
(this “Agreement”) made as of April 21, 2008, between USS Vessel
Management LLC, a Delaware limited liability company with an office at 399
Thornall Street, Edison, New Jersey 08837 (the “Company”), and Anthony
J. Guzzo residing at 621 Agnes Avenue, Brielle, NJ 08730 (the “Executive”).

W I T N E S S E T H:

          WHEREAS,
the Company desires to employ Executive, and Executive desires to be employed
by the Company, on the terms hereinafter set forth;

          NOW,
THEREFORE, in consideration of the premises and of the mutual promises,
representations and covenants herein contained, the parties hereto agree as
follows:

	
 

	
 

	
 

	
 

	
1.

	
EMPLOYMENT.

          The
Company hereby employs Executive and Executive hereby accepts such employment,
subject to the terms and conditions herein set forth. Executive shall hold the
office of Vice President—Chief Accounting Officer, reporting to the Vice
President—Chief Financial Officer of the Company.

	
 

	
 

	
 

	
 

	
2.

	
TERM.

          The
initial term of employment under this Agreement shall begin on the date hereof
and shall continue until April 20, 2009, subject to prior termination in
accordance with the terms hereof (the “Initial Term”). The Initial Term
shall be automatically extended for successive additional periods of one (1)
year commencing on each anniversary of the date hereof (each such period, an “Additional
Term”) unless either party shall have given written notice to the other
party of non-extension at least sixty (60) days’ prior to the end of the then
applicable Initial Term or Additional Term (the Initial Term and any Additional
Term collectively, the “Employment Term”). Notice of non-extension by
the Company shall be deemed a termination without justifiable cause (as defined
herein) at the end of the then current Employment Term and notice of
non-extension by Executive shall be deemed a termination without good reason
(as defined herein) at the end of the then current Employment Term.

	
 

	
 

	
 

	
 

	
3.

	
COMPENSATION.

          As
compensation for the employment services to be rendered by Executive hereunder,
including all services as an officer or director of U.S. Shipping Partners L.P.
(the “Partnership”), US Shipping General Partner LLC, the general
partner of the Partnership and the sole member of the Company (the “General
Partner”), and any of their respective subsidiaries (collectively, the “US
Shipping Group”), the Company agrees to pay, or cause to be paid, to
Executive, and Executive agrees to accept, payable in equal installments in
accordance with Company practice, an initial annual salary of $190,000.
Executive’s annual salary hereunder for the remaining years of employment shall
be determined by the Board of Directors of the General Partner (the “GP
Board”) in its sole discretion; provided, however, that in no event shall
Executive’s salary in any year be reduced below the rate for the previous year.
In addition, Executive shall be eligible for bonuses from time to time in such
amounts as may be determined by the GP Board in its sole discretion, it being
agreed that the target bonus for 2008 shall be 60% of salary.

	
 

	
 

	
 

	
 

	
4.

	
EXPENSES.

          The
Company shall pay or reimburse Executive, upon presentment of suitable
vouchers, for all reasonable business and travel expenses which may be incurred
or paid by Executive in connection with his employment hereunder in accordance
with Company policy as established from time to time by the Board of Directors.
Executive shall comply with such restrictions and shall keep such records as
the Company may reasonably deem necessary to meet the requirements of the
Internal Revenue Code of 1986, as amended from time to time (the “Code”),
and regulations promulgated thereunder.

	
 

	
 

	
 

	
 

	
5.

	
OTHER
  BENEFITS.

          Executive
shall be entitled to four (4) weeks paid vacation per year and to participate
in such benefit plans and arrangements and receive any other benefits
customarily provided by the Company to its senior management personnel
(including any profit sharing, pension, short- and long-term disability
insurance, hospital, major medical insurance and group life insurance plans in
accordance with the terms of such plans) and including stock option and/or
stock purchase plans, all as determined from time to time by the GP Board, on a
level commensurate with Executive’s seniority (the “Benefit Plans”). The
Company shall indemnify Executive to the fullest extent permitted by Delaware
law, including the advancement of legal expenses and costs.

	
 

	
 

	
 

	
 

	
6.

	
DUTIES.

