Organization Agreement Dated January 29, 1993

MARITRANS INC. ORGANIZATION AGREEMENT

EXHIBIT C

ORGANIZATION AGREEMENT, dated as of , among

Maritrans GP Inc., a Pennsylvania corporation (“MGP”), Seneca GP Inc., a Delaware corporation (“SGP”), Maritrans Partners L.P., a Delaware limited partnership (“MLP”), Maritrans Operating Partners L.P., a Delaware limited partnership (“MOP”), and Maritrans Inc., a Delaware corporation (the “Company”; and together with MGP, SGP, MLP, and MOP, the “Parties” and, singularly, a “Party”), with reference to the following RECITALS:

RECITALS

A. MLP has been formed pursuant to that certain Agreement of Limited Partnership of Maritrans Partners L.P., dated as of (the “Partnership Agreement”; all terms used herein and not otherwise defined herein shall have the meaning ascribed thereto therein), among MGP, SGP and certain underwriters.

B. The Company has been incorporated for the purpose of acquiring all the rights, assets and properties belonging to, and assuming all liabilities and obligations of, MLP (the “MLP Contributed Assets”), all partnership interests of MGP in MOP (the “MGP Contributed Assets”), and all partnership interests of SGP in MOP (the “SGP Contributed Assets”).

C. The parties hereto desire to provide in this Agreement for the terms and conditions upon which (i) the Company will acquire the MLP Contributed Assets from the MLP and in connection therewith the MLP will acquire shares of Common Stock, par value $.01 per share (the “Common Stock”), of the Company, (ii) the Company will acquire the MGP Contributed Assets from MGP and in connection therewith MGP will acquire shares of Common Stock, and (iii) the Company will acquire the SGP Contributed Assets from SGP and in connection therewith SGP will acquire shares of Common Stock, all pursuant to the transaction provided for hereby (the “Organization”) which is intended to qualify under Section 351 of the Internal Revenue Code of 1986, as amended (the “Code”).

D. Upon completion of the Organization, the MLP will dissolve and liquidate in accordance with the Partnership Agreement and the Plan of Complete Dissolution and Liquidation attached hereto as Exhibit A (the “Dissolution Plan”) and distribute the shares of Common Stock received by the MLP in connection with the Organization to its partners as provided herein and in the Partnership Agreement (the “MLP Dissolution”).

NOW, THEREFORE, in consideration of the Recitals and the representations, warranties, covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:

ARTICLE 1.
FORMATION AND ORGANIZATION

1.1 Incorporation of the Company. MGP has caused the Company to be incorporated under the laws of the State of Delaware by the filing of the Certificate of Incorporation in the form attached hereto as Exhibit B, in accordance with the Delaware General Corporation Law.

1.2 Unitholder Approval. As soon as reasonably practicable, the MLP shall take all action necessary in accordance with Rules 14a-1 et. seq. under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the laws of the State of Delaware and the Partnership Agreement to call, give notice of and convene a meeting (the “Meeting”) of its unitholders to consider and vote upon the approval and adoption of this Agreement and the MLP Dissolution and for such other purposes as may be necessary or desirable.

1.3 Proxy Statement and Registration Statement. In connection with the Meeting, MLP and the Company shall take such reasonable steps as shall be necessary for the preparation and filing with the Securities and Exchange Commission (“SEC”) (i) by MLP of a proxy statement (the “Proxy Statement”), as contemplated by the Exchange Act, and (ii) by the Company of a Registration Statement on Form S-4 (the “Registration Statement”), as contemplated by the Securities Act of 1933, as amended (the “Securities Act”).

1.4 Organization of the Company. Upon the satisfaction of the conditions precedent to Closing set forth in Article 4 hereof, but prior to the consummation of the transactions contemplated hereby, the consent of incorporator of the Company shall be executed for the purpose of adopting the Bylaws of the Company and electing as the initial directors of the Company the persons disclosed in the Proxy Statement.