          (a)          Executive
shall perform such reasonable duties and functions as the Vice President—Chief
Financial Officer of the Company may lawfully assign to him, such duties being
commensurate with the duties customarily performed by executives responsible
for accounting and finance at companies, and Executive shall comply in the
performance of his duties with the policies of the Chief Executive Officer, the
Board of Directors of the Company (the “Company Board”) and the GP
Board, and be subject to the direction of the Chief Executive Officer,
President, the Company Board and the GP Board. Executive shall also serve,
without additional compensation, as Vice President—Chief Accounting Officer of
the General Partner, United States Shipping Master LLC (“Parent”), the
Partnership and each subsidiary of the Partnership and the General Partner. At
the request of the GP Board, Executive shall serve as an executive officer,
director and manager of any other member of the US Shipping Group without
additional compensation and, in the performance of such duties, Executive shall
comply with the policies of the board of directors or board of managers of each
such entity.

          (b)          Executive
shall devote all of his business time and attention, reasonable vacation time
and absences for sickness excepted, to the business of the Company, as
necessary to fulfill his duties. Executive shall perform the duties assigned to
him with fidelity and to the best of his ability.

          (c)          Nothing
contained in this Section 6 or elsewhere in this Agreement shall be construed
to prevent Executive from investing or trading in non-competing investments as
he sees fit for his own account, including real estate, stocks, bonds,
securities, commodities or other forms of investments.

	
 

	
 

	
 

	
 

	
7.

	
TERMINATION
  OF EMPLOYMENT; EFFECT OF TERMINATION.

          (a)          Executive’s
employment hereunder shall terminate upon the first to occur of the following:

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                    (i)          upon
thirty (30) days’ prior written notice to Executive upon the determination by
the GP Board that Executive’s performance of his duties has not been fully
satisfactory for any reason which would not constitute “justifiable cause” (as
hereinafter defined);

                    (ii)          upon
three (3) days’ prior written notice to Executive upon the determination by the
GP Board that there is justifiable cause for such termination;

                    (iii)          automatically
and without notice upon the death of Executive;

                    (iv)          in
accordance with the terms of subsection (d) hereof upon the “disability” (as
hereinafter defined) of Executive;

                    (v)          upon
written notice by the Executive to the Company of a termination for good reason
(as hereinafter defined) within ninety (90) days after the event that
constitutes good reason; or

                    (vi)          upon
30 days’ prior written notice by Executive to the Company of the Executive’s
voluntary termination of employment without good reason.

          (b)          For
the purposes of this Agreement, the term:

                    (i)          “disability”
shall mean the inability of Executive, due to illness, accident or any other
physical or mental incapacity, substantially to perform the material functions
of his duties for a period of six (6) consecutive months or for a total of
eight (8) months (whether or not consecutive) in any twelve (12) month period
during the term of this Agreement, as reasonably determined by the GP Board, in
good faith, after examination of Executive by an independent physician reasonably
acceptable to Executive.

                    (ii)          “change
of control” shall mean (A) the occurrence of any transaction the result of
which is that any person (other than Parent), any entity controlled by Sterling
Investment Partners L.P. or its affiliates, or any entity in which Executive is
an executive officer and/or equity holder that is formed for the purpose of
effecting the transaction that would constitute a change of control and that,
prior to effecting such transaction, does not have any equity securities that
are publicly traded) acquires more than 50% of the outstanding equity of, or
otherwise obtains the right to appoint a majority of, the directors (or
equivalent) of (x) the General Partner or (y) Parent or (B) the sale of all or
substantially all the assets of the General Partner or Parent to any person
other than an affiliate of Parent, any entity controlled by Sterling Investment
Partners L.P. or its affiliates or any entity in which Executive is an
executive officer and/or equity holder that is formed for the purpose of
effecting the transaction that would constitute a change of control and that,
prior to effecting such transaction, does not have any equity securities that
are publicly traded);

                    (iii)          “good
reason” shall mean (i) any material diminution of Executive’s duties, (ii)
any change in Executive’s reporting relationship that removes the Executive
from reporting directly to the Vice President—Chief Financial Officer of the
Company, (iii) any change in Executive’s or another person’s duties that
provides such other person with substantially all the duties then being
performed by Executive, or (iv) requiring Executive to be physically present
during a substantial portion of the working hours he is required to devote to the
Company at a location that is not within a 50 mile radius of Metro Park, New
Jersey, in each case that has not been remedied within thirty days after
written notice from Executive to the GP Board; and

-3-

                    (iv)          “justifiable
cause” shall mean: (i) Executive’s repeated failure or refusal to attempt
to perform his duties pursuant to, or Executive’s breach of, this Agreement
where such conduct or breach shall not have ceased or been remedied within 15
days following written warning from the Company; (ii) Executive’s performance
of any act or his failure to act, for which if Executive were prosecuted and
convicted, a crime or offense involving money or property of the US Shipping
Group, or which would constitute a felony in the jurisdiction involved, would
have occurred; (iii) Executive’s performance of any act or his failure to act
which constitutes, in the reasonable good faith determination of the GP Board,
dishonesty, fraud or a breach of a fiduciary trust, including without
limitation misappropriation of funds; (iv) any intentional unauthorized
disclosure by Executive to any person, firm or corporation other than the
members of the US Shipping Group and their respective directors, managers,
officers and employees, of any confidential information or trade secret of the
US Shipping Group; (v) any attempt by Executive to secure any personal profit
in connection with the business of the US Shipping Group (for example, without
limitation, using US Shipping Group assets to pursue other interests, diverting
any business opportunity belonging to US Shipping Group to himself or to a
third party, insider trading or taking bribes or kickbacks); (vi) Executive’s
engagement in a fraudulent act to the material damage of the US Shipping Group;
(vii) Executive’s engagement in conduct or activities materially damaging to
the property, business or reputation of the US Shipping Group, as determined in
reasonable good faith by the Board of Directors; (viii) Executive’s illegal use
of controlled substances; (ix) any act or omission by Executive involving
malfeasance or gross negligence in the performance of Executive’s duties to the
material detriment of the US Shipping Group, as determined in reasonable good
faith by the GP Board; or (x) the entry of any order of a court that remains in
effect and is not discharged for a period of at least sixty (60) days, which
enjoins or otherwise limits or restricts the performance by Executive under
this Agreement, relating to any contract, agreement or commitment made by or applicable
to Executive in favor of any former employer or any other person. Upon
termination of Executive’s employment for justifiable cause, Executive shall
not be entitled to any amounts or benefits hereunder other than such portion of
Executive’s annual salary and reimbursement of expenses pursuant to Section 4
hereof as has been accrued through the date of his termination of employment.

          (c)          If
Executive should die during the term of his employment hereunder, this
Agreement shall terminate immediately. In such event, the estate of Executive
shall thereupon be entitled to receive such portion of Executive’s annual
salary and reimbursement of expenses pursuant to Section 4 as has been accrued
through the date of his death. Executive shall also be entitled to any amounts
or benefits payable under the terms of the Benefit Plans.

          (d)          Upon
a finding by the GP Board of Executive’s disability in accordance with Section
7(b) hereof, the Company shall have the right to terminate Executive’s
employment. Notwithstanding any inability to perform his duties, Executive
shall be entitled to receive his compensation (including bonus, if any)
pursuant to Section 3 and reimbursement of expenses pursuant to Section 4 as
provided herein until he begins to receive long-term disability insurance
benefits under the policy provided by the Company pursuant to Section 5 hereof.
In the event that payments received from such long-term disability insurance
policy do not equal the Executive’s rate of salary at the time of the
disability, then for a period of 12 months following termination the Company
shall continue to pay to Executive the difference between the policy benefit
and such rate of salary, subject to any applicable tax withholding. Any termination
pursuant to this subsection (e) shall be effective on the later of (i) the date
30 days after which Executive shall have received written notice of the
Company’s election to terminate or (ii) the date Executive begins to receive
long-term disability insurance benefits under the policy provided by the
Company pursuant to Section 5 hereof. Executive shall also be entitled to
receive any amounts or benefits payable under the terms of the Benefit Plans.