1.5 Organization of MOP-GP Inc.. Immediately after the organization of the Company pursuant to Section 1.4 hereof, the Company shall incorporate and organize Maritrans General Partner, Inc. as a Delaware corporation (“MOP-GP”).

ARTICLE 2.
PURCHASE AND SALE

2.1 Sale of Common Stock to SGP. Subject to the terms and conditions of this Agreement and in reliance upon the representations, warranties and covenants of the other parties contained herein, SGP shall acquire at the Closing, and the Company shall issue to SGP at the Closing, shares of the Company’s Common Stock (the “SGP Shares”) in exchange for the transfer by SGP of all of SGP’s right, title and interest in and to the SGP Contributed Assets...

2.2 Sale of Common Stock to MGP. Subject to the terms and conditions of this Agreement and in reliance upon the representations, warranties and covenants of the other parties contained herein, MGP shall acquire at the Closing, and the Company shall issue to MGP at the Closing, shares of the Company’s Common Stock (the “MGP Shares”)...

2.3 Sale of Common Stock to the MLP.

(a) Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of the other parties contained herein, at the Closing... the Company shall acquire from MLP... by an appropriate general bill of sale and assumption agreement (the “MLP Transfer Document”) in exchange for the delivery by the Company to MLP of shares of Common Stock (“MLP Shares”).

(b) Without limiting the generality of Section 2.3(a), the Company will assume pursuant to the MLP Transfer Document:

(i) all liabilities and obligations of MLP under Sections 7.11(b) and (c) of the MLP Partnership Agreement;

(ii) all liabilities and obligations of MLP arising out of or incurred by MLP in connection with the Proxy Statement, the Registration Statement, or any document filed under state securities or “blue sky” laws;

(iii) all liabilities and obligations of MLP with respect to expenses incurred by or on behalf of MLP in connection with the Conversion.

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES

3.1 General Representations and Warranties. Each Party hereto hereby represents and warrants to each of the other parties hereto that:

3.1.1. Organization. Such Party as is a corporation is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation.

3.1.2. Authorization. All corporate, partnership or other action on the part of such Party necessary for the authorization, execution and delivery of this Agreement and the transactions contemplated hereby and the performance of all obligations...

3.1.3. No Conflicts. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal, state or local governmental authority on the part of such Party is required...

3.1.4. Title to Contributed Assets. Provided that the amendment referred to in Section 5.1 of this Agreement is duly executed and delivered, such Party will, at the Closing, transfer to the Company title to such Party’s Contributed Assets...

3.2 Representations and Warranties of the Company. The Company hereby represents and warrants to each of the other parties hereto that:

3.2.1. Capitalization. Upon completion of the Organization, the authorized capital of the Company will be as set forth in the Proxy Statement.

3.2.2. Valid Issuance of Common Stock. Upon completion of the Organization, Common Stock to be issued and sold to the MLP, MGP and SGP, when issued, sold and delivered in accordance with the terms hereof, will be duly and validly issued...

ARTICLE 4.
CONDITIONS PRECEDENT TO THE CLOSING

The obligations of the Parties under Article 2 of this Agreement are subject to the fulfillment on or before the Closing of each of the following conditions precedent:

4.1 Representations and Warranties of the Parties. The representations and warranties of each of the other Parties contained herein shall be true in all material respects on and as of the Closing...

4.2 Performance. Each of the other Parties shall have performed and complied with all agreements, obligations and conditions contained in this Agreement...

4.3 Unitholder Approval. This Agreement and the MLP Dissolution shall have been approved and adopted by the requisite vote of the LP Unitholders of the MLP...

4.4 Injunctions, etc. There shall not be any judgment, decree, injunction, ruling or order of any court, governmental department, commission, agency or instrumentality outstanding against any Party...

4.5 New York Stock Exchange Listing. The New York Stock Exchange shall have approved the listing of the Common Stock effective upon official notice of issuance.

4.6 Blue Sky Compliance. The Company shall have complied with all requirements of federal and state securities or “blue sky” laws with respect to the issuance of the Common Stock hereunder.