-4-

          (e)          Notwithstanding
any provision to the contrary contained herein, in the event that Executive’s
employment is terminated by the Company without justifiable cause or by the
Executive for good reason, the Company shall (i) pay Executive, for a period of
one year following the date of termination (such period being hereinafter
referred to as the “Severance Period”), a monthly payment (subject to
applicable tax withholding) equal to one-twelfth of his then annual salary and
one-twelfth of his target bonus for the year in which termination of employment
occurs, as established by the compensation committee of the GP Board (provided
that if the compensation committee has not established a target bonus for such
year, then for purposes of this Section 7(e) such target bonus shall be 50% of
Executive’s then current salary), which amount shall be in lieu of any and all
other payments due and owing to Executive under the terms of this Agreement
(other than any payments constituting reimbursement of expenses pursuant to
Section 4 hereof and any payments or benefits payable under the Benefit Plans),
and (ii) continue to allow Executive to participate, at the Company’s expense
(to the same extent the Company bears such expense at the time of termination),
in the Company’s health insurance program, to the extent permitted under such
programs, until the earlier of (1) the end of the Severance Period or (2) the
date Executive begins employment with another entity which provides
substantially similar benefits to the Executive (collectively, the “Severance
Payments”); provided, however, that the Company’s obligation to make the
Severance Payments shall be conditional upon Executive executing a general
release in favor of the Company and Executive’s compliance with his obligations
under Sections 9, 10, 11 and 12 hereof; and provided further, that in the event
that Executive’s employment is terminated by the Company without justifiable
cause (including by reason of non-renewal of this Agreement) or by the
Executive for good reason within two years following the effective date of a
change of control, then the Company shall pay to Executive, in lieu of the
amounts to be paid pursuant to clause (i) of the first sentence of this Section
7(e), an amount equal to the product determined by multiplying (x) the sum of
his then annual salary and his target bonus for the year in which termination
of employment occurs, as established by the compensation committee of the GP
Board (provided that if the compensation committee has not established a target
bonus for such year, then for purposes of this Section 7(e) such target bonus
shall be 50% of Executive’s then current salary), by (y) two, such payment to
be made within ten business days following such termination of employment. If
Executive’s employment is terminated by the Company without justifiable cause
(including by reason of non-renewal of this Agreement) or by the Executive for
good reason at a time when the Partnership, the General Partner or Parent is in
negotiations regarding a transaction that would, if consummated, constitute a
change of control and such transaction is consummated within one year following
Executive’s termination of employment, then Executive’s severance shall be
calculated and paid as if such termination had occurred within two years
following a change of control, and the Company shall, upon consummation of such
transaction, pay to Executive an amount equal to the difference between the
amount he would be entitled to pursuant to this sentence and the amount of
severance payments Executive has received through such date.

          (f)          Upon
Executive’s termination of his employment hereunder or his election not to
renew this Agreement, this Agreement (other than Sections 5, 9, 10, 11, 12 and
15 which shall survive in accordance with their terms) shall terminate. In such
event, Executive shall be entitled to receive such portion of Executive’s
annual salary and bonus, if any, as has been accrued to date. Executive shall
be entitled to reimbursement of expenses pursuant to Section 4 hereof and to
continue to participate in the Benefit Plans to the extent participation by
former employees is required by law or permitted by such plans, with the
expense of such participation to be as specified in such plans for former
employees. Executive shall also be entitled to any amounts or benefits payable
under the terms of the Benefit Plans.

	
 

	
 

	
 

	
 

	
8.

	
REPRESENTATIONS
  AND AGREEMENTS OF EXECUTIVE.

          (a)          Executive
represents and warrants that he is free to enter into this Agreement and to perform
the duties required hereunder, and that there are no employment contracts or
understandings, restrictive covenants or other restrictions, whether written or
oral, preventing the performance of his duties hereunder.

-5-

          (b)          Executive
agrees to submit to a medical examination and to cooperate and supply such
other information and documents as may be reasonably required by any insurance
company in connection with the Company’s obtaining life insurance on the life
of Executive, and any other type of insurance or fringe benefit as the Company
shall determine from time to time to obtain.

	
 

	
 

	
 

	
 

	
9.

	
NON-COMPETITION.

          (a)          In
view of the unique and valuable services expected to be rendered by Executive
to the US Shipping Group, Executive’s knowledge of the trade secrets and other
proprietary information relating to the business and in consideration of the
compensation to be received hereunder, Executive agrees that during his
employment by the Company and, following the termination of Executive’s
employment hereunder, during the Non-Competition Period (as defined below),
Executive shall not, directly or indirectly, as owner, partner, joint venturer,
stockholder, employee, broker, agent, principal, trustee, corporate officer,
director, licensor, or in any capacity whatsoever engage in, become financially
interested in, be employed by, render any consultation or business advice with
respect to, or have any connection with, (i) any business which is competitive
with products or services of the US Shipping Group in the United States of
America or (ii) any business conducted under any corporate or trade name
utilized by the US Shipping Group or any name similar thereto without the prior
written consent of the Company; provided, however, that Executive may own any
securities of any corporation which is engaged in such business and is publicly
owned and traded but in an amount not to exceed at any one time one percent
(1%) of any class of stock or securities of such corporation. The Company
agrees that the following activities shall not be deemed to be a business
competitive with the business of the US Shipping Group during the
Non-Competition Period:

	
 

	
           (i)          employment,
  following termination of employment hereunder, by any entity that is not
  engaged in the ownership and operation of vessels engaged in the coastwise
  trade under the Jones Act; or

	
 

	
 

	
 

	
          (ii)          employment,
  following termination of employment hereunder, by an entity that has
  divisions or affiliates engaged in the ownership and operation of vessels
  engaged in the coastwise trade under the Jones Act as long as Executive is
  employed in, or otherwise only provides services to, a division or affiliate
  of such entity that does not, directly or indirectly, engage in the ownership
  and operation of vessels engaged in the coastwide trade under the Jones Act and
  Executive does not share information, directly or indirectly, with those
  divisions and/or affiliates of such entity engaged in the ownership and
  operation of vessels engaged in the coastwise trade under the Jones Act.

In addition, Executive shall
not, directly or indirectly, during the Non-Competition Period, request or
cause any suppliers or customers with whom the US Shipping Group has a business
relationship to cancel or terminate any such business relationship with any
member of the US Shipping Group or solicit, interfere with or entice from the
Parent or any of its subsidiaries any employee (or former employee) of the
Parent or any of its subsidiaries. For purposes hereof, the “Non-Competition
Period” shall mean: (i) if Executive’s employment is terminated by the
Company for justifiable cause (as defined in Section 7(b)) or disability (as
defined in Section 7(b)), or if Executive voluntarily terminates his employment
hereunder (including by electing not to renew this Agreement), a period of two
(2) years following such termination of employment; and (ii) if Executive’s
employment is terminated by the Company for other than justifiable cause or
disability, by the Executive for good reason, or as a result of the Company’s
election not to renew the employment agreement, the Severance Period, provided,
however, that in the case of this

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clause (ii) if the Company
breaches its obligation to make the Severance Payments or to comply with its
obligations under Section 4 hereof, and such breach is not cured within thirty
(30) days after written notice of such breach is provided to the Company by
Executive, Executive shall be released from his obligations under this Section
9.

          (b)          If
any portion of the restrictions set forth in this Section 9 should, for any
reason whatsoever, be declared invalid by a court of competent jurisdiction,
the validity or enforceability of the remainder of such restrictions shall not
thereby be adversely affected.

          (c)          Executive
acknowledges that the US Shipping Group has invested substantial monies in
connection with the development of its business and that the provisions of this
Section 9 were a material inducement to the US Shipping Group to the employment
of Executive hereunder, and that the US Shipping Group would not have employed
Executive but for the agreements and covenants contained herein. Executive
further acknowledges that the territorial and time limitations set forth in
this Section 9 are reasonable and properly required for the adequate protection
of the business of the US Shipping Group. Executive hereby waives, to the
extent permitted by law, any and all right to contest the validity of this
Section 9 on the ground of breadth of its geographic or product and service
coverage or length of term. In the event any such territorial or time
limitation is deemed to be unreasonable by a court of competent jurisdiction,
Executive agrees to the reduction of the territorial or time limitation to the
area or period which such court shall deem reasonable.

          (d)          The
existence of any claim or cause of action by Executive against the Company or
any other member of the US Shipping Group shall not constitute a defense to the
enforcement by the US Shipping Group of the foregoing restrictive covenants,
but such claim or cause of action shall be litigated separately.

	
 

	
 

	
 

	
 

	
10.

	
INVENTIONS
  AND DISCOVERIES.

          (a)          Executive
shall promptly and fully disclose to the Company, with all necessary detail for
a complete understanding of the same, all developments, know-how, discoveries,
inventions, improvements, concepts, ideas, writings, formulae, processes and
methods (whether copyrightable, patentable or otherwise) made, received,
conceived, developed, acquired or written during working hours, or otherwise,
by Executive (whether or not at the request or upon the suggestion of the
Company) during the period of his employment with the Company, solely or
jointly with others, using the US Shipping Group’s resources, or relating to any
current or proposed business or activities of the US Shipping Group known to
him as a consequence of his employment or the rendering of advisory and
consulting services hereunder (collectively, the “Subject Matter”).