ARTICLE 5.
CERTAIN COVENANTS

5.1 Amendment of MOP Partnership Agreement. At the Closing, the Parties shall amend the Limited Partnership Agreement of MOP, dated April 17, 1987 (the “MOP Partnership Agreement”) to permit transfers...

5.2 Continuation of MOP. MOP-GP, the Company, the MLP and MOP shall, and effective upon the Closing hereby do, agree in writing to continue the business of the MOP...

5.3 Dissolution of the MLP. Immediately after consummation of the Closing, the MLP shall be dissolved and liquidated and the MLP Shares shall be distributed...

5.4 Termination of Certain Agreements. Effective automatically upon the consummation of the Closing and without further action required of any party thereto, the Parties hereby terminate the Deposit Agreement and the Net Worth Maintenance Agreement...

5.5 Code Section 351. The Company shall file with its income tax return for the taxable year in which Closing occurs the statement required by Treasury Regulation 1.351-3(b)...

5.6 Indemnification; Contribution.

(a) Prior to the Closing MLP shall... indemnify SGP and MGP... against expenses... judgments, fines, awards and amounts paid in settlement...

(b) If the indemnification provided for in Section 5.6(a) above is unavailable to or insufficient to hold harmless an indemnitee... then MLP or the Company... shall contribute...

ARTICLE 6.
TERMINATION AND ABANDONMENT

6.1 Termination and Abandonment. This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Effective Time...

6.2 Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of each of the Parties...

6.3 Waiver. Any time prior to the Effective Time, whether before or after the Meeting, any Party may waive compliance...

ARTICLE 7.
MISCELLANEOUS

7.1 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties.

7.2 Governing Law. This Agreement shall be governed by and construed under the laws of the Commonwealth of Pennsylvania...

7.3 Counterparts. This Agreement may be executed in two or more counterparts...

7.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only...

7.5 Finder’s Fee. Each Party represents that it neither is nor will be obligated for any finders’ fee or commission in connection with this transaction.

7.6 Expenses. Except as otherwise provided in this Agreement, each Party shall pay its own expenses...

7.7 Contents of Agreement, Etc. This Agreement, together with the MLP and MOP Partnership Agreements, sets forth the entire understanding of the parties...

7.8 Notices. Any notices or other communications required or permitted hereunder shall be sufficiently given if sent by registered or certified mail...

EXHIBIT A

PLAN OF COMPLETE DISSOLUTION AND LIQUIDATION OF MARITRANS PARTNERS L.P.

This Plan of Complete Dissolution and Liquidation (the “Plan”) is for the purpose of dissolving and liquidating Maritrans Partners L.P....

1. Approval of Plan. The Plan as hereby submitted has been approved by MGP and shall become effective following approval of this Plan by a Majority Interest...

2. Dissolution and Liquidation Process. After the Effective Date, the MLP shall not perform business activities other than those required for satisfying its obligations...

3. Liquidation Transaction. Upon approval of the Plan and in accordance with the Organization Agreement and Section 17.1 of the Partnership Agreement, the MLP shall purchase...

4. Distribution to Unitholders. Such shares of Common Stock shall be distributed as follows:

12,250,000 Common Shares to the Limited Partners on the basis of one Common Share for each LP Unit held of record by the Limited Partner on the Effective Date;

123,750 Common Shares to MGP;

1,238 Common Shares to SGP.

5. Surrender of Certificates. As promptly as practicable after the Effective Date, each holder of an outstanding certificate or certificates which prior thereto represented LP Units shall surrender such certificate or certificates with appropriate letters of transmittal to an agent or agents (the “Exchange Agent”) designated for the purpose by Maritrans Inc. (the “Company”)...

6. Further Assurances. If at any time the Company shall consider or be advised that any further assignments, conveyances, or assurances in law are necessary or desirable to vest, perfect, or confirm of record in the Company the title to any property or rights of the MLP...