          (b)          Executive
hereby assigns and transfers, and agrees to assign and transfer, to the Company
all his rights, title and interest in and to the Subject Matter, and Executive
further agrees to deliver to the Company any and all drawings, notes,
specifications and data relating to the Subject Matter, and to execute,
acknowledge and deliver all such further papers, including applications for
trademarks, copyrights or patents, as may be necessary to obtain trademarks,
copyrights and patents for any thereof in any and all countries and to vest
title thereto in the Company. Executive shall assist the Company in obtaining
such trademarks, copyrights or patents during the term of this Agreement, and
any time thereafter on reasonable notice and at mutually convenient times, and
Executive agrees to testify in any prosecution or litigation involving any of
the Subject Matter; provided, however, that following termination of employment
Executive shall be reasonably compensated for his time and reimbursed his
reasonable out-of-pocket expenses incurred in rendering such assistance or
giving or preparing to give such testimony if it is required after the
Non-Competition Period.

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11.

	
NON-DISCLOSURE
  OF CONFIDENTIAL INFORMATION.

          (a)          Executive
shall not, during the term of this Agreement, or at any time following
expiration or termination of this Agreement, directly or indirectly, disclose
or permit to be known (other than as is required in the regular course of his
duties (including without limitation disclosures to the Company’s advisors and
consultants) or as is required by law (in which case Executive shall give the
Company prior written notice of such required disclosure) or with the prior
written consent of the Company’s Chief Executive Officer), to any person, firm
or corporation, any confidential information acquired by him during the course
of, or as an incident to, his employment hereunder, relating to the US Shipping
Group, any client of the US Shipping Group, or any corporation, partnership or
other entity owned or controlled, directly or indirectly, by any of the
foregoing, or in which any of the foregoing has a beneficial interest,
including, but not limited to, the business affairs of each of the foregoing.
Such confidential information shall include, but shall not be limited to,
proprietary technology, trade secrets, patented processes, research and
development data, know-how, market studies and forecasts, competitive analyses,
pricing policies, employee lists, personnel policies, the substance of agreements
with customers, suppliers and others, marketing or dealership arrangements,
servicing and training programs and arrangements, customer lists and any other
documents embodying such confidential information. This confidentiality
obligation shall not apply to any confidential information which becomes
publicly available from sources unrelated to the US Shipping Group.

          (b)          All
information and documents relating to the US Shipping Group as hereinabove
described (or other business affairs) shall be the exclusive property of the
Company, and Executive shall use commercially reasonable best efforts to
prevent any publication or disclosure thereof. Upon termination of Executive’s
employment with the Company, all documents, records, reports, writings and
other similar documents containing confidential information, including copies
thereof, then in Executive’s possession or control shall be returned and left
with the Company.

	
 

	
 

	
 

	
 

	
12.

	
SPECIFIC
  PERFORMANCE.

          Executive
agrees that if he breaches, or threatens to commit a breach of, any of the
provisions of Sections 9, 10 or 11 (the “Restrictive Covenants”), the
Company shall have, in addition to, and not in lieu of, any other rights and
remedies available to the Company under law and in equity, the right to
injunctive relief and/or to have the Restrictive Covenants specifically
enforced by a court of competent jurisdiction, without the posting of any bond
or other security, it being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to the US Shipping Group
and that money damages would not provide an adequate remedy to the Company.
Notwithstanding the foregoing, nothing herein shall constitute a waiver by
Executive of his right to contest whether a breach or threatened breach of any
Restrictive Covenant has occurred.

	
 

	
 

	
 

	
 

	
13.

	
AMENDMENT OR
  ALTERATION.

          No
amendment or alteration of the terms of this Agreement shall be valid unless
made in writing and signed by both of the parties hereto.

	
 

	
 

	
 

	
 

	
14.

	
GOVERNING
  LAW.

          This
Agreement shall be governed by and construed in accordance with the laws of the
State of New Jersey, including choice of law rules, applicable to agreements
made and to be performed therein.

-8-

	
 

	
 

	
 

	
 

	
15.

	
ALTERNATIVE
  DISPUTE RESOLUTION.

          Any
controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be settled by arbitration in New York City by one (1)
arbitrator in accordance with the Commercial Arbitration Rules of the American
Arbitration Association, and judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof. Each party shall bear
its own costs (including legal fees and expenses) in the arbitration unless the
arbitrator determines otherwise. Nothing in this paragraph shall preclude any
party from seeking a preliminary injunction or other provisional relief, either
prior to, during or after invoking the procedures in this paragraph, if in its
judgment such action is necessary to avoid irreparable damage or to preserve
the status quo.

	
 

	
 

	
 

	
 

	
16.

	
SEVERABILITY.

          The
holding of any provision of this Agreement to be invalid or unenforceable by a
court of competent jurisdiction shall not affect any other provision of this
Agreement, which shall remain in full force and effect.

	
 

	
 

	
 

	
 

	
17.

	
WITHHOLDING.

          The
Company may deduct and withhold from the payments to be made to Executive
hereunder any amounts required to be deducted and withheld by the Company under
the provisions of any applicable statute, law, regulation or ordinance now or
hereafter enacted.

	
 

	
 

	
 

	
 

	
18.

	
NOTICES.

          Any
notices required or permitted to be given hereunder shall be sufficient if in
writing, and if delivered by hand or courier, or sent by certified mail, return
receipt requested, to the addresses set forth above or such other address as
either party may from time to time designate in writing to the other, and shall
be deemed given as of the date of the delivery or at the expiration of three
days in the event of a mailing.

	
 

	
 

	
 

	
 

	
19.

	
COUNTERPARTS
  AND FACSIMILE SIGNATURES.

          This
Agreement may be signed in counterparts with the same effect as if the
signatures to each counterpart were upon a single instrument, and all such
counterparts together shall be deemed an original of this Agreement. For
purposes of this Agreement, a facsimile copy of a party’s signature shall be
sufficient to bind such party.

	
 

	
 

	
 

	
 

	
20.

	
WAIVER OR
  BREACH.

          It
is agreed that a waiver by either party of a breach of any provision of this
Agreement shall not operate, or be construed, as a waiver of any subsequent
breach by that same party.

	
 

	
 

	
 

	
 

	
21.

	
ENTIRE
  AGREEMENT AND BINDING EFFECT.

          This
Agreement contains the entire agreement of the parties with respect to the
subject matter hereof, supersedes all prior and contemporaneous agreements,
both written and oral, between the parties with respect to the subject matter
hereof, and may be modified only by a written instrument signed by each of the
parties hereto. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective legal representatives, heirs,
distributors, successors and assigns, provided, however, that Executive shall
not be entitled to assign or delegate any of his rights or obligations

-9-

hereunder
without the prior written consent of the Company. It is intended that Sections
9, 10, 11 and 12 benefit each of the Company and each other member of the US
Shipping Group, each of which is entitled to enforce the provisions of Sections
9, 10, 11 and 12.

	
 

	
 

	
 

	
 

	
22.

	
SURVIVAL.

          Except
as otherwise expressly provided herein, the termination of Executive’s
employment hereunder or the expiration of this Agreement shall not affect the
enforceability of Sections 9, 10, 11 and 12 hereof.

	
 

	
 

	
 

	
 

	
23.

	
FURTHER
  ASSURANCES.

          The
parties agree to execute and deliver all such further documents, agreements and
instruments and take such other and further action as may be necessary or
appropriate to carry out the purposes and intent of this Agreement.

	
 

	
 

	
 

	
 

	
24.

	
CONSTRUCTION
  OF AGREEMENT.

          No
provision of this Agreement or any related document shall be construed against
or interpreted to the disadvantage of any party hereto by any court or other
governmental or judicial authority by reason of such party having or being
deemed to have structured or drafted such provision.

	
 

	
 

	
 

	
 

	
25.

	
HEADINGS.

          The
Section headings appearing in this Agreement are for the purposes of easy
reference and shall not be considered a part of this Agreement or in any way
modify, demand or affect its provisions.

          IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
and year first above written.

	
 

	
 

	
 

	
 

	
USS VESSEL
  MANAGEMENT LLC

	
 

	
 

	
 

	
 

	
By:

	
/s/ Paul B.
  Gridley

	
 

	

	

	
 

	
 

	
Name: Paul B.
  Gridley

	
 

	
 

	
Title: Chairman
  and Chief Executive Officer

	
 

	
 

	
 

	
 

	
Agreed and
  accepted:

	
 

	
 

	
 

	
 

	
By:

	
/s/ Anthony
  J. Guzzo

	
 

	

	

	
 

	
 

	
Name: Anthony
  J. Guzzo

-10-

